Sitting of 16 March 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENVIRONMENT

    Haringey Council
    Mr. David Shaw: To ask the Secretary of State for the Environment when he last met the leader of Haringey council; and what was discussed.
    The Minister for Local Government (Mr. Michael Howard): On my right hon. Friend's behalf, I met the leader of Haringey council on 1 February to discuss with him my right hon. Friend's proposal to set a rate limit of 2140·69p for Haringey for 1988–89.
    Mr. Shaw: Is my hon. and learned Friend aware that during the past year proposals have been considered by Haringey council to employ a number of policy assistants for committee chairmen and vice-chairmen, at a cost of £143,000, I believe? It has sponsored a gay rights week, which it has been promoting in schools — sometimes primary schools — and has wasted a considerable amount of money in other sectors of Haringey's expenditure. According to a recent statement by a former director of social services, Haringey council is now run on such strong politicised lines that ratepayers are not receiving value for money in their local services.
    Mr. Howard: My hon. Friend is quite right. What is particularly preposterous is that while all this activity is going on Haringey council complains that it is short of funds for legitimate services, such as the trading standards service. Haringey council would be well advised to devote its resources to the services that are most and properly needed.
    Mr. Bernie Grant: Will the Minister say whether he has any hard evidence whatsoever that Haringey council is abusing its statutory duties with regard to schools or anything else? If he does not have that evidence, will he institute an inquiry so that the good name of Haringey council can be cleared once and for all?
    Mr. Howard: I shall quote verbatim from the former director of social services of Haringey council, who said of his former employer:
    "Working in a borough as highly politicised as Haringey could be difficult. It's hard to accept a decision to spend thousands of pounds on a festival to make a point about nuclear waste, or even £60,000 a year on a cats' home, when you have 40 child abuse cases waiting for a social worker, and pensioners eight to a room in an old people's home".
    Sir Hugh Rossi: I am extremely grateful for the solicitude of my hon. Friends about the suffering of my
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    constituents and the Tammany Hall pork barrel politics that prevail in Haringey. I welcome very much the rate capping, which has brought some relief to my constituents, but the best way in which my right hon. and hon. Friends could help my constituents would be to undo the damage that their Department did to my constituency in 1964. They should dismantle the London borough of Haringey, restore the constituency boundaries and return to the annual election of one third of the council, which would concentrate the minds of councillors enormously.
    Mr. Howard: I can well understand my hon. Friend's concern, but we have an alternative remedy to propose. The community charge will being home true accountability and will enable all the residents of Haringey to take a responsible attitude to local elections and to electing a responsible council in future.
    Dr. Cunningham: Is the Minister aware that we deplore this abuse of Question Time for the purpose of making wild, dishonest and unsubtantiated allegations about Labour councils? Is the Minister aware that today the chair of the education committee in Haringey has denounced the allegations of his hon. Friend the Member for Dover (Mr. Shaw) as being without foundation? Why does the Minister not get the facts from the authority instead of listening to petty, malicious and dishonest abuse?
    Mr. Howard: I can well understand why it causes the hon. Gentleman considerable embarrassment to listen to the truth about what Labour local government is really like. If the hon. Gentleman is suggesting that Haringey's former director of social services is dishonest, I hope that he will withdraw that allegation.

    Imported Waste
    Mr. Heathcoat-Amory: To ask the Secretary of State for the Environment what is the most recent annual tonnage of imported waste disposed of in United Kingdom land sites.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): The latest estimate of waste imports for landfill is 174,000 tonnes during 1987–88, of which 44,000 tonnes were treated before disposal.
    Mr. Heathcoat-Amory: Is my hon. Friend aware that such imported material contains a good deal of hazardous waste? Does he agree that the regulations governing the disposal of hazardous chemicals are a good deal less stringent than those governing the disposal of nuclear waste? Will his Department give more thought to the safe disposal of hazardous chemicals, and at least as much thought as the Government give to the safe disposal of nuclear waste?
    Mr. Moynihan: We ensure that all waste is properly controlled in transit and disposed of without risk to public health. We are looking to introduce a statutory code of practice to place greater responsibilities on the producers of waste to ensure its safe disposal. We are also looking at several other measures that I announced in the House two months ago on this important issue.
    Mr. Barry Jones: May we urgently have a set of stringent regulations to govern the matter? Last year my constituency received a large tonnage of contaminated soil

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    from Holland. My constituents were upset and worried and, to some degree, quite frightened that material that the Dutch had rejected was about to be placed near their homes. Does the Minister realise that people make a profit from receiving contaminated soil from abroad and dumping it in constituencies such as mine? We need an urgent review and strict regulations.
    Mr. Moynihan: We have strict regulations. One of the reasons why waste imports have increased— albeit they represent a small percentage of total waste inports; only 0·5 per cent.—is that we have a long history of waste control. Treatment and disposal operators are required to achieve the highest standards. The Government intend to ensure that that continues to be the case.
    Mr. Sayeed: Will my hon. Friend confirm that the statutory code will include the proper fencing of sites? He will be aware that children have gone to sites, dug into the area, and come across highly contaminated materials.
    Mr. Moynihan: I confirm that the statutory code of practice will place greater responsibilities on producers of waste to ensure its safe disposal.
    Mr. Allan Roberts: Is the Minister aware that the Government do not have a good record on the safe disposal of toxic waste? There is great concern about the fact that 500,000 tonnes of toxic waste are being imported into this country, and the tonnage is ever growing and increasing. In answer to parliamentary question after question the Minister has refused, or been unable, to say where imported waste goes and how it is disposed of. He does not know, or he will not tell us. Is it not unsatisfactory? Is it not wrong for the Government to cover up their balance of payments deficit by importing toxic waste to be disposed of in this country?
    Mr. Moynihan: I totally reject the hon. Gentleman's last point, but I share his concern about the potential growth in imports where there is no wider technical or environmental benefit to be gained by treatment or disposal of waste in this country. Therefore, the Government are considering ways in which imported waste may be more closely controlled.
    Sir Hugh Rossi: The Environment Select Committee is concerned about the problem and intends to conduct a rigorous inquiry into the matter soon after Easter. No doubt my hon. Friend will have to answer us in some detail about the form of statutory declarations and other measures proposed by the Government.
    Mr. Moynihan: We look forward to the outcome of the review. I assure my hon. Friend that the Government will carefully consider all the detailed representations made through that report.

    Radioactive Discharges
    Ms. Ruddock: To ask the Secretary of State for the Environment if he will list all the non-nuclear industrial sites in England and Wales making authorised discharges of radioactive substances and gas to the air.
    Mr. Moynihan: I am arranging to have placed in the Library of the House a list of all non-nuclear establishments in England and Wales authorised to dispose of radioactive waste under the Radioactive
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    Substances Act 1960. It is not practicable to segregate industrial premises or those solely authorised to make discharges to air.
    Ms. Ruddock: I am grateful to the Minister for that action. Can he confirm that the Smiths Industries factory at Bishop Cleeve, Gloucester and the Capper Pass smelting works at Humberside are on that list? I understand that the latter is authorised to discharge a higher level of alpha emitters than that allowed at Sellafield. Is the Minister concerned that there could be a connection between discharges from the sites that he has listed and childhood leukaemia clusters being found in children in their vicinity? Will he repeal the secrecy clauses in the Radioactive Substances Act so that there can be proper public examination of these issues?
    Mr. Moynihan: The answer to the hon. Lady's first question is that both establishments will be on the list that will be placed in the Library. With regard to the second question, Her Majesty's Inspectorate of Pollution has cleared Bishops Cleeve. In regard to her third point, the Government intend to follow the presumption that any new powers to be adopted should be in favour of openness. That will mean that there will be a review of the implications of section 13, as outlined implicitly in pollution paper No. 23, which has recently been published.
    Mr. Cran: I am grateful to my hon. Friend for the reassuring information that he has provided to me and my constituency in relation to Capper Pass in north Humberside and the associated cancer cluster problem. Will he let me know when he will be in a position to announce the date when HMIP will begin its investigations of the Capper Pass, as that is in the public interest? The company wants it, my constituents want it and so do I.
    Mr. Moynihan: I assure my hon. Friend that HMIP has already started work. I shall provide him in writing with as comprehensive and accurate a timetable as possible when I have received the information from HMIP.
    Mr. Frank Cook: The Minister has been most helpful, and we are grateful to him. He will know that the National Radiological Protection Board has amended its recommendations on radiation levels. Will he give the House an assurance today that the criteria on which licences for that type of effluent are granted will be reviewed, in terms of new licences to be issued in future, and in terms of existing licences that control emissions?
    Mr. Moynihan: At present, the Government are content with the licence system. The reason for my statement this afternoon is that it is important to provide more information and greater public accountability of the information that is available. To date it has been very difficult for people to contact the Government or local authorities on a case-by-case basis. The fact that some 1,100 establishments will be listed brings to public accountability the full range of all non-nuclear establishments in England and Wales. This will allow hon. Members and the public to follow up each and every case if they so wish.
    Mr. Butler: Can my hon. Friend say whether I am right in thinking that coal-fired power stations emit substantial amounts of radioactivity to the immediate environment? How does that compare with nuclear-powered generation?
    Mr. Moynihan: As far as I am aware, it would be misleading to say that they emit "substantial" degrees of

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    radiation. As for my hon. Friend's request that I give a comparison, I shall ensure that a comprehensive answer on the scientific data is provided in a letter to him as soon as possible.
    Mr. Campbell-Savours: Will the Minister make a point at the Dispatch Box of condemning the front page article in The Star newspaper last week, which linked malformed fish in the Irish sea to discharges from Windscale? Is the Minister aware that we are tired, sick and fed up of the national media completely distorting information about discharges from Sellafield? We regard objective criticism as helpful, but we intensely dislike damaging publicity based on inaccurate information and no statistical evidence at all.
    Mr. Moynihan: It is a special pleasure to say that I am in total agreement with the strength of opinion expressed by the hon. Gentleman, especially about The Star article, which was grossly misleading and inaccurate.

    Rent Arrears
    Mr. Heddle: To ask the Secretary of State for the Environment what steps he intends to take to monitor efforts by local councils to reduce rent arrears.
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe): My Department monitors local authorities' performance in collecting rent arrears through their annual subsidy claim forms, which give the rent arrears figures at the end of each financial year. The latest figures for 1 April 1987 were placed in the Library of the House on 20 January.
    Mr. Heddle: Is not £250 million owed to councils in rent arrears? Are not some Labour-controlled authorities owed between 20 and 30 per cent. of their rent rolls? Is that not a scandal and gross negligence by those authorities? Should not rent collection from and the management of council estates be put out to the private sector?
    Mrs. Roe: Direct Government intervention in the performance of individual local authorities would serve no useful purpose. As day-to-day management functions are matters for them, it would be wrong for the Government to intervene. I agree that the current levels of arrears in some local authorities are an unjustifiable waste of resources. They place an immense burden on those tenants and ratepayers who have to bear the costs of interest charges and, ultimately, the writing off of debt.
    Mr. Eastham: Is it not true that since 1979 rents have risen two or threefold under this Government? Does that not mean that more than half of tenants' income is accounted for by rent? From 1 April, will not those arrears probably increase and their incidence accelerate?
    Mrs. Roe: We do not accept that high rent levels lead to arrears because tenants cannot afford to pay the rent. Individual local authorities have discretion to set rents that reflect the location, size and amenities of their dwellings. However, we continually seek to persuade local authorities to set rents sufficiently high to ensure that funds are available for repair and maintenance. The housing benefit system exists to help tenants in real need.
    Mr. Gow: Will my hon. Friend reconsider her answer to my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle)? Is not the total of rent arrears, which now stands
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    at £250 million, larger than ever before? Is it not clear that the Department should take powers to bring that scandalous state to an end?
    Mrs. Roe: Local authorities have repeatedly been warned about the damaging effects of arrears, most recently in a circular issued in May 1987. That warned that we would not rule out the possibility of legislation if authorities continued to fail to bring the problem under proper control. We shall keep the matter under review.
    Mr. Soley: Rather than the Government making persistent attacks on local democracy, would it not be more constructive if they responded to our offer to reform housing finance to make it fairer for those who rent or buy? Not only could we then deal with those made homeless because of mortgage or rent arrears, but we could do something about a Chancellor of the Exchequer who is sufficiently inept to push people out of the privately owned sector while giving tax handouts to potential Rachmanite landlords.
    Mrs. Roe: The Government announced their plans for housing finance in the Budget yesterday.

    Residential Areas
    Mr. Chapman: To ask the Secretary of State for the Environment what steps Her Majesty's Government take to protect the character of residential areas, particularly in the London boroughs.
    Mrs. Roe: Detailed policies to protect the character of residential areas are best determined locally.
    Mr. Chapman: Will my hon. Friend sympathetically consider whether there is a need to offer further protection for certain residential areas outside conservation areas by making it Government policy to support local planning authorities in resisting developments unless they blend in scale, character and density with surrounding buildings? Would not a good start be made by requiring permission to be sought for demolition of properties in such areas, in accordance with the early-day motion tabled by my hon. Friend the Member for Harrow, East (Mr. Dykes)?
    Mrs. Roe: We should avoid excessive complexity in the planning system. Local authorities have substantial powers to control the environmental character of their areas. General control over demolition would not necessarily secure the end that my hon. Friend seeks. Permission is often granted before any demolition takes place. Forced retention of buildings is not always in the interests of the character of the area.
    Mr. Simon Hughes: Is the Minister aware of how disastrous yesterday was for the conservation of inner London? The London Docklands Development Corporation took two decisions through its planning committee. The first will result in the construction of a blue marble and glass tower block of residential flats following the demolition of the whole of the St. Saviour's dock conservation area, one of the only two remaining conservation areas in London along the riverside. This will be done contrary to the advice of the City of London, the local authority, English Heritage, the Minister's Department and the Victorian Society. At Hays wharf there is to be a mock-up of the Palace of Westminster that will be nearly 200 ft high and provide 1 million sq ft of office space. That will be done against the express advice,

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    following consultation, of the guardians of the Royal Tower of London and the parks authority, which comes under the Department of the Environment. Will the Minister please intervene to protect the heritage that the LDDC is destroying in the capital city?
    Mrs. Roe: We believe in leaving planning decisions to the local authority in whose area those planning matters arise. The LDDC is responsible for the planning in its area. The hon. Gentleman has made representations in the past, to which I have responded in the House, and I am sure that he is aware that I have always listened to what he has had to say.
    Mr. Squire: Does my hon. Friend accept that one of the major impacts on the environment is the increasing dirt, filth and litter that cover our streets, including the litter from takeaway shops? Will my hon. Friend again carefully consider the possibility of introducing on-the-spot fines, as already happens in a number of other countries?
    Mrs. Roe: We shall want to see how Westminster council progresses with its proposals.
    Mr. Pendry: Is the Minister aware that paragraph 15 of Government circular 2/81, which refers to the calling in of planning applications by the Secretary of State, says that he will be very selective and will do so only when the issues are of more than local importance? In view of the calling in of the planning application on the Chelsea FC ground at Stamford bridge, may I ask whether the Secretary of State has changed the criteria? The reasons given were the density of the proposed building and the consequent parking and traffic problems. Clearly, those are local issues. Has the Secretary of State changed the criteria? Will he make plain the details?
    Mrs. Roe: As the hon. Gentleman has said, call in is considered only if the application has regional or national importance. I am not able to discuss on the Floor of the House the particular application to which the hon. Gentleman referred.
    Mr. Butterfill: Does my hon. Friend agree that the environment in many areas would be greatly improved if derelict land could be developed? Does she agree also that this land should be developed, where possible, for the provision of housing to let? Does my hon. Friend welcome the business expansion scheme that was announced yesterday by my right hon. Friend the Chancellor, which should encourage the provision of rented housing under assured tenancies?
    Mrs. Roe: I welcome my hon. Friend's point. Some of the land must be provided by bringing derelict and unused sites on to the housing market. There are about 4,000 acres of under used land on the land register in London and about 2,500 houses were built in docklands last year. I also welcome the announcement yesterday by my right hon. Friend the Chancellor on the business expansion scheme for rented housing. Deregulation of new private lettings will open up new opportunities for investment in much needed private rented accommodation.

    Rating Reform
    Mr. Allen: To ask the Secretary of State for the Environment what proposals he has to review the cost of collecting the poll tax in Nottingham, in the light of the estimates prepared by the Association of District Councils of the comparative costs as against rate collection.
    Mr. Howard: As my right hon. Friend the Secretary of State announced on 8 March in his reply to the hon. Member for Copeland (Dr. Cunningham), he is commissioning a national study into the costs of preparation and collection of the community charge.
    Mr. Allen: Is the Minister aware that the rates cost £1·4 million to collect in Nottingham, whereas, according to figures produced by the Conservative city of Nottingham authority, the new poll tax will cost £3·3 million to collect and that, whereas 68 people now collect the rates in Nottingham, it will take 158 staff to collect the poll tax? The Minister tells us that the poll tax will be simpler and cheaper. How can he justify double the number of staff and double the cost to the people of Nottingham and the rest of the country?
    Mr. Howard: The hon. Gentleman has it wrong. We never said that it would be cheaper to collect, but we think that it is a price worth paying for the advantages of the new system. I have seen the study produced by Nottingham city council, and I can tell the hon. Gentleman that Nottingham will be included in the study to which I referred.
    Mr. Brandon-Bravo: May I put it to my hon. and learned Friend that the question asked by the hon. Member for Nottingham, North (Mr. Allen) has little to do with genuine concern about the cost of collecting the poll tax in our city of Nottingham? I suggest to my hon. and learned Friend that it has much more to do with Opposition Members' growing concern and their realisation that what they look upon as their captive audience — those who can be relied upon to campaign, lobby and vote for them at local level—will now have to pay something towards the measures for which they vote.
    Mr. Howard: My hon. Friend is absolutely right. As the Labour co-ordinating committee recently put it:
    When the community charge is in force and the local council wants to carry out a programme of service expansion, local people will want to know that increased expenditure is well spent."
    Mr. Rooker: Notwithstanding the merits that the Minister might see in introducing the poll tax — for reasons that the Government may think are positive—does he agree that the public will not look well upon the conduct of public administration when they realise that they are paying a tax, each pound of which will cost twice as much to collect as each pound of the tax that it replaces? The public will see no sense in that and it will bring the rest of the conduct of public administration into disrepute.
    Mr. Howard: I do not accept a word of what the hon. Gentleman has said. I do not see how the effects to which he has referred apply in any sense to the collection of income tax from those who do not pay it on PAYE. As the hon. Gentleman well knows, that costs more as a proportion of the yield to collect than the community charge will.
    Mr. Rooker: That is not true.
    Mr. Dykes: What did the Minister think about the letter on this matter from our hon. Friend the Member for Beckenham (Sir P. Goodhart) in The Times?
    Mr. Howard: I could answer my hon. Friend's question at some length. However, the most important point about the letter that our hon. Friend wrote to the newspapers

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    earlier this week was that he took the first-year figures, which include the effect of the safety net, and not the figures that would have applied had the community charge been fully in force this year, which would have been to the great benefit of his constituents.

    Estuarine Development Schemes
    Mr. Ron Davies: To ask the Secretary of State for the Environment what information he has as to how many estuarine development schemes are presently under consideration for England and Wales.
    The Secretary of State for the Environment (Mr. Nicholas Ridley): I am not sure what an estuarine development scheme is.
    Mr. Davies: If that is the case, I am not quite sure what we have a Secretary of State for the Environment for.
    When the right hon. Gentleman gets round to doing some work in his Department and starts to identify the many estuaries around the coast of England and Wales threatened by developments — to control the ebb and flow of water or provide marinas, barrages or crossings — perhaps he will take the opportunity to study the number of estuaries affected by such developments and identified as sites of special scientific interest. When he has done that, will he be prepared to make a clear statement to the country about the value that he attaches to sites of special scientific interest when they are threatened by development?
    Mr. Ridley: I would not dare to make any clear statement about any matter to do with planning in Wales. As the hon. Gentleman knows, it has nothing to do with me. As any application for development in relation to an estuary or anywhere else comes forward, it will be treated in the normal way and all relevant considerations will be properly weighed.
    Mr. Steen: Since I have virtually more estuaries in my constituency than Labour voters, will my right hon. Friend be good enough, when looking at estuarial development, to realise the pressure on the land around estuaries, particularly in constituencies such as mine, where there are areas of outstanding natural beauty and where people want to come and live and constantly want to erode the natural beauty of the area? Will he consider issuing some circular or guidance to encourage local planning authorities to resist any suggestion that areas such as that should be spoilt for development?
    Mr. Ridley: I shall certainly resist any Labour voter development schemes that come to my notice. The factors that my hon. Friend mentioned are important and are, or should be, taken into account at the level of applications, and certainly will be if anything comes to me on appeal. I think that these matters are already covered adequately in circulars.

    Rating Reform
    Mr. Nellist: To ask the Secretary of State for the Environment what is his estimate of the number of single pensioners who will be (a) losers or (b) gainers under the poll tax; and if he will make a statement.
    Mr. Howard: In England and Wales 80 per cent.—around 2 million—of single pensioners living alone and 66 per cent.—around 2·75 million — of all single
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    pensioners would have gained if the community charge had been introduced in full on the basis of 1987–88 local authority spending. Twenty per cent. — around half a million and 34 per cent. — just over 1 million —respectively would have paid more.
    Mr. Nellist: It is bad enough that a third of a million single pensioners living alone would suffer under the poll tax and be losers, often the poorest pensioners living in the lowest-rated authorities. Why has the Minister not admitted, almost until the answer today, that of the 1 million single pensioners living with their children or grandchildren, two thirds will be losers under the poll tax? Yesterday, half a million of the richest people in this country gained £2,000 million in tax cuts, while, in reality, 1 million single pensioners in England alone—just over 2,000 per constituency—will lose under the poll tax.
    Mr. Howard: It is absolutely typical of the hon. Gentleman that when a measure is taken that ensures that 80 per cent. of single pensioners living alone will benefit, he complains about it. The effect of the Budget yesterday on a single adult on national average earnings will be to make him better off by more than £200 a year. That is virtually enough to pay for his community charge in the average area.
    Sir George Young: Does my hon. and learned Friend recall defending the poll tax as a fair tax before the Budget by saying that households in the top 10 per cent. of incomes would pay 16 times as much as households in the bottom 10 per cent.? How does he propose to defend it now?
    Mr. Howard: My hon. Friend is quite right. We have to reconsider our figures in the light of the Budget. I have to tell the House that we have not yet completed that exercise. Preliminary estimates show that instead of the top 10 per cent. of households paying 16 times as much as the bottom 10 per cent. towards the cost of local authority services, in future they are likely to be paying 15 times as much.
    Mrs. Fyfe: Would the Minister care to tell us how much more the top earners are earning when compared to the bottom earners? Is it more than 15 times as much?
    Mr. Howard: I am afraid that I tried to follow the hon. Lady's question, but I did not catch it.
    Mr. Speaker: Quite exceptionally, will the hon. Lady say it again?
    Mrs. Fyfe: The Minister said that the top earners would now be paying 15 times as much, implying that the tax changes have made very little difference the comparison about which we are talking. Those top earners may he contributing 15 times as much to local taxes, but how much more are they earning when compared with the lowest earners? Is it more, or less, than 15 times as much?
    Mr. Howard: It is not how much they are earning, or even how much they are paying in national taxes, that is the figure that I gave a few moments ago. The top 10 per cent. of households in income terms will pay 15 times as much as the bottom 10 per cent. towards the cost of local authority services.

    Housing (Maladministration)
    Mr. David Martin: To ask the Secretary of State for the Environment whether he will meet members of the

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    local authority associations to discuss the findings of the latest annual report of the Local Government Ombudsman concerning maladministration in housing.
    Mrs. Roe: No. The Local Government Ombudsman's findings of maladministration are addressed to the authorities being investigated and it is for them to consider what action they should take in response.
    Mr. Martin: Has my hon. Friend noticed that the report's findings of maladministration by Labour councils outnumber those by Conservative councils by four to one? Does that not provide eloquent evidence of what even the New Statesman admitted the other day, which was that Labour authorities make lousy landlords?
    Mrs. Roe: There are many poor landlords among local authorities, but the Government's policies will change that. Tenants' choice will act as a powerful incentive for local authorities to bring their management and maintenance standards up to those of potential new landlords. Tenants will be able to seek a new landlord if they are dissatisfied with the standard of service they are receiving.
    Mr. Cohen: While the Minister is considering maladministration in local government, will she give a thought to Westminster, which sold for 15p three cemetries which were worth about £5 million? That sum could have been used in the public sector for housing. Will the Minister take direct action to refer that waste of public money to the ombudsman?
    Mrs. Roe: That is for the local councils and local ratepayers to do.
    Mr. Harry Greenway: Does my hon. Friend agree that the time has come to put some teeth into the Local Government Ombudsman's reports, bearing in mind that often serious maladministration is thrown up in them and nothing is done about that by local councils, particularly Labour local councils such as Ealing?
    Mrs. Roe: It is for the local authorities themselves to take note of what the Local Government Ombudsman says. I hope that local councillors will put pressure on management to put right whatever has caused the difficulty.
    Dr. Cunningham: As there is such anxiety about the efficiency and conduct of Labour-controlled local government among Conservative Members, why is there such a deafening silence about the conduct of the Conservative-controlled City of Westminster, which has facilitated and connived at the asset-stripping of cemetries in several other London boroughs? Would the Minister recommend to the ratepayers of Westminster that they raise that matter with the ombudsman?
    Mrs. Roe: I think that this subject is already being investigated by other authorities.
    Mr. Heddle: Is it not true that the Local Government Ombudsman in Northern Ireland has the legal teeth which, as my hon. Friend the Member for Ealing, North (Mr. Greenway) said, the English local ombudsman does not have? Is it not also true that the Labour-controlled local authorities which he cited will not carry out the recommendations unless there are legal reasons why they should?
    Mrs. Roe: That is so.

    Local Government (Functions and Powers)
    Mr. Beith: To ask the Secretary of State for the Environment when he last met representatives of local authority associations to discuss the functions and powers of local government.
    Mr. Ridley: I frequently meet representatives of the local authority associations in the Consultative Council on Local Government Finance and on other occasions, when the functions and powers of local authorities are regularly among the topics discussed.
    Mr. Beith: Why do the Government find it so difficult to accept that elected local authorities, such as are represented in these associations, should have the freedom to act on policies which differ from those of central Government? Why did the Secretary of State in his recent pamphlet about local government refer to it
    "conforming to the national model"?
    Does he think that that was the ideal for which his father or brother went into local government when they became chairmen of county councils, or is that the type of Tory paternalism that he wants to sweep away with the county councils?
    Mr. Ridley: Many councils do not conform to the suggestions that the Government make. The hon. Gentleman does not seem to understand that consultation is supposed to be two-way: local councils can listen to me just as well as I can listen to them.
    Mr. Jack: Does my right hon. Friend think that the imposition of an 18 per cent. rate increase by Lancashire county council was a justifiable use of its present functions? [Interruption.] May I repeat for my right hon. Friend—
    Mr. Speaker: Order. It takes up a great deal of time if questions have to be repeated.
    Mr. Jack: Does my right hon. Friend think that it was a justifiable use of the Labour-controlled Lancashire county council's functions to impose upon its citizens an 18 per cent. rate increase?
    Mr. Ridley: It is within the powers of the county council to fix its rate, although one wishes that it had not put up the rates in that way. I very much hope that the large amount of money that my right hon. Friend the Chancellor of the Exchequer put back into people's pockets yesterday will not be taken out again by Liberal and Labour councils.
    Mr. Corbett: Will the Secretary of State assure the House that he is a keen supporter of elected local government and that he will go out of his way to resist turning elected local councillors into mere openers of sealed bids for what is left of local services?
    Mr. Ridley: I assure the hon. Gentleman that I am a keen supporter of elected local government and that I am looking forward to seeing many Labour councils turned out at the elections in May. Birmingham may well be one of those councils.
    Mr. Corbett: Not Birmingham.
    Mr. Ridley: Birmingham is on our list. The hon. Gentleman had better get back there and do what he can, if anything, to stop that. He need have no fear but that I will be there trying to get the Conservative councils in.

    Planning Appeals
    Mr. Thurnham: To ask the Secretary of State for the Environment how many planning appeals have been decided by him during the last 12 months.
    Mr. Ridley: A total of 17,606 appeals were decided in the 12 months to January 1988 — 619 by myself and 16,987 by my inspectors.
    Mr.Thurnham: Does my right hon. Friend welcome the fact that the inspectors' advice has been overruled much less often under this Government than under the last Labour Government? Will he confirm that, when their advice is overruled, careful judgment should always be exercised, especially if historic covenants are involved?
    Mr. Ridley: I confirm that the number of times when inspectors' advice has not been taken by the Miniser, in those cases where Ministers have decided appeals for themselves, has fallen considerably from the days of our predecessors. As my hon. Friend the Minister for Housing and Planning informed my hon. Friend yesterday, applications may be made to me for the discharge or modification of certain restrictions and I will, of course, consider such applications on their merit.
    Mr. Haynes: Why does the Secretary of State ignore people who object to planning applications from a large organisation that wants to build a large store that will affect small businesses, particularly in my constituency? Why does he say yes to a large organisation that contributes to Conservative party funds?
    Mr. Ridley: The other side in these cases—those who wish to make developments—is equally ferocious and sometimes just as vehement as the hon. Gentleman in complaining about not being able to obtain planning permission.
    Mr. Forman: Is my right hon. Friend aware that one of the strongest complaints from residents in my part of the world, Carshalton, and elsewhere, is that far too often the local planning authority is bereft of effective powers to control local developers? Given that his hon. Friend said in answer to an earlier question that such matters are best decided locally, will he reconsider the proportion of cases that go to appeal, as that seems to convey an unfair advantage to property developers who use the length of their purse and their determination to wear down local residents?
    Mr. Ridley: Ninety eight per cent. of planning permissions are given by local authorities, and only 2 per cent. result from appeals to Ministers. That puts the matter in perspective and makes it clear that local planning authorities take 98 per cent. of the decisions to grant permission. This matter must not be seen out of perspective.

    Homeless Families
    Mrs. Clwyd: To ask the Secretary of State for the Environment how many homeless families there are in England and Wales at present.
    Mrs. Roe: Local authorities in England secured accommodation for 27,500 households accepted as homeless under part III of the Housing Act 1985 in the October—December quarter. My right hon. Friend the Secretary of State for Wales has responsibility for these matters as they affect the Principality.
    Mrs. Clwyd: Is the Minister not thoroughly ashamed of the fact that there are twice as many homeless people now as in 1979; that in our wealthy society people are living in cardboard boxes and in unhealthy and overcrowded accommodation, and that councils are allowed to buy bed-and-breakfast accommodation but are prevented from using their money more wisely and economically by building homes for people? Why has the Chancellor done nothing for the poor and the homeless?
    Mr. Roe: The primary responsibility for helping the homeless rests with local authorities under the Housing Act 1985. It is for local authorities to decide how to fulfil their duties.
    Homelessness is a long-standing problem and the increase reflects the underlying social changes. I advise the hon. lady that there are now more divorces—we have the second highest divorce rate in Europe— that there are more illegitimate births and that more young people are now leaving the family home.
    Mr. Bowis: Will my hon. Friend put the problem into context by giving the number of vacant homes that are owned by local authorities and the number of homes that are lost to housing by the Labour party's Rent Act?
    Mrs. Roe: There are more than 112,000 empty local authority properties, and no fewer than 25 per cent. of them have been empty for more than one year. Local authorities must make better use of their existing housing stock. The number of local authority properties standing empty for more than a year is nearly three times the number of families who are in bed-and-breakfast accommodation. We have sought to help to get empty local authority properties back into use through our estate action scheme. We have approved schemes totalling nearly £5 million for 1,200 dwellings since August 1986 and, more recently, through our £25 million supplementary allocation.
    Mr. Soley: Only this Minister could believe that dealing with divorce will help the homelessness. Is she not aware that 200,000 families applied to be registered as homeless and that 100,000 were accepted, which is an all-time record? Is she not aware that this Government have cut public housing investment by two thirds and that that is what is causing the problem? Is she not aware that local authorities have less of their stock empty than the private sector or housing associations or, above all, the Government sector, which has no less than 6·9 per cent. of its housing stock empty?
    Mrs. Roe: There is a reduction in local authorities' allocations from £1,360 million in 1987–88 to £1,290 million in 1988–89, but that is more than offset by the increase in capital receipts available to local authorities. Overall, local authorities' capital spending will increase by 4 per cent. The Government have urged that priority should be given to those in special need, and homelessness is taken into account when determining those allocations.

    Rating Reform
    Mr. Forth: To ask the Secretary of State for the Environment what information he has on research into the likely effect of the community charge on voting turnout at local elections.
    Mr. Howard: A recent NOP opinion poll found that nearly a quarter of those surveyed said they would be more

    1099
    likely to vote in local elections when the community charge is introduced. That is a clear sign that our proposals will revitalise local democracy and lead to improved accountability.
    Mr. Forth: I am encouraged by my hon. and learned Friend's reply. Does he agree that when voters receive the bill through their doors their minds will be concentrated wonderfully? Is he not optimistic that the long-broken relationship between representation and taxation will at long last be re-established under his community charge proposals?
    Mr. Howard: Yes, my hon. Friend is right. I believe that that is what accounts for the panic and hysteria with which the Opposition greet our proposals.
    Mr. Andrew Welsh: Does the Minister agree that it will be in the implementation of the poll tax that the first signs of its effects will be seen? Is he aware of the answer given me by the Scottish Office, showing that, far from the expected increase in electorates over the next two years, this year there has been a fall in the electoral rolls in 52 of the 72 Scottish constituencies? In particular, all but one of the city constituencies have fewer voters registered. Are not those the first signs of the effects of the poll tax?
    Mr. Howard: No, they are not. I listened to the responsible officer for Strathclyde, who, in an interview on the radio, attributed the fall in registration for electoral purposes to the fact that those such as students, who are entitled to register at two addresses, are now registering at one rather than two. That cannot be attributed to the community charge, nor is it in any sense a sign that people will be less likely to register on the electoral roll.
    Mr. Cormack: With regard to the point made by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth), is not the historic slogan, "No taxation without representation," rather than the other way round?
    Mr. Howard: All aspects of these matters must be considered, and the essence of the point was that put by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth).
    Mr. Doran: Is the Minister aware that in my constituency of Aberdeen, South, 63,000 electors were registered at the June 1987 election, but in the draft register published in December that figure had fallen to 58,000? Can he explain where the 5.000 went?
    Mr. Howard: A number of factors could account for that. I referred to one earlier. There is also a known tendency for fewer people to register after a general election than before it.
    Mr. Baldry: Does my hon. and learned Friend agree that it is common sense that more people will be encouraged to vote after the introduction of the community charge because they will wish to hold their local authorities accountable to them? Does he not think that those who vote will be more inclined to vote for candidates and parties that are prudent and efficient than for those that are profligate and wasteful?
    Mr. Howard: My hon. Friend is quite right. I cannot believe that anyone in the House takes any comfort from the fact that in the last local elections fewer than half the electorate bothered to vote in elections in the metropolitan
    1100
    districts. That is intolerable. One of the great advantages of the community charge is that it will go a long way towards remedying that.

    Chlorofluorocarbons
    Mrs. Ray Michie: To ask the Secretary of State for the Environment what plans he has to introduce legislation on chlorofluorocarbons.
    Mr. Moynihan: On 21 March the European Communities' Council of Ministers will have a first exchange of views on the Commission's proposals for implementing the Montreal protocol on substances that deplete the ozone layer. That will enable us to consider the extent to which legislation, at Community or national level, will be necessary.
    Mrs. Michie: Will the Minister consider introducing legislation to make it compulsory for manufacturers to list the CFCs in their products, particularly, as he said, as we know that they lead to the destruction of the ozone layer?
    Mr. Moynihan: It would be quite wrong to pre-empt the discussions that start next week with legislation. Obviously, we shall need to examine the range of options that the European Community is addressing — from regulations to directives. If a European-wide directive emerges, there will be no need for national legislation.
    In answer to the second point, a number of companies are responding to the hon. Lady's wish and are using the slogan, "ozone friendly," which is to be commended.
    Mr. Summerson: Will my hon. Friend consider strengthening the BS standard on air-conditioning systems in vehicles to ensure that the coolant that they use, which is swarming with chlorofluorocarbons, does not leak?
    Mr. Moynihan: That was an important point at the centre of the discussions with the Americans when we began negotiating on 16 September in Montreal. It will certainly he looked at in more detail in the discussions that start next week in the Community.
    Mr. Wigley: Does the Minister accept that this is perhaps the most important matter that we shall face this week or any other? Because of that, will he say what resources the Government are providing for research into it?
    Mr. Moynihan: I totally agree with the hon. Member that this is a critically important issue for environmental protection. I welcome the fact that action was taken in international forums before the scientific data came along to demonstrate that there is a major problem. More research is required and is currently going on. I will ensure that the hon. Member has details of the specific sums involved as soon as they become available.

    Rent Arrears
    Mr. Gerald Bowden: To ask the Secretary of State for the Environment whether he will meet councillors of the London borough of Southwark to discuss the level of rent arrears in the borough.
    Mrs. Roe: This would serve no useful purpose. The Government have already offered advice and assistance to the London borough of Southwark to help it to reduce rent arrears from their present scandalous level of £14 million — by far the worst in the country. The responsibility is that of Southwark.
    Mr. Bowden: I am interested in my hon. Friend's reply. The figure that I had heard mentioned was £30 million in relation to rent and possibly rate arrears. Can she say what this represents in cost per household? Has the time not come to put commissioners in to do the job which Southwark council is unable or unwilling to do itself?
    Mrs. Roe: I know that Southwark's performance on rate arrears is equally deplorable. The arrears stand at
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    nearly £14 million, bringing the total of all arrears, as my hon. Friend has said, to £28·5 million. That is equal to £462 per tenant household. In effect, Southwark's hard-pressed ratepayers are subsidising the inefficiency of the borough's housing department to the tune of nearly £19 million. That is an appalling indictment. I have noted what my hon. Friend has said.

Sharpeville Six
3.30 pm
Mr. Gerald Kaufman(by private notice): To ask the Secretary of State for Foreign and Commonwealth Affairs what reply has been received from the South African Government to the representations made by Her Majesty's Government that President Botha should see fit to exercise the prerogative of mercy in respect of the Sharpeville six.
The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): No reply has been received. The best outcome would be the exercise of the prerogative of mercy by President Botha.
Mr. Kaufman: I am grateful to the right hon. Lady for her reply. I trust that she will keep the House informed of any response that comes from the South African Government.
I am sure that the right hon. Lady will be aware that the response of the international community to the threatened executions has been overwhelming and unprecedented, and that today the European Commission has called in the South African ambassador to that body and asked for clemency and the abandonment of the executions. I understand that the United Nations Security Council will consider this issue later today. May we have the right hon. Lady's assurance that the representative of the United Kingdom will both speak and vote for a clemency resolution?
The House greatly welcomed the Prime Minister's firm statement yesterday opposing the hangings, and the Minister of State herself has rightly declared that if the South Africans ignore international appeals we must be sure that we have done all we can. In that spirit, may I ask her to urge the Prime Minister this afternoon to pick up a telephone and speak directly to President Botha, urging him personally to stop the hangings?
One of the condemned people, Theresa Ramashamola, has said that Jesus died for the sins of others and that she is ready to die like Jesus. In what the Prime Minister herself has described as the very unusual circumstances of this particular case, will she make that telephone call to prevent the martyrdom of Theresa Ramashamola and her five fellow victims?
Mrs. Chalker: We are playing a constructive role in the United Nations Security Council in securing a suitable text which we expect to emerge shortly.
As my right hon. Friend the Prime Minister said yesterday, we have done everything in our power to help. In early 1986, our then ambassador expressed to the South African Deputy Foreign Minister our concern at the allegations, made in the course of the original trial of the Sharpeville Six, of torture being used against three of them to extract confessions. Once their appeals had been rejected, we took bilateral action with the South African Government on several occasions — at least three formally and several others informally. We also supported representations made by the German presidency on behalf of the European Community, as well as the statement by the President of the Security Council in December 1987. I cannot add any more to what my right hon. Friend told the Leader of the Opposition in the House yesterday.
Mr. Andrew Hunter: While hoping unequivocally that clemency will be exercised and that the
1104
defence lawyers' last efforts will be successful, may I nevertheless draw my right hon. Friend's attention to the appeal court judgment, a copy of which I have recently obtained? It contains assertions and facts not yet reflected, to the best of my knowledge, in the United Kingdom media. I hope that the House and you, Mr. Speaker, will bear with me—
Mr. Speaker: Order. This is question time.
Mr. Hunter: In that case, Mr. Speaker, let me simply say that the appeal court judgment contains evidence of the direct involvement of the accused. I ask my right hon. Friend to comment on that.
Mrs. Chalker: I cannot comment on that. I believe that the House already knows that it is our long-held policy to make representations only in cases that are clearly political when there are extenuating circumstances and strong humanitarian grounds for such action. Our appeal is on humanitarian grounds, and such an approach has the best chance of success.
Sir Russell Johnston: Does the Minister agree that the humanitarian grounds are not simply strong; they are overwhelming? Surely she agrees that there is no precedent for any country claiming to be civilised to put to death six people who have not directly committed the crime with which they are charged? In view of what has already been said by the right hon. Member for Manchester, Gorton (Mr. Kaufman), will the Minister urge the Prime Minister to follow the example of Chancellor Kohl, and lift a telephone and ask President Botha to change his mind?
Mrs. Chalker: The Chancellor of the Federal Republic is acting in his role as President in Office of the European Community. I believe that the overwhelming nature of this case is what prompted all the appeals that have been repeatedly made for clemency. I do not think that, in the particular circumstances of the case, any more can be done. All that could be done is being done now.
Mr. Michael Grylls: Does my right hon. Friend accept that, while it is understandable that humanitarian views have been expressed, in the House today and when the matter was raised with the Prime Minister, we should be slightly careful about interfering with another country's system of justice when a criminal case is before the courts? If that happened in Britain, people in this country would understandably resent it very much.
Mrs. Chalker: I understand what my hon. Friend has said. It was because we were aware of the continuing efforts by lawyers on behalf of the Sharpeville six that I did not comment further.
Mr. Ernie Ross: Surely the Minister can take from the House this afternoon the point that is being repeatedly made by the Opposition. The Prime Minister has made it clear that she is a friend of South Africa, in that she does not wish to impose sanctions. Surely that is the best reason why she should be the one to pick up a telephone and suggest that President Botha should exercise clemency.
Mrs. Chalker: Sanctions have nothing to do with this case. My right hon. Friend the Prime Minister has expressed her hope that President Botha will see fit, even

1105
at this late stage, to exercise the prerogative of mercy, and that is exactly what the South African Government have been told.
I find it deplorable that the Opposition should seek to turn this human tragedy into a party political issue.
Mr. Eric Forth: Is this really any of our business? Is my right hon. Friend satisfied with the judicial procedures of every country in the world? Will she seek to intervene where she is not satisfied with those procedures in any other country, for example, in Africa? Has she sought to intervene in the recently reported execution for fraud in the People's Republic of China? Where will this end? Is not my right hon. Friend a little worried that in singling out a case such as this she is setting a precedent for gratuitous interference in the judicial processes of many other countries?
Mrs. Chalker: I refer my hon. Friend to what the Prime Minister said in this House yesterday. It is the particular circumstances of the case that have led my right hon. Friend to express the hope that
"President Botha will see fit, even at this late stage, to exercise the prerogative of mercy." —[Official Report, 15 March 1988; Vol. 129, c. 991.]
I will not comment on the internal judicial and legal procedures of other countries.
Mr. Andrew Faulds: Since it is quite clear that the South African apologists on the Conservative Benches do not support the Prime Minister's representations to President Botha, would it not perhaps strengthen her representations, in her own interests, were she to make it clear that she and her Government will now contemplate the imposition of sanctions?
Mrs. Chalker: No, Mr. Speaker.
Mr. Simon Burns: Is my right hon. Friend aware that the actions of the Prime Minister in these extraordinary circumstances are to be warmly welcomed? Is she also aware that if, sadly, the executions take place on Friday they will lead to revulsion and horror throughout this country and the world and will make a mockery of the word "justice"?
Mrs. Chalker: I cannot believe that the entire South African Government are not already aware of the revulsion throughout the world at the impending sentences of death on the Sharpeville six. My hon. Friend is absolutely right to welcome the Prime Minister's statement given in answer to a question from the Leader of the Opposition yesterday. We have all along taken the stance outlined in my right hon. Friend's statement, and we sincerely hope that the prerogative of mercy will be exercised.
Mr. Peter L. Pike: Will the Minister make it clear to the Prime Minister that she should tell the South African Government that if they are not prepared to concede clemency in this case, in response to worldwide demand and the demands of our ambassador, even she will find it necessary to cease to maintain normal diplomatic relations with them—given that they are not prepared to take any notice of such relationships?
Mrs. Chalker: I must point out to the hon. Gentleman that all the representations that have continued to be made in this case, as in many other cases, simply could not be made if we were not properly represented within the Republic of South Africa.
Mr. Tony Baldry: Does my right hon. Friend agree that if, alas, these executions take place, the opprobrium, blame and shame of that will be the South African Government's and the South African Government's alone?
Mrs. Chalker: Yes, Sir.
Mr. Eric S. Heffer: As somebody who opposed the Soviet movement into Afghanistan, who has consistently supported the rights of the Czechs to freedom, who supported the rights of the people in the Soviet Union to have free trade unions, who supported the fight against dictatorships in Chile and elsewhere, and who does not have double standards regarding the rights of freedom for people throughout the world, and accepting that the Prime Minister has done a good job in getting our ambassador to make representations, could she not nevertheless, even at this late hour—I am not trying to blame her — put pressure on Botha to whom she apparently still talks? Could that not be done as a last-minute effort to try to save these people, four of whom I understand are supporters of the justice and peace movement of the Roman Catholic church?
Mrs. Chalker: We shall continue to do all in our power to get the South African state President to respond to the worldwide, widely shared appeals, which are supported by practically every person in this House, for the exercise of the prerogative of mercy.
Dame Elaine Kellett-Bowman: Is my right hon. Friend aware that the communication that most hon. Members have received today contains none of the observations made by my hon. Friend the Member for Basingstoke (Mr. Hunter)? Is she further aware that, although I support capital punishment, I am fully behind my constituents in backing the Prime Minister in seeking clemency for these people?
Mrs. Chalker: This is a very special case, as my right hon. Friend the Prime Minister said yesterday, and it bears no relation to the other matters that my hon. Friend mentioned. I have not seen the round robin letter that was sent by the South African embassy, but I am not surprised by what my hon. Friend has said.
Mr. Brian Wilson: The Prime Minister has used such phrases as "do all" and "do everything in our power". Does the right hon. Lady believe that the use of those phrases is accurate if the Prime Minister will not take the basic step of lifting the telephone and making personal contact with President Botha, thereby doing what the families of the Sharpeville six want her to do?
Mrs. Chalker: It has long been the case that diplomatic channels are always used for representations of this kind. A senior official of the Prime Minister's private office saw relatives of two of the Sharpeville six yesterday and made it quite clear that we would use all the proper channels, and that we are doing.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard to the fact that there is great pressure on the Budget debate and that this is a private notice question. I shall call two more hon. Members from each side of the House.
Mr. James Couchman: Like many hon. Members, I am sure, I have written to the South African

1107
ambassador to urge clemency. Is my right hon. Friend aware that those who have resisted the blandishments of the Left to wreck the South African economy by imposing mandatory sanctions will nevertheless find it increasingly difficult to support evolutionary change in South Africa if this step towards barbarism is taken and those six people are executed, apparently as a warning to those who might indulge in riotous assembly?
Mrs. Chalker: I sincerely hope that even at this late stage common sense and understanding will prevail in South Africa. Whatever happens, the process of evolution in South Africa is one for which everybody must work. We hope that that will be done through dialogue and not through violence.
Mr. Greville Janner: Will the right hon. Lady completely repudiate the suggestion that was made twice by her hon. Friends, that the proper representations made by the Government amount to an interference in the affairs of South Africa? Will she state, having regard to the extraordinary failure of the South Africans to reply to the representations made by the Government, what further steps she proposes to take to avert this incipient tragedy, which would appal the vast majority of hon. Members?
Mrs. Chalker: I must say to the House, with some regret, that I do not think that the questions being asked are helping the Sharpeville six. What is helping them are the representations that are being made and will continue to be made for as long as it is necessary. I understand the hon. and learned Gentleman's point about some of the views that have been expressed. The Government, as my right hon. Friend the Prime Minister told the House yesterday, sincerely hope that in this particular circumstances the state President in South Africa will see fit to exercise the prerogative of mercy. It is to that end that we shall work unceasingly.
Sir Ian Lloyd: As one who is opposed to judicial murder at any time, in any place or in any country, I hope that the appeal for clemency will succeed. Should we not make it clear to the President of South Africa that we are appealing not only for clemency for those six individuals but for him to show clemency for the reputation of his country?
Mrs. Chalker: I thank my hon. Friend for what he has said. I completely endorse his comments.
Mr. John Home Robertson: What is the good of maintaining diplomatic or trading relations with a regime that conducts itself in the way that the South African regime is threatening to do on Friday?
Mrs. Chalker: A phrase that was once used was that talking is far better than anything else. I believe that that is right. All I hope is that there is listening as well as talking. Without listening by the South African Government to the views of the whole world, there will be no respect whatsoever for that country.

Belfast Funeral (Shooting Incident)
3.50 pm
Mr. Seamus Mallon: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have consideration, namely,
"the shooting incident at the funeral today in Belfast of the three people shot by security forces in Gibraltar."
Right hon. and hon. Members may be unaware that the incident has taken place. After the funerals had been concluded peacefully and with dignity, there was an attack on the mourners. Three people have already been killed and 23 people have been seriously injured.
Over the past 20 years, we have seen many instances of the obscenity of violence. This one involves the desecration of consecrated ground in a cemetery. The type of sacrilegious act that we have seen today must revolt every person who is aware of the enormity of the type of crimes that we have seen. Those of us who have condemned and will continue to condemn every act of violence from wherever it may come must be aware of the implications of the terrible assault today.
Over the past 20 years, we have become the killing fields of Europe. On public television, on the first day of this week, the Ulster Defence Association, which is not banned or proscribed, clearly announced to the people of the North of Ireland that it was stepping up its campaign against the Catholic community in Northern Ireland. As a result of that, one young man was shot at his work yesterday morning and at least three people have been killed today.
In the light of that announcement and the horrific offences today, we must take this opportunity to ensure that the voice of the House is heard again calling upon the Government to ensure that that organisation, which is committed to bloody murder, is proscribed, as it should have been long ago.
Mr. Speaker: The hon. Member has asked leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing an important and specific matter that he believes should have urgent consideration, namely,
"the shooting incident at the funeral today of three persons shot by security forces in Gibraltar."
I have listened with great concern, respect and sympathy to what the hon. Member said. As he knows, my sole duty in deciding whether a matter should be given precedence over the Orders of the Day is to decide whether it meets the criteria laid down. I regret that I cannot find that that is so, and, therefore, I cannot submit his application to the House.
Mr. Frank Dobson: On a point of order, Mr. Speaker. We understand that news of the awful events in Northern Ireland is still coming in. Will you confirm that, should the Government wish to make a statement this evening, you or your deputies will facilitate the making of a statement? In view of the grievous events in Belfast, the sooner the matter is reported to the House the better.
Mr. Speaker: I fully understand the concern of the whole House about the matter. Of course I shall bear carefully in mind what the hon. Member has said.
Mr. Merlyn Rees: Further to that point of order, Mr. Speaker. I realise the difficulty of the situation and that statements are statements, but when tit-for-tat killings start, little can be done. Through you, Mr. Speaker, I ask the Secretary of State to use the available channels to get messages to the heads of the paramilitary organisations telling them that, unless they assert control, the bloodshed will go on for weeks, that the House has had enough of it, and that something must be done. The authority is in Northern Ireland, and the British security forces can play little part in this.
Mr. Speaker: I fully appreciate what the hon. Gentleman has said. His background will, I know, ensure that his comments will be carefully noted.

BILLS PRESENTED
  SCHOOL BOARDS (SCOTLAND)
  Mr. Secretary Rifkind, supported by Mr. Michael Forsyth and Mr. Norman Lamont, presented a Bill to make new provision for the government of public schools in Scotland; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 122.]
  CROWN PREROGATIVES (HOUSE OF COMMONS CONTROL)
  Mr. Tony Benn, supported by Mr. Jeremy Corbyn, Mr. Bill Michie, Mr. Eric S. Heffer, Mrs. Alice Mahon, Mr. Bernie Grant, Ms. Dawn Primarolo, Mr. Harry Cohen, Ms. Mildred Gordon, Mr. Tony Banks, Ms. Diane Abbott and Mr. Dennis Skinner, presented a Bill to extend and entrench the democratic rights of the electors of the United Kingdom, through their representatives in the House of Commons, over all Crown prerogatives that do not, at present, derive from statute; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 117.]

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I shall put together the first five statutory instruments on the Order Paper. I understand that the sixth is not to be moved.
Ordered,
That the draft Financial Services Act 1986 (Stabilisation) Order 1988 be referred to a Standing Committee on Statutory Instruments, &c.
That the Financial Services Act 1986 (Extension of Scope of Act and Meaning of Collective Investment Scheme) Order 1988 (S.I., 1988, No. 496) be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Financial Services Act 1986 (Investment Advertisements) (Exemptions) (No. 2) Order 1988 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Financial Services Act 1986 (Delegation) (No. 2) Order 1988 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) Regulations 1988 be referred to a Standing Committee on Statutory Instruments, &c. —[Mr. Peter Lloyd.]

Scottish Grand Committee
Ordered,
That, in the course of its consideration of the matter of Education in Scotland, the Scottish Grand Committee may meet in Edinburgh on Monday 21st March at half-past Ten o'clock.—[Mr. Peter Lloyd.]
3.54 pm
Mr. David Steel: May I raise a point of order, Mr. Speaker, concerning section 3 of Standing Order No. 94, under which the motion on the Scottish Grand Committee was moved?
You, Mr. Speaker, will recall that last December, when a similar motion was moved, it was blocked under the terms of the Standing Order by some 20 hon. Members rising in their places. I should have thought that the fact that the meeting did not take place would have taught the powers that be a lesson, and we would have had adequate notice, the lack of which we were protesting against on the last occasion.
I have letters from successive Government Scottish Whips dated December 1986 and December 1987, accepting the need for at least two weeks' notice, and probably more, of the meeting of the Scottish Grand Committee in Edinburgh. Indeed, when the Standing Order was drafted, and consultation took place through the usual channels, it was accepted that the meeting should take place on the date of Welsh questions in the House, of which there is usually four to five weeks' notice.
Now we have been given five days' notice. That is wholly inadequate. My home and constituency happen to be near Edinburgh and I have only to cancel an industrial visit in my constituency, but other hon. Members are required to leave early on Sunday evening to get to the meeting. The hon. Member for the Western Isles (Mr. Macdonald) and my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), if they are to attend the meeting at 10.30 on Monday morning, will have to leave home on Saturday afternoon.
It is a scandalous and arrogant abuse of the Standing Order to put down a motion of this kind at such short notice. I would normally be asking you, Mr. Speaker to refer the matter to the Select Committee on Procedure for a tightening of the Standing Order, but that Committee has not been set up since the general election. Therefore, I ask you, Mr. Speaker, as the custodian and protector of the interests and rights of hon. Members in whatever part of the House they sit, to advise us how we can prevent the repeated misuse of the Standing Order without losing the meeting altogether through further blocking action.
Mr. Speaker: I appreciate what the right hon. Member has said. Unfortunately, as he correctly states, there is no Procedure Committee. I shall consider what he has said, but it is not a matter for me if motions are put on the Order Paper. If the right hon. Gentleman objects to a motion, he should voice his objection, and, provided that 20 hon. Members stand, the motion will not go through.
Later—
Sir Russell Johnston: On a point of order, Mr. Speaker. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) raised a point of order about Scottish business, and I wish to ask you one question. You said that the proper course would be to object as we did on the previous occasion, but that would result in putting off a meeting

1111
that we are not against having. We are seeking some way whereby civilised, sensible and decent warning can be given. Surely something can be done.
Mr. Speaker: The hon. Gentleman knows that I am not responsible for motions on the Order Paper. The House decides whether or not to accept them. The best course for the hon. Gentleman and his colleagues would be to have discussions through the usual channels about the shortage of time. I fully appreciate the point made by hon. Members.
Mr. James Wallace: On a point of order, Mr. Speaker.
Mr. Speaker: Order. The hon. Gentleman is the Chief Whip of the alliance party, and I must tell him that a large number of hon. Members wish to speak in today's debate, including a number from his party.
Mr. Wallace: The point made by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) was that the usual channels had singularly failed to ensure that the Government adopted decent procedures towards hon. Members. We are looking to you, Mr. Speaker, to protect our position, which is why we raised the point of order.
Mr. Speaker: Unfortunately, I cannot help. As the hon. Member for Bolsover (Mr. Skinner) reminded the House—it is something on which I do not readily look back these days—I used to be in that position, but I am no longer there.

Standing Order No. 39
3.57 pm
Mr. Patrick Cormack: On a point of order, Mr. Speaker. May I refer to Standing Order No. 39, which states:
Mr. Speaker or the chairman may, after the lapse of two minutes if in his opinion the division is unnecessarily claimed, take the vote of the House, or committee, by calling upon the Members who support, and who challenge his decision, successively to rise in their places; and he shall thereupon as he thinks fit, either declare the determination of the House or committee, or name tellers for a division."
1112
This is not to be taken in any sense as a criticism of you, Mr. Speaker, or of any occupant of the Chair. On a number of occasions recently, the occupant of the Chair has seen fit to name a Member. When the occupant of the Chair does that, he is, in effect, asking for the support of the House in upholding his authority and the authority of the House.
I respectfully suggest that the Standing Order could be used on those occasions in future to the profit of the House. If the occupant of the Chair were to say simply, "Does the Chair have the support of the House?", hon. Members could then rise, and if they demonstrated by overwhelming numbers that they supported the Chair, the business of the House could proceed.
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker. Standing Order No. 39 used to be Standing Order No. 35 and it was used on rare occasions by Mr. Speaker. It was not used in the way that the hon. Member for Staffordshire, South (Mr. Cormack) described. It was used to allow Mr. Speaker to call a Division when it was possible, with only a few hon. Members in the Chamber, to discern, by counting in the Chamber, that the Division could take place in that fashion. However, when the House is full and Mr. Speaker cannot make that count, to have a Division is nonsense.
You, Mr. Speaker, will recall that, when you were Deputy Chief Whip for the Tory party in opposition, there were occasions when the previous Speaker used that method. On every occasion that it has been used since I have been a Member of Parliament, there have been a relatively small number of Opposition Members willing to take on the Government. It was usually during a sitting that continued throughout the night.
I am not trying to incite you for the future, Mr. Speaker, but that is the only time it can be used, so that the Speaker is absolutely clear that there is only a small number of hon. Members present. If it were to be used in the circumstances that that so-called democrat suggested, the net result would be to close the Division lobbies and just leave it to Mr. Speaker and the hon. Gentleman.
Mr. Speaker: We have a very heavy day ahead of us, and this matter was raised yesterday. The Chair is aware of the various options under Standing Order No. 39, and always takes them into account. I am inclined to the view expressed by the hon. Member for Bolsover (Mr. Skinner).

Road Traffic (Blood Alcohol Concentration Limit)
4.2 pm
Mr. Roland Boyes: I beg to move,
That leave be given to bring in a Bill to amend the Road Traffic Act 1972 to lower the prescribed blood alcohol concentration limit from 80 milligrammes of alcohol to 100 millilitres of blood, to 50 milligrammes of alcohol to 100 millilitres of blood:
This is the second time that I have had the opportunity to introduce a ten-minute Bill drawing the attention of the House to the scourge of drinking and driving. It is an appalling social evil that must be combated with urgent and dramatic solutions. There is a desperate need for counter-measures to make people think very carefully both about the possibility of being caught and about the serious consequences of driving after drinking.
The Bill is concerned with lowering the legal limit of blood alcohol concentration. In November last year, I obtained the support of the House to bring in a Bill to introduce random breath tests. That is still the top priority —the most important initiative needed to stop drinking and driving. However, there is clearly a need to change the legal limit of blood alcohol concentration levels, and that is the issue with which I am dealing today.
The Bill calls for a reduction in the blood alcohol level from the current 80 mg to 50 mg. I shall present my reasons for supporting a level of 50 mg and detail some of the considerable amount of scientific research that justifies it.
In 1967, the current level of 80 mg was set because that was thought to be the point at which excess accident risk occurred. However, 20 years later there is widespread agreement among experts, in both the United Kingdom and abroad, that the point at which excess risk is reached is much lower — at about 60 mg and, for young and experienced drivers, even lower. During the past 10 years, hundreds of experiments under laboratory conditions have studied the relationship between driving impairment and alcohol intake levels. They support the view that there are different degrees of impairment for a number of driving-related variables—for example, reaction time, tracking skills, vigilance and perception—at well below the 80 mg level.
Another accepted method of determining the effect of alcohol risk is to study real accidents, and those studies also recognise that impairment can occur at or even below the 50 mg level. In studies where the driver was subjected to a series of complicated tests, there appeared to be no blood alcohol concentration level below which impairment could not be said to exist. That means that even a tiny amount of alcohol can affect a driver's judgment.
Mr. Anthony Beaumont-Dark: The hon. Gentleman is a kind man, but he is talking exaggerated nonsense.
Mr. Boyes: The hon. Gentleman might regret that remark one of these days.
The 50 mg level is used in New South Wales, Australia, and in a 1985 review its traffic authorities concluded that any relaxation in the 50 mg limit could only
"lead to an increase in traffic crashes, injuries and deaths."
Further evidence for changing the legal limit is shown in the Grand Rapids study conducted in Michigan in the
1114
1960s, which included 6,000 accident-involved drivers. Analysis of that data was used to set the current British legal limit.
The data have since been reanalysed, and they suggest that, in fact, the risk of causing an accident or death is significantly greater for the majority of people at the 60 mg level, not at 80 mg.
There is no doubt that if accidents are to be avoided, drivers must be persuaded that only a small amount of alcohol can impair their judgment. I am convinced by the weight of available scientific evidence that at 60 mg the accident risk is too high and that at 50 mg judgment is badly impaired. Clearly, the best advice is that people should not drink and drive. If they feel it necessary to have a drink, they should realise that after a very small amount of alcohol they would not drive with the same proficiency as they would without any alcohol in their blood, even when driving on a full stomach or after drinking coffee. Such drivers are a menace to themselves, to other road users and to pedestrians.
As part of the process of discouraging drinking arid driving, it would be useful if the Minister would amend his leaflet "Key facts about drinking and driving", which he recently distributed to all of us. He is clearly mistaken in defending the present legal limit. My case for a 50 mg level is supported by the fact that I can name at least 11 countries, including Australia, Japan and some of the American states, that have set their legal limit at 50 mg.
Perhaps the Minister is concerned that a lowering of the limit would be unpopular. I can allay his fears by telling him that public opinion is in favour of a change in the law. A survey last autumn by the Guild of Experienced Motorists, carried out on a representative sample of its membership, found that 71 per cent. of respondents were in favour of a reduction in the legal limit to 50 mg.
In a statement two weeks ago, the Church joined the growing body of support for a reduced limit and for random breath testing. A survey by Gallup in 1987 revealed that drinking and driving was perceived by the public to be by far the greatest single killer compared with other social concerns such as drug-taking, AIDS and murder. Almost one in 10 motorists claimed to have lost a friend in a drink-driving accident, while one in 20 had lost an immediate relative.
Following my previous ten-minute Bill I received many heart-rending letters from those who had suffered such a loss, describing their thoughts and emotions. One woman, whose 21-year-old son was killed by a drunk driver, wrote:
Every day is a nightmare knowing my son is dead. People don't understand the pain and misery we are going through … and say, 'Try to rebuild your lives'. But how can we when part of us has gone?"
I am equally saddened by those who have written to inform me that they can drive equally well, if not better, after drinking. One recent letter said:
The legal limit, about 2 pints of draught bitter, is ridiculously low for a seasoned drinker who can hold his drink, although it would be ample for the young yob."
Such contemptible attitudes demonstrate that there is clearly a need for urgent Government action.
The carnage must stop. It is tragic enough to lose a friend or relative through natural causes but to lose a loved one because some ignorant, arrogant, anti-social fools and cranks believe that they can drink and drive is appallingly wrong. Three people are killed on our roads every clay as a consequence of drinking and driving. More than 1,000 lives a year are destroyed—equivalent to a King's Cross

1115
disaster every 10 days—yet drink-driving deaths are so accepted by many that they get no dramatic headlines. Drink-driving costs 30 lives every 10 days, and it must stop.
I hope that I have demonstrated to the satisfaction of hon. Members that urgent action is needed to stop this needless slaughter on our roads. I hope also that the weight of scientific evidence available, which confirms that the present level of 80 mg is far too high, will be taken seriously into account by the Minister. In view of the widespread support from the vast majority of people for changes in the law on drinking and driving, I ask for the support of the House of Commons for my Bill, which is backed by hon. Members from all political parties.
Question put and agreed to.
Bill ordered to be brought in by Mr. Roland Boyes, Mr. Don Dixon, Mrs. Ann Clwyd, Mr. Barry Sheerman, Mr. Andrew F. Bennett, Mr Ray Powell, Dr. Lewis Moonie, Mrs. Alice Mahon, Mrs. Rosie Barnes, Mrs. Margaret Ewing, Sir Bernard Braine and Mr. A. J. Beith.

Road Traffic (Blood Alcohol Concentration Limit)
  ROAD TRAFFIC (BLOOD ALCOHOL CONCENTRATION LIMIT)
  Mr. Roland Boyes accordingly presented a Bill to amend the Road Traffic Act 1972 to lower the prescribed blood alcohol concentration limit from 80 milligrammes of alcohol to 100 millilitres of blood, to 50 milligrammes of alcohol to 100 millilitres of blood: And the same was read the First time; and ordered to be read a Second time upon Friday 8 July and to be printed. [Bill 121.]
Orders of the Day
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [15 March].
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    Motion made, and Question proposed,
    That it is expedient to amend the law with respect to the natonal debt and public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

    (a) for zero-rating or exempting any supply;

    (b) for refunding any amount of tax;

    (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

    (d) for relief other than relief applying to goods of whatever description or services of whatever description. — [Mr. Lawson.]

    Question again proposed.

  Budget Resolutions and Economic Situation
  [Relevant documents: European Community Document No. 9561/87, Annual Economic Report 1987–88 and the unnumbered document, Annual Economic Report 1987–88 (final version as adopted by the Council).]
  Mr. Speaker: I repeat that a large number of right hon. and hon. Members seek to participate in the debate. Because there is no limit on speeches, it would be helpful if Privy Councillors, who may be called earlier than other hon. Members, set a good example.
  4.12 pm
  Mr. John Smith: The Budget which was presented to the House yesterday is an outrage. It is immoral, wrong, foolish, divisive and corrupting. As its full import began to sink in towards the end of the Chancellor's statement yesterday, I looked across at Conservative Members. A significant number did not wave their Order Papers or cheer the Chancellor on. Quite a number looked askance or troubled, and a few even looked concerned because they knew that what was happening was not right.
  Let us never forget that, in a country where there are still millions of people, young and old, thrown on the scrap heap of unemployment, where our Health Service is on the edge of collapse and where we have a growing underclass living in ever deepening drabness and despair, it is not right to slash the rates of tax for the highest paid and redistribute the tax collected to the tune of £2 billion and give it all—every penny piece—to those whose earnings and wealth have already been ostentatiously increased in recent years. No Budget in this century has more savagely redistributed the proceeds of taxation towards the super-rich. There is a simple rule about this Budget: the more you earn, the more you gain; the more you have, the more will be given unto you.
  A married man who earns £200,000 a year—not a fanciful figure in modern Britain—gains £33,314, over £640 each week. That is enough. I remind Conservative Members, to keep open the hospital ward in Wales which the Queen Mother opened and which is now closing because of the shortage of funds.

  1117
  When the Budget is stripped of its frills and when its contents are disentangled from its frequently misleading packaging, it is clear that the percentage of GDP raised in tax hardly changes from last year to the coming year. Last year it was 38 per cent.; this year it will be 37·9 per cent. —a fall of merely 0·1 per cent. It is worth recalling that 10 years ago in 1978–79 the proportion was only 33·9 per cent.
  Of course income tax rates have been cut in the Budgets of the Tory years, but our people know only too well that income tax is but one of the taxes that they pay. They pay VAT, which was doubled in this Government's first Budget, excise duties and national insurance contributions — a special extra tax now on those who earn under £16,000 a year—which went up from 6·5 per cent. to 9 per cent. in the Government's earlier Budgets.
  The Budget is essentially about the redistribution of the same proportion of tax, but that redistribution goes from the rest of us to the highest paid. Ten million of our fellow citizens whose pensions, benefits or incomes are so low that they do not even reach the lowest rung of the income tax ladder, gain no benefit from the Chancellor's cut in the basic rate announced yesterday.
  Another 2·5 million people who will be covered by the new social security system, to come into force a few weeks from now, have a cut in the tax rate read straight across to a cut in income support or in housing benefit. For a person on family credit in receipt of housing benefit and receiving £100 a week, the 2p cut in the tax rate will mean a gain of 2p a week or £1·04 throughout the year. I observe in passing that their poverty does not mean that they do not pay the huge increases in indirect taxes which are the hallmark of the Government's tax policies. So many of those who are facing the greatest difficulties get no help from the Budget.
  If we look to the higher ranges, the beneficiaries soon become apparent. The married man on five times average earnings, a salary of £64,000, will save £129 each week from this Budget alone—more than will be provided in income support for five people under 25 when the new social security system is implemented. For that same man on five times average earnings, the reduction in his income tax since 1979 amounts to £182 weekly—more than the total income tax rate for two married couples, each with three children. The top 10 per cent. of households in Britain get 50 per cent. of the concessions provided by the Chancellor. The bottom 50 per cent. get only 10 per cent. of the gains.
  Mr. Tony Marlow: Will the right hon. and learned Gentleman give way?
  Mr. Smith: I shall do so in a second. No wonder there was, and I hope is, some sense of shame among a few Conservative Members. I doubt whether I shall reply to the points raised by the hon. Member for Northampton, North (Mr. Marlow), but I shall give way to him.
  Mr. Marlow: I am grateful to the right hon. and learned Gentleman for giving way. The tragedy is that he has forgotten that taxation is not about punishing people. It is about raising revenue. Those people whom the right hon. and learned Gentleman is banging on about being in the higher tax brackets have been able to employ advisers and have sought tax shelters. By getting those tax shelters,
  1118
  many have paid little tax. The probability is that, after my right hon. Friend's Budget yesterday, those people at whom he is aiming will pay more tax than ever before.
  Mr. Smith: It is interesting to hear the comforting illusions of Conservative Members. The hon. Gentleman knows perfectly well, because he can look it up in the Red Book, that there is a cost to reducing the top rate of tax from 60 per cent. to 40 per cent. It is spelt out clearly for a full year —more than £2 billion. That is the cost of paying the rich in the way that the Chancellor has done. It is a bitter irony that the total to be committed in tax forgone in a full year— the very £2 billion to which I have just drawn the attention of the hon. Member for Northampton, North—to pay for the massive cuts in higher rates is what the Labour party has been campaigning for as the additional money to be spent on our National Health Service.
  When the Chancellor had so much money to spend, why did he choose to ignore the pressing needs of the National Health Service, which is in acute crisis, as the professionals repeatedly tell us? Is it because he does not believe that the money needs to be spent on the National Health Service? Is it that he felt that he did not have the money available because of financial stringency or other pressing priorities? Is it because he felt that the NHS was not a priority favoured by the electorate?
  It cannot be for any one of those reasons. We know that the money is desperately needed by the National Health Service. We know from the evidence of the Budget itself that the money was available. We know from opinion poll after opinion poll that spending on the National Health Service was the public's top priority. I know of only one opinion poll in which people said that they were in favour of tax cuts as opposed to funding for the NHS; it was an opinion poll of Conservative Members.
  Let us examine briefly the evidence of the needs of the National Health Service. Evidence is available from a wide variety of sources, but it all points to the same conclusion about the Health Service. Every piece of evidence that I am about to cite comes from one of two sources — the British Medical Association or the Royal College of Nursing. [HON. MEMBERS: "A vested interest."] I should hope they have a vested interest. They have a vested interest in the National Health Service; we all have a vested interest in the National Health Service. It is a vested interest which I am proud to declare and even more proud to fight for, which is what we shall do during these debates.
  This very month, the BMA's central committee for hospital medical services produced a report that gave a chilling description of what its chairman, Mr. Alexander Ross, describes as
  "a nationwide crisis in the acute hospital sector".
  The report contained the results of a survey conducted by the BMA district representatives on regional committees throughout the country. Let me list some of their conclusions. They found that in England and Wales as a whole, 5,300 hospital beds had been closed in the year to December 1987. Anxious to be scrupulously fair, they excluded 30 per cent. due to the implementation of so-called strategic plans and 11 per cent. due to rationalisation measures. That leaves 59 per cent., or 3,100 beds closed permanently due to short-term financial restrictions. In addition, 2,800 beds have been temporarily closed for varying lengths of time over the same period.

  1119
  It is bad enough to lose so many beds in one year, but the picture looks even worse when we examine the statistics relating to the cancellation of clinical sessions. On a grossed-up basis on an examination over a three-week period, it was discovered that 900 operating theatre sessions had been; put another way, 300 operations each week are not being carried out because of financial restrictions.
  The BMA quotes the remarks of its consultant members who took part in its survey. Those remarks are perhaps more revealing than the bare statistics that I have cited. A consultant in Wales said:
  Everyone is gloomy and sad because the old ideal of providing the best service has been lost and the new one of cutting all possible corners and taking all possible risks in the name of the great god efficiency and savings just doesn't seem to make our hearts beat faster. Everyone is taking to the practice of doing the bare minimum."
  From one end of the country to the other, the devastating evidence emerges that our National Health Service is in acute crisis.
  Dame Elaine Kellett-Bowman: Is the right hon. and learned Gentleman aware of the tremendous difference between bed usage in one part of the country and another, and, indeed, in different parts of the same area? For example, in Lancaster, which is top of the league in the north-west, bed usage is 115·19 per cent. whereas in Salford it is only 97·46 per cent. Is it not important to improve bed usage and the use that we make of the money that we are given?
  Mr. Smith: All that I am doing is to report to the House the evidence of the consultants who work in the National Health Service. With the greatest respect to the hon. Lady, I think that they might know a little bit more about the National Health Service than even she does. Their evidence was that more than 3,000 beds were closed in England and Wales over the past year. I am happy to accept that evidence. Do the Government deny it? We can either believe the Government, who caused the problem, or the Health Service professionals, who are fighting for a future for their own service. I know which the nation will believe.
  There is one great source of comfort about the crisis in the National Health Service. It is not a crisis which arises from a lack of skills or commitment among those who work so hard for us in the Health Service. If that were the problem, the crisis would be grave and the prognosis could only be despairing. Mercifully, the problem is of a different kind: it is principally financial and can therefore be solved financially.
  What makes the Budget all the more mistaken, wrong-headed and morally faulted is that the money is available. The money was there, but the Chancellor chose to spend it on what he thought were more important priorities than our National Health Service. In the months leading up to the Budget, we have argued that new funds are desperately required. The Chancellor could have spent the £2,000 million that we advocated by simply removing the tax concessions for the rich. The plain fact of the matter is that the Chancellor chose not to do that. So all those who work in our Health Service and depend on it have got their answer.
  It is not good enough for the Chancellor to claim that money is not provided for the Health Service in a Budget.
  1120
  He can announce an extra spending programme any time he likes. He could have done it two months or two weeks ago. He could do it today or two weeks hence. He should announce it now because the crisis is now.
  I remind the Chancellor that my right hon. Friend the Member for Leeds, East (Mr. Healey), in his Budget of 1978, not only announced an extra allocation of funding for the NHS, but, as the Royal College of Nursing pointed out in its excellent submission on the Budget, he specified what it was to be spent on: reductions in waiting lists, a number of new staff posts, enough cash to enable newly built hospitals to be opened and the provision of 400 new kidney machines.
  Several Hon. Members rose—
  Mr. Smith: I know that this does not go down well with Conservative Members. They do not like to be told the truth about the crisis in the National Health Service. I know that they like the truth about the last Labour Government even less. In that Budget, my right hon. Friend the Member for Leeds, East allocated 400 extra kidney machines to the Health Service.
  The fight to save the National Health Service will go on. It must go on. The fight to obtain for it the resources that it needs will be maintained until it eventually succeeds. We know that there is another danger facing the National Health Service, apart from the financial crisis. Many Conservative Members see the financial crisis in the NHS—
  Mr. Tim Smith rose—
  Mr. John Smith: I shall not give way.
  They see in the financial crisis of the NHS a new opportunity to attack its basic principle and what they correctly divine as its Socialist basis. For many years, they have been forced to accept a Health Service funded on the principle that it is paid for when people are well so that it is available without financial inquiry when it is needed. Since the second world war, the NHS has lifted a burden of worry from the backs of the ordinary people of this country and provided our nation with a unique and especially effective method of providing life-long medical care and attention for everyone in our community, irrespective of income, wealth or status. That is why the Health Service is deeply rooted in the interests and affections of our people.
  For a long time, on the grounds of political prudence, Conservatives said little, whatever they thought privately. The Prime Minister herself told us in words that seem very hollow now that the NHS was safe with her. Now, like sharks sniffing blood in the water, the enemies of the NHS are circling round ready to strike at what they regard as a Socialist extravaganza.
  They claim that the Health Service costs too much and that it is inefficiently administered. Let me give just two replies. All the evidence suggests that the NHS is far superior in terms of administration costs to any private health care system in this country or abroad. Conservative Members who admire the private medical system in the United States should bear in mind that we spend 5 per cent. on administration in the Health Service and the Americans spend 22 per cent. on administration in their private, bureaucratic system.
  On two central questions, this Budget—
  Mr. John Butterfill: Does the right hon. and learned Gentleman agree that there are

  1121
  profound regional variations? Will he accept that Sir Brian Thwaites, the chairman of Wessex health authority—my region —said that there is no crisis in Wessex? In the Boscombe general hospital, the unit cost per patient is £546. That compares with an average in London of over £1,000 and a cost in Hackney of £1,300. Surely there is a big difference in administrative costs somewhere.
  Mr. Smith: It just so happens that on the first page of the submission from the BMA there is a quotation from a consultant in Wessex. I shall tell the hon. Gentleman what that consultant said:
  "At present the acute services have an open ended and expanding remit. They are expected to cope with everything and anything demanded of them. The boundary of their area of responsibility must be drawn if no more money is forthcoming, but this in itself begs more questions than there are answers."
  That is the evidence from Wessex, the part of the country to which the hon. Member for Bournemouth, West (Mr. Butterfill) referred.
  The Chancellor's first priority should have been to secure our Health Service. That done, he should then have turned his sights towards the creation of a stronger, more competitive, more balanced economy. The Government seem to believe that because a short-term boom raised the level of economic growth in 1987, Britain has somehow turned an economic corner. Time will soon tell us how lasting or, alternatively, how evanescent is a rate of growth boosted by an easy credit society and the lowest levels of personal savings for more than four decades.
  We know already that the deteriorating balance of payments is the most serious constraint on economic management, apart from the Prime Minister, in the years immediately ahead of us. Despite the massive contribution of North sea oil during the years of this Government—over £60 billion in extra revenue to the Goverment—and the even more important cover in terms of freedom from balance of trade and balance of payments constraints, here we are, moving towards the edge of the decade, only eight years or so after reaching oil self-sufficiency, heading into balance of payments problems again. The historians will ask what we did with North sea oil, because it looks as if we will face the 1990s without the beneficial changes in society and our economy that a proper investment of those riches would have secured.
  The Secretary of State for Energy answered that question honestly the other day by remarking that North sea oil revenues were spent on unemployment. He was, of course, correct. The tragedy is that the money was not spent on employment—not just on creating jobs now to reduce our still appalling totals of unemployment, but on jobs for the future based on new skills and new technologies.
  Now that North sea oil is declining in volume and may, for all we know, decline in value, the problem is less easy to solve. However, it remains urgently on the national agenda and one of our top priorities should be to see how to build a strong, competitive industrial economy that can sustain growth, not in episodic spurts or election-oriented booms, but powerfully, continually and steadily. In the context of our present position it can be put quite succinctly: how do we convert short-term boom into long-term recovery?
  One would have thought that to a sensible Government, the opportunity provided by a Treasury awash with revenues was obvious. This is the time to invest
  1122
  those resources in new technology, new science-based industries, education and training and research and development. This should be the opportunity to create in these islands the best educated and trained work force in western Europe by a sustained and energetic commitment, starting with the Government and spreading throughout the whole of our society, to utilise that unique resource —the skills of our young people — so that they can found our economic security in the 1990s.
  This should be the opportunity to end the neglect of research and development in the public and private sectors and in the universities and industry. If that is not soon corrected, Britain will limp into the next decade well behind the leaders in the technologies of the future. All those are opportunities which could have been seized. But, sad to say, the Government prefer tax cuts for the rich investment in those crucial areas.
  Is not our economy hopelessly unbalanced in two crucial respects: the balance between the public and private sectors and between the economic regions, the north and the south? Throughout the 1980s, under the perverse set of priorities which constitute Thatcherism, investment in public services and facilities has been deliberately and continuously run down. We have the worst public investment record of all the OECD countries. That is why we have outdated and inadequate hospitals and schools, crumbling inner cities, industrial wastelands, decrepit commuter trains, leaking water courses, collapsing sewers, and roadways in a perpetual state of deterioration.
  It is difficult to digest the information in a parliamentary answer which said that 80 per cent. of all the buildings used by the NHS were built before 1918 and only 7 per cent. have been built since 1965. No reckoning seems to be made of the costs in economic efficiency of muddling through with an inadequate and antiquated infrastructure. For too long now the myth has been perpetuated that public spending is intrinsically damaging to the economy. The truth is the opposite. Public assets are essential to produce a modern and competitive economy as well as a decent society. Transport, basic utilities and modern and proper housing are all crucial to the effective functioning of a civilised society. Ought we not now to be putting thousands of unemployed people to work to repair, improve and modernise the rapidly declining housing stock in which so many of our fellow citizens are forced to live?
  When we look at the yawning and widening gap between the north and south, which the present Government do not even acknowledge to exist — so blind are they to the realities of life in many parts of modern Britain—we see social injustice and economic waste combined in spectacular fashion. On a recent visit to the north-east of England—to Bishop Auckland and the Wear valley — I was astonished to discover that companies seeking to bring work to county Durham—where unemployment rates go up to 20 per cent.—were having to be turned away because there was no money left to build new factories for incoming industry.
  I quote from the Financial Times of 7 March which said:
  "North East England, which has one of the worst unemployment problems in Europe, has run out of factory space for inward investors or existing businesses that want to expand."
  The report goes on:

  1123
  "A West German company is fighting an English business for the last sizeable factory available in County Durham. Each project would create 100 jobs. Last week another would-be incomer from elsewhere in the UK was told there was no room in Hartlepool, a town where male unemployment is the region's highest at 26·8 per cent. The company is going elsewhere."
  The writer reports:
  "with the current winding up of the two new towns in the region, Washington and Aycliffe — Peterlee and tight control of local authority spending, responsibility for building advance factories has fallen almost entirely on English Estates North, the Government's commercial property developer. It too is constrained by tight spending limits of £20 million in the current year, all spent, and £13·5 million in 1988–89."
  It must be a crazy country in which the Government will not even finance a proper building programme for companies that are competing to occupy factories in areas of high unemployment.
  Mr. Nicholas Budgen: Is it not the case that English Estates has been erecting factories at such a low rate of return that the private sector cannot now compete with it? Is it not the case also that English Estates has run out of subsidies from the taxpayer and that, as a result of distorting the market, it has become impossible for anyone to get a factory there?
  Mr. Smith: Whatever the hon. Gentleman's analysis of the cause of the problem, the solution is perfectly clear —give some more money to English Estates so that it can build more factories for companies to occupy. Would it not make much more sense to spend the money on building factories than on paying unemployment benefit for people who could work in the factories? Sometimes I wonder when the light will ever dawn on some Conservative Members. However, we will try with patience and determination to bring those economic facts of life constantly to their attention. After the wanton and senseless destruction of regional economic policy, I should not be surprised. Anything can happen in the north of England.
  Why have the Government not used the resources in this Budget to start a revival of economic activity in the regions? Why cannot there be development agencies for the English regions as there are for Scotland and Wales, to act as a catalyst for economic regeneration and to harness the talents and assets of those communities—not only for the sake of their own advancement but to contribute to the economic wealth of our nation?
  It is increasingly necessary to break down the north-south gap that is dividing this nation. When we see the right hon. Member for Henley (Mr. Heseltine) moving in on a subject, we should adjust our political seismometers carefully. There is something stirring in the Tory undergrowth, and it probably has something to do with the coming leadership struggle in the Conservative party. It is also probably something to do with a recantation of some policy for which the right hon. Gentleman was previously responsible. None the less, he speaks for many when he opposes the urbanisation of large parts of the south of England by the unrestrained operation of market forces in which the Conservative party places such touching faith.
  Foreign commentators simply do not understand—this was emphasised to me only the other week by a CSU Minister in Bonn—why any Government would allow
  1124
  such a division of a country to take place and not have a programme of encouraging industry and employment where such a programme is passionately desired, but rather seek to force such a programme on areas where it is bitterly resisted.
  Mr. Ian Taylor: Will the right hon. Gentleman give way?
  Mr. John Smith: I am not giving way to the hon. Gentleman.
  We could start a programme tomorrow to combat the north-south divide, but it would need the Government to lead it. Regrettably, they would not do so. Let us not hear from them ever again that such a programme cannot be undertaken because the money is unavailable. The money was available but they chose not to spend it.
  The Chancellor has turned his back on investing in the country's long-term future in favour of rewarding in the short term his party political supporters of today. It is not that he can be unconcerned about the state of the economy. If there were only a few worries, as he pretends, why has there been the continued, comic farce over who runs the Government's exchange rate policy? Is it the Prime Minister or is it the Chancellor? Some day the Chancellor might tell us. We do not know whether we can rely on what he said in his Budget Statement about exchange rate policy because it has not yet been either contradicted or corroborated by the Prime Minister, who so often chooses to intervene in such matters.
  First we were told that there was no dispute and that they were both working in harmony towards the same objectives. Then there was, apparently, what was quoted as a "healthy argument". We heard that the Chancellor's friends were active in the Lobby, stressing one day his anger or irritation, and the next day his resolve or bitterness—even that he was contemplating his personal future in some detail. The truth is that an idiotic Punch and Judy show took place over who runs the shop. From what I read of interest rate policy this morning, it seems that Judy has slaughtered Punch. She may go on beating him, beating him and beating him again—because in the Punch and Judy show that is the present Government, Judy always wins.
  It seems that interest rates will not come down, but that means that our economy will be run on the basis of high exchange and high interest rates. How on earth will British industry compete in what will be a very difficult international market place in the years ahead? God forbid that we should return to the follies of 1980–81, when an absurdly overvalued exchange rate helped to eliminate 20 per cent. of British industry within a year or two.
  Perhaps it is indelicate of me to refer to those difficult years. In a terse parliamentary answer that the Chancellor gave when he was a junior Minister at the Treasury, when he was asked how the exchange rate was determined he replied with one word — "Markets". He has since changed his mind. It all seems to be different now, unless, of course, one takes the view that one cannot buck the markets. Perhaps it is the Prime Minister who has stayed constant to the true faith and the Chancellor who has slipped behind. I am sure the Chancellor finds those notions unappealing today.
  Sir Peter Tapsell: Is that not rather an artificial argument? Do not markets in fact pay some attention to interest rates?
  Mr. Smith: I was trying to work out in as kindly and gentle way as I could who is running the Government's exchange rate policy. That is a little harder to divine than the effect that interest rates have on the market. But as it is an important area of policy, and as it is unclear who in the Government is responsible, the subject is worth inquiry and that gives the Chief Secretary the opportunity to tell the House a little more about that aspect.
  The Chancellor spoke yesterday about the management of the economy, but he has failed dismally to take the action that could give it the long-term, supply-side strength. But then, we were told that the Budget was about tax reform. The Chancellor billed himself, rather immodestly, as the tax reformer of the century. How can anyone claim to be a tax reformer when he cuts the top rate of tax from 60 to 40 per cent. but leaves an upper earnings limit for national insurance contributions of £16,000 per year?
  We shall have in this country a combined tax and insurance system that will start at 30 per cent., move up to 34 per cent., drop again to 25 per cent. when one reaches £16,000, and then increase again to 40 per cent. Is that supposed to be some kind of logical and cleverly designed, sensibly constructed policy for income tax rates and national insurance contributions?
  We know perfectly well why the Chancellor did not reform also national insurance contributions. It was because he did not want to remove the privilege enjoyed by people earning more than £16,000 a year, who do not have to pay anything in excess of the existing national insurance contributions even though the rest of the community earning below that figure has to pay its full whack.
  Let us see how the Chancellor scores in terms of being a Budget reformer. There were five major areas of tax abuse that we invited him to tackle because we knew that the vast majority of people in this country pay their tax under the PAYE scheme, where there is not much room for manoeuvre. But there is another group of people—those who pay if they like. They are the people hiding in the tax shelters. The Chancellor says that he has removed some of those shelters. It was about time that he did something about them, in the light of the evidence that we have recently received. But no sooner has one tax loophole been filled than a few others will be found to have been left open.
  I refer, for example, to the business expansion scheme. Not much has been done there to close loopholes. There has been no reduction in the amount that individuals can invest. We know that in the case of Park Hotels, for example, the cost was financed almost entirely through the business expansion scheme. We know that all the income from those who lived there came from DHSS benefits, and that the huge increase in the value of the property will be totally free of capital gains tax. Is that the sort of enterprise that should be encouraged and rewarded in Britain?
  We know that not only is such activity being allowed to continue but that there are new BES rules for rented accommodation which will provide a huge tax shelter for profiteering landlords. That is happening at the same time new restrictions are being introduced that will shove up the rents for the very people who will inhabit the properties financed by taxpayers through the business expansion scheme.
  Why did we hear nothing about bed and breakfasting whereby rich individuals and institutions can wipe out
  1126
  losses for capital gains tax by the device of selling shares in the evening and buying them back the following morning? Why are such artificialities allowed to erode the basis of our taxation system? Why are we not in this Budget plugging these important loopholes? If the Chancellor had done that, he could have earned some credit for being a reforming Chancellor.
  But the Chancellor tells us that independent taxation is his marvellous innovation. His plan for independent taxation is basically a con. We shall see not the abolition of the married man's allowance, but, basically, its renaming as the married couple's allowance. We shall not see, except in form alone, the independent taxation of men and women. The clue to it all was given in the cost of £500 million. Why does it cost that sum? Because we stop disaggregating the investment incomes of husbands and wives. It is so that those can be added together that it costs so much.
  Capital gains tax is another area of concern again; we find that windfall benefits are given to those who make large increases in capital gains. The Financial Times was wise to counsel further consideration of the independent taxation scheme so that we might get a proper system that genuinely respects the privacy and individuality of women—a desirable principle which we should seek to attain.
  As we look through the Budget, we find that what is constructed behind a facade of tax reform is a major redistribution of income and wealth through the tax system. The Government took £2,000 million that could have been spent on the Health Service and gave it to the rich. That is why at its core there is a fault in this Budget, a moral fault. It is a massive political miscalculation. The Chancellor has revealed in all its vulgarity and unfairness the Thatcher vision of society, in which unfairness, inequality and injustice march side by side. The decent majority will react to what they have seen in the Budget. It is a Budget too far. It is the beginning of the end of Thatcherism.
  4.51 pm
  The Chief Secretary to the Treasury (Mr. John Major): Contrary to what the right hon. and learned Member for Monklands, East (Mr. Smith) said, this Budget is about tax reform. Yesterday, my right hon. Friend the Chancellor of the Exchequer introduced a package that cut six rates of income tax to two; that introduced independent taxation for wives; that reformed the taxation of capital gains; and that introduced a single rate of inheritance tax. It represents the most sweeping reform of personal taxes this century and leaves us with no single rate of personal taxation above 40p in the pound. [HON. MEMBERS: "We have heard all this."] Hon. Members are about to hear it again, because it is a good story and I shall keep telling it until they understand it.
  The centrepiece of my right hon. Friend's proposals was a promise redeemed: the reduction of the basic rate of income tax to 25p. He has linked that with a comprehensive reform of higher rates. Taxes have been simplified and reduced. The right hon. and learned Gentleman is indignant because he would have preferred to spend more and raise the effective rate of tax. When asked a question by one of my hon. Friends, the right hon. and learned Gentleman responded like one of Pavlov's dogs—"You know the answer: spend more." That is the universal answer of the Labour party: whatever the problem, spend more and to hell with the taxpayer.
  Mr. Robert N. Wareing: What does the Minister think the rich will do with the money? Will they not spend it?
  Mr. Major: The hon. Gentleman may or may not have been part of the football hooligan behaviour yesterday, but if he was, I hope that he will not repeat it today.
  The right hon. and learned Gentleman made a different speech from that of his predecessor, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who last year claimed that we could afford neither higher spending nor lower taxes. The Opposition saw last year's increase in spending as a pre-election boom which could not be sustained, and they predicted that the Budget's tax reductions would be reversed after the general election. Now they have their answer. Spending is up again and taxes are down again, and the right hon. Member for Sparkbrook has wisely moved on.
  The right hon. and learned Member for Monklands, East agrees that his right hon. Friend was wrong on all counts, for his message today is that the economy is so successful that we can afford both to raise spending and to reduce taxes. It is a pity that he has not examined our plans more closely because that is precisely what we have done. We have raised spending by £2·5 billion, allocating an extra £4·5 billion to programmes. The right hon. and learned Gentleman does not appear to have noticed that. We have reduced taxes by £4 billion. The right hon. and learned Gentleman disapproves of that. We are repaying debt of £3 billion into the bargain. The right hon. and learned Gentleman should be shamefaced about that, because it is his party's debts that we are repaying.
  Mr. David Winnick: Has the Minister seen the article in The Daily Telegraph today entitled,
  "Smiles on the faces of the rich"?
  Has he noticed how much some millionaires will gain—from £10,000 to £44,000 a year extra—as a result of the tax reduction? Does he not consider that it is an affront that the richest in the community should gain so much while the National Health Service and other essential services are so desperately in need of cash?
  Mr. Major: If the hon. Gentleman had waited a few moments, he would have heard me deal precisely with those important matters because I know that they are of concern to him and the whole House. It is a matter that I shall deal with at some length.
  Mr. Kenneth Hind: Will my right hon. Friend confirm that, despite all the criticism about the 40 per cent. rate, by increasing the thresholds my right hon. Friend the Chancellor of the Exchequer has taken 750,000 low-paid people out of tax?
  Mr. Major: My hon. Friend also anticipates precisely a point to which I shall come.
  Mr. Dennis Skinner: He is only a barrister.
  Mr. Major: The hon. Gentleman says that my hon. Friend is only a barrister. What he would say to the right hon. and learned Member for Monklands, East, who is a distinguished and learned Queen's Counsel, I have not the faintest idea.
  The fact is that my right hon. Friend the Chancellor, for the second successive year, has produced a fiscal hat trick of more spending, lower taxes and less debt. It is a hat trick that no Labour Chancellor could ever have produced.
  Mr. Alistair Darling rose—
  Mr. Major: I shall give way in a moment.
  I may not admire the Opposition's judgment, but, by golly, I certainly admire the right hon. and learned Gentleman's cheek. After nine years of denouncing the economic policies that have made this Budget possible he now has the brass neck to lecture the House on how he would have used the room for manoeuvre that the Chancellor has obtained. I must tell him that if we had followed the policies he advocated, we would never have had that room for manoeuvre in the first place.
  Mr. John Smith: The Treasury is awash with money.
  Mr. Major: The right hon. and learned Gentleman says that the Treasury is awash with money. How does he think that happened? I shall tell him. It happened because of the success and growth of the economy. He referred to a short-term boom. That was his expression. Eight successive years of growth and he thinks that it is short-term boom.
  Over the past few hours, the right hon. and learned Gentleman has made several claims about the effect of the social security reforms and he touched on that again today. I know that he feels deeply about this and I shall turn to it. Unfortunately, most of the claims made by the right hon. and learned Gentleman were wrong. In cash terms, 88 per cent. of claimants will either receive more benefit or remain unaffected as a result of the reforms on 1 April. That is 7·5 million people, compared with the 1 million people whose benefit will not be increased.
  As the right hon. and learned Gentleman knows, there will be full cash protection for the poorest, so that, in April, no one on income support will receive less weekly cash benefit than they receive under supplementary benefit.
  Mr. Darling: Will the Chief Secretary explain how a married man with two children, earning £115 a week gross, will lose 32p in benefit as a result of the tax changes? How can he say, therefore, that there will be no loss as a result of both the Chancellor's announcement yesterday and the announcement of the Secretary of State for Social Services earlier this year? Surely the poor are losing while the rich are gaining.
  Mr. Major: It is extremely difficult to explain how people can lose when there is cash protection of social security benefits, a substantial reduction in income tax and an increase in the thresholds.
  Ms. Marjorie Mowlam rose—
  Mr. Major: If the hon. Lady listens, she may learn something and I may give way to her later as a reward for her listening.
  For most of the vulnerable groups, there are substantial gains. The majority of sick and disabled people will gain from the reforms. Of those, about half will gain £5 a week or more, and 80 per cent. of families not in work will gain. Sixty per cent. of lone parents, many of them divorced, separated or in difficulties, will gain or be unaffected. Well over one quarter of all lone parents will gain by over £5 a week. Despite the right hon. and learned Gentleman's mischief over the social security reforms, that is the fact of the matter.
  I wish to add a further fact that the right hon. and learned Member for Monklands, East might not find palatable. The social security reforms add £400 million to public expenditure on benefits in 1988–89 and the social

  1129
  security programme as a whole will increase by £2 billion next year, on top of the £2 billion added this year. Those are the largest cash increases in any individual programme, and they have been made against a background of falling unemployment.
  All those social security benefits directed at the poor and the disabled have been increased in value since 1979. We have targeted extra help specifically where it is needed, so our reforms provide more help for the sick and disabled, poor families and lone parents. It is against that background, not the mischief perpetrated by the right hon. and learned Gentleman, that we must see the Budget.
  Mr. Nigel Griffiths: Will the Chief Secretary admit that over 300,000 pensioners on housing benefit will lose their benefit entitlement altogether because they have £6,000 or more in savings and that there will be no transitional protection?
  Mr. Major: The hon. Gentleman must understand that the cut-off point for other benefits, which he expressly failed to mention, was moved from £3,000 to £6,000 and that one in three households is at present receiving housing benefit. There is far more assistance under housing benefit now than there has ever been.
  Opposition Members who are clearly not interested in hearing rational debate, have been inventive in finding reasons for opposing tax cuts. Some of them have claimed that cutting taxes will damage the balance of payments. The right hon. and learned Gentleman said that we should have used the money to boost what he calls investment. The hon. Member for Berwick-upon-Tweed (Mr. Beith) has formed a new Lib-Lab alliance on that point with the right hon. and learned Gentleman, but their concerns about investment are misplaced. As the forecast published yesterday shows, investment is expected to rise by 9 per cent. in 1988, not because we are pumping taxpayers' money into industries to which the market will not lend, but because our policies have created an environment in which businesses have the resources and confidence to invest and they are doing so.
  I understand the right hon. and learned Gentleman's concerns about that, because memories of short-term balance of payments crises are seared into the collective conscience of all those, including the right hon. and learned Gentleman, who had the misfortune to serve in Labour Cabinets or in Lib-Lab alliances with the then Labour Government. The deficits run up by the Labour Government of up to 4 per cent. of GDP were four times as large as the prospective deficit that my right hon. Friend has forecast for 1988. The income from our huge stock of overseas assets should mean that there will be no problem in financing that deficit.
  It is hardly surprising that we should have a current account deficit when growth in the United Kingdom economy is far stronger than that of most of our trading partners. During our period of office we have had a cumulative balance of payments surplus of almost £20 billion; all Labour ever had were deficits. The right hon. and learned Gentleman is seeking a return to the bad old days of short-term demand management, of so-called tinkering and fine tuning.
  Mr. Stuart Holland rose—
  Mr. Deputy Speaker: Order. I understand that the hon. Member for Vauxhall (Mr. Holland) will be seeking to catch my eye later. Perhaps he will save his speech for then.
  Mr. Major: I doubt whether the hon. Gentleman's speech will improve with the keeping.
  Our approach is different. We set fiscal policy in a medium-term context. That medium-term approach has rescued our finances from the batterings of five years of Labour government. Frankly, it is a colossal cheek for the right hon. and learned Gentleman, as a member of the party that wrecked our economy, to criticise the Government who have rebuilt it.
  The right hon. and learned Gentleman told us a great deal today about the National Health Service. He also told us how the right hon. Member for Leeds, East (Mr. Healey) increased spending on the NHS in one of his Budgets. That is quite right—I believe that it was the 1978 Budget. However, the right hon. and learned Gentleman did not tell us how that right hon. Member for Leeds, East cut the capital programme by one third in 1976 because the country was almost bankrupt.
  The Labour party's view of the NHS is simplistic. Labour Members are utterly clear about what needs to be done and they would happily admit it. They say quite simply, "Give the National Health Service more money." [HON. MEMBERS: "Hear, hear."] Opposition Members say, "Hear, hear," but that fragile consensus in the Labour party begins to break down on the question of how much more. The hon. Member for Peckham (Ms. Harman) suggested £200 million. The Leader of the Opposition, the right hon. Member for Islwyn (Mr. Kinnock), upped that to £1·3 billion. The right hon. and learned Gentleman now pitches his demand between £1·7 billion and £2 billion. So it is accelerating.
  Mr. Skinner: Tell us what the Government have given.
  Mr. Major: I shall tell the hon. Gentleman precisely what we have given—an extra £1 billion this year, an extra £1 billion next year and an extra £1 billion in the following year, the largest increases that the NHS has seen. On top of that, there is the product of the cost improvement programmes, the income generation schemes and the increased efficiency. We have produced that money.
  Mr. A. J. Beith: Does the Chief Secretary think it reasonable to compare that figure with the 8 per cent. rise in prescription charges? Does he agree that it must be deflated to conform to the rate of inflation in the Health Service, expressed in the Government's increase in prescription charges?
  Mr. Major: The hon. Gentleman neglects to mention the fact that those resources feed into the National Health Service to help increase resources for patient care. The hon. Gentleman and I must both pay prescription charges, but the vulnerable do not pay prescription charges. That is why the hon. Gentleman and I pay an increase greater than the rate of inflation. I should have thought that he would have found that acceptable. We are providing that money to the National Health Service because we care about the NHS at least as much as the Labour party does. We care about its efficiency as well as the resources that are put into it.
  Mr. Dafydd Wigley: The Chief Secretary said that there may be £1 billion next year and £1 billion the following year for health, if needed. If the review of the Health Service shows, as has been suggested by representatives of the royal colleges, that there is a need

  1131
  for some £2 billion, will he confirm that he has that money in his contingency reserve and that he can make it available without disrupting his Budget strategy?
  Mr. Major: There are two aspects to the important point that the hon. Gentleman has just raised. What I said about an extra £1 billion was not that I will provide an extra £1 billion next year, but that I have already provided it, docketed it, annotated it and put it in the accounts for next year and for the year after. That money is already provided in the accounts. We shall review the question of mainstream funding for the National Health Service again in the next public expenditure round.
  On the hon. Gentleman's other point, which clearly relates to the nurses' pay review body, we have made it absolutely clear that we expect to receive the report in April. We will consider the report speedily and make our decision on it speedily. The House and the health authorities will know our decision on it, and the extent to which we may be able to assist in its funding, before the end of April. We shall deal with that matter speedily, but I can go no further than that today.
  I should like to make another point absolutely clear so that there is no doubt among Opposition Members. Despite the scaremongering in which Opposition Members indulge so frequently, I reaffirm to the House yet again that the principle of access to medical care irrespective of ability to pay is not at risk now, is not at risk in the review and will not be at risk at any stage in the future.
  Mr. Sam Galbraith rose—
  Mr. Major: I should like to make a further point about the National Health Service. The right hon. and learned Member for Monklands, East and his hon. Friends have talked at some length in recent months about the position of the nurses. I remind the right hon. and learned Gentleman that a typical nurse would be paying over £40 per month more in income tax if we had stuck with the income tax regime that the right hon. and learned Gentleman supported; nor would that nurse have had a review body on pay, because that too was a Conservative initiative.
  I said a few moments ago that this Budget is about tax reform and tax reduction. I believe that the case for both is overwhelming on economic grounds, on fiscal grounds and on practical grounds.
  Mr. Anthony Beaumont-Dark: Before my right hon. Friend leaves the subject of the Health Service, he said that patients' access to the National Health Service is not at risk. Can he explain why hospital wards and, indeed, some hospitals are being closed because they do not have sufficient money? Does that mean that if access is at risk the extra funds will be found?
  Mr. Major: My hon. Friend is being uncharacteristically mischievous. The principle that I enunciated was that access to medical care, irrespective of ability to pay, is not at risk. I reaffirm that principle, and events will show it to be justified.
  The reductions in tax rates in this Budget reduce the marginal rates faced by over 99 per cent. of taxpayers. Allowances have been raised by precisely twice the amount
  1132
  needed for indexation, which especially helps those on modest incomes. As a result of the changes made by my right hon. Friend, personal allowances are now over 25 per cent. higher in real terms than they were in 1978–79.
  Taken together, the reduced tax rate and the increased allowances mean that the married man on average earnings will find himself better off by about £5 a week as a result of this Budget. That is equivalent on its own to a pay increase of £370 a year and means that a pay rise of less than 2 per cent this year would maintain living standards. Anything higher would materially raise them.
  Mr. Ian Gow: As nurses and others outside are listening carefully to what my right hon. Friend is saying about cuts in direct taxation, will he give way to the Shadow Chancellor so that he can tell the House and the nurses by how much be would diminish the tax thresholds and what the standard rate of tax would be if he became Chancellor?
  Mr. Major: I am always exceedingly happy to accommodate my hon. Friend and, of course, the right hon. and learned Gentleman, if he wishes to rise in his place to respond to that attractive invitation, but he shows no inclination to do so.
  Mr. Galbraith rose—
  Mr. Major: Yes, I shall certainly give way to a surgeon.
  Mr Galbraith: I was interested in what the Chief Secretary said about access to care being free at the time of need. Can he give us a guarantee that in the review there will be absolutely no charges applied in the National Health Service for access to general practitioners or to anyone else? Can he also tell us how that equates with the Government's new policy of charging for dental checks and eye examinations? How does that equate with free access at the time of need?
  Mr. Major: The hon. Gentleman will have to wait on all those matters, which will be the result of the review. One thing that I might usefully say to the hon. Gentleman, who I understand, is a surgeon —[HON. MEMBERS: "A brain surgeon."] Yes, I understand that he is a brain surgeon. I am pleased to hear that. I have something to say to the hon. Gentleman, with which he may agree. He will recall that some years ago, towards the end of the 1970s, many of his colleagues, who were distinguished surgeons, were leaving the country to go abroad to Canada, America, New Zealand and elsewhere, precisely because of the rate of taxation and their small net incomes. Changing the upper tax rates will stop that drain, which will materially help the National Health Service.
  Mr. Galbraith: The right hon. Gentleman is quite wrong. What stopped my colleagues going to places such as Canada was that Canada refused to let them in. It has absolutely nothing to do with income tax rates.
  Mr. Major: I am not sure that the hon. Gentleman does not add to my point rather than detract from it, as he sought to do.
  The point about a low tax environment — [Interruption.] If the right hon. and learned Member for Monklands, East wished to intervene, he had his opportunity a moment ago.
  Moreover, a low tax environment helps create new jobs—genuine jobs that are not for ever dependent on state expenditure or subsidy year after year, with the consequent

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  high taxation, but not a word of that found its way into the right hon. and learned Gentleman's speech. The Labour party claims that it wishes to improve living standards. If that is true, how ironic that Opposition Members invariably seek to do so by supporting high wage claims that cost jobs, and opposing tax cuts that help create them.
  The right hon. and learned Gentleman disliked the reduction in basic rate tax, but he was positively apoplectic at the reductions in upper rates, as were many of his hon. Friends, despite the fact that anyone who cares to examine the matter knows that low tax economies work better than high tax economies.
  The right hon. and learned Gentleman also referred, in an entirely class-conscious way, to what he refers to as "the rich". Let us examine who the gainers predominantly may be from the tax changes that my right hon. Friend has made. Of those gaining from the abolition of the higher rates above 40 per cent., about two thirds have incomes that are not in the "super rich" category but are under £40,000—less than that of, for example, the Leader of the Opposition. They include scientists, surgeons, doctors, engineers—they are the meritocracy, not the outstandingly rich or the privileged. It is those people we wish to help, for whom we wish to provide incentives and whom we wish to keep in this country.
  Mr. Tam Dalyell: The right hon. Gentleman has just mentioned scientists. How does he deal with the worry of the Royal Society that about 10 per cent. of its members are going abroad and that the drain of top scientists from this country is something that should worry us all?
  Mr. Major: The hon. Gentleman, representing the aristocracy, makes the point clearly. It is precisely because we want to keep those people, who are so valuable to this country, that we are seeking to change the tax rates to give them greater rewards so that they will stay here.
  Mr. Galbraith: Will the right hon. Gentleman give way?
  Mr. Major: I have given way twice to the hon. Gentleman, and that was once too many.
  On the subject of redistribution, the other point that is clear to all except the Opposition is that, since 1979, the real revenues paid by the top 5 per cent. of taxpayers have risen by a third and those paid by the other 95 per cent. have been reduced. That is what has happened up to and including my right hon. Friend's changes of yesterday. But the Opposition's stance is admirably clear. They believe in high taxation, not because it raises more revenue—it does not—or because it improves the quality of public services—it does not—or because it leads to economic success—it does not. They believe in high taxes for their own sake, whatever the damage to the economy.
  Mr. John Smith: Will the Chief Secretary explain why the Government maintain the upper limit on national insurance contributions? Why is it right for a person earning £18,000 a year to pay less by way of tax and national insurance contributions than someone on 16,000?
  Mr. Major: It is enlightening that the right hon. and learned Gentleman should ask that question, because the Labour party spent the first two weeks of the last general election campaign denying that it was going to lift the upper earnings limit on national insurance contributions.
  1134
  So it is interesting that the right hon. and learned Gentleman now places on record the fact that the Opposition will lift the upper earnings limit on national insurance and carry national insurance charges right through the scale. If that is their policy, everyone earning more than £15,800 a year will be losers, and I hope he will accept that that is now the Labour party's position.
  The Government last cut the top rate of tax in 1979. Despite that, the top 5 per cent. of taxpayers now contribute 29 per cent. of income tax revenues, compared with the 24 per cent. they contributed when they were subject to the right hon. and learned Gentleman's penal rates.
  That trend mirrors what happened after my right hon. Friend reformed corporate taxes two or three Budgets ago. Companies now contribute a higher proportion to our revenues than when they were subject to higher rates. They are also investing in and moving to this country, rather than disinvesting from and leaving it. That is the other advantage of lower tax rates. They are doing that partly because we have one of the lowest corporation tax rates in the industrialised world.
  Reducing tax rates is not merely a bizarre fetish of this Government—
  Ms. Hilary Armstrong: The Chancellor told us yesterday that no one would pay more than 40 per cent. tax. Had he forgotten about the 500,000 people whose marginal tax rate, after yesterday, will he between 70 and 90 per cent. — the group included in what we call the poverty trap? Will the Chief Secretary tell us what he will do to take those people out of that marginal tax rate?
  Mr. Major: My right hon. Friend specifically said that no one will face a personal tax rate in excess of 40 per cent. The underlying point that the hon. Lady made is one to which there is no solution, as successive Governments have found. The more benefits we provide, the worse the poverty trap becomes for many people. If there were a solution, I would have taken it when I was a Minister in the DHSS. I could not find one. If the hon. Lady will offer me one, I shall willingly take it to my right hon. Friend the Secretary of State for Social Services.
  Mr. Robin Cook: May I offer the Minister an immediate solution: not to proceed with the changes on 11 April, which will double the number of families who are subject to a deduction rate in excess of 70 per cent.? How does he justify that doubling when the top 5 per cent. have a cut of a third in their tax rate?
  Mr. Major: First, I suspect that the hon. Gentleman's numbers are wrong. Secondly, he will know that, before the social security reforms, it was quite possible to have a marginal tax rate of well over 100 per cent. We have lessened that poverty and employment trap substantially with the changes that we have made. If more people are now in the trap, that is entirely a result of increasing levels of benefits, as the hon. Gentleman knows.
  As I said, reducing high tax rates, with which the Opposition disagree, is not merely a fetish of this Government. The Socialist Government in India and the Labour Governments in Australia and New Zealand are all cutting taxes substantially—
  Mr. Holland: Not in Germany.
  Mr. Major: They are doing so because it has been accepted by those in government, Socialist and non-Socialist alike, that high tax rates are inefficient for raising revenue, and damaging to the economy. Only the British Labour party, excluded from power for so long, does not recognise that. Until it does, it will stay where it deserves to be—in opposition and out of government.
  Penal tax rates do not encourage effort, risk-taking or wealth creation. They only encourage tax avoidance, tax evasion and emigration.
  Dr. Jeremy Bray rose—
  Mr. Major: I have given way enough.
  "Lower marginal tax rates will reward effort and enterprise, and give an incentive to invest in productive areas of the economy."
  Does the right hon. and learned Member for Monklands, East agree with that? Was he listening to it, and would he understand it if he was? Probably, the answer is no, but those were the words of the New Zealand Labour Finance Minister, when he announced a reduction in the top rate of tax from 66 per cent. to 48 per cent. He was right, we are right, and the right hon. and learned Gentleman was wrong.
  Dr. Bray rose—
  Mr. Major: I shall not give way.
  We cannot insulate ourselves from the worldwide trends towards lower tax rates. We cannot hope to keep the best talents in this country—the best entrepreneurs, surgeons, electricians and scientists—if the price of their success is 60p in the pound here as against 28 cents in the dollar in the United States, 29 cents in Canada, 49 cents in Australia and 48 cents in New Zealand. That is why it was right to cut tax rates in the Budget. Opposition Members who disagree with that must explain to the sick and unemployed why they want to cling to a tax regime that offers low rewards to those who can most help them and encourages such people to seek rewards overseas.
  The right hon. and learned Member for Monklands, East had a lot to say about our policies but was shifty about his—in so far as he has any. He knows what he is against, but I am not sure that he will tell anyone what he is for — if he knows. It is clear that the Opposition would reverse many, if not all, of these tax reductions. We now know that they would abolish the upper earnings limit on national insurance, thereby severely damaging anyone earning more than £15,000 a year. We know what they tried and failed to hide during the general election—that they would abolish the married man's tax allowance and reduce the income of 6 million households. They tried and failed to conceal that, and lost the election because of it.
  If the right hon. and learned Gentleman wants to be credible, he needs to do more than merely carp at us. He needs a policy of his own, but he and his party lack one. If they have one, will he tell us—he failed to do so—whether the Opposition will reverse the reduction in the basic rate of tax in the Budget? Will they reverse the threshold increases? Do they still hold to moving tax up to 29p in the pound, which was their general election position? I am happy to give way to the right hon. and learned Gentleman on that. Answer comes there none. [HON. MEMBERS: "Answer!"] This is perhaps the first time in the whole debate that the right hon. and learned Gentleman has been silent. So perhaps at least we can be grateful for that.
  1136
  But there is one area where the right hon. and learned Gentleman and I might conceivably agree and that is that there is a converse to lower tax rates. If it is not right to have penal tax rates then neither can it be right to have many special reliefs which the better off can exploit to reduce, or even eliminate, their tax bills. The great majority of wage and salary earners, with modest investment incomes, including small private shareholdings, do not really have the option of exploiting tax shelters.
  Most of those on higher incomes pay their taxes in full as well. But, for a small minority — a very small minority—the present tax system means that, while the nominal tax rates for which they are liable is high, the actual tax rates they pay can be very low. That can, of course, be wholly within the law, but it is also wholly unfair. Far too many people have been able to avoid far too much tax by utilising tax shelters. I agree with the right hon. and learned Gentleman: I believe in low taxes. But I also believe those taxes should be paid.
  But tax avoidance on a large scale is an inevitable consequence of a tax regime which gives the highly paid and the better-off incentives to invest in tax planning. That point has been very well put by others:
  "It would be stupid not to recognise the lesson of recent history; taxpayers just will not pay ridiculously high marginal tax rates. The system invites abuse if it attempts to impose such a burden."
  Not my words, but those of Paul Keating, Labour Treasurer in Australia in the 1985 Budget. He recognised the basic truth that tax shelters are the product of punitive tax rates. It is right that, in a Budget where we are bringing tax rates down, we should take measures that start to remove those shelters.
  Nor should the amount of tax paid depend on how one is paid — whether in cash or through a benefit in kind. Therefore, in this Budget we are tackling the most criticised tax shelter—the present tax regime for forestry — and the most widespread perk — the company car. Both these measures will make a significant contribution—
  Mr. Skinner: What about Ministers' cars?
  Mr. Major: I hope that the hon. Gentleman does not lose his company car if he has one.
  Mr. Skinner: I have no company car. I have a bike with 531 tubing.
  Mr. Major: As my right hon. Friend the Member for Shropshire, North (Mr. Biffen), the former Leader of the House, once remarked, we grammar school boys must stick together.
  Both these measures will make a significant contribution to making the impact of the tax system fairer. But a real assault on tax shelters is possible only in an environment which does not encourage them to flourish—and that is a low tax environment.
  My right hon. Friend's significant reforms have not been confined to income tax alone. He has overhauled the tax treatment of capital gains, ended the injustice of taxing notional pre-1982 gains and reduced the distortion of taxing a higher rate taxpayer's gains at 30 per cent. but the same taxpayer's income at 40 per cent. He has announced a drastic restructuring of inheritance tax. The four rates of tax have been reduced to one single rate and the threshold has been increased. As a result, 20,000 more estates, most

  1137
  of them people with modest home ownership values, will pay no tax at all next year. My right hon. Friend the Financial Secretary to the Treasury and my hon. Friend the Economic Secretary will expand on these changes later in the debate.
  All these reforms mean that there will be no personal tax rate higher than 40 per cent. in the system. This is a total transformation from the days of 98 per cent. marginal rates on investment income, 83 per cent. on earned income and 75 per cent. on capital transfers. Those days are gone—and gone for good.
  These measures alone would represent a catalogue of substantial reform. But there is one other area I must single out, and that is the reform of the tax treatment of married women. Frankly, the present system is utterly outdated and widely accepted as such. But while there has been a long-standing clamour for some reform, there have been differing views on what reform there should be—and the result has been the perpetuation for too long of an unacceptable status quo.
  The proposals that my right hon. Friend announced yesterday will end, at long last, the present unfair and widely resented tax regime for married women, and remove absurd and unjustifiable penalties on marriage from our tax system. They will provide the privacy and independence that women have long sought. They have been widely — until today, almost universally — welcomed.
  In all this there is one dissentient voice, that of the right hon. and learned Gentleman. Perhaps Labour's attitude is best summed up by the fact that, when he chose to unveil his Budget thoughts, there was not one word about the tax treatment of women in an article of 1,500 words—and this was not to the Financial Times, not to The Economist, nor even to the New Statesman—but to Woman's Own.
  Ms. Mowlam: I thank the Minister for giving way. If he is so keen to help women, could he please explain why it is possible under the Budget to park one's car with tax relief but not to park one's children in creches with tax relief?
  Mr. Major: I am not sure that most people would refer to "parking" their children in quite that fashion, but I hope that the hon. Lady, whatever other reservations she may have, will welcome the changes to independence and privacy in taxation for women in this Budget, which most people have welcomed.
  Contrary to the impression the right hon. and learned Gentleman sought to give, these reforms and reductions in tax rates have not been bought at the expense of fiscal prudence, for the remarkable fact is that the strength of the economy is such that we are able to reduce taxes by £4 billion and plan to repay £3 billion of debt next year. And for future years our strategy will be based on a zero public sector borrowing requirement — a balanced budget, something that many of us have long sought and greatly welcome, now that my right hon. Friend has achieved it. That, for most of us, is a welcome development, and we hope to sustain it permanently.
  In many ways, this is a landmark Budget, because we have been able to re-draw the tax system. We have radically simplified personal taxation; we have the lowest basic rate since the second world war and the lowest top rate since the first world war; and we have transformed the tax treatment of married women. It is a landmark because
  1138
  we have done all this on top of substantial increases in spending on priority public services and we have planned a Budget surplus for next year.
  That has been made possible only by the dramatic improvement in the performance of the economy since 1979. That improvement is possible only as a result of the policies of my right hon. Friend the Chancellor of the Exchequer and his predecessor over the past eight years. Without those policies, this Budget and these tax reductions would not have been possible. This Budget will give a further impetus to those policies of improvement in the economy. My right hon. Friend has delivered a Budget that is a product of past success and the foundation of future success. It is an historic Budget, and I commend it to the House.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. I must remind the House of Mr. Speaker's earlier appeal for brief speeches.
  5.37 pm
  Mr. Bruce Millan: The Chief Secretary has done his best to defend yesterday's Budget but he has not made much of a job of it and I am not really surprised, because this a Budget which is indefensible where justice, fairness and morality are concerned. I have listened to many Budgets in the House but have never before felt the sense of outrage that I felt yesterday in listening to the latter part of the Chancellor's speech and the announcement that he made then about the reductions in the higher rates of taxation, in particular.
  I find it nauseating to see hon. Gentlemen on the Government Benches, all of whom will do well out or this Budget, and some of whom who will do extremely well out of it, waving their Order Papers in the air, when in the past few weeks the same hon. Gentlemen have voted for the social fund — an attack on the poorest members in our community — voted to freeze child benefit, voted to reduce housing benefit, voted for attacks on the unemployed and, of course, voted for the iniquities of the poll tax as well.
  Anticipating what the Chancellor was likely to say yesterday, I had the perhaps naive feeling that he would cover his tax reductions for the better off with a figleaf of additional expenditure on the National Health Service. I had not appreciated the depths of cynicism to which the Government have now sunk. Not a penny is to go to the NHS. Yet it is agreed by all who have examined the matter that there is a real and major crisis in the Health Service. That is the finding of studies by the British Medical Association, the Royal College of Nursing and the all-party Select Committee on Social Services.
  That Committee recommended, very modestly, that at least £1 billion should be put into the NHS over the next two years—in addition to the figures in the White Paper on public expenditure—to make up even a part of the £1·9 billion by which the NHS had been underfunded during the past few years. In all the polls held before the Budget, public opinion made the NHS its top priority.
  The excuse cannot be given this year that no money is available. Plenty of money is available, but it has been devoted overwhelmingly to the better-off. It is a scandal that £2 billion of that in a full year is paying for the elimination of the higher rate of tax, above 40 per cent.

  1139
  The money, or even half of it, could have been spent on improving the NHS and other aspects of the social services, and on more general improvements.
  The Chief Secretary pretended that there was a direct correlation between the highest rates of income taxation and economic performance. That is an odd view, as we see by comparing the economic performances of Japan and the United States in recent years. The top rate of taxation in Japan is 60 per cent., while in the United States it is only 33 per cent. There is no such correlation. Similarly, there is no proven correlation between reductions in the higher rates of taxation and increasing effort on the part of those who benefit.
  It is odd that those at the top end of the income range should be provided with incentives through the reduction of their taxation burden, while the poorer sections of the community are provided with incentives by being screwed down even further. But that has been part of the Government's policy over the past few years. High tax rates may encourage excessive salaries. Some grotesque salaries have been paid to directors and, in some instances, to completely useless people in the City of London. It will be interesting to see whether, having received all these concessions, they will volunteer reductions in their salaries, but I do not believe that they will. We are simply giving large sums to the least deserving members of the community.
  I have always entertained a certain scepticism about the independence of taxation for women, believing that to move to a completely independent system without doing an injustice to some members of the community—sometimes deserving—would be a very difficult task. The general argument for independent taxation of women was that it was a redistribution to make the whole system fairer. The typical Opposition proposal was that the abolition of the married man's allowance would make possible considerable increases in child benefit. The Chancellor, however, has done exactly the opposite. On the one hand, child benefit has been frozen. On the other, the proposals will overwhelmingly benefit the better-off.
  The present wife's earned income allowance has been converted to a wife's income allowance, earned or unearned, and the disaggregation of investment income is also proposed. The proposals will make no difference to the vast majority of couples who have no income other than earned income, with husband and wife both earning. Certain earners will experience a marginal difference, but on the whole they will be those who are already on high incomes and paying the higher rates of taxation.
  It is the disaggregation of unearned income that will have the impact. The husband's unearned income, such as investments, will be switched to the wife. For unearned as well as earned income, separate higher rate thresholds are being created. For those at the top end of a total income scale, the threshold for higher rates of tax has been effectively doubled. The benefits to the rich of such so-called reform of the taxation of married couples are potentially immense. The £500 million, or whatever will be the cost of the reform, will go overwhelmingly to the rich.
  The position is even worse than that. It has not been sufficiently noted that one part of the reform will provide for the business expansion scheme to be dealt with independently for husband and wife, so that the £40,000 investment allowed under the present arrangements will be
  1140
  increased for the very rich taxpayers to £80,000 a year. That is a massive benefit. The Chief Secretary talked about plugging loopholes, but the business expansion scheme has already been diverted into all sorts of activities that most of us would consider at best neutral, and in many cases positively harmful, for the economy as a whole.
  Mr. David Shaw rose—
  Mr. Millan: I shall not give way, because I have been asked to be brief.
  That loophole will be doubled, with immense loss to the Revenue, when the scheme is introduced in 1990. The only change announced yesterday is that the business expansion scheme will be extended to let properties. The deregulation of rents is an invitation to Rachmanism. If hon. Members do not believe that Rachmanism still exists, they should visit my constituency, where only last week a landlord—a Mr. Solomons — was sentenced to four years' imprisonment for harassing and intimidating tenants and defrauding the DHSS. He did that by using loopholes that had been repeatedly drawn to the Government's attention, but which they steadfastly refused to block.
  The Budget does nothing for the economy. We have a serious problem with manufacturing and an increasingly serious problem with the balance of payments. That problem will get worse for many reasons and in particular as a result of the impact of the elimination of all kinds of barriers in the Common Market in 1992. That change fills me with considerable dismay, especially when we consider that British industry is less well prepared than other Community member industries for that reform.
  The Budget also does absolutely nothing for the unemployed. I consider it shameful that the Chancellor has boasted about his economic success when there is still a massive number of unemployed people in this country. In my constituency of Govan, on the official count—those figures are, of course, massaged beyond recognition—I still have a total of 18·1 per cent. unemployed. Male unemployment is a good deal higher. If that rate was calculated in the old way, unemployment in my constituency would be 21·8 per cent. and the male unemployment rate would be considerably higher.
  The relative position of Scotland in the unemployment league has deteriorated recently for many reasons and Scotland now has the second worst unemployment rate in the United Kingdom after the north of England. The situation continues to deteriorate.
  Within recent weeks, the Government have produced a reform of regional policy which will do immense damage to areas such as Scotland and areas of England that have depended upon such regional development grants in the past. Every study that has been made of the proposals in the Regional Development Grants (Termination) Bill has come to the same conclusion—that there is no way in which the new scheme will produce the same kind of benefits for the regions as the old one. All this is happening against a background of continuing serious problems in areas such as Scotland and a continuing deterioration in standards as a result of the employment gap between the north and the south. The south-east unemployment rate is only half of the unemployment rate in Scotland.
  Yesterday was an opportunity to do something to remedy the disasters that are occurring in so many parts of our country. It was an opportunity to bring the nation together. Instead, the Budget will divide the nation even

  1141
  further. It is a Budget for the rich and against the interests of the poor and it will lead to an increasingly divided and bitter nation.
  5.51 pm
  Sir Ian Gilmour: My right hon. Friend the Chief Secretary of the Treasury made an able defence of the Budget.
  Everyone on the Conservative Benches has every reason to be grateful to my right hon. Friend the Chancellor because I doubt that any party has ever gone into a general election with every economic indicator bearing such favourable interpretations. As a result, all our majorities happily benefited from the Chancellor's exploits. Furthermore, as my right hon. Friend pointed out yesterday, last year's Budget was not an electoral bonanza that had to be reversed—such prophecies have proved false — and he has been able to repeat the mixture this year.
  My right hon. Friend deserves considerable congratulations for the growth rate of 4·5 per cent. and the consequent fall in unemployment. In contrast to the unemployment rate of 18·1 per cent. that is found in the constituency of the right hon. Member for Govan (Mr. Millan), the unemployment rate in my constituency is 2·1 per cent. By any standard that percentage represents full employment. Furthermore, the growth has been achieved without a sharp increase in inflation.
  Many of the Chancellor's tax reforms will be beneficial. However, I am bound to say that I believe that it is more than a little insensitive to hand out quite so much money to the rich — also to the not-so-rich, as my right hon. Friend the Chief Secretary pointed out—especially at a time when next month, quite a lot of people will find their social benefits markedly reduced. I find the refusal to uprate child benefit even more unforgivable than I found it last autumn. I still find it regrettable that, despite my right hon. Friend's reassuring remarks this afternoon, the Chancellor did not provide more money for the Health Service, which plainly needs that money. The Government are taking some unwarrantable social risks.
  Nevertheless, undoubtedly my right hon. Friend the Chancellor has been an extremely successful Chancellor. I do not wish to concentrate on his taxation proposals, but on something that he said yesterday afternoon:
  "The plain fact is that the British economy has been transformed. Prudent financial policies have given business and industry the confidence to expand, while supply side reforms have progressively removed the barriers to enterprise."—[0fficial Report, 15 March 1988; Vol. 129, c. 995.]
  The claim of transformation is a high one, and if it is justified we can all stop worrying about the British economy and start worrying about something else — a number of other candidates spring to mind. My right hon. Friend's claim deserves examination. If one looks back just a few years it may have some substance, but I am sure my right hon. Friend will agree that it cannot be substantiated if we go back and consider the entire period since 1979. During that period, Britain's average growth rate—even including the boost from oil—has been 1·8 per cent. which is lower than in any other eight-year period prior to 1979.
  There has, of course, been an extremely promising increase in productivity in manufacturing, but that is not of great use unless it leads to an improvement in our ability to compete at home and abroad and therefore to an
  1142
  increase in production. Unfortunately, that has not yet happened. Some good figures were published yesterday, but production in manufactured goods is still not much higher than it was in 1979, while imports of manufactured goods have nearly doubled.
  The claim of transformation must relate to a shorter and more recent period. Certainly in the period 1985–87 the growth rate has been much better—it has been a highly respectable rate of nearly 4 per cent. If the Government's claim is true, that rate of growth or something like it will be sustained and this latest recovery will be different from all previous recoveries when the go ended with a stop.
  The last time that we had a two-year growth period as large as the 1985–87 growth period was in 1971–73 during the Government led by my right hon. Friend the Member for Bexley and Old Sidcup (Mr. Heath) of which I had the honour to be a member. The conduct of economic policy during that period has rightly or wrongly come in for a great deal of criticism. Unemployment was reduced to a mere half a million—2·3 per cent.—but the hostile view, which has been widely expressed, is that real jobs were not created at that time and that the profligate use of monetary and fiscal policy first caused an inflationary crisis and then led to an extremely large increase in unemployment.
  It may be instructive therefore to compare 1985–87 with 1971–73. Certainly, those who oppose, in retrospect, the policies adopted in 1971–73 will want to make absolutely sure that we have not just got another consumption boom on our hands that is doomed, in common with all the others, to end with adverse consequences for inflation and employment. The policy stance in 1985–87, in common with 1971–73, has been strongly expansionary. Money supply—I do not know whether one is allowed to use such a phrase any more—
  Mr. Giles Radice: It is out of fashion.
  Sir Ian Gilmour: It certainly is. Money supply has risen by nearly 50 per cent. in the past two years, compared with just over 61 per cent. in the earlier period. If we measure the real money supply, correcting the figures for inflation, it turns out that there is no significant difference between the two periods.
  I have mentioned money supply not because it has any significant connection with inflation — that notion has been mercifully discredited — but because it is the counterpart of a huge rise in personal borrowing and a sharp fall in personal savings.
  There seems to me no doubt that fiscal policy, if properly measured, has also been expansionary, and in itself I greatly welcome that. The movement of the public sector borrowing requirement provides no guide because — as we know—it includes asset sales and the handing out of capital gains which happens nearly every time, although not, the last one. The PSBR works in the opposite direction to what it is said to do in the public accounts; it adds to, not subtracts from, personal consumption.
  Quite apart from the Government's privatisation programme, the fiscal stance, properly measured, has been expansionary. Even the so-called financial deficit is an ambiguous guide to the stance of fiscal policy, because that also seems to have been reduced by sales of existing assets. So far as I can see, the figure for the financial deficit is struck after deducting sales of houses by local councils and

  1143
  new towns, and apparently it was worth £4 billion in 1987–88. Those sales by a convention seem to be treated in the accounts as negative public expenditure, although they do not reduce demand at all.
  The fact that fiscal policy has been expansionary is not belied by the fact that revenue is so buoyant. No more than in Rab Butler's notorious first Budget in 1955 is buoyancy to be taken as evidence of fiscal prudence. Revenue receipts have been buoyant because loan-financed expenditure has risen and personal savings have fallen. The buoyancy therefore denotes the effect of the economy on the Budget rather than the effect of the Budget on the economy.
  The structure of demand was not exactly the same in 1985–87 as in the earlier period, but it was broadly similar. While investment and Government consumption rose less in 1985–87 than in 1971–73, the 5·5 per cent. growth in personal consumption was almost exactly the same, and accounted for a larger proportion of the total expansion — two thirds in 1985–87, compared with one half in 1971–73. The recent rise in personal consumption has been far larger than in any of the go periods. The expansionary stance of fiscal policy is confirmed by the Chancellor's expectation that consumption will rise another 4 per cent. this year, making gross consumption over the period 1985–88 the largest on record.
  The conclusion, therefore, must be that the expansions of 1971–73 and 1985–87 are broadly similar. I do not know whether the conclusion is more palatable to my right hon. Friend the Chancellor or to my right hon. Friend the Member for Old Bexley and Sidcup. My right hon. Friend the Member for Old Bexley and Sidcup had the bad luck to be hit by a fourfold increase in oil prices but, thank goodness, that will not happen today.
  The recent excessive growth in consumption has generated an inevitable deterioration in the balance of payments from a surplus of £3·2 billion in 1985 to a deficit of £1·7 billion in 1987, which, according to the Chancellor's figures, will this year rise to £4 billion.
  A few years ago, the Government kept saying that they were laying the foundations for a greatly improved economy and for an economic policy that was quite different from the failures of the past. It seemed to me that the foundation-laying was going on for a very long time, and I remember urging them to get on with the building. They finally finished the foundations and erected the building. Unfortunately, they did not erect the building on the foundations that they had spent such a long time laying. They erected their building miles away from the foundations on the same old boggy marsh that they had denounced previous Administrations for floundering in since 1945. The edifice that they have erected is the same old rickety structure as the others — the classic, authentic, British consumption-led economic boom, with imports rising far faster than exports.
  Whatever the potential merits may be of the Government's supply side measures — the trade union legislation has been beneficial in that regard—nothing has yet happened to the overall performance of the economy that cannot be accounted for by having had an unusually large and prolonged dose of old-fashioned stop-go. The restrictive monetary and fiscal measures of 1979 caused an unprecedentedly deep recession—that was the stop—and expansionary, fiscal and monetary policy—in
  1144
  a word, reflation—has caused the subsequent recovery. That was go. Thankfully, that has lasted longer than the other goes, because it started from a uniquely low level, because of North sea oil, because of the Government's trade union legislation and because of the weakness of the Opposition, which has enabled the Government to run the economy at a far higher level of unemployment than would have been possible in the past.
  Demand is being driven up towards the limits of our capacity to produce, which has dangers for inflation and the balance of payments. That has happened many times before, but this time it is happening long before we are anywhere near having re-established full employment.
  My right hon. Friend the Chancellor may be right in maintaining that he can get through the present year and beyond. Treasury forecasts have been so strikingly accurate over recent years that it is a brave man who questions them. I only hope that my right hon. Friend's optimism is justified.
  But no strategy for growth will be sustained for long unless it ensures that exports rise sufficiently to pay for imports. At present, they are certainly not doing so. We are undergoing a consumption boom, which, however popular it may be with those who have benefited from it—fortunately, many people have benefited from it—it does nothing whatever to resolve Britain's strategic problem in the medium or short term.
  I fear that the British economy has not been transformed. I therefore hope that my right hon. Friend the Chancellor will devote his formidable powers and energies to effecting the genuine transformation that is still so badly needed.
  6.4 pm
  Mr. A. J. Beith: The right hon. and learned Member for Monklands, East (Mr. Smith) said that there was something stirring in the Tory undergrowth. How elegantly it stirred in the remarks of the right hon. Member for Chesham and Amersham (Sir. I. Gilmour), and with what passion and determination it is possible to mount a critque of the Budget when it is done in the face of the recent rewriting of history. The experience of history being written prompts literary endeavour to quite a striking degree. One wonders how much more will stir in the undergrowth as a result of the Budget. So far, few heads have appeared over the top of the grass.
  What strikes one about this budget is its sheer, bare-faced injustice. The Chancellor has gone out of his way not only to make major changes in the taxation structure which will benefit one section of society, but to add to them all the other measures he can find. He has gone far beyond what anyone expected. Most of the press commentators and some Conservative Members were surprised—some have been pleased, but others have not — by the extent to which he was prepared to go in tilting the balance of the Budget.
  The impression given is of a Budget that is imprudent, not fiscally but in relation to the overall economic position and the serious problems with which we are faced, such as the balance of payments and the pressures towards inflation, which are likely to become worse. The balance of payments problem is bound to become worse for the reasons that were given by the right hon. Member for Chesham and Amersham. More money is available

  1145
  through tax cuts, which to a large extent will be spent on imported goods, which will add to the balance of payments problem.
  There is no sense of the urgency of the problems of the National Health Service and no commitment to the investment that the country needs. The beneficence of the past series of Budgets has been based on the sale of assets or assets gained from oil revenues. It is basic economic sense that, if one is selling assets and benefitting from those sales, the money should go not into current expenditure but reinvestment.
  It is difficult to see how the management of the economy is being carried out. Given the Chancellor's experiences of the past week or so, one wonders whether he dares to come out to get the milk bottles and the Financial Times off the doorstep for fear that the door along the street will open, a head will appear and that he will be warned that half a per cent. on interest rates is essential to curb inflation or that no intervention in the market must be contemplated. There is genuine doubt about the management of exchange rates in particular and interest rates arising from the events of the past two weeks. The Chancellor's few approved remarks in the Budget speech did not resolve those doubts.
  The injustice of the Budget is not merely the reduction in top rates of taxation or the effect of the standard rate reduction, but the fact that the Chancellor, having taken those measures, went on to decline to lift the national insurance ceiling, which was referred to earlier by the right hon. and learned Member for Monklands, East. It is arguable that in isolation it might be wrong to lift the national insurance ceiling and that it would create many losers, but in face of the other tax reductions it seems perverse not to lift the national insurance ceiling.
  In the circumstances, it seemed equally perverse not to limit mortgage interest relief and other reliefs to the standard rate of tax. When that is seen against the background of what poorer people will experience in coming months, it seems much more unjust. Many people will have to face up to the social security changes, the loss of benefit, the loss of housing benefit, and the changes that will affect young people. Of course, further down the track, but not so far down the track in Scotland, is the impact of the poll tax, the most regressive tax ever devised by anybody since the middle ages. All that is part of the background against which the Budget appears so uniquely unjust.
  No Chancellor can really claim the title of a reforming Chancellor if he does not seek to make the overall effect of the tax system fairer. That cannot be so in respect of the position of people at the bottom of the scale. Take a married couple with two children and £100 a week who, before the tax and social security changes, have a net income of £96·01 a week. After the tax and social security changes, they will find their income going down to £87·17 a week. There is something fundamentally wrong with a tax and benefit system that does that. The Chancellor has not considered the kind of reforms that will deal with that —indeed, he does not seem in any way exercised about that most serious problem.
  When we consider the number of people out of work, it is even more unjust. They are estimated at between 2 million and 3 million. Let us give the Government the benefit of the doubt about the way in which they calculate the figures and assume that it is not over 3 million. It is still far too many people who are deprived of the
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  opportunity effectively to contribute to the economy and to have the dignity and self-respect of being in employment. The Chancellor could have usefully cut employers' national insurance contributions. He could have done so generally or on a selective basis, directing help to regions in which the level of unemployment is highest. That would have encouraged employers in such areas to take on more labour.
  The Budget does not back or support investment in the economy. A better use of much of the money that was available to the Chancellor would have been on the supply side of the economy—for example, improving training and education. Why should we not have a highly trained unemployed labour force that is in demand by employers, rather than an unemployed labour force with which the Government do not know what to do and for which they provide time-using schemes of one sort or another?
  It is interesting to look at the way in which the Swedish system works. In Sweden, the money spent on unemployment is used completely the other way round. Three quarters of it is spent on training and employment services, and only one quarter of it is spent on benefits. We are worse than the reverse of the picture. We spend only one sixth on training and employment services and five sixths on benefit. We are notably unsuccessful at getting people into the position in which they are rapidly sought in the labour market.
  There are other areas in which public investment would have been appropriate. For example, I refer to housing. Small builders will be hit by the removal of mortgage tax relief on home improvements. There was an argument that something had to be done about abuse of that provision. Everyone knows the ways in which it had been abused. It was unwise for that to happen when no other measures were taken to stimulate housing improvement, given the need to improve our housing stock.
  The Government would have generated more investment if they had followed the experience of the present Foreign Secretary when he was Chancellor, and carried out a deferred corporation lax reduction and announced that, in a phased way, they would reduce corporation tax, thus encouraging and inviting investment when the economy so clearly needs it. Investment could have been generated by the sensible use of the massive resources available to the Chancellor.
  Of course, the overriding public worry was about the National Health Service and the fact that the Government seem oblivious of the crisis going on in it. The Government are fond of quoting the resources that they have put into the National Health Service, but, when the figures are looked at a little more closely, the true picture becomes clear. The Government have given a cash increase of 5·6 per cent. to the National Health Service, taking 1987–88 and 1988–89 figures. On the Government's own figures, after that is re-measured to take account of inflation, it goes down to an increase of a little over 1 per cent. When we take account of the higher rate of inflation in the National Health Service itself, the figure becomes minus 0·8 per cent.
  The Government stand convicted. The Chief Secretary did not seem to understand the point when I put it to him earlier. I was not putting to him the basic argument about the merits of prescription charges, I was quoting in evidence that the Government say that such is the rate of inflation in medicines that they feel obliged to put up prescription charges by more than the rate of inflation.

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  They must acknowledge that the rate of inflation in things crucially affecting the National Health Service is higher than in the economy as a whole.
  That means that their vaunted cash increase for the National Health Service is not an increase in real terms at all. Moreover, that does not take account of demographic changes—the larger number of people whom the Health Service must look after—or new technology and financial implications. The Government have been aware of that for long enough.
  Most Governments, when they prepare Budgets, are in the unhappy position of having made expenditure projections in November and then having a Budget that does not give them an opportunity to increase the projections. On their own admission, the Government are in a position to make substantial changes to the disposal of resources. They have the chance to do something about that problem. There is a greater urgency for them to do so. Health authorities are closing wards because they do not believe that they will have enough money to meet the result of the review body's decision on nurses' pay.
  If the Government were now to say that they will fund the outcome of the review body's decision, or even fund what they agree to pay nurses—if they are too mean to pay what the review body says, as they have sometimes been in the past—and if they were at least to tell health authorities that they are prepared to meet that cost, the rate of ward closures could be slowed down. At the moment, health authorities feel obliged to close wards and cut services because they cannot safely anticipate that they will have enough money to meet the pay review. That only begins to deal with the problem, given the figures that I have quoted. We need something to be done now. The Government should make an immediate announcement about the Health Service.
  We are faced with a Government who believe that public expenditure, as a proportion of gross domestic product, should decline year by year. That is the Government's continuing and unchanging objective. The only end product of that must be public squalor amidst private affluence. If we go along that route with no limit, we shall not sustain proper public services.
  There are other Budget proposals about which it is necessary to comment. The Chancellor's decisions on excise duties are strange. On tobacco taxes—the health evidence is absolutely overwhelming — he has done nothing about his pre-election sweetener of not making inflation increases. Therefore, he is totally failing to respond to the concern of those who have to face up to the problems of smoking and health.
  Similarly, the right hon. Gentleman has not taken any measures to deal with the failure to increase alcohol duties last year. He has made no increase at all in respect of spirits. For two years running, there has been no increase. He has made a fool of the Lord President of the Council, who is chairing a working party that is supposed to co-ordinate Government policies, so that there is some sensible policy on how to achieve more moderate drinking and deal with alcohol abuse. The Lord President issued a lame press statement welcoming what the Government have done about low-alcohol drinks. He dare not say more about the problem, because the Government have not touched the most dangerous area of all, spirits.
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  On fuel excise duties, the Chancellor took a step in a sensible direction. The differentials that he has so far produced are nothing like enough to encourage motorists to switch to fuels that do less damage to the environment—for example, lead-free petrol and diesel in cars. We need the much wider differential that we see in many other countries.
  On wider share ownership, an objective we share with the Chancellor, what he has done in the Budget is pathetic. Personal equity plans were a flop from the start, except for those who had already exhausted their capital gains tax allowances. It is a good scheme for them. Having exhausted their other allowances, they can go into that scheme and get more. It is of no value at all for the new investor.
  What new investor has any real incentive to go into a scheme that he does not need to go into? There are already existing capital gains tax allowances that are quite sufficient for anything that he is likely to get for his first few ventures into the stock market. If the Chancellor wants to encourage wider share ownership, he cannot simply raise the limit of the scheme. He must find a way of directing tax relief to new investors and thereby generate tax relief at the time of investment.
  The Financial Secretary to the Treasury (Mr. Norman Lamont): Does the hon. Gentleman not think that getting one's income free of taxation is of some interest to the small investor?
  Mr. Beith: The income first has to be generated by the capital gains, which will not be achieved on a scale necessary to exhaust the existing allowances by a new investor making his first venture. The evidence is that the large majority of the users and beneficiaries of the PEP scheme are those who already have substantial investments. The Chancellor's purpose was to widen share ownership, not to increase it for those who already hold shares, and I hope that he will look again at that issue.
  There are particular questions about the business expansion schemes in relation to rented housing. Why on earth are the Government generating an incentive that is confined to assured tenancies? Why are the Government saying to landlords, "You can have substantial tax relief only if you give your tenants the least favourable possible kind of tenure in that property"? Why should it be denied to those who offer protected shorthold tenancies and to those who offer more favourable tenancies in the properties that they build under the benefits of the scheme? Landlords can obtain very substantial benefits through the business expansion scheme only if they give their tenants the minimum possible tenure. That is an absurd proposal.
  We argued for the forestry changes, and we welcome them. We shall examine the planting grant scheme in more detail, to see whether the balance is right and whether the right kind of encouragement is given to planting where it is appropriate and where it is environmentally sensible.
  We shall examine the covenant changes in rather more detail, especially in relation to students, to see whether the scale for revised parental contribution really offsets the problems that will result from that change in the law.
  The move towards independent taxation for married women is welcome and long overdue, but it is not the mechanism that we would have chosen. It is striking that the high cost, as the right hon. Member for Glasgow, Govan (Mr. Millan) pointed out, arises from the

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  disaggregation of allowances on unearned income, so the most immediate tangible benefit from the scheme will go in large measure to those who have substantial investment income and the disaggregation of those allowances.
  Yesterday, the Budget speech was interrupted in scenes that I thought were deplorable and were illustrative of the problems which the Labour party has created for itself. It was not the first Budget speech to be interrupted. The Budget speech of 1909 was interrupted for the more benevolent reason of allowing the Chancellor to have a break after he had spoken for several hours.
  Perhaps the House needed a break after listening to several hours of oratory, even from Lloyd George. His Budget was a people's Budget and it became known as that. It rings with the sort of phrases that it would be impossible to use about yesterday's Budget. Lloyd George said:
  "This … is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests."—[Official Report, 29 April 1909; Vol. 4, c. 548.]
  Mr. Edward Leigh: Will the hon. Gentleman give way?
  Mr. Beith: This Budget wages war against none of those things. It wages war only against social justice. The Chancellor is in a much more favourable position than Lloyd George, who had to spend several hours explaining why he had to raise more taxes to deal with the problem that he described.
  Mr. Leigh: Will the hon. Gentleman give way?
  Mr. Beith: No. I am coming to the end of my remarks.
  The Chancellor had unprecedented resources at his disposal, far more than he expected when the public expenditure figures were originally decided. He could have fulfilled some of his tax-cutting objectives and still have done more to help the National Health Service, and to boost investment, but he chose instead to prove his boldness—
  Mr. Tony Favell: What is the hon. Gentleman's party going to do?
  Mr. Beith: Unlike some other hon. Members, I set out earlier in my remarks the precise measures that we would have taken had we presented a Budget. [Interruption.]
  The Chancellor chose instead to prove his boldness—and nobody can question his boldness—by showing how much further he dared to go than anyone had expected in slanting the Budget towards the better-off.
  The Chief Secretary said that it was a landmark Budget. Who needs landmarks, except landowners and those who have property, to set the bounds of ownership? Landmarks also set boundaries as to who will not get the property and will not get the benefits.
  The Budget is setting back the cause of a genuine enterprise society in which there is a sense of community. I believe that many people in Britain want an enterprising society and do not believe that the state should run everything or that industry and enterprise should be cramped by a bureaucratic system. Many people want society to be enterprising and successful, but believe that it can be done with social justice. The Chancellor has set
  1150
  his face against that and has put on his party the indelible stamp of a party which does not care about social justice, and that will be left to others.
  Mr. Nicholas Bennett: What is social justice?
  Mr. Beith: The hon. Gentleman does not know what is social justice. It is a recognition that a fair enterprise society does not merely have to create opportunities for people to make money.
  Mr. David Shaw: It is to make jobs.
  Mr. Beith: It also has to harness and maintain things which are of value, and to spread employment opportunities around the country to regions which do not now share prosperity. It is to do many more things on which the hon. Gentleman invites me to spend more time.
  It is quite clear that the Conservative party has set its face against combining the objective of enterprise with that of social justice, and it will be left to Social and Liberal Democrats to take up that challenge.
  6.26 pm
  Mr. David Madel: I agree with some of what the hon. Member for Berwick-upon-Tweed (Mr. Beith) said about training, but he would not expect me to agree with what he said about the Conservative party's views on social justice. He could have shown greater recognition of what my right hon. Friend the Chief Secretary said in his welcome remarks restating our full commitment to the National Health Service.
  I shall say something about training later, but I shall start by saying that the Budget was needed to maintain expansion and growth, which is the main reason for the welcome fall in unemployment in the past 12 months. We need to ensure that unemployment continues to fall and that the training provided by the Government is always relevant to the new jobs that are rapidly being created.
  I particularly welcome what my right hon. Friend the Chancellor said about exchange rate stability. He referred to the dangers to this country and the whole world economy if there were
  "further wild gyrations in the dollar exchange rate".
  He also recommitted himself and the Government to working for
  "greater exchange rate stability … in the process of international co-operation".—[Official Report, 15 March 1988; Vol. 129, c. 997.]
  Last night, in his television broadcast, my right hon. Friend gave some very interesting figures and graphs showing how this country has performed. He was right to reaffirm that at present we are top of the European growth league. He also did not shrink from other graphs which showed us at the bottom of those leagues in the 1960s and 1970s. Let us hope that we shall stay top of the growth league for the rest of the 1980s. We also need to continue being top of the growth league in the 1990s to even the score to 2–2. We have been 2–1 down at present. Indeed, we are now so closely tied to Europe with a growing trade, particularly in semi-manufactured goods which are then completely manufactured here and sometimes manufactured in Europe.
  As my right hon. Friend the Chancellor said, it is absolutely vital that exchange rate stability is maintained. In addition, multinationals have plants dotted around Europe, all of which are interdependent. There is a need for more overseas and multinational investment in Britain,

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  especially in research and development. That is another reason why I was so pleased by what my right hon. Friend said about exchange rate stability. It is important that industry advances and brings about more import substitution through an expansion of its manufacturing base here.
  I wish to comment on specific points made by my right hon. Friend in what was, basically, a statement about taxation rather than about Government expenditure, on which there is as usual a statement in the autumn. My right hon. Friend said that he was disappointed that there had not been a greater swing towards lead-free petrol.
  The newspapers are today carrying a number of advertisements by the oil companies that tell the public what to do. The public would do better to pay attention to the car manufacturers rather than the oil companies, because the immediate use of lead-free petrol could be damaging to certain car engines.
  My right hon. Friend appeared to be anxious to do more in that direction, and certainly there are opportunities to encourage more people to use lead-free petrol. For example, new cars exclusively designed for lead-free petrol could attract a lower rate of vehicle excise duty. I understand that the 10 per cent. car tax must be abolished by 1992 in line with the freer European market. There is a case now for a lower car tax on small and medium cars that use lead-free petrol.
  However, an even more important initiative is contained in a paper published by my right hon. and noble Friend Lord Young on the role of the Department of Trade and Industry and the changed system of research and development grants. Under the new scheme, support for innovation will be given only if a company has a project that offers exceptional national benefits. It it qualifies, it will be considered for a research and development grant.
  I hope that what will flow from this Budget and from the White Paper on support for research and development is that, once again, this country will become a more popular centre for the design, research and development of car and lorry engines. That will provide not only the engines for the next decade, which are bound to change because of the move to lead-free petrol and the introduction of new technology, but greater job opportunities as well.
  Although oil is easy to be had at present, we should never take a casual attitude towards fuel consumption. Oil is a finite product and we should encourage people to drive more fuel-efficient cars and to use lead-free petrol. My right hon. Friend has certain weapons in his hands, but I especially hope that the DTI initiative will be developed in the vehicle industry. It is particularly appropriate for research and development if the product will be of exceptional national benefit.
  My right hon. Friend included the treatment of company cars in his statement. We should remember the history of their growth. Many of them were provided as a consequence of the statutory incomes policy in the 1970s—they were a means by which companies could merrily get around the 3 or 4 per cent. pay limit. It is important not to get matters out of perspective. The popular view of a company car is that the managing director and senior managers drive from their homes to work, park their cars in the company car park and then drive them home at
  1152
  night. That is certainly one aspect of company car use, but another is the use by sales and marketing personnel, for whom the car is a tool of the trade.
  Current tax law provides that if a car is driven for more than 18,000 miles a year on company business, the tax liability is halved. My right hon. Friend has introduced a new package for company cars, and he should cut the threshold from 18,000 to 12,000 miles a year so that sales and marketing managers—who do not carry out the same tasks as representatives, but whose cars are a tool of the trade—are not penalised or discriminated against. I hope that he will consider making that change during the Finance Bill Committee, as it would complete his new package.
  I welcome my right hon. Friend's remarks about increasing share ownership. He said that he would change the provisions of section 79 of the Finance Act 1972, which would
  "make it easier for companies to provide shares to their employees outside the approved schemes … This will be of particular benefit to subsidiary companies and their employees."—[Official Report, 15 March 1988; Vol. 129, c. 1006.]
  That should lead to a further growth in self-employment because a number of those who have such shares may wish to cut their ties with the company and set up in self-employment.
  We recently had an important debate on the role of the self-employed, and the key to increasing self-employment is the definition by the Inland Revenue and the Department of Health and Social Security of "self-employed". When replying to the debate my hon. Friend the Minister for Employment said:
  "Since April last year, each tax and social security office has had one official responsible for decisions on employment status, which can save people much time in explaining their circumstances … It is perhaps still more important that a ruling by one Department will be accepted by the other, which ensures consistency and saves time. We are continuing to monitor the position to ensure that the measures alleviate the problem sufficiently." —[Official Report, 15 February 1988; Vol. 127, c. 741.]
  A consequence of this Budget should be a growth in self-employment, but I wonder about the attitude of the Inland Revenue and the DHSS. In many areas they are suspicious of the self-employed, but if they hinder them they are acting contrary to Government economic policy. I should like an appeals system for those who cannot obtain a redefinition of their status to self-employed. There should at least be more co-operation between the Inland Revenue and the DHSS on this important matter. I am convinced that with early retirement and with rationalisation in certain companies, not only individuals but groups will wish to carry out contracts for just one company, but be classed as self-employed. We should not stand in their way, because one reason for the fall in unemployment has been the rapid and welcome increase in self-employment.
  In my right hon. Friend's explanation of the reduction in the public sector borrowing requirement, he said that one reason for the undershoot was that less had been spent on benefits for the unemployed as a consequence of the fall in unemployment. I hope that, in 12 months' time, we hear that more has been spent on training for the unemployed. We need an even more ambitious scheme of training, especially for the older unemployed. As the number of young people coming on to the labour market begins to drop, there will be an increasing problem of the older

  1153
  unemployed who desperately need new skills and opportunities to return to the labour market. That should be the shift in emphasis during the next 12 months, and our economy is more than strong enough to achieve that.
  The Budget is generous to high-paid managers, and I welcome that. The tax cuts are an incentive to those wishing to move up the managerial scale. That puts an even greater onus on managers to get employee-management relations right. The Government have more than done their bit in changing trade union legislation to get the balance right between management and unions.
  Management has had a considerable tax advantage in the Budget, and that is welcome and correct. Yesterday, my right hon. Friend the Chancellor referred to the need to keep costs down and keep pay settlements reasonable. Management must get greater employee commitment to the welfare of their company and get a much greater feeling among, employees that they, too, are part of the company and are working for greater prosperity. There is now an uneasy calm in industrial relations. It is up to management to transform that into a sustained and durable peace.
  6.40 pm
  Mr. Giles Radice: I shall not follow the remarks of the hon. Member for Bedfordshire, South-West (Mr. Madel), who is one of the most civilised Conservative Members. I shall consider the Chancellor's Budget from three aspects—first, what it tells us about the Government's economic policies; secondly, what it tells us about the long-term prospects for the British economy; and, thirdly, what it tells us about the Government's social and political strategy.
  On economic policy, we should note first that monetary policy—at least, monetary policy on the 1980 medium-term financial statement — has been effectively abandoned. Aficionados of monetary aggregates—I am sure that there are many in the House—will be aware that the Government have successively announced different definitions—M3 in 1980, M1 in 1982, a re-defined M3 in 1985 and M0, also in 1985. All have proved entirely inadequate.
  Dr. Bray: What about M4?
  Mr. Radice: I shall come to that. In this year's MTFS a target is still set for MO, which is an extremely narrow measure. In fact, it is cash. Most people would consider that far too narrow a gauge of what is happening in the economy. Significantly, there is no target for broad money, which I think is what my hon. Friend the Member for Motherwell, South (Dr. Bray) calls M4. The MTFS does not say that the connection between the growth in monetary aggregates and inflation has proved extremely hard to discern. In fact, it has proved so hard to discern that in April 1986 the Chancellor told the Lombard Association that no economic relationship was perfect. One can say that again.
  Back in 1980, the Chancellor stressed the key role of markets in setting the level of interest rates, yet in his Budget speech he emphasised their importance as a key element in the Government's counter-inflation strategy. As he told the Treasury and Civil Service Select Committee last autumn: "When I think they ought to go up, they go up and when I think they should come down, they come down." That was the Chancellor in his grandest manner on interest rates.
  1154
  One point about interest rates on which the Chancellor is reticent is their relationship to and connection with the public sector borrowing requirement. I wonder whether hon. Members remember that the Chancellor used to say that reducing the PSBR would lead to a fall in interest rates, yet now, with a negative PSBR—I think that it is now called the PSDR, or public sector deficit requirement, in the Chancellor's jargon—interest rates here remain higher in real terms than in most other industrial countries. There does not seem to be a strong connection there.
  That brings me to the matter of greatest confusion—the Government's policy on exchange rates. The Prime Minister told the House that exchange rate levels are determined by market forces. The Chancellor, however, castigates the markets for their "wild gyrations". He extols the merits of a stable currency and preaches the virtue of managed floating. Yesterday he reaffirmed the importance of greater exchange rate stability. As it happens, I think that he is dead right, but the question is whether a stable and competitive exchange rate is compatible with an interest rate which attracts funds from abroad because it is higher than in most other countries. Clearly, the Chancellor must address himself to that question.
  The other question is political. Is the Chancellor's view compatible with the Prime Minister's? Does the Prime Minister still believe that sterling should be allowed to be pushed even higher, whatever its impact on our exporters? At the heart of this confusion is the dilemma facing the Government: should it be the prime task of interest and exchange rates to act as counter-inflationary measures or, bearing in mind the disastrous experience of 1980–81, must regard be paid also to the impact of high exchange rates and an overvalued currency on British industry? Understandably, as we have seen from the CBI's comments, British industry is eagerly awaiting the answer to that question.
  As the right hon. Member for Chesham and Amersham (Sir I Gilmore) said in an elegant and eloquent speech, the Chancellor frequently tells us—he did so yesterday—that the long-term prospects for the British economy have been transformed. It is certainly true that since 1982, after the major recession of 1980–81—about which, as the right hon. Member for Chesham and Amersham pointed out, we do not hear much these days—our growth rate improved. There has also been a significant improvement in productivity.
  Even so, there have been a number of disquieting signs that recovery, especially on the scale induced by the Chancellor's pre-election boom, may be difficult to sustain. For one thing, skill shortages are already appearing in the south of England. As the Oxford review of economic policy has shown, British training and education effort still lags significantly behind that of most of our competitors.
  Another problem is that the gap in research and development and high technology still seems to be widening rather than narrowing. That must be of concern. Last, but not least, there is the growing and disturbing balance of payments deficit—£1·5 billion this year and £4 billion next year. Of course, the Chancellor shrugs off the £4 billion deficit which is forecast for next year as "temporary" and as something about which we should not concern ourselves too much. If the right hon. Gentleman had been in opposition and there had been a Labour Chancellor, he would not have been saying that.

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  There is no evidence from what the Chancellor has said, or from the Red Book, the Autumn Statement or any of the forecasts that the British balance of payments of deficit is likely to be "temporary". There is no evidence from what the Chancellor has said that he has any plans to do anything about the deficit, but, as he has often reminded us and the Americans, the American example is a horrid warning of what happens when a balance of payments deficit is allowed to continue unchecked year after year. The Chancellor has made much of his fiscal caution in planning for a negative PSBR—we can argue about the merits—but the value of his project is less impressive when one listens to his remarks.
  The tax cuts proposed by the Chancellor, which amount to more than £6 billion in a full financial year, according to table 1·1 of the Red Book, are inevitably biased towards consumption. The truth is that this weighting towards consumption, when combined with already buoyant high street spending as the latest figures show clearly, and with extensive private borrowing—we know about the fall in the savings ratio—is bound to aggravate Britain's balance of payments difficulties. It will aggravate them quite simply because it will push up imports faster than we can push ahead exports. Therefore, on current policies, we shall be faced with a growing balance of payments deficit. Notwithstanding the Chancellor's trendy talk about the merits of supply-side measures, his Budget will almost certainly weaken rather than strengthen the British economy.
  My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) spoke earlier about the political and social aspects of the Budget. The Chancellor is primarily an economic Minister, but his Budget is bound to reflect the Government's social and political priorities. This Budget has certainly done that. The Chancellor had £11 billion more in revenue than was forecast last year. He had £11 billion to distribute. That gave him a magnificent opportunity—perhaps the greatest opportunity since the war—to heal wounds and to bring the nation together. He had the opportunity to unite north and south, the inner cities and the suburbs, the better-off and the less well-off.
  However, as my right hon. and learned Friend has shown, the Chancellor has completely missed that opportunity. Instead, he has rewarded the super-rich by reducing the top rate of tax from 60p to 40p. Furthermore, he has done it without restricting the main special allowances or taking into account the impact of increases in allowances on marginal tax rates.
  The Chancellor cites the examples of Australia, New Zealand and the United States. He might have pointed out that reductions in the top rates in the United States and Australasia were at least made less objectionable by attacks on the major tax breaks, which this Government have not made, by reforms in the allowance and credit systems and by help to those on lower incomes. This Government did precisely the opposite in the weeks before the Budget.
  What is so morally objectionable about the Chancellor's tax changes is that at a time when social benefits are being cut and those on average earnings are getting £5 a week extra, those earning £60,000 a year will receive at least £128 a week extra.
  Miss Emma Nicholson rose—
  Mr. Radice: I shall not give way, because I am about to finish.
  At the same time, there is nothing in the Budget for the 2·5 million unemployed or for those who use the health and education services. Clearly, the Chancellor thinks that politically he can get away with ignoring the needs of the poor, of the National Health Service and of the development areas. He also thinks—this is clearly the Government's political strategy—that he can buy the acquiescence of more affluent employees by tax cuts. The Government hope that their tax cuts will encourage those voters to forget about the needs of the less well-off and about the extent to which the Government have rewarded the super-rich.
  I believe that in this Budget the Chancellor has gone too far, even by Thatcherite standards. As the details of the Budget are fully digested in the coming weeks, its political cynicism will become increasingly clear. Economically risky and morally repugnant, the Budget does not deserve the support of the House, let alone the British people.
  6.53 pm
  Mr. David Howell: There is no doubt that my right hon. Friend the Chief Secretary was entirely right in his remarks. This Budget obviously represents a major turning point in the post-war pattern of taxation in Britain. For the first time since the war, we shall be a country of low taxes and high enterprise. For the past 40 years we have been universally regarded—sometimes caricatured—as a nation inevitably associated with high taxes, low enterprise and shoddy performance. That has changed, and this Budget represents a landmark, a milestone or whatever my right hon. Friend the Chief Secretary likes to call it: we are making a clean break with that past and the national humiliations and shame that went with it.
  I declare an interest, because for all my years in this House I have hoped for and campaigned for a really simple—a beautifully simple—tax system, which is now emerging with the two rates of 40p and 25p. Better still, from my point of view and for those who share my views, we have irrefutable evidence that the supply side system is now working—not that it will work in the future but that it is already working.
  As the right hon. and learned Member for Monklands, East (Mr. Smith) said, we have already witnessed the results of previous tax-cutting policies. As the right hon. and learned Gentleman said, the Exchequer is "awash" with revenue and it is precisely the areas of activity in which tax cuts have been largest — those affected by corporation tax and the higher rates of income tax—that have generated the largest increases in revenue for the public finances.
  If I have a disagreement with my right hon. Friends the Chancellor and the Chief Secretary it is a disagreement about one of the figures in their Red Book. According to the estimates showing the supposed yields from taxes next year and the year after, the abolition of tax rates higher than the 40p rate will cost £965 million in 1988–89 from the index base and more than £2 billion the following year. I would take a bet that this time next year we shall find that those figures are mythology and that higher revenues have been generated from lower tax rates. It will be an interesting laboratory case.

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  It can he argued that high-rate tax cuts so far have been one of a number of contributing factors; I have heard that argued on both sides of the House. Now, however, with the move towards lower top rates and a dramatically simpler system, we have a clear laboratory case in front of us. My bet is that the net effect will be a dramatic increase, rather than a reduction, in revenue. In other words, this so-called handout for the rich will probably cost nothing and it is quite possible that it will generate substantial extra revenues for the Exchequer.
  I listened to the Labour party, as represented by the right hon. and learned Member for Monklands, East, paint itself further and further into its dismal and dangerous corner as a high-tax party and push itself further and further into the political wilderness—where it could stay for 40 years if it continues to take this high-tax line.
  I fell to wondering somewhat whimsically what I would advise the Labour party to do to get itself into a more promising position if I was its consultant. The first thing that I would advise Opposition Members to do is to beat a rapid retreat from their attack on my right hon. Friend's tax reforms. There is no doubt that if they were pursuing a policy of lower taxation all round—particularly in low income groups but also in high income groups—they would simultaneously argue for higher revenues. The Labour party wants higher revenues for the various purposes with which I shall deal in a moment.
  Ms. Armstrong: One of the main complaints made by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) concerned the redistributive nature of the tax changes. Our main complaint is that the Government are redistributing from the poorest and the most vulnerable in our society to the richest.
  Mr. Howell: The hon. Lady has anticipated my remarks. I was going on to say, in my self-appointed consultancy role, that if the Labour party would get away from arguing about tax rates—not to put too fine a point on it, Opposition Members have made pretty good asses of themselves in that respect — they could concentrate on the more genuine intellectual question of how the enormous proceeds that have already flowed from previous tax-cutting policies and the success of the supply side theory should now be used. In that, there is an opportunity for intelligent debate.
  However, the Labour party has done its very best to lower the intellectual level of the debate by concentrating on the absurd theory that high taxes are a good thing and that low taxes are a bad thing. The opposite is true, from their point of view as well as ours.
  Mr. Holland: Would the hon. Gentleman advise the Labour party to follow the example of the United States? The Laffer effect did not work there, except that increased revenues were put into increased stock market investment, boosting stock market prices and contributing to the crash on 19 October. That happened because there was no mechanism for translating savings into investment through an industrial policy in the United States, and there is none here either because of this Government.
  Mr. Howell: I would advise the Labour party not to follow the budgetary policy of the United States, although it is presently inclined to do so, and pile up a budget deficit of horrifying proportions—although, thank goodness,
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  that is now coming down. I would argue that the Labour party would have a good debating ground and a perfectly genuine one—I do not agree with it—if it got away from its obsession with high taxes. It places the Labour party in an impossible position. My right hon. Friend the Chief Secretary had the right hon. and learned Member for Monklands, East nailed to the floor on the question whether he would restore taxes on the lower incomes of student nurses and so on.
  It so happens that my right hon. Friend the Chancellor has made a triple judgment about how he intends to make use of the enormous growth of revenue that has accrued as a result of past tax cuts. He is going for three things. First, he is going for further tax cuts. That is correct because it will refuel the engine of revenue generation and produce even more revenue in the future. Secondly, he is financing huge increases in spending. We tend to get those increases out of focus now because they were announced in the autumn. However, the increases are vast and many people, in all parties, may question the priorities there. Nevertheless, my right hon. Friend is using part of the revenue for huge increases in spending.
  Thirdly, my right hon. Friend is going for something quite remarkable, which, in the language of the past 10 years, would be amazing. He is not going for a deficit at all, but a £3 billion surplus in the public budget, with national debt being retarded by £3 billion. He has chosen that as a decision of policy and as a way of using some of the revenues. By past standards that is staggering and, of course, it is highly restrictive.
  I heard and enjoyed the speech of my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour), who told us about the expansionary stance that he believed he detected in current economic policy. I can tell him that there is nothing expansionary about running a £3 billion public sector surplus combined with rather high interest rates. In fact, some people would argue that interest rates are too high as well. Therefore, the brakes are on. The question is whether those brakes are slowing down the economy.
  Mr. Budgen: Will my hon. Friend give way?
  Mr. Howell: I have given way so often that I shall exceed my time and be penalised by the Chair. Much as I admire my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), I shall deal with him in the Tea Room afterwards.
  The question is simply why, in addition to his excellent and epochal tax reforms and his sanctions on large increases in social spending, my right hon. Friend has chosen to go for the £3 billion surplus. He is obviously worried about overheating, but I hope that he does not believe that a budget surplus of £3 billion will automatically be a great brake on the considerable growth of consumer borrowing and credit.
  The truth is that the whole business of deficits or surpluses in the budget is an extremely inexact science. Figures are paraded with spurious precision. As my right hon. Friend the Member for Chesham and Amersham pointed out, the Treasury missed the target last year by about £12 billion, and one could argue that the figure was even greater. Therefore, this is an imprecise area. We are subject to vast global influences over which we have not the slightest control. Therefore, on those grounds there is

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  not much reason to go for a £3 billion or £2 billion surplus or even a perfectly round zero, which would also have been a restrictive stance.
  The real worry of my right hon. Friend the Chancellor is to be found in the charts in the Red Book. The chart on page 9 shows the enormous growth in private borrowing with a corresponding decline in public borrowing and the table on page 23 shows the worrying, indeed some would argue catastrophic, decline in private savings. There is a miserable private savings ratio.
  We and the Americans, the two Anglo-Saxon nations, have had a miserable performance in this respect. The American performance looks as if it is now turning round. The aim of policy now must be to do that here so that we become a nation of higher personal savers. I also want to see much more interest by individuals in the use and investment of savings, rather than leaving it to institutions. However, as I have said, the aim must be to turn around that miserable personal savings ratio figure and to improve it by the appropriate tax reforms, which might even have been possible this year.
  If my right hon. Friend the Chancellor was worried that a lower budget surplus would have meant more money in the hands of people in the street who would have swarmed out and bought videos and imported goods, that is understandable. However, it may be that it would have been possible—it would certainly be possible next year — to have the sort of tax reliefs that transfer Government saved money not into individual spent money but into money saved by taxpayers. A graph on page 24 in the Red Book shows that the financial assets held by individuals are growing at a mighty rate. There is an underlying desire in Britain, in spite of all the difficulties people face, to increase personal borrowing and to hold moneys that they may get back in their wage packet instead of it being taken by the Government.
  Therefore, I should like to see—I should like to have seen it this year—a bigger boost to individual saving and investment than anything we have had so far. Personal equity plans have not been all that marvellous. Why not take the bold step and go for tax-free investment available to all on the first £2,000 along the lines of the loi monory in France? That would take the cause of wider ownership in this country on to its next stage.
  That is what I would have liked to see on top of what has already been done. In a sense, that is a greedy demand because I admire greatly what has been done. However, there would have been room for a further step without the danger of sucking in imports, increasing consumer borrowing or bringing about any of the other problems that exercise the Bank of England and other authorities now. Those are problems and they probably need to be dealt with by completely different means. It is whimsical to imagine that they could be dealt with by raising base rates by half a point. That will not help at all. That would simply push the pound up and cause us other difficulties.
  I should like to deal with another not totally unrelated issue. It is a much more specific matter raised by the Budget and by the present policies of income taxation and its administration. We know, because surveys now tell us, that the labour market today is not what it was. A third of it is involved in what is called flexible employment—that is, self-employment, part-time employment and other types of employment, not necessarily in the black economy
  1160
  but in jobs that are not the traditional employee status jobs. That is a wholly welcome development and it is one that Government policy, Government rhetoric and Government intentions constantly back. They want to see more self-employment, more independent employment and a much more flexible labour force. The Government's intentions are aimed at that. Indeed, some of the tax reforms in the Budget are designed to reinforce that.
  I have to tell my right hon. and hon. Friends that the news of their intentions has not reached the Inland Revenue. The Inland Revenue administration is still being conducted on the principle that all sorts of sub-contracting and flexible employment should, if possible, be opposed and rolled back into employee status. That is its dedicated crusade and it goes wholly against what I understand to be the policies of my right hon. and hon. Friends on the Front Bench.
  They need to look again at the definitions of self-employment being used by the Inland Revenue and at some of the more absurd cases where the concept of full-time employment is being applied by the Revenue to things which common sense tells us could not possibly justify that sort of categorisation. Of course, there are the usual bureaucratic answers, such as that individual taxpayers can challenge, appeal and so on. Nevertheless, out there a war is going on, with the Inland Revenue pursuing a war policy against a flexible economy. As I have said, that is not in line with Ministers' policies.
  I have to say to my right hon. and hon. Friends that I think that they are being taken for a ride over this issue. If tax reforms for a more flexible labour force, more self-employment and more enterprise is the policy, it needs to be backed up more vigorously in the administration of that policy as well as in the laws we pass in this House.
  That is one grumble, and I do not want it to detract from my admiration for the boldness of the Budget. What it shows after all these years is that the supply side works and that if one cuts income tax one achieves higher revenues, which allows further tax cuts and more enterprise.
  At the same time, it allows one also to finance good public services. If Opposition Members are trying to make the point that, in addition to what is being done, finance should be diverted to certain public services, that is a respectable point and one that can be debated on its merits. That would be better than moaning about tax rates, on which the Labour party is simply shooting itself in both feet.
  My right hon. Friend has the revenue and will have more revenue still next year, despite the tax cuts. Let him therefore show that the aims of supply-side economics can be fulfilled and that we can have a low tax society, a low or zero balanced budget—as the Chancellor has said is his aim—and well-financed, high quality public services. We as good Tories should show how that can be done.
  7.10 pm
  Mr. Nigel Griffiths: This Budget is a body blow for the low-paid, pensioners, the poor and the unemployed. Even as the Chancellor of the Exchequer rose to deliver his speech yesterday, he knew that 7 million British taxpayers are paid below the income decency threshold of the Council of Europe, and when he sat down, he knew that his Budget made absolutely no difference to them. Nor did the Chancellor help in any way the 3 million

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  men and women in this country whose wages have dropped so much under this Government that they pay little or no tax on their low incomes.
  Ten Tory budgets have seen the burden of taxation increase from 34 per cent. of national income to 38 per cent. The extension of value added tax yesterday to a new range of consumables, combined with an increase in various duties, ensures that the burden of taxation continues to run at a level 4 per cent. above that under the previous Labour Government.
  One of the many mistakes made by the Chief Secretary to the Treasury this afternoon was to raise the issue of housing benefit. The real hammer blows of this Budget fall on those in low income groups who receive rent and rate rebates in the form of housing benefit. In the five years since it replaced the rent rebate system, the Chancellor has clawed back £1 billion from pensioners and the poor and has removed housing benefit entitlement from more than 2,400,000 people— not by ensuring their incomes rise to a decent level but by pulling from under them the financial rug to which many of them contributed during their working lives and from which they were entitled to receive benefit in their retirement.
  The Chancellor would have done well yesterday if he had provided for reinstating the £640 million deducted as part of the latest social security cuts. Some 700,000 pensioners have been hammered by that change.
  After the 1982 Budget, a low-paid worker claiming both rent and rate rebates lost 60p in the pound in earnings. As a result of this year's Budget, he will lose more than 90p in the pound. That provides no incentive for the low-paid to work harder.
  The Chancellor is providing incentives for a very different set of people. In doing so he has laid bare the real economic motives of the Government. The picture of the Chancellor stripped to the waist on the front page of one newspaper today carried the misleading caption "The Tax Exterminator", when he is really the Rambo of the rich. As a result of the tax threshold being dropped to 40 per cent., the wealthiest 600,000 taxpayers have gained £2 billion at a stroke. And while the wage earner receiving £120 a week will benefit by 10p, those earning £60,000 a year will gain £136 a week. That cannot be fair. Is it fair that the poorest 500,000 families caught in the poverty trap now face an effective rate of tax of 60p in the pound? No, it is not.
  One newspaper today cited the case of a family with three children and a mortgage. The husband said that the Budget had been a great help to their stretched finances. He is paid £70,000 a year and has a home worth £250,000. He has an XJ6 as a company car and sends his two children to private school. Yesterday the Chancellor put an extra £500 a month in that man's pocket to help his stretched finances, which include a £164,000 mortgage.
  Even the Daily Mail comments that the Budget leaves pensioners out in the cold, and when the Chancellor reads that newspaper's interview with a senior nurse he should hang his head in shame. She is not one of the City slickers whom the Chancellor prizes so highly, or one of the 500,000 people who are paid the most although they do not necessarily earn it. Her job is less important to the Chancellor—she only saves lives. She earns every penny of the £7,800 salary she receives, yet she will gain in direct taxation by less than £150 a year under this Budget.
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  That nurse has a message for the Chancellor and the Government that they can read in the newspaper today. She would sacrifice all that modest gain if more could be spent on the National Health, Service.
  Some people enjoy more than a modest increase. The Daily Express lists them today. The merchant banker Christopher Heath will receive £500,000 from the Chancellor on his £2·5 million pay packet. Ralph Halpern will net an additional £250,000. Maurice Saatchi has helped the Chancellor and now the Chancellor is helping him. He will gain an extra £93,000 a year. The Chancellor has even helped himself to a more modest £4,000.
  Mr. David Shaw: The hon. Member has mentioned some very successful business men and the incomes they receive. Has he examined the accounts of the businesses they run to see the massive increase in corporation tax on the wealth they have created for this country, and at the number of jobs created by those businesses?
  Mr. Griffiths: The hon. Member entirely misses my point, but it is one that is not lost on the country. This Government have looked to those people who have done very well over the past seven years and this year have rewarded them more then ever. The problem is that most people in this country have suffered in order that the others may grow rich. That is the point the hon. Member misses, and he would do well to heed it.
  The problems created by the Chancellor are summed up in a statement made in the Daily Express today, which echoes the sentiments of the Chief Secretary to the Treasury. It states:
  "Our managers are so badly paid that they need every penny they can get from the Chancellor."
  That gives the game away. The real beneficiaries of this Budget are not the workers but the directors, not the nurses but the nouveau riche, not the ward sisters but the spivs. We reject the rationale of this Budget, and so does the country.
  7.17 pm
  Mr. Edward Leigh: Apart from the fairly dreary recital by the hon. Member for Edinburgh, South (Mr. Griffiths) of the tabloid press, he has nothing to say about what a Labour Government would do with tax affairs. This morning, his leader was asked repeatedly to state what his party would do for nurses' tax, and he refused to answer.
  This is an honest Budget. For 40 years, successive Governments have cheated the people. They have covered their tracks by subsidising the voters of today and stealing from the children of tomorrow. The replacement of a doctrine of national public borrowing by a national reduction of indebtedness will be seen as an historic return to decency. Incidentally, it is a courageous commitment, given the squalls in international waters. It is an example to the world against deceit in the management of public finance. It marks a vital staging post in the conquest of inflation. It is public recognition that, as inflation is theft, state morality is quite as important as private morality. It recognises that one cannnot help the poor by robbing their children's children.
  How that stands in contrast to the Labour way in their own crumbling fiefdoms, as they mortgage their town halls to fund their lack of financial prudence. How ironic it is that the party which accuses the Government of being the

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  most interventionist this century is reduced to the spluttering impotence of terrace chanting when faced with the massive withdrawal of government that is represented by cuts in taxation in this Budget.
  This is a people's Budget. If the hon. Member for Berwick-upon-Tweed (Mr. Beith) were still here or any member of the Social and Liberal Democratic party were present, I would tell them that this is a final rejection of the absurd doctrine that in some undefined and wholly unsubstantiated way the poor can be raised by punitively putting down the rich. Such a myth flies in the face of experience, which shows that cutting taxes for the better-off is repaid through higher productivity, more enterprise and less evasion.
  Only those, like some Opposition Members, afflicted with chronic political myopia or feelings of futile jealousy deny what every progressive left of centre party in the world—
  Ms. Armstrong: Will the hon. Gentleman give way?
  Mr. Leigh: No, I shall make a short speech. All those parties, including the New Zealand Labour party, accept that simplicity in tax bands literally reaps dividends.
  This is a Budget for decency. It has cut through years of sophistry, prevarication and double dealing in the treatment of married women and it ends the dependence of married women on their husband's tax affairs. This is a Budget for investment. It will unlock assets frozen in small farms and dormant businesses by the punitive and inexcusable refusal hitherto to recognise that CGT has been an inflation tax because it did not recognise inflation before 1981.
  This is a homes Budget which will begin a return to sanity by ending years of persecution of the privately rented sector that has hit the potentially mobile, the young and single so hard for so long. Above all, this is a Budget for a new consensus—a last goodbye to the low-growth, high-tax, low-productivity economy of the 1970s that at no time and in no place anywhere in the world has met people's expectations in terms of health and education provision. How well that is illustrated by the fact that in a year when we have cut taxes so dramatically, we have given an extra £1 billion to the NHS.
  If yesterday had been Labour Budget day, it most certainly would not have been national health day; it would have been national tax increase day for everyone and hospital building cut day, because that is the legacy of the Labour Government. That would be our fate if we were ever under Labour tutelage again.
  This will be remembered as a Budget for new ideas which finally and irrevocably committed the Government and the Conservative party to the progressive dismantling of shackles on the enterprise culture. This is the party of new ideas and a party which has the courage to go into new areas. Above all, we can build on this Budget and continue the work of aligning and simplifying the tax and benefit structures so that the poverty and unemployment traps which continue to be the most deadening restraint on self-reliance and self-respect are finally whittled away.
  I agree that it cannot be right that 500,000 people effectively pay a marginal tax rate in excess of 50 per cent. While I do not underestimate the difficulties in dealing with the poverty and unemployment traps, to which my right hon. Friend the Chief Secretary referred, we are
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  rapidly approaching the day when it will be possible to replace tax allowances and progressive tax bands with a universal, non-means-tested, cash payment paid for by a universal single tax band, created by fusing national insurance contributions and basic rate tax.
  That in turn could pay for all social security and health care—broadly £4 of every £10 of Government spending. In effect, it would become a national insurance premium which could be made mobile, if asked for, into private education and health care. Such a reform would dramatically reduce the poverty trap. At the same time, mortgage interest tax relief could be converted into a national investment benefit, usable not just for home purchase but for the purchase of shares.
  This is a Budget debate and I shall resist the temptation to go further into these radical and interesting ideas. I shall wait hopefully for a reply from the Prime Minister to an 18-page letter of ideas which I sent her. I am sure that it is sitting by her bedside all the time.
  This Budget consciously paves the way, not just for a low tax economy, but for a tax regime that positively encourages ordinary people to invest in private health and education provision and in shares, in the same way that we have traditionally encouraged them to invest in pensions and homes. In these terms words like historic and radical are not enough —"progressive" and "exciting" equally sum up a Budget on which I warmly commend the Chancellor.
  7.24 pm
  Ms. Marjorie Mowlam: The hon. Member for Gainsborough and Horncastle (Mr. Leigh) said that the Budget ends the dependence of married women on their husbands. Yesterday we heard similar statements from the Chancellor of the Exchequer and today similar statements came from the Chief Secretary to the Treasury about how this is a breakthrough for women. The Daily Mail carries the headline, "Lawson the Ladies' Man". We hear that this is a Budget for women.
  If this was a breakthrough for women and this was the first step along the road to equal pay for work of equal value, I would support the Chancellor on this section of the Budget. But the section that relates to women shows clearly that this will benefit only a small group of women. If a woman is a high earner or married to a rich husband, she will benefit. For the majority of women this Budget is a con, a sham and a fraud. Women will not be fooled by being told that it benefits them.
  I shall support those statements by picking out three parts of the Budget to substantiate them. First, we are told that independent taxation is a change from the married man's allowance to the married couple's allowance. Clearly there is a marginal advantage for women which I welcome, in that we shall not have to go through the humiliating experience when we complain about our tax of having a letter from the tax office sent to our husbands. That is an improvement and a change in the rights of women and their privacy, and I acknowledge it. But that is the only advantage. The majority of the section does not change the position of women in real terms.
  There are three reasons for that. First, the married couple's allowance will be paid to husbands only. If the Chancellor is serious about benefiting women, why is it not paid to wives? That would be a clear statement of his commitment to women. Secondly, the married couple's taxes will still not be independent. A husband will be able

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  to transfer any unused portion of his married couple's allowance to his wife. To do so will still involve the paperwork and exchange of particulars of income that occurs now. So although we shall have a marginal change in the rights of women, it will be small.
  Thirdly, few people will benefit from the transferability that is included in this section. It will benefit those with earned income only: a couple where the man is paid less than the woman and less than £4,095. The main couples to benefit from a transfer will be those where the husband does not work and has some investment income—in other words, mainly those over retirement age—and where the wife works with sufficient income to take advantage of it. That applies to few people. Therefore, that section looks as though it benefits women but in practice it does not. For most married couples, the section on independent taxation will mean no change.
  The second section which supports my argument relates to mortgage interest tax relief being set at £30,000 for one property. I accept that in any change there are gainers and losers, but ironically in this section the losers will again primarily be women. In London and the south where housing prices are so expensive and women are primarily in low-paid jobs, the only way to get into the housing market is to buy a property together. This section will militate against women and others on low pay trying to benefit in that way.
  The third section of the Budget that I wish to use to support my argument is that relating to changes in maintenance provision. That section simplifies the present regulations. Like many pressure groups concerned with such matters—for example, the National Council for One Parent Families—I welcome that simplification, but there is a rather insidious aspect of that part of the Budget which will affect the chances of many women and single parents of obtaining maintenance. At present, tax relief can be obtained if an unmarried man wants to pay maintenance to his partner, but, under this part of the Budget, that will no longer be possible, so women who are single parents and the children of unmarried couples, who already suffer a fair amount of discrimination, will suffer again. That section of the Budget is particularly discriminatory to one section of the community. Similarly, the setting of tax relief at £1,490 might affect the payment of maintenance which remains at £1,490 or below, so there will be no incentive to go above that level.
  I use those three arguments to suggest that the Budget is not primarily positive for the majority of women. If the Chancellor were serious about increasing supply side deficiency and women's chances of returning to the job market, he could have done a number of things.
  First, the Chancellor could have provided some tax incentive for workplace nurseries. I questioned the Chief Secretary about this earlier, but, as in the case of most of the other questions that he has been asked this afternoon, he managed to avoid answering the question completely. If there is to be relief for car parking and perks are to be taxed, there should be some incentive because, more than anything else, the provision of workplace creches would provide women with a chance to return to the job market. That would make a substantial difference to women.
  Secondly, the Chancellor had a chance to change child benefit. We have seen it cut by 30p in real terms. A couple of days ago, we went through the charade of discussing the Lords amendments to the Social Security Bill 1988, when the Government accepted that they might reconsider
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  increasing child benefit in line with inflation. However, in concrete terms, the amendments meant nothing. That benefit was paid directly to women. If the Chancellor were serious, he could have increased it and thereby made a difference for women.
  Thirdly, the benefit system provides 80 per cent. rebates for people on some form of benefit, but the poll tax will hit low-income families and part-time workers, again primarily women. They will suffer badly under the tight tapering of the benefit system and the introduction of the poll tax. Again, that is something that will change the reality of women's lives.
  Fourthly, the Chancellor could have done something for pensioners, a large proportion of whom are women. Pensioners have suffered a great deal under the rate and rebate cuts in housing benefit. They will suffer as a result of the increase in the price of TV licences and electricity. If the Chancellor were serious about improving the position of women, he could have done something about all those things.
  Finally, as a result of the change from family income supplement to family credit, free school milk and welfare milk will be stopped. Let me give two examples to support my argument. Under the Budget, a single woman on £100 a week will lose £4·98 per week overall. Her tax cut will be £1·44, but that is far less than the amount that she will lose in housing benefit as a result of the changes in April; that sum will be £6·42. Similarly, a single mother with two children under 11 will lose £11·69 per week overall. Her £1·23 tax cut will not make up for the loss in child benefit of 60p, free welfare food of £4·74 and housing benefit of £18·42. Therefore, even with the increase in family credit of over £10, she will still be a loser.
  I believe that I have given sufficient examples of how the Chancellor, if he were serious about being the ladies' man, as the Daily Mail tells us, could have done something more concrete for women. For the majority of women, this is not a positive Budget. It is not a charter for women. It is not the end of women being treated as their husbands' property. It is cosmetic. It is window-dressing and the women of this country will not be fooled by it.
  7.34 pm
  Mr. David Davis (Boothferry): I listened yesterday to the Leader of the Opposition saying that government was about choices. I have listened today to the alternatives being put forward. I have rarely heard such a band of false options and non-existent choices as those being proposed today. Tax cuts are not an alternative to funding the Health Service, except in the dire circumstances of the 1970s when we were mortgaging tomorrow to pay for today.
  The enterprise culture pays for the NHS and the welfare state. As my right hon. Friend the Chief Secretary has explained, the Chancellor has created a culture and society in which we have the incentive to be creative, the ability to be competitive and, therefore, the wherewithal to be compassionate. On that basis, I commend the Budget as a brilliant blend of the cautious and the radical—the cautious macroeconomic policy with a radical tax-reforming policy. I commend this Budget, and all previous Budgets of Conservative Chancellors that have made this Budget possible by the careful husbandry of the national resources, which, through a combination of a £3 billion surplus and tax reforms, has allowed us to build upon our success.

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  The keystone of that success is the ability of the British economy to compete in the international market place with its international rivals for a constant, or even a growing, share of world markets. Without that keystone, our growth rate would not be possible, our tax receipts would be unavailable and our social objectives would be unachievable.
  The competitive ability of an economy depends on two factors. The first is qualitative—the so-called supply-side effect and the enterprise economy. Yesterday the Chancellor talked about a financial virtuous cycle. That sector of the economy has been helped by tax cuts, small business aids, capital taxation aids and, in previous Budgets, corporation tax reform. Those supply-side effects are difficult to measure. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) said that they were not measurable. The best way of measuring supply-side effects is to consider the times when economists and econometricians get their forecasts wrong. We should consider those times when the Treasury underestimates the returns that we make.
  We should consider, for example, the economy since 1985. During that time, we have had a high level of domestic demand growth. Normally, in those circumstances, we see increases in import penetration in the economy, but since 1985 we have seen static import penetration and export shares of world markets being higher than was predicted by price and other measures. So the supply side of the economy is working well. The Budget will accelerate that aspect.
  On the other side, three quantitive factors have been supported by a responsible and stable economic policy. Those are productivity growth, low inflation and a stable exchange rate. I should like to consider how the Budget has affected each of those. My right hon. Friend the Member for Chesham and Amersham implicitly criticised the growth in consumer demand in the economy when he referred to the drop in the savings ratio. In large part, that drop is a function of a responsible policy. Since 1981, two thirds of that drop has come about because of a reduction in corporate pension payments. That is because the expected inflation has reduced dramatically, which has cut the requirement for those pension payments, and the returns on investments have grown dramatically. That too has cut the requirements of pension payments. Therefore, one aspect of that demand growth is a direct response to our stable policies.
  I return to the question of productivity growth, which is a key part of the competitive ability of the economy. Indeed, in many ways it is the key to its competitive ability because it is a component part of an industrial virtuous cycle. Productivity growth gives us more competitive ability. With more competitive ability comes more growth, and more growth makes it easier to achieve productivity growth. The Red Book shows that our productivity grew by 7 per cent. last year. In that same period, West German productivity grew by 2·5 per cent. Therefore, we have a significant advantage, which must be protected.
  That growth is another sign of supply-side success because our intrinsic productivity growth rate has increased from below 3 per cent. to above 4·5 per cent. Many academic economists around the country are living on a diet of humble pie as a result of having to reassess
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  what they thought our economy was capable of. Our productivity growth is one of the principal reasons for that.
  Another important aspect of our competitive ability is our inflation rate. Nobody can gainsay the Chancellor's success historically. I do not want to get into monetary technicalities on this matter, but I should like to consider our inflation as it affects our ability to compete. To do so, I shall divide inflation into two parts. I turn first to external inflation—inflation which is imported and has an effect upon our commodity and raw material prices. It is clearly demand-led or monetary-led, and is growing significantly at the moment. Commodity prices are increasing sharply, probably as a result of the buoyancy of world trade. I do not consider that aspect to be terribly important. Although it is important as a corrosive issue in the United Kingdom economy, it is not important as a competitive issue because it affects our competitors as much as ourselves.
  The other part, which I consider more important, and which has implications for our economic strategy, is internal inflation. It is internal inflation in the sense that it affects the components of the value added to our manufactured goods and the services that we export—what one might think of as measured by the GDP deflator. It is influenced dramatically by earnings.
  The Chancellor commented on earnings as climbing at about 8·25 per cent. That is not surprising because the British economy—the British private sector—has seen both large increases in its profitability, and a high level of profitability. I believe that 22 per cent. is the quoted return on capital today. Therefore, it is not surprising that we have a high earnings growth. Managers will not refuse their work force their earnings claims.
  However, it is interesting to note that that 8·25 per cent. is largely made up of overtime, on top of a 5·5 per cent. wage settlement. That must be looked at in conjunction with the productivity growth to which I referred earlier. The effect of the two together is a small cost increase in manufactured goods, of between 0 per cent. and 2 per cent.
  Our competitive ability is a function of our internal inflation and our productivity growth together. Productivity growth is itself dependent on growth. Therefore, one difficulty that we must consider in our exchange rate policy is that we do not administer such a shock to our economy that we lose growth and therefore lose productivity growth, because that sort of control could have the opposite effect to the one that we want.
  Therefore, I was pleased to hear the Chancellor say that he has a clear view of exchange rates as part of his strategy. We should not see exchange rates as an exercise in silly precision. Most industrial companies hedge their forward position and their foreign sales. They are not concerned with a 7 pfennig move on a one-day basis. They are concerned principally with major changes that they cannot hedge, such as major changes that are more than one or two years forward. When a company such as ICI builds a factory, it has to make its plans on a multi-year basis. It cannot make those plans if it cannot forecast, with some degree of reliability, what the exchange rates will be. However, neither would I advocate a Canute-like, or rather a Canute-adviser's-like, defiance of economic tides.
  As we have heard, market operations are useful for smoothing, which can have a useful effect on our interest rate policy because the smoothing of short-term volatilities reduces the risk to capital investors in the currency.

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  Therefore, they will invest at a lower interest rate in a smoother currency than they would in a volatile currency. Therefore, short-term smoothing is an appropriate use for that measure. It is also appropriate for countries and central banks to intervene as medium-term speculators.
  Outside the central banks, there does not exist a set of medium-term speculators in currency markets. It is all short-term speculation and, as such, the markets can become distorted. I give the example of the central banks' intervention in 1984 and 1985 in the dollar, when they held it down, which was quite profitable for them in the long run.
  Nevertheless, one must understand and accept that a currency policy is ultimately an interest rate policy. It is important that we have flexibility to keep our interest rates in a range that allows our trade-weighted index to stay somewhere in the 70s. That may be a 3 deutschmark level, or near to it. Again, that is not terribly important to 1 or 2 per cent., but it is important in order of magnitude terms.
  The significant issue is that that surplus or PSBR level means that the medium-term interest rates will tend slightly downwards. That is appropriate and helpful because at the moment Germany's interest rates will look up because the German economy is growing faster than expected. That, too, is rather fortuitous because it means that towards the end of this year we shall see a slightly better trade relationship than is facing us now.
  That is important, because the acid test of this Budget is not 1988; it is 1989, when growth rates will have diverged more than they do now; when the currency protection of hedging is lost by most British business; and when most world trade will look to turn down, even on the Treasury model. That will he the acid test of whether this Budget is successful as an economic strategy. In my view, the Chancellor and his team have made a brilliant judgment and created real foundations for British economic growth.
  7.47 pm
  Ms. Hilary Armstrong: This Budget was the first that I have heard in the Chamber. For many new Members, the Budget is a major event and, of course, it is the major parliamentary event that most of our constituents are aware of. They were listening, they were concerned and were looking for the messages that the Chancellor was giving. The Budget is the one thing that everyone in the country knows will happen and it is the one time of the year when the Government can give clear signals, not just about fiscal policy, but about the sort of society that they see themselves creating and the sort of society at which they are aiming. Through the Budget the Government give clear messages about the behaviour that they expect of individual people. In those terms, yesterday was very interesting.
  What messages were the Government giving about their sort of society? What sort of society are the Government interested in? Yesterday the Chancellor made it clear that he was making choices. He told us in no uncertain terms and more than once that it was not a question of "no money" but as he termed it, of a buoyant and successful economy. He was making choices about the way in which that economy was moved forward and would be used. We were told that the choices were based not on scarcity but on surpluses, as my right hon. Friend the
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  Leader of the Opposition said. The Chancellor has reminded us on numerous occasions that the money does not belong to the Government—it is the people's.
  How, then, did the Government choose to act on behalf of the people? We have heard today that this was supposed to be the people's Budget, in which case I detect a cynical view of what the people are like and of who would benefit from the Budget. It was restricted to a narrow band of our people.
  More than anything else, I was enormously saddened by the narrow and restrictive view that the Government have of the British people. The Chief Secretary reiterated time and again today that the only thing that can motivate them is personal gain. When I have met nurses, they have not gone on at me about their pay and asked why the Government were not giving them more; they have expressed concern about patient care. They are not asking for more for themselves, but more to do a proper job to ensure that the patient care that they have been trained to deliver can be given. But the Government have told them again and again that motivation comes only from personal gain—greed, to use a cynical word.
  I do not believe that the British people are like this. Of course they are interested in looking after their families and themselves, but they also care about their neighbours, their communities and the nature of the society in which they live. They want a Government who reflect that care. Despite all that the Government have said to the Opposition about higher taxation, we were not talking about that but about the choices before the Government. Overwhelmingly, the nation told the Government that it wanted one of those choices to be to put some of the surplus into a better National Health Service. It is a matter of quality of care as well as of pay.
  What message have the Government given to folk in my constituency? The Government have often used it as an example of the success of their policies. Consett has suffered the depths of the worst ravages of the Government's policies: unemployment there reached 30 per cent. Since the closure of the steelworks, jobs have been created there largely by the determination of the local councils, the regional arm of local government and the local people to ensure that the town would have a future. But no one in Consett says that the corner has been turned, and we still have high rates of unemployment. Jobs have been created and unemployment has fallen mainly because of the changes in the way in which the Government calculate the figures, but never mind. We welcome any new jobs, but yesterday the Government said that they were not interested in the nature of the regeneration.
  I had wanted to discuss Consett in greater detail—once I start on the subject, I get carried away—but let us instead consider women and children in my constituency. Women have begun to work in Consett and the rest of my constituency because of the change in the nature of employment, so they are interested in the tax system. My hon. Friend the Member for Redcar (Ms. Mowlam) has already dealt with this in some detail, so I shall be brief.
  There was nothing in the Budget for children, but we know that the number of children living in poverty has more than doubled under the Government. There was nothing in the Budget to assure us that future generations will be catered for.
  As for women, I wish to quote from the Financial Times leader about women, which says of the Chancellor:

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  "Having accepted the principle of separate taxation, he has kept a 'married couple's allowance' equal to the difference between the married man's allowance and the single allowance, which, amazingly, goes first to the husband, not to the principal earner. This is a very peculiar half-way house. Thankfully, the Chancellor has two years within which to have second and better thoughts."
  We would urge the Chancellor to have those second and better thoughts, to be radical and to address the issue rather than trying to con us, as he did yesterday.
  Because of the changing nature of work, many of my constituents are now what the statistics would call low-paid. A gentleman who was interviewed on television on Sunday, in a programme in which a Minister took part, said that his take-home pay is now what it was eight years ago when he worked in the steelworks. That shows what low pay is like in my constituency. The Government may well say that the low-paid should be grateful that they have a job—they are. But the Government have a double standard, consisting of one economic theory for the rich and a wholly different one for the low-paid and the poor.
  We have been told that the rich need greater tax hand-outs as incentives. But the people who are the key to economic development in Derwentside and Wear valley are those who fall into the category of the 500,000 who will have marginal tax rates of 60 per cent. to 90 per cent. That is not good enough. Many of them are in the poverty trap.
  The Government have given the people in my constituency a clear message: they are at best irrelevant to the Government and are being treated as an irritant. What have the Government done to encourage them to play the full part that they want to play in the economic regeneration of their towns and regions? How are these people to be encouraged to become entrepreneurial, and what incentives are they being given to contribute to economic regeneration? There is one economic theory for the rich and another for the rest.
  Whatever the disagreements between the Prime Minister and the Chancellor—on those we can only speculate—we know that there is one major agreement: that those who have shall be rewarded. It is inevitable, whether the Government like it or not, that it will be at the cost of the rest. The Chancellor's choices mean that he is satisfied with the divisions in our society, that he wishes to institutionalise those divisions, to strengthen them. The anger and disbelief felt by people in the north is widespread. The Government have intervened once again to emphasise that the north is an area that they have abandoned.
  There is moral outrage that a national Government can be so ready to abandon any notion of nationhood. There is a great feeling of social injustice. But there is more than that—there is a recognition that the Government have given up trying to procure a healthy economy throughout the country, that they have failed to take the steps necessary to bring about a thriving economy countrywide. Yesterday's Budget will continue to fuel the economy in the south but will do very little, if anything, to assist those of us who live in the north.
  The north wants the opportunity to play its full part. Earlier in the debate, during the speech of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), there was an exchange about factory space in the northern region. What Government Members fail to
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  recognise is that, because the economy is still so fragile, we must continue to have proper public recognition of the help that is needed.
  The market is not yet ready to take over in areas like mine. We still have the lowest representation and the lowest growth of small firms of any region in the country. We still have the lowest number of self-employed anywhere in the country. It is precisely the folk that I have been talking about who will have to become the self-employed and who will have to set up the small businesses. It will not be the £100,000-or-more-a-year men. It is precisely the lower paid to whom we look in our region to carry out this process of rebuilding.
  In these circumstances, the Government's crude reliance on the opinion that giving the rich additional rewards will lead somehow, magically, to more investment in the north—whether it can be described as naive or not—fails to address the reality.
  We know that what we need in the north is investment in manufacturing. We know that such investment is currently still 14 per cent. below what it was in 1979. We also know that prospects for manufacturing industry this year are not good. If we continue even at the same rate—and the rate of change in unemployment is forecast to slow down rather than increase—it will take between 10 and 11 years for unemployment to return even to the 1979 level.
  That is a price that it is not fair, not just, not moral for the Government to ask of people in the north. It is also an economic price that the country does not want and cannot afford to pay.
  8.3 pm
  Mr. Nicholas Budgen: I expect that you often reflect, Mr. Speaker, as we rise, hoping to catch your eye, that it is good for us to wait and listen to other hon. Members as they make their contributions; and, although we complain, it certainly is. I reflect that sometimes, when the House is apparently at its most noisy and contentious, there is none the less an extraordinary element of consensus.
  I say that in spite of the comments of the hon. Member for Durham, North-West (Ms. Armstrong), because although she expressed with great vigour her plea that her constituency and her part of England should be dealt with, as she would see it, with more compassion and with a higher level of public expenditure, the Government have, in fact, done much of what has been demanded of them by the Opposition in the past eight years.
  We have seen a massive change in the Government's overall control of the economy. After all, one of the main reasons why the Government were elected was to control inflation and then eliminate it, not to enjoy or even tolerate a rate of inflation of about 5 per cent. but to reduce it to 0 per cent. Another important reason for the election of the Government was to reduce public expenditure. But at least since the end of 1986 there has been a considerable increase in public expenditure.
  In so far as the Government put forward specific proposals for the elimination of inflation, they said that they would do so by the control of the money supply; and they even went so far as to identify a particular indicator as being the best example of what the money supply was—sterling M3. Sterling M3 is now growing by over 22 per cent. per annum. So there is, in spite of what the hon. Lady has said, a remarkable consensus between what the

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  Opposition demands and what the Government are doing. It is only those who had the misfortune to agree in detail with the argument put forward before 1979 who find themselves excluded from this cosy consensus. Nevertheless, in spite of being so excluded, I should like to say a few words about why I think this is an important Budget.
  All Chancellors say that all Budgets are important. In the 14 years that I have been in this House I have never heard a Chancellor describe his Budget as a modest little thing, unlikely to be noticed much by the historians. While this year's Budget may not be vastly historic, I suspect that it will be a Budget of some importance because of its tax changes. I would like to say why I, as an excluded monetarist, believe that the reduction of taxation by £4 billion in the next financial year is wise and may even be prudent.
  Although the Chancellor talks about himself as a tax cutter, he is not, of course, a tax cutter overall but only an income tax cutter. He is an increaser of taxes in a number of other important areas. When we talk about the dangers of overheating in the economy, clear signs of which exist, we must ask ourselves whether a relaxation of £4 billion in respect of income tax is dangerous as inserting yet further demand into the economy. I say no, for this reason, that it is £4 billion out of a total of about £160 billion; and £160 billion itself is only 42 per cent. of the gross domestic product. So we are not talking about a very large percentage increase in demand in the economy.
  Of course, it is important to all those who are affected by the tax reductions. As the hon. Member for Durham, North-West demonstrated, those who feel that they do not benefit from the reductions in income tax, and have a sense either of anger on behalf of their constituents or of envy on behalf of themselves, feel very annoyed. But, in terms of overall control of the economy, a reduction in tax of £4 billion is not all that significant.
  One of the most educational aspects of sitting here for some time is to observe the extraordinary way in which the Labour party expresses its envy. There is, of course, no party divide in that respect; we in the Tory party can express envy just as well when required to do so.
  Mrs. Maria Fyfe: May I say that no party can display greed as the hon. Gentleman's party can?
  Mr. Budgen: I agree that the Tory party can display greed very well. There is no doubt about that.
  Mr. Doug Henderson: Can the Tory party display morality any more?
  Mr. Budgen: The Tory party can indeed display morality, but it is sometimes reasonable to say that the modern Tory party does not display the wish for consensus and social cohesion as much as it might. I am simply trying to explain why I think that these tax cuts are permanent and will not be reversed, even when the present Conservative Government ultimately lose power. I believe that there has been a profound shift in taxation policy which reflects social changes. That shift is very well illustrated on page 58 of the Red Book, which shows that income tax as a proportion of general Government receipts dropped between 1979 and 1988 from 29 per cent. to 23 per cent.
  One of the great successes of the present Chancellor's regime—here I feel that he is entitled to describe his
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  activities as almost historic—is his change in the structure of corporation tax. He has succeeded in turning a voluntary tax into a low-rated tax paid by everyone, and abolishing the various tax havens in the corporation tax structure. As a result, corporation tax as a proportion of general Government receipts has risen from 6 per cent. in 1978–79 to 9 per cent. in 1988–89. The Chancellor has been very successful in that regard, and in increasing the yield from VAT and excise duties.
  There has been a fundamental change in the way in which the state raises its revenue—a change that is reflected in the extraordinary silence of Opposition Members, who are not saying that they will reverse these tax reliefs. They know that it would he unwise to say that, because, whatever they may say about the greed that undoubtedly exists in all of us, that greed also exists in their supporters, who will be delighted at the tax cuts. They will also notice that the cuts do not go only to the rich; They go on the standard rate, on the allowances and to all the lower-paid people whom the hon. Member for Durham, North-West represents with such force.
  Although the tax reliefs will not be reversed, they will be a very important change in the climate of opinion, which will last long after the present Chancellor is as well remembered in the House as Mr. Chancellor Heathcoat-Amory is now.
  Let me conclude by referring to a real dispute which I do not think the Budget has settled. Often, when there is the most noise, there is the most agreement, but although the dispute between my right hon. Friends the Chancellor and the Prime Minister has been private and quiet, it has been long-standing. It depends on very different attitudes towards the management of the economy, both here and in other countries. The 1979 theory of free markets depended on the proposition that it was impossible to rig exchange rates, although it might be desirable to do so, and that is also the lesson of the Louvre agreement. Let us take two examples of the way in which it has not worked.
  Before the crash, the Americans were promising, under the Louvre agreement, that they would take all the necessary steps to hold up the value of the dollar against that of other currencies. Once the crash came, and it became obvious that the cost of holding up the dollar was higher than they were prepared to sustain, political support for the actions necessary to the Louvre agreement went, and all the other countries that had been buying dollars like mad to support the agreement were left with dollars that were quickly worth 10 per cent. less than they had been. Poor old Britain, and poor old Bank of England; they had bought $20 billion, and they were left with a 10 per cent. loss—apart from the question of how they funded the intervention. That did not work because the political will to support the external agreement was not there.
  The Friday before last, the Governor of the Bank of England and my right hon. Friend the Prime Minister disagreed with the Chancellor, and also with the Louvre agreement, which contemplated—as does the European monetary system—the fixing of the pound against the deutschmark. When the Chancellor said, "Let us intervene, or, for the sake of argument, let us drop interest rates," the Prime Minister said no. There were, she said, signs of severe overheating in the economy, and dropping interest rates would give inflation a further push.

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  Intervening would be very expensive, and might add to the money supply. There was not the political support for rigging an exchange rate mechanism.
  There is also a dispute of substance between my right hon. Friends the Prime Minister and the Chancellor about whether the best indicator of future inflation is to be found in the exchange rate or in the consideration of the money supply, however that is indicated. Until that dispute has been publicly resolved, and proper disciplines exist and are known to be followed in the economy, there will never be such stability. I accept that there never can be total or certain stability, but an element of stability in public policy is required.
  I am opposed to the Louvre agreement, opposed to the EMS and opposed to the attempts to rig our economy according to an exchange rate mechanism. In one way Mr. Sam Brittan had it right when, on Thursday of last week, he wrote:
  "The DM3 free link was not the only possible nominal framework. By nominal I mean one which will allow for reasonable growth but not accommodate inflation. Monetary targets have been tried. A nominal gross domestic product objective was tried half-heartedly. But in the last year or two the sterling—D/Mark link was the only game left in town and now there is no game left at all."
  There must be some clear discipline if the economy is not just to drift along being fine tuned and fiddled according to whatever are the electoral requirements of the moment. There may be respectable arguments as between fixing the economy to the exchange rate or fixing it to some measure of the money supply, but there can be no respectable argument for a vacuum at the centre of policy.
  8.21 pm
  Mr. Alistair Darling: I am grateful for the opportunity to contribute to this debate and I shall be brief.
  I wish to echo the criticisms of the Budget that were admirably made this afternoon by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor. When I heard the Chancellor say that the Budget was to be a reforming one I, in common with my colleagues, listened in anticipation to learn what would be forthcoming. If one looks at this Budget, one is extremely disappointed.
  Let us consider, for example, the treatment of the rich and the poor. The abolition of the higher rate tax will cost the country £2·1 billion this year. I believe that that money could have been better spent on the Health Service or on research and development, which is sadly lacking in this country.
  I listened to the Chancellor talk about some of the taxes and perks that he intended to scrap. He said that he was going to scrap tax relief on covenants, but then went on to mention how they are used by individual families to finance student support. I wonder how many students are financed in that way. I believe that the Chancellor was talking about a tiny minority. Perhaps his friends or friends of Conservative Members finance their children's grants in that way, but most students rely on the grant that they receive and, over the years, that has been steadily undermined. I hope that, in the future, the Chancellor will give much more thought to incentives and opportunities for student finance than he appeared to do yesterday.
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  If the Chancellor was considering perks, why did he not scrap the share option scheme? That is ripe for scrapping as it benefits a very few people who do not need such benefit or incentive. Indeed, is it not the case that, very often, the people on the lowest level of income desperately need the incentive of more cash? It has already been said that it is they who find it most difficult to better their positions because of the penalising, marginal rates of tax. I believe that those at the lower end of the economy should be given the incentives rather than those at the top.
  I also wish to register my protest about the business expansion scheme. The Government are to encourage and give licence to people to make money out of those at the lowest end of the income scale. I believe that that is quite shocking. From experience in Edinburgh, I know that there have been scandals about bed-and-breakfast accommodation and I am shocked that people will be able to use such establishments as a tax shelter at the same time as exploiting the most vulnerable and, economically, the most weakest people within our society.
  Let us consider the effects of the Budget. Someone earning £60,000 year will be £128 a week better off. At the other end of the scale a married man, with two children, earning £115 will be 32p a week worse off. That demonstrates the disparity within the Budget. Surely, the unfairness of flat rate taxes occurs to the Government. With regard to income tax, there is a great deal to recommend a tapering system that reduces the difficulties that we face with high marginal rates, but is, at the same time, fair. We oppose the poll tax because it is grossly unfair and pays no regard to the ability to pay. I believe that the Chancellor's drive to reduce taxes will demonstrate similar unfairness. I am especially concerned about that.
  I am also greatly concerned about his threat—I mean a threat—to reduce the basic rate of income tax to 20 per cent. in the not-too-distant future. That bodes ill for the public services within this country because it suggests that public spending will be cut even further.
  What will the effect of the Budget be on our balance of payments? It appears that our current account deficit is now £4 billion. In November it was forecast at £3·5 billion and it appears to have increased in the past few months. If it was not for oil this country would face a major balance of payments crisis. A spending spree, without corresponding investment in the country, will mean that more foreign goods will be sucked in. It would have been nice if the Chancellor had paid some heed to the ravages of those missing years of Conservative ideology, 1979–81. Those years are never quoted when considering the country's growth or anything else; they are rather like Stalin's missing years.
  The Chancellor must address the major problem of the balance of payments, because if he does not, the result will be that the only people cheering at the end of the day will be our European and other foreign competitors.
  In common with most of my colleagues I am extremely concerned about the Americanisation of this country. In America a cruel deception is perpetuated year after year: everyone, no matter what their station, can somehow make it and they should remember they live in the land of the free and in the land of opportunity. We know that that is simply not true. In this country, the vast majority will remain at the bottom of the heap and those that have will be able to better themselves because they have the financial ability and other advantages to do so. Those at the bottom

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  will be denied that opportunity. In this country those who have money are able to exercise choice and improve their standing in many ways. We need to ensure that all the people have the power to choose rather than some of the people.
  We cannot run an economy whereby those living in one part of the country have the necessary opportunities and incentives whereas the vast majority—those who live in Scotland, the north, Wales. Northern Ireland and so on—are constantly disadvantaged. The reason for yesterday's anger—an anger that will continue—is that the Budget is for those that have. It is for the rich man, a champagne Budget. No wonder there was much cheering in the stock exchange last night and the cracking open of champagne bottles. On the other side, the dispossessed have every reason to fear for the future and fear for the welfare of their families. That is why the Budget is bad. It is about short-term gains for the few. For that reason we shall oppose it throughout this long summer.
  8.28 pm
  Mr. Graham Bright: I hope that the hon. Member for Edinburgh, Central (Mr. Darling) will not think it discourteous if I do not refer to his speech, but, in the interests of time, I shall push on with my speech.
  The Budget was unique because it recorded the longest period of sustained economic growth that Britain has enjoyed since the war. That growth is consistently higher than that enjoyed by many of our rivals and it has been accompanied by low inflation, rising output, rising productivity and falling unemployment. Those are achievements about which the Government and the nation can feel justifiably proud.
  It is vital that those achievements are sustained. The policies of restraint in public expenditure and borrowing, of lowering taxation and of rewarding enterprise have been the key to our economic recovery. Firm monetary discipline and a prudent fiscal stance go hand in hand.
  My right hon. Friend the Chancellor of the Exchequer is right to stick to those policies. They have created an enterprise economy in which the incentives to work and to prosper operate. The net addition of 500 new businesses created each week since 1979 and the welcome growth of 800,000 people in self-employment are proof of that. It is right to use the carrot of lower rates of income tax and higher thresholds to encourage that process.
  I strongly support the decision to cut the standard rate of income tax by 2p. It will provide a further incentive to private individuals, particularly small business men, to work harder. The 7·5 per cent. increase in personal allowances will be of direct benefit to those on lower incomes. The process of lowering direct taxation in this way must be continued in future years.
  I make it equally clear that I support the simplification of the higher rates of income tax and their reduction to 40p in the pound. The tax burden on the top 5 per cent. of earners had been growing recently. Those earners are also the creators of many jobs. Action to cut that burden and to reduce the attraction of tax-avoidance schemes is appropriate. Higher tax revenues will be produced in due course.
  Given those reductions in income tax, it is certainly right to reduce the rate of corporation tax for small companies to 25 per cent. My right hon. Friend the Chancellor of the Exchequer is, I know, aware of the concern which is shared by many hon. Members who are
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  interested in the prosperity of small businesses—that the impact of corporation tax should be more progressive. That reduction is a step in the right direction and it will leave many small incorporated businesses subject to the lowest level of taxation since 1945.
  I hope that my right hon. Friend the Chancellor will entertain the idea that I have been advancing for many years of enterprise bonds to allow small companies an instant rebate on corporation tax if they intend to expand, invest or carry out research and development, which is essential if a small company is to continue to grow.
  The difficulties that rapidly expanding small companies face in finding new equity are well known. The Government have rightly taken measures to help small companies and to encourage growth in the number of venture capital institutions. I understand that more than £700 million a year is being channelled through those institutions.
  There is evidence that the business expansion scheme has been benefiting companies of rather larger than those that it was originally intended to help. For that reason, I particularly welcome the proposal to limit the amount that any one company can raise under the BES in one year to £500,000. It will give newly established firms and those of smaller size a better opportunity to find equity investment than they have had in recent years. This is a matter about which I and my hon. Friends on the Back Bench smaller business committee have expressed our concern. I thank my right hon. Friend the Chancellor for responding so positively to that problem.
  One of the great advantages of small firms is their flexibility and mobility. Where there are opportunities and premises, there are always small businesses willing to take them up. Unfortunately, our housing market before 1979 had severe inbuilt constraints and our work force was relatively immobile. The position has improved, but more needs to be done, especially in the inner urban areas. The extension of the BES to residential property let on the new assured tenancy basis will encourage new private investment and provide more flexibility for workers seeking new employment.
  No tax is ever popular with small businesses, and VAT is slightly less popular than most. It imposes a considerable bureaucratic burden, although that is counterbalanced by the salutary need to keep up-to-date and accurate accounts, so there are benefits from it. Nevertheless, the increase in the threshold will be welcomed.
  There will be an even warmer welcome from small business men for the reform in capital taxation. Capital gains tax has posed a serious disincentive to owners of small firms who are contemplating retirement, and the differential in the rates of income tax has provided clever lawyers with scope for devising ingenious methods of avoidance. I have nothing against lawyers, but their activities in that regard provide a classic illustration of the problems created by an over-complex tax system.
  The extension of the ceiling on retirement relief for capital gains tax from £100,000 to £125,000, and the concession that half of any gain between that level and £500,000 will be free of tax, will go a long way towards solving this problem. Families whose assets, on passing to the next generation, have been subject to inheritance tax will now, thanks to the Budget, have to pay no more than 20 per cent. in total.
  That is important because small businesses are not just one-off, one-generation enterprises. They are often family

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  concerns offering employment and prosperity to successive generations. They are an essential part of the social and economic fabric of Britain, but they have been gravely damaged in the past by excessively high taxation. That era is over, thank goodness. I am sure that the extension of the ceiling will help to keep small businesses in the forefront for a long time.
  It is only in a prosperous enterprise economy that resources for private and public consumption can be generated. That is a matter about which we have heard a lot from the Opposition. However, if wealth is not being generated it cannot be spent. That requires a low tax regime, with in-built incentives and without complex allowances, reliefs and shelters. We have moved, step by step, towards such a system since 1979, despite being told that it could not be done and that it would have disastrous consequences. That has been shown, by experience, to be false.
  Regrettably, Opposition Members do not understand or do not wish to understand that fact, and they have no intention of accepting it. When I listen to them I sometimes think that they would be happier if their recurrent prophecies of doom were being realised, if the economy was contracting, if output was falling and unemployment was rising, if inflation was back at 27 per cent. and if the burden of taxation was increasing rapidly. Their prescription has been tried. It failed disastrously and no amount of crude blustering will disguise that fact.
  The Government have succeeded in revitalising the economy. The Budget builds on that success and my right hon. Friend the Chancellor is fully entitled to ask for the support of the House and the country for its contents. I am confident that he will get that support.
  8.38 pm
  Mr. Allen McKay: Is it the case that Opposition Members do not realise that the economy must prosper, that people must make money and be paid, and that money must be provided to pay for the National Health Service and for prosperity? Of course we believe that. We do believe that, over the years, the Conservative Government have put their hands into one pocket, taken from the poor and given to the rich. That has happened in Budget after Budget. It is not a case of funding the economy. This Budget is funding the rich. It is not a case of envy but of asking the Government why they used the available money in a different way.
  Everybody knew that money was available and that this could be a once-and-for-all opportunity. Everybody knows that most of our resources have come from oil and VAT. That must stop at some time. Instead of using the money that is now available to rejuvenate aspects of the economy that need to be rejuvenated—that is the sad thing about it—the Government have decided to give money to aspects that should not have received it.
  The Opposition's wrath was not directed to what the Chancellor said at the beginning of his speech. Some hon. Members sometimes nodded or shook their heads in agreement. When he announced the 40p tax level, there was the realisation that £3 billion went to the wrong place. About £2 billion would have done the National Health Service the world of good.
  That is what we were talking about. That is what people were angry about. The Government have said, "We shall
  1180
  not give £2 billion to the National Health Service because something could come up later." There is no doubt that the Chancellor had about £4 billion up his sleeve. He could say, "I hope that nurses' pay will be completely funded by central resources." That is the least that can be done in the present circumstances.
  Some of my colleagues and I met representatives of the Royal College of Nursing. It is true that they did not talk about wage increases or what was in it for them. They asked what was in it for the people they were taking care of. For years I have been proud of our general hospital. It is fairly new. When people have talked about the problems of their hospitals, I have wondered why they have not attacked my hospital. When I met representatives of the Royal College of Nursing I realised that my hospital has growing staff problems and that there are patient care problems.
  The Government's policies are driving wages down, encouraging private enterprise, harming hospital infrastructures and interfering with patient care. That is what the Opposition's wrath was about—not because money had gone to other things but because the Chancellor had money to use to put matters right. That was the problem. We have different points of view. Sometimes, hon. Members' points of view coincide.
  Unlike what is happening in any other area, unemployment in my area is reducing extremely slowly. Male unemployment is still about 18 to 19 per cent. My area is not coming out of the recession in the way in which other areas are. I have questioned why that is so. I knew why it was so, but I wanted to prove it. I live in a coal and steel-producing area. Industries have been wiped out because of Government policies. Recovery is sluggish because nothing is going in to replace them. Yorkshire and Humberside are the worst areas for prosperity—for example, car and house ownership and other facets. South Yorkshire has produced coal and steel for some time. There is only one worse area in terms of prosperity, and that is Northern Ireland. I was shocked to discover what is happening.
  Why is some of the money not available for my area? Why are we not getting unemployment down? [Interruption.] The Minister is smiling, but the facts are there. Time and again, I have said what is happening. The Government did not believe me. I asked the Government to declare it a special development area and provide some impetus. It is available. We have one of the finest work forces in the country. We have a network of roadways that join at the correct points. We have land available for building. We have people who are willing to get off their bottoms and get it done. We need that little bit extra to get it moving, and that little bit extra could have come from the Budget.
  There is no doubt that we are falling behind. I have a census to prove it. Time is short, so I shall raise the topic on another occasion.
  The Opposition emphasise what should have been done with the available money. The Government should have taken one important step, which would not have cost a lot. At least it would have shown that they have some compassion. I refer to television licences for old people. More than ever before, the Government had the opportunity to wipe out an anomaly. Old people, knowing that money was available, looked closely at what happened. They will not forgive the Government.

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  I refer now to the problems in my area and ways of overcoming them. First, we must provide special development status. Second, we must put money into infrastructure — schools, hospitals, roads, and, in particular, housing. I was in local government for about 26 years before I came to this place. At one time, a couple could get married and have a house within three weeks. But, within the short space of five years, the first homeless family has had to go into bed-and-breakfast accommodation. That is a clear sign of what has happened over the past five years. From the prospect of having a house in three weeks, they have moved to the prospect of bed-and-breakfast accommodation in five years. That is a measure of where the Government's policies have taken people in my area.
  We must examine what is happening and see how to put it right. With the Budget, the Government could have done a lot to put things right, but they failed to do so. In moving money to the rich, who could well afford to do without it, the Government have failed millions of people.
  I clearly remember one Prime Minister saying that our people
  "have never had it so good."
  That was true at the time, but it is not true now. We now have another Chancellor of the Exchequer virtually saying, "I am doing this because you have never had it so good." Retribution must come about. By the Budget, the people of this country will judge the Government for what they are. They will judge the Tory party's ideology and the thought behind what the Government have done.
  8.47 pm
  Miss Emma Nicholson: An Opposition Member referred to the Budget as a rich man's champagne Budget. It is in fact an ordinary woman's cup-of-tea Budget, and I shall show why.
  Again, Opposition Members have accused the Government of framing a Budget that says, "What is in it for us?" We are meant to be greedy Tories. By asking, What is in it for them?" Opposition Members are guilty of unacceptable paternalism. The Government have created a Budget that has something in it for all of us, and that is the way it should be.
  I am pleased that the hon. Members for Redcar (Ms. Mowlam) and for Durham, North-West (Ms. Armstrong) referred—albeit scathingly—to the subject that I wish to discuss. I was glad that they did so late in the debate, because, as the Chief Secretary to the Treasury pointed out in his lengthy speech of about 1,500 words, the shadow Chancellor did not even bother to mention married women. I am appalled by that.
  The Chancellor has put forward a tremendous reform. Although there may be pieces of fine tuning that perhaps the shadow Chancellor, had he bothered to glance at the subject, might have wished to offer us, he did not take it seriously enough to talk about it. That is abominable. It is a betrayal of Labour ideals. Surely, in their manifesto, Opposition Members pledged to produce independent taxation for women. However, when it appears, they ignore it.
  Of course, I did not expect any proper reaction from splinter groups on the Opposition Benches. Indeed, I did not get it. The hon. Member for Berwick-upon-Tweed (Mr. Beith) did not bother to talk about it, either. It is an important topic. It affects almost all women in the United Kingdom. For some reason, marriage is immensely
  1182
  popular today. Twenty years ago, 70 per cent. of the population married: now 90 per cent. of the population get married. I assume that 50 per cent. of those getting married are women. I suggest therefore that this reform affects almost every woman in the United Kingdom and that the new reforms will ease the constraints of marriage.
  How galling and humiliating it must be for a woman whose marriage is less than comfortable—and some people are unlucky in their private lives—to have to discuss her private financial affairs, her small savings—not the grand gains that a few women make on the stock exchange, but small, personal, intimate savings which she has set aside from the housekeeping—with someone whom she does not respect as much as she should. [Interruption.] I suggest that the Chancellor is removing the financial chador which cloaked western marriage laws in darkness for so long. He has thrown it off and women will be grateful.
  The tax laws which affect married women go back 203 years to the time of Trafalgar. While I appreciate that it may have been correct for Nelson to turn a blind eye to the extra-curricular activities of my namesake, Emma Hamilton, I sincerely believe that the abolition of the wife's earned income allowance is a magnificent move. This has surely been a crushing ceiling on the employment of women. It may have been acceptable in the bad old days when work was seen as the prerogative of male heads of households, but it is surely not acceptable now when 63 per cent. of all married women work and only 5 per cent. of all families have male heads of households who are the only earners. I therefore believe that this is a very important measure.
  I am delighted about the abolition of the married man's tax allowance. I shall return to the point raised by the hon. Member for Redcar. She called the reform a sham and a fraud. She said that it will benefit only a very small proportion of the population and that it will help women only if they happen to be married to a very rich man or if they are very high earners. I believe that she is wrong because, as. I have already mentioned, independence, personal dignity and the ability to spend will be achieved by the new measures.
  Privacy was not mentioned by any other hon. Member, male or female, who spoke for the Opposition, although the hon. Member for Redcar agreed that privacy matters desperately to women within marriage as well as outside it.
  The equality of personal allowances will benefit everyone. We are being offered, and we shall accept, the first ever tax allowance for married women. It can be placed against all forms of income. It does not matter whether it has been earned or saved. That is a real and signal advance.
  The married woman's pension will affect the poorer female population. Women pensioners will be able to have allowances and any elderly married women will qualify for age allowance for the very first time. Generally, we are an aging population and pensioners are among the poorest in the land. I am delighted to say -that this measure will affect women at the poorer end of the scale as well as those who are better off.
  Ms. Mowlam: I agree that the measure will give a certain degree of independence and will get round any lack of privacy that we suffer. Does the hon. Lady agree that the Chancellor could have increased the allowance of

  1183
  individuals when they get married and kept the married couple's allowance? Does she agree that the Minister has not gone far enough?
  Miss. Nicholson: I am happy to say that I hold the view—as I believe the Government do—that the state should, as far as possible be non-judgmental in its financial dealings with its citizens. That means we have to withdraw the discriminatory charges against marriage. I appreciate the hon. Lady's earlier point about the problems of mortgages for women who share accommodation and who need to buy houses together. Nevertheless, it is right and proper that discriminatory charges against marriage should be removed and that the mortgage ceiling should be attached to the building and not to the people who are living in that building and contribute towards it.
  Returning to the equality of personal allowances, that will give women a enormous incentive to save. The fact is that not many married women sit at home doing nothing. Only 11 per cent. of married women not in work do not take care of dependants who are either children under school age or elderly or sick people. Only a fraction of married woman are not working, in terms of not being out in the market place and not having a carer's duty at home. That is a very important point.
  Couples' allowances reflect the lack of equal pay for work of equal value and the fact that women are still the smaller earners in society. I hope and believe that that will change.
  Many married women prefer to stay at home while their children have not reached the statutory school age. Nonetheless, I should have preferred the couple's allowance to go to the higher earner. I accept that for the moment in almost every instance the higher earner will be the husband, although I hope that as the pattern of society, work and reward alters in terms of wages and salaries, the Chancellor will examine that again. I can only assume that is an easement of the abolition of the married man's tax allowance.
  Finally, I believe that £500 million is a very small price to pay to clear away the injustice of 203 years. This is a reform which will be welcomed by all women. I suggest that it is economical, inventive and fair-minded and that those three qualities are the hallmarks of this great reforming Budget.
  I commend the Chancellor's magnificent work in doubling the limit on donations which will come through the system of payroll giving. Payroll giving was invented in 1947 by the Children and Youth Alyah, the British arm of the Zionist movement. There has been a very slow increase ever since. Until the Chancellor turned his attention to it, it never took off. It is a magnificient way to make a pesonal contribution to the welfare of others. Voluntary giving is the bedrock of our society and can be equally matched through state provisions by the Conservative Government.
  Mr. Deputy Speaker (Sir Paul Dean): Order. It is hoped that the wind-up speeches will begin at 9.10 pm. I appeal for brief contributions so that some of the hon. Members who have been sitting here for a long time will not be disappointed.
  8.57 pm
  Mr. Pat Wall: For many years of my working life, I spent Budget Tuesdays being summoned to an office, under a distributive trade three-line whip, and forced to sit and listen to a transistor radio—which was banned on Derby day—and await with bated breath any changes in purchase tax, latterly VAT. Quite often, they resulted in many additional hours of weekend working drawing up new price lists. I assure the House that I found it far nicer to sit on these Benches yesterday, even listening to the present Chancellor, than to carry out those tasks.
  For the 850,000 people on the hospital waiting lists, for the 3 million who earn too little even to pay income tax, for the 7 million who take home less than £135 a week—the European decency threshold—for those, whose number has increased by 50 per cent. to more than 500,000, who are caught in the poverty trap, for the two-child family who pay as much in direct taxation on average earnings today as they did 10 years ago, for the two-child family on half average earnings who pay twice as much in direct taxation as they did 10 years ago, this Budget is a disaster, especially if we compare them with those who earn 10 times the average income and who, as a result of the Budget, will pay 45 per cent. less in direct taxation.
  The cut in tax rates for the top earners, which will cost £2 billion, will provide one third of the total tax cut, to the benefit of just 3 per cent. of taxpayers. Overall, the burden of taxation has increased because of indirect taxation, which hits working people hardest, and which has increased from 34 per cent. to 38 per cent. under this Government.
  Mr. Chris Pond, the director of the Low Pay Unit, said today:
  "The analysis shows clearly the double standards in operation with tax cuts for the rich and benefit cuts for the poor. The Government will save £1₷1 billion in the social security changes introduced this April, but it has given away twice this amount in tax cuts. The Chancellor boasts proudly that he has managed to balance the Budget. But he has failed to balance the scales of justice between rich and poor."
  The rich will do very well out of this Budget. Under this Government, the number of millionaires has increased from 4,000 to 21,000. The top 60,000 taxpayers have already received about £5,000 each in tax rebates. For two fifths of our population, yesterday was not "super Tuesday"—it was never on a Monday, never on a Tuesday, and never on any other day.
  A few weeks ago my hon. Friend the Member for Newham, North-East (Mr. Leighton) likened the Chancellor to the Emperor Nero. I understand that the right hon. Gentleman plays the piano rather than the fiddle. Despite the media hype, the flamboyancy and the rather sickly looking Dispatch Box cake, the Chancellor is the emperor without any clothes. What is worse, he has convinced himself that he is cloaked with levels of production, investment, employment, productivity and profit that serious analysts and even the more sober Opposition Members know are but an illusion.
  As has been said, from 1964 to 1973 the rate of production was 3 per cent., falling to 1₷4 per cent. from 1979 to 1986. It is far lower than Europe, the USA or Japan. In comparable periods, the British economy has lagged behind that of its rivals. When growth in manufacturing output is taken into account, the figures are far worse. Between 1973 and 1985, our manufacturing

  1185
  fell absolutely by an average of 0·5 per cent. a year, while that for every major competitor rose. The faster rate of growth in manufacturing in 1987 of 4·5 to 5 per cent. must be set against that long-term record. Manufacturing production now only equals its peak eight years ago, and manufacturing investment is still 9 per cent. below its 1979 level. So much for the Chancellor's boom.
  The boom, such as it is, has been boosted by £60 billion of oil revenue and, more recently, by revenue from the financial and service industries. Until last year, manufacturing was stunted, and any growth was made possible only by a sharp decline in the value of sterling, making exports cheaper and imports dearer. During the past six years, sterling has risen sharply against the dollar and has now passed through the Chancellor's personal European snake of a 3 deutschmarks parity. He appears to be getting little help from the Prime Minister.
  The Confederation of British Industry, in "CBI News", takes a view rather different from that of the Chancellor. It said:
  "The decline of the dollar … has resulted in a sharp drop in optimism. The balance of optimism to pessimism is minus 7 per cent. compared with plus 14 per cent. in October. Although export orders and deliveries increased over the past four months, they are expected to slow over the next four."
  I wish to make many points, but I am aware that other hon. Members wish to speak. I want to make one point about productivity and manufacturing. An article in the Financial Times said:
  "It is often forgotten quite how far Britain fell behind. Manufacturing outpt in September, for example, despite the recovery of recent years, was still 2½ per cent. lower than in the boom of 1973 under Mr. Edward Heath. Over this period, production has risen by 49 per cent. in Japan, 46 per cent. in the US, 18 per cent. in Italy and 16 per cent. in West Germany.
  The comparison is in some ways even bleaker if 1979, the year Mrs. Margaret Thatcher entered Downing Street, is taken as the starting point. A marginal 1½ per cent. rise in manufacturing output in the UK contrasts with gains of, for example, around 32 per cent. in Japan and 23 per cent. in the US. If Britain is to regain its standing, even of the late 1960s, it will have to out-perform its rivals for at least a decade, perhaps much longer."
  It continued:
  "it is not unreasonable to argue that British productivity is still only between a third and a half of that in other leading industrial countries."
  The Government had an opportunity to finance health and insurance infrastructure and to refinance industry and building, which is a non-inflationary approach, but they chose to give money to the rich. There is a growing world crisis. British factories are under-funded and under-equipped. The workers are under-trained and under-skilled. There is under-investment in industry. Whether the Government like it or not, the Budget does not herald an atmosphere of growing prosperity and growing riches for the top section of society. It denotes a future of disaster for the people of Britain unless we change this Government and their proposals.
  9.6 pm
  Mrs. Maria Fyfe: The hon. Member for Wolverhampton, South-West (Mr. Budgen) said that where there was a lot of noise there had to be agreement. It is a little like imagining a large crowd at a Celtic and Rangers match shouting at each other, "We want a draw."
  We have been told also that the Opposition argument is about the politics of envy. I should like to point out
  1186
  something to the few Conservative Members in the Chamber. The people whom we represent created the wealth in the first place. Their money created the £2 billion and, as they said in every opinion poll that one cares to name, they wanted it to go towards the Health Service. The House rises during the long summer recess and the country seems to manage quite well without us. If the work force who created the wealth stopped their work for two and a half months, the economy would collapse. That proves my point.
  The Chancellor's Budget has been presented as a great deal for women. That is far from true. Fifty per cent of all the tax cuts in the Budget have gone to the top 10 per cent. of taxpayers. The bottom 50 per cent. of taxpayers pocket 10 per cent. of the tax cut money. Who are largely among the bottom 50 per cent. of taxpayers? It is women, mostly in low-paid jobs. Indeed, there are many in the lowest quartile. Taxes remain at 38 per cent. of GDP. The burden has shifted to indirect taxes, national insurance contributions and other taxes which fall predominantly on low-income groups—again, mainly women.
  There are 13 million people in families below the tax threshold on untaxed benefits who will get no tax cuts. For up to 2 million people living on low incomes, benefit cuts cancel out any tax cuts that they have had. A wife and mother in such a household, struggling to keep her family fed and clothed, will view the Budget with bitterness, if she has any time to take in its details. For a person with a weekly income of 100 the net gain is 5p a week. There will be dancing in the streets of Maryhill at that! For a person with a weekly income of £2,000 the net gain is £281 a week.
  We have been told that this is all justified by the need to control tax avoidance and evasion℄in other words, do not put taxes too high in case people dodge them. It is amazing how the financially well-off get financial incentives not to indulge in what can be criminal behaviour but the lowest of the low-paid and the unemployed are chased by social security snoopers to ensure that they do not break the law.
  We are supposed to have seen a big reform with tax forms. Because, at long last, women will fill in their own tax forms the Chancellor thinks that we cannot see through his little game. He has abolished the married man's tax allowance, but, hey presto, just like a magician, he flicks out of his sleeve a married couple's allowance. Is that to go to the man and the woman half each? No, it is to be paid to the man, not the woman. Where is the big reform in favour of women in that? Will all couples—or at least the male half of them—benefit? Do not ask silly questions.
  As the hon. Member for Torridge and Devon, West (Miss Nicholson) said, this dodge gives an extra £500 million of tax cuts through independent taxation of investment income—hardly the kind of money that most families aspire to see. A couple with £10,000 investment income will save an extra £41 a week in tax. That is more than some of my constituents have to live on all week. The Government continue to ignore that fact.
  On the same day as the dawning of the new era of independent tax form-filling, the Chancellor is to introduce for women in England and Wales the joint and several liability for their husbands' poll tax—a year later than in Scotland. If women think that the Chancellor is doing anything for them, they will learn differently before very long.

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  There is much else to be said about the Budget that I do not have time to say. However, let me mention the general impact of the Budget. The Chancellor has put more money into the hands of those men and women who will do nothing with it other than live lives of even more offensive display while others live in squalor. The consumer boom depends on imports bought with credit cards and other forms of high interest loans. The Prime Minister read some economics 40 years ago, it seems, and she thinks that high interest rates curtail borrowing. That seems logical, but it has not happened, has it? All the borrowing is boosting imports from other economies and not boosting our investment in our economy.
  Even if the forecast were correct, that investment would still be below the level achieved in 1979. The hopes for jobs are therefore bleak. We continually hear about the recovery of the economy. Hon. Members mentioned high unemployment rates in their areas, and they are dreadful indeed, but I have yet to hear of a constituency with unemployment as had as that in my constituency, with 22 per cent. average unemployment and 29 per cent. for men. Where is the wonderful boom in the creation of jobs? We are still waiting for it. The Government give tax incentives for the rich, but if one is poor one must learn to live on less. That is the message of the Government.
  This Budget has shown more clearly to many more people that the Government are hellbent on a massive transfer of wealth from the low-paid and unemployed to those who are already substantially well off. It will not be forgotten or forgiven.
  9.12 pm
  Mr. Stuart Holland: We have heard many interesting contributions during the debate and it is a great pity that the House is not more fully attended, given the major issues to which we have addressed ourselves. In that context, I think especially of the contributions made by hon. Ladies—for example, my hon. Friend the Member for Redcar (Ms. Mowlam), who talked about the married man's allowance and the implication of the change for women, my hon. Friend the Member for Durham, North-West (Ms. Armstrong), who referred to the Health Service, and my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) who has just spoken. I regret that she did not have time to make her further points. Among other things, the hon. Member for Torridge and Devon, West (Miss Nicholson) kindly drew to our attention the fact that she is the namesake of Nelson's mistress, a point that I note with interest.
  There is a character in Voltaire's "Candide" called Pangloss. He is the man who echoed Leibniz in saying that "All is for the best in the best of all possible worlds". He said that over the ruins of the city of Lisbon, which had just been devastated by earthquake. The Government's economic policy has not yet been devastated by earthquake but there are considerable tremors in the ground.
  When we strip the Budget of the rhetoric and self-congratulation with which the Chancellor opened his speech, we find that there is a great difference between his fantasy view of the economy and the facts as they are actually are. Let us consider the Chancellor's first fantasy:
  "the six years to 1987 have been the longest period of steady growth … for half a century."
  1188
  Set aside the challenge to half a century. Again, I quote:
  "During the 1980s, our growth rate has been the highest of all the major European economies."
  What are the facts? Since 1979, the growth rate of the United Kingdom has been the lowest of the Group of Seven top economies. Furthermore, we rank second lowest in terms of income per head among the G7 countries on 1986 figures and we are currently being overtaken by Italy, making us the lowest of all. In the OECD we are 15th in terms of GDP per head, which is a fall in the OECD league tables since the time of the outgoing Labour Government in 1979.
  The Chancellor's second fantasy concerns unemployment. He says that in 1987
  "unemployment fell faster than in any other year since the war".
  That is terrific, but what are the facts? Under this Government unemployment has increased faster than in any other OECD country. It has reached record levels. Registered unemployment is now 2·69 million but the de facto unemployment, in terms of the unamended figures, is at least 3·2 million. The Government kept changing the basis on which the measurements were made or adopted policies that affected those registered as unemployed.
  One can change according to choice the number of ways in which the Government have done that. Some estimate that there have been only half a dozen ways but others estimate that there have been up to 19 ways and some estimate up to 23. I shall mention three of the most important.
  In February 1981, the register affect of special employment and training measures meant that, in effect, half a million people were taken off the dole at the stroke of a pen. In October 1982, there was a change in definition and compilation of monthly unemployment figures from a clerical count of people who registered for work at jobcentres to a computer count covering only benefit claimants. This took another one fifth of a million people off the dole at the press of a button. From October 1986 to January 1987, the introduction of the tighter availability for work test took nearly 100,000 people off the registered figures within a year and over 120,000 after that.
  The reality is that unemployment will get worse. All we have to do is ask some of the self-styled experts. From February-March, before the Budget, the independent average, which is an average of 11 forecasts, including Liverpool, the Confederation of British Industry, Cambridge, OECD, the National Institute, the London Business School, Henley, Oxford, Economic Forecasting and others, estimated that unemployment would increase over the period concerned. If one takes the GDP growth rate as the fundamental reason, it will fall from about 4·1 per cent. in 1987 to 2·7 in 1988 and to 1·9 in 1989.
  There may be some stimulating effect on the economy as a result of tax cuts. However, it is not nearly as effective to stimulate or sustain economic growth by cutting tax as it is by more direct forms of expenditure. In fact, it is only about one fifth as effective to do so and that is another reason why we can see that the growth—the so-called miracle on which the Chancellor congratulates himself—was a pre-election boom that will not last.
  The Chancellor's third fantasy is:
  "The plain fact is that the British economy has been transformed … This outstanding performance was founded on a further big improvement in productivity."
  Productivity has gone up, essentially because it is higher in bigger business with greater capital intensity and more

  1189
  embodied innovation and is lower in smaller firms. One reason for the increase in productivity is that so many small firms have been bankrupted, especially during the 1979–81 period. That may well be replicated by allowing the pound to rise now because the Chancellor is not in control of exchange rate policy and has the Prime Minister breathing down his neck.
  Any fool can increase productivity by cutting jobs. No one in the Government has increased productivity by raising long term investment and innovation on a scale comparable with our competitors. That is what counts: it is not simply the rate at which productivity increases from the depths to which it had sunk by 1981. It is especially not done under this Government by the oft-cited mechanism of promoting new small and medium-sized firms. That has been well shown by Mr. David Storrey of Newcastle university, who specialises in such matters. Within the lifetime of this Government, for every 100 firms that started, 80 are now dead; four out of five are now dead. That is the mortality rate among such firms. Four of each 100 now account for half the employment. In other words, there is an advantage to bigger business.
  The fourth fantasy of the Chancellor is that the current account deficit is now manageable and that
  "the outlook both for exports and for jobs will depend critically on employers keeping their costs firmly under control." — [Official Report, 15 March 1988; Vol. 129, c. 995–996.]
  The wage element clearly influences the outcome but it does not do so "critically". This Government have consciously pursued a policy of increasing aggregate unemployment, or sustaining high levels of unemployment to reduce wages. They have sought also to compete internationally by confronting trades unions and organised labour, relying on low wages to give us a competitive advantage in world markets.
  Tell that to the country having the most competitive economy in the modern world, which is Japan. In contrast to the Chancellor, the Japanese rely on investment and innovation to raise competitiveness, and state-supported investment to sustain competitiveness. They also guarantee lifetime employment to core company workers.
  The results in the examples are these. The labour content of the value of a product in Japan in heavy engineering, medium engineering and electronics — and including companies such as Matsushita and its household brand names, and the Japanese auto firms Toyota and Nissan—is now down to 5 per cent.
  The Japanese are not running a low-wage economy in order to compete. They are running a high-wage and innovating economy in order to compete. Again, that is reflected in training, as was stressed by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). Again from Japan comes the illustration that an average skilled on-line worker in Toyota or Nissan spends seven years training during a working lifetime. At Ford, until very recently, only one and a half years was spent training during a working lifetime. The Japanese are reskilling and extending the skills of their workers and relating them to innovation rather than going for a wretched low-wage economy, which has been the record of the Government in recent years.
  That policy in itself affects tax rates. Taking 2p off tax when the wage is low is only one way of increasing disposable income. The real way of increasing long-term
  1190
  disposable income is through investment in sound products in entirely new sectors of industry and by raising wages.
  Further, we have a change in the exchange rate. The Chancellor has moved his position on that, and I am sorry he is not with us tonight. We are led to believe that he was Keynesian in his youth — I believe he was at Christ Church, so he cannot have been far away from Sir Roy Harrod—an advocate and supporter of a fixed exchange rate. He then moved to supporting a floating exchange rate, and then to managed floats. Now we are back to target zones. All very good — certainly give him a blue star for effort. But exchange rate policy is not simply a matter of whether or not rates float but what firms actually do at prevailing rates.
  The illusion of this Government was shared, for example, by Lord Joseph when he was Secretary of State for Trade and Industry. When in this House, he said that the Government would roll the burden of taxation off the back of business — and the Chancellor has now clone that — and we would see an unleashing of millions of British entrepreneurs, British exporters and foreign markets.
  It is always very problematic in this House that after getting to one's feet a certain number of times—as you know very well Mr. Deputy Speaker, sometimes one gets to one's feet quicker than others — It becomes almost automatic. It is rather like the member of another place who dreamt one night that he was speaking and woke up and found that he was speaking. I found myself asking the Secretary of State for Trade and Industry whether he was really unaware that there were not millions of British firms in manufacturing or visible trade. There are only about 10,000 regularly exporting firms. Two hundred and twenty control two thirds of our trade, 75 control half and 30 firms account for 40 per cent. of our visible export trade.
  What those firms do matters. The Japanese know that. The Germans, for all their reluctance to use four-letter words such as "plan", either because they are too close to the East German border or to an unlamented past, nevertheless intervene at the level of leading firms through the Deutsche Bank. Recently there was a Dm7 billion package of investment through the Kredietanstalt für Wiederaufbau. They know how to intervene, but this Government do not. That reflects the Prime Minister's prejudice against any intervention.
  I suspect that the Chancellor may well prefer to have an industrial strategy. He has come some way towards target rates on the demand side and he may well want to have a real supply side economics rather than the laughing matter of the Laffer curve and its alleged incentive and volume effects. But he cannot reach an industrial strategy, because his mistress will not let him.
  The result is that the Government have been offering Austin Rover and British Leyland on the market to the highest bidder. Under the Labour Government, we had a British motor industry. We invested resources through the National Enterprise Board. As a result, we had a considerable increase in productivity. What happens under this Government? They offered to sell the industry or let it have a joint venture with Honda, so that a Rover is now a Honda with a Rover badge. That is the failure of the Government's strategy, and it relates both to incomes and employment.
  The fifth fantasy is that the fight against inflation should be "paramount". That was what the Prime

  1191
  Minister said only a few days ago in this House. Obviously, countering inflation should be a key objective of any Government, but the fight against inflation should not be a paramount aim, even of a Conservative Government. The Government's Budget strategy should have been to make it possible to get higher productivity through investment and innovation, thereby increasing our international competitiveness against this disastrous chronic deterioration in our balance of trade.
  No hon. Member in his right mind would thank a doctor for reducing a patient's temperature if the result was rigor mortis. Why then should we thank the Government for reducing inflation when it has killed at least 2 million jobs and we have forgone billions of pounds of income and output? Even if that income had been taxed at the rate which obtained a day before the Budget, it would have been higher from sustained economic growth than it has been under the Government.
  The Chancellor likes to give the signal in the City that he is no longer going for monetary targets. The code words are that he is no longer a monetarist. Certainly he is the only person who is paying attention to M0. [Interruption.] The Economic Secretary to the Treasury questions that. Perhaps he or the Chief Secretary would like to get to their feet and tell us whether the Chancellor is still a monetarist. If so, what is meant by monetarism? Where is the relation between inflation and the money supply? M3 targets have been abandoned down to M0. What is M0? It is cash in the till and certain types of deposit. Nobody takes that seriously as an index, other than the Chancellor.
  A further fantasy is that there are inherent benefits in a balanced Budget because public spending in principle drains the private sector. We have news for the Chancellor: public spending does not drain the private sector or crowd it out; it sustains the private sector. In housing, for example, in England and Wales as a whole, over 90 per cent. of the council houses built are built not by public but by private contractors. So it is hardly miraculous that the cuts in the housing investment programme, which approach nearly two thirds of the total for 1979–1986, collapsed the sales of private contractors nine times more than those of the direct labour organisations of councils.
  That is the so-called success of the Government. The cuts have deprived people of housing and have doubled the rate of bankruptcies in the private housing sector. That is not a record that the Government will wish to defend.
  Keeping a balanced budget when the remainder of the OECD is slowing down, the United States economy is slowing down and the world economy as a whole is slowing down is like putting an aircraft on to auto-pilot. It deprives the Government of the ability to influence the level of demand and of the possibility of taking a lead at European Comunity level with, for example, the Governments of France and West Germany, to follow the example of Japan and give a stimulus to spending, income and trade in the world economy.
  The Economic Secretary to the Treasury (Mr. Peter Lilley)indicated dissent.
  Mr. Holland: I see the Economic Secretary shaking his head. Perhaps he wishes to rise and say, "No, that is not the case." [Interruption.] I know who the Economic Secretary is, but I am now looking at the Chief Secretary
  1192
  who is also nodding his head. Perhaps Ministers would like to tell us whether they think it necessary that the European economies should take the strain from the world economy, the leadership of which can no longer be provided by economic growth in the United States. Have the Government any priority for that? Why did they not reply to the call made by the Secretary of the United States Treasury, Mr. James Baker, before the Venice summit, to other leading OECD Governments to set targets for economic recovery?
  If spending and demand targets, which are more important than exchange rate targets, had been set, we might not have seen Black Monday. If they had been set and there had seen a recovery of Europe's trade and sustaining of the dollar by the volume effect on exports, we might have had the "adjustment" on 19 October of the Chancellor's euphemism rather than collapse. In those respects, the Government are heading, at best, into a recession of the world economy and, at worst, into a possible slippage into slump. Through their commitment to a balanced Budget, they are denying themselves the means of coping with that or contributing to a recovery programme with our leading partners.
  In contrast with the Chancellor's claims, the real economic scenario is that this country has had the lowest growth rate of any G7 country since 1979. The GDP per head has fallen in OECD tables. Unemployment is still over 3 million and more than double the figure when Labour left office in 1979. Manufacturing investment is still lower than it was in 1979 and the trade crisis is chronic. After more than eight years of Tory rule, this country is uncompetitive, unproductive and unready to cope with a worsening global crisis.
  In addition, as my right hon. Friend the Leader of the Opposition said yesterday and as my right hon. and learned Friend the Member for Monklands, East and so many other other hon. Members have emphasised today, this is the most uncharitable and uncaring Budget of all. If the Conservative party thinks that it has anything to do with the economic and social philosophy of the gurus at the Adam Smith Institute and the Institute of Economic Affairs, it has a surprise coming.
  Adam Smith was not the man who elevated to the highest principle the self-interest of the entrepreneur. The reference to the invisible hand is a throwaway phrase in "The Wealth of Nations", relating to Smith's preference for domestic trade rather than international trade. Smith thought that by far his most important contribution was his book "The Theory of Moral Sentiments" in which he criticised
  "This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or … to neglect persons of poor and mean condition … is, at the same time, the great and most universal cause of the corruption of our moral sentiments".
  Smith went on to say:
  "It is not the soft power of humanity … that is capable of counteracting the strongest impulse of self-love. It is a stronger power, a more forcible motive … It is reason, principle, conscience".
  Smith stressed the sense of propriety — which is so missing from this Budget — and what is proper versus the rights of privilege and property. He wrote of
  "the propriety of resigning the greatest interests of our own for the yet greater interests of others; and the deformity of doing the smallest injury to another in order to obtain the greatest benefit to ourselves".

  1193
  In practice, in the terms of Adam Smith himself, the Government stand condemned for the Budget because it embodies what he deplored, the
  "deformity … inequity … and corruption of our moral sentiments".
  which stem from putting profit and privilege for the stronger in our society before the interests of society as a whole.
  9.35 pm
  The Financial Secretary to the Treasury (Mr. Norman Lamont): I am grateful to my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) not only for welcoming the Government's extremely important proposals on independent taxation, but for pointing out what I regard as the astonishing fact that the Opposition's Front-Bench spokesmen have spent so little time addressing what the Government have put forward as a solution to something that has always been regarded as an important and long-standing problem. My hon. Friend said that it went back to the battle of Trafalgar and the taxation system that was regarded as appropriate at the time of the Napoleonic wars. Certainly the reception that we have had suggests that, contrary to what Opposition Members have said, that is regarded as an important problem.
  The present tax laws generally treat a married woman as if she had no separate identity from that of her married husband. Her income is taxed as if it were his income. Her capital gains are treated as though they belong to him. Even her tax allowance is technically his allowance for use against her earnings. Other taxpayers have a personal tax allowance as of right. Only a married woman has to go out to work to qualify for any allowance at all. Therefore, it is no wonder that people have been pressing for reform for so long.
  That is why my right hon. Friend put forward in his Budget a radical proposal for independent taxation, which will come in from April 1990. It will give married women the independence and privacy in tax matters that they have been denied for so long. That is the earliest possible date at which such a system can be implemented and suggests the priority that we are giving to that important reform.
  Under the new system, a married woman will be treated as a taxpayer in her own right with a full personal allowance to set against her income, and her own basic rate band. She will have responsibility for her own tax matters and will be able to enjoy complete privacy if she wishes. The change will mean that a married woman will no longer have her income from savings taxed at her husband's highest rate, regardless of the size of her income. A married woman whose only income comes from modest savings need pay no tax at all.
  Ms. Armstrong: The problem with what the Financial Secretary is saying is that it does not match up with what his right hon. Friend said yesterday. If the Government are serious about enabling women to have independent taxation, will they pay the married couple's allowance to the woman or at least to the highest earner?
  Mr. Lamont: As my right hon. Friend the Chancellor explained, the married couple's allowance will go in the first instance to the married man. However, it will be transferable to the wife if the married man does not have the income necessary to absorb the full allowance. The new system will be a step forward because it will mean that
  1194
  married women who work and who, at the moment, may have an allowance, but none the less have their income aggregated with that of their husband, will no longer have their income so aggregated.
  The hon. Lady— and other Opposition Members — have suggested that the married couple's allowance is wrong, but if we did not have it, the threshold for married men would be lowered and considerable numbers of people would lose from the change. That is why we have designed the married couple's allowance in this way. This will allow incomes to be disaggregated, which was a point that the hon. Member for Redcar (Ms. Mowlam) addressed. However, she was wrong to suggest that this was an insignificant reform, primarily of interest and importance only to rich couples or rich women. Those who will benefit will not only be the well-off—three quarters of the benefit will go to basic rate taxpayers and non-taxpayers.
  Another major beneficiary group will be the elderly. Large numbers of elderly wives earn their pensions on the basis of their husbands' contributions. They, too, will be major gainers — those who have category B pensions — and half the cost in the first year will go to elderly couples. That clearly shows that this tax reform does not only benefit the better off.
  It is an important principle that there should be independence and privacy in taxation matters. That has been requested for a long time, and at long last my right hon. Friend has devised a system that will achieve all these objectives.
  Mr. Millan: The right hon. Gentleman has said that pensioners' wives will be major gainers from the reform, and they will enjoy some gain. But the taxpayers who will gain overwhelmingly will be those with large investment incomes, or large incomes that include investments as well as earned income.
  Mr. Lamont: I can only assume from that intervention that the right hon. Gentleman is against independent taxation and thinks that people should not have it merely because they have investment or savings income. The hon. Member for Berwick-upon-Tweed (Mr. Beith) made the same mistake. It is not necessary to be rich to have some savings income. At present, women with modest savings income have it aggregated with their husbands' income and must pay tax at their husbands' rate of tax, even if they are non-taxpayers.
  The hon. Member for Redcar also mentioned covenants and maintenance. My right hon. Friend has announced some far-reaching changes in those, which will remove an unnecessary shelter in an era of much lower tax rates. The use of covenants for student support is an example that underscores and emphasises the need for reform. The present arrangements for covenants are also unfair to married couples. A covenant between husband and wife can have no effect for tax purposes because their incomes are aggregated, but unmarried couples can reduce their tax liability by making a covenant to transfer incomes between themselves.
  My right hon. Friend the Chancellor also identified the present rules for maintenance as being an area in need of change, as it would be hard to imagine a system more complicated than we have now. His announcement will mean that the system will be much simpler for those who receive and those who pay maintenance.

  1195
  The hon. Member for Redcar referred to the unmarried mother's affiliation order, and said that she thought it was wrong that there would be no tax relief on it. That is true, but all maintenance from now on will be wholly tax-free. That is part of the simplification. She also feared that, because of the limit on relief of £1,490 — the difference between the single and married allowance—there would be no incentive for anyone to pay more maintenance than that. That, of course, will largely be a matter for the courts, but I point out to the hon. Lady that, in fixing this figure of £1,490, we were not unaware that the vast majority of maintenance payments were actually under that figure.
  The hon. Member for Berwick-upon-Tweed devoted part of his speech to wider share ownership, which has certainly been one of the Government's major successes. In his Budget speech, my right hon. Friend referred to the survey that we had carried out, by the Treasury and the stock exchange, in January and February of this year, which shows that 9 million people, or 20 per cent. of the adult population, now own shares, compared with 19·5 per cent. a year ago and 7 per cent. in 1979. What the survey shows is that, if anything, there has been an increase in share ownership and a willingness by investors, even in difficult market conditions, to hang on to shares.
  The hon. Member for Berwick-upon-Tweed may be interested to know that the survey also showed that personal equity plans have encouraged a lot of people who had not previously bought shares to do so. A number of hon. Members, including the right hon. Member for Glasgow, Govan (Mr. Millan), talked about the Government's changes to the business expansion scheme. Some Opposition Members seem to have missed the important announcement by my right hon. Friend that there will be a ceiling on companies raising BES finance in future. There will be a ceiling of £500,000 on the total amount that any company can raise through the business expansion scheme in any one year.
  We have taken this step precisely for the reasons adduced by some Opposition Members; we felt that the business expansion scheme was sometimes being used for raising money for asset-backed investments of a kind that could attract finance in other ways, and that it was wrong to give such a big tax relief in those situations.
  The right hon. Member for Govan also raised the question of double BES relief under independent taxation. It is an interesting point but again, for the reason that I gave earlier, he is exaggerating the effect there, because the vast majority of wives with disaggregated incomes in future will either pay no tax or be basic rate taxpayers, and the opportunity for that will be extremely small.
  Mr. Millan: No.
  Mr. Lamont: I follow the logic of the right hon. Gentleman but equally he must follow ours. If there is independent taxation there should be separate reliefs, just as there are for capital gains tax and just as there are in the area of the business expansion scheme as well.
  We have heard a lot of accusations by Opposition Members that this Budget does not help the very poorest in society. We have heard a lot about non-taxpayers. Opposition Members seem to think that people not paying tax have nothing to do with this Government's policy of tax reductions. It is a fact that the Government, not just in this Budget but in others, have been raising the tax
  1196
  threshold and taking people out of tax, and that some of those who do not pay tax are people who have benefited directly from the Government's policies.
  The hon. Member for Dunfermline, East (Mr. Brown) has put forward an extraordinary figure. He has actually talked about the 12 million adult non-taxpayers who will not benefit from this Budget. One would not think, from the way in which he talked about it or in which some of his hon. Friends have canvassed the same figure today, that of that number only 400,000 are people of working age in full-time employment. All the others are either part-time workers, married women with part-time jobs and young people living at home, perhaps some of them coming from relatively well-off homes.
  Keeping people out of tax is not something of which we should be ashamed, or which causes pain or anxiety. Keeping people out of tax by constantly increasing tax thresholds is extremely necessary, and is something for which the Government have an extremely good record.
  The hon. Member for Redcar implied that the Budget had done nothing for the elderly. Again, many of the elderly are non-taxpayers precisely because the Government, through successive Budgets, have taken them out of taxation. We have the highest tax threshold for married pensioners since the second world war.
  As I said a moment ago, pensioners will also be major beneficiaries of the move to independent taxation, especially older pensioners. Each married pensioner will receive an age allowance in his or her own right. They will also be entitled to a married couple's age allowance, based on the age of the older partner in the marriage.
  Ms. Mowlam: I thank the Minister for giving way. I was trying not to interrupt, so that he would have a chance to finish, but I must correct his inaccuracies.
  If the Minister had followed the logic of my argument, he would have understood that I was identifying the parts of the Budget that do not cater for women. If the Government are serious about their commitment to women, they should be dealing with that. Pensioners know, from the context of electricity privatisation and television licences, that what is given with one hand is taken away with the other. The Minister should put his remarks in the right context.
  Mr. Lamont: I am sorry that I gave way to the hon. Lady. I think that my proposition that independent taxation — as put forward by my right hon. Friend the Chancellor—is indeed independent, and achieves privacy for taxpayers, stands and has been well demonstrated.
  When the Leader of the Opposition replied to my right hon. Friend's Budget speech, he said that the Budget did nothing for the average person. It comes as something of a relief to many people to hear the Labour party putting its shoulder behind average people: it so seldom seems to pay any attention to them.
  The average person benefits from the Budget. The married man on average earnings benefits by nearly £5 a week, and some 6 million people with between three quarters of average earnings and one and a quarter times average earnings have benefited by between £4 and £6 a week.
  No one who listened to the right hon. and learned Member for Monklands, East (Mr. Smith) would have dreamt that over 70 per cent. of the cost of these tax changes had gone on the basic tax rate, and on increasing

  1197
  allowances. Some 23 million people are basic rate payers, and 99 per cent. of them are beneficiaries of the Budget. They will gain, as they have gained from previous Budgets from the present Government, by significant amounts.
  It should be remarked — as my right hon. Friend has pointed out — that the basic rate of tax is at its lowest level since the second world war, and the personal allowance for a married couple is at its highest since then. That is how ordinary people have benefited from the Budget, and they can be confident that they will benefit from future Budgets produced by my right hon. Friend and the present Government. We have set our sights on reducing the basic rate of tax to 20p in the pound, as my right hon. Friend has said.
  My right hon. Friend the Chief Secretary has pointed out that the majority of European countries have a top rate of taxation that is lower than our previous rate of 60 per cent. In some countries, such as Switzerland, the rate is significantly lower. Many other countries are moving to cut their top rates — Australia, New Zealand, Canada and the United States.
  Mr. Holland: Germany?
  Mr. Lamont: Yes, Germany has a rate that is lower than 60 per cent., and so does France. I would be happy to go through every country and demonstrate, as my right hon. Friend has, that the majority of European countries have top rates below 60 per cent.
  The Government have reduced the top rates previously. Indeed, the last time we reduced them it was by a larger amount — 23 points as compared with the reduction of 20 points announced yesterday. As a result of that reduction, the revenue from top rate payers soared in real terms and indeed, my right hon. Friend noted that the proportion of tax represented by the top 5 per cent. of taxpayers increased from 24 per cent. to 29 per cent. We expect that broadly to continue to be the case even after the changes that have been made in the Budget. My right hon. Friend emphasised that policy.
  If the result of cutting the top rate of taxation in the past has been to increase revenue, why is the Labour party so opposed to such cuts? When we previously reduced the top rate to 60 per cent. Opposition Members said that that was outrageous and pledged themselves to reverse that decision. However, the increased revenue provided more money for the National Health Service and for our public services.
  Several Hon. Members rose—
  Mr Lamont: I will not give way now.
  I had long given up hope for the Labour party, but perhaps I am doing it an injustice because I noticed a
  1198
  report in The Times of 26 January—admittedly it is a Murdoch newspaper and some Labour Members may not have read the announcement—which was headed:
  "Labour to end the policy of high taxes for rich."
  That article said that the Labour party believed that the starting point for income tax could be extremely low, but that the maximum top rate under a Labour Government might only be 50 per cent.
  Apparently, despite yesterday's indignation and disruptions, that is what the Labour party has been thinking about in private. It appears that a cut of 20 points is outrageous and unacceptable, but a cut of 10 points is something quite different. We have the greatest difficulty in understanding what great difference of principle is involved in that argument.
  Labour Member after Labour Member has referred to the amount that my right hon. Friend the Chancellor has had to give away — that is the phrase that they have used. Every word of their speeches showed that they had no understanding of how my right hon. Friend has achieved his current strong position. They talk about the amount that he could give away as though the increased revenues were somehow an accident or manna from heaven—
  Mr Holland: They come from oil.
  Mr. Lamont: That is an interesting comment. Occasionally, the hon. Gentleman may dip into the Red Book, but perhaps the last time he did so was seven or eight years ago. Today, North sea oil accounts for something like 1·9 per cent. of revenue.
  I noticed yesterday that when my right hon. Friend was talking about the strength of revenue, Labour Member after Labour Member said, "North sea oil," and that simply shows that they do not understand that it is by prudence that my right hon. Friend has achieved the current position.
  In the past, my right hon. Friend has shown that prudent financial policies are the ones that will leave this country in a strong position. However, we cannot expect Labour Members to understand that. There was a look of utter bewilderment when my right hon. Friend talked about reducing the PSBR or reducing debt.
  The Opposition do not look beyond today into tomorrow and they do not look for savings in debt interest. The Autumn Statement of my right hon. Friend the Chancellor amply showed that reducing debt interest can create more room for improvements in priority sectors. Prudence has enabled us to place more and more resources into state services.
  Debate adjourned. —[Mr. Neubert.]
  Debate to be resumed tomorrow.

  Sidbury
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
  10.1 pm
  Sir Peter Emery: I wish to speak on behalf of a number of my constituents — farmers who are farming on land that is difficult to farm and would be judged to be difficult in whatever part of the world it was situated. They do a remarkably fine job against all possible odds and in conditions that seem to work against them. The EEC could hold out some financial help and relief for their farms, but the Government have so far found themselves unable to help.
  The farmers are in an area north of Sidbury. It is difficult farming land and they want the Government to grant their land to be eligible for disadvantaged area status. Such status, which is available through the EEC's less-favoured area directive, would enable them to receive grant-aided headage payments on beef, cows and sheep.
  The area submitted can be specifically seen on a map, which no doubt is in the possession of my right hon. Friend the Minister. It is a high, sharp, sloping area north of Sidbury and stretches almost up to Honiton on the northern boundary, with the scarp slope east of Ottery St. Mary on the western boundary and stretches almost to Colyton in the east.
  The central part of the appeal area is on a high plateau, which is just under 800 ft high, and is a southern extension, in geological and geographical terms, to the Blackdown hills. An application was submitted on behalf of the Blackdown hills area, which is similar in nature, for less-favoured area status and subsequently that application was successful.
  An appeal was submitted on behalf of nearly 70 farmers, and a clear boundary was put forward to give an island site well in excess of the 1,200 hectare minimum size required for less-favoured area status. Subsequent to the proposal being submitted, surveyors from the Ministry of Agriculture, Fisheries and Food assessed the area to see whether it would qualify under the terms of directive 75/268/EEC, article 3(4).
  The Ministry is the initial assessor of whether proposals meet the criteria of that directive and, in essence, whether the block of land in question is of sufficiently poor quality to be handicapped in its farming activity to such an extent that it requires the additional farming assistance that the EEC would allow.
  Having surveyed the area, the Government surveyors rejected the initial submission for less-favoured area status on two counts: first, that there was not sufficient land of grade 4 or 5 status for it to be determined as being a predominantly less-favoured area, and, secondly, that it was not homogeneous.
  In keeping with previous practice, the Minister allowed the rejected proposal to be submitted to an appeal process. That process requires farmers to resubmit their proposals to an independent tribunal. The tribunal was made up of three farmers appointed by the Minister, with terms of reference set by the Minister. It was required to assess the submission at a formal meeting and on site. Ministry officials gave evidence to the tribunal about why the site was originally rejected. In the case of the Sidbury appeal on 3 and 4 February 1987, the Minister's appointees met and heard evidence by farmers, the Minister's surveyors
  1200
  and independent experts produced by the National Farmers Union. A detailed case was put by the NFU experts, who represented 66 of the 70 farmers.
  I am certain that the Minister knows the basis of the case. The high plateau top of the area reaches 835 ft and is exposed and difficult to farm. Many of the valley combes off the plateau are not south-facing and are open to northerly winds. Slopes off the plateau are extremely steep — if one drives over them, one realises that that is an understatement — and are beyond the gradient recommended by health and safety standards as suitable for tractor work. Virtually the entire area is above 600 ft, and is so similar in characteristics to the Blackdown hills just to the north of the appeal site as to be indistinguishable. Again, I stress that the Blackdown hills site has been accepted as suitable for LFA status.
  Because of the land's physical characteristics, the principal form of farming in the appeal area must be beef and sheep, and only around the periphery is there any evidence of dairy production. After all, the Minister does not need to be reminded that dairy farming is the basis of the Devon farming industry. Characteristically, farms have low stocking densities, and high yields are achieved only by the purchase of high levels of concentrates and by renting land off the hill for summer and winter grazing. A natural boundary can be found around the area. If the Minister cares to look at the map, he will see that it is obviously a boundary. It was submitted to the Ministry, and it is inclusive; there are no areas away from it.
  Perhaps most significantly, the soils of the area are inherently poor and offer little prospect for improving farming. Much of the plateau suffers from poor natural drainage due to impermeable clay subsoils. Without exception, loamy topsoils contain a high proportion of flint and chert stones. The plateau is surrounded by steep scarp slopes, at the bottom of which is a spring line of running sand, which is almost impossible to drain. There is frequent land slipping. Valley bottoms are poorly drained and are frequently in a marshy condition.
  In summary, the interaction between climate — rainfall exceeds 40 in a year—soil types and topography restricts the period for grazing and land work essentially to only summer months. In the spring, most of the area remains wet until the end of April in an average year, and May in a wet year. Where it is possible to cultivate, a high flint content leads to additonal costs in respect of implement wear and breakage.
  The panel of Government arbitrators fairly considered the appeal area that was submitted to them. I stress that they spent two days on site. It has become widely known that, having heard the arguments of all parties concerned, including Government officials, they felt that the area was suitable for LFA inclusion. In short, an independent panel reached the conclusion that the Government should include the area as part of their submission to Brussels. It must be pointed out that the tribunal panel was given very clear guidance by the Minister as to what was acceptable and what was not. It was fully briefed as to the criteria for less-favoured area status.
  The tribunal's views towards the area were submitted to the Minister along with many other appeal decisions around the country. In the case of Sidbury, it would appear that the same officials who submitted evidence to the tribunal again submitted views, after the tribunal had

  1201
  reported, urging the Minister to overturn the tribunal's decision. The Minister decided not to accept the independent tribunal's view, and to reject the appeal.
  One of my local farmers wrote to me saying:
  "Our local committee of farmers representing the whole group carried out considerable preliminary work to make sure that we only appealed on land genuinely disadvantaged and to identify a boundary that excluded patches of better land. Our committee had several farmers with a wealth of experience drawing on generations of farming in this area, and could readily identify those farms and areas where farming is hard."
  Mr. Hailey continues:
  "I have had fourteen years' experience of running farms both on the plateau and in the steep valleys in an area which the Ministry agrees is Less Favoured and I was impressed with the homogeneity of the area in the application. The Ministers' panel of experienced, practical farmers, familiar with other panels and appeal areas, were apparently also impressed with what they saw of the whole area …
  If we had been told that we do not qualify for Less Favoured status in comparison with other areas, then we would be able to accept it. However, to be told that part of the area is acceptable and another part, which is indistinguishable from the first, is not makes no sense whatsoever."
  My conclusion is twofold. It comprises an argument and a request to my right hon. Friend the Minister of State. An appeal procedure was established and the terms of reference were set by the Minister. It has also been confirmed to me in writing that
  "the vast majority of Panel recommendations have been accepted by officials without the need for reference to Ministers."
  That was said in a letter from Lady Trumpington dated 12 August 1987.
  How many or what percentage of representations have not been accepted, because Sidbury is one of them? I gather that very few have been rejected. In the Sidbury case, the panel's recommendations were overturned, so the Minister has been influenced either by the old arguments rejected by his appeal panel or by new arguments put by the same Ministry officials whose noses have been put out of joint by the panel's decision. If there have been new arguments to overcome the panel's judgment, surely the farmers should know what those arguments are and should have had the opportunity to refute them.
  The Minister's reasons for refusal are twofold. First, he says that this is not a homogeneous farming area. However, it is contiguous, and has a single boundary to create a continuous island site and is more than 1,200 hectares. If the Minister were to visit the area, he would see that the land is of a uniform nature — one of the definitions of "homogeneous" in the "Oxford English Dictionary." The farmers have gone to great trouble to exclude land that was better land or was not homogeneous to the site.
  Secondly, the Minister has stated that the land is not of sufficiently poor quality to qualify. However, the farmers—not the civil servants—the designated members of the appeal and the independent experts before the appeal, do not accept that view; nor do I. On one side there are the local farmers, the independent experts, the NFU, the appeal panel and the local Member of Parliament. Against them are the local civil servants supported by Whitehall.
  I realise from experience the extreme difficulties for Ministers in reaching decisions when there is such conflicting advice. However, if my right hon. Friend were to see the land, be driven up and down the massive slopes
  1202
  of the combes, see the slate and stone, the nature of the soil, the wet, the dampness and the overall difficulties, I am sure that he would join me in supporting this application.
  As one of my right hon. Friend's supporters and admirers, I ask him to accept my invitation to come and see the site. I should be delighted to ask him and his wife to spend a relaxed weekend with me, and we might even have a good bottle of claret. However, it is necessary to spend only two hours on the Sidbury hills, and then my right hon. Friend might immediately reverse his decision. If that is now impossible, he might at least accept a new application upon which he could look favourably. After all, it is not asking very much, and it is w hat this Adjournment debate is all about. Will he come and see for himself?
  10.16 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): Those who read the report of this debate will recognise the care and local knowledge with which my hon. Friend the Member for Honiton (Sir P. Emery) has put his case. None of his constituents could possibly imagine a better advocate for his cause. Certainly, he has been most kind in taking us through the real problems in agriculture in that part of his constituency. He will recall that I have seen that part, and others, when I have visited him. His offer is a considerable temptation. I remember when I accepted such an offer before and enjoyed myself immensely. If I do not satisfy my hon. Friend on this occasion, I hope that he will not refuse to allow me to walk on those scarps and to look at the countryside.
  Sir Peter Emery: All that my right hon. Friend has to do is to say, yes.
  Mr. Gummer: The problem is rather different from that which my right hon. Friend described.
  There were about 1,700 appeals against the original decisions, but ultimately only six of them came to me. That is not a large number, so I was able to devote some considerable time to studying the problems. My temptation was to agree to them all, because there is nothing to be gained from saying no to one's right hon. and hon. Friends, or even to Opposition Members. It is much easier to say yes than to say no, as my hon. Friend will understand.
  When the alterations to the less-favoured areas are finally put together, they must be submitted to the European Commission, which must be satisfied that the process through which we have gone has been proper and that the Commission's requirements, which have been endorsed by the Council, have been met.
  If we allow within our submission areas of land that do not meet those requirements, they will be in jeopardy, as will all those areas that do meet the requirements. There are problems. Already more than half the land area of this country is designated as less-favoured. The Commission is naturally cautious about extending that land area. We have gone through the most complex and careful consideration of all those parts of the United Kingdom that have asked for this status because, as my hon. Friend says, it carries with it certain considerable advantages in terms of the aid available to farmers. My problem is that, if I decide in a way that the Commission would find contrary to the regulations — which we all have agreed

  1203
  as members of the European Community — I cast in doubt areas that fully meet those requirements. This gives me a considerable burden to bear.
  I did not agree with my officials on all the appeals. I upheld several. I look at the appeals carefully. Wherever possible, consonant with my duty to the rest of those appeals whose cases were so clear that they had already been included, I tried to include those appeals that came before me. In this case, I was unable to do so. The reasons will, I think, be clear to my hon. Friend, although they are not particularly helpful, because obviously my hon. Friend would like me to change my mind.
  I have a difficulty. I cannot comment on what advice was given to me by the local panel, because that advice is confidential and, for almost every local panel, and all the cases at which they looked, it has remained so. I cannot undermine the confidentiality which has already been kept by almost every panel asked to do this job by agreeing, or disagreeing, with my hon. Friend, and he will understand why. There may be three farmers with local knowledge. They have to live in that community for the rest of their lives. If they are to give the best advice they can, it must not be advice that is automatically spread abroad to everyone else who lives in the area. I must defend their right to confidentiality. In a sense, I cannot defend myself, or otherwise, on this matter, and my hon. Friend must excuse me for not doing so.
  There are two issues which, I am afraid, those who want this area to be included within the LFAs must face. An area that wants to be included in an LFA must either be contiguous with an area already in the LFA or be an island site at least 1,200 hectares in size. Those 1,200 hectares must be—it is no good avoiding it; I wish that it were not so, but this is the rule — homogeneous in the sense that the land must have common qualities of poverty and of not being able to maintain sufficient stock such that it would be unreasonable to expect people to get a decent living from it. That is the kind of criterion that applies.
  The difficulty with this area is that it is neither contiguous nor does it contain sufficient areas which are disadvantaged, by objective judgment rather than in the subjective view of those who have been there—which I understand. It does not contain more than 700 hectares of disadvantaged land. The area is not even on the margin of acceptability; it is 500 hectares out from the European Community's regulations.
  What would happen if I included the area because of my respect for my hon. Friend and for the pressure that he has brought to bear, and my respect for the farmers and my knowledge of their difficulties? Because the measurement is an objective measurement, the Commission could without difficulty assess that I had included in the LFA application an area which clearly, on that ground alone, did not meet the criteria.
  It is rather like filling in a tax return. If the tax man finds that one has failed to declare something that one has clearly been paid, he begins to think rather carefully about the rest of the contents of one's tax return. He begins to ask, "I wonder whether that is right. I wonder whether he has remembered to include that. Do I think that he should
  1204
  have included this?" Very soon, the taxpayer, I think with justification, finds himself having to answer a whole series of questions that he would not have been asked had he not brought it into question that he was following the rules properly. If I include the area in the application, every doubt will be cast on every other area that we propose. The Commission has the final word; it can say no. It can reject the whole application.
  There is a second reason why I cannot include the area. The less favoured areas directive says that the area must be
  "homogeneous from the point of view of natural production conditions"
  and comprise a predominance of land
  "mainly suitable for extensive livestock farming".
  In practice, the area is a mixed farming area typical of large parts of south-west England, particularly those inland from the south coast of east Devon and west Dorset. Many of the farms in the wooded valleys are dairy farms, most of which have been developed in recent years and are modern, intensive units. There are also many sheep flocks in the area, but they are predominantly intensive flocks, producing fat lambs, not the extensive enterprises typical of the LFAs. There is also a large acreage of cereals in the area — a far higher proportion than one would normally expect in a livestock-rearing area, let alone a less-favoured area.
  My problem is that, because the area does not meet the criteria, I cannot include it without endangering other areas proposed. My other problem is that many other areas, which have already been excluded and have accepted their exclusion, could more reasonably be included than the Sidbury area. It worries me considerably to have to say that, because my hon. Friend is a friend. I love his constituency and would wish to support its countryside and give additional aid to his countrymen. However, the criteria laid down by the Community are quite clear and the area does not meet them.
  I wish it could be otherwise, because I should have loved to tell my hon. Friend, "I have considered this matter again. I have seen the problems and I believe that with careful phraseology and proper presentation I can encourage the Commission to take it on board." However, I cannot. As Minister I have one job that the advisers and the panels do not have: I have to consider each individual case not just as an individual case but bearing in mind its effect on the rest of the cases. Even if it were true that the panel had said otherwise and that the local people said otherwise, I have to think of how that would affect the rest of the United Kingdom. For that reason, I have to disappoint my hon. Friend in order to protect others.
  Sir Peter Emery: I thank the Minister for his reply. I believe that some of the information about the amount of farming, the cereal and the dairy, is not accurate. If I can support that, I hope that my hon. Friend the Minister will look at the matter again.
  Mr. Gummer: I give my undertaking that if that is so, I shall look at it again.
  Question put and agreed to.
  Adjourned accordingly at twenty-nine minutes to Eleven o'clock.

WALES

  North Wales Newspapers Ltd.
  Mr. Leighton
  To ask the Secretary of State for Wales if he will list the amount and type of each grant made available to North Wales Newspapers Limited to assist in the relocation and re-equipping of the company's premises from Oswestry in Shropshire to Mold, Clwyd; what information he has as to the proportion of the company's costs for(a) rebuilding, (b) relocating and (c) new plant and equipment which were met by such aid; if the company gave any information or undertakings on the creation of new jobs as a result of the move or about the continued employment of existing staff after the company's relocation; and if any assurances or undertakings were given on the maintenance of terms and conditions of employment, including trade union recognition, for existing staff after the company's relocation.

  Mr. Peter Walker
  Details of regional selective assistance offers (exceeding £5,000 and regional development grant payments cumulatively exceeding £25,000 in any quarter) to individual companies are published in British Business following a payment under the grant concerned. No information has been published about grants payable to North Wales Newspapers Ltd. in respect of this project. Both the RSA and RDG schemes are linked to the provision of employment opportunities but aspects relating to the terms and conditions of employment and trade union recognition are not subject to the formal criteria of the schemes.

  Wales Tourist Board
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales what was the total grant to the Wales Tourist Board in cash terms and expressed at constant 1988 prices in each of the past 10 years.

  Mr. Wyn Roberts
  The information is as follows:

  Net expenditure for Wales tourist board

  (£ thousand)

  Year

  Current prices

  1Constant 1987–88 prices

  1978–79

  3,200

  6,507

  1979–89

  3,400

  5,916

  1980–81

  4,000

  5,870

  1981–82

  4,887

  6,530

  1982–83

  5,362

  6,682

  1983–84

  4,827

  5,746

  1984–85

  6,177

  7,039

  1985–86

  7,579

  8,151

  1986–87

  7,746

  8,075

  1987–882

  8,707

  8,707

  1 The figures have been converted to 1987–88 prices using the gross domestic product (market price) deflator.

  2 Estimate of likely outturn.

  564

  Wales Tourist Board—Welsh Development Agency
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales what arrangements are in place for liaison and co-operation between the Wales Tourist Board and the Welsh Development Agency; and if he will make a statement.

  Mr. Wyn Roberts
  The Wales Tourist Board and the Welsh Development Agency work closely on a wide range of issues.

  Community Nursing
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales what is the total annual expenditure and the number of staff employed in the community nursing service in each Welsh health district.

  Mr. Grist
  The information requested is set out in the following table:

  District Health Authority

  Community Nurising Expenditure 1986–87 £ Thousand

  Community Nursing Staff Whole-Time Equivalents

  Clwyd

  5,309

  375

  East Dyfed

  3,574

  244

  Pembrokeshire

  1,467

  111

  Gwent

  6,407

  415

  Gwynedd

  3,478

  235

  Mid Glamorgan

  7,160

  489

  Powys

  1,617

  112

  South Glamorgan

  5,348

  425

  West Glamorgan

  5,076

  366

  Total Wales

  39,436

  2,772

  Notes:

  1. Community nursing expenditure includes both salary expenditure and other associated non-staff expenditure such as travel and subsistence expenditure.

  2. Community nursing staff whole-time equivalents as at 30 September 1986 including school health nurses.

  Integrated Operations Programmes
  Mr. Wigley
  To ask the Secretary of State for Wales, pursuant to his reply to the hon. Member for Caernarfon of 10 December 1987,Official Report, column 216, what progress has been made in securing an early and favourable decision by the European Community Commissioner on the integrated operations programme for Dyfed, Gwynedd and Powys.

  Mr. Peter Walker
  I went to Brussels on 3 February to discuss integrated operations programmes with Commissioner Varfis and I understand that he intends to consult the other Commissioners about the Dyfed, Gwynedd and Powys programme before the end of this month.

  PICKUP
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will make a statement on the progress of PICKUP in Wales.

  Mr. Wyn Roberts
  The Welsh Office joined the PICKUP programme in 1984 with the appointment of the PICKUP agent for Wales. I am pleased to be able to report that progress to date has been steady and continuous. A second full-time officer was appointed in September 1987
  565
  who is primarily engaged in the development of in-service training for college lecturers involved with running PICKUP courses.

  The eight local education authorities in Wales have appointed PICKUP co-ordinators with funding from education support grant arrangements and six of the colleges of the University of Wales have received Welsh Office funding to promote and develop PICKUP provision through the appointment of co-ordinators.

  Major advances have been achieved through the local collaborative project programme, funded jointly with the MSC, with a total of 30 projects being commissioned during 1986–87 involving some 140 firms and 24 colleges. An important feature of the LCP programme was the launch in 1987 of the Technology Centre for Wales, located with WINTECH, the first of its kind in the United Kingdom, and the Language Exports Centre for Wales based at University College, Swansea.

  The Wales Advisory Body has also been actively concerned with the development of PICKUP activities, allocating funds to the Polytechnic of Wales and five higher education institutions to fund the appointment of PICKUP co-ordinators. Also, three of the colleges of the University of Wales have successfully bid for PICKUP funding from the University Grants Committee.

  The response from participants has also been encouraging. A survey of PICKUP activities in colleges undertaken in November 1986 indicated that some 6,800 individuals were receiving updating/re-training during that month. The last two years have seen increases of about 40 per cent. in the number of PICKUP courses provided and 100 per cent. in the number of students benefiting from those courses.

THE ARTS

  Arts Council (Equal Opportunities Policy)
  Mr. Fisher
  To ask the Minister for the Arts by what means and at what annual cost the implementation of the Arts Council's equal opportunities policy is monitored.

  Mr. Luce
  [holding answer 4 March 19881: As regards council staff, an equal opportunities policy is part of the council's personnel work, and monitored by its senior management. In respect of its clients the council looks at their equal opportunities policies as part of its evaluation procedures.

  No separate account is kept of the cost in either case.

  National Theatres and Opera Houses (Ethnic Minorities)
  Mr. Fisher
  To ask the Minister for the Arts how many(a) black, (b) Asian and (c) other ethnic minority people are employed (i) full-time and (ii) part-time in the Royal Shakespeare Company, the National Theatre, the Royal Opera House and the English National Opera as (1) artists, (2) administrators, (3) secretaries and (4) cleaners, caretakers and caterers.
  566
  Mr. Luce
  [holding answer 4 March 1988]: This information is not held centrally.

  Arts Council (Ethnic Minority Employees)
  Mr. Fisher
  To ask the Minister for the Arts how many(a) black, (b) Asian and (c) other ethnic minority people are employed (i) full-time and (ii) part-time at the Arts Council in (1) executive, (2) clerical and secretarial and (3) ancillary, cleaning, caretaking and catering grades.

  Mr. Luce
  [holding answer 4 March 1988]: The reply is based on ethnic monitoring questionnaires voluntarily completed by staff; not all questionnaires were returned. Answers relate only to full-timers; no part-timers were identified in any ethnic minority group.

  Blacks

  Asians

  Other ethnic minorities

  Executive

  5

  1

  1

  Clerical

  5

  3

  3

  The Arts Council employs no ancillary grades directly.

  Office of Arts and Libraries (Ethnic Minority Employees)
  Mr. Fisher
  To ask the Minister for the Arts how many(a) black, (b) Asian and (c) other ethnic minorities people are employed (i) full-time and (ii) part-time at the Office of Arts and Libraries in (1) executive, (2) clerical and secretarial and (3) ancillary, cleaning, caretaking and catering grades.

  Mr. Luce
  [holding answer 4 March 1988]: The reply is based on ethnic monitoring questionnaires voluntarily completed by staff in post on 1 October 1987; not all questionnaires were returned.

  Black

  Asian

  Other ethnic minorities

  Executive

  0

  0

  0

  Clerical

  11

  21

  0

  1 Full-time.

  2 Part-time.

  The Office of Arts and Libraries has only a small staff and employs no ancillary grades directly.

NATIONAL FINANCE

  Income Tax
  Mr. Greg Knight
  To ask the Chancellor of the Exchequer what information he has about the starting rates and top rates of income tax and the level of gross income at which those rates become payable in(a) Canada, (b) France, (c) Germany, (d) Italy, (e) Japan and (f) the United States of America, for a married couple with no children.

  Mr. Norman Lamont
  The information requested is given in the table:
  567

  Country

  Starting rate Per cent.

  Starting rate threshold

  Top rate Per cent.

  Top rate threshold

  £

  £

  Canada

  25·5

  5,003

  43·5

  25,000

  France

  12·8

  6,698

  56·8

  53,463

  Germany

  22

  3,439

  56

  65,670

  Italy

  22

  3,358

  62

  253,924

  Japan

  17·5

  4,286

  78

  152,607

  United States of America

  15

  5,086

  34·7

  22,086

  United Kingdom

  25

  4,096

  40

  19,301

  Notes:

  1. The figures relate to 1988 (1988–89 in the case of the United Kingdom).

  2. It is assumed that the income of the married couple is wholly employment income of the husband.

  3. Conversions to sterling were made at the purchasing power equivalent of sterling in July 1987 (the latest date for which we have figures). The purchasing power equivalents are calculated on the basis of updating OECD figures. Purchasing power parities give a better indication of real values than exchange rates as they are calculated by reference to prices of the same basket of commodities.

  4. In determining gross income levels, personal reliefs, employment income reliefs and other standard reliefs have been taken into account. Where social security contributions are deductible in computing taxable income they have also been taken into account (France, Germany, Italy, Japan).

  5. The figures in the tables reflect national taxes and, where applicable (Canada, Japan and the United States), local income taxes at typical rates.

  Share Ownership
  Mr. Tredinnick
  To ask the Chancellor of the Exchequer if he will make a further statement on the level of share ownership in Great Britain.

  Mr. Norman Lamont
  A joint Treasury/stock exchange survey carried out in January and February this year shows that:Nine million people, or 20 per cent. of the adult population, now own shares, compared to 19·5 per cent. one year ago, and seven per cent. in 1979.
  13 per cent. hold shares in privatised companies, and six per cent. own only privatised shares.
  Three per cent, hold shares in the company for which they work.
  The increase in share ownership is widely spread; two thirds of British shareholders come from outside the ranks of managers and the professions; similarly, two thirds come from outside the south-east.

  I am placing copies of the survey report in the Libraries of both Houses.

  Independent Taxation
  Miss Widdecombe
  To ask the Chancellor of the Exchequer what is his estimate of the total reduction in income tax liability from introducing independent taxation in 1990–91; and how that reduction will be distributed amongst taxpayers at different levels of income.

  Mr. Norman Lamont
  The proposals for independent taxation of personal income outlined in the Budget are estimated to reduce income tax liability by about £670 million in a full year at 1990–91 levels of income and reduce income tax receipts by £500 million in 1990–91. The distribution of the full year cost by income of the individual taxpayers who benefit is as follows:

  Income £000s

  Cost £ million

  0 to 5

  260

  5 to 10

  100

  10 to 15

  60

  15 to 20

  50

  20 to 25

  50

  25 to 30

  50

  30+

  100

  All

  670

  568
  The costs are estimated by comparing tax liabilities on husbands' and wives' incomes separately before and after independent taxation. Liability on the wife's income before independent taxation is estimated by treating her income as the top slice of the couple's income. The calculations assume that the 1988–89 income tax regime is indexed to 1990–91 by the statutory formula, and the composite rate of tax on bank and building society interest does not change between 1989–90 and 1990–91. Estimates are based on a projection of the distribution of the incomes of husbands and wives in the 1985–86 survey of personal income and are therefore provisional.

  Public Service Pensions
  Mr. Cartwright
  To ask the Chancellor of the Exchequer if he will list the charities which are to receive donations from the Government in respect of the underpayment of public service pensions, indicating the sums likely to be received by each.

  Mr. Brooke
  Pursuant to my answer to my hon. Friend the Member for Croydon, South (Sir W. Clark) on 18 December at columns 845–6, the arrangements have yet to be settled, but I hope to make a statement in the near future.

  Credit Union Act 1979
  Mr. Allan Stewart
  To ask the Chancellor of the Exchequer what representations he has received concerning possible amendment of the Credit Union Act 1979; and what response he has given.

  Mr. Lilley
  I have recently received four letters enclosing a copy of the same letter from the acting secretary of Glasgow Licensed Taxi Trade Credit Union, who seeks increases in the limits in the Act on the amount of shares in which a member of a credit union may have or claim an interest and in the total amount on loan to a member of a credit union at any time. I will be replying to the representations in due course and I will also write to my hon. Friend.

ATTORNEY-GENERAL

  Land Ownership
  Mr. Wray
  To ask the Attorney-General what steps Her Majesty's Government will take to make information about land ownership more publicly accessible; and if he will make a statement.

  The Attorney-General
  The Land Registration Act 1988, which implements the Law Commission's recommendation in the report Law Corn. No. 148 that the register of title at the Land Registry should be made open to public inspection, received Royal Assent on 15 March. The Act will be brought into force by commencement order made by the Lord Chancellor.

PRIME MINISTER

  Nuclear Warheads
  Dr. Thomas
  To ask the Prime Minister, pursuant to her oral reply to the hon. Member for Blaenau Gwent (Mr. Foot),Official Report, 4 March, column 1284, if she will set out the basis for her statement that the Soviet Union probably has more nuclear warheads than any other country.

  The Prime Minister
  My reply to the right hon. Member for Blaenau Gwent (Mr. Foot) reflected the fact that, while there is broad parity in the number of strategic systems held by the Soviet Union and the United States, in the intermediate and short-range category the Soviet Union has many more nuclear capable forces deployed than NATO, as indicated in figures 15 and 16 in annex A to the Statement on the Defence Estimates 1987, a copy of which is in the Library.

  No estimate of warhead numbers can be precise, particularly because we cannot assess the number of nuclear warheads held in reserve by the Soviet Union, but on the basis of the number of deployed launchers the Soviet Union retains a considerable advantage over all NATO countries.

  Lease-back Transactions
  Mr. Heffer
  To ask the Prime Minister whether she will provide particulars of all lease-back transactions entered into by Government Departments or agencies since 1 June 1979 showing(a) capital sums received from leases in respect of the assets comprised in the transaction, (b) the time terms of the leases concerned (c) the annual lease rental payable to the leasors by lease-back agreements and (d) the date of the respective transactions.

  The Prime Minister
  Guidance to Departments emphasises the importance of avoiding unconventional financing which does not provide benefits sufficient to offset any extra costs. Records of departmental assets are not held centrally.

  Broadcasting Standards Council
  Mr. Dalyell
  To ask the Prime Minister what criteria Her Majesty's Government proposes to use in making appointments to the Broadcasting Standards Council; and if she will make a statement.
  570
  The Prime Minister
  These appointments, as in other such cases, will be made on the basis of personal distinction, experience and ability.

  Mr. Dalyell
  To ask the Prime Minister what factors are delaying an announcement of the membership of the Broadcasting Standards Council; and if she will make a statement.

  The Prime Minister
  My right hon. Friend the Home Secretary hopes to make an announcement before long.

TRADE AND INDUSTRY

  Infantry Radars (Export to Sudan)
  Ms. Armstrong
  To ask the Chancellor of the Duchy of Lancaster whether the implications for development will be taken into account when consideration is given to granting a licence for the export of infantry radars to the Sudan.

  Mr. Alan Clark
  It has been the practice of successive Governments not to discuss their consideration of export licence applications for individual export orders. However, each application is judged on its merits taking into account all relevant factors including the nature of the equipment, its destination and end use.

  Westminster Property Group
  Mr. David Shaw
  To ask the Chancellor of the Duchy of Lancaster if, in the light of the statement by Sir Nicholas Browne-Wilkinson in the High Court on 9 March in connection with the Westminster Property Group, he will again refer the papers relating to the group's activities to the Crown Prosecution Service.

  Mr. Maude
  Sir Nicholas Browne-Wilkinson has directed that a copy of his judgment be sent to the Director of Public Prosecutions for him to reconsider whether any criminal charges can properly be formulated against Mr. Raper. The Director of Public Prosecutions will contact my Department on this matter if necessary.

  Cosmetics (Labelling)
  Mr. Galbraith
  To ask the Secretary of State for Trade and Industry if he will introduce legislation to require labelling of cosmetics to indicate whether or not they have been tested on animals.

  Mr. Butcher
  I have no plans to do so.

  "Action for Cities"
  Mr. Spearing
  To ask the Chancellor of the Duchy of lancaster what steps were taken to ensure delivery to the House of Her Majesty's Government's brochure entitled "Action for Cities"; what requests were made to his Department in this respect; when copies first were supplied to the Vote Office of the House; and if he will make a statement.

  Mr. Kenneth Clarke
  Copies of the Government's "Action for Cities" document were placed in the Library of the House by 11 am on 7 March. One hundred copies of the document were delivered to the Vote Office before 3 pm that day, a further 200 copies were delivered at 3.30
  571
  pm, and 200 more on 8 March. In addition, on 7 March I sent personal copies with a letter to 200 hon. Members with urban constituencies.

  Mr. Boyes
  To ask the Chancellor of the Duchy of Lancaster what has been the estimated cost to the Government of producing the booklet and accompanying materials of "Action for Cities".

  Mr. Kenneth Clarke
  The total estimated cost of producing the 37,000 copies to date of the "Action for Cities" document and the associated press notices issued by Government Departments on 7 March is £72,900. This expenditure is designed to attract further involvement and financial commitment to the inner cities from the private sector, and is a small part of the approximately £3,000 million each year already committed by the Government to a wide range of policies to help regenerate our inner cities.

  Mr. Tony Banks
  To ask the Chancellor of the Duchy of Lancaster what was the total print of the documents associated with the Government's campaign "Action for Cities"; and what was the final cost.

  Mr. Kenneth Clarke
  The print to date is 37,000 copies of the document "Action for Cities", 2,000 press notices on each of the 12 announcements about new action by Government Departments and 2,000 press notices summarising these announcements. The total cost is about £72,900. This expenditure is designed to attract further involvement and financial commitment to the inner cities from the private sector, and is a small part of the approximately £3,000 million each year already committed by the Government to a wide range of policies to help regenerate our inner cities.

EDUCATION AND SCIENCE

  Pupils (Enrolment)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Education and Science whether, in view of the fact that Easter is a movable feast, he will take steps to fix 1 May each year as the eligibility date for pupils where entitlement to start school depends on the start of the summer term.

  Mr. Dunn
  No. The Government have no plans to alter the requirement for schools to admit children at the beginning of the term following their fifth birthday. It is open to local education authorities and schools to admit children earlier than this and it is clear that most are doing so.

  Church School Authorities (Finance)
  Mr. Sheerman
  To ask the Secretary of State for Education and Science what plans he has to speed up the payment of section 2 moneys due to church school authorities.

  Mr. Dunn
  My right hon. Friend is aware that there have been delays in the making of orders under section 2 of the Education Act 1973. Officials are considering a number of measures to improve the present regrettable situation.

HOME DEPARTMENT

  Mentally Disordered Offenders
  Mr. Cummings
  To ask the Secretary of State for the Home Department what representations he has received from local authorities and other bodies in Durham concerning the release into the community of mentally disordered offenders; and if he will make a statement.

  Mr. Douglas Hogg
  We have received no such representations. If, however, the hon. Member has a particular case in mind I would be ready to consider his views about it.

  Political Asylum
  Mr. David Evans
  To ask the Secretary of State for the Home Department if he will make a statement on Amnesty International's call for a major review of current Home Office procedures for dealing with applications for political asylum in the United Kingdom.

  Mr. Renton
  I met representatives of Amnesty International on 11 February to discuss their proposals. I stressed at that meeting that the United Kingdom will continue to carry out its obligations under the 1951 refugee convention and that since 1979 we have granted refugee status to over 8,000 applicants and admitted 20,000 Vietnamese refugees as well as allowing over 7,000 applicants who did not qualify for refugee status to remain here on an exceptional basis. Moreover, much of what Amnesty proposes represents current Home Office practice. There does, however, have to be an effective procedure for distinguishing between applications which meet the requirements of the UN convention and those which do not and, in this context, I cannot accept Amnesty's main recommendation that those who are refused asylum on arrival at a port should have a right of appeal exercisable before removal. The experience of other European countries reinforces our view that such a system would be likely to encourage abuse of our asylum procedures.

  Local Government Finance
  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department if he has any plans to review the use by local authorities of moneys granted under section 11 of the Local Government Act 1966; and if he will make a statement.

  Mr. John Patten
  Improved arrangements for monitoring the use made by local authorities of posts funded under section 11, introduced in the Home Office circular of 1 October 1986, now apply to all posts approved or reviewed since that date and are being extended to all other funded posts. We shall be considering whether any further changes are needed.

  AIDS
  Mr. Butler
  To ask the Secretary of State for the Home Department if he will make it his policy to screen all prisoners at the reception stage for HIV-1 and HIV-2.

  Mr. Douglas Hogg
  Screening of all prisoners at the reception stage is already undertaken in the form of medical inquiry and investigation. Routine blood testing is not practised and there are no plans to introduce it.

  Polyester Security Glazing Film
  Sir Eldon Griffiths
  To ask the Secretary of State for the Home Department what studies he has made of recent developments in polyester security glazing film; and if he intends to encourage the use of this form of window protection for police cars and police stations.

  Mr. Douglas Hogg
  Two studies of the resistance of various types of glazing, with and without the addition of polyester film, were conducted in 1986 and their findings were made available to chief constables. Further related work is now in progress.

  Since 1977 the Home Office has recommended that wherever necessary windows in new police stations should be shatter-proof or protected by film.

  Police (Firearms)
  Sir Eldon Griffiths
  To ask the Secretary of State for the Home Department if he is satisfied with the present facilities for tactical weapons training; whether he has yet established common physical standards for firearms officers in all English forces; how many forces still lack counselling facilities for officers who may suffer post-shooting traumas; and what response he has made to the recommendation at paragraph 130 of the Home Office working group on police use of firearms that a chief superintendent with knowledge of firearms be seconded to assist Her Majesty's Inspectors of Constabulary.

  Mr. Douglas Hogg
  The Home Office working group on the police use of firearms made 36 recommendations for the improvement of policy and procedures relating to the issue to and use by the police of firearms in England and Wales, all of which we support. The majority of recommendations have already been implemented, but there are some on which further work is still required. A working party of the Association of Chief Police Officers is giving urgent attention to identifying a suitable site for a tactical training facility. A second ACPO working group is considering how best to develop a range of physical fitness and medical standards to meet the requirements of each category of firearms specialisation. Although there are some forces where work is still in progress to build into operational contingency plans provision for counselling facilities for officers involved in shootings, most of those forces have made interim arrangements for such counselling to be provided. The suggestion that a chief superintendent with knowledge of firearms should be seconded to assist Her Majesty's Inspectors of Constabulary is being actively pursued by the inspectorate.

  Gibraltar (Shooting)
  Mr. Soley
  To ask the Secretary of State for the Home Department whether the powers contained in the Prevention of Terrorism Act were used at any time in the events leading up to the shooting of three people in Gibraltar; and if he will make a statement.

  Mr. Hurd
  No.

  Fire Prevention Officers
  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department (1) if he will list the lack of outstanding initial, re-inspection and routine fire 574
  prevention inspections in each county in the United Kingdom as an annual figure expressed in officer man years for each of the last 10 years;

  (2) if he will list the lack of outstanding initial, re-inspection and routine fire prevention inspections for private residential homes in each county in the United Kingdom as an annual figure expressed in officer man years for each of the last 10 years.

  Mr. John Patten
  This information is not readily available and could be obtained only at disproportionate cost.

  Forensic Science Service
  Mr. Hunter
  To ask the Secretary of State for the Home Department what steps have been taken by the Home Office forensic science service to improve the quality of scientific evidence provided by the service in criminal cases.

  Mr. Hurd
  Substantial improvements have been made. Since 1979, there have been formal arrangements to monitor the quality of work in the Home Office forensic science service. These are based on a regular series of open and "blind" trials, organised both within each laboratory, and centrally by the service's research establishment. They cover the problems normally found in case work in a range of disciplines. The results of such trials are thoroughly reviewed, with a view to further improvements in case work procedures; in 1986 a general review of the quality assurance arrangements concluded that they were effective and economical.

  These are supplemented, first, by regular inspections of the major Departments of each laboratory by senior officers from other laboratories in the service, and, secondly, by a scientific advisory group, chaired by Sir Ronald Mason FRS, and comprising eminent scientists, which was established in 1986, to advise the service on the development of its scientific standards.

  Linked to the efforts to improve the quality of the service's work is an extensive training programme at the service's training unit at Birmingham. This provides an induction course for all newly appointed scientific staff; courses on specific techniques and instruments; and a course to prepare staff to give evidence in court. In 1987, 214 staff received training at the unit, varying from a day to a week.

  Parole
  Mr. John Marshall
  To ask the Secretary of State for the Home Department how many convicted rapists have been paroled during the past 10 years; and how many have committed subsequent offences.

  Mr. John Patten
  [holding answer 15 March 1988]: The table shows the numbers of persons with a principal offence of rape who were paroled from determinate sentences (excluding life) between 1977 and 1986, together with the numbers considered. To provide information on the number of these parolees who were reconvicted subsequently, whether for rape or any other offences, would involve disproportionate cost. Since 1983, prisoners given sentences of more than five years for rape have been granted parole, other than in wholly exceptional circumstances, for only a few months towards the end of the sentence where this seems likely to reduce the long-term risk of reoffending.
  575

  Prisoners serving determinate sentences for rape who were considered for parole: by outcome, 1977–86

  Number of persons

  Considered for parole

  Released on parole1

  1977

  374

  137

  1978

  385

  170

  1979

  390

  149

  1980

  445

  211

  1981

  496

  253

  1982

  359

  146

  1983

  422

  186

  1984

  489

  213

  1985

  545

  201

  1986

  587

  177

  1Including those deported on release.

  Juvenile Boys
  Mr. Wheeler
  To ask the Secretary of State for the Home Department what changes he proposes to make to the arrangements for the remand in custody of juvenile boys.

  Mr. John Patten
  [holding answer 29 February 1988]: It is the Government's policy, consistent with the terms of the Bail Act 1976, that remands in custody should be restricted to those cases where they are unavoidable, given all the circumstances of the case. There is a particularly strong argument for keeping untried juveniles out of custody wherever possible, especially when they might otherwise have to be held in an overcrowded local prison. The scope for remanding juveniles in custody has been progressively restricted. After careful consideration and having due regard to the need to maintain adequate safeguards for the public, the Government propose to restrict further the circumstances in which juveniles may be remanded in custody.

  The only juveniles who may now be remanded in custody are 15 and 16-year-old boys certified by the courts as being too unruly to be safely remanded to local authority care. The unruliness certification procedure is available for two categories of boys; those charged with or previously convicted of an offence of violence or charged with an offence carrying a penalty of at least 14 years imprisonment; and those remanded in care who have persistently absconded or been seriously disruptive. Under the Government's proposals, the procedure will still be available for 15 and 16-year-old boys but the categories will be narrowed. The first will he limited to boys charged with or previously convicted of an offence carrying a maximum penalty of life imprisonment, the second to those remanded in care who pose a substantial risk to themselves or others. Certain other changes to the procedure are also proposed. The changes will reduce the numbers of juveniles remanded in custody, while ensuring that the courts retain all necessary powers for the protection of the public. The details of the proposals are set out in a consultation paper published today.

FOREIGN AND COMMONWEALTH AFFAIRS

  Irish Republic (British Ambassador)
  Mr. McCusker
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many times the British ambassador to the Irish Republic has been called 576
  to the Department of Foreign Affairs in Dublin during the past three months; and what matters the Government of the Irish Republic expressed concern about.

  Sir Geoffrey Howe
  The British ambassador to the Republic of Ireland regularly visits the Department of Foreign Affairs, at his request or at that of the Department. A variety of subjects of interest to both Governments have been raised at these meetings. He has been summoned to the Department only once in the past three months, to discuss the operation of the Prevention of Terrorism Act on 7 March.

  Consultative Documents
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy that responses received to consultative documents issued by his Department be made publicly available in his Department's library, except where the respondent has specifically asked that this not he done; and if he will arrange for this procedure to be made clear when future consultative documents are issued.

  Mr. Eggar
  Although Foreign and Commonwealth Office consultative documents are few in number we have a clear policy to make as much information available as possible while preserving the confidentiality essential to the effective working of Government.

  NATO (Brussels Demonstration)
  Ms. Ruddock
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has regarding the arrest of 14 British citizens in Brussels during a demonstration outside the North Atlantic Treaty Organisation headquarters on 2 March; and if he will make representations to his counterpart in Belgium regarding the conditions of their detention.

  Mr. Eggar
  A group of British citizens were taken into custody by the Brussels town police on 2 March 1988 and held for between eight and 10 hours. They were detained under normal police procedures for reasons of security and public order.

  We have no evidence to suggest that their conditions of detention were different from those which a Belgian citizen could expect if detained in similar circumstances.

  Nuclear Materials
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to the evidence given on 10 March, by the EEC Energy Commissioner to the European Parliament special inquiry committee on nuclear materials mismanagement in the EEC, on the specific current location and present safeguard arrangements for(a) 180 kg of United Kingdom origin civil plutonium exported to Belgium under an agreement of 3 May 1968, and (b) 200 kg of United Kingdom civil origin plutonium exported to NUKEM, at Hanun in the Federal Republic of Germany under an agreement dated 4 August 1969.

  Mr. Mellor
  As far as we are aware, no evidence was given on either of these exports.

  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he
  577
  possesses on the statement and hearing by the EEC Environment Commissioner before the European Parliament special inquiry committee into nuclear waste and nuclear materials transport in the EEC, held at Strasbourg on 10 March.

  Mr. Mellor
  Mr. Clinton Davies, Commissioner for the Environment, stated that the Commission had so far found no irregularities in the mode of transport or of the containers used in the transport of radioactive material between Belgium and Federal Germany and Commission experts had found that the radioactivity of discharges from Mol had remained within Community public health limits. However, there had been irregularities in the labelling and recording of nuclear waste sent from Mol and the Commission would now consider the need for Community legislation in this area.

DEFENCE

  Soviet Missiles
  Mr. Cohen
  To ask the Secretary of State for Defence what evidence he has, and from what source, of Soviet development of tactical air-launch cruise missiles; and if he will make a statement.

  Mr. Ian Stewart
  The Soviet Union deploys a wide range of tactical air-launched cruise missiles and continues to develop new and more advanced weapons systems of this type. It would not be in the interests of security to comment on the source of this information.

  Soviet Territorial Waters
  Mr. Cohen
  To ask the Secretary of State for Defence what arrangements he has made to ensure that British vessels do not sail within Soviet territorial waters without authority; and if he will make a statement.

  Mr. Ian Stewart
  The commanding officers of Royal Navy vessels are, of course, made fully aware of our obligations under international law and are issued with such other instructions as are considered appropriate for the areas to which they may be deployed. The details of such instructions are classified.

  Mr. Cohen
  To ask the Secretary of State for Defence what discussions he has had with his NATO allies to ensure that none of the member states' vessels sail within Soviet territorial waters without authority; and if he will make a statement.

  Mr. Ian Stewart
  My right hon. Friend regularly has discussions with his NATO colleagues on a wide range of defence matters of mutual interest. It is not our general practice to disclose the details of such discussions.

  South Atlantic
  Mr. John M. Taylor
  To ask the Secretary of State for Defence if he will make a statement on the conduct of the recent military exercise in the South Atlantic.

  Mr. Ian Stewart
  Exercise Fire Focus, designed to practise the reinforcement of the Falkland Islands, is still in progress, and it would be premature to comment on its conduct.

  French Defence Minister
  Mr. Adley
  To ask the Secretary of State for Defence if he will make a statement on his most recent discussion with his French counterpart on matters of mutual interest.

  Mr. Ian Stewart
  When my right hon. Friend met M. Giraud in the context of the Anglo-French summit on 29 January they discussed a range of issues including equipment collaboration and European security co-operation. The talks were a valuable continuation of the close bilateral dialogue which we enjoy with France on defence matters.

  Falkland War Widows
  Mr. Tony Lloyd
  To ask the Secretary of State for Defence if he has any plans to review the benefits paid by his Department to Falkland war widows: and if he will make a statement.

  Mr. Freeman
  I have no plans to do so.

  HMS Resolution
  Mr. Canavan
  To ask the Secretary of State for Defence whether he will place in the Library a copy of the report on the causes of the electrical malfunction affecting the cooling system of the nuclear reactor of the submarine HMS Resolution on 26 January.

  Mr. Ian Stewart
  No. Since it is not generally our practice to comment on matters affecting the operation of Her Majesty's submarines, the report in question will be classified.

  Binary Munitions
  Mr. Andrew Smith
  To ask the Secretary of State for Defence what discussions he has had with his North Atlantic Treaty Organisation counterparts regarding the deployment of binary munitions in western Europe.

  Mr. Ian Stewart
  My right hon. Friend has regular discussions with his NATO counterparts on a full range of defence issues. I have nothing further to add to the reply of my hon. Friend the Under-Secretary of State for the Armed Forces to the hon. Member for Leyton (Mr. Cohen) on 24 July 1986 at column 490.

  Armed Forces (Shooting Inquiry)
  Sir John Biggs-Davison
  To ask the Secretary of State for Defence what is the normal procedure of inquiry when someone is killed or injured as a result of opening of fire by a member of the armed forces.

  Mr. Freeman
  Cases of death or serious injury in the United Kingdom as a result of a service man opening fire would normally be investigated by the civil police and, in the case of death, by a coroner's inquest. The services would, of course, co-operate with the civil authorities in these investigations. The procedure for the investigations of incidents overseas will depend upon the jurisdictional arrangements that apply in the country concerned.

  The form of any separate service inquiry would depend on the cirumstances of the particular incident. Where one was required the service police would carry out an initial investigation which would, if necessary, be followed by a service board of inquiry.

SCOTLAND

  Scottish Development Agency
  Mr. Nicholas Bennett
  To ask the Secretary of State for Scotland what was the total expenditure in cash terms and at constant 1988 prices of the Scottish Development Agency on the tourism industry in each year since the establishment of the Scottish Development Agency; and what percentage these figures represent of the total expenditure of the Scottish Development Agency in each of these years.

  Mr. Lang
  The Scottish Development Agency's activity in tourism is concerted with the Scottish Tourist Board, the Highlands and Islands Development Board and other interested bodies in Scotland. The agency has provided loan and equity finance for tourism projects which meet its normal investment criteria, and has also funded tourist projects under the local enterprise grants for urban projects scheme and the programme for rural initiatives and developments. Expenditure on tourist projects from these sources is as follows:

  Expenditure on tourism by SDA

  Cash terms £ million

  Per cent. SDA expenditure

  Real terms £ million

  Per cent. SDA expenditure

  1983–84

  0·143

  0·17

  0·170

  0·17

  1984–85

  0·240

  0·3

  0·273

  0·3

  1985–86

  0·235

  0·3

  0·253

  0·3

  1986–87

  4·62

  6·4

  4·82

  6·4

  The above table represents 14 investments. Prior to 1983–84 separate figures were not kept. In addition, the SDA funds feasibility studies, land engineering and property development projects which may have a tourist element.

  Infertility
  Mr. McTaggart
  To ask the Secretary of State for Scotland if he will instigate a survey by the Scottish Home and Health Department into the extent of infertility in Scotland and the case for increased staff at infertility clinics in each health board area.

  Mr. Michael Forsyth
  The Government have for some time recognised the importance of developments in the alleviation of infertility. We shall consider the need for a review of infertility services in Scotland when consideration has been completed of the Warnock report on human fertilisation and embryology.

  Acute Surgical Beds
  Mr. Galbraith
  To ask the Secretary of State for Scotland if he will give the number of acute surgical beds in each hospital in each health board in Scotland.

  Mr. Michael Forsyth
  The information requested is given in the table.
  580

  NHS hospitals—average available staffed beds in acute surgical1 specialties: year ending 31 March 1987

  Hospital-health board

  Average available staffed beds

  Argyll and Clyde health board

  Dunoon and district general hospital

  31

  Hawk head hospital

  44

  Inverclyde Royal hospital

  216

  Paisley district general hospital

  104

  Royal Alexandra infirmary

  81

  Royal Alexandra infirmary annexe

  31

  Royal Victoria eye infirmary

  16

  Thorn hospital

  21

  Vale of Leven district general hospital

  116

  Victoria infirmary, Helensburgh

  22

  Victoria hospital, Rothesay

  9

  West Highland hospital

  33

  Health board total

  724

  Ayrshire and Arran Health Board

  Ayr County Hospital

  97

  Ballochmyle Hospital

  158

  Heathfield Hospital

  31

  Crosshouse Hospital, Kilmarnock

  330

  Seafield Sick Childrens Hospital

  31

  Health Board Total

  647

  Borders Health Board

  Peel Hospital

  126

  Health Board Total

  126

  Dumfries and Galloway Health Board

  Cresswell Maternity Hospital

  8

  Dumfries and Galloway Royal Infirmary

  241

  Carrick Hospital, Stranraer

  22

  Health Board Total

  271

  Fife Health Board

  Adamson Hospital

  15

  Cameron Hospital

  25

  Dunfermline and West Fife Hospital

  131

  Hunter Hospital

  28

  Milesmark Hospital

  40

  Randolph Wemyss Memorial Hospital

  12

  St. Andrew's Hospital

  25

  Victoria Hospital, Kirkcaldy

  256

  Health Board Total

  532

  Forth Valley Health Board

  Clackmannan County Hospital

  41

  Falkirk and District Royal Infirmary

  226

  Stirling Royal Infirmary

  167

  Health Board Total

  434

  Grampian Health Board

  Aberdeen Royal Infirmary

  506

  Chalmers Hospital, Banff

  14

  Dr. Gray's Hospital, Elgin

  66

  Glen O'dee Hospital

  54

  Huntly Jubilee Hospital

  9

  Royal Aberdeen Children's Hospital

  95

  Woodend General Hospital

  221

  Health Board Total

  967

  Greater Glasgow Health Board

  Belvidere Hospital

  62

  Canniesburn Hospital

  125

  David Elder Infirmary

  12

  Elder Cottage Hospital

  29

  581

  Hospital-health board

  Average available staffed beds

  Gartnaval District General Hospital

  291

  Glasgow Royal Infirmary

  521

  Mearnskirk General Hospital

  129

  Philipshill Hospital

  99

  Royal Hospital for Sick Children, Drumchapel

  10

  Royal Hospital for Sick Children, Yorkhill

  149

  Royal Samaritan Hospital for Women

  54

  Southern General Hospital

  368

  Stobhill Hospital

  289

  Victoria Infirmary, Glasgow

  267

  Western Infirmary

  284

  Health Board Total

  2,688

  Highland Health Board

  Belford Hospital, Fort William

  30

  Bignold Hospital

  15

  Caithness General Hospital

  11

  Dunbar Hospital, Thurso

  10

  Lawson Memorial Hospital

  15

  Mackinnon Memorial Hospital, Broadford

  19

  Raigmore Hospital, Inverness

  299

  Ross Memorial Hospital, Dingwall

  10

  Town and County Hospital, Nairn

  1

  Town and County Hospital, Wick

  7

  Health Board Total

  416

  Lanarkshire Health Board

  Hairmyres Hospital

  265

  Law Hospital

  325

  Monklands District General Hospital

  244

  Stonehouse Hospital

  181

  Health Board Total

  1,014

  Lothian Health Board

  Astley Ainslie Hospital

  85

  Bangour General Hospital

  225

  Beechmont Hospital

  29

  Bruntsfield Hospital

  46

  Chalmers Hospital, Edinburgh

  32

  City Hospital, Edinburgh

  130

  Eastern General Hospital

  90

  East Fortune Hospital

  18

  Edenhall Hospital

  9

  Leith Hospital

  51

  Liberton Hospital

  4

  Longmore Hospital

  17

  Northern General Hospital

  26

  Princess Margaret Rose Orthopaedic Hospital

  228

  Roodlands General Hospital

  40

  Royal Hospital for Sick Children

  68

  Royal Infirmary, Including Eye Pavilion

  453

  Royal Victoria Hospital

  7

  Simpson Memorial Maternity Hospital

  8

  Western General Hospital

  178

  Health Board Total

  1,743

  Orkney Health Board

  Balfour Hospital

  42

  Health Board Total

  42

  Shetland Health Board

  New Gilbert Bain

  38

  Health Board Total

  38

  Tayside Health Board

  Blairgowrie and Rattray Cottage Hospital

  1

  Bridge of Earn Hospital, Perthshire

  116

  Dundee Royal Infirmary

  258

  582

  Hospital-health board

  Average available staffed beds

  Forfar Infirmary

  16

  Kings Cross Hospital, Dundee

  10

  Ninewells Hospital, Dundee

  260

  Perth Royal Infirmary

  105

  Stracathro Hospital, Brechin

  162

  Health Board Total

  928

  Western Isles Health Board

  Daliburgh Hospital2

  10

  Lewis Hospital, Stornoway

  44

  Health Board Total

  54

  Note: Components may not sum exactly to totals due to rounding.

  1These specialties comprise: general surgery; orthopaedic surgery; ENT surgery; ophthalmology; urology; orthodontics and paediatric dentistry; oral surgery and oral medicine; restorative dentistry; paediatric surgery; gynaecology; acute mixed; neurosurgery; cardiothoracic surgery; plastic surgery and accident and emergency. Obstetric specialties are not included.

  2 Figures for year ending 30 September 1986.

  Under-Sixes (Education)
  Mr. Kirkwood
  To ask the Secretary of State for Scotland (1) if he will make a statement on the provision of education for the under-sixes;

  (2) what was the cost of producing the review of education provision for the under six-year-olds prior to its abandonment;

  (3) why his Department cancelled the review of education provision for the under six-year-olds; and if he will make a statement.

  Mr. Michael Forsyth
  The review was discontinued to allow resources to be concentrated on more urgent matters. Work on it formed part of the overall functions undertaken by Her Majesty's inspectorate of schools and professional staff in the social work services group, and was not separately costed. I see no case at present for changing the existing arrangements under which regional and Islands councils have discretion over the extent and content of provision for pre-school children.

  Fife Health Board
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will list the number of(a) physiotherapists, (b) speech therapists, (c) radiographers, (d) chiropodists, (e) occupational therapists, (f) dieticians and (g) laboratory technicians employed by Fife health board in the last five years for which information is available; and what current vacancies, if any, there are.

  Mr. Michael Forsyth
  The information requested on numbers of staff employed by Fife health board is shown in the table. The number of vacancies is not available centrally.

  Qualified staff in post in Fife Health Board at 30 September

  Whole-time equivalent

  Staff Group

  1983

  1984

  1985

  1986

  11987

  Physiotherapists2

  49·5

  52·7

  61·4

  63·2

  66·9

  Speech therapists

  22·0

  21·5

  23·7

  25·3

  26·0

  Radiographers

  36·3

  35·3

  36·6

  37·5

  38·3

  Chiropodists

  43·8

  43·7

  44·0

  44·3

  46·1

  583

  Staff Group

  1983

  1984

  1985

  1986

  11987

  Occupational therapists

  11·0

  11·5

  19·8

  28·1

  32·5

  Dieticians

  6·0

  6·0

  7·0

  7·0

  10·0

  Medical laboratory scientific officers

  65·0

  62·0

  64·4

  66·5

  70·6

  1 1987 data are provisional

  2 Includes one remedial gymnast in 1985

  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will list the members of Fife health board, their respective dates of appointment and their respective periods of appointment.

  Mr. Michael Forsyth
  I refer the hon. Member to my reply of 3 November 1987 at columns 687–8 to the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg). All members of Fife health board are currently on four-year periods of appointment.

  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will list(a) the capital expenditure and (b) the revenue expenditure incurred by Fife health board in the last five years for which information is available; and what is the projected capital and revenue expenditure in the current year.

  Mr. Michael Forsyth
  The information is as follows:

  Nursing, staff Doctors and Paramedical staff employed by Fife health hoard at 30 September

  Whole-time equivalent1

  Staff Group

  1983

  1984

  1985

  1986

  31987

  Nursing staff

  3,253·9

  3,261·1

  3,444·2

  3,548·6

  3,549·0

  —qualified

  1,811·9

  1,848·0

  1,920·8

  2,025·7

  2,060·7

  —in training

  591·0

  581·0

  620·5

  625·0

  586·0

  —unqualified

  851·0

  832·1

  902·9

  897·9

  902·3

  Paramedical Staff2

  204·5

  212·4

  237·4

  249·5

  271·5

  General Medical Practitioners1

  186·0

  187·0

  193·0

  192·0

  194·0

  Hospital Doctors

  190·9

  194·1

  197·6

  197·3

  202·4

  1General medical practitioners are shown as head count.

  2Includes qualified and unqualified staff.

  31987 data are provisional

  Kidney Dialysis
  Mr. Darling
  To ask the Secretary of State for Scotland how many patients are currently undergoing kidney dialysis, by each health board area.

  Mr. Michael Forsyth
  This information is not available in the form requested. Only five health boards provide renal dialysis services. The number of patients being treated by the various forms of dialysis by each of those boards at 31 December 1986 is as follows:

  Number

  Grampian

  59

  Greater Glasgow

  384

  Highland

  24

  Lothian

  147

  Tayside

  74

  688

  584

  Hospital and community health services

  £ thousands

  (a) Capital expenditure

  (b) Net recurrent expenditure

  1982–83

  7,564

  49,999

  1983–84

  5,968

  57,399

  1984–85

  6,171

  62,250

  1985–86

  4,968

  67,310

  1986–87

  2,921

  73,264

  1987–88

  14,580

  178,808

  1 Estimated final allocations (including supplementary allocations); actual expenditure by hoard is not yet known.

  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will list the numbers of(a) nurses, (b) paramedical staff, (c) general practitioners and (d) hospital doctors employed by Fife health board in the last five years for which information is available; and what current vacancies there are.

  Mr. Michael Forsyth
  The information requested on numbers of staff employed by Fife health board is shown in the table below. The number of vacancies is not available centrally.

  Mr. Darling
  To ask the Secretary of State for Scotland how many patients are awaiting kidney dialysis, by each health board area.

  Mr. Michael Forsyth
  All patients who are referred to consultants for treatment for end-stage renal failure receive renal dialysis timeously provided that it is the consultant's clinical judgment that they would benefit from it.

  Mr. Darling
  To ask the Secretary of State for Scotland (1) what is the average number of nurses available for each kidney dialysis machine in each health board area;

  (2) what is the percentage of time that kidney dialysis machines are either being used or are being prepared for use in each health board area.

  Mr. Michael Forsyth
  This information is not centrally available.

  Mr. Darling
  To ask the Secretary of State for Scotland if he intends to provide extra funding to provide for
  585
  nursing staff to allow the kidney dialysis machines at Edinburgh Western general infirmary to operate at maximum capacity.

  Mr. Michael Forsyth
  For 1988–89 Lothian health board has been allocated £266·427 million for net revenue expenditure on hospital and community health services, an increase of 5·3 per cent. over the equivalent figure for 1987–88. It is for individual boards, in the light of their knowledge of local needs, to decide on the provision of particular services and priorities between services. I understand that the board is preparing a report on the future provision of renal services in their area and that some neighbouring boards are also considering provision of this service.

  Mr. Darling
  To ask the Secretary of State for Scotland how many kidney dialysis machines there are in each health board area; and in which hospitals.

  Mr. Michael Forsyth
  Information on the number of kidney dialysis machines in hospital use is not available centrally. Hospitals with renal units where dialysis is carried out are listed below. Many patients are dialysed outside hospital, either on a machine in their home or using the continuous peritoneal ambulatory dialysis technique. My officials are at present considering the geographic coverage provided by the service.

  Aberdeen Royal Infirmary

  Dundee Royal Infirmary

  Edinburgh Royal Infirmary

  Glasgow Royal Infirmary

  Raigmore Hospital, Inverness

  Royal Hospital for Sick Children, Yorkhill, Glasgow

  Stobhill Hospital, Glasgow

  Western General Hospital, Edinburgh

  Western Infirmary, Glasgow

  Private Hospitals
  Mr. Darling
  To ask the Secretary of State for Scotland, further to his reply of 24 February,Official Report, column 237, which health boards have met which private hospital operators.

  Mr. Michael Forsyth
  This information is not available centrally.

  Public Appointments
  Mr. Wallace
  To ask the Secretary of State for Scotland if he will list in the Official Report all public and quasi-public body appointments for which he is responsible.

  Mr. Rifkind
  The bodies to which I make appointments are listed in "Public Bodies—1987" which is available in the Library of the House.

  Forestry
  Sir Hector Monro
  To ask the Secretary of State for Scotland whether any modifications to the Government's forestry policy policy are envisaged as a result of the changes to the forestry tax and grant arrangements announced by the Chancellor of the Exchequer in his Budget Statement.

  Mr. Rifkind
  The changes to the tax and grant arrangements announced by my right hon. Friend are designed to provide a simpler and more widely acceptable system of support for private forestry. There has not,586
  however, been any fundamental change in the Government's policy for encouraging forestry, in an environmentally acceptable way. This is reflected in the Forestry Commission's statutory duty to endeavour to achieve a reasonable balance between forestry and environmental considerations.

  My right hon. Friends, the Minister of Agriculture, Fisheries and Food and the Secretary of State for Wales, and I remain of the view that a healthy forestry industry is in the national interest and that long term confidence in both forestry and wood processing industries in this country is fully justified. Last year in the context of new policies for alternative land use we announce an expansion of the forestry programme to 33,000 hectares of new planting a year, with particular emphasis on the private sector and with due regard to environmental considerations. The planting of a higher proportion of trees on low ground of better quality was also to be encouraged.

  These policies remain unchanged, and to this end planting grants will be substantially increased. The expansion of planting in recent years has led to a significant and welcome growth in the United Kingdom of a modern wood processing industry through developments such as the Shotton Paper Company in Wales and Caledonian Paper in Scotland. The industry will in turn help to meet the growing demand for wood products and, together with the new planting programme, this will ensure that forestry contributes to employment in rural areas. Increased planting on better land will also provide an alternative-to agricultural production and thereby assist in the reduction of agricultural surpluses.

  4. The environmental effects of the changes will be positive for a number of reasons. First, the new arrangements for Government financial assistance for planting will strengthen the careful scrutiny and consultation procedures undertaken by the Forestry Commission, because it is very unlikely that any sizeable scheme will go ahead unless the commission has approved it for grant purposes. In considering applications the commission will continue to observe its published management guidelines relating to broadleaved woodland and will introduce similar guidelines for all types of woodland as part of the new scheme. Its procedures for dealing with applications for planting grants should thus gain in effectiveness as a means of controlling the environmental impact of forestry and ensure that the right trees are planted in the right places.

  5. Second, the increased planting grants will incorporate a substantial differential in favour of broadleaved planting, so that the share of broadleaves in total planting can be expected to continue to increase. Third, there will be a new supplement for planting on arable or improved grassland. Full details of a new Forestry Commission grant scheme reflecting these new arrangements will be announced next week.

  6. Finally, the increased grants will be available for replanting in existing forest areas. In considering applications for replanting grants the Forestry Commission will follow policies which are designed to convert forests of an even age into attractive and more varied landscapes with a mixture of types and ages of tree.

  7. The changes that have been announced, together with the new grant scheme to be announced next week, are designed to encourage the achievement of the Government's aims for forestry in a manner which is acceptable in environmental and land use terms and which

  587
  appeals to a wider range of interests. Forestry has an important role to play in the well being of this country. The industry has the support of this Government and has an assured future.

  8. My right hon. Friend, the Secretary of State for the Environment, is today making a separate announcement on behalf of my right hon. Friend the Minister of Agriculture, Fisheries and Food and himself, about environmental guidance on the approval of grant applications for afforestation in England.

  Job Training Scheme (Dundee)
  Mr. McAllion
  To ask the Secretary of State for Scotland if he will give for the Manpower Services Commission area manpower board covering Dundee, the most recent monthly statistics for new JTS showing entrants in the latest available period, and the number of cumulative entrants since the scheme started and a breakdown of entrants which shows how many were male and female, the length of time they had been out of work, their ethnic backgrounds and whether or not they had any disabilities.

  Mr. Lang
  [holding answer 10 March 1988]: The new job training scheme figures for Grampian and Tayside area manpower board are given in the table.

  Number

  Number of entrants in February 1988

  244

  Cumulative entrants April 1987 to February 1988

  1,585

  Table 1

  Unemployed six months or more in January each year Travel-to-work areas in Tayside

  Previous TTW As

  1979

  1980

  1981

  1982

  1983

  Arbroath

  339

  343

  506

  850

  914

  Blairgowrie

  138

  170

  224

  320

  398

  Dundee

  4,167

  4,223

  6,159

  8,976

  8,945

  Forfar

  128

  113

  255

  537

  538

  Montrose

  226

  214

  436

  496

  513

  Perth

  695

  769

  1,024

  1,654

  1,811

  Tayside

  5,693

  5,832

  8,604

  12,833

  13,119

  Current TTW As

  1984

  1985

  1986

  1987

  1988

  Arbroath

  819

  757

  909

  965

  828

  Blairgowrie and Pitlochry

  657

  690

  706

  784

  599

  Brechin and Montrose

  591

  642

  714

  819

  761

  Crieff

  179

  218

  225

  235

  198

  Dundee

  9,962

  10,036

  10,318

  9,797

  8,512

  Forfar

  618

  550

  635

  684

  561

  Perth

  1,470

  1,465

  1,662

  1,865

  1,480

  Tayside

  14,296

  14,358

  15,169

  15,149

  12,939

  Table 2

  Unemployed 6 months or more in January each year. Jobcentre areas in Tayside

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  Arbroath

  339

  343

  506

  850

  914

  1,085

  1,050

  Blairgowrie

  138

  170

  224

  320

  398

  451

  465

  Dundee

  4,167

  4,223

  6,159

  8,976

  8,945

  9,767

  9,837

  Forfar

  128

  113

  255

  537

  538

  610

  545

  Montrose

  226

  214

  436

  496

  513

  547

  575

  Perth

  695

  769

  1,024

  1,654

  1,811

  1,802

  1,862

  Tayside

  5,693

  5,832

  8,604

  12,833

  13,119

  14,262

  14,334

  588

  Number

  of which:

  Male

  1,176

  Female

  409

  6–12 months unemployed

  732

  13–24 months unemployed

  461

  Over 2 years unemployed

  392

  White

  1,509

  Black, African or Caribbean descent

  2

  Indian subcontinent descent

  8

  Others

  52

  Chose not to answer the question

  14

  Disabled

  72

  Labour Statistics
  Mr. McAllion
  To ask the Secretary of State for Scotland if he will give, for each of the last 10 years, the total number of long-term unemployed in each travel-to-work area and jobcentre area in Tayside, indicating the resultant fall since the introduction of the restart programme.

  Mr. Lang
  [holding answer 10 March 1988]: Table 1 shows the number of people unemployed for six months or more in travel-to-work areas in Tayside in January of each year since 1979.

  Table 2 shows the number of people unemployed for six months or more in jobcentre areas in Tayside in January each year from 1979 to 1985. Figures by jobcentre areas are not available after 1985.
  589
  Due to the various changes which have taken place in the compilation of the statistics during the period, the figures are not directly comparable.

  It is not possible to determine how many unemployed claimants left the count as a direct result of the restart programme, which began in Dundee in January 1986 and was extended nationally in July 1986.

  Mr. McAllion
  To ask the Secretary of State for Scotland if he will give for the Manpower Services Commission area manpower board covering Dundee, the most recent monthly statistics for new JTS showing (i) the number of trainees in the latest available period who entered work placements, (ii) the cumulative total of how many are in work places at the latest available date, (iii) trainees who left the scheme in the latest available period, and (iv) the number of cumulative leavers since the scheme started.

  Mr. Lang
  [holding answer 10 March 1988]: The new job training scheme figures for Grampian and Tayside area manpower board area are given below.

  Number

  (i) Number of trainees who entered work placements/directed training in February 1988

  44

  (ii) Cumulative total of trainees in work placements/directed training from April 1987 to February 1988

  277

  (iii) Trainees who left the scheme during February1988

  124

  (iv) Number of cumulative leavers from April 1987 to February 1988

  1,295

  Mr. McAllion
  To ask the Secretary of State for Scotland if he will give for the Manpower Services Commission area manpower board covering Dundee, the most recent monthly statistics for new JTS showing for all those trainees who have left the scheme how many (i) found work, (ii) failed to attend, (iii) went on to another course of training or education, (iv) completed the course, (v) left for sickness and (vi) went back into unemployment; and what is the total number of currently filled places.

  Mr. Lang
  [holding answer 10 March 1988]: This information is not available. An independent follow-up survey to collect data on the destination of trainees leaving the new job training scheme has been commissioned and the results are expected to be available in the next few months.

  There are currently 277 trainees on new JTS in the Grampian and Tayside area manpower board area.

EMPLOYMENT

  Benefit Fraud
  Mr. Cummings
  To ask the Secretary of State for Employment what is the estimated cash saving accrued to his Department in the last year as a result of the activities of his Department's benefit fraud investigators in the Seaham and Peterlee areas during that period; and if he will make a statement.

  Mr. Lee
  The estimated gross benefit saving from my Departments investigation work in the Seaham and Peterlee areas in 1987 is £232,000.

  Jobcentres
  Mr. Leighton
  To ask the Secretary of State for Employment if he will establish a jobcentre at the business efficiency centre on the Isle of Dogs.

  Mr. Lee
  The area is already covered by jobcentres at Poplar and in the library building on the Isle of Dogs. We are currently considering whether any changes to the facilities are needed to improve the services to unemployed people in the area. If we do decide to relocate our jobcentres we would certainly wish to look at a number of possible locations.

  Mr. Leighton
  To ask the Secretary of State for Employment if he will establish jobcentre facilities for the people of Silvertown and Canning Town.

  Mr. Lee
  Silvertown and Canning Town are already well covered by our Plaistow jobcentre. This office deals with all jobseekers in the E13, E6 and E16 postal areas.

AGRICULTURE, FISHERIES AND FOOD

  Intervention Stores
  Mr. Wareing
  To ask the Minister of Agriculture, Fisheries and Food if he will list the location of European Community intervention stores within the United Kingdom.

  Mr. Donald Thompson
  [holding answer 14 March 1988]: As at 1 March 1988, intervention product was in store at the following locations, in various quantities:

  Skimmed milk powder

  Craigavon

  Telford

  Exeter

  Chard Junction

  Butter

  Aberdeen

  Frome

  Annalong

  Gillingham

  Avonmouth

  Glasgow

  Aylesford

  Glenrothes

  Ballymena

  Goole

  Banbridge

  Grantham

  Banbury

  Great Harwood

  Belfast

  Grimsby

  Birmingham

  Hereford

  Blairgowrie

  Heywood

  Bloxwich

  Hull

  Bristol

  King's Lynn

  Buxton

  Leeds

  Cannock

  Leek

  Cardiff

  Lisburn

  Chard Junction

  Liverpool

  Cheltenham

  Llangadog

  Coleraine

  London

  Colnbrook

  Londonderry

  Craigavon

  Lowestoft

  Cullompton

  Luton

  Cumbran

  Manchester

  Dagenham

  Merthyr Tydfil

  Derby

  Newport

  Doncaster

  Newtown Abbey

  Droitwich

  Northallerton

  Dundee

  Northshields

  Dungannon

  Nuneaton

  Eastleigh

  Omagh

  Easton

  Oswestry

  Edinburgh

  Peterborough

  Eglington

  Plymouth

  Evesham

  Pontefract

  Exeter

  Preston

  Fleetwood

  Reading

  591

  Retford

  Swansea

  Rhyl

  Swindon

  Rochdale

  Tamworth

  Scunthorpe

  Taunton

  Sevenoaks

  Tewkesbury

  Sheffield

  Thetford

  Sherborne

  Truro

  Shrewsbury

  Warrington

  Southshields

  Warwick

  St. Helens

  Wigan

  Stoke

  Wigston

  Stonehouse

  Wolverhampton

  Stourport

  Yate

  Strabane

  Sutton-in-Ashfield

  Beef

  Aberdeen

  King's Lynn

  Antrim

  Leeds

  Avonmouth

  Leicester

  Ballymena

  Lisburn

  Banbury

  Liverpool

  Belfast

  London

  Bishops Stortford

  Londonderry

  Blackburn

  Lowestoft

  Bridge of Allan

  Maidstone

  Bristol

  Manchester

  Bourne

  March

  Bury St. Edmunds

  Newtownabbey

  Cannock

  Newry

  Cardiff

  Omagh

  Coleraine

  Oswestry

  Colnbrook

  Paddock Wood

  Craigavon

  Peterborough

  Cullumpton

  Peterhead

  Dagenham

  Plymouth

  Doncaster

  Pontefract

  Droitwich

  Portadown

  Dundee

  Reading

  Dungannon

  Retford

  Eastleigh

  St. Asaph

  Edinburgh

  St. Helens, Merseyside

  Exeter

  Scunthorpe

  Felixstowe

  Sheffield

  Fleetwood

  Sherborne

  Fraserburgh

  Shrewsbury

  Frome

  Strabane

  Gateshead

  Strathclyde

  Gillingham

  Stourport-on-Severn

  Glasgow

  Truro

  Glenrothes

  Walsall

  Grantham

  Warwick

  Great Harwood

  Wigan

  Hereford

  Wigston

  Hull

  Wolverhampton

  Inverness

  Yate

  Cereals

  Airdrie

  Gainsborough

  Bardney

  Glenrothes

  Belford

  Gloucester

  Birmingham

  Halesworth

  Braintree

  Hartlebury

  Bressingham

  Heybridge

  Chipping Warden

  Honeybourne

  Christchurch

  Hull

  Cleveland

  Huntingdon

  Clifton, Yorks

  Ipswich

  Clopton

  Keith

  Coventry

  Kentford

  Doncaster

  Kidderminster

  Driffield

  Kings Lynn

  Dumfries

  Kirkcaldy

  Duns

  Linton

  Dysart

  Louth, Lincs

  Ely

  Maldon

  Felixstowe

  Market Rasen

  Foulsham

  Misson

  592

  Newcastle

  Staughton

  Newmachar

  Stowmarket

  Newmarket

  Stracathro

  Ormiston

  Telford

  Penicuik

  Tranent

  Raydon

  Turriff

  Retford

  Watford

  Ringwood

  Whitchurch, Salop

  Royston

  Whittlesford

  Salisbury

  Wimblington

  Scunthorpe

  Wisbech

  Snetterton

  Witney

  Thames Flood Plains
  Mr. Bowis
  To ask the Minister of Agriculture, Fisheries and Food if he will place a copy of the Thames water authority's map of the river Thames flood plains in the Library.

  Mr. Gummer
  [holding answer 10 March 1988]: I have arranged for a map of the river Thames flood plains to be placed in the Library of the House. More detailed versions may be inspected at Thames water authority's offices or in those of appropriate local authorities.

ENERGY

  Nuclear Reactors (Decommissioning)
  Mr. Pike
  To ask the Secretary of State for Energy what representations he has received regarding the ending of Central Electricity Generating Board participation in research programmes into decommissioning nuclear reactors.

  Mr. Michael Spicer
  The UKAEA is in touch with my Department about the implications of the CEGB's position.

  Mr. Pike
  To ask the Secretary of State for Energy how many nuclear reactors he estimates will be decommissioned before the year 2000; and which ones they will be.

  Mr. Michael Spicer
  This is a matter for the Central Electricity Generating Board. I have asked the chairman to write to the hon. Member.

  Mr. Pike
  To ask the Secretary of State for Energy whether the conduct of research into the decommissioning of nuclear reactors will be a managerial matter for the appropriate privatised electricity generation company.

  Mr. Michael Spicer
  Yes. Other organisations may of course also wish to undertake research into decommissioning.

  Electricity Distribution
  Mr. Oppenheim
  To ask the Secretary of State for Energy what representations he has received regarding the monopolistic position of electricity distribution hoards; and if he will make a statement.

  Mr. Michael Spicer
  My right hon. Friend and I have received representations on numerous aspects of electricity distribution. As my right hon. Friend the Secretary of State told the House on 25 February 1988, the distribution of electricity is largely a natural monopoly, in which it would not be economic to duplicate resources.

  However, it will be possible for adjacent distribution companies to compete with one another to supply large users near their common borders, and there will be scope

  593
  for large users to buy their supplies direct from generators. There is, in addition, substantial room for competition in the generation of electricity by power stations.

  Uranium (Imports)
  Dr. Thomas
  To ask the Secretary of State for Energy (1) for what purpose natural uranium was imported from Durban to Southampton on 28 February 1987; and if that material was under safeguards arrangements;

  (2) what is the final destination and intended end-use of the uranium hexafluoride from Houston, received at Felixstowe on 22 April 1987; and if this material is under safeguards arrangements;

  (3) for what purpose natural uranium was imported from Houston to Felixstowe on 15 May 1987; and if this uranium was under safeguards arrangements;

  (4) for what purpose yellow cake uranium was imported from Houston to Liverpool on 17 June 1987; and if this material was under safeguards arrangements;

  (5) for what purpose natural uranium was imported from Houston to Felixstowe on 24 June 1987; and if this material was covered by safeguards arrangements;

  (6) for what purpose yellow cake uranium was imported from New Orleans to Felixstowe on 7 September 1987; and if this material was covered by safeguards arrangements;

  (7) for what purpose uranium hexafluoride was imported from New Orleans to Felixstowe on 2 December 1987; and if this material was under safeguards arrangements;

  (8) for what purpose natural uranium was imported from Savannah, Georgia, to Felixstowe on 2 December 1987; and if this material was covered by safeguards arrangements.

  Mr. Michael Spicer
  Uranium imported on the dates specified by the hon. Member was for processing in plants operated by British Nuclear Fuels plc. All material processed by BNFL for civil purposes is under safeguards.

  Magnox Reactors
  Mr. Cohen
  To ask the Secretary of State for Energy if he will call for a report from (i) the Central Electricity Generating Board in the United Kingdom and (ii) the Health and Safety Executive's Nuclear Installations Inspectorate about what implications the closure of the Magnox reactor at Latina in Italy has for the British Magnox programme; and if he will make a statement.

  Mr. Michael Spicer
  I refer the hon. Member to the answer I gave him on Thursday 10 March 1988 at column 349.

  Mr. Thomas
  To ask the Secretary of State for Energy what information he has on the statement made by the EEC Environment Commissioner before the European Parliament on 9 March in Strasbourg concerning the applicability of Euratom treaty article 34 to present Central Electricity Generating Board plans to conduct safety tests on their Magnox reactors.

  Mr. Michael Spicer
  I have noted the points made by the Commissioner.

  Regional Electricity Boards (Credit Sale Agreements)
  Mr. Heddle
  To ask the Secretary of State for Energy if he will publish in the Official Report what information
  594
  he has on the real rates of interest charged by each of the regional electricity boards in England and Wales on credit sale agreements.

  Mr. Michael Spicer
  The setting of interest rates on credit sales agreements is a matter for the electricity industry. I have asked the chairman of the Electricity Council to write to my hon. Friend.

  Oil and Gas Projects
  Mr. Macdonald
  To ask the Secretary of State for Energy if he will list the oil and gas projects in the North sea waiting for annex B approval; and if he will give the dates since which each of these projects has been waiting approval.

  Mr. Peter Morrison
  The Department is currently discussing with operators 16 North sea developments (new fields and incremental projects). Examination of development plans is undertaken on a confidential basis. I am unable to specify which projects are under consideration, and, as I said in my reply of 18 January 1988, column 506, it is not my practice to comment on timing.

  Nuclear Materials
  Dr. Thomas
  To ask the Secretary of State for Energy if he will make a statement on his Department's policy towards submitting evidence to the European Parliament committee of inquiry on nuclear materials safeguards in the European Economic Community, with particular regard to the managing and packaging of nuclear materials sent from the United Kingdom to Mol in Belgium and Hanau in the Federal Republic of Germany.

  Mr. Michael Spicer
  No request for evidence has been received by my Department.

  Dr. Thomas
  To ask the Secretary of State for Energy what information he possesses on the statement, and subsequent cross-examination, of the EEC Energy Commissioner before the European Parliament special inquiry committee into nuclear materials mismanagement and transport in the EEC held in Strasbourg on 10 March.

  Mr. Michael Spicer
  Mr. Mosar, Commissioner for Energy, made a presentation to the committee stating that following re-examination of previous checks on nuclear material at Hanau and Mol, the Commission had found no evidence of illegal exports. Mr. Mosar noted that the International Atomic Energy Agency had reached the same conclusion.

  Nuclear Accidents
  Mr. Roy Hughes
  To ask the Secretary of State for Energy what national plan he has for dealing with a Chernobyl type accident in Britain.

  Mr. Michael Spicer
  The Chernobyl accident occurred because of a combination of design weaknesses in the reactor system, as the Russians themselves acknowledged, and deliberate failures of staff to observe prescribed safety procedures. The Chernoblyl reactor was of a completely different design from any operating in, or proposed for, the United Kingdom.

  The precautions taken in the design and construction of nuclear installations in this country, and the very high standards applied in operating and maintaining them,

  595
  make it highly unlikely that accidents will occur which might significantly affect the public. But, however remote that possibility, Her Majesty's nuclear installations inspectorate requires, as a condition of its site licences, that emergency plans are prepared and tested regularly in exercises. The Health and Safety Executive believes that a balance needs to be struck between detailed plans that are sufficiently extensive to cope with a serious accident and the unjustified use of resources involved in planning for improbable accidents.

  Plutonium
  Dr. Thomas
  To ask the Secretary of State for Energy if any safeguarded plutonium, originating in the United Kingdom and exported to Belgium since 1979, was sent to the MOL nuclear centre.

  Mr. Michael Spicer
  [holding answer 22 February 1988]: Total exports of safeguarded plutonium sent to the MOL nuclear research centre since 1979 have amounted to significantly less than 1 gram.

ENVIRONMENT

  Unused Land
  Mr. Madel
  To ask the Secretary of State for the Environment whether he will consider further action to improve the performance of local authorities in disposing of unused land.

  Mr. Ridley
  In replying to my hon. Friend, the Member for Banbury (Mr. Baldry) on 7 March, I said that I intend that local authorities should regularly publish information about the unused and underused land that they own, in order to stimulate improved management of their land and contribute to their public accountability.

  Property Advisory Group
  Mr. Bowis
  To ask the Secretary of State for the Environment what issues are being investigated by the Property Advisory Group.

  Mrs. Roe
  The Property Advisory Group provides advice on a wide range of matters relating to land and property development, and is at present examining the problems of vacant land in inner cities.

  Forestry
  Mr. Hood
  To ask the Secretary of State for the Environment what representations he has received about the measures the Government intend to apply to prevent further damage to forests in the United Kingdom.

  Mr. Ridley
  The Forestry Commission's 1987 survey established a benchmark of tree health, not evidence for damage. This is a point which the few representations my Department has received on the topic fail to understand.

  Forestry (Grants)
  Mr. Gow
  To ask the Secretary of State for the Environment what environmental guidance the Government propose to give to the Forestry Commission about the approval of grant applications for afforestation in England.
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  Mr. Ridley
  My right hon. Friend the Secretary of State for Scotland is making a general statement about forestry policy in Great Britain in the light of the Budget changes. Both in its own forestry operations and in considering applications for planting grants, the Forestry Commission has statutory duty to endeavour to achieve a reasonable balance between forestry and environmental considerations. In cases where the appropriate balance is in doubt, because an objection has been made by the relevant public or local authority and has not been resolved by the commission's regional advisory committee, the commission has since 1974 been directed by forestry Ministers to seek their views before approving the application, or proceeding with the scheme, as the case may be. In England, I am consulted in appropriate cases.

  My right hon. Friend the Minister of Agriculture, Fisheries and Food and I have decided that it would be helpful for the Forestry Commission also to have general guidance from the Government about fulfilling its statutory duties in relation to the environment in England. This guidance will be contained in a letter which the Minister of Agriculture, Fisheries and Food will be sending to the chairman of the Forestry Commission. The main features of the guidance will be as follows:
  A large proportion of the land in England has been used for agriculture as either arable or improved grassland. We therefore attach a high value to conserving, and where necessary restoring, the habitats which the remaining unimproved land provides, including the uplands and ancient woodlands. While we see some scope for broadleaved and mixed woodlands, approval should not normally be given in the uplands of England for new planting which consists predominantly of conifers. The only exception would be small areas where it is clear that such planting would be environmentally acceptable.
  The main potential for afforestation in England lies on arable land and improved grassland which may no longer be needed for food production. It has already been decided that the farm woodland scheme should be targeted on land previously in agricultural use. This concept is incorporated in the Farm Land and Rural Development Bill currently before Parliament. The new grant rates will provide additional incentives for the planting of broadleaved trees and for planting on improved land.
  In existing forested areas, the granting of felling licences by the Forestry Commission to private owners is normally subject to the condition that replanting should be carried out. In future, however, the Forestry Commission will be expected to follow policies which will convert forests of an even age into attractive and more varied landscapes with a mixture of types and ages of trees.

  Water Industry (Privatisation)
  Mr. Henderson
  To ask the Secretary of State for the Environment what response he has received from the Water Companies Association about the consultation papers relating to how the present structure of statutory water companies will be safeguarded in any future plans for privatisation.

  Mr. Ridley
  We are discussing with the association its constructive response to the two papers which outline our proposals for the future of the water companies.

  Olympic Games (Funding)
  Mr. Menzies Campbell
  To ask the Secretary of State for the Environment what representations he has received from the British Olympic Association regarding the funding of high level competitors.

  Mr. Moynihan
  None.

  Rating Reform
  Mr. McAllion
  To ask the Secretary of State for the Environment what is his estimate of the number of single old-age pensioners likely to lose financially from the introduction of the poll tax.

  Mr. Howard
  I refer the hon. Member to the answer I gave to the hon. Member for Coventry, South-East (Mr. Nellist) some moments ago.

  Opencast Mining
  Mr. Yeo
  To ask the Secretary of State for the Environment what recent representations he has received regarding planning policy in relation to opencast mining.

  Mr. Mullin
  To ask the Secretary of State for the Environment if he has any plans to revise further his planning policies towards opencast coal mining; and if he will make a statement.

  Mr. Ridley
  The Department issued revised draft guidelines for opencast coal mining for consultation in April last year. We received a number of representations and these are being considered. We propose to publish revised guidelines in the near future.

  Nuclear Waste
  Mr. Wallace
  To ask the Secretary of State for the Environment what representations he has received from foreign Governments on Britain's nuclear waste disposal programe.

  Mr. Moynihan
  My right hon. Friend has received no recent representations from foreign Governments on Britain's nuclear waste disposal programme. However, the disposal options currently under consideration have been discussed at various international meetings.

  Warrington-Runcorn New Town
  Mr. Butler
  To ask the Secretary of State for the Environment if he will make a statement regarding the progress of Warrington-Runcorn new town in allocating factory space.

  Mrs. Roe
  Warrington and Runcorn development corporation continues to make good progress in attracting private investment for industrial development. In disposing of development land for new factories, the corporation is required to achieve the best consideration reasonably obtainable.

  Homeless Children
  Miss Lestor
  To ask the Secretary of State for the Environment if he will give his estimate of the number of children in homeless accommodation and their approximate length of stay.

  Mrs. Roe
  This information is not collected by the Department.

  Badgers
  Mr. Janner
  To ask the Secretary of State for the Environment what recent representations he has received concerning the protection of badgers setts.

  Mr. Moynihan
  We have received a number of representations from right hon. and hon. Members and 598
  members of the public on this matter. The badger already receives a substantial degree of protection under the Badgers Act 1973 and the Wildlife and Countryside Act 1981, as amended. We have no plans at present to amend the current statutory provisions.

  Housing Action Trust
  Mr. Litherland
  To ask the Secretary of State for the Environment if he will list the Housing Action Trust areas.

  Mrs. Roe
  My right hon. Friend has yet to decide where he intends to seek designation of the first housing action trust areas. We shall announce our proposals while the Housing Bill is before Parliament.

  Houses (Asbestos)
  Mrs. Maureen Hicks
  To ask the Secretary of State for the Environment what evidence he has of the number of local authority houses which have been identified as having sufficient asbestos content in their heating systems and service ducts to warrant remedial action.

  Mrs. Roe
  The joint central and local government working party on asbestos attempted to estimate the extent to which asbestos has been used in local authority properties, including its use in heating systems. The working party concluded that there was insufficient information for a meaningful estimate to be made. Furthermore, my Department and the working party take the view that the amount of asbestos is not an appropriate criterion for deciding on remedial action. Such actions should be based on an assessment of the condition of the asbestos and of its potential to release fibres. This can only be done locally and on a case by case basis.

  Local Government Staff
  Mr. John Marshall
  To ask the Secretary of State for the Environment if he will make a statement about the trends in numbers employed in local government over the last 10 years.

  Mr. Howard
  The numbers employed in local government fell from a peak of 1,975,200 full-time equivalents in June 1979 to 1,887,200 full-time equivalents in June 1982. There followed a period of relative stability until June 1985. Since then every quarterly survey of the Joint Manpower Watch has shown a year-on-year increase. This increase accelerated and by June 1987 the numbers had risen to 1,923,500 full-time equivalents.

  Control over staff numbers should be a routine part of good management in local government. There is certainly scope for substantial staff reductions in local government without any loss in the quality of the services provided.

  Local Authority Housing
  Mr. McFall
  To ask the Secretary of State for the Environment if he will give financial incentives to local authorities to build new dwellings for rent for groups in the population with special needs.

  Mr. Waldegrave
  No. It is for local authorities to determine their own priorities for capital spend. But they may find increasingly that they get better value for money by assisting other providers of housing for rent, including providers of housing for those with special needs, rather than by direct provision themselves.

  Council House Sales
  Mr. Pike
  To ask the Secretary of State for the Environment how many local authority homes were sold in 1987(a) to sitting tenants and (b) as empty properties.

  Mrs. Roe
  English local authorities sold 90,000 homes to sitting tenants and 2,900 vacant dwellings in 1987. In addition, the London residuary body transferred some 5,500 dwellings to Thamesmead Town Limited.

  Local Authority Services
  Mrs. Fyfe
  To ask the Secretary of State for the Environment what percentage of work in the services to be put to compulsory tender he estimates will remain in-house once the Local Government Bill becomes law, in(a) Scotland and (b) England and Wales.

  Mr. Howard
  There is no way of predicting who will be successful in competition. My Department has therefore made no such estimates.

  Camden Council
  Mr. David Evans
  To ask the Secretary of State for the Environment when he last met the leader of Camden council; and what was discussed.

  Mr. Chope
  On my right hon. Friend's behalf, I met representatives of Camden council, including the leader, Councillor Dykes, on 28 January to discuss my right hon. Friend's proposal for Camden's rate limit for 1988–89.

  My hon. Friend the Minister for Housing and Planning also met the council, including Councillor Dykes, on 9 February to discuss homelessness in the borough.

  Flying Lessons
  Mr. Leigh
  To ask the Secretary of State for the Environment under what powers local authorities may provide free flying lessons.

  Mr. Chope
  Local authorities have powers under section 19 of the Local Government (Miscellaneous Provisions) Act 1976 to provide such recreational facilities as they think fit, inside or outside their area.

  London Docklands Development Corporation
  Mr. Spearing
  To ask the Secretary of State for the Environment if he will list the existing and any known future vacancies in the offices, hoard or any senior executives of the London Docklands Development Corporation; and if he will make a statement.

  Mr. Trippier
  There are five vacancies on the LDDC board—for the deputy chairman, the chief executive and one other; and for two members with special knowledge of the locality. The corporation's staffing structure and organisation are matters for the board.

  Planning Applications
  Mr. Simon Coombs
  To ask the Secretary of State for the Environment what proportion of planning applications are approved by his Department, following refusal by local authorities and subsequent appeal.

  Mr. Waldegrave
  The average planning appeal success rate is currently about 37 per cent.

  Derbyshire and Staffordshire County Councils
  Mr. McLoughlin
  To ask the Secretary of State for the Environment what will be the level of rate precept levied by Derbyshire county council and Staffordshire county council in 1988–89.

  Mr. Chope
  The county precepts in Derbyshire and Staffordshire in 1988–89 will be 297·5p and 215p respectively.

  Nirex
  Mr. Kennedy
  To ask the Secretary of State for the Environment when he next intends to meet the chairman of Nirex to discuss matters relating to the management of nuclear waste.

  Mr. Moynihan
  I refer the hon. Member to the answer my right hon. Friend gave to him on 17 February at column 673.

  Empty Council Properties
  Mr. Nicholas Bennett
  To ask the Secretary of State for the Environment what is his estimate of the number of empty council properties in England.

  Mrs. Roe
  I refer my hon. Friend to the reply I gave to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) on 28 October 1987 at column 276.

  Ozone Layer
  Ms. Quin
  To ask the Secretary of State for the Environment if he will make a further statement on recent Government action to protect the ozone layer.

  Mr. Moynihan
  I refer to the answer I gave earlier today to the hon. Member for Argyll and Bute (Mrs. Michie).

  Rate Support Grant
  Mr. Butterfill
  To ask the Secretary of State for the Environment whether his provisional rate support grant settlement for 1988–89 took account of the cost of meeting the teachers' pay awards.

  Mr. Chope
  Yes.

  Conservation Areas (Building Demolition)
  Mr. Eastham
  To ask the Secretary of State for the Environment if he has any proposals for bringing demolition of buildings in conservation areas under the control of the planning system; and if he will make a statement.

  Mr. Waldegrave
  Most demolitions of any significance already require conservation area consent under the Town and Country Planning Act 1971. Similarly demolitions of listed buildings require listed building consent.

  Waste Disposal
  Mr. Vaz
  To ask the Secretary of State for the Environment what assessment he has made of the public health implications of his decision to leave to the discretion of local authorities whether they collect or dispose of waste from non-domestic premises; and if he will make a statement.

  Mr. Moynihan
  The decisions on the classification of commercial and industrial waste reflect the existing
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  collection practices of the majority of local authorities. Because of this, we do not believe that the decisions on classification carry any public health implications.

  Homeless People
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment what consideration he has given to ways of relaxing the duties of local authorities with respect to homeless persons; and if he will make a statement.

  Mrs. Roe
  My right hon. Friend has no plans to amend the duties of local authorities towards the homeless. But we do not rule out discussing with them ideas about the way they are carried out.

  Mr. Morgan
  To ask the Secretary of State for the Environment how many homeless families have been placed in bed-and-breakfast accommodation in England and Wales in the current year so far; and what is his latest estimate of the cost.

  Mrs. Roe
  At 31 December 1987, the latest quarter for which information is available, there were 10,370 households in bed-and-breakfast accommodation placed there by local authorities in England. My right hon. Friend the Secretary of State for Wales has responsibility for these matters as they affect the Principality. Information on the number of households placed in bed-and-breakfast accommodation during the financial year 1986–87 and on related expenditure is contained in "Homelessness Statistics, 1986–87 Actuals" published by the Chartered Institute of Public Finance and Accountancy, copies of which are in the Library.

  Empty Council Houses
  Mr. Fallon
  To ask the Secretary of State for the Environment whether he will initiate legislation concerning empty council houses.

  Mr. Squire
  To ask the Secretary of State for the Environment when he will be tabling amendments to the Housing Bill requiring local authorities to make better use of empty properties.

  Mr. Waldegrave
  I am considering whether to introduce legislation to make better use of empty local authority dwellings.

  Nitrogen Emissions
  Mr. Alan W. Williams
  To ask the Secretary of State for the Environment why, at a United Nations meeting on nitrogen emissions in February, his officials supported a draft agreement which would only freeze nitrogen oxide emissions at the current level by the end of the 1990s; and if he will make a statement.

  Mr. Moynihan
  A draft agreement in the terms described by the hon. Gentleman was not raised at the February meeting of the United Nations Economic Commission for Europe working group on nitrogen oxides. Negotiations are proceeding on a protocal to the UŃECE convention on long-range transboundary air pollution, on the reduction of nitrogen oxide emissions. The United Kingdom is playing a full part in these negotiations, along with other parties to the convention, and I hope that early agreement will be reached.

  Veterinary Premises (Waste)
  Mr. Doran
  To ask the Secretary of State for the Environment if he will outline the reasons for his proposal to classify clinical waste from veterinary premises as industrial, rather than commercial waste.

  Mr. Moynihan
  Clinical waste arises in many different circumstances and we do not think it appropriate to lay an additional duty on local authorities to collect it, which would be the effect of classification as commercial waste. At present, the majority of authorities do not collect clinical waste and do not have the facilities to do so. Classification as industrial waste enables authorities which currently collect clinical waste from veterinary practices to continue to do so.

  Defective Housing
  Mr. Wareing
  To ask the Secretary of State for the Environment what further financial support he will offer to local authorities with defective housing.

  Mrs. Roe
  The annual housing investment programme allocations take into account local authorities' needs for expenditure under the housing defects legislation. Those authorities with particular housing defects problems have also been able to bid for a share of the £20 million reserve put aside nationally for 1988–89. My right hon. Friend expects to decide these additional allocations within the next few weeks.

  Density Planning Controls
  Mr. Dykes
  To ask the Secretary of State for the Environment if he has any plans to seek to change the existing density planning controls available to local authorities under town and country planning legislation.

  Mr. Waldegrave
  No. Density policies are a matter for local planning authorities and should normally be contained in their development plans. They should have sound planning justification. My Department's advice is that county structure plans should give general guidance on the densities expected; more detailed density policies are a matter for local plans. Where planning decisions are based on those policies, they should be well reasoned if they are to be secure against successful appeal.

  Sports Policy
  Mr. Pendry
  To ask the Secretary of State for the Environment when he will next meet the chairman of the Sports Council to discuss issues affecting sports policy during the coming year.

  Mr. Moynihan
  I meet regularly the chairman of the Sports Council to discuss issues affecting sports policy. I have met him on two occasions recently, on 3 March and 8 March, and I look forward to seeing him at other times in the near future.

  M20 (Hollingbourne)
  Mr. Rowe
  To ask the Secretary of State for the Environment how many representations he has received on the planning implications of the proposal to site a motorway service area at Hollingbourne on the M20.

  Mr. Waldegrave
  The Department of Transport's and Esso Petroleum Company Limited's proposals to
  603
  construct a motorway service area on the same site on the M20 at Hollingbourne were considered at a public local inquiry held last month. Fifty two representations on the proposals were received by Maidstone borough council and an additional three by the Department. Others may have been made at the inquiry, but until the inspector's report is received I am unable to say how many representations were made on planning grounds.

  District Councils
  Mr. Adley
  To ask the Secretary of State for the Environment when he next intends to meet the representatives of district councils as planning authorities; and what he intends to discuss.

  Mr. Waldegrave
  I met representatives of the Association of District Councils on 2 February, and my hon. Friend the Member for Broxbourne (Mrs. Roe) met the National Development Control Forum on 18 February. No further meetings are fixed at present, but I have no doubt that they will take place as necessary.

  Council Housing Accounts
  Mr. Ian Bruce
  To ask the Secretary of State for the Environment if he will make a statement about the treatment of balances in council housing accounts.

  Mrs. Roe
  In 1980 we removed from local authorities the restriction on the extent of credit balances for which they could budget in housing revenue accounts. We also permitted transfers of part or the whole of any balance to the general rate fund, a counterpart to the existing discretion to make contributions from the rate fund to the HRA. The obligation to make good any deficit in the HRA has not been altered. We are currently reviewing the financial regime for local authority housing.

  Planning Gain Deals
  Mr. Cohen
  To ask the Secretary of State for the Environment if, in the light of the Royal Opera House case, he will review current planning legislation, with particular reference to the effect of planning gain deals on approved local plans.

  Mr. Waldegrave
  General policy guidance on planning gain is given in the Department's circular 22/83. We are considering whether any change is needed to the current legislation.

  Rates
  Mr. Stevens
  To ask the Secretary of State for the Environment whether he will meet members of the Association of County Councils to discuss the level of rates in the coming financial year.

  Mr. Chope
  The Association of County Councils will have an opportunity to discuss this with my right hon. Friend the Secretary of State at the next meeting of the Consultative Council on Local Government Finance.

  Rating Reform
  Mr. Burns
  To ask the Secretary of State for the Environment whether he intends to respond to the recent paper issued by the Association of London Authorities on its preferred alternative to the community charge.
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  Mr. Howard
  I do not intend to comment in detail on the ALA's suggestions, which I assume are directed primarily towards helping the Labour party find a local government finance policy. The Government's own proposals are presently before Parliament and received a large majority in this House on Second Reading.

  I have, however, noted that the ALA advocates a combination of domestic rates and local income tax. Such a system would fail to provide accountability, be very volatile, produce big changes in Bills, and he extremely complicated and expensive to administer.

  Mr. Favell
  To ask the Secretary of State for the Environment what is the estimated financial effect of the introduction of the community charge on a pensioner living on his own in(a) Stockport and (b) England and Wales as a whole.

  Mr. Howard
  In England and Wales as a whole we estimate that 80 per cent. of single pensioners living alone would have gained if the community charge had been introduced in full on the basis of 1987–88 local authority spending. Projections for individual local authority areas are not possible because of the limitations of the sample survey data on which the estimate is based.

  Homelessness
  Mr. Leighton
  To ask the Secretary of State for the Environment what action he is taking to reduce the demand on homeless accommodation provided by the London borough of Newham.

  Mrs. Roe
  We are encouraging Newham to return to use as many as possible of its 2,500 empty dwellings by a combination of improved management and better targeting of resources. In 1987 we increased the HIP allocation by £1·2 million to enable 67 voids to be returned to use and provide 103 hostel places, all for homeless families. For 1988–89 we have increased Newham's initial HIP allocation to over £18 million with a further £3 million resources in prospect for estate action schemes.

  Rate Increases
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment what further research he intends to commission into the possible correlation between rate increases and job losses; and if he will make a statement.

  Mr. Chope
  I have no doubt that the excessive rates imposed by some councils can have serious consequences for employment opportunities. Many cases have been drawn to my attention where high business rates are reported to have affected the location of investment and employment by individual firms. The national non-domestic rate will soon be in place which will prevent high levels of business rates and damaging year-to-year variations. My right hon. Friend has no plans at the moment to commission further research into the correlation between rate increases and job losses.

  Hampstead Heath
  Mr. Corbyn
  To ask the Secretary of State for the Environment if he will outline his Department's policies to safeguard the future of Hampstead heath.

  Mr. Chope
  The London residuary body will shortly be making recommendations to my right hon. Friend as to
  605
  the future ownership and management of the heath. In accordance with undertakings given during the passage of the Local Government Act 1985, my right hon. Friend's policy is to ensure that Hampstead heath is managed as an entity.

  Lambeth (Housing Investment Programme)
  Mr. Fraser
  To ask the Secretary of State for the Environment what is the housing investment programme allocation for Lambeth for 1988–89.

  Mrs. Roe
  The initial HIP allocation for 1988–89 is £29·4 million but there is a possibility of further allocations in support of estate action schemes.

  Hooliganism
  Mr. John Carlisle
  To ask the Secretary of State for the Environment whether he is considering recommending to the football authorities any further measures to combat hooliganism; and if he will make a statement.

  Mr. Moynihan
  I hold regular meetings with the football authorities. Measures to combat hooliganism are under continuous review.

  Land Register
  Mr. Steen
  To ask the Secretary of State for the Environment what is the area of land on the Land Register; and what was the area in 1983.

  Mr. Trippier
  On 29 February 1988 the registers of unused and underused land owned by public bodies contained details of 90,000 acres of such land. At the end of February 1983, details of 108,000 acres were recorded.

  Horses (Breeding, Keeping and Stabling)
  Mr. Anthony Coombs
  To ask the Secretary of State for the Environment what plans he has for redesignating the breeding and keeping of horses and associated stabling as an agricultural activity for planning purposes.

  Mr. Waldegrave
  We have at present no proposals for altering the extent to which the general development order exempts development involving horses from the need for specific planning permission. Breeding and keeping horses for the working of the land or as agricultural livestock is not development for the purposes of the planning Acts.

  Parliamentary Bills (Planning Permission)
  Mr. Worthington
  To ask the Secretary of State for the Environment how many parliamentary Bills his Department has introduced in the last five years in relation to the construction of projects which would normally require planning permission; and what is his policy towards the use of legislation, rather than the planning system for this purpose.

  Mr. Waldegrave
  My Department does not itself promote private Bills. A private Bill may usually only be used as a means of securing planning permission (by virtue of class XII of the Town and Country Planning General Development Order 1977) if the scheme requires other authorisations which only Parliament can provide. If such a Bill is required, it is reasonable for Parliament to 606
  consider the planning issues at the same time. These matters are among those at present being considered by the Joint Committee on Private Bill Procedure.

  Sheffield (Economic Regeneration)
  Mr. Patnick
  To ask the Secretary of State for the Environment when he last met members of Sheffield council to discuss their policies for encouraging economic regeneration.

  Mr. Trippier
  I met members of Sheffield city council on 7 December for this purpose. Also I was in Sheffield earlier this week to announce that the Secretary of State is setting up an urban development corporation in the lower Don Valley area. This will make a major contribution towards urban regeneration.

  Merseyside Urban Development Corporation
  Mr. Day
  To ask the Secretary of State for the Environment what progress has been made by Merseyside urban development corporation in regenerating the urban development corporation area.

  Mr. Trippier
  In 1981 the Merseyside development corporation was charged with the regeneration of 865 acres of derelict and disused docklands. Progress has been spectacular: 380 acres of land have been reclaimed; 1·5 million sq ft of buildings have been refurbished including the Albert dock, the largest collection of grade 1 listed buildings in the country. Factory units have been provided in Bootle and in particular at the Brunswick business park in the south docks where 500,000 sq ft has been let. Over 1,600 jobs have been created, 1,100 safeguarded and another 1,000 jobs provided on construction and related projects. Two hundred and forty residential flats are being provided by refurbishment and conversion schemes in partnership with the private sector at Albert dock and Wapping warehouse, another historic listed building. £47 million of private sector investment has been secured with another £67 million in the pipeline. In seven years MDC has transformed its area and the Secretary of State's announcement on 7 March to extend the designated area will enable a larger area of Liverpool and Wirral to benefit from MDC's direct and determined approach.

  Council House Starts
  Mr. Haynes
  To ask the Secretary of State for the Environment how many council homes were started in 1987; and how many were completed.

  Mrs. Roe
  Provisional figures of local authority and new town house-building in 1987 appear in table 3 of this Department's press release No. 68 issued on 5 February, a copy of which is available in the Library.

  Urban Initiatives
  Mr. Andrew Hargreaves
  To ask the Secretary of State for the Environment what is his Department's budget in the next financial year for urban initiatives.

  Mr. Trippier
  Planned expenditure in 1988–89 on my Department's urban group of programmes totals £593 million. The group includes urban development grant and urban regeneration grant (to be replaced from 2 May by city grant), the urban development corporations, derelict
  607
  land grant (part of which will be incorporated in city grant) and the urban programme. Provision has also been made for £140 million additional resources for local authorities' estate action schemes, and for £5 million spending by housing action trusts. The level of provision for the urban group, estate action and housing action trusts combined is £120 million higher than in 1987–88.

  Local Authority Land
  Mr. Summerson
  To ask the Secretary of State for the Environment if he will take steps to ensure that every local authority(a) keeps a publicly available register of parcels of all land it owns, (b) is obliged to sell such land at valuation on request unless it proves to his satisfaction a genuine need to retain it for its own use, and (c) shall be forbidden to sell such land to any other public or official bodies without his consent.

  Mr. Chope
  My right hon. Friend announced on 7 March, at columns 75–76, in response to my hon. Friend the Member for Banbury (Mr. Baldry), that he intends that public bodies should regularly publish information about the unused and underused land they own.

  There is immense scope for local authorities to improve the management of their property, including sales of surplus or underused assets particularly to the private sector. The Audit Commission's recent report on property management gives local authorities detailed guidance and I hope that they will follow up the recommendations in the report in the interests of their ratepayers.

  Mr. Soley
  To ask the Secretary of State for the Environment, pursuant to his statement on Wednesday 16 March,Official Report, columns 325–6, in what circumstances local authorities will be allowed to pass land over to a housing association and then to lease back any houses that are built by that housing association.

  Mr. Chope
  The measures announced on 9 March will not prevent local authorities disposing of land to housing associations or acquiring leases of houses built by housing associations. Prescribed expenditure will, however, now be scored when a lease of three or more years is acquired and authorities which wish to acquire such leases will need to make appropriate provision within their prescribed expenditure limits.

  Mr. Soley
  To ask the Secretary of State for the Environment whether he will list in the Official Report those local authorities which have entered into negotiations on, but have not yet concluded, leaseback schemes with housing associations of the type which will be prevented by the legislation announced in his statement on Wednesday 9 March, Official Report, column 325.

  Mr. Chope
  Local authorities are not obliged to inform my right hon. Friend that they have entered into, or concluded, negotiations with housing associations and in general do not do so. The information requested is therefore not available.

  Tree Preservation Orders
  Mr. Brazier
  To ask the Secretary of State for the Environment if in the light of the recent decision of the Court of Appeal, he has plans to introduce legislation to protect councils from claims for compensation from 608
  developers in relation to the effect of tree preservation orders, where the proposed development lies outside the Town and Country Planning Acts.

  Mr. Moynihan
  I understand that the local planning authority concerned are considering whether to petition the House of Lords for leave to appeal against the decision of the Court of Appeal. Until the judicial process is complete in would be inappropriate for me to comment on this issue, but we are keeping in touch with developments.

  Council House Rents
  Mr. Forth
  To ask the Secretary of State for the Environment if he will give the average council house rent for each region of England.

  Mrs. Roe
  Estimates of the average rents, net of charges for amenities and rates, in each English region were published by the Chartered Institute of Public Finance and Accountancy in "Housing Rents Statistics at April 1987," a copy of which is in the Library.

  Moorings
  Mr. Barry Field
  To ask the Secretary of State for the Environment what representations he has received seeking an explanation of the different treatment of swinging moorings, as defined in the new schedule on Non-Domestic Rating: Exemption to the Local Government Finance Bill, and mooring between piles and in marinas; and what response he has sent.

  Mr. Howard
  I have received one such representation. The Bill, as amended, preserves the existing exemption from rating for "swinging" moorings consisting of a buoy attached to a weight or anchor. Permanent moorings, including those in marinas or between piles, will continue to be rated unless they are used for a boat which is someone's sole or main residence.

  National Rivers Authority
  Mr. David Porter
  To ask the Secretary of State for the Environment what responses he has had to date to the proposals to set up the National Rivers Authority; and if he will make a statement.

  Mr. Moynihan
  I refer my hon. Friend to the reply given on 17 December 1987, at columns 619–21, to my hon. Friend the Member for Banbury (Mr. Baldry). Copies of responses to the consultation paper on the National Rivers Authority, which respondents agreed could be published, were placed in the Libraries of both Houses. Further details of our policy were given in a memorandum issued at the time of the statement. The Public Utility Transfers and Water Charges Bill, which is currently before Parliament, will confer on the water authorities an express power to prepare for privatisation, including preparations for the setting up of the National Rivers Authority. Once the Bill has received Royal Assent, guidelines will be issued to the authorities about the preparation of schemes of organisation.

  Beaches (East Anglia)
  Mr. David Porter
  To ask the Secretary of State for the Environment what progress has been made on bringing beaches in East Anglia into line with European Economic Community standards; and if he will make a statement.
  609
  Mr. Moynihan
  In the Anglian water authority area, 28 waters are identified as within the scope of the bathing water directive (76/160/EEC). Twenty of these waters met the directive's standards in 1986, and provisional results for 1987 suggest that 22 now meet these standards. Major improvement schemes are under way at Great Yarmouth, Heacham and Cromer, and Anglian water authority plans to spend some £18 million over the next four years on schemes related to the improvement of bathing waters.

  Rainfall (Radioactive Fallout)
  Mr. Roy Hughes
  To ask the Secretary of State for the Environment what measures the Government have now adopted for early detection of rainfall which may be carrying radioactive fallout.

  Mr. Moynihan
  The Government's proposals for implementing their national response plan for detecting and responding to future nuclear incidents like Chernobyl were published in January (reference: "The National Response Plan and Radioactive Incident Monitoring Network (Rimnet). A Statement of Proposals"). Copies of the statement have been placed in the Library of the House. Annex 3(iv) sets out the proposed procedures for detecting radioactivity in rainwater.

  Mortgages
  Mr. Tony Lloyd
  To ask the Secretary of State for the Environment what information he has as to the proportion of mortgages which have gone to first-time buyers in inner cities in 1983, 1984, 1985, 1986 and 1987.

  Mrs. Roe
  The information available is for 42 authorities which are urban programme areas in London and the English metropolitan counties and the four which comprise the county of Cleveland. In these areas, first-time buyers received 58 per cent. of mortgages advanced for house purchase by building societies in 1984, 59 per cent. in 1985, 58 per cent. in 1986 and 53 per cent. in 1987.

  Construction Industry
  Mr. Kirkhope
  To ask the Secretary of State for the Environment when he last met representatives of the construction industry; and what was discussed.

  Mr. Ridley
  The Under-Secretary of State, my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier), met the group of eight last July when issues of current concern such as work load, training, research and development and inner cities were discussed. In addition, I met construction industry representatives at numerous functions organised by the industry's organisations and institutions over the year.

  Water Charges
  Mr. Cryer
  To ask the Secretary of State for the Environment whether he is satisfied that the water authorities are taking sufficient steps to produce a new and fair system of levying charges after the disappearance of rateable values; and if he will make a statement.

  Mr. Moynihan
  Water authorities are actively considering alternatives to replace the present rateable value basis of water charges. Whatever new methods of charging they decide to introduce will have to comply with 610
  the statutory requirements, in section 30 of the Water Act 1973, that in fixing their charges water undertakers must have regard to cost, and must not show undue preference to or undue discrimination against any class of persons.

  Water Industry (Privatisation)
  Mr. Boyes
  To ask the Secretary of State for the Environment what is his estimate of the expenditure in preparation for privatisation with regard to the water industry.

  Mr. Moynihan
  The latest estimates of expenditure in 1987–88 by the Department on preparation for the privatisation of the water authorities are as follows:

  £

  DOE staff and office services:

  760,000

  Advisers' Fees

  650,000

  These figures do not include certain other costs, such as accommodation, which are borne centrally. The first item includes the costs of the present system of financial control of the water authorities.

  Information on water authorities' own expenditure in relation to privatisation is not available centrally.

  Mr. Boyes
  To ask the Secretary of State for the Environment how much aid from the EEC regional fund has been received by the English water authorities in each year since 1980; how many applications are projected for each year until 1993; and whether water authorities will continue to be eligible for such grants before and after the privatisation of the water industry.

  Mr. Moynihan
  The total amounts of grant aid awarded to English water authorities from the European regional development fund since 1980 are:

  £

  1980

  13,778,150

  1981

  16,286,365

  1982

  18,748,630

  1983

  26,085,600

  1984

  31,662,700

  1985

  17,481,406

  1986

  84,594,532

  1987

  48,200,842

  I would expect future applications to come forward at broadly the present level. Water authorities will be eligible to apply before and after privatisation.

  Rate Support Grant
  Dr. Cunningham
  To ask the Secretary of State for the Environment if he will show for each local authority the rate support grant paid in each year since 1979, expressed in(a) cash terms and (b) real terms at 1987–88 prices; and what percentage of the council's total expenditure in each year this represented.

  Mr. Ridley
  [holding answer 15 March 1988]: I have today placed this information in the House of Commons Library.

  Government Property
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment which Government property assets have been the subject of sale and lease-back agreements with private institutions since 1979.
  611
  Mr. Chope
  We do not keep records as far back as 1979. But we certainly know of no such cases during the last three years involving properties on the civil estate held in the name of my right hon. Friend.

SOCIAL SERVICES

  Rating Reform
  Mr. Wilson
  To ask the Secretary of State for Social Services if he is now in a position to estimate how many student nurses will be eligible for a rebate under the poll tax.

  Mr. Scott
  It is not possible to make such an estimate. The details of the community charge rebate scheme have yet to be decided and benefit rates for 1989 (when the community charge is introduced in Scotland) and 1990 (when it is introduced in England and Wales) have not yet been set. Whether individual student nurses will be entitled to rebate will also depend on their resources, their age and family circumstances, and on the level of community charge set by the local authority in the area in which they live.

  South East RHA
  Mr. David Shaw
  To ask the Secretary of State for Social Services what has been the average cost per accident and emergency attendance and per new accident and emergency case in each hospital in the South East regional health authority area in the last year.

  Mrs. Currie
  The information for 1986–87 in respect of those hospitals in the South East Thames region which undertake treatment of accident and emergency patients is as follows:

  Accident and emergency patients

  Health District and Hospital

  Cost per Attendance £

  Cost per New Case £

  Bexley

  Erith and District

  11·96

  21·15

  Queen Mary's

  22·80

  29·59

  Brighton

  Royal Sussex County

  19·09

  20·77

  Bromley

  Beckenham

  10·02

  22·18

  Bromley

  20·73

  25·04

  Orpington

  22·38

  31·10

  Camberwell

  King's College

  18·38

  22·72

  Canterbury & Thanet

  Kent and Canterbury

  22·17

  25·67

  Thanet District General Hospital

  17·83

  19·28

  Dartford and Gravesham

  Gravesend and North Kent

  13·57

  17·93

  West Hill

  23·30

  26·62

  Eastbourne

  Eastbourne District General Hospital

  17·02

  31·74

  Uckfield

  3·35

  8·44

  Greenwich

  Brook General

  20·71

  26·19

  Greenwich District General Hospital

  17·43

  21·70

  612

  Health District and Hospital

  Cost per Attendance £

  Cost per New Case £

  Hastings

  Royal East Sussex

  15·08

  20·80

  Lewisham and North Southwark

  Guy's

  15·17

  22·17

  Lewisham

  26·18

  33·70

  Sydenham

  13·40

  21·25

  Maidstone

  Maidstone

  16·89

  20·72

  Medway

  Medway

  18·51

  18·55

  Sheppey General

  15·15

  16·18

  South East Kent

  Buckland

  17·38

  23·90

  Royal Victoria (Folkstone)

  9·44

  13·84

  Victoria (Deal)

  11·64

  18·01

  William Harvey

  26·99

  33·31

  Tunbridge Wells

  Kent and Sussex

  18·92

  21·67

  West Lambeth

  St. Thomas'

  37·20

  41·83

  NHS (Land)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Social Services what is the total amount and value of surplus land owned by each district and regional health authority; and how much land has been disposed of by each district and regional health authority between(a) 1974 and 1979 and (b)

  Mrs. Currie
  The amount of surplus land held and disposed of by regional health authorities in the years in question is as follows:

  Surplus Land Disposed

  Region

  Surplus Land held as at 31 March 1987

  1974–75 to 1978–79

  1979–80 to 1986–87

  acres

  acres

  acres

  Northern

  407

  131

  262

  Yorkshire

  978

  247

  827

  Trent

  873

  231

  880

  East Anglian

  102

  36

  123

  North West Thames

  454

  50

  485

  North East Thames

  277

  66

  214

  South East Thames

  541

  362

  181

  South West Thames

  130

  107

  287

  Wessex

  75

  69

  524

  Oxford

  148

  18

  408

  South Western

  645

  360

  1,125

  West Midlands

  491

  413

  543

  Mersey

  873

  39

  429

  North Western

  104

  181

  602

  Figures for district health authorities and the value of surplus land currently held are not kept centrally.

  Cervical Cancer
  Mr. Boyes
  To ask the Secretary of State for Social Services what is the average length of time between screen testing and the attainment of test results relating to cervical cancer in(a) the Northern regional health authority and (b) Sunderland district health authority.
  613
  Mrs. Currie
  This information is not available centrally. The hon. Member may therefore wish to contact the chairman of the Northern regional health authority for the information he requires.

  In the recently issued Health Circular HC(88) on 12 January, we asked health authorities to ensure that laboratories report the results of smear test within one month. Health authorities not meeting this target are asked to explain what action they are taking to remedy the situation.

  Mr. Wray
  To ask the Secretary of State for Social Services what new cervical cancer smear tests have been tried by his Department; and how these compare with the effectiveness of the present test systems.

  Mrs. Currie
  [holding answer 14 March 1988]: The Department keeps under review all scientific and technological developments that might improve the effectiveness of cervical cancer screening. Its procurement directorate recognises the importance of finding a practical system that will improve routine laboratory examination of cervical smears. Applications for research funding that are endorsed by independent referees as having scientific merit are giving high priority in the competition for funds. The active involvement of British industry is sought to ensure that any potentially successful system can be made commercially available and brought into NHS use as rapidly as possible.

  The Government have contributed towards the cost of developing and evaluating several automated systems for cervical cancer screening. In recent months a number of applications have been received by the Department for funds to support other possible developments. These applications were reviewed on 26 February by an expert panel chaired by the Department's chief scientist, Professor O'Grady, and are now receiving final consideration in the light of the panel's views.

  Intermediate Treatment Projects
  Ms. Mowlam
  To ask the Secretary of State for Social Services what the cost of grants to intermediate treatment projects have been since their implementation; how many people have attended intermediate treatment projects; and what he estimates the savings were to the Exchequer of keeping young people on intermediate treatment projects rather than in custody or borstals.

  Mrs. Currie
  By the end of March 1988 the Department will have made grants to voluntary organisations in England under the intermediate treatment initiative (launched in 1983) totalling some £13·1 million. These grants were to provide intensive schemes of intermediate treatment for young offenders as direct alternatives to care or custodial disposals. One hundred and ten such schemes have been established capable of providing intensive IT programmes for some 3,400 juvenile offenders a year.

  Information about the number of young people attending such projects is not held centrally, nor is information available about comparative costs or possible savings. We have commissioned Dr. Martin Knapp (University of Kent) to undertake a research study to evaluate the cost-effectiveness of various forms of intermediate treatment compared with other court disposals, both custodial and non-custodial, but the results of his work are not yet available.

  Mental Handicap Services
  Mr. Wigley
  To ask the Secretary of State for Social Services what assessment he has made of the value to mental handicap services of improvements in co-ordination and co-operation between various agencies involved, rather than a single agency taking lead responsibility; and if he will make a statement.

  Mr. Newton
  Sir Roy Griffiths addresses the general issue here, among others, in his report on community care published today. As my right hon. Friend the Secretary of State said in his reply to the hon. Member, the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and the hon. Member for Ynys Môn (Mr. Jones) on 8 March at column 171, the Government will be considering Sir Roy's proposals, taking account also of the report of the committee chaired by Lady Wagner, and of reactions to both reports; and will bring forward their own proposals in due course. But clearly it will always be important to develop co-ordination and co-operation between the wide range of agencies involved in the provision of care for mentally handicapped people.

  Mental Handicap Nurses
  Mr. Wigley
  To ask the Secretary of State for Social Services what evaluation has been made by his Department of the contribution of qualified mental handicap nurses to the success of community care initiatives relating to mental handicap and the use of such qualified nurses by local services in these initiatives.

  Mr. Newton
  Departmentally sponsored evaluations of community care initiatives for mentally handicapped people take account of the contribution by all categories of care and support staff. A recent survey of centrally funded schemes providing alternative health care in the community for long-stay children from mental handicap hospitals pays particular attention to the role of qualified mental handicap nurses, along with other care staff. A copy of this survey "Out of Hospital", by Anne Leonard, department of social policy and social work, University of York, will be placed in the Library.

  Mr. Wigley
  To ask the Secretary of State for Social Services if he will make a statement on his policy with regard to trained mental handicap nurses.

  Mr. Newton
  The Chief Nursing Officer's letter of 18 December 1985 (CNO(85)5), a copy of which has been placed in the Library, discusses the developing role of mental handicap nurses in the light of the shift to community care and the contribution they can make to the support of people in their own homes or in a range of residential and other settings in the community.

  Mental Hospitals
  Mr. Wigley
  To ask the Secretary of State for Social Services (1) what information he has regarding district health authorities which have decided on mental hospital closures before the full implementation of appropriate community services;

  (2) what guidance he has issued to district general managers concerning the time scale of mental hospital closures in cases where appropriate alternative community services have not been fully implemented.
  615
  Mr. Newton
  Guidance in the relevant policy paper sent to all districts says:"New facilities must be available before old facilities are dispensed with."
  We do not fix any time scales on closure plans and I am not aware of any health authority which has closed facilities without the provision of appropriate alternative services. We see the closure of mental illness and mental handicap hospitals as a consequence of the current development of comprehensive locally-based community-oriented services and not vice versa.

  Maternity Units
  Mrs. Rosie Barnes
  To ask the Secretary of State for Social Services how many general practitioner maternity units have been closed in England since 1983

  Mrs. Currie
  [holding answer 15 March 1988]: Twelve general practitioner maternity units were approved for closure between 1983 and December 1986.

  Mentally Ill People (Day Centres)
  Mr. McCrindle
  To ask the Secretary of State for Social Services if he will list those district health authorities in England and Wales which do not have a day centre for mentally ill people.

  Mrs. Currie
  [holding answer 10 March 1988]: Day centres for mentally ill people are usually provided by local authorities. In England only Trafford, Suffolk, Hounslow, Gloucestershire and City of London did not report having day centre places for mentally ill people in 1986. Additionally the following district health authorities in England did not report attendances at mental illness day hospitals in 1986:

  Hartlepool

  Darlington

  Scarborough

  North Lincolnshire

  West Norfolk and Wisbech

  Winchester

  Torbay

  Herefordshire

  Halton

  Rochdale

  North Tyneside

  Northallerton

  Dewsbury

  Rugby

  East Birmingham

  However, all except the last five in the list reported attendances at mental illness day facilities at the main hospital in 1986.

  Information for Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

NORTHERN IRELAND

  Teachers of the Deaf
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland how many teachers from Northern Ireland are being trained as teachers of the deaf; and if he is satisfied that sufficient qualified teachers are available to meet the needs of hearing impaired children in Northern Ireland.

  Dr. Mawhinney
  Thirteen student teachers are on specialist courses of initial training for teachers of the 616
  hearing impaired. In addition, eight serving teachers have engaged over the past two academic years in a range of courses of in-service training.

  I am satisfied that sufficient qualified teachers are available.

  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland what action he has taken in response to the recommendations of the Northern Ireland Assembly report on the education of hearing impaired children (March 1985) concerning the training of teachers of the deaf.

  Dr. Mawhinney
  Consideration is being given to the best means, in the long term, of providing training in counselling for teachers at one of the training institutions. In the meantime, a short course has been included in the 1988 summer school programme to cater for any immediate demand.

  Advertising Costs
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what is the cost of his Department's advertising campaign currently being screened on television and broadcast on radio.

  Dr. Mawhinney
  The cost of the present, television only, campaign from its inception on 18 January 1988 to 14 March 1988 is £136,000, including £73,600 for production of the commercial.

  The BBC did not use the commercial but did broadcast a supporting public information message on radio and television; only minor production costs were met by the Northern Ireland Office.

  War Memorials
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many names of Ulster Defence Regiment members murdered by terrorists have been added to war memorials in Northern Ireland to date.

  Mr. Needham
  War memorials are the responsibility of individual district council and other bodies and no central records are maintained of the names recorded on them.

  University Courses
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what information he has as to how many four-year courses at(a) the University of Ulster and (b) Queen's University, Belfast, have been cut to three-year courses over the past three years.

  Dr. Mawhinney
  No such reductions have been made at the University of Ulster. Owing to changes in course structure and subject options at Queen's University, it is not possible to provide the information in the form requested.

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what information he has as to how many Gaelic-oriented courses exist at(a) the University of Ulster and (b) Queen's University, Belfast; and what increase in the number of such courses has taken place over the last five years.

  Dr. Mawhinney
  Three at the University of Ulster arid six at Queen's University. There has been an increase of three in the last five years.

  Single Payments
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many(a) claims for single payments and benefit and (b) appeals currently await decisions arising from claims lodged at Department of Health and Social Security offices in Larne, Carrickfergus and Newtownabbey.

  Mr. Needham
  At 4 March 1988 the information was as follows:

  Larne

  Carrickfergus

  Newtownabbey

  Single Payments

  141

  430

  816

  Supplementary Benefit

  18

  133

  183

  Unemployment Benefit

  60

  96

  182

  Appeals

  7

  5

  8

  Belfast Urban Area Plan
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if he will give his best estimate of the cost of preparation of the Belfast urban area plan including the involvement of staff, consultants, reports, publications and so on; and what additional expenditure he envisages in the process up to the public inquiry.

  Mr. Needham
  Much of the work on the plan was carried out by officials of the Department of the Environment (NI) over a period of three years, and it is not possible to cost this input without disproportionate effort. Work by consultants up to the commencement of the public inquiry is estimated to cost a total £1·9 million of which £1·2 million relates to transportation. Other costs, including grants to community technical aid, amount to £200,000.

  Farmland
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what was the average price paid per acre for farmland taken into public ownership for the building of Craigavon; how much land was taken; how much was subsequently sold back to its original owners; and what was the average price of the land resold to each category of owner as set out in the legislation to deal with such resales.

  Mr. Needham
  [holding answer 14 March 1988]: Some 6,200 acres of land was vested for Craigavon new town in 1966 at an average price per acre of £650. To date 560 acres of the surplus land has been sold to former owners. The average price of land sold to former owners who are still on the land is £1,565 and the average price for land sold to former owners who left the land is £1,765.

  Nurses
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland how long the system of 12 hour shifts for nurses has been in operation in the Western health and social services board area; and whether he can give a comparison of wages and salary costs of the personnel involved in the 12 hour shifts as opposed to the previous eight hour shifts.

  Mr. Needham
  [holding answer 14 March 1988]: The 12-hour shift system for nurses in the Western health and social services board has been implemented progressively
  618
  since the summer of 1986; information on the comparative costs of wages and salaries is not readily available at present but I will write to the hon. Gentleman with this information as soon as possible.

  Health and Social Services Boards
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland if he will publish a table showing for each unit of management in the Eastern, Northern, Southern and Western health and social services boards the number of new beds, the bed complement and the number of permanent bed closures for (i) strategic, (ii) rationalisation and (iii) financial reasons in the last three years.

  Mr. Needham
  [holding answer 14 March 1988]: This information is not available in the form requested.

  Ardilea River, County Down
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland whether he will now take urgent steps to designate the Ardilea river, County Down as a salmonid river under the EEC directive 78/759/EEC; and if he will make a statement.

  Mr. Needham
  [holding answer 15 March 1988]: The Ardilea river will be considered along with other rivers for future designation under the EEC directive 78/659/EEC. As I pointed out to the hon. Gentleman on 1 March 1988, at column 524, further disignations will be made as resources permit. I am unable at present to say when further designations will be made.

  Road Works Carrickfergus
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland, further to his answer of 18 January,Official Report, column 549, when he anticipates work will begin on the shore road between Carrickfergus and Whiteabbey, County Antrim.

  Mr. Needham
  No start date has been allocated. However, proposals for the work remain in the Department of the Environment's current major works programmes.

  Schools and Colleges (Insurance)
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland if he will publish the arrangements made by Her Majesty's Government for the insurance of(a) controlled schools and colleges, (b) maintained schools and (c) voluntary schools.

  Dr. Mawhinney
  Property insurance policy is as follows:

  Controlled Schools and Colleges

  These properties are not insured against fire and special perils which is in line with current Government practice for publicly-owned properties.

  Voluntary (including Maintained) Schools

  School authorities are required, as a condition for receipt of grant, to insure these properties adequately against fire, flood and other risk.

  Electricity (Privatisation)
  Mr. Michael Brown
  To ask the Secretary of State for Northern Ireland what discussions he has had with Northern Ireland Electricity about the privatisation of the company; and if he will make a statement.

  Mr. Viggers
  None as yet. However, NIE is aware of the Government's commitment to the privatisation of the electricity supply industry throughout the United Kingdom and that it is our intention to examine the prospects of privatising NIE after a decision has been taken on the next phase of generating capacity in the Province.

  Mr. Michael Brown
  To ask the Secretary of State for Northern Ireland what plans he has to publish a White Paper on the privatisation of electricity in Northern Ireland.

  Mr. Viggers
  None at present. Our immediate priority is the determination of the current competition between Antrim Power Company Limited (a private consortium) and Northern Ireland Electricity for the provision of the next phase of generating capacity in the Province.

TRANSPORT

  Motor Cycles (Leg Protectors)
  Mr. Beaumont-Dark
  To ask the Secretary of State for Transport (1) how many organisations or individuals have notified his Department that they are wholly in favour of the introduction of leg protectors for motor cycles;

  (2) how many organisations have been consulted on his proposals to introduce leg protectors on motor cycles;

  (3) what extent the research into proposed leg protectors for motor cycles has established that they will not, in the event of accidents, subject the rider to greater danger in terms of injury or death;

  (4) if he will make a statement on the extent of the research into leg protectors for motor cycles carried out by his Department, particularly that research relating to the transfer of injuries to parts of the body other than the lower leg.

  Mr. Peter Bottomley
  A draft specification for leg protectors was sent to 26 organisations for comment. Of the 13 who responded three expressed support for the principle of leg protectors. The TRRL's research which includes over 50 impact tests so far, took as a main objective the avoidance of injuries to other parts of the body, including the head. The specification fully achieves this objective. We are making some detailed amendments in the light of comments received. I will send a video of the tests to my hon. Friend shortly and make a copy available in the Library.

  Manchester Airport
  Mr. Alfred Morris
  To ask the Secretary of State for Transport what arrangements have now been made for negotiations with the United States Government on United States carrier access to Manchester international airport; what consideration was given in arranging a date for the negotiations to the letter dated 2 February from Northwest Airlines sent to him by the right hon. Member for Manchester, Wythenshawe; and if he will make a statement.
  620
  Mr. Peter Bottomley
  Officials from the Department of Transport will be meeting a delegation from the United States Government in London tomorrow. The discussions are planned to last two days. All relevant representations were, of course, taken into account in seeking a meeting with the United States Government on this subject.

  Mr. Alfred Morris
  To ask the Secretary of State for Transport what emphasis he will be giving, in the impending negotiations between the United Kingdom and United States Governments on United States carrier access to Manchester international airport; to improving access to the United States for British airlines flying from Manchester; and if he will make a statement.

  Mr. Peter Bottomley
  In negotiating wider access for United States carriers to Manchester international airport, the Government are committed, by the 1985 airports policy White Paper, to securing benefits of equivalent value for United Kingdom carriers in return. British airlines already have substantial opportunities under the United Kingdom/United States air services agreement to serve the United States from Manchester. The emphasis placed on obtaining further improvement access from Manchester must remain a matter to be decided in the course of the negotiations.

  Motor Cyclists (Eye Protectors)
  Mr. Roger King
  To ask the Secretary of State for Transport if he has received any representations about the difficulty that motor cyclists with prescription-lensed goggles have in complying with the eye protector regulations.

  Mr. Peter Bottomley
  Yes. I understand that prescription-lensed goggles meeting the British Standard in full are not yet available. Since existing prescription-lensed goggles will generally be of good quality, we propose to amend the regulations to allow the continued use of existing goggles of this special type and to postpone the requirement for new ones to be BS approved and marked, for a further year. The Department is circulating for comment appropriate draft amendments to the regulations. The amendments also permit the use of glass-lensed goggles approved to an earlier version of the standard which did not require marking with the letter A to show abrasion resistance.

  Pedestrian Areas
  Sir Brandon Rhys Williams
  To ask the Secretary of State for Transport whether he plans to issue up-to-date guidance on ways in which traffic and parking in pedestrian areas can be better regulated; and if he will make a statement.

  Mr. Peter Bottomley
  All county, borough and district councils in England and Wales are being sent a local transport note—"Getting the Right Balance—Guidance on Vehicle Restriction on Pedestrian Zones". This will also be sent to national and other organisations who responded to our earlier consultation on the subject.

  The guidance to local authorities and others stresses the need for a careful balance to be drawn where ideas are being considered for pedestrian zones. Traffic restriction measures can increase safety and convenience for many pedestrians, and improve the attractiveness of a street or

  621
  area. The importance of providing access for essential vehicle movements, including servicing and for mobility handicapped people is emphasised strongly.

  Copies of the note have been placed in the Library, and are available for sale at HMSO.

  Dual Carriageways
  Mr. David Shaw
  To ask the Secretary of State for Transport what information he has on the estimated cost, first year rate of return and net present value for the dualling of the current roads(a) between Lydden and Whitfield (A256), (b) Whitfield to Deal road (A258) and (c) Deal road to Eastern docks in Dover; and if he has any further information on those road projects.

  Mr. Peter Bottomley
  The following provisional estimates for dualling the A2 between junctions were prepared in 1985:

  £ million—1979 prices

  Cost

  Net present value1

  Lydden to Whitfield (A256)

  5·1

  -1·0 to -0·7

  Whitfield to Deal Road (A258)

  3·2

  -0·7 to -0·5

  622
  1 Discounted to 1979.

  We have no proposals to improve the A2 between Lydden and Dover. We shall keep the position under review. The A2 and the improved A20 routes, taken together, should be able to cope with predicted traffic beyond the turn of the century.

  VED (Evasion)
  Mr. French
  To ask the Secretary of State for Transport if he has any plans to reduce the level of evasion of vehicle excise duty on heavy goods vehicles.

  Mr. Peter Bottomley
  Reducing the level of excise duty evasion on heavy goods vehicles is central to the Department's enforcement strategy. In addition to the attention given to goods vehicles in day-to-day enforcement they are subject to special roadside inspections by the Department's traffic examiners which include checks to ensure that they are fully licensed.

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

National Health Service: Spending
Lord Ennals Lord Ennals asked Her Majesty's Government:
What additional funds are to be made available to the National Health Service in response to complaints of underfunding.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, spending on the National Health Service in the United Kingdom in 1987–88 has been increased from a planned level of £20.8 billion to £21.5 billion, an increase over the previous year of 5.3 per cent. in real terms. Additional allocations made by the Government included £328 million in respect of pay review body awards and, for the hospital and community health services, £145 million to meet both specific and general pressures. The Government's plans for 1988–89 to 1990–91 provide for an additional £3.5 billion for the National Health Service as a whole.
Lord Ennals: My Lords, I thank the noble Lord for his reply. Since the consensus among responsible organisations—the BMA, the Royal College of Nursing, the Institute of Health Services Management, the National Association of Health Authorities, the King's Fund and the all-party Select Committee on Social Services—is that the National Health Service still needs an additional £1 billion to cope with severe underfunding, and since the consensus of the four most recent opinion polls is that four out of five taxpayers would have preferred the Chancellor to have given that sum of money to the National Health Service rather than in income tax relief, does the Minister accept that the decision to do the opposite shows an extraordinary degree of insensitivity both to health needs and to the wishes of the taxpayers?
Lord Skelmersdale: No, my Lords. I do not think that it shows extraordinary insensitivity at all. As is well known, the Government make known their public expenditure plans in detail in January of each year. The Budget explains how those plans will be financed. However, the House should note that in his Budget speech yesterday my right honourable friend the Chancellor of the Exchequer said that over the coming year we shall be spending at least £1,100 million more on health care than in the year now ending. That can be found at column 998 of the Official Report of another place.
Lord Kilmarnock: My Lords, is the Minister saying that the Government propose to disregard entirely
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the recommendations of the Select Committee of another place which has a majority of Conservative Members? Among various other recommendations along the same lines, the committee recommended that there should be real expansion in development of the National Health Service of 2 per cent. in 1988–89? Will the Government pay any attention to that?
Lord Skelmersdale: My Lords, of course the Government always pay attention to and study with great care the reports of Select Committees of another place. In this case, the Government will be making a formal response in due course. However, my right honourable friend the Secretary of State thought it right to make clear that the Government do not accept that there is any need to provide additional funds in respect of 1987–88.
Lord Mellish: My Lords, does the Minister accept that the last time this matter was raised on the Floor of the House he said that an internal inquiry was being undertaken? When is that inquiry likely to be completed? Do the Government intend to announce their intentions and to comment on the report? Can he give more information about the inquiry?
Lord Skelmersdale: Yes, my Lords. The noble Lord is absolutely right. There is indeed an internal inquiry, chaired by my right honourable friend the Prime Minister, which is examining the resources, state and management of the National Health Service. It will be for my right honourable friend to make a decision, firstly, as to how long the inquiry will continue and, secondly, whether a report of some kind will issue from it at the end. I shall be very surprised if there is not a report.
Lord Orr-Ewing: My Lords, did my noble friend note that the Labour Party was anxious to make Budget day into National Health Service day? Was that a success? Was the National Health Service working exceptionally well yesterday or was it limping?
Lord Skelmersdale: My Lords, I observed that it rained for much of yesterday. I did not notice that the health employees who took industrial action made Budget day into a National Health Service day. I already know of 55 operations which had to be cancelled yesterday as a result of that industrial action.
Noble Lords: Shame!
Lord Cledwyn of Penrhos: My Lords, is the Minister aware that his right honourable friend the Chancellor of the Exchequer yesterday cut taxes by £1.8 billion and that the Select Committee to which my noble friend referred said that the National Health Service had been underfunded by about the same amount of £1.8 billion? How does he reconcile those figures? Does he think that that is the way to create a just and caring society?
Lord Skelmersdale: My Lords, in reply to the noble Lord the Leader of the Opposition, I made clear that

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public expenditure plans and paying for them were carried out in two separate operations and announced on two separate days. However, I should make the point that the Budget considerably increases the take-home pay of all employed people. The employees of the National Health Service, which is the largest employer in the kingdom, stand to gain significantly from the Chancellor's tax proposals. The precise position of individuals will vary according to circumstances, but on average a female nurse will be better off by £3 a week and an ambulance man by about £4 a week.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that there is clearly a genuine feeling throughout the country that the National Health Service should be treated fairly and, up to a point, generously? Does he know that the nation is aware of certain groups which are trying to turn that feeling into a weapon of party-political propaganda? Does he agree that his right honourable friend should take that into account so that the conclusions to which he comes will be based upon efficiency and fairness?
Lord Skelmersdale: My Lords, I agree absolutely with my noble friend. I should like to see the conclusions resulting from the review to which the noble Lord, Lord Mellish, referred and the various Whitley Council and pay review body awards to be based fairly and squarely upon logic.
Baroness Seear: My Lords, is the Minister aware that the change which many of us welcome in the mortgage interest relief, limiting it to the house and not to the number of persons, is likely to have a very serious effect on nurses, who are having difficulty trying to get housed in London and who have been getting together in twos and threes in order to make purchases? I should have thought that this will be a matter of very considerable concern to the noble Lord's department.
Lord Skelmersdale: My Lords, I am glad that the noble Baroness welcomes the proposal in general. It will indeed make a difference to those nurses who are clubbing together, because the new arrangements apply per house rather than per person.
Lord Wallace of Coslany: My Lords, I do not wish to make any narrow party political point, unlike the noble Lord opposite. However, will the Minister explain to me why, with these millions of pounds of additional money that the Government have given, in some instances wards remain closed or where they have been partially opened the future looks bleak for keeping them in operation? Why are wards still being closed after all this money has been given?
Lord Skelmersdale: My Lords, with the greatest respect, that is a very good question. The basic answer is that services have been allowed to expand to a greater extent than the money available.
The Viscount of Oxfuird: My Lords, is the Minister aware that the Opposition have complained
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frequently about the percentage of gross national product devoted by this country to the health service compared with other industrialised nations? Does that mean that people in other countries have better health than the people in this country?
Lord Skelmersdale: My Lords, the answers to the two parts of my noble friend's supplementary question are, yes and no. Although the United Kingdom spends less of its GDP on health care than some other countries, it has no worse health as a result. For example, it has a lower rate of infant mortality than Austria, Belgium, Italy and the United States, all of which spend more.
Lord Diamond: My Lords, with regard to the figures that the noble Lord gave in his first reply, can he tell the House what account has been taken in them of the relative price effect?
Secondly, can he tell us more generally whether it is considered that the National Health Service is still safe in the hands of the present Government?
Lord Skelmersdale: My Lords, yes. On the second part of the supplementary question, the record levels of health service expenditure which I described in my original Answer have been made possible by the Government's economic strategy, which has now seen the longest period of steady growth, at an average annual rate of 3 per cent., since the war. When considering figures—additional amounts of money for the National Health Service—the important factor is to make sure that what is allocated is wisely and properly spent. Therefore, yes, of course we take account of prices and wage inflation within the National Health Service.
Lord Ennals: My Lords, does the noble Lord agree that he was able to give the answers yes and no to his noble friend because of the excellent organisational structure of a tax-financed National Health Service? Is he aware that the current underfunding, and the Government's determined squeeze on the National Health Service, with all the consequences that we understand, lead some people to believe that the Government are doing this quite intentionally in order to show that the NHS now needs some major re-organisation with the emphasis on privatisation?
Lord Skelmersdale: My Lords, I had better not go into the question of privatisation in answering a question on the health service in your Lordships' House. However, these are record levels and how the noble Lord can possibly describe them as a cut is beyond my comprehension.
Lord Nugent of Guildford: My Lords, is my noble friend aware that year by year this Government have provided more for the National Health Service, and infinitely more than the party opposite, in particular, the noble Lord, Lord Ennals? It is a matter of judgment for the Government of the day to decide in their Budget how much can be allocated to each of the major services including the National Health Service. That this Government are getting it about right is indicated by the fact that, whatever other

1133
public opinion polls may show, a political poll shows the Conservative Party firmly 12 points ahead of the Labour Party.
Lord Skelmersdale: My Lords, yes, indeed I am aware of that; but quite clearly noble Lords opposite are not.
Lord Taylor of Gryfe: My Lords, although the Minister states that more has been spent on the National Health Service, will he accept that for various reasons there is still serious underfunding? In that event, how can he justify the fact that a married couple on £4,000 a year receive £55 remission from tax under the new arrangements but a couple with £70,000 per annum receive £7,914? Is that socially defensible? Are the Government's priorites right?
Lord Skelmersdale: My Lords, I find it very difficult to relate that question to the one that I am trying to answer today. However, I would point out that there are quite a considerable number of people—for example, consultants within the health service—who will he helped by the reduction in the higher rates of tax in pursuing their chosen activity.
Lord Carter: My Lords, in an earlier reply the Minister referred to the use of resources. Is he aware that in some hospitals it is now extremely hard to admit patients at all? In one hospital in the South-West on Sunday, Monday and Tuesday of last week the surgeons in just one department wished to admit 17 patients for urgent investigations. As a result of the stringency of the budget, there were beds available for only four. The doctors, nurses, porters and technicians still had to be paid and equipment at a cost of £1 million was left idle. The Government sometimes refer to the misuse and waste of resources within the health service. Does the Minister agree that a large proportion of that so-called "misuse" is a direct result of government policy?
Lord Skelmersdale: My Lords, no, of course it is not a result of government policy. The noble Lord should understand that we should all be thinking and talking about patients and not furniture. Over 1 million more in-patient cases are now being treated than in 1979. The number of cases is 6.4 million, a rise of 18.8 per cent., and that is the important figure to keep in mind.
Lord Carter: My Lords, would the Minister care to explain that to the 13 people who were not admitted?
Noble Lords: Next Question!
Viscount Hanworth: My Lords, will the noble Lord agree that we are facing two problems? The first problem is that the increase in high-tech is constantly demanding a substantial increase in the resources of the National Health Service. Secondly, it is arguable that the service may not have been as efficient as it could have been; but that does not excuse the Government cutting off funds with the idea of increasing efficiency when they are considering a long-term solution to the problems. In the meantime,
1134
we should not have to suffer what is being suffered by the National Health Service.
Lord Skelmersdale: My Lords, at least £1.1 billion extra for the National Health Service next year is no cut.

Marriage: Independent Taxation
2.53 p.m.
The Lord Bishop of Worcester The Lord Bishop of Worcester asked Her Majesty's Government:
Whether anything is to be done to remove the financial disadvantage in terms of tax relief to those who marry as compared with those who choose to live together unmarried.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): Yes, my Lords. In his Budget yesterday my right honourable friend the Chancellor of the Exchequer announced proposals which will remove the tax penalties on marriage.
The Lord Bishop of Worcester: My Lords, I thank the noble Lord for his Answer. Had I put the Question last Wednesday as I had intended, he would not have been able to give that Answer. However, I am glad that one from these Benches has had the opportunity of congratulating Her Majesty's Government for something that they have done. Many people will be grateful for what has been done in the Budget. Will the noble Lord agree with this? In view of the fact that an important principle is involved—namely, the support and encouragement of marriage as a key part of our society—and also in view of the fact that we have been able to grant tax concessions in other sectors of our land, the concession should have been granted forthwith rather than in 1990?
Lord Brabazon of Tara: My Lords, I am grateful for the right reverend Prelate's general welcome to the proposals contained in my right honourable friend's Budget yesterday. Had the right reverend Prelate asked the Question last Wednesday, I should not have been able to give the Answer, so his sense of timing in having asked it today is immaculate. Each individual measure will be introduced as soon as is practical. Independent taxation is a major change in the tax affairs of millions of couples and it will need careful preparation. For that reason it was not possible to introduce the measure until 1990.
Lord Barnett: My Lords, does the Minister recognise the fact that those who had some responsibility in this area but who failed to do anything about it will readily acknowledge, as do I, that the Chancellor has sought to grasp this very difficult nettle? On the other hand, will he also accept the fact that the new married couple's allowance goes some way to negate the advantages contained in the proposal in that there is still a substantial difference between men and women—
Noble Lords: Hear, hear!
Lord Barnett: My Lords, I am glad that your Lordships recognise that fact. I should also like to put to the Minister that in the red book the Chancellor states that in the second year of introduction the proposals will cost £1 billion of revenue, and that is based on the existing capital and income distribution which will change when tax avoidance opportunities are recognised. In those circumstances, can we at least have an assurance from the Government that that is only a transitional arrangement, and that it is their intention to move towards real equality between men and women in the tax field?
Lord Brabazon of Tara: My Lords, I am grateful for the first part of the noble Lord's Question, and I shall pass on his remarks to my right honourable friend the Chancellor of the Exchequer. As regards there being a substantial difference between men and women, I believe that all noble Lords recognise that to be the case. We believe that the tax system should recognise the financial responsibilities of marriage. Without the married couple's allowance, the married man's tax threshold would fall substantially. I cannot at the moment give an answer regarding the figures which the noble Lord quoted.
Lord Bruce of Donington: My Lords, is the noble Lord aware that there is a feeling among noble Lords on this side of the House (but which is by no means confined to noble Lords who sit on these Benches) that it would have been much fairer, within the ordinary concept of British justice and fairness, to have brought some measure of relief to the 12 million of our population who are living at or below the poverty level, and which includes a large number of married couples?
Lord Brabazon of Tara: My Lords, that has little to do with the Question before the House. That refers to the discrimination between married and unmarried couples. The package that was introduced in yesterday's Budget removes the discrimination against marriage, and I believe that it should be welcomed from that point of view.
Baroness Young: My Lords, will my noble friend convey to his right honourable friend the Chancellor of the Exchequer the fact that the proposals have been received with a great deal of pleasure by many women's organisations which have compaigned for a very long time? I believe that in this field the proposals will provide a real measure of justice which has been long sought.
Lord Brabazon of Tara: My Lords, of course I shall do so; and I am grateful to my noble friend for her remarks. When the package is finally complete in April 1990, there will be no further discrimination against marriage.
Lord Underhill: My Lords, does the Minister not agree that the date on which the new legislation for married women takes effect will be the same date on which vast numbers of married women will pay a
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community charge for the first time; in other words, the poll tax?
Lord Brabazon of Tara: My Lords, their husbands will not have to pay rates. Therefore, the situation will be even more equal than at present because the husband and wife will each pay the same, as compared with the present time when the husband probably pays the rates.

DHSS Income Scheme
2.58 p.m.
Baroness Lane-Fox Baroness Lane-Fox asked Her Majesty's Government:
When the Department of Health and Social Security new income generation scheme will come into operation.
Lord Skelmersdale: My Lords, health authorities already raise income in a variety of ways and we are currently seeking powers in the Health and Medicines Bill, which will come before your Lordships shortly, to enhance their ability to do this. The income generation unit, which will start work early in the new financial year, will help authorities to obtain the maximum benefit from both existing and new powers.
Baroness Lane-Fox: My Lords, I thank my noble friend for his enlightening reply. Can he explain how this exciting and promising new scheme will operate?
Lord Skelmersdale: My Lords, the income generation unit, to which I referred in my original Answer, has been set up to establish good practice in the income generation field and to help, develop and disseminate new opportunities. It will be headed by Mr. Ron Kerr, currently a district general manager in the North Hertfordshire District Health Authority and will be staffed by a mixture of seconded National Health Service employees and civil servants. It will be up and running early in the new financial year. We expect the income generation to increase funding for the health service by approximately £10 million to £20 million in 1988–89, rising over three years to over £70 million a year.
Lord Kilmarnock: My Lords, Clause 4(1)(d) of the Health and Medicines Bill empowers the Secretary of State to supply services to any person and to provide new services. Can the noble Lord say whether that means that health authorities will be able to run an NHS pharmacy on hospital premises, open to the general public but outside the remit of the pharmaceutical sub-committee, under the recently re-negotiated pharmacies contract?
Lord Skelmersdale: My Lords, it is a very wide power to which the noble Lord has drawn attention. I believe it would be better to discuss it during the period given over to discussion of the Health and Medicines Bill rather than now.
Lord Ennals: My Lords, does not the noble Lord agree that however successful the new income generation scheme may be, it is unlikely to do much to solve the current grave problems of underfunding in the NHS?
Lord Skelmersdale: My Lords, every little extra is welcome, as I am sure the noble Lord will agree. I can confirm that health authorities will be able to keep the money they raise.
Lord Wallace of Coslany: My Lords, can the Minister say who will be responsible at local hospital level for this fantastic scheme of income generation which could be described in other words?
Lord Skelmersdale: My Lords, I expect that those hospitals that decide to go in for the scheme in a big way would need an extra person in order to carry it out.
Baroness Lane-Fox: My Lords, perhaps I missed it, but can the Minister tell me the date when the scheme is thought to be coming into operation?
Lord Skelmersdale: My Lords, not specifically. The income generation unit will be up and running early in the new financial year. As regards the extra powers under the Health and Medicines Bill, they will depend on the date of Royal Assent.
Lord Kilmarnock: My Lords, does that mean that the scheme will not come into operation until the Bill receives Royal Assent?
Lord Skelmersdale: My Lords, that is not a reason, however, why planning should not be conducted.

Nuclear Power: Discussions on Safety
3.6 p.m.
Lord Rodney Lord Rodney asked Her Majesty's Government:
What action has been taken to promote public discussion of safety in, and near, nuclear power stations in line with the undertaking given by the Secretary of State for Energy when he approved the development of Sizewell B power station.
Viscount Davidson: My Lords, on 4th February the Health and Safety Executive published a document on the tolerability of risk from nuclear power stations as a contribution to public discussion on this subject. A copy of the document was placed in the Library of the House.
Lord Rodney: My Lords, I thank my noble friend for that Answer. I hope that Her Majesty's Government will continue to reassure the public on the safety of nuclear power stations. Can the Minister tell me what progress is being made in getting the Nuclear Installations Inspectorate up to strength?
Viscount Davidson: My Lords, the Government are committed to ensuring that the Nuclear Installations Inspectorate has the necessary resources to perform
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its duties effectively. Following special pay awards and extensive recruitment campaigns, the NII has now met its target of 120 inspectors by 1st April 1988.
Baroness Nicol: My Lords, is not the greatest single worry of the public above nuclear energy the problem of radioactive waste disposal? Can the Minister say whether the Government have made any progress on the recommendation of the Layfield Report with regard to radioactive waste management?
Viscount Davidson: My Lords, yes. The composition of the Radioactive Waste Management Advisory Committee—or RWMAC—is kept under review by my right honourable friends the Secretaries of State for the Environment, for Scotland and for Wales who have availability of environmental expertise to the committee well in mind. Several of the present members have a background in environmental science and the Government will continue to look for environmental expertise when making future appointments. I believe that meets with the inspectors' concerns underlying those recommendations.
Lord Dean of Beswick: My Lords, bearing in mind previous Questions in your Lordships' House, can the Minister give any indication as to the commencement date of the next nuclear power station?
Viscount Davidson: My Lords, no. This document will have a very important effect and will be scrutinised when the public inquiry into Hinkley C takes place.
Lord Cledwyn of Penrhos: My Lords, is the noble Viscount aware that there was considerable disquiet in North Wales about the proposal to conduct certain tests at the Trawsfynydd nuclear power station? Is he further aware that those tests were abandoned at the last moment? Will he give the House and myself an assurance that there is no question that those tests will be reconsidered?
Viscount Davidson: My Lords, the test was postponed due to the strength of concern felt locally. When the CEGB wish to proceed with tests of this kind in the future, a full presentation to the local residents will be made so that concerns can be set at rest. No test can go ahead without the agreement of the NIL who only give such agreement if it is totally assured as to the safety of the test.
Lord Cledwyn of Penrhos: My Lords, is the noble Viscount aware that I and many others in North Wales will appreciate that the Government and the CEGB took account of the concern of the local population?
Viscount Davidson: My Lords, I am grateful to the noble Lord.

Business
3.5 p.m.
Viscount Davidson: My Lords, with the leave of the House, I should like, as usual, to say a word about the two short debates standing in the names of my noble friend Lord Campbell of Croy and the noble Lord, Lord Peston. It is customary in short debates that the mover is allowed approximately 15 minutes, and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debates. In the case of the short debate in the name of my noble friend Lord Campbell of Croy, this means that all other speeches should be limited to a maximum of 14 minutes, and in that of the noble Lord, Lord Peston, to 11 minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in the debate.

The Security Services
3.6 p.m.
Lord Campbell of Croy Lord Campbell of Croy rose to call attention to the recruitment process to the security service and British intelligence and the case for a legally enforceable contract of silence to be entered into at the time of recruitment; and to move for Papers.
The noble Lord said: My Lords, I am grateful to noble Lords—some very eminent in different fields of public service—who have put down their names to speak. In particular, I look forward to the maiden speech of the noble Baroness, Lady Hart. We were together in another place and made our maiden speeches there at about the same time having entered Parliament following the 1959 general election.
In many of our debates the opening speaker asks for, and expects, replies from the Minister. That does not apply today. The services which feature in my Motion have to operate in secret and governments have to be careful how much they can prudently say. This convention has been accepted by Parliament. For my part, I do not intend to put any questions to my noble friend Lord Ferrers, and I will understand if his comments at the end of the debate have to be limited.
My purpose in raising the requirement for a legally enforceable contract of silence is to give the subject an airing because it has become a matter of interest and concern to the public. I have formed the impression that it is now widely understood and acknowledged in this country that there is a need for certain services—the security service and certain other organisations which can be simply referred to as British intelligence—to operate in secret. Besides having the general duty of protecting this country, these organisations are the most effective means of countering terrorism. Without intelligence obtained secretly and without the ability of these organisations to co-operate in secret with their counterparts abroad, it would be impossible to keep up with terrorists of all kinds let alone be ahead of them and forestall their planned outrages.
The security service and British intelligence have an essential role and their work must be secret. Furthermore, friendly countries will be reluctant to co-operate closely in these matters if the necessary
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curtain of secrecy cannot be depended upon. Our debate last month was on the accountability of these organisations and I am not raising that matter today. Nevertheless, the subject this afternoon is complementary to the discussion which took place then. My view remains that Ministers must be accountable to Parliament for these organisations, the Ministers concerned being the Home Secretary, the Foreign and Commonwealth Secretary and the Prime Minister. My suggestion in that debate for an advisory group which could be helpful to Ministers would in no way relieve those Ministers of their present responsibilities of supervising and answering for the secret organisations.
In order to preserve with certainty the necessary conditions for secrecy, I submit that those working in the special services should be bound by a contract of silence for life. They should enter into it at the time they start working for the organisation. The obligation should be made unmistakably clear before their careers begin and it shoud be pointed out that it will continue as strongly after retirement, including early departure should that happen for any reason. The Government clearly have been upholding this principle and must surely agree in general with my theme. However, I am referring to the present and the future, not to the recent past, so I shall not be touching on anything that might be sub judice.
The mainstay in securing secrecy in the public service generally has been the Official Secrets Act and it must remain until it is properly and adequately replaced. There is wide agreement that it is not satisfactory, largely because Section 2 is so all-embracing as to make it seem unworkable. The Government must share this view because they have decided to introduce a replacing Bill and a White Paper this summer. From the inquiries which I have made at Question Time over the past five years, your Lordships will know that I support the Government in that move, and I am sure that we all look forward with keen interest to examining their proposals.
This is not a sudden new departure by the Government because they introduced a Bill for the same purpose at the end of 1979. It passed through only one parliamentary stage, its Second Reading in this House, before it was withdrawn. The difficulty appears to be in finding a replacement for Section 2 which will attract a broad measure of agreement in Parliament and in the country.
The Official Secrets Act is used where appropriate for the whole public service, including the home Civil Service, the Foreign Office, the Diplomatic Service and the Armed Forces. Many noble Lords have signed the Act, as I have. In my case it was on entry into the Foreign Office. Later, in 1970, I also took the Privy Counsellors' oath. As a Foreign Office official in the early post-war years I was at times a keen observer of the secret organisations and I was able to appreciate the benefits for Britain resulting from their work. For two years also I was assigned to be private secretary to the then Secretary to the Cabinet, Sir Norman Brook, where again I was concerned with the work of those organisations. I have never been a member of one of the organisations.
I do not know the present status or the conditions of service of people working in them. I do not expect to know as there is no need for more than a very few—those at present engaged in these subjects— to be acquainted with the particulars. I should not be surprised, however, if many in the organisations are not in the category of civil servants or Crown servants.
I must make it clear that I am not referring to agents. Much entertaining fiction about spies, especially the adventures of James Bond, has confused the roles of the intelligence officer and the agent, largely because in the case of Mr. Bond he does everything himself. I am addressing myself in my suggestions to the careers of what can most suitably be called officers in the secret organisations. There will no doubt be differences in status depending on which organisation they work in and the function performed. It seems to me, therefore, that the most effective way of employing officers in these organisations is by contract entered into willingly, with all the restrictions well understood.
I am encouraged in putting forward this view by knowing that my noble and learned friend Lord Hailsham took the same view during a television programme a few days ago. It may increasingly be regarded as the best way of employing people more widely in the public service also. Contracts can be different for different jobs and for different people. For those in the secret organisations there must be provisions enjoining lifelong silence on subjects connected with their work.
The Government's contract would be with an individual as an employee and after he leaves as a former employee. Breach of contract could lead to that person being sued. It may well be asked what the position would be abroad. There may be difficulties depending upon the country. However, there was an interesting letter in The Times of 18th August last from a Mr. Dalby, who drew attention to the strength of international copyright law. In his view, if certain information acquired during government employment could be made government copyright, a contract like a publisher's copyright clause would have the best standing of all in courts at home and abroad. It is a well-known form of protection. Anything which an individual might wish to publish would have to be agreed beforehand in detail with the Government under the terms of the contract, so the possibility of enlisting international copyright law certainly seems worth exploring fully if that is not already being done.
It is normal procedure in the public service generally, and should be observed as a convention besides any obligation, that books and articles of an autobiographical nature touching on any possibly sensitive matters connected with service in an official position should be submitted to the relevant department for clearance. I have seen this done correctly. It is only fair to the authors that such vetting should be carried out quickly. For example, I recall being made responsible in the Foreign Office in the late 1940s for the checking of a book on his wartime mission to Yugoslavia and his pre-war service as a diplomatist by Sir Fitzroy Maclean, whom I came to know later in the other place.
The obligation of silence should extend also to broadcasting and to informing other people who are writing books, articles or scripts. Under the kind of contract I have in mind, clearance would have to be sought and given with any changes considered necessary. A former employee may think there is nothing secret, sensitive or indiscreet in an article, but on his own he is not necessarily in a position to judge. Nine-tenths of the material may be harmless but one-tenth may be unfortunate, though he cannot recognise it as such himself.
I have heard of remarks by authors to the effect that the KGB knows it all, so why go to so much trouble? That is not a sound argument. We are concerned with terrorists and also with the less sophisticated regimes, usually in small countries, engaged in unfriendly, aggressive or disruptive activities. Why hand information on a plate to them, information which would help an Idi Amin or a Colonel Gaddafi to carry out or support international acts of terrorism or subversion?
As regards the passing of sensitive information to authors and journalists for them to use, this should be caught too by the obligation of silence in the contract, prior clearance having to be sought and given. Unfortunately, there are a few people outside the secret organisations who appear to make a living from ferreting out secrets and then disclosing them. A pretext is usually employed such as supposed impropriety of some kind or unauthorised expenditure. The alleged aim is to expose some misdoing which is being covered up. The purpose, however, is clearly to achieve newsworthiness or a scoop in revealing something previously kept under a veil for reasons of security. I hope that those few, the practitioners of that gambit, feel some pangs of conscience when a bomb explodes in Rome, Belfast, in an aircraft, or here in London, for it is the secret organisations which can do most to frustrate the plans of terrorists and prevent such diabolical incidents.
It may be contended that journalists are catered for by the D notice system. I believe that system has a useful role. Nothing I am suggesting is intended to subtract from its functions. A journalist can also obtain advice direct from a senior member of the news department of the Foreign and Commonwealth Office or the Ministry of Defence. But these procedures deal with news items on a day-to-day or week-to-week basis. They are not appropriate for memoirs whose authors in any case are not usually in journalism and do not receive or see D notices. Neither do these procedures apply in cases where someone is determined to make information public and who has no intention of prior consultation.
Of course there is no reason why members of a secret organisation should not write books or articles on subjects unconnected with their work—for example, on gardening or music; or novels—provided they are not using their special knowledge without clearance.
I have been speaking about restrictions. I should now like to say a few words on the positive side of careers in these services. I suggest that Parliament expects the three Ministers most concerned (as part

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of their responsibilities) to ensure that those working in these organisations have favourable conditions of service, including satisfactory pensions allowing for early retirement, because some officers have to leave early through no fault of theirs. As their work is secret, we do not know about these matters; and I do not expect my noble friend to comment. My own impression is that officers in these organisations are dedicated people doing special jobs, who live quietly and who do not talk about their work. This is definitely not an occupation for someone seeking public limelight; for example, aiming to become a television personality. If a person is suitable and willing to enter into an obligation of life-long silence, and has the aptitude and the ability required, the career should be worthwhile, challenging and rewarding.
I welcome the initiative of the Government in appointing an internal ombudsman for the security and intelligence services. He is to be known as the staff counsellor. In this House on 10th February my noble friend informed us that Sir Philip Woodfield was to be the first counsellor. This means that members of these services with issues of conscience, worries about the nature or the ethics of their tasks, can take these concerns to the counsellor appointed for that purpose rather than to superior officers. The temptation to leak information to a journalist (as apparently was the only option in the past) should no longer be there.
I come now to retirement. We must be prepared for the eccentricities and failing faculties that may accompany advancing years. The brilliant younger man may become elderly and gaga. To borrow from the way Shakespeare's Jacques described the last phase of man's life, he could be sans his earlier intellect and sans a sense of proportion. In addition, he could be engrossed in a particular cause or theory or he could be nursing a grievance—probably an imagined one. The kind of contract between a government and an individual which I hope may be possible should cover that situation too.
This debate is taking place at a time when the Government must be considering the whole subject of confidentiality in the public service while preparing their White Paper which is expected in the summer. I hope that the suggestions made and views expressed by speakers in this debate will be helpful to Ministers and their advisers.
I conclude by warmly commending the unknown individuals in vital positions of trust who carry out their tasks with silent efficiency as officers of these secret organisations. I express my hope that they find their careers gratifying in the knowledge that their work is essential for the defence and security of this country. I beg to move for Papers.
3.24 p.m.
Baroness Hart of South Lanark: My Lords, it is a great privilege for me to take part on this first occasion in a debate initiated by the noble Lord, Lord Campbell of Croy, with whom I have had many debates in the other place in the past. I believe that your Lordships may like to know one tiny point. I am
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not quite sure how far your Lordships take interest in the Guinness Book of Records. I think there may be a tiny point of interest here. If one takes myself, the noble Lord, Lord Home and the noble Earl, Lord Lauderdale, between us we take the name of South Lanark as a constituency and its representation right back to 1931. I believe that is quite a considerable period. I am not sure whether it has been exceeded in any instance.
The noble Lord, Lord Campbell, in introducing this debate, has said that he wishes to do so in order to air the whole subject that he has raised. One welcomes that. That being so, I know that I shall not be regarded as being wrongly controversial or provocative if I venture not to agree with absolutely every point that he has put forward. I believe the issue that he raises promotes and requires consideration of questions of quite fundamental importance in a democratic society.
Many of those questions would be much easier to resolve if we had a freedom of information Act. In itself that would answer many of the difficulties that arise without such an Act. It is a matter of some debate. I very much hope that on all sides we can agree that in this respect the Americans have set us a very good example and that we could well move towards a really effective freedom of information Act.
Perhaps the principal dilemma that faces us when we consider the issues which the noble Lord has raised, is that of balancing the right of freedom of information with the duty of confidentiality. I hasten to say that I have no quarrel with him whatever when it comes to protecting confidentiality on issues of terrorism and matters of that kind. That is situations where life is involved. However, it stretches far wider than that.
Perhaps I may take as a kind of text the recent decision in Edinburgh in the Cavendish case and the judgment of Lord Coulsfield. In passing, perhaps I may mention that one of the examples to which he refers in making his judgment I have not had the time to look up although it looks a fascinating case. He quotes the 1849 case of Prince Albert v. Strange. I confess that I have not taken the energy to see exactly what that involves.
Lord Coulsfield in his judgment does not specifically refer to the publication of the particular memoirs or the argument with the Glasgow Herald or The Scotsman. It is a statement of some principle. He said:
"…on the one hand the interest in preservation of confidentiality of government information is a public interest and, on the other hand, there are competing public interests in freedom of speech and freedom of the press, and, indeed, a public interest in good government, which may be advanced by public discussion of the information in question".
He went on to say,
"In striking the balance the court is not bound to accept the ipse dixit of the government or its representative as to the effect of a particular disclosure on the national interest."
The final passage I quote is one where I agree entirely with Lord Coulsfield:
"If it is said that a particular disclosure will directly endanger national security, little, if anything, more may be required. Apart from that extreme case, however, it is for the Crown, like any other party

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seeking to restrain publication, to show that the restraint is necessary.".
If we take that as an extremely good context within which these matters should be considered, I think that we may go on to consider the following points.
Immediately a further question is raised concerning to whom or to what loyalty lies. I note that last week in evidence to a Select Committee in the other place on this subject, Sir Robin Butler, the head of the Civil Service, said that the duty of loyalty of a civil servant (anyone who has signed the Official Secrets Act) lay to ministers and to the government of the day. That is the commonly accepted view. I am not sure that we do not need to reconsider that a little in the light of some of the facts that we now know.
Let me mention in passing the highly controversial hook of Peter Wright, which in my view is extremely mediocre and does not deserve the immense royalties it is presently earning. However, what are his disclosures about the MI5 plot against the Wilson Government? I am one of those who know that allegations in his book are true. But if the duty of loyalty is to ministers and the government of the time—that is to say if Sir Robin Butler's definition is accepted—it follows that it is the duty of loyalty of the civil servants of the time to expose those machinations. I cannot see that logic can take us in any other direction. Why did Mr. Wright not do so? Why did his superiors not do so if their duty was to the government, as Sir Robin Butler and the present Government insist that it should be?
I believe that there is a real problem here about achieving accountability, and hence the proposals which the noble Lord has mentioned are useful. I think that the further proposals to achieve greater accountability would go a little further, and I would welcome them. But without accountability there can clearly be the irresponsibility (and I use the word in its perfectly proper sense) which allows such activities to be indulged in by those who are supposed to have a prime loyalty to the government under whom they serve.
I believe a rather wider definition of the duty of loyalty may be required. In the troubled and changing times in which we live it may be better if we at least considered a definition which said that loyalty should be to the values of a democratic society and the concept of liberty which is essential to those values. If one were to take that kind of definition and link it with the public right to freedom of information, one would be in a different and perhaps more sensible ball game.
Perhaps I may give just one example. There was some discussion earlier today concerning the safety of nuclear power stations. Let us take as a hypothetical example the case of a civil servant or quasi-civil servant bound by the Official Secrets Act who is working in the field of nuclear energy and who knows that there is hazard to public health which is not publicly known. Where does his duty lie in the balance which is expressed in Lord Coulsfield's judgment between the public right to information and the duty of confidentiality? I suggest that such a case throws up questions which have not yet been answered and which I venture to suggest would not
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be answered by the approach which the noble Lord has taken in introducing the debate.
It may be (and this has tended to happen recently) that in order to resolve his personal dilemma he leaks some information; then there is a mole hunt in Whitehall. Of course this is a highly unsatisfactory way of dealing with such a problem. It may even be that the balance of rights and duties favours what he has done. How much better if the right of the public to information did not impose upon him a problem which he can resolve only by the rather unpleasant act of leaking documents to the press or whoever.
There have been so many recent battles in the courts on these issues and so much activity undertaken in relation to them, that I have sometimes wondered whether there was not a very secret new method of employment creation—if one takes into account the lawyers, the journalists, the television producers and the film producers to come. If there were a freedom of information Act I might be able to discover whether this is a secret technique of the Department of Employment.
In the meantime I say very seriously that I believe the issue which the noble Lord has raised is one which merits very full exploration. I do not believe that his approach is enough. However, I hope very much that if the Government are now considering a White Paper on a new Official Secrets Act they will provide the opportunity for the very full and philosophical debate about the competing rights and duties that is necessary before there can be a satisfactory resolution of the issues.
3.37 p.m.
Lord Mayhew: My Lords, in following the noble Baroness in this debate I have the pleasure and honour of congratulating her most warmly on her maiden speech. It may be that in the history of this House there have been less controversial maiden speeches, but I doubt whether there has been a speech which has been listened to with greater respect and attention. When I say that we hope to hear her again I do so with a special meaning. I imagine that the subject that she raised so interestingly of the balance between preserving confidentiality and access to information will be discussed further and that in June when the Government issue a White Paper, and soon afterwards perhaps when there is a Bill, we shall have endless debates in Committee and at Second Reading We look forward to the contribution which we are certain to hear from the noble Baroness.
There was not a great deal of common ground between the two speeches that we have heard. The noble Lord, Lord Campbell, concentrated on the question of recruitment to the intelligence services. There were one or two questions which I wished him to answer about his scheme for subjecting new entrants to the intelligence services to a binding contract. I wanted to know how that linked up with the new legislation that is certain to be introduced in the field of secrecy and the preservation of state secrets. Perhaps if he gets an opportunity we can know more. It seems to me that we shall have a major study of this whole problem of confidentiality versus freedom of information. I do not see how that will fit

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into the suggestions made by the noble Lord for the recruitment of intelligence personnel.
I was also slightly disappointed that he said that he had no questions for the Government. I have many questions for them. We are grateful to the noble Lord, Lord Campbell, for providing the Government with this opportunity to confirm that there will be a White Paper in June in this field and to tell the House how they are thinking on these difficult questions. We were all puzzled, for example, when the Government put a three-line Whip on an admirable Bill by a gallant Conservative Back-Bencher, Mr. Richard Shepherd. We could not understand this. We could not understand why the Government should object to Mr. Shepherd's Bill. Now that some time has passed, perhaps the noble Earl, when he replies, can tell us what the Government found wrong with that Bill. After all it was very nearly passed by another place on Second Reading despite a three-line Whip.
Of course we all share the aim of the noble Lord, Lord Campbell of Croy, of democracies' need to protect themselves against terrorism, subversion and espionage. They often need to act secretly in order to do so. People who knowingly divulge such secrets, without seeking authority, are traitors. I have read the book Spycatcher—I think we all have—and I share entirely the rather derogatory view of the noble Baroness. In fact, I go a little further if only because if contains one sentence about myself which is both derogatory and untrue.
However, the fact is that it is not a book written from a sense of principle in order to inform the public of matters there is a need for them to know; I deny that absolutely. I am also a little suspicious about those rather skimpy passages about a plot againt the previous Prime Minister, Mr. Harold Wilson. In my opinion, the book was in effect an act of treachery. I think we have to ensure somehow or other that such a situation does not arise again or, if it is done again, that the perpetrator is put behind bars.
The question is: does the suggestion of the noble Lord actually fulfil the admirable aim that he has in mind? This is why I have some doubts. I am inclined to think that legislation is better. It seems to me that if an intelligence officer needs to be bound by a binding contract not to divulge secrets, then he is not fit to be an intelligence officer. I doubt whether one will ever be able to coerce an intelligence officer in that manner. Furthermore, I cannot see why the solution suggested by the noble Lord, Lord Campbell of Croy, should prevent an intelligence officer who has signed a contract doing what happened in the case of Spycatcher—publishing overseas, beyond the reach of punishment, should he wish to do so. Therefore, a good intelligence officer is one who keeps his mouth shut because he is a person of principle rather than because he has signed an elaborate contract.
It would be better perhaps to await the outcome of the long discussions which will take place about the proposals for new legislation. Everyone agrees, and has done so for years, that Section 2 of the Official Secrets Act is too wide and too weak and that new legislation is needed. Indeed, my old party, the
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Liberal Party, introduced on two occasions into another place a freedom of information Bill which would not only have made accessible to the public information to which they are entitled and to which at present they have no access but also would have strengthened the protection of state secrets—another admirable project. As I have said, Mr. Shepherd produced only this January another Bill along the same lines which very nearly succeeded. We now await the arrival of the White Paper in June.
I think it is fairly easy to predict that we will find it particularly difficult to legislate against the intelligence officer who, as in the case of Spycatcher, is prepared to make his fortune and avoid punishment by going abroad. Perhaps during the debate we shall find some way around that loophole. I am not satisfied that the solution offered by the noble Lord, Lord Campbell of Croy, overcomes the difficulty. Therefore, it may be that we should concentrate once more on the need to refine our methods of recruitment, observe meticulously the work and the attitude to work of intelligence officers and attend carefully to terms of service. The noble Lord mentioned pensions and such matters. I think that if our standards here had been higher in the past we could have avoided some of the disastrous mistakes that have been made.
I ask noble Lords to believe that I have never been a security risk. However, I have known some famous MI5 officers. I knew Blunt and Burgess; I was once even interviewed by Spycatcher. I played golf with Roger Hollis. Yet, with the exception perhaps of Hollis, I do not think that any of those men should have been recruited into the security service. I doubt whether any of us here today would have done so. Recruitment is the matter in the end we need to come hack to and examine carefully. We can devise binding contracts and pass new laws. But the worth of our intelligence service depends most of all on the integrity of its staff. It may well be that improved recruitment and management would do most to avoid the disasters of the past.
3.46 p.m.
Lord Carver: My Lords, may I from these Benches add our congratulations to the noble Baroness, Lady Hart of South Lanark, on her very eloquent and thoughtful maiden speech. I am sure that we all look forward very much to hearing equally eloquent and thoughtful speeches on other subjects in the future.
We are most grateful to the noble Lord, Lord Campbell of Croy, for giving us the opportunity to talk about this subject. The difficulty is that if we actually knew what the arrangements for selection and recruitment of officers into those services were, and what their contracts were, we would not be allowed to talk about them. It is true to say that most of us do not in fact know. The result is that we are dependent upon revelations of mistakes that have been made in the past, to which the noble Lord, Lord Mayhew, referred. We have recruited people who, as it turned out, should not have been recruited; for example, Philby, Burgess, Blunt and, no doubt, Peter Wright.

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My qualifications for speaking on the subject are that I have been a customer of those services over many years in many different places. I must, however, stress that I am very out-of-date. It is 10 years since I had any job which involved dealing with those services. Over that period, on many occasions and in many places, I was a very satisfied customer. I am sure that today the authorities responsible for the affairs in Northern Ireland and Gibraltar are highly satisfied customers.
The recent operations of the intelligence service in keeping track of the gang of three who met their unfortunate end in Gibraltar is an example. On the other hand, I must admit that at times and in many different places, I was not a wholly satisfied customer. I know, and I have experienced working with, many able and dedicated members of those services. However, I have unfortunately come across some of those people who seem to be a little amateurish. At times their attitude towards their work appeared to me to savour of Sherlock Holmes, Richard Hannay, Bulldog Drummond—if anyone can remember him—or even James Bond.
I have two criticisms to make. First, the people concerned seem to live in a completely closed world whereby what really went on and what people actually thought and did, they just did not understand. My other criticism is the lack of coordination between the different intelligence services and between them and the counter-intelligence services. In each case where the army became involved in troubles which involved close work with the intelligence and counter-intelligence services, for example in Malaya, Cyprus, Kenya, Aden and certainly in Northern Ireland—it was not quite the same in Borneo—the whole intelligence side had to be sorted out, brought together and a single head appointed to co-ordinate them in order for operations to have any success. I ask why those criticisms should have arisen. The answer is, of course, the obsession—correctly—of the services themselves with extreme secrecy.
As the noble Lord, Lord Campbell, said, it is of course essential that the services' operations should be secret; that people should not know who their operators are; that they cannot recognise them; and, what is more, that no one should understand their methods. The result of that is often that the services do not co-operate with one another because of their fear that their secrecy will somehow be broken. That obsession with secrecy is also the cause of their appearing to live in an unreal world.
I am attracted by the noble Lord's suggestion of a contract which is not the same for everyone in the service. Some people in the service have to observe strict restrictions on what they say and do. That does not necessarily apply to all. Although I see the force of the argument put forward by the noble Lord, Lord Mayhew, that no contract would have prevented the men I mentioned from doing what they did—I think he is probably right about that—the idea of a contract different for different people is attractive.
I am uncertain about the vow of lifelong silence. I speak as a trustee of the Institute of Contemporary British History, among other things. My experience
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of dealing with the Ministry of Defence since I wrote a book on E1 Alamein 30 years ago is that. if one leaves the matter to the government department concerned, or the head of the service, to decide whether something can be revealed, nothing is ever revealed; and trivial things could have been revealed much earlier.
There should be an independent tribunal of some kind. It could be something in the nature of the Security Commission, to which a Crown servant, including a member of the secret services, if he wishes to reveal something that occurred during his service, can submit. That material could be looked at, not by the government department involved, but by such an independent tribunal. That suggestion is something that might be considered.
Had the criticisms of which I have spoken occurred in the armed forces, one would not have looked just at the selection and recruitment of the personnel in the first instance, but at their training—because training reveals a great deal about a man. I know nothing of the training system, if there is one, for any of the intelligence services or for the security service; but the impression one receives—it may be a totally false impression for all I know—is that the system for selection and training is rather like the one employed by the army in the 18th century. We want to be careful about criticising that system because it produced Marlborough and Wellington, so it did not do too badly, but the armed forces have moved forward from there. The system operates on the basis that, provided the man or woman is a friend of a friend of a friend, he or she must be all right. After having enlisted that person, the training consists of seeing that he or she learns on the job. Most organisations, and especially the armed forces, would feel that that was a totally inadequate system for a service as important as these services.
If selection and training are to be improved, how is that to be done? I understand that there may have been some inquiries on the subject in recent years. I do not know whether there have been. I do not know what their recommendations were. I do not know whether they were implemented. A form of central organisation for selection, recruitment and training for all the services we are talking about has something to be said for it. There are of course grave dangers in a centralised intelligence organisation. There is the sinister aspect—that we are creating something like the KGB or the Gestapo. There is also a grave danger for intelligence itself of having a monolithic organisation. All intelligence organisations tend to have fixed ideas about things. The Israeli intelligence organisation before the Yom Kippur war is a good example of that point. If one relies solely on one source, one may be badly let down.
There is one aspect of this issue which is of great importance: the exploitation of science and technology in all those services. I am a member of your Lordships' Select Committee on Science and Technology. I am sure that it would be interesting to study the application of science and technology to the intelligence services, but I do not think that we should be allowed to carry it out. Any application of information technology to the gathering of secret

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information must immediately be applicable to someone who is trying to prevent people from gathering information. That is one aspect of the problem which calls for a central selection and recruitment organisation. However, I realise that the subject of organisation is beyond the scope of the debate.
On the aspects which have been raised in the debate—the publication of material which was classified at the time but should not necessarily forever remain classified; selection and recruitment; and training in general—there are great advantages in having people who do not come from the service concerned and who can take a broader look at the problem. Perhaps this would meet the point made by the noble Baroness. Such a body would not be an executive arm of the Government but an organisation that could take an independent look. Like the noble Lord, Lord Campbell of Croy, I do not expect the Government to give any answers. I should like merely to draw those aspects of the problem to their attention.
3.57 p.m.
Lord Birdwood: My Lords, judging from the evidence of her maiden speech, the House is fortunate to have added the noble Baroness to its number. I appreciated her willingness to speak of important ideas. We all look forward to hearing much more from the former honourable Member for Lanark. I was pleased when my noble friend's Motion surfaced so soon after the second debate on the security services which was opened by the noble Lord, Lord Jenkins. One does not often have the opportunity to develop an argument or point of view, and so I make no apology for speaking a third time in three debates.
We are grateful to the noble Lord, Lord Campbell of Croy, on this occasion, because he has forced us to focus on two key issues of our intelligence gathering. If we get them wrong, our intelligence, which should be the very foundation of policy, becomes a waste of time and money. The choice is as stark as that. If we know more and know it first, we have the raw material for turning the future; if we know less, and we know it last, we have not only wasted money, we have put at risk lives, principles and freedom itself.
The task given to the intelligence services begins with information. It ends with assessing the importance of that information. As I have said in the House each time the subject has been aired, the mission of the service is to predict intention. It is the mission of the service to pass on those findings to the political managers of the country's affairs. The long-range objectives, which we as a nation support by voting funds and by granting access to the Royal Prerogative, are necessary to this Government and to any government of Great Britain.
We in this House have twice debated the issue of accountability. It usually comes down to a call for operational scrutiny, which would be inane if it were not dangerous. Arguments put foward for an accountability body do not stand up in the real world.
However, turning to the first part of the proposition put forward by the noble Lord, Lord
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Campbell—the issue of recruitment—we are in an area in which we have perhaps less need to conjecture. I shall talk for a moment about what became MI6. At the end of the war, the service drew mainly on SOE people, and leaned towards the more temperamentally thoughtful. This source dried up in the early 1950s and the service opted for a system of talent-spotting through the universities, giving the talent scouts a profile which concentrated on well-roundedness, academic stability rather than glitter and a personal framework of integrity. I believe the system, contrary to some popular speculation, has worked extremely well. Since the 1950s the flow of candidate raw material has been steady and it has been of high calibre.
I think we can also straighten out the myth that recruitment was or is propped up by the class system. We can infer that recruitment into the security and intelligence services has not been on class lines since the war. If anything, because of tragic mistakes which harked back to 19th-century ideas of links between class and codes of honour, we can deduce a real effort to split apart the recruitment process and any lingering discrimination in favour of privileged backgrounds.
Since the time that this university system has been in use the recruitment process has been remorselessly tightened. Positive vetting, after the Radcliffe recommendations, has become increasingly thorough and is recycled every five years for every officer. The first six months' training for candidates, one believes, is now the severest test of mental resilience and even after that an officer is on probation for three years.
Reviews are made every year throughout a person's service and a man's or woman's progress is constantly being shaped to capitalise on that individual's particular strengths or gifts. I am told that positive vetting has been made more thorough in the last couple of years and is now a substantial user of the service's resources.
The result of the care with which people are recruited, assessed, guided and promoted is that the security services—only really now in their maturity—enjoy an exceptional quality of cohesion. The bonds of respect are lifetime bonds. Where we on the outside find episodes like Spycatcher comic or distasteful, from inside the service attitudes are of the deepest disgust and an uncompromising linking of such oath-breaking to treachery.
There is a new ingredient—and I am glad that the noble and gallant Lord, Lord Carver, made such a point of it—which has brought its own particular issues of values and beliefs. I am talking about the colossal increase in data processing requirements. The word "increase" is not strong enough to describe what has had to happen. More descriptive, the explosion in computing which has hit any organisation dedicated to information has, we can assume, been even more influential in these services.
Recruiting and assessing the staff needed for this will have put new strains on the service resources and this will have been felt most acutely in the technical arms such as GCHQ. There was a risk—now passed, I hope—that recruitment into the scientific side took

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place in a different framework of attitudes from mainstream recruitment. Nothing could have been more dangerous. It is easy to be sidetracked into a false philosophy which suggests that scientific truth transcends national interests. But the central mission of the intelligence community is commitment to the truth, any way you want to describe it. The mission is to gather and analyse facts, distilling true information out of distortion and subversion. There is no room to dilute the idea of a traitor, using the excuse of scientific integrity.
The second part of my noble friend's Motion draws our attention to the binding power of the Official Secrets Act. I needed to remind myself of its actual wording and, like anybody who has read it recently, the language strikes me as very John Buchan. There are lots of "harbouring of persons" and "communicating sketches or plans". Like so many of these catch-all legal instruments, there is an after-taste of their origins in expediency. When we debated the intelligence services a few weeks ago, my noble friend on the Front Bench committed the Government to a root and branch review of this Act. I look forward to these proposals when they see the light of day, but I am not in any hurry and I do not think the country is.
The outcry for reform, reform, is not likely, I hope, to result in some string-and-paper piece of legislation. The core of this debate is I suppose: how long can one expect an individual to keep silent about his work? Is the threat of this Official Secrets Act enough? Well, no, it probably is not, but not because silence is an unreasonable expectation but because there is a perception that a person's position is legally ambiguous. In cold legal fact it probably is not at all, but one can understand the feelings of ambivalence which surround the obligation. This leads me to agree with the Motion that a legally enforceable contract can be made a condition of employment. Into this contract absolutely specific and grave personal sanctions could be written—and why not?
As I have been inferring, the selection processes are some of the toughest around. Adding a legally enforceable contract will hardly have aspiring candidates going into shock. I think the evidence is that these services as a career have got to the point of maturity where what we can call "open law" can be calmly applied. I have been asked whether it is fair to request someone to keep silence for all his life. My reply is unvarying: why not? I am not an expert on the intelligence services. If I were I probably would not be standing up in open forum like this today. But I think I am an expert, or getting there, on what to expect from individuals.
Because of my work, I suppose I have interviewed upwards of 4,000 people. They have been of all sorts and backgrounds, many gifted in one way or another. I was thinking about this host of faces in the context of this debate. I was reflecting that if it was made clear to the average, ordinary citizen that he or she must cherish certain facts and take those to the grave, the average, ordinary citizen could be expected to do so.
I believe that bringing clarity to an obligation to keep silent will be welcome, but I also believe that it is a deep instinct in our people to protect what they
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hold precious. There are not many aspects of this country's safety more important than its knowledge of the world's intentions.
4.7 p.m.
Lord Annan: My Lords, I must begin by congratulating the noble Baroness. Lady Hart, who gave a speech which I think showed to perfection the art of being thought provoking without being provocative.
Recruitment is, I think, always a very difficult problem. If you advertise you run the risk of not knowing very much about the man himself or his referees and you may be recruiting a mole—not necessarily a mole for a foreign power but a mole for an internal subversive organisation. On the other hand if you leave recruitment solely to the services they tend to recruit people whose views correspond with their own, and you get one type alone in the service. I think that that was what happened before 1939 in MI6. As a result, that service was not really in very good shape when the war came, because they had not got round to the fact that we were fighting Germany. When the noble Lord, Lord Mayhew, was talking about the recruitment of some of the spies, the odd thing about the recruitment of Philby was not that he had been a communist student at Cambridge. The odd thing was that for his cover he had chosen to belong to the Anglo-German Fellowship and had been a correspondent on Franco's side in the Spanish Civil War.
The CIA advertises, but I believe it would be much better if some arrangement could be made with the Civil Service Selection Board. After all, some of the skills needed, particularly in the security services, are not all that different from those displayed in the old administrative class of the Civil Service. Could not that board give the services a choice of suitable candidates, candidates who had impressed the board as being the sort of men or women for whom the services are looking?
However, the best way to recruit is through dons who have the interests of the services at heart. Sir John Masterman may have behaved exactly like a character out of John Buchan, but as a student of Christchurch he had a very keen nose for the kind of man whom the services needed. I believe that Sir Dick White was one of his protégoés; so, in wartime, I suspect, was Lord Dacre.
Of course things are much more difficult nowadays. There are far too many students for dons to know them individually as they used to, and few dons are bachelors. But I think that every vice-chancellor has a duty to the state to advise the Home Office of members of his academic staff who could help in this matter. They should be the kind of don who can assess character and judge what the services need. That is the first order of persons to be recruited.
I now turn to the second part of the Motion. When Peter Wright published Spycatcher he behaved like the school sneak. It was very natural that the headmistress was determined to punish him. But the rules of Roedean as it was in the 1930s, admirable though those rules were, are not capable of being universally applied. I think that the Crown lawyers gave the

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Prime Minister very bad advice. Whatever they may have thought the law was, anyone who knew Australia could have told them that an action of that kind did not have the faintest chance of success for the very excellent reason that whatever damage may have been done to our security by the publication of the book no one could possibly believe that it had done much damage to Australian security. As a result the taxpayer was faced with a bill of about £2 to £3 million and I do not think that the incident redounded to the credit of the country.
Of couse we all sympathise with the gut reaction of the Prime Minister on this matter towards Wright's treachery. No one likes to see a four-letter man getting away with it. But sometimes one has to grit one's teeth and not respond to one's nobler feelings.
It seems to me the same may be true of the proposal that the noble Lord, Lord Campbell of Croy, puts forward, which would compel officers of the services to sign a legally enforceable contract. What will they be compelled not to disclose? Where I may differ from the noble Lord is that I do not accept that everything connected with the services should be secret if they are to be effective, for if the services are to be effective they must have the confidence of the public. There are certain parts of their work that the public needs to know about. It is ultimately members of the public, let us never forget, who make positive vetting effective. It is members of the public at home or abroad whom the services need to ask for help in a number of ways.
What is this legally enforceable contract to cover? What is an officer to say to his wife, or a woman officer to her friends, when they are asked what they do? Is that to be something they cannot disclose? Are they to repeat some formula such as, "I work in the Potato Peel Recycling Corporation"? Many officers are bound to have to talk to civil servants, diplomats, politicians and members of the public about their work. Indeed sometimes that is part of their work. I wonder how one can draw up a contract which takes account of that.
Lord Campbell of Croy: My Lords, I am most grateful to the noble Lord for giving way. I think that there is less disagreement between us than he thinks. Of course there are parts of the lives of the people working for these organisations which are not secret, but the point is that what is said by them should be cleared beforehand. That is what is important; not that everything should be kept secret but that what is not secret should be cleared and understood.
Lord Annan: My Lords, I fully take the point of the noble Lord. I was just thinking that I was glad that I was not a lawyer having to draw up such a contract. I think that the same principle applies here as to recruitment. Trust is everything. From one rotten apple like Wright one should not deduce that the whole barrel is rotten.
If may of course be said that the contract—I was very glad to hear the noble Lord, Lord Campbell of Croy, say that—would enable officers to publish some books if they wished to but not necessarily
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others. The CIA has a very sensible rule that an officer may do this provided that he clears it with the organisation. But I share the doubts of the noble and gallant Lord, Lord Carver: when one does submit a book to the authorities for clearance the answer comes back not that a few deletions have to be made but that it cannot be published at all.
I shall give an example of this. Your Lordships may remember an admirable and most entertaining book entitled Ill Met by Moonlight by Paddy Leigh-Fermor. It described how he captured General Kreipe in Crete and eventually got him away by submarine to Egypt. Colonel Monty Woodhouse and others also published books on their experiences in Greece.
One of the officers who was parachuted into Greece, Mr. Nigel Clive, went to the Epirus to operate with Zervas. After the war was over he joined the intelligence service. When he retired he too wrote a book about his time in the mountains. As a loyal member of the services he submitted it to the authorities. They told him that he could not publish it even though he was not a member of the services at the time that he was writing about and like Woodhouse and Leigh-Fermor he was an army officer. Nothing in his book related to any secret matter in the services. I am very glad to say that he published the book.
That is not a good augury. There is this obsession with total secrecy about every single matter. We are no longer living in the age of John Buchan or of Dornford Yates. We are living in the age of John le Carré, who has disclosed a very great deal about the services in his books on spies.
Nor are we for that matter living in the age of Shakespeare. In Troilus and Cressida Ulysses tells Achilles that the Greek high command knows all about the fact that he is having an intrigue with a Trojan princess in Troy. Ulysses goes on to say:
"There is a mystery (with whom relation Durst never meddle) in the soul of state,
Which hath an operation more divine,
Than breath or pen can give expressure to,
All the commerce you have had with Troy
As perfectly is ours, as yours, my Lord.
And better would it fit Achilles much
To throw down Hector than Polyxena".
The mystery in the soul of state is of course the secret service and "relation" is Shakespeare's word for the press. But of course the press durst meddle today with the services only too readily. If a Cabinet Minister was discovered by MI5 to be having an affair with the daughter of a member of the Politburo, Private Eve would be onto it before the director general could walk round to No. 10.
No one could be more determined than I am to stop journalists like Mr. Duncan Campbell from getting information. I should like to see him thwarted on every occasion. Mr. Campbell was a friend of Philip Agee, the defector from the CIA who made public the names of all CIA and MI6 officers that he knew. Mr. Campbell does not care whether the information he unearths is sensitive and valuable to organisations hostile to this country. In fact my impression is that he rather prefers it to be so.

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But the services need to maintain relations with the media like any other department of government. It would be much better if the heads of the three services were publicly known, as they are in America and in the Soviet Union. Then they could deal with the legitimate interests of the press in their activities.
There is one other thing which I think is important for the heads of the services to be able to do; that is always to be able to restore, if necessary, the morale of the officers who work under them. Where officers are publicly named— they may have retired—as being this or that, and when totally false statements are made about them, I think that the head of the services should be able publicly to defend those officers.
We are all grateful to the noble Lord, Lord Campbell, for having aired the matter. I hope we shall explore further the possibilities and the difficulties of obtaining binding contracts for officers in the services. However, such contracts run the danger of being absurd. I am bound to say that the noble Lord, Lord Mayhew, was right when he said that no contract would have stopped a man like Peter Wright doing what he did, nor would it have caught the infamous spies recruited by the Comintern in the 1930s.
4.20 p.m.
Lord Colnbrook: My Lords, I shall start by congratulating the noble Baroness, Lady Hart of South Lanark, on her maiden speech. I have heard her speak many times in another place and have always enjoyed it. I have not always agreed with her and I expect that when she becomes more controversial as time goes on I shall again not agree with her. However, I am delighted to congratulate her on a most interesting performance.
The noble Baroness referred, as have others, to freedom of information and a possible freedom of information Act. A number of people—not the noble Baroness but those outside this House— have spoken of the right of the public to know practically anything that they wish to write about. That demand comes, not widely from the press, but from certain sections of the press. I get very bored with that.
I do not know whether any of your Lordships have asked a journalist to tell you where he got his information. He will not do it. No journalist will ever reveal his sources. In fact, journalists have been know to go to prison rather than reveal their sources. It seems to me that even those who call most loudly for the right of the public to know to be honoured should also accept that there are certain things that cannot and must not be disclosed. I believe that your Lordships as a whole will agree to the elementary proposition that the operations of the security services must not be disclosed. In that matter, the right of the public to know does not exist. The reason is that the objective of the security services is to thwart those who wish to take over this country by means other than the democratic process, whether by invasion or by attack from within. The vital prerequisite for thwarting those activities is intelligence. Intelligence must be gathered almost
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entirely from people who do their utmost to make their plans in total secrecy.
Many of your Lordships will be more familiar than I with the detailed workings of the intelligence services. However, I know something of some of the organisations which occupy the attention of those services. I am thinking particularly of two organisations in Ireland—the Provisional IRA and the Irish National Liberation Army. We must never forget that it is the publicly declared intention of the Provisional IRA to overthrow the Government of Northern Ireland and, incidentally, that of the Republic of Ireland as well, and to replace those governments with itself. Its methods include the killing of innocent people, the destruction of property and the extremely ruthless way in which it deals with people whom it suspects—not proves but suspects—of having given information, sold information or perhaps just leaked information about what it is seeking to do.
Gathering intelligence about the objectives of those organisations is extremely difficult and extremely dangerous. Thank goodness there are people who are prepared to do that and also that those people are efficient enough—not necessarily all the time but occasionally—to thwart their intentions. One such incident took place, as we know, in Gibraltar recently. I shall say nothing about the denouement of that operation because it is the subject of inquiry by a coroner's court in Gibraltar. However, it seems to me that the whole operation of discovering what was intended, identifying the people who were going to do it, keeping them under surveillance for months at a time and co-operating with the intelligence services of other countries reflects the greatest possible credit on the intelligence services both of this country and of the other countries concerned. Mercifully, because they were successful, scores and perhaps even hundreds of innocent civilians and soldiers are alive today who would otherwise be dead.
I do not know and do not want to know how that was done. The thought that how it was done and the details of the operation might conceivably some day he made public horrifies me. Recent history tells us—does it not?—that things are not going to stop there and that other plots will be made. I think that no one, for whatever reason, ought to be permitted to make the task of thwarting future plots more difficult and dangerous by revealing, even after some years, how that particular plot was thwarted.
We must face two questions. The first question is what we want to stop people from publicising and the second question is how that should be done. The question of what we wish to stop is difficult. The noble and gallant Lord, Lord Carver, spoke from his great experience in the Ministry of Defence when he said that it regards anything—even the number of lumps of sugar that the Secretary of State has in his tea—as being absolutely top secret. I know exactly what he means; everything is thought to be top secret. That is unreasonable. However, I do not go along with him in his suggestion that there ought to be an independent body advising on such matters.

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The question is whether any piece of information is damaging to our national security. Who can decide that? It seems to me that only a Minister of the Crown—in fact, the Prime Minister, who is the ultimate head of all the security services—can decide such matters. What independent person can judge that? An independent person does not have the detailed knowledge of what is going on. Furthermore, if a judgment is made and is thought to be wrong, an independent person cannot be challenged. However, the Prime Minister can be challenged, and that is what Parliament is for. A Prime Minister or any other minister can be challenged on the exercise of judgment and, if necessary, dismissed. That cannot be done with an independent person.
In the end, it seems to me that we must leave those matters to the executive of the day. However, I absolutely agree that there ought to be a much clearer definition of what is or is not a matter of state security. Some people undoubtedly go too far in regarding everything as secret when it is not. How does one stop that? The people who stop it are nearly always the members of the security services themselves. Nine hundred and ninety-nine out of a thousand people—no, more than that—would not dream of ever giving publicity to something which they should not. We must not forget that. We talk about people stepping over the line. However, we must not forget that tens of thousands of people do not. They are the best weapon to ensure that that does not happen.
However, there will always be the odd rogue; there always has been and I have a nasty feeling that there always will be. How do we stop that person? My noble friend Lord Campbell of Croy spoke of an enforceable legal contract. I agree on that matter. However, I thought I understood him to speak of copyright, and there he lost me. That seems to be an entirely different kettle of fish. I prefer to the forthright pronouncement of the noble Lord, Lord Mayhew, who said that such people ought to be behind bars. I think that that is a better arrangement.
The precise wording of any contract is something which I should not be competent to spell out. What is clear is that the existing Official Secrets Act and the signing and acceptance of that Act by members of the security services is not always enough. We know that the Government are considering the Official Secrets Act. I understand that we are to have a White Paper some time later this year. I ask the Government, when preparing any proposal to strengthen, revise and replace the Official Secrets Act, to pay the most careful attention to ensuring that there is a provision in it which will ensure (so far as the law is able to do so) that no member of the security services is ever allowed, whether he is still serving or retired, to put at risk both the other members of his service and, in the end, the safety of all the citizens of this country.
4.30 p.m.
Lord Moore of Wolvercote: My Lords, I am most grateful the noble Lord, Lord Campbell of Croy, for giving us the opportunity to talk about
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confidentiality in regard to the security services. I was taught that the affairs of the secret service must remain secret, otherwise the whole objective would be defeated. I am glad to say that in my 40 years of public service confidentiality was the strict rule. Anyone whose work necessarily brought him into contact with the security services was expected to keep his mouth shut and not to discuss their business with any person who did not have a need to know. This applied not only during one's working life but in retirement. The same rule naturally applied to members of the security services. It would have been regarded as unthinkable that a member or ex-member of a security service should speak or write about his work. Today, however, we have a new situation in which members of the security services are being encouraged by the media to write or to speak about their work. This is surely deplorable.
I was abroad and unfortunately unable to attend the debate in the House on 10th February. However, I was very impressed by the excellent speech of the noble Lord, Lord Hankey, in which he said:
"There has been an inexcusable lapse of national discipline".—[Official Report, 10/2/88; col. 220.]
We are not at present allowed to discuss the Spycatcher case since it is sub judice, but I have been greatly heartened to note that all the judges both in the High Court and in the Appeal Court unequivocally endorse the view that members of the security services, whether still serving or in retirement, have a duty of confidentiality to the Crown. I suggest, as mentioned by other noble Lords, that a very good example of the vital importance of secrecy is the operation recently carried out in Spain and Gibraltar. One loose word could have ruined the whole operation; or of course would the co-operation of the Spanish police have been forthcoming if they had not completely trusted their British counterparts. The work of the secret service must be kept secret. On that I think that we are agreed. The content of its work is fascinating to the layman. Of course people wanted to read Spycatcher once it was published, but the point is that such books should not be published.
How this is to be achieved, which is the nub of today's debate, must eventually be the responsibility of government. As I said, I was brought up in a very strict school, and I remain slightly shocked that it should be thought necessary for members of the security services, for whom I have the highest regard, to be required to sign a legally enforceable contract of silence, but if today this is necessary to enable them to resist the blandishments of the media, so be it. What is important is that we should have complete confidentiality in regard to the work of the security services of this country. I shall be interested to hear in due course what the Government propose to do about the problem.
4.34 p.m.
Lord Mishcon: My Lords, the House will be indebted to the noble Lord, Lord Campbell of Croy, for three things: first, for having introduced into your Lordships' Chamber a most valuable debate; secondly, for having given the House the opportunity

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to hear the maiden speech of my noble friend Lady Hart of South Lanark; and thirdly, for inspiring the noble Lord, Lord Annan, to recite from Troilus and Cressida in a manner, dramatic as it was, that would have been worthy of the noble Lord, Lord Olivier, whom, unfortunately, we so rarely see these days.
In an attempt to draw together the threads of this interesting and important debate, it may be of advantage to start with the matters on which there appears to be universal agreement in the Chamber. The first is the necessity for having the intelligence services for the security of the state. The second—even though there may have been some sad exceptions to the rule—is the obligation to the members of those services for work well, loyally and truly done. The third matter of agreement is the need, where it is appropriate, to ensure that there is no divulging of secrets learnt in that service to the detriment of the realm. It is in regard to that last part that a discussion can be started which I hope will be useful to the Minister when he replies.
My noble friend Lady Hart of South Lanark posed a question about loyalty: she asked, loyalty to whom? Your Lordships may think that, within the confines of the constitution that we treasure, the loyalty of the intelligence services may well be seen to belong to the Crown, which represents the safety of the realm. Within our constitution there is a remarkable concept which I believe has the admiration—certainly in its title—of nearly every other country in the world: Her Majesty's Government and Her Majesty's loyal Opposition. Your Lordships may well feel in the circumstances that that concept has to be borne in mind when considerations of this kind are being discussed in the House.
Perhaps I may start with a discussion about whether the existing law is in the slightest degree clear in order that the White Paper, the publication of which is anticipated in June, can be written with some clarity as to what that law is. Only two days ago an honourable Member in another place, whose name has been referred to in your Lordships' House this afternoon with respect, Mr. Richard Shepherd, asked the Attorney-General whether it could possibly be desirable to have a lifelong undertaking about confidentiality when such matters as treason, fraud and other criminal acts might be involved. The reply of the Attorney-General on 14th March at col. 855 of the Official Report of the other place is:
"The first thing to establish in these difficult matters is the law of the country. My hon. Friend is aware that considerable importance is attached to the fact that former and serving members of the security services owe a duty to the Crown".
I observe that the lights in the Chamber have dimmed. I think it is quite intentional that I be prohibited from reading the quotation, though I do not accuse the Attorney-General of taking any part in the occurrence.
The passage continues:
"The question of whether that duty is owed in all circumstances, including the circumstances to which my hon. Friend has referred, is before the courts at the moment. We shall have to see what the House of Lords says when it hears that appeal on 7 June. Then will be the time to consider what, if any, changes should be made to the law by other means".
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I noted that the judgment in question was to be given in June and equally—the Minister will correct me if I am wrong—that the White Paper was promised for June. I wonder whether that White Paper will have the clarity that it ought to possess when the Attorney-General himself appears to be waiting until June for a judgment of the House of Lords in order to decide whether the issue of confidentiality is applicable in the circumstances to which we have been referring this afternoon.
It was suggested very clearly by the noble Lord, Lord Campbell of Croy, that an answer might lie in a lifelong contract of silence required from members of the security services—a statutory obligation which your Lordships may be relieved to know does not occur in the Life Peerages Act. It seems to me that reliance upon a contract as the sanction to stop wrongful disclosures of the kind that we have been hearing about suffers from certain deficiencies.
First of all it invokes a civil remedy and, as most of your Lordships will know, as a rule a civil remedy can be the subject of argument. The matter is neither decided suddenly, as is a criminal act which upon conviction is immediately followed by punishment, nor decided by jury. It is decided as a question of law and interpretation with rights of appeal that often take a very long time to be heard. Therefore, would a contract as such be the appropriate remedy in this case when it is perfectly obvious that the people whom we are anxious to go for (if I may use that expression) are not likely to be deterred by the issue of a civil writ or even an application for an injunction which may lead to proceedings for contempt of court? Would that be sufficient? Is it applicable?
Other speakers in this debate have raised the very important consideration of whether there ought to be a contract of complete silence for life, quite apart from the issues that were raised through the Attorney-General the day before yesterday, as mentioned in the passage that I read out, concerning questions of fraud, treason and other matters that obviously ought to be divulged. I suppose that the answer to the second point might be, "Well, happily, there is now a situation in which proper reports and complaints can be made to a new ombudsman, Sir Philip Woodfield, who is the Staff Counsellor"—that is the title that he has been given. Although many noble Lords asked for a tribunal to be set up almost in the way suggested by the noble and gallant Lord, Lord Carver, in the context of his speech, at least one could be grateful for the fact that something existed by way of an institution to which certain complaints could be made. I hope that that situation is working out well.
However, in a previous debate I raised with the Minister the subject of the availability and ease with which complaints or worries of that kind could be made in future to the Staff Counsellor and I asked him whether it had been made abundantly clear to members of the security services that they had nothing to fear by way of any adverse circumstances happening to them as a result of going to see the Staff Counsellor or of communicating with him about any matters which were thought to be going awry in the security services.

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The Minister was courteous enough, as he always is, to reply to me by letter. I have his consent to read out to the House that reply:
"As I indicated in the debate, the Staff Counsellor keeps confidential the identities of individuals who approach him when they so request it, unless security considerations determine otherwise. As to the ease with which Sir Philip Woodfield may be consulted, all members of the security services have been advised exactly how he may be contacted in complete confidence. The method of approach is simple and direct.".
I know that the noble Earl will not think me ungrateful if I say that that was not a reply to the question that I put. I am quite sure that it is made clear to the members of the security services that they will have easy contact with Sir Philip Woodfield. What this House wants is an assurance that it will be made abundantly clear to members of the security services that they have nothing to fear from bona fide communication with Sir Philip Woodfield when they feel that anything is going wrong or that something should be brought to his attention which it would not be sensible, convenient or whatever to bring to the attention of a superior officer. I believe that that is a most essential matter.
In your Lordships' House it never does to make a speech which consists entirely of negative pronouncements. Therefore noble Lords are entitled to ask whether there is any positive contribution that can be made to the question of how to stop the kind of conduct which I believe is found objectionable by all sections of the House; namely, blatantly making money out of what are supposed to be Crown secrets and secrets which are obviously a matter of great importance to the security of the Realm.
The only answer that I can give is some sensible substitution for the ridiculous Section 2 of the Official Secrets Act. Clearly we must not be too insular in our concept of what we are trying to stop. I hope it will be agreed that action must be limited to matters which quite definitely affect the security of the state, whether they are matters of terrorism or concern the enemies or potential enemies of this country. Noble Lords may immediately say, "Well, it may very well be that you have some sort of definition in a new Official Secrets Act which will commend itself to Parliament. But what will be the deciding factor as to whether or not that situation has been created and whether there is a breach of its provisions?" I can see no alternative. A Minister who is responsible for these matters has to take the view that the provisions have been breached and to obtain the advice of the Law Officers of the Crown and the Director of Public Prosecutions as to whether an offence has been committed.
The answer to the most interesting and important question raised by the noble Lord who introduced this debate must be that it is a matter of criminal law and not of civil rights. It must be the criminal law that protects the public, who are entitled to know, and to know especially, about matters which are already within the knowledge of an enemy and other countries and their media, but who are not entitled to know matters which affect the security of the state in cases where that security may be impinged upon should publication take place.
4.50 p.m.
The Minister of State, Home Office (Earl Ferrers): My Lords, we have had what I believe has been an extremely interesting debate which has produced a lot of very constructive, thoughtful speeches. It is always a privilege to speak after the noble Lord, Lord Mishcon. It is always a quite alarming prospect. He speaks with total clarity. He seems to speak without any notes. There was this evening a touch of H. M. Tennent about it. The lights went down as he spoke—no reflection on what he was saying—and then they went up again. The noble Lord, Lord Mishcon, continued unperturbed, purposefully and faultlessly. I admired that.
My noble friend Lord Campbell, in introducing this debate this afternoon, kindly said that he did not expect any answers. I commend that helpful approach to noble Lords who wish to put Questions which I have a responsibility to answer! I also enjoyed the speech of the noble Lord, Lord Annan, not only for its content and his memory, but because of his method of delivery, which, rather like the noble Lord, Lord Mishcon, made me feel that I had momentarily been transported to Stratford-upon-Avon.
The debate was also remarkable because of the maiden speech of the noble Baroness, Lady Hart. Our acquaintance, regrettably for my part, has not been a deep one, but we met when we both sat on the Armitage Committee for the political activities of civil servants way back in 1977. When the noble Baroness joined herself in happy harmony today with my noble friends Lord Home and Lord Lauderdale, and referred hack to 1931, I thought that she was a little on dangerous ground. I was glad that it was only the aggregate of service to Lanark to which she was referring and not to the aggregate of service.
The noble Baroness managed with remarkable restraint to contain the natural tiger of controversy which she always has, and which is always ready to leap out at any possible opportunity, although it did not do so today. It is that natural tiger of controversy that gives the noble Baroness her remarkable character. We look forward to hearing her on many occasions when doubtless the tiger will emerge a little further than it did today. However, we were glad to see her here among us.
If I say that I am grateful to my noble friend Lord Campbell of Croy, noble Lords will understand if my gratitude is muted. I am of course glad to have the opportunity to underline that in our view the essential national interests of this country must impose upon every member of the security and intelligence services a lifelong duty of confidentiality. I was glad my noble friend Lord Campbell underlined that the need for essential and secure intelligence for the protection of our country and our citizens should continue.
However, noble Lords would not expect me to give a seminar on how the security and intelligence services set about recruiting people to their staff. To set out such matters in detail would provide valuable information to those who are hostile to our country. Your Lordships will understand why I cannot

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therefore respond in detail to those kinds of questions which have been raised during the debate.
Your Lordships are aware that the Government are, and have been, involved with a number of legal actions in order to protect confidential information. There is a simple, fundamental and vital principle which must be preserved: that members of the security and intelligence services have a duty to the Crown not to disclose any information which they may have obtained during the course of their employment, unless they have first received authority to do so. That obligation must obtain whether they are in active employment or retired.
Of course there is the point to which the noble Baroness, Lady Hart, referred. She said that there is the right of freedom of information and the requirement of confidentiality. I was glad that she underlined the necessity for confidentiality. It is a difficult balance to keep and the needle on the public meter is perpetually hunting to try to find the correct balance.
My noble friend Lord Campbell's Motion refers to a contract. The noble and gallant Lord, Lord Carver, found this matter interesting. The noble Lord, Lord Annan, thought that such a contract would not work. I was interested in the controversy which that proposal produced. I prefer not to follow that controversy. Using that word "contract" puts one in some difficulty. The question of whether there is a contractual relationship between the Crown and its servants is at present before the courts. It would be wrong therefore for me to go too far down that road today.
However, I think that most sensible people would readily understand that the nature of employment in the security and intelligence services, and the requirements of national security, demand that there is a duty of confidence and that this must be respected. The duty, if it is to make any sense at all, must continue to apply throughout an officer's life and it cannot end with retirement.
I was glad to hear my noble friend Lord Colnbrook, with his wide experience, reinforce this point so strongly. I was especially glad to hear the suggestion be made at the end of his speech—that in future, if any alteration of the law is going to be made, it should not permit anyone to put his country at risk. This was a very helpful suggestion which I shall draw to the attention of my right honourable friend. I doubt whether there is anyone who can imagine a security service working effectively on any other basis. To suppose that any security service could operate effectively without such confidentiality is, frankly, to wander in the realms of pure fantasy.
I was glad to hear my noble friend Lord Campbell acknowledge the crucial need for the duty of confidence in the debate which we had on 10th February. He said that the security and intelligence organisations must operate in secret if they were to do their job. He went on to say that almost everything connected with their work must be secret if they were to be effective. I am bound to say that I concur 100 per cent. There is no other way.
There is much talk about open government these days. That is very important. But there is one matter
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about which there cannot be openness. That is the security and intelligence services. The fact is that no organisation can operate effectively if its employees are able to disclose publicly any or every piece of information with which they are entrusted. This is true in the commercial world. It is true in the work of government departments. It is axiomatic in the work of the security agencies.
Unauthorised disclosures by those who have the privilege of privileged and secret knowledge can do untold damage. My noble friend Lord Campbell reinforced this. Bit by bit, these disclosures can assist hostile countries and can enable groups and individuals to build up a picture of our security arrangements which may be unanticipated by those who divulge apparently innocuous information. The disclosure of sensitive material, sometimes in innocence, can alert, for example, terrorists and put the lives of others at risk. Unauthorised disclosures damage the confidence in the security service of those who deal with it, they jeopardise its access to intelligence of what might be of crucial importance to this country. I was glad that the noble Lord, Lord Moore of Wolvercote, referred to that in what was a meritoriously succinct speech.
Such disclosure damages the confidence of our allies in our own country. It creates a reluctance to share knowledge. It destroys trust and it risks lives. There is nothing whatever to be said in favour of it other than for those people who find it a virtue to criticise any government or country for holding a secret.
There are certain things in every family, in every business and in every person which have to be kept secret. A country is no different. There are some parts of our national life which have to remain secret. Those who hold these secrets are in a unique position of trust. The noble Lord, Lord Birdwood, had strong words for those who break this trust. They debase themselves. They debase their personalities and their characters and they let down their countrymen when they break that trust.
Our insistence on the duty of confidence is not a question of trying to stifle a free press. We are not engaged in seeking to foreclose parliamentary discussion about security matters when Parliament has a legitimate concern to express its views. If the record is studied, it can be seen that there has been a remarkable history of frankness in your Lordships' House and in another place on that.
I was interested to hear the suggestion of the noble and gallant Lord, Lord Carver, that there should be a tribunal to vet requests to publish. My noble friend Lord Colnbrook dismissed this idea as being unrealistic. I shall certainly draw this to the attention of my right honourable friend the Home Secretary, but I have to say that the Government remain strongly of the view at present that members of the security services should not reveal details of their work, even if they have been retired for a number of years. The information can still be highly valuable to those who are our enemies.
My noble friend Lord Campbell of Croy referred to the Official Secrets Act. This has come under much public criticism. The Government accept that it needs

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to be reformed. My right honourable friend has said that the Government's proposals for the reform of the Act will be set out in a White Paper which he hopes to lay before Parliament in June with a view to early legislation. The noble Lord, Lord Mayhew, tweaked the Government for not wishing to see Mr. Shepherd's Bill, the Protection of Official Information Bill, go through. He asked why. Perhaps I can tell him.
Matters relating to official and national secrets are of a highly sensitive nature. We take the view that the Government, whose responsibility it is in these spheres to protect secrets, must take the initiative in putting forward proposals for alteration. Had a Bill been put forward by a Private Member, the Government would have to be in a position of responding to all the various arguments and all the various amendments put down to it—and which would inevitably be put down to it—at a time when the Government themselves have not made up their minds.
The Government are considering the matter. They are considering all the views. They will consider the views which have been expressed today. At the end of that, they will produce a White Paper. There will then be discussion on the White Paper, no doubt inside Parliament as well as outside Parliament. Then there will be a Bill and there will be further discussion. That is a reason why, in order to get this right, we felt that that was the right course to take.
The noble Lord, Lord Mishcon, referred to what was said recently in another place. I can assure him that if anything emerges on the Lords appeal in the Wright case which needs to be taken into account, it will be.
We have embarked on a work to identify a suitable replacement for the Official Secrets Act 1911 because we want to see information which is of importance to the safety and the security of the nation protected. Everyone agrees that the present legislation is nearing exhaustion. It is too wide and it is too weak. The proposals will come in this White Paper and there will be opportunities for debate on it.
At the heart of my noble friend Lord Campbell's Motion is the proposition that more can and should be done at the time of recruitment and appointment in order to ensure that the confidences which are obtained are not broken later. My noble friend made the interesting suggestion that the law on copyright should become involved. My noble friend Lord Colnbrook, in a happily confessional way, said that he was lost when that suggestion was put forward. I do not blame him, and I do not propose to pursue the thoughts of copyright too far this afternoon.
I believe it is premature at present to talk about possible changes in the law. We shall first have to see what the final outcome will be of the legal actions which are now in train concerning the duty of confidentiality. That will be the time to consider what, if any, changes should be made by any other means. I do not think it will surprise any of your Lordships to know that the Government have been considering whether any other measures would help to uphold the duty of confidentiality which is
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imposed on public servants. We will obviously want to consider carefully the interesting points which have been made from all sides of the House this afternoon.
My noble friend Lord Campbell has argued the need for a legally enforceable contract to be entered into. While I cannot say too much about that, I thought it might be helpful if I let your Lordships know what is being done already. The position is this. On joining the security service new entrants are given a comprehensive briefing on the need to protect classified material and to respect the duty of confidentiality. They are required to sign a declaration that they are aware of the implications of the Official Secrets Act.
The matter is not left there. Staff are regularly reminded of these requirements by their line managers and by their personnel officers. They are also reminded of this during the periodic reviews of their security clearance. Getting the recruitment stage right is obviously one vital step towards ensuring the loyalty of staff. In recruiting its officers the security service spreads its net widely in order to encompass a broad range of backgrounds, of experience and of skills. There is a particular need to look for people who possess the qualities of reliability and discretion which are required for the handling of the sensitive matters with which the service deals.
Your Lordships would not expect me to go into a detailed description of the selection procedures, much as this might whet the appetites of the curious. Let me just say that the selection procedures which are employed are geared to the special need for reliability and discretion, and a variety of selection methods are used.
Any organisation must see that it gets its management procedures and structures right, not least in the interests of securing the loyalty of its staff and their respect for each other, as well as their respect for the position of trust which they enjoy. Improvements have been made recently. Your Lordships will remember the Bettaney case. The Security Commission's report was presented in 1985. It made certain criticisms and recommendations on the management of the security service and in the field of vetting in the light of that particular case.
As a result, the director general prepared a report on changes in the organisation and management of the security service. The report was shown to the Security Commission. My right honourable friend the Prime Minister, my right honourable friend the Home Secretary and the Security Commission have paid tribute to the amount of thought and effort which the security service devoted to this task.
The process has continued. The style of management has become more open and the procedures which affect the appraisal of staff, their postings and promotions, have all been reviewed and improved so that proper attention is paid to career planning and development. As a result, morale, which is so vital in a service that by its very nature cannot generally defend itself in public, is good. Changes which were promised in the field of positive vetting have also been made and more investigating officers have been recruited.

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Your Lordships have referred to the post of the Staff Counsellor and it may be helpful if I explain the part which he plays in these arrangements. One of the concerns expressed in recent years—and the noble Baroness, Lady Hart, referred to this—was that members of the intelligence and security services who were troubled over particular matters and activities should have a means of going outside the ordinary management structures in order to have those anxieties considered. My right honourable friend the Prime Minister asked the director general of the security service to consider the proposal and to let her have some recommendations on the subject. The appointment of Sir Philip Woodfield as Staff Counsellor for the security and intelligence service is the result of that consideration.
The appointment of a Staff Counsellor complements the other changes in management of the security service. Sir Philip is available to be consulted by any member or retired member of the security and intelligence agencies who has anxieties—anxieties which relate to his or her work and which have not been possible to allay through the ordinary processes of discussion with line management. He provides an opportunity to talk in confidence to someone who is senior and knowledgeable about the background but does not have the day-to-day responsibility for operations and is independent of management structures. He can be valuable both to the individual member and the well-being of the service as a whole and act as a safety valve.
The noble Lord, Lord Mishcon, referred to a letter which I sent him and he said in that courteous way of his that I had not actually answered the point which he was addressing. If the letter did not do so I apologise to him because I would not wish him to think that I had deliberately not answered it. He wanted to know whether people in the intelligence services who took the opportunity of seeing Sir Philip Woodfield would be able to do so without fear of any retribution. I am happy to reassure the noble Lord that people who go to the Staff Counsellor in good faith have nothing to fear.
Lord Mishcon: My Lords, perhaps the noble Earl will forgive me. I am sure that that is absolutely right. However, I want to know, as other noble Lords may, whether members of the security and intelligence services are aware beforehand that that is the position and that is not just a statement by the Minister. In other words, are they so informed?
Earl Ferrers: My Lords, I take the noble Lord's point. I will ensure that, if they are not so informed, they are informed. I realise that that is a very genuine and real anxiety and it is important that members of the security services should know that if they wish to avail themselves of the services of Sir Philip Woodfield they may do so in good faith without fear.
I tried to explain to your Lordships some of the improvements that have been made recently in the security services. I am grateful for the support which has been given this afternoon from all sides of the House to what is a vital and frequently dangerous
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task and is undertaken by our security and intelligence services with remarkable vigour. I was grateful to my noble friend Lord Campbell who put that so forcibly at the end of his speech. That support will be appreciated by those who undertake this difficult and dangerous work on our behalf. Of course we shall study the suggestions which have been made by your Lordships with great care. This is an important subject. There is a White Paper coming out in the future and we shall listen with care both now and in future to the suggestions made as to ways in which we can improve these services.
Lord Campbell of Croy: My Lords, I rise briefly to reply to the debate although we are well within our time limit. I thank all speakers who have taken part and I particularly congratulate, as others have, the noble Baroness, Lady Hart, on her maiden speech, made with a fluency with which we were all familiar in another place. We look forward to hearing her many times in this House.
I should like especially to thank the Minister for imparting to us what he felt he could on this sensitive subject. I understand the difficulty about present legal proceedings to which he referred, and that is one reason why I did not press him for information or replies.
I should like to ask one or two questions. First, the noble Lord, Lord Mayhew, asked me about the proposal for a contract and its relationship to the coming legislation which aims to replace Section 2 of the Official Secrets Act. My proposal is not intended to be contrary to any Bill that comes before Parliament. I hope that the ideas that I have put forward are in tune with the legislation of which the White Paper will be the forerunner.
I should like to point out that the new legislation is likely to cover the whole public service, as did the Official Secrets Act. Therefore, it will be used in many departments where there is very little secret work being carried out. However, the organisations which we have been discussing today operate in complete secrecy so that they are a special group and I hope that arrangements for them will be in tune and within the ambit of the new legislation to replace Section 2.
I should say for the record that it was twice suggested that Burgess was a member of one of those organisations. His position was simply that of a temporary employee of the Foreign Office, having come from the wartime Ministry of Information, and at the time the Foreign Office personnel department had for some period been trying to part with his services and terminate his work because he was unsatisfactory in so many ways. Far from being recruited by our service, he must have been recruited by a Soviet service. However, he was not a very good recruit for anybody.
The noble and gallant Lord, Lord Carver, contributed suggestions on the care needed in recruitment and training. I am sure that the Minister will take those into account. I was delighted that the noble Lord, Lord Annan, was able to take part in the debate because he had previously told me that he might have to be abroad. What a loss it would have been to have been deprived not only of his

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contribution but also the tour de force of that extract from Troilus and Cressida. He also suggested that dons could be good advisers on recruitment and I am sure that that has also been taken on board.
The noble Lord suggested that contracts are by no means an easy method and I entirely agree with that. I do not suggest that they could be 100 per cent effective. My modest proposal is that it may be a better method for the future than ways which have been employed in the past. I must also make that clear to the noble Lord, Lord Mishcon. With his legal knowledge, experience, lucid thinking and exposition, he has given the House quite a lot to think about concerning the problems of contracts. The Government will no doubt particularly take into account his comments on the application of criminal law required in this field as distinct from civil law.
I hope that government ministers and their advisers will be taking those and other comments made in this debate into full account when preparing this White Paper, which we look forward to seeing in the summer, paving the way for the legislation to replace Section 2. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Business Education
5.20 p.m.
Lord Peston Lord Peston rose to call attention to the state of business education and the role of business schools; and to move for Papers.
The noble Lord said: My Lords, my first duty and indeed pleasure in introducing this debate is to say how much we look forward to the maiden speech of the noble Marquess, Lord Huntly. I am particularly delighted that he has chosen my debate in which to make his maiden speech.
In introducing the debate I am also obliged to declare one or more interests. At my college, Queen Mary College, we take the subject of business education extremely seriously. We have introduced in our undergraduate economics degree and our masters economics degree a business economics option which in a sense shows our bona fides on these matters. More to the point, we are introducing a business school in Docklands, and the noble Baroness will be delighted to hear that we shall finance that school using private money rather than public funds. Indeed, she will probably be more pleased with that than myself. Be that as it may, we certainly are extremely committed to business education, as I am too.
My other point of departure in introducing the debate is of course the statement to be found in the Department for Enterprise White Paper (I can never remember whether it is Department of Enterprise or Department for Enterprise). Chapter 5, under the heading "Management", says:
"Management which is educated, trained and aware of new opportunities is the spearhead of a competitive business."
All of us will agree with that. In that sense, although some of the issues that I and other noble
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Lords will raise are controversial, they are controversial, as it were, with respect to the substance and how to do various things and not controversial in the normal political sense. Indeed, I have myself been very involved with this subject for a great many years. I was horrified to discover that it is more than 20 years since I wrote a hook on the use of highly qualified manpower in British industry. I cannot claim to be the first person who worked in that field, but certainly I was one of the earliest. To say the least, it makes one feel very old to discover that 20-odd years have gone by and that I am now standing in your Lordships' House discussing the same matters.
Another matter which relates to, sadly, a departed Member of this House is the Robbins Report. In that report of the 1960s great emphasis was laid on the importance of management education and particularly on the need to found a couple of major business schools, which we went on to set up.
That is the background. Beyond that there is another kind of background which concerns the state of our economy. I hope we can all agree that taking the longer view and not falling into the trap of discussing yesterday's events, which we will have plenty of time to discuss in due course, we must agree that the future of our country requires us to be not merely as efficient as our competitors but to be one step or more ahead. Many of us believe, and the evidence shows, that at the moment we are still relatively backward. That means that as a first priority we must learn to make better use of available resources and to exploit known technology as efficiently as possible; certainly more effective than we do.
More than that, we must be innovative and in the forefront of technical progress. I have argued in your Lordships' House that one part of our national strategy must be to find more resources for basic science. I have also argued that the whole of our labour force needs to be better trained, and retrained, as other noble Lords have argued on many occasions. I still believe that. My theme today fits in with that and concerns what is called investment in human capital, but this time my emphasis in on management. Simply because I emphasise management I do not intend to argue that the other matters are somehow unimportant. They are all equally important but we cannot discuss everything at the same time.
The problem with education for business is multifaceted. Again, to produce an echo of another debate, it is partly a matter of positive images; but in this case it is, so to speak, a matter of the psychology of industry and of what image industry presents to our young people. It is also a matter of market forces and economics, to which I shall return later.
On the subject of positive images, there is no doubt in my mind that work in industry has not for some time—in fact, perhaps not at all in this century—appeared to be sufficiently attractive to our best young people. They have not seen industry as a place that welcomes the talented. Industry has appeared to them to be anti-analytical, anti-intellectual and anti-cultural. I have to say with regret that they have also seen industry as politically biased

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and not as an environment in which someone with progressive views can flourish. I should add that I use the word "progressive" not merely to refer to our side of the House but also to refer at least to some views on the government side of the House.
Young people have not seen industry as a place in which people who are concerned with general welfare are at home, or people who have such beliefs more generally would be welcomed. That is the pity. Equally paradoxically, they have not seen industry as a place to welcome the tough-minded either; namely, those who wish to pursue efficiency in what I will call, for want of a better expression, a ruthless fashion. Indeed, for too long British industry and British management have settled for a quiet life.
I make these remarks because in arguing, as I believe most strongly, that we must encourage business education, it seems to me that a part of the problem—perhaps a large part—lies with industry itself. It is all very well to say that schools, colleges and universities must take a more positive attitude to industry. I believe that very strongly indeed. Equally, I believe that industry itself must change if it is to use what the education system is capable of producing. It must take career development more seriously.
This is a topic which has concerned me for many years and I believe that industry must, in particular, take middle management more seriously and pay middle management better. One of the better consequences of the Budget yesterday—I break my rules slightly to say that there are not many good consequences that I can see—is that reducing business perks as a reward to middle management is a most sensible course of action. It is better to pay a proper salary and not, so to speak, fob off middle management or management generally with a minor concession or car.
That leads me to a problem. Simply to say that what we must do in education is to produce what industry wants is absurd. As I have argued on previous occasions, and as other noble Lords have argued, the problem is precisely that industry is not a good judge in this area of what it requires. My own view is that a major task of management education is to educate and persuade management and industry in what they need and the value of business education in the first place.
Having said that, I turn to business education itself. Here again, I come to a possible paradox and possible contradiction. Certainly questions of great difficulty arise. In the first place, it is apparent to me that we need courses of the highest academic standards. I also believe strongly that those courses must have a quantitative bias. That means that we must one way or another remove British management's distrust of the high powered, of the technical and of what is analytical. Its reliance on rules of thumb and on traditional methods must be subject to continual scrutiny.
In my younger days, when I needed the money, I used occasionally to act as a consultant. The most frustrating thing of all was that one would turn up as a bright young man with all kinds of bright, young ideas only to discover that these had no impact because industry was totally locked into a traditional
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way of doing things and definitely did not want change. The last thing it wanted was bright young men. That was before the days of bright young women of whom we hope to see many more in the future. That has to change.
This is where the paradox arises; namely, that, at the same time, the courses we offer must be practically-minded and practically-directed. My view is that the business schools have not got the balance right. I put this forward as a hypothesis. On the whole what they do is too academic and too little concerned with the practical reality of industry. In that connection I was particularly delighted to see a reference in a paper the day before yesterday to my old colleague Sir Douglas Haig who probably goes a little further than someone more judicious like myself. He refers to business schools as not taking a blind bit of notice of industrial trends. That may be a little strong but one takes exactly the point he has in mind. Business schools must address themselves to the practical needs of industry and not see themselves as solely devoted to academic matters.
It is not true of all business schools and courses when I talk about the lack of practical impact. Interestingly enough, in the lesser known centres—not the least of which are the polytechnics—one will often find courses of a more worthwhile nature than those in places which are more famous and perhaps with a better reputation in academic circles.
Perhaps I may add one other point now that I am in my normal acerbic mood. I do not believe that the business schools to which I have referred in particular have quite got the balance right between what one might call manufacturing industry on the one hand and commerce on the other. To put it crudely, it seems to me that the needs of the City of London are met slightly better than those of medium-sized firms in the North and North-West. This is a subject upon which I hope other Lords will speak. I would emphasise the enormous value of short courses tailor-made to meet the needs of specific firms and specific industries and responding to local and regional demands. I believe that this is an opportunity that is still available. But it is still not met by the various educational institutions we have been talking about.
I should like to raise another matter which, again, is rather controversial. It is the difficulty to which I referred earlier; namely, entrepreneurship. As I understand the Government view, it is that one task of those of us in education—I am at least still somewhat in education—is to encourage entrepreneurship. My difficulty is that the problem is really two-fold. I am not clear that entrepreneurs can be made rather than born. I am not at all clear whether one can do anything at all about the entrepreneurial spirit. I shall be very interested to hear the contributions of the other noble Lords on this subject. It is by no means obvious to me that what Britain actually lacks is entrepreneurs. It seems to me that the problem with our entrepreneurs is that their efforts are excessively devoted to certain areas, notably services, including retailing, rather than producing things. I do not make the vulgar error of assuming that somehow things are better than

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services. They all contribute to values. But within that situation we still have not got the balance right.
I shall be interested to hear the reply of the noble Baroness. I am not convinced that for this nation encouraging entrepreneurship is what matters. I reiterate the point. The problem with industry is that people in it are still insufficiently appreciative of what we might call first-class and up-to-date management. I believe that many of our entrepreneurs are gifted and intuitive. But they are amateurs. One of their problems is that they sometimes undervalue the professionals.
I have referred to the regional problem and I hope that other noble Lords will join in the debate on that aspect. I believe our regional policies might turn out to be more successful if more of our business education was developed in the regions. In education, in the days when it was very hard to get teachers to work in the less attractive parts of the country, there used to be a view that those who did their teacher training in those parts would be more inclined to take jobs there. That may well still be the case. If our potential first-class managers have some experience of being trained or educated away from London and the South-East, they might find it more attractive to operate as managers in other parts of the country.
I have no desire to detract from the achievements of the London Business School and since I have introduced my own college, I have no desire to detract from the hope that Queen Mary College will be very successful as a business school. I understand that Oxford and Cambridge are moving more strongly into the business school area. I have no desire for them not to be successful. Having said that, I hope that a great deal of future development will occur in Scotland, Wales, Liverpool, Newcastle and similar places.
My final comments go back less to business schools themselves than to the business element in other degree courses. I have been convinced for many years of the desirability of introducing a business element into many other kinds of degree course. I am very pessimistic of the future here; but I also believe strongly in the value of sandwich degree courses. We have seen many developments of joint degrees: natural science degrees coupled with business and economics; engineering degrees with business and economics; and language degrees with business and economics. I believe that to be wholly desirable, but much more is needed to be done.
I emphasise the sandwich degree side. It has concerned me while I have been involved in the teaching of economics as well as during the time when I was a student. Most of us involved in this subject as students need to be appreciative of the real world which our subject is about. Yet we have virtually no experience of the real world before we study the subject. I hope I do not shock the noble Baroness before she replies. My own view is that no-one should be allowed to read for a degree in the social sciences without one year of work experience before going up to university. I believe that very strongly indeed. Those students might then have some understanding of what the subject is about.
Particularly as regards business education, one of the worries is that young people on degree courses will have no idea what it is they are discussing until they have left. They will have no feel for the matter. What one would really like for some of our young people is a high-powered programme spread over, say, five years. Within this, one would have an undergraduate curriculum, a sandwich element and even a master's curriculum. I suppose that most people would regard that as rather too high flown and well beyond what we can afford.
That covers most of the ground I wish to explore. It is obvious to noble Lords that I have put forward certain views in the way of statements. As my friends know, that is very much my personal style; namely, I say things positively rather than ask questions. My intention is to ask questions and I look forward to at least some of the answers from noble Lords. I beg to move my Motion for Papers.
5.40 p.m.
The Marquess of Huntly: My Lords, before speaking about what I have clearly set out on the notes in front of me, perhaps I may say that I am very heartened that I do not find myself in total contradiction of the noble Lord, Lord Peston; for to be in that position as a maiden speaker would be an appalling predicament. As I develop what I wish to say, I hope that your Lordships' House will find that I have avoided the controversial element which is so important in the role that I have to play today.
At the point at which I learnt that your Lordships would be discussing this Motion I recognised that it would be the postgraduate business schools that would chiefly be under consideration today. It is true that the stream of graduates that they produce have to compete in the job market with students from the private sector. The jobs that all those candidates seek may be the same.
My reasons for wishing to speak are threefold: first, because I am a product of a business school; secondly, because I retain a financial interest in a business school, and it is the way of this House that one makes such involvement perfectly clear so that self-interest can be seen; and thirdly, because I try to employ the methods and skills that I was taught at business school in the conduct of a complex business life.
I support the view that there is a need for further thought as to the effectiveness of business education and that we are correct to be considering this Motion this evening. If I have any contribution to make in this debate it is on account of the experience that I have gained at business school—a private sector school. I hope that any observations that I make will not be seen as controversial, bearing in mind the respect that a maiden speaker properly accords to all Members of this House. Further, I trust that I shall not be seen as using this unique and privileged opportunity to promote the cause of self-interest.
I am heartened that moves to draw up and monitor standards relating to further education in the private sector are currently under review. That is overdue. There have been some appalling examples of private schools operating in a manner which I do not believe

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any Member of this House would wish to see allowed to continue. People who know no better have been afforded an opportunity to attend an educational establishment and what they believe will be a good quality course only to learn to their dismay that it turns out to be very much the reverse. Therefore I support such moves.
With regard to business education in this country, we need to be concerned not only about teaching standards, by which I mean whether those who stand up and teach have some business background as well as merely an academic background. We need also to be concerned about the value of the qualifications gained and the use to which they can be put. I believe that is very important. It is self-evident that there is no benefit in gaining what is perhaps a very difficult qualification to have earned in the first place if it is of little use to you in earning your living.
I should like to make three observations about the private business schools in this country, again drawing only from the experience which my involvement gives me. First, though they correctly receive no public funding, they prosper and generate substantial sums of foreign exchange despite extensive competition from Australia, America, Canada and indeed elsewhere as well. Secondly, they offer a more practical business education. It is in this area that I am so gratified to learn that the noble Lord, Lord Peston, and I have a common view. Consumer response indicates that they are correct to do so. They are totally market driven and must satisfy the customer effectively or close down; there is no safety net.
Thirdly, through the alternative syllabuses which they offer, they teach the student to look at business from a practical as well as a theoretical point of view. I believe that it is necessary to understand the jungle that business really is and not just to be allowed to believe in the model of it; to promote the leadership skills and creativity that are to a greater or lesser extent in all of us. Again, it is very difficult not to agree with the noble Lord when he asks whether it is possible to put entrepreneurial flair into someone if it is not there in the first place. That is a very valid point.
Students of business must learn to bang on doors and find out what it is like to be faced with confrontational issues. One of the problems of the classroom or the lecture room is that the opportunity does not exist to learn what it is like to have to pit your wits—which means your money—against somebody else's. One must learn to develop powers of persuasion, and most of all, as is so often expressed by the government of the day, to see things the way the customer sees them.
So in the private business schools that I have known the student begins to learn both sides of the equation; on the one hand, the experience gained while still a student—and that is the important point; discarding the jeans in favour of the dark suit and getting into the community—and, on the other, learning the disciplined syllabus of traditional management training, the marketing, accounting, statistics and so on, so that the growth and
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development of the target business can be monitored in the correct way.
I trust that I am correct that this evening we are questioning as a body whether we are making the best use of our resources to serve industry and commerce and, as has already been mentioned, the City, through our business training programme. Perhaps I may say heaven help us if further innovative management systems are discovered next week. The biographies of wealthy, prosperous and successful businessmen are thick with theory on the subject, often in contradiction of each other and yet each able to demonstrate success for its own formula.
I admit that I am not a successful tycoon—or at least I am not a successful tycoon yet. However, for my part, in addition to the study of all the basic disciplines, I advocate employing a maximum of common sense, calling on one's wit and judgment and, as a priority, putting time aside to think before taking those all-important decisions.
I am well aware of the breadth of experience that exists on the Benches of this House and that many noble Lords hold or have held the highest office in government and within our educational establishments. But in deference to this and to the enormous breadth of the subject under consideration, I trust that the House will not view my remarks as those of an advocate of grass-root values without regard to the immense contributions made by the growing science of sophisticated financial and commercial management, as was also mentioned by the noble Lord. I wish merely to propose that it may be beneficial to consider a balancing influence between practical and academic training.
I understand that on occasions such as this your Lordships allow the occasional aside. This may be the best opportunity, or the only opportunity, I shall have of saying with genuine humility how enormously grateful I am for the privilege of being able to speak in your Lordships' House. I am able to do so on account of political and military service rendered hundreds of years ago by members of my family.
I should like to add one point. My father held the title of Marquess of Huntly for 50 years and yet he never came to speak in your Lordships' House. I regret that, not simply on account of common courtesy or as a mark of respect, but because he had the most wonderful speaking manner. He never hesitated over his words; nor did I see him with supporting notes in his hand, whether he was speaking to audiences great or small; although, on reflection, perhaps that could be a reprieve for your Lordships as on almost every subject he held the most outrageous views.
I repeat my thanks to the noble Lord, Lord Peston, for the opportunity his Motion has given me to speak on a subject in which I have such an interest. I hope that some of the points I have made may be seen as helpful in the wider consideration of the subject.
5.50 p.m.
Lord Ezra: My Lords, it is with great pleasure that I congratulate the noble Marquess, Lord Huntly,

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upon his very thoughtful maiden speech and his contribution to our debate based on a double experience; that is, his experience as a student at a business school and now as one who is concerned with the running of a business school. Experience of this kind is extremely valuable in the debates which we have in this House. If we can have people contributing who come here with fresh experience, as the noble Marquess has, that undoubtedly adds to the breadth and importance of our discussions.
The noble Marquess has highlighted some of the issues to which the noble Lord, Lord Peston, referred when he introduced the subject in his important speech. Perhaps the major issue—which many of us will be returning to—is the essential need at all times to ensure that in business training, especially in the business schools, there is a proper balance between the academic and the practical. That fact must never be lost sight of. I believe that we are looking at this question at a very important time in the evolution of business training in Britain.
Last year, two important reports were prepared on the subject; the Handy Report and the Constable Report. In his report, Professor Handy compared the state of business training in Britain with that of our main competitors in the United States. Japan, Germany and France. The conclusion that was reached, after a very detailed survey, was that in all those countries they are taking a much more professional approach to the manager, his training, his skills and his qualifications than we are. There are of course centres of excellence in Britain and firms which have a very good reputation for the training of their managers.
However, on the whole, we demonstrate a spasmodic and intermittent approach to the problem, whereas our main competitors appear—at least on the face of the report—to be taking the subject very much more seriously. Therefore we need to consider how we can adopt some of their methods with the intention, eventually, of overtaking them. This is where the second report, the Constable Report, comes into the picture. That was a report which, on the basis of the findings of the previous survey, put forward various proposals for action.
However, before considering those proposals, I think it is worthwhile recalling the evolution of the attitudes towards business training in this country since the war to which the noble Lord, Lord Peston, briefly referred. I have personally been very much involved for many years in a large organisation which tried to develop its management training in a comprehensive manner. I was also involved in the raising of funds for management training in general, and so was fairly familiar with what was going on.
I think we can refer to three periods, the first of which extended up to about 1960. That was a period when very little careful thought was given to the right approach to the problem. Some firms such as Unilever, Shell and also some nationalised industries—I am glad to say because I was involved in one of them—stood out. They paid particular attention to management training. But, on the whole,
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it was not regarded as a national issue. As the noble Lord, Lord Peston, mentioned, in the early 1960s there was the Robbins Report. I believe it was published in 1963. It recommended the setting up of two major management schools, and that was done, based on the American experience, especially that of the Harvard Business School. I am glad to say that industry, both in the public and the private sector, rallied around that recommendation and funds were raised from enterprises (£5 million in the first instance and another £7 million later on) in order to enable those two centres of excellence and other centres of management training to be set up.
The result of those initiatives is that we now have many centres where the skills of management are being taught, for example, in universities, polytechnics and in private establishments similar to those which the noble Marquess, Lord Huntly, referred to. There is no shortage of places where people are taught management skills but the problem is that there has been no effort to think out a total approach. However, I am glad to say that I believe that this is now being done as a result of the two reports to which I have referred.
A group has been formed under the initiative of the CBI, the BIM (British Institute of Management) and the FME (Foundation for Management Education) to take a new look at the whole status of business training in this country. The group has come to the conclusion that this concept not only needs to be extended in a very big way but that we must take account of the rapidly evolving technological world in which we live.
It is a sobering thought that, of the 2·75 million managers in Britain today, it is estimated that most lack any formal management training. Furthermore, only 21 per cent. are estimated to have degrees of any sort. In the other countries considered, that figure is at least twice as high, so there is a long way for us to go. It is suggested that there should now be established a diploma of skills in management which could create the professional grade of the chartered manager, just as in recent years we have developed the concept of the chartered engineer in order to give more recognition to that vital profession.
It is felt—I must say that I agree with this—that we need to put great effort into creating the concept of the chartered manager; that is, the manager who will have not only the basic skills in management but will also have had a required degree of practical experience. Therefore, if someone describes himself as a chartered manager it will be known immediately by any prospective employer, or anyone he is dealing with, that he has those skills combined with the experience. When this is set up many young people should be encouraged to qualify as chartered managers. That will be the first step.
Secondly, the training of a manager never stops. It is no good thinking, even if this scheme were to be successful—as I hope it will be—that once you employ a chartered manager that is the end of it and he has all the skills he will ever need; that is not true. Therefore a major effort, which will largely be the responsibility of the employer, is required to ensure

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that there is continuous development in the training of the manager.
As regards the concept of the chartered manager, I think that perhaps the Germans lead the way with their apprenticeship scheme, whereas the Japanese lead the way in attention to the development of management skills. With the knowledge that we have obtained from those other countries and under the momentum of the new initiative that has been taken and very much encouraged by the noble Lord, Lord Young of Graffham, we can gain from their experiences. We can introduce a much broader concept of management training, including the idea of the chartered manager as a basis, and then inculcate throughout industry and commerce the vital need to regard management training as a continuous process, right up to and including the post of chairman.
6 p.m.
Lord Russell of Liverpool: My Lords, I should like to thank the noble Lord, Lord Peston, for giving your Lordships' House the opportunity to debate a subject that will be central to our ability to compete in the international economy. Following the DTI's enterprise White Paper, the Handy and Constable and McCormick reports, the setting up of the Council for Management Education and Development and the Charter Group, now is an appropriate moment to reflect upon what it is that we are trying to achieve, and how we can best achieve that within the context of the rapidly approaching unified European market in 1992.
Like the noble Marquess, I am a member of a species which has been the target of much criticism from both industry and government. I have a master's degree in business administration, albeit not from a British business school but from INSEAD in Fontainebleau, France. I should also declare that I am a member of the advisory council of the Association of MBAs, previously known as the Business Graduates Association. In choosing to go to INSEAD, I made a conscious and rather un-British decision to learn about how the rest of the world conducts its business and to do so in a school that is deliberately multinational and multilingual. It was a salutary and stimulating experience. MBAs have been criticised in this country for a variety of sins—overweening ambition, theoretical rather than practical knowledge, and a know-it-all attitude. Perhaps so, but many top companies find MBAs highly valuable and are able to forgive them their sins and put them to good use. A glance at the INSEAD address book reveals that organisations such as IBM, Courtaulds, Digital, British Petroleum, Barclays Bank and Procter and Gamble gainfully employ large numbers of my fellow-alumni. Nevertheless, the dissatisfaction felt by much of British industry with the business-school product has led directly to the Charter Group initiative.
I welcome that initiative as evidence that the climate of opinion about business education is changing. The Charter Group code of practice may at last force the boards of large parts of British industry to face up to their management development
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responsibilities and to acknowledge that a trained and motivated workforce is a vital source of sustainable competitive advantage. I shall find it less easy to welcome the concept of the chartered manager until some important issues have been resolved—issues about which I hope the Minister will be able to comment. I raise all of these issues within the context of 1992 and the absolute—there are no half-way houses—need for us to be internationally competitive.
First, on the concept of the chartered manager much has been said of the need to develop a business education system suited to our insular peculiarities. Unless we are careful, we may produce a wholly British invention carrying neither recognition nor conviction in any other country. I hope that the Government will give vigorous guidance and direction in this area.
Secondly, as to the practicalities of what a chartered manager will be, there appears to be a plethora of potential routes to acquiring chartered status. There is a danger that the quality and content of the courses will be so closely related to particular companies and to their particular industries that uniform standards may be near impossible to achieve, thus devaluing all courses whether good or not quite so good. Will the Department of Education and Science, with its embarrassment of current experience in shaping and reshaping curricula, please undertake to offer solid guidance?
Thirdly, a key point of sucessful management is the ability to take risks. Individuals are more prone to enterprise than institutions or organisations. It is a rare organisation that is able to engender a culture that can profitably and creatively challenge the status quo. Does the Minister agree that outside organisations, such as business schools, have a valuable role to play in lifting management development out of the work place and into an uncomfortable world where traditional beliefs can be recast?
Fourthly, and finally, what of the business schools themselves? For all the apparent irrelevance of a business school degree, the top British and Continental business schools are embarrassed by the paucity of places on offer in relation to the large number and high quality of applicants. I am willing to go on public record as admitting that some MBAs can be a pain in the proverbial; but the vast majority of them are making their way quietly and effectively up through their organisations. They can bring to their place of work a breadth of vision that draws on a pool of knowledge based not on abstract theoretical notions of good and bad business practice, but on a syllabus grounded in theories emanating from empirical observations that are often dismissively described as mere common sense.
Common sense is a valuable commodity. Does the Minister agree that the Government will themselves be lacking in common sense if they do not vigorously encourage and promote the activities of our leading business schools? The year 1992 draws too close for us to attempt to reinvent the wheel. While welcoming the Charter Group initiative, let us not neglect to build on what we are already fortunate enough to possess.
6.8 p.m.
Lord Irvine of Lairg: My Lords, I propose to speak on what I believe to be one of the most crucial challenges facing business education today: the education and training of our businessmen to equip them for the Common Market's Big Bang in 1992. That is the internal market to which the noble Lord, Lord Russell of Liverpool, has just referred. It is an attempt to create a single market in goods and services for all EC states by 1992. It is not just that Customs checks are to be abolished and technical regulations for products standardised; about 80 of the Commission's 300 proposals have already been agreed. Those proposals extend from opening up the financial services sector to a general system of mutually recognised professional qualifications; from an end to national bias and public procurement policy to plans for fiscal harmonisation. I pose two questions: will businessmen be adequately trained and educated to meet the challenges and opportunities of the internal market? What steps are the Government taking to ensure that the necessary training and education take place?
The Government have accepted some responsibility. Starting this Friday they are mounting a campaign to increase the awareness of British businessmen of the advantages and opportunities of trading in Europe. I hope there will be more to this campaign than what we know is already planned: working breakfasts—in practice sometimes a contradiction in terms. There is rather more to the education of businessmen about the challenges and opportunities of the internal market than a cosy chat over a good English breakfast, the one matter on which perhaps we have nothing to learn from our Continental friends.
This awareness campaign is apparently to be launched on breakfasts. So also is the promotion of the Government's inner cities initiative, Action for Cities. I ask myself whether a new political issue is emerging—the breakfast issue. I have a vision of policy being lost to sight behind a mountain of breakfasts.
As the European Court has recently put it, the Community is a Community of law. Whether or not we like lawyers that is the nature of the Community of which we are members. Lawyers as a breed are somewhat generally reviled. I well remember at the time of the Industrial Relations Act 1971 that Barbara Castle in another place complained that it would prove to be breakfast, dinner and tea for the lawyers. That seemed to her and to others to be a quite sufficient indictment of the Act. I suppose it follows from that pronouncement of Barbara Castle that a lawyer such as myself should be the last to deny a businessman a good breakfast. But my hope is that the Government have rather more in store than good breakfasts to equip the businessman to trade in the internal market by 1992. I hope that in the reply to this debate by the noble Baroness we may be told what educational substance there will be to this campaign.
A basic understanding of European Community law and practices must be an essential part of any adequate programme for the education of
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businessmen about the internal market. Businessmen must learn the significance of law and of legal remedies in the Community system. They must understand the significance of competition law; they must know who is the commissioner for competition, what are his powers and what is his policy. They must know what to do if the commission's inspectors arrive on their doorstep and ask to examine their files. They must understand that, if they are obstructed in penetrating a new market by some ingenious non-tariff barrier, they should first think of suing in the courts of the other country rather than rushing off to the DTI or their MP, hoping that he can do something about it.
They must also appreciate that competition in the new internal market of 1992 will mean inward competition as well as outward competition. They must be prepared to meet competition on their own home patch. They must learn that an open market for public procurement means an end to "sweetheart" deals with government departments. There are hard lessons for business to learn if it is not to let itself down and the nation in the process.
I hope that in the reply to this debate we can hear what serious educational content the Government's campaign will have. Above all, if there are to be seminars and courses of instruction, what, if any, use is to be made of the unrivalled expertise of our universities? All our universities now include Community law in their law degrees and some are highly distinguished in the field. One such centre for education in Community law and practice is the Centre of European Governmental Studies at the University of Edinburgh. For 25 years it has been organising seminars on the subject.
It was disheartening to hear its distinguished professor, Professor Edward, a Queen's Counsel with many years of legal practice behind him, as well as great expertise in Community law, complaining recently on the radio that his offer to the noble Lord, Lord Young, that his centre would be enthusiastic in taking part in the process of education for businessmen in the run up to 1992 was brushed aside. The noble Lord wrote to Professor Edward on the subject of the awareness campaign:
"Apart from the national launch, there will be a series of seminars and events throughout the country. We are still in the early stages of planning but I have asked my officials to keep in touch with the programme as it develops and we will let you know if opportunities for your involvement arise".
That was on 16th November 1987. It is now mid-March 1988. Professor Edward of course has heard nothing. I hope that the noble Baroness who will be replying to this debate will inform her noble friend Lord Young that I have called attention to this correspondence.
I think it is a fair comment on the noble Lord's letter to Professor Edward that it should surely not be a matter of the Government graciously considering giving the universities opportunities. The question is whether the Government have the common sense to take advantage of and to encourage business to take advantage of the opportunities which the universities can make available to the Government and to business.

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So I ask: are the Government really interested in involving the universities in the education and training of businessmen to make them ready for 1992? Adequate information for businessmen needs a combined effort of government, the universities, institutions such as the CBI and the Institute of Directors and businessmen themselves.
I hope that in the reply to this debate we may be given some detail about the educational content of the Single Market Awareness Campaign to be launched on Friday. We should be told whether the accumulated expertise of the universities is to be drawn on. The law faculties of our universities are particularly adept at constructing courses geared to the needs of busy people. The universities, for example, as their contribution to the Law Society's scheme for the continuing legal education of solicitors in busy legal practice, are putting on special courses to update solicitors on new developments in particular subjects and even to teach them wholly new subjects. The seminars take place at the weekends or in the evenings and are constructed to meet the convenience of those in full-time employment.
I endorse the remarks of my noble friend Lord Peston about the need for our academic institutions to fashion courses tailor-made for particular requirements of business. I see no reason why the law faculties of the universities in our major commercial centres should not design courses in Community law and practice for British businessmen in the run-up to 1992. They should be encouraged by the Government to do so and the Government should encourage businessmen to participate.
Working breakfasts are costly PR. They have the authentic ring of the really phoney. Education, by contrast, is not PR but is substance. So I hope that we shall hear in the reply to this debate from the noble Baroness what precisely, as part of their Single Market Awareness Campaign, the Government will be doing to promote the education and training of businessmen in the run-up to 1992 and to what extent they will ensure that our universities are involved.
6.19 p.m.
Lord Taylor of Gryfe: My Lords, I put my name down to speak in this debate because I wished to assure the noble Lord, Lord Peston, from these Benches that we share his concern for the promotion of business education. I want to make a general comment and deal briefly with the position in Scotland, for which I assume the Minister has no responsibility whatsoever. Before doing so, I wish to congratulate the noble Marquess, Lord Huntly, on a model speech. I had always associated the title of the Marquess of Huntly with estates in Aberdeenshire and the grouse moors. How delightful it is to see that the noble Marquess is an MBA and a practical teacher in the field of management studies. That I think indicates the changing climate in relation to management studies.
I was interested to read the report of Professor Charles Handy when he made the comparison—to which the noble Lord, Lord Ezra, referred—between ourselves and other countries in the industrialized
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world in the field of management education. Professor Handy states:
"Management in Britain has traditionally been more to do with pragmatism than professionalism. Common sense, character and background have been thought more important than education, with experience the only worthwhile school. These things are still widely held to be true, but the complexity of modern business and the rising levels of both education and expectation among younger managers have brought demands for a swing towards professionalism."
I believe these words to be profoundly true. They should be learnt. How often have we heard, particularly those of us who have been in business for a long time, the words, "Oh, it just needs a hit of common sense and experience and you are all right"? The companies who take that view and reject professionalism in management very often find themselves the victims of takeovers by companies which have professional managers and can exercise their skills.
One of the factors that affects the changed attitude to management education is inward investment. I have seem this in the Scottish scene. On my doorstep there is a huge factory of IBM. Not so far away is the new Nippon Electronics factory—an import from Japan. If one looks at those successful companies one will see that they have brought professionalism in management into the industrial scene. They have raised the whole standard of management in other neighbouring industries which are competing for employees.
When I talk about the impact of the companies coming in in changing attitudes to professional management, I think that we must recognise that professional management is very mobile and that the competition for management is great. People with the appropriate qualifications can move readily with high rewards to the United States and to other parts of the world where their professionalism is recognised and valued.
If we are going to train professional managers let us be sure that we give them standards that are internationally recognised. The noble Lord, Lord Russell of Liverpool, made that point very strongly.
There is a great proliferation of business schools. I have seen some of the courses and I have sat in on some of the courses that are being taught because business schools have become a big thing in universities. Many universities naturally are taking advantage of this new interest. They are also taking advantage of the fact that by running business schools they can sometimes attract funding from industries which will benefit from the graduates who will emerge. So it is attractive to the universities to have business schools.
I think that the one thing that has been achieved in the United States is a reasonable standard for their MBAs. It is not a uniform standard. It varies a great deal. But nevertheless if one looks at the Handy Report one will see that the United States has four times the population of Britain but over 40 times the number of graduates with business qualifications that we have. I believe that that is an important lesson to learn. Not only must we produce more graduates but we must observe a standard that will be recognised in the market place.

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I wish to say a few words about the Scottish scene, where there are eight universities, five of which have reasonable business schools. I underline the word reasonable because the great opportunity that Scotland has missed is the creation of a Scottish Harvard in Stirling University. It is just the right size for that. I found in discussing the development of business education in Scotland that there was a great desire for all the universities to protect their own little patch and their own little group and to have their own little business school.
I believe that in a country the size of Scotland it would be desirable to establish a high standard business school with an MBA which would be universally recognised. I am delighted to see that in Stirling at the present time a school for Japanese studies has been developed. Apart from Sheffield and Oxford it is the only university that has developed such a school in a serious way, as it recognises the importance of Japan in our future industrial development. However, I should like to see a greater co-ordination of business education in Scotland with a view to raising standards and achieving standards that would be universally recognised.
I shall say a few words about the content of business school training. It should not all be about training accountants and producing people who are good at corporate planning. People have to be trained to make things too. Managers are required on the shop floor as well as in the merchant banks. I would certainly stress that point.
I think it was the noble Lord, Lord Peston, who said that too much of the management training is academic and too little is practical. I believe that a balance has to be struck. Indeed I would go so far as to say that in the modern business world and in the modern business school there might be a department which trained students on ethics in business.
I am encouraged by the fact that Sir Hector Laing and some of his peers are encouraging companies to release on secondment some of their young managers to work in inner city development, in urban renewal, and in business in the community, offering advice and guidance to small firms. I believe that a good manager requires experience, sympathy and a feeling for people which goes beyond a purely academic achievement.
Finally, I wish to mention that in my experience of living in the United States I observed that the business schools promoted the principle that their professors and teachers should be actively involved in business. A colleague of mine was a professor of marketing at New York University but he also ran his own business on the side. He had practical experience of applying his teaching there.
It was not uncommon at Harvard to find professors who were on the boards of companies. I believe that it is important that teachers in business schools should not be remote from the industry in which their students are going to practise their skills. They should be encouraged to become involved in the community and also in practical business.
6.30 p.m.
Baroness Carnegy of Lour: My Lords, we are all extremely grateful for the opportunity which has been given to us for this fascinating debate. The skill and expertise of managers is crucial not just in business, as has been discussed by noble Lords so far, but also in the health service, in local government and in schools, particularly under the impending regime. My noble friend Lord Huntly spoke in his eloquent speech of business schools in the private sector. I wish to speak particularly about open and distance learning for management education. In order to do that, I wish to draw on my experience of the Open University, where I am a member of the governing board. It may be that the noble Lord, Lord Graham, who also has extensive involvement there, will wish to add to what I have to say.
The Open University believes that there are some 2½ million managers in Britain. Of those, fewer than 20 per cent. have degrees or the equivalent. Seventy per cent. of all managers have no training at all for their present positions. The Open University also believes that the average amount of training which managers receive is less than one day per year.
One of the major problems is that managers, by definition, are key people. They make a considerable economic contribution to their firms and they cannot easily be spared. They also do not wish to be spared in order to go off for prolonged training courses. Smaller firms can easily be put off by the cost of traditional courses, and many managers do not live within reach of courses which take place in the evenings. That was one of the reasons why, in 1983, the Open University set up its open business school by means of which managers, wherever they live and whether or not they have any previous qualifications, can study, as all Open University students do, at home and in their spare time. They have available to them at their own firesides high quality and practical teaching on the subject which they want to learn by means of the best of modern distance and open learning techniques.
The response since 1983 speaks for itself. In that year, 998 managers registered for the courses of the open business school. By 1987 the number had risen to 6,372. In less than five years, 18,500 managers have joined courses. Over 22 per cent. were women and 21 per cent. came from businesses employing 100 people or fewer. It is interesting to note that two out of three of those students were sponsored by their firms, with the total of sponsoring firms being no fewer than 2,500.
Until now, that has been done without recourse to public funds, with finance being a combination of fees, support from industry and a welcome grant at the outset from the Foundation for Management Education. That approach has proved so popular that it is being incorporated this year with the help of government finance into a new school of management within the Open University. That faculty will bring together staff who have worked within the existing business school and others who have contributed to management programmes elsewhere in the university. They will work with external consultants from business and other institutions.

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The existing courses which have been carried out until now will be used as a base for a professional diploma in management. The DES has now agreed to fund the development of an MBA programme within the next three to five years. It is interesting to note how the Open University's way of working, which operates across all the subject areas for some 150,000 students, is proving to be particularly successful for students of management.
Why is that? First, managers can take part, as can all Open University students, wherever they live, whether or not they have any previous qualifications, whatever their educational background and on the job, without having to be absent from work. They fit the course in with their own home and family lives. The course is especially designed to build on their current and previous experience of work. That Open University way of doing things has proved to be very attractive to management students.
Secondly, it is possible for management students, as for all Open University students, to benefit from the teaching of a wider range of academics and practitioners using a wider range of teaching methods than is often possible for students who attend traditional courses which may be on offer locally. Each Open University management course is designed by a team which is based at Milton Keynes.
In the team there are academics who are usually people with recent practical business experience. They bring together their knowledge of the subject on the ground with their experience of research at the frontiers of the subject and the frontiers of distance learning and teaching methods. Working with them is a BBC production team backed up by photographers, artists and librarians, as well as management practitioners who come in to advise and help. One of those courses may take the equivalent of ten man years to complete, with as many as 50 people contributing. Yet because so many people follow the course, it is possible to set the fees at the full market price and still produce an extremely cost-effective operation.
Thirdly, it is possible to make full use of modern technology in that kind of education. Students learn by means of an ever-developing variety of methods—well-produced and attractive printed materials, television and radio broadcasts, video and audio cassettes, computer conferencing and assessment by computer. People enjoy using those combinations of modern media. Properly delivered, it is extremely effective in management education.
Fourthly, as elsewhere in the Open University, management students each have a local tutor assigned to them. That is a crucial element in the course. They meet the tutor from time to time on their own or with other students in the locality to discuss problems, clarify parts of the course which they do not understand and receive help in relating the course to their current work experience. Students often meet in the absence of the tutor to help one another with problems they come across. The tutor also assesses the written assignments which students undertake. It is important that that is done wherever possible by someone who knows the student personally. The examination at the end of the course can be taken at
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a centre located somewhere close to where the student lives so that attendance is not too difficult.
Lastly, when a firm or other institution wishes to run a management course in-house, the Open University materials can be provided in a package so that the staff of the firm can assist students to follow the course. I think that is a response to the sort of tailor-made provision which the noble Lord, Lord Peston, called for.
All those ways of working which apply throughout the Open University are clearly especially suitable for management students. It is interesting that at the present time, of those taking courses at the Open University 67 per cent. are between the ages of 26 and 40; 30 per cent. are junior managers; 35 per cent. are middle managers; and 53 per cent. have less than five years' experience as a manager. Forty-four per cent. of all students left education before they were 18. Six out of every 100 have no 0-levels at all, while 31 per cent. have degrees.
What can be learnt from the Open University experience for future management education in Britain? Open entry and distance learning, properly combined, are undoubtedly a very useful way forward. I draw to the attention of my noble friend the proven success in that respect. The Open University has demonstrated that open and distance learning is very much more than having, as it were, a factory at the centre churning out films, cassettes and written material, sending them to students and waiting for the students to respond. There is a large and developing area of teaching expertise in this multi-media approach in representing first-class and up-to-date material in such a way that the student can relate it to his own experience, take it unto himself, make it his own and increase his effectiveness as a manager.
The Open University goes on learning. It is in no way sanguine about its current offerings. The noble Lord, Lord Peston, has made clear the need for more and better management education. It is clear also that the Open University and other bodies with distance and open learning provision have a significant contribution to make. I ask the Government to consider carefully whether there is something that they can do to increase the provision of such facilities in various institutions throughout the country.
6.42 p.m.
Lord Graham of Edmonton: My Lords, it is a pleasure to follow the noble Baroness, Lady Carnegy of Lour. What she said was interesting and familiar and must have given great pleasure to the House. It will surely have been particularly pleasing to the first Vice-Chancellor of the Open University, the noble Lord, Lord Perry of Walton. He contributed a great deal to the foundation of that body, which is so well used, and was among the pioneers of the tutorial and academic staff. I am one of a trio of noble Lords who are proud to speak in the Chamber whenever possible on this subject. The noble Baroness, Lady Carnegy, gave an excellent outline of the place of the Open University, thus relieving me of the necessity to do so, for which I am grateful. There are other interests that I wish to serve in the debate.

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Can the Government tell us what they are doing and what they have in mind to improve the role of business schools? Perhaps I may develop this a little. I have attended a prize-giving in Edmonton in the last seven days. The prizes were given by Brenda Dean, the eminently respected trade union leader. I sat through the prize-giving knowing that this debate was to take place and wondering how much energy the department is devoting to the objective of producing good British business managers in 20 years' time from among youngsters now aged 15 and 16. Can the Minister say how concerned the Government are not only that youngsters should go on to further education but that, from among today's school-leavers aged 16 and 17, there should emerge good managers for the country?
I have also attended in the last seven days Thurrock Technical College where I was pleased to give the prizes. The college does excellent work of a high standard. The students were naturally proud and pleased to receive their awards in the presence of a great range of representatives of local industry. The college is well endowed both physically and in terms of a dedicated staff. The students afterwards told me some sad news. They said that although they had been well sustained by local industry in their apprenticeships, they were receiving in one hand prizes and awards from local companies and, in the other, their notices because they had been trained without the guarantee of a job. The jobs do not exist. Can the Minister tell us what action the Government are taking to alleviate the frustration and depression not only of young people and their parents but of dedicated staff like those at Thurrock Technical College?
The Open University has evolved gradually. We are indebted to the noble Baroness, Lady Carnegy of Lour, for having given an excellent outline and for describing the progress that has been made. I am particularly interested in what she said about the MBA diploma and the work undertaken in conjunction with the British Institute of Management; one awaits the concept of the chartered manager with optimism.
The Open University is properly called open because it does not lay down criteria that must be met before an applicant can be accepted. If someone wishes to reach the top, it is not necessary to climb over hurdles that could prove difficult for a young person. It is frequently not the large companies that are laggard in regard for training but the small and medium companies. Can the Government confirm that they are taking account of the desperate need to ensure that small and medium companies respond in terms of training and encouragement and in making opportunities available to their employees?
I acknowledge my indebtedness to the Co-operative movement. The Co-operative College at Stamford Hall has much to its credit. I observe that the noble Lord, Lord Taylor of Gryfe, is nodding his head vigorously. He has known the college perhaps even longer than I have. He will be proud of its place in trying to improve the education and ability of working people. The noble Lord, Lord Jacques, my
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noble friend Lord Gallacher and I are ex-students and graduates of the college. Although I was the first Member of Parliament to be given a degree by the Open University, a Co-operative colleague of mine, John McFall is also a graduate of the university.
It is right and proper that we should have what might be called almost an elite or a cult of elitism. However, it has to be recognised that, even though one can quote impressive figures—numbers growing from hundreds to thousands and to tens of thousands—the acme of perfection may well be seen to be the MBA. It is not the be-all-and-end-all of business education for there is a range of things that can be done, indeed, they are being done by many people.
Documents that I have received from the Open University contain a list of major businesses and organisations that support the business school of the university—Beecham, Boots, the Co-operative Wholesale Society, the John Lewis Partnership, ICI and Nalgo among many others.
I should like to mention a document I have received from the Co-operative College. It might be useful to give some details of that organisation which has developed its techniques and last year earned more than £2 million in consultancy fees advising not only small companies and businesses in this country but also governments abroad. It offers a range of courses: non-food marketing strategies; stocking and selling wines; fresh food in supermarkets; women in management; senior dairy managers; dairy selling; funeral department management; motor trades management; dairy business diversification; and training skills for funeral managers. In a debate that concerns itself with the product of business education and business schools, we should remember to pay tribute to such organisations.
It is a sobering fact that in the retail industry—which is an aspect of industry about which I know perhaps a little more than I do about some other parts—there is a lack of women who rise to the top and achieve management positions. The Government ought to be telling us their intentions in that respect. I should also like to draw attention to the collaboration that exists to improve the quality of management within the retailing industry. I am told there is a consortium of retail teaching companies and that most of the big companies support its aim to improve the quality of retail management education.
There is one final point I wish to make. I happen to be closely associated with the British Business Graduates Society, a body originally started by students from the Middlesex Technical College. The college is of particular interest to me. The students have become successful managers. They did not have the benefit of one or two years of highly concentrated education and had to do most of their studying in the evenings and at other times. I believe that we should pay due tribute to such organisations.
The present situation lacks a central focal point for the consideration of the systems of other countries, as several noble Lords have pointed out. I had the pleasure and privilege of visiting Japan for a short period. I was most impressed by the way in which

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business, education establishments, the government and the community seem to have got their act together. In this country I do not think that we have done so. There is no recognition by the community—not even perhaps by the Government—of a lack of management education and training. That is a significant handicap to British business. I certainly support everything that has been said about the work of Professor Handy, Professor Constable and Mr. McCormick who have made some very wise observations.
Time defeats me and I am conscious of my responsibility to those who will speak later. However, I hope that the Minister will be heartened by what has been said. The noble Baroness will never be able to satisfy everyone on all points but she should know that there are Members of your Lordships' House with long experience of industry who have a deep commitment to this aspect of it and who want to ensure that she is successful in promoting in the community the idea that training for successful business management is well worthwhile.
6.54 p.m.
Lord Auckland: My Lords, the noble Lord, Lord Peston, has made it possible for the House to debate this subject at a very timely moment. The Education Reform Bill will very soon come before your Lordships. We shall be discussing the whole spectrum of education and, I hope, the question of managers for the future.
Unlike many noble Lords I have no interest in or connection with a business school or university. Because of National Service I did not go to university and in 1948 went straight into the insurance world where I have spent the bulk of my working life. I recall very clearly the manager of the office where I started work at the age of 22 saying to me, "I think you are settling down well, but, my boy, may I give you a word of advice?"; I said, "Yes, sir". It is rather different nowadays with young people, but time marches on. He said, "I have been in this firm for 43 years and I am still learning".
The moral of that remark is that management is always learning. Of course 40 years ago computers and videos were virtually unknown and there was far more person-to-person contact. I believe that one of the problems that we face in business management, and indeed in management generally, today is the lack of personal contact.
I should like to say a few words about the Chartered Insurance Institute College of Insurance at Sevenoaks in Kent. I have no interest in the organisation but the principal happens to be a longstanding friend of mine in the insurance business. Management training through management courses is one of the main aims of this college. There was roughly a 57 per cent. pass rate for last year's entrants, which is very encouraging for the future. In his presidential address in 1987 Mr. Alan Cleary made the very apposite remark:
"There is in the UK insurance industry (unlike the American insurance industry) a noticeable lack of visible top management commitment to insurance education and training".
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That observation is not, I believe, to be confined entirely to insurance. One of the problems is that managers today are frequently very much younger than managers were 30 years ago and they do not perhaps command quite the same respect from their juniors.
It is quite clear that the complicated Financial Services Act which is now on the statute book will have an enormous impact upon management, particularly in the field of commerce. It will revolutionise—in fact it has already done so—much of the world of insurance and the impact will fall particularly on management. There is therefore the added need for management to pull its act together and to ensure the success of our insurance industry (and indeed the City in general), particularly in view of the increasing competition not only from Japan and America and the larger countries but from some of the smaller countries as well.
I believe therefore that in management training communication is more important than almost anything else. Some years ago I spent a short time as a management consultant and had the privilege of helping to run a course at the Management Centre, Europe, in Brussels on the subject of effective public speaking and business-letter writing. Those noble Lords who know the Management Centre, will know that it is a very prestigious establishment. It does not command a fee. It is regarded as an honour to be asked to speak there. On the course were a number of persons not only from the country but from overseas. I believe that this point is germane: the standard of English which they spoke, even 15 or 20 years ago, was rather higher than the standard of our managers speaking French, German or Spanish. As was mentioned in your Lordships' House not long ago, a knowledge of foreign languages is all important. I am sure that the Minister will take that point on board.
I was at a school concert in Surrey the other evening. It is a school that both our daughters attended. The point was made by the headmistress about the vital importance of languages. It is a girls' school, and it is good to see that there are more and more women going into management, in particular in the catering industry, which, although not always regarded as being in the field of business, is nevertheless an industry which earns currency for this country. Through very much better management our catering industry has done enormously well compared with even 10 years ago. The University of Surrey is due much credit for that.
I should like to ask the Minister what significance the Government are putting on communication in the business and other schools under their jurisdiction. The challenge in the future of business management, and management in general, in a very competitive business world is to be able to impart the knowledge that one has gained in student days.
7.3 p.m.
Lord Taylor of Blackburn: My Lords, I am very grateful to my noble friend Lord Peston for introducing this debate. I congratulate the noble Marquess, Lord Huntly, on contributing in the way that he did. I know that it is the tradition in this

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House to say, "Long may he continue to do so", but I say most sincerely that what he had to say was absolutely first class.
Sometimes I agree with my noble friend Lord Peston and sometimes I disagree. I am pleased to say today that I agree with most of what he has said. I have wished for a long time to put forward ideas about training teachers and people in universities. I have felt that they were out of touch with what is going on in industry and commerce. Very often I find that people in the teaching profession go from school to college, from college to university and from university back into teaching. Then after a number of years, because they have come from this background, they start acting like the children whom they are teaching. It would be good for them to have experience outside their profession.
I am a late developer. I am learning every day. One of the matters that I have learnt in your Lordships' House is that when one becomes the 10th batsman on the list many points have already been made that one would have made. However. I took the precaution of having a word with the Whips today. I said that I should like to speak later in the debate; I did not wish to be one of the front-runners. I felt that I should like to bring in a new dimension. I tried to anticipate the way in which this debate would go.
I should like to bring in another aspect on business training and to speak on the role of the colleges of further education. I believe that they play an important part in business training. It would be interesting to know how much the average British businessman knows about present day business education. Even though his business may be in a perilous condition, his workforce in a state of disarray and his organisation crying out for new ideas and fresh stimulation, the answer could very well be that he does not know very much, if anything at all.
If pressed, one or two businessmen may think back to the days when education finished on their last day at school, and training, if any, was carried out by sitting next to the only employee who could be bothered to show them the ropes, and never mind if bad practices were picked up along with good ones. Business studies qualifications could be obtained in those days only by a long, wearisome series of night classes at the local tech, where the teacher's blackboard notes were copied down by the students, learnt and then thrown into the waste-paper basket after the examination. It is little wonder that many businessmen still talk in despairing terms about business education at colleges of further education. What they do not realise is that times have changed. Colleges now house thriving, bustling, aggressively competitive business studies departments, very much in touch with the needs of modern businesses and as eager as any other business to find clients and to satisfy their requirement. Complacency is a thing of the past. Traditional methods of delivery are disappearing. Flexibility of approach is the order of the day. Business training can now be delivered in exactly the package that the businessman requires. Does he want one person or a dozen trained? Does he want the training to take place on or off the job? Does
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he want it spread over a number of weeks, or does he want it concentrated in a few days? No problem!
Let me give your Lordships' a couple of examples of the type of activities covered in my area in the Blackburn College. A large company operates a policy of appointing all its supervisors from its pool of operatives. It has found, however, that good operatives do not necessarily become good supervisors overnight. Traditional forms of training were out. The company did not want all its supervisors off the site at the same time each week. The solution was simple. The training was carried out by means of a series of distance learning packages which could be worked through the supervisors when time was available. Tutor back-up from the college was at hand when it was required.
At the other end of the spectrum a woman with a part-time job and a young family who wished to update her secretarial skills but who found difficulty in attending regular classes was able to take advantage of the business studies drop-in open learning scheme. That was a good scheme. She could return during the hours she chose, arrange for a tutor and at the end she was able to accept some qualifications and responsibilities.
An old saying is put your money where your mouth is. If a product is good enough it should sell and it can attract customers. The Manpower Services Commission is traditionally a hard customer to satisfy. It wants to know what value it is getting for its money. The fact that it is actively involved in many local collaborative training projects with colleges indicates the increasing significance of the role of such colleges in business education.
The fact that colleges are moving forward along those lines, attracting more people to take part in this type of business education, is an achievement in so many ways. Today young people are more anxious than ever before to achieve as much as possible and to get a great deal out of business. In many cases the only way in which they can do that—forgetting the universities and independent business studies—is by going to their local colleges of further education where they can achieve their objectives. I should like to impress on the noble Baroness that it is worth while and that the Government should consider giving a great deal more help than they are giving at the present time.
7.12 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to my noble friend Lord Peston for introducing this debate on a matter which is now recognised as being of the highest importance but which was not recognised as such 10 or 15 years ago. Judging from the debate, it is a matter on which all noble Lords agree. There is unanimity in the House that we must concentrate intensely on this important problem. As the noble Lord, Lord Russell of Liverpool, and my noble friend Lord Irvine of Lairg have said, 1992 is getting closer and the skills that we shall then require in the internal market are not those traditionally associated with British management.

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I am extremely disappointed to note that noble Lords who should have contributed to the debate have not seen fit to take part. I mean noble Lords who are captains of industry and who, I believe would have had a great deal to say about business education and education for 1992. The speakers' list consists of a number of noble Lords who are academic, a number who are failed tycoons, such as myself, and a number of tycoons-to-come, such as the noble Marquess, Lord Huntly. However, we have had no contributions in the debate from a real live tycoon. That is unfortunate because we are missing an experience that we should have had.
There are several stands in this discussion and I should like to draw attention to four of them. The first is: how do we bridge the divide between the practice of business and formal education? Secondly, in the words of the first boss of the noble Lord, Lord Auckland, how do we ensure that there is continuing education in employment? Thirdly, how do we get rid of the difference between training and education? That may appear to be a slightly semantic point but it expresses something which is most fundamental and I shall return to that in a moment. Fourthly, in the words of my noble friend Lord Peston, how do we try to educate industry, if that is what must be done, to want the products of the various organisations such as the business schools and the Open University?
My noble friend's Motion concentrates on business education and puts emphasis on management by referring to the role of business schools. However, my noble friends Lord Graham of Edmonton and Lord Taylor of Blackburn reminded the House that we must not forget the lower echelons, if I can describe them as such. In that respect I now turn to the difference between training and education. The Handy Report brought out the fact that there is a greater flow of management talent coming up from the junior ranks and artisans in other countries than there is in the United Kingdom. I am afraid that somewhere we may be locked into a post-imperial class problem, where our traditional education is turning out people designed for a certain role in life which is no longer relevant.
The fact that there has been an extremely disappointing response to the Open College, which was designed by the Manpower Services Commission to give training for adults, is extremely significant. According to one newspaper article the whole thing is near collapse because it is not working; it is not receiving sufficient candidates and it is in need of a relaunch. Even more disappointing is the fact that those who are not availing themselves of this important new initiative are the small and medium-sized firms which particularly need this type of continuing educational input. I regard that as saying something rather worrying about the education formation, if I can use that expression, of people as they go through their working career. It is those people who must be trained, retrained, reformed and brought up to the point at which we hope they will take on a more supervisory role, as my noble friend Lord Graham said.
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Clearly there is a point to which the Government must pay considerable attention. If the Open College is failing, what kind of schemes are the right schemes? Is it a question of relying on local authorities? Is it a question of relying on Open University-style programmes? Is it a question of relying on the colleges of further education? Someone must answer that question quite quickly. The question which underlies that is: which government department is in charge of that programme? Is it the DES or the DTI? In that respect we get down to the point to which we shall finally return.
My noble friend Lord Peston concentrated on management and most noble Lords have followed him along those lines. When reading through the Handy Report and the Constable Report, it is unfortunate to note how far behind we are in management education. It makes rather depressing reading. In all countries studied by Professor Handy there is a consistent belief that the real basis for continuing learning in management is experience at work allied to continuing education. That must be the principle on which we all stand. However, the noble Marquess, Lord Huntly, and the noble Lord, Lord Ezra, were absolutely right in pointing to the necessity of having a practical application in the business school and other programmes which were applied to the managers in business.
The differences between the countries that were studied by Professor Handy seemed to lie in the interaction between the institutions providing such formation, education—use whatever words you like—and business itself. In Japan it is formalised. For almost every individual in a Japanese company there is a programme of what is known as self-enlightenment. As he goes through his career in one company—because the Japanese tend to stick to one company—he is put through a series of courses of an incidental nature, which may be evening classes, day release or sandwich courses and he updates his knowledge on a monthly and yearly basis. Therefore, he is kept fully informed about the progress of management techniques and the technology of the firm for which he is working.
In the United States it is rather different, because the market for managers is rather more diverse and people move from company to company quite easily. The tendency seems to be that the development of managers, as Professor Handy says, is opportunistic and individualist. In other words, people take their own responsibilities and say, "I am going to develop my career in this way and I am going to learn outside the job I am doing".
Professor Handy notes that in the United Kingdom the development is accidental; it depends in which company you happen to be working. Some companies are extremely good and others are extremely bad. To me that is the nub of the problem. Not only do the companies that are extremely bad not recognise the virtues of entrepreneurship—because I agree with my noble friend that you cannot educate people to be entrepreneurs. They do not recognise that there is a skill in management that can be taught. It is those companies to which the Government must direct their attention.

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I believe that there are programmes available. The noble Baroness, Lady Carnegy, very impressively set out what the Open University has to offer. There are other programmes available. There is the Charter Group, to which I shall refer in a moment. There are possibilities. However, as my noble friend Lord Peston said, you first have to educate many people in industry that they actually need these products, and that is the fundamental problem that we have.
Management development in the United Kingdom clearly must be more systematic than it is at the moment. The Charter Group is a start of that and the DTI has become a member of that group. I confess that I share some of the doubts of the noble Lord. Lord Russell of Liverpool, about the charter. The Constable Report puts forward a programme that formation management should be similar to that of professionals; and indeed, we are very good at educating and forming our professions—for example, the accountancy profession has a very good record. I am slightly doubtful whether that is the right formula for industrial business management but it is what we have. It is an initiative and it must be developed. I am not going to knock the Charter Group but I join with the noble Lord, Lord Russell, in some of the doubts which he expressed.
In its recent White Paper the DTI put its finger on what I believe to be the real problem. That White Paper states:
"Experience suggests that market forces on their own will not bring about the necessary improvements in the quality of British management, or, at any rate, not quickly enough".
Such a sentence coming from the department headed by the noble Lord, Lord Young of Graffham, must be taken very seriously because he is a great protagonist for market forces. If he in his White Paper says that market forces will not produce the desired result, that is a proposition that we must take seriously.
I am quite clear about it. I do not believe that the response that the noble Lord, Lord Young, made to the professor in Edinburgh of my noble friend Lord Irvine of Lairg is in any way adequate. I believe that the Government must intervene much more actively in the process of training. They have to persuade people and not just encourage and facilitate. They must reward and penalise companies that do not get a move on, because I believe that is the only way to do it. If the Government sit back and say, "Our job is to do little things here, promote programmes here, join the Charter Group there", I am afraid that some of the predictions that noble Lords have made, including my noble friend Lord Irvine, about 1992 are correct. We will go into the internal market wholly unqualified to do business in a completely different environment. If that happens the whole question of management education becomes more or less a theory and no more than that, because we shall find that the people in Germany and France who are learning about our ways will start knocking us out of business rather faster than we can knock them out of business.
I therefore ask the noble Baroness to draw the attention of the House and her noble friend the Secretary of State to the prime necessity of
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government intervention and government intervention in a purposive manner in management training so that we can meet the challenge of the internal market and ensure that this country can hold its head up in the battle that is to come.
7.26 p.m.
The Parliamentary Under-Secretary of State, Department of Education and Science (Baroness Hooper): My Lords, we welcome the opportunity to debate this important topic and I add my thanks to those of others who have already thanked the noble Lord, Lord Peston, for introducing his Motion and providing us with this opportunity to learn from so many who have contributed their very wide knowledge and experience to this debate. I also welcome the fact that at least two contributions have come from the products of business schools and I believe that augurs well for the future of those schools. It also gives me great pleasure to add my congratulations to my noble friend Lord Huntly on his excellent maiden speech. We shall look forward to hearing from him on many occasions in the future.
The subject of business and management education is a very wide one, as has been demonstrated. There may not be time to cover all the aspects to which I should like to draw attention, but I shall try. It has emerged, not only from this debate but from the great debate outside your Lordships' House, that there is wide agreement that we need more and better education for business and management in order to keep the United Kingdom competitive in world markets, particularly in the light of 1992 and the completion of the internal market.
Industry is quite properly taking the lead in trying to develop a coherent framework for management education which will meet the country's requirements for the future. The Government—like the noble Lord, Lord Ezra, and others—recognise the message of the Handy and Constable-McCormick reports; namely, the specific needs for more and better educated and trained managers. The Government are always concerned to know what the customer wants, and the international comparisons that these reports provide are indeed most valuable.
The Constable-McCormick Report looked at the making of British managers. Both the reports point out the need for a cultural change to make management development and training an established part of the life of the country. That cultural change has been referred to by many of your Lordships. The acquisition of management competences needs to seem desirable and prestigious in the eyes of aspiring managers. This may come in part from the establishment of some more specific recognition that is currently available.
However, it is hard for changes in attitude to occur overnight, although there are heartening signs that our society is becoming more realistic and responsive to the economic facts of life. So while we hear from the two reports that change is necessary, we know that conviction is needed before the change will take place. That conviction must stem from the customers and particularly the employers.

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Therefore, it is entirely right that the CBI should be leading the response to the two reports. That lead was particularly welcomed by the noble Lord, Lord Ezra. We look to the new Council for Management Education and Development, which brings together representatives of industry, government and education to tell us precisely what employers want from the management education system. Indeed, we expect that to include the need for a proper balance between the practical and the academic, as has been mentioned.
Can a structure of qualifications be devised which will be as relevant to managers in heavy manufacturing industry as to those in local government and the service industries? Some of the educational issues which the council are grappling with are associated with the recommendation in the Constable-McCormick report that there should be a new diploma in business studies. Professor Handy called it an MBA Part 1.
This was conceived as an exam-based qualification for the aspiring manager up to 25 years of age. I think that the recommendation may encourage some carefully conducted experiments. The MSC and the DES have put together a programme of pilot projects which will be designed to try a number of different approaches. I trust that this will go some way to reassuring the noble Lord, Lord Russell of Liverpool.
Once we have decided on the curriculum and the qualifications, we must then consider how to put in place a number of different delivery mechanisms—including open and distance learning—which will allow young managers at the most effective stages of their careers to take on board the training that will enable them to progress even more quickly up the ladder of job advancement. I believe that this too will coincide with the aims stated by the noble Lord, Lord Williams of Elvel.
It is not for me to prescribe solutions to these problems here and now. The Council for Management Education and Development must be supported in its work, not pre-empted. But I am bound to say that it seems very probable that employers are going to favour the route which interrupts the company's business the least. This means that we can expect to see emerging an increasing number of training schemes tailored for particular firms, pursued part-time and in the evenings. Such schemes may lack educational breadth and depth. When the new structures are in place there may be less need for this sort of course. But that will take time and we cannot postpone all remedial action.
My noble friend Lady Carnegy of Lour and the noble Lord, Lord Graham of Edmonton, reminded us of the valuable role of open and distance learning.
The part-time distance learning approach is increasingly popular with individual managers, for whom it offers flexibility and the chance to make use of the newly-acquired skills without delay. As the CBI has made clear, it is equally attractive to employers. The result has been a sharp rise in the number of managers studying in this way. As my
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noble friend said, the Open University's open business school, to take but one example, had over 6,000 registrations in 1987 and now, with government help, is developing an MBA programme. But Constable McCormick are clearly right to stress that even more extensive use of distance learning methods is essential if a major expansion of management education is to be achieved. We endorse that. Indeed, the Open College, which has been referred to, is intended as a further step in this direction.
At a meeting on the two reports arranged by the Foundation for Management Education last May, I understand one industrialist voiced the fear that if more were done to encourage suitable young people to become managers then this would simply aggravate the shortage of engineering and technology graduates. Clearly we need to plan the balance of our higher education provision carefully; but for the moment, the Government plan for 35 per cent. more undergraduates entering science courses and 25 per cent. more entering engineering by 1990, and this is being achieved at the same time as a planned increase in business and management graduates.
The past mismatches arose for a number of reasons. Not least of these has been the narrow curriculum in many schools. The Government's plans for a national curriculum, with its inclusion of English, maths and science as core subjects, and craft design and technology, and a compulsory modern foreign language as foundation subjects, should help to redress that balance. I trust that the noble Lord, Lord Graham of Edmonton, will welcome wholeheartedly those proposals when they come before your Lordships' House.
I accept, as I expect that most of your Lordships do, that there should be a clear ladder of progression for managers to climb. The stages of progression need labels. The labels, and what they mean in terms of competences, need to be understood properly and universally. Employers must find them reliable guides to performance. There must be opportunities to get on to this ladder of progression from all levels of the workforce. This ladder must not be solely for an elite. All employees deserve the chance to reach their full potential. Some would argue that there are extremely demanding management posts at the lower levels where there is not much to distinguish the junior manager from his, or her, workmates—from whom he is only one step removed—beyond added responsibility.
This ladder of progression and its accompanying qualifications do not imply concentration on knowledge alone. We must not lose sight of the skills of leadership and the management of people to get that balance.
A revised ladder of qualifications, more emphasis on training and open access to it, may be of most immediate relevance to the young and successful. There are, and will be for some time to come, many serving managers who for age or other reasons will not become directly engaged in a new structure of qualifications and training. But these people have valuable experience. They have influence within their firms. Their help and advice, perhaps as mentors,

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could contribute greatly to the success of improved management education and development.
The expansion of management education which is being envisaged will require additional teachers. I am told that schemes to enable some of these experienced managers to help meet this requirement are being worked on. Indeed, business studies feature in the DES teacher recruitment campaign as a shortage subject and applications are up 23 per cent. this year.
Perhaps I may say to the noble Lord, Lord Peston, that we welcome the enterprise initiative to which he referred that has been made by Queen Mary College to set up a major new business school in Docklands. There are a number of colleges already providing business courses. The noble Lord, Lord Irvine of Lairg, referred to some and the noble Lord, Lord Graham of Edmonton, referred particularly to the Co-operative college. I fully recognise those contributions.
There are other organisations such as the Institute of Directors, the British Institute of Managers, the Institution of Independent Managers, and the Chartered Institute of Insurance to which my noble friend Lord Auckland referred. They all make valuable contributions and increasingly work together.
There is also the pickup programme, to which I shall refer in more detail. There are firms such as W. H. Smith, Shell, and Rank Xerox, to name but a few, which have schemes in being. Therefore, we already have some experience to build on. In this context, I also endorse the value of "Business in the Community", which has been recognised by the Government in their inner city policies.
The noble Lord, Lord Peston, referred to enterprise in higher education. There is a clear need for more business and management enterprise awareness for all those who are benefiting from higher education. The Government are committed to encouraging enterprise throughout society. Today's rapidly changing world of work demands not just highly qualified people but those who are innovative, enterprising and competent in business skills. That is why the Department of Employment recently launched, with the Department of Education and Science, the enterprise in higher education initiative.
The initiative aims to develop more enterprising graduates by forging closer links between higher education and business and with, in particular, small firms. All higher education institutions have been invited to participate. The MSC funding for each project accepted will be up to £1 million over five years. We are also expecting industry and commerce to provide substantial financial support if this initiative is to succeed. Succeed it must if our businesses, however small, are to achieve that competitive edge that they need in order to grow.
It has been said that entrepreneurs are born and not made. I recognise that we need to support them by ensuring that our educational institutions are ready to provide that necessary support. Many noble Lords referred to the need for encouraging the development of business and management short
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course provision. This has also been a priority of the Department of Education and Science and its pickup programme. Under this programme, support has been provided to promote various continuing professional development schemes including a major project concerned with the continuing education and training needs of engineers and technicians. The scheme was recently launched and it is being run jointly with the Engineering Council.
Both the National Advisory Body for Public Sector Higher Education and the University Grants Committee have made moneys available under their pickup selective exercises to support the development of business and management education. The pickup programme covers many individual projects, including a scheme with which I was recently involved. It involves the Royal College of Veterinary Surgeons and emphasises the need to provide management and business skills for those vets who essentially run small businesses as well as updating their professional and technical skills. The pickup programme is also involved with collaboration with universities in export language centres. This provision fills the gap which has been referred to by many of your Lordships.
The noble Lord, Lord Peston, mentioned the regions. I should like to draw attention to the regional management centres which have been set up in many parts of the country based upon polytechnics. The northern RMC involves Newcastle, Teeside and Sunderland polytechnics and co-operates with Durham University Business School in the provision that it makes. The noble Lord referred to Scotland in particular; it was also referred to by the noble Lord, Lord Taylor of Gryfe. A substantial contribution is made to business education in Great Britain. I understand that in 1984–85 there were almost 20,000 students on business and management courses in higher education institutions in Scotland. The subject has not been missed out there.
As the Minister responsible for further education, I particularly welcome the references made by the noble Lord, Lord Taylor of Blackburn, in stressing the contribution of further education colleges. I cannot claim that all colleges come up to the ideal described in the HMI NAFE In Practice report on business studies. However, it provides an explanation of a variety of practice and it has been followed up by HMI at both local and national levels.
Like the noble Lords, Lord Williams of Elvel, Lord Irvine of Lairg and Lord Russell of Liverpool, I acknowledge the importance of suitable preparation for the single European market and its completion by 1992. I agree that an awareness of EC law and practice in particular and knowledge of languages for communication purposes will be an increasingly important aspect in the social, economic and political context of which managers must be aware. I have no doubt that the development work for qualifications will bear this in mind and that institutions will respond to the demand for short courses. I shall certainly draw the attention of my noble friend Lord Young of Graffham to the remarks that have been made in the course of this debate.

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Many of us, like the noble Lord, Lord Taylor of Blackburn, may feel that we are late developers. I certainly feel that I can carry on learning with considerable benefit. I believe that we have a consensus this evening that business and management education has rarely been as important as it is today. There may be a long way to go but the Government are supporting industry and commerce as they articulate their needs in the light of the Handy and Constable-McCormick reports. I am confident that the considerable challenges posed by the rapid development of the business world can be met by industry and commerce, education and government working together in partnership.
Lord Irvine of Lairg: My Lords, before the noble Baroness sits down, perhaps she will give way and answer this question. What will be the precise educational or training content of the awareness campaign to be launched by the Government on Friday with a view to the single internal market which comes into being in 1992? I wonder whether the noble Baroness can allow the House the benefit of that information.
Baroness Hooper: My Lords, I believe that we are running out of time. If the noble Lord is not satisfied with the numerous ways I have described in which we are going to meet this challenge, perhaps I may be permitted to write to him.
Lord Irvine of Lairg: My Lords, I shall be content with a short answer. I should like to know whether there is any specific educational content to this awareness campaign, which is only a couple of days away from its launch.
Baroness Hooper: My Lords, I shall be as brief as possible. The answer is, yes.
7.46 p.m.
Lord Peston: My Lords, I thank noble Lords for taking part in this debate and the Minister for her response. I believe it is a besetting sin of your Lordships' House that we tend to be a trifle self-congratulatory. This has been a very good debate and I for one have learnt a great deal from it. Not least of the contributions has been that of the noble Marquess, Lord Huntly. He referred to his father as having one or two outrageous views and it may be that the noble Marquess has one or two such views himself. In that case I look forward very much to hearing them. If it will encourage him, he ought to know that one or two others of us have opinions which are occasionally a trifle outré. We can be persuaded to say a word or two to your Lordships on those matters.
This is an enormously important subject. I hope that we can return to it on other occasions, but for the moment I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Betting, Gaming and Lotteries (Amendment) Bill [H.L.]
7.48 p.m.
Report received.
Lord Newall Lord Newall moved an amendment:
After Clause 1,
("Amendments to maximum charge.
.—(1) The Secretary of State, after consultation with such persons as he considers to have an interest, may by order made by statutory instrument further amend the said section 18(1) by deleting the multiple and by substituting such multiple as he may determine.
(2) A statutory instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
The noble Lord said: My Lords, this amendment is very similar to the one that I moved last week at Committee stage. As your Lordships know, the purpose of this Bill is to raise the multiple which determines the price which bookmakers have to pay for admission to greyhound racecourses. In 1963 the Betting, Gaming and Lotteries Act fixed the sum as five times the cost of admission to the general public. Clause 1 of this Bill changes the multiple from five to 55 times to bring it roughly into line with the total which is now paid by the on-course bookmakers via the voluntary contributions paid to the tracks.
At Committee stage I suggested that in order to avoid primary legislation every time this arrangement has to be changed, it might be a more expedient solution if the Secretary of State had the power to amend Section 18 of the 1963 Act by simply laying a statutory instrument subject to the negative procedure. My noble friend replied that in the view of the Government a necessary condition for the Secretary of State to exercise this discretion will be that interested parties are agreed that a variation is desirable and what the variation should be. The fact that the interested parties might not have agreed when the legislation was introduced in the first place is an inconsistency which I will pass over for the moment.
My noble friend was kind enough to say that if I were to propose a power the exercise of which was explicitly contingent upon a prior arrangement with the interested parties he would consider the matter at Report stage (the reference is to Hansard, cols. 494–495). I believe that this amendment is the expression of just such a power. It does not mention who the interested parties are. If it did, I believe that the Bill would then become hybrid in nature, and without naming the parties it would probably be unwise and even misleading to include prior agreement as a precondition to laying an order.
The wording in my amendment, inserting the phrase:
"consultation with such persons as [The Secretary of State] considers to have an interest",
in the matter is, in my opinion and in that of our legal advisers, the most appropriate method of meeting my noble friend's suggestion. This new clause would greatly enhance the Bill and obviate the need to resort to a Private Member's Bill every time the formula for charges to bookmakers had to be reviewed.
There are numerous parallels in the racing world relating to the need for deductions, levies and charges to be altered after negotiation between the interested parties which do not have to detain both Houses of Parliament. I commend the new clause to your Lordships. I beg to move.
The Earl of Arran: My Lords, I regret that I cannot commend the new clause to the House. As my noble friend has explained, it would confer on my right honourable friend the Home Secretary a power to vary by order the figure in Section 18(1) of the Betting, Gaming and Lotteries Act 1963. In Committee, on 7th March, I doubted whether it would be easier and better to vary this figure by order than by primary legislation. But I said that we should be prepared to consider a power the exercise of which was explicitly contingent upon a prior agreement between the interested parties.
The new clause does not provide for such an agreement. Instead, it asks the Home Secretary only to engage in consultations. This may be because my noble friend does not accept the condition which we had to set in Committee, or because he doubts that the consultation would achieve agreement. But, whichever may be the case, I have to say that the clause is defective in policy. In the absence of provision for prior agreement, it is extremely difficult to envisage on what other criterion my right honourable friend the Home Secretary could decide whether or not to make an order, and furthermore to justify that decision to Parliament.
Since the new clause does not meet the condition we set earlier, I ask my noble friend to withdraw it.
Lord Newall: My Lords, I am most grateful to my noble friend for the trouble that he has taken to explain the Government's position yet again. Obviously, I am unhappy that he cannot accept this amendment. We shall have to agree to disagree. However, as he undoubtedly has the whip hand, I feel that discretion will be the better part of any contemplated valour on my part. As I wish to see the main thrust of the Bill go forward to another place, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Appropriation (Northern Ireland) Order 1988
7.54 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 10th February be approved.
The noble Lord said: My Lords, the order is being made under paragraph 1 of Schedule 1 to the Northern Ireland Act 1974. It has two purposes. The first is to authorise the expenditure of some £76 million included in the 1987–88 Spring Supplementary Estimates. If noble Lords care to look at the major booklet they will find the sum of
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£76 million referred to on page 4. This amount, when added to the £3,447 million previously approved by the House, brings the total estimates provision for Northern Ireland departments to some £3,523 million for this financial year The second purpose of the order is to authorise vote-on-account expenditure of some £1,598 million for 1988–89. This amount is necessary to enable services to continue until the 1988–89 main Estimates are, as we hope, approved later this year. Full details of all the expenditure sought in the order are set out in the Northern Ireland Spring Supplementary Estimates 1987–88, the booklet to which I referred, and in the 1988–89 Statement of Sums Required on Account paper, copies of which have been placed in the Printed Paper Office and are available for your Lordships' scrutiny.
Perhaps I may take this opportunity to draw your Lordships' attention to the recently published Commentary on Northern Ireland Public Expenditure Plans 1988–89 to 1990–91. This publication provides detailed information about the Government's spending plans for the coming three financial years. I trust that noble Lords interested in Northern Ireland affairs will find the commentary a useful additional source of information. Copies are, of course, available from the Printed Paper Office.
The draft order covers the entire range of services provided by Northern Ireland departments. I shall say a few words about certain key features of the Northern Ireland economy which inevitably influence the pattern of public expenditure provision. I am glad to say that unemployment in Northern Ireland continues to show a downward trend. The seasonally adjusted total for February 1988 was the ninth consecutive monthly fall. This is a positive and encouraging sign and reflects the trend at national level.
In the broader context the economy of the United Kingdom is now in its seventh successive year of steady growth and the Northern Ireland economy can be expected to benefit from growth at national level in the years ahead. This expectation is confirmed by recent independent surveys, for example by the CBI, which suggest that the economic outlook for the Province is fairly encouraging, with an increase in investment intentions and business confidence in the manufacturing sector last year. This is despite some instability in the financial markets. Meanwhile the rising incomes of those in employment can be expected to provide a further stimulus to businesses in the service sector in general and to the commercial revival of the Province's urban centres in particular.
In Belfast the second in a series of planned developments, the Victoria Centre, will be completed by September this year and the most ambitious project, Castlecourt, is due for completion in 1990. These developments will provide new retailing, office and car-parking space and will make a major contribution to revitalisation and to the growth of employment and prosperity in the inner city. Outside Belfast, many urban centres are experiencing a similar revival, as exemplified by Marks and Spencer's decision to build a major shopping complex at Sprucefield near Lisburn.
I should draw your Lordships' attention to a general point affecting three Votes of these supplementaries. This relates to the funds being provided by the International Fund for Ireland to finance programmes which are being administered on behalf of the fund by the Department of Agriculture, the Department of Economic Development and the Department of the Environment. I shall take one example. The international fund is providing £225,000 to the Department of Economic Development for the provision of tourist amenities in the Province. Reference to that item can be found on page 17 of the booklet under subhead A8.
In order to allow for the transmission of cash for the three programmes, what we call "net subheads" have been introduced into the appropriate three Votes. The treatment of Estimates in this particular form is appropriate because the expenditure on these programmes by the respective departments is being fully funded by receipts from the International Fund for Ireland.
I turn to the Estimates before us. I shall take your Lordships through one or two points on each particular Vote which I think merit the attention of the House. Page 6 of the Estimates volume concerns my own department, the Department of Agriculture's Vote 1. It provides for Northern Ireland expenditure on United Kingdom-wide support schemes. We find here that an additional net provision of £4·5 million is required. This is mainly to meet outstanding commitments on two capital grant schemes; namely, the Agricultural and Horticultural Development and the Agricultural and Horticultural Grants Schemes, both of which have now been discontinued.
The Vote also provides for an expenditure of up to £7·7 million under the national element of the Agricultural Improvement Scheme. Reference to that is to be found under subhead B6 on page 6. The scheme is primarily for the provision of effluent storage and disposal facilities, which is not a particularly pleasant thought for this time of night. However, as noble Lords will know, because of the climate and layout in the Province, as regards agriculture, this is an especially necessary item.
I move further on to the Department of Agriculture's Vote 2 at page 9. That requires an additional £4·7 million, the major components of which are expenditure on the Grassland Scheme and residual commitments under the original Northern Ireland agricultural development programme, which ceased taking new investment in 1986.
General support to industry is covered by the Department of Economic Development's Vote 2 on page 12. An extra £7 million under subhead A3 is required to meet the current level of expenditure on industrial development grants under selective financial assistance agreements. This reflects continuing success by the Industrial Development Board in its main task of promoting and safeguarding employment. When the pluses and minuses are taken into account, the net additional provision for this Vote is some £4·8 million. Votes 3 and 5 are what we call "token" supplementary estimates, each for £1,000. Their purpose is to draw
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attention to various increases in expenditure which are being offset by savings elsewhere.
The final economic development Vote requiring an increase is Vote 6 relating to administration and miscellaneous services on page 23. The additional £1·5 million sought is required for increased staff costs arising from the implementation of further employment measures, including the expansion of the Restart programme. In addition, the department's computer facilities will be upgraded to cope with increased workload. This, together with other efficiency measures, will improve management information and consequently the service provided to the public.
Next we come to the Department of the Environment Vote 1, which covers roads, transport and ports. Some £3 million, in subhead A4 on page 27, has been channelled into an extended programme of structural maintenance works on roads. This includes the repair works made necessary by the severe flooding of last October, for which additional resources were made available to Northern Ireland from the contingency reserve. Much of this has been financed by additional receipts and savings, leaving a net supplementary estimate of £580,000. That is to be found at the top of page 26.
Moving to the Department of Environment's Vote 4, additional provision is being sought to meet increased expenditure on environmental and miscellaneous services detailed on pages 42 to 47. This includes £4 million for the Belfast programme, £1·5 million for land acquired for the Ballymacoss development scheme and some £600,000 for the general grant to district councils. However the additional expenditure has been partly offset by savings and additional receipts within the Vote, leaving a net requirement of a little over £4 million.
Moving on to the Department of Education, Vote 2 is classified as higher and further education on page 56, for which an extra £3·2 million is sought. This is largely required to cover grants to the two Northern Ireland universities, reflecting mainly the recommendations of the University Grants Committee and to cover the additional costs of the pay award for further education lectures agreed earlier this year.
An additional £476,000, detailed on pages 59 and 60 of the Estimates volume, is sought under Vote 3 for Department of Education miscellaneous services and administration. I would particularly draw your Lordships' attention to the £200,000, at the foot of page 59, under subhead El. This is required for our new community relations initiative to promote cross-community contact between schools as well as among the young people of Northern Ireland. Also to be noted is the £85,000 in subhead F12 on page 60, required to fund the Council for Catholic Maintained Schools whose main objective will be to promote high standards of education in these schools. Other additions include extra resources for the Belfast urban programme, provision for the Northern Ireland contribution to the National Council for Vocational Qualifications, payments to the Northern Ireland Training Authority in respect of the Open Learning Centre, and increased expenditure on

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departmental administration, mainly on consultants' fees and equipment.
In Vote 4, on page 62, which covers grants to education and library boards, an additional £11·4 million is sought. Some £8·4 million is for recurrent grants to boards including increased expenditure of £3·5 million on rates, £2·2 million on salary costs and £2·1 million for mandatory awards and special schools. The increases sought will also enable education and library boards to carry out certain essential maintenance work on school buildings. In particular there will be extra money to cover the costs of repairs to schools in the Western board area following the storms last autumn. The additional provision in capital grants to education and library boards is £4·5 million. This is partly offset by increased receipts from the sale of land and buildings of some £1·5 million.
Turning to the Department of Health and Social Services, which is an important department, gross spending on health and personal social services this year will increase by some £28·6 million. Details of those increases can be found on pages 69 to 72 of the Estimates. Some £2·1 million of this provision is the Northern Ireland share of the £100 million additional resources made available from the reserve in 1987–88 for the health services throughout the United Kingdom, as announced by the Government on 16th December 1987. Of the total increase, some £16·7 million (subhead A 1) will go to health and social services boards. This will help them meet the cost of higher than anticipated pay settlements in 1987.
The £28·6 million increase in spending will therefore contribute towards maintaining the high standard of health and personal social services which we have in Northern Ireland, and also assist in the process of transition from institutional to community care for those in long stay accommodation. This reflects one of the main themes of the regional strategy for health and personal social services—the development of community care as a real alternative to care in institutions The increase in the capital programme of just over £1 million will be applied principally to minor works and the essential replacement of medical equipment. Section D on page 71 shows that £9 million is required for family practitioner services to meet increased demand and higher costs, particularly in the pharmaceutical services.
In the social security programme, which is covered by DHSS Votes 3 and 4—that is moving from page 77 to page 80—an additional provision of £15·4 million is sought. Of this £6·34 million is for DHSS Vote 3. We call that administration and miscellaneous services, of which £3·4 million is needed to ensure the successful completion of the reforms in the administration of social security benefits and to maintain momentum in the computerisation programme. A balance of £2·9 million is required to meet a shortfall of receipts from the National Insurance Fund.
Finally, in Vote 4 (social security) an additional £9.1 million is required to meet an increase in
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supplement to the National Insurance Fund, increased expenditure on supplementary pensions, attendance allowance, payments into the social fund, maternity grants, and the special payments to beneficiaries resulting from the error in the retail prices index. That concludes my opening remarks. I have taken your Lordships on a brief tour of the main expenditure provisions of the draft order. I shall listen with great interest to the points that your Lordships make. I undertake to answer them all. I beg to move.
Moved, That the draft order laid before the House on 10th February be approved.—(Lord Lyell.)
8.10 p.m.
Lord Prys-Davies: My Lords, I thank the Minister for his tour through the main expenditure adjustments covered by the order and for underlining its salient features, which we support. I welcome his reference to the contribution from the International Fund of Ireland and for the additional support to meet the costs of repairing the flood damage caused last October.
I am also glad that the Minister has drawn attention to the helpful commentary on government expenditure in Northern Ireland which has recently been published. That is the first time such a commentary in respect of government expenditure in Northern Ireland has been published. Nevertheless, it is still difficult for a layman, or at least this layman, to form a coherent view of the totality of expenditure in Northern Ireland and the extent to which it achieves the Government's main policy objectives. I shall give an example of what I have in mind. The Department of Economic Development attaches great importance to its pathfinder initiative. The people of Northern Ireland were bidden by that initiative to tackle the six roots of their economic problems which it had identified.
Your Lordships will know that one of those problems was said to be the high dependency of its industry on public funds. We are told that the scale of government subsidy to the manufacturing section in 1986–87 was equivalent to £39 per week per manufacturing employee. It would therefore appear that one aim of the policy is to reduce the scale of that dependency. It would be helpful if the Minister could tell the House to what extent that aim has been achieved in the year 1987–88 and what is forecast for that dependency in the year 1988–89. From studying the appropriation order I have been unable to form a view of whether that dependency has been lessened.
When he replies the Minister will perhaps tell us whether the policy of reduced dependency is linked to a broader, and possibly more sinister, policy of reduction on planned spending on investment on economic affairs in Northern Ireland.
I wish to deal at some length with the health Vote and the important Health Department because the state of the NHS in Northern Ireland is the subject of serious concern, as it is on the mainland. It is a major worry. Growth revenue spending by the health boards will increase by 5·2 per cent. during 1988–89, which is below the yearly increase of 6·3 per cent. that

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has been agreed for the rest of the United Kingdom. If one deducts, as one must, 4·5 per cent. for inflation, the yearly increase is a meagre 0·7 per cent. That is way below the 2 per cent. a year increase which is required to meet the pressures on the NHS, according to Ministers' evidence to the Social Services Committee of the other place.
The capital programme has been reduced, and the department has acknowledged that the number of capital schemes due to start in 1988–89 will have to be deferred because of that reduced capital allocation. I should be grateful if the Minister would give particulars of the capital schemes which will be deferred during 1988–89. I anticipate that he may remind the House that the percentage of GDP spent on the NHS in Northern Ireland is double that spent in the UK. That is correct, but Northern Ireland Ministers do not claim that NHS spending in Northern Ireland is extravagant; the public do not claim that it is extragavant. On the contrary, the Health Minister for Northern Ireland, Mr. Richard Needham, has rightly acknowledged that the present level of spending in Northern Ireland on health services is "necessary and important".
That is consistent with the requirement of the pressures to be found in the poorest regions in the United Kingdom. High unemployment levels of 21 per cent. or 22 per cent.—I gladly acknowledge that they have been coming down over the past nine months—the high dependency on social security, poor housing, let alone the tensions consequent upon terrorism for the past 20 years, together generate greater demands on the health service. They also make the discharge from hospital and the provision of care in the community that much less acceptable.
The concern which we on these Benches express will come as no surprise to the Health Ministers for Northern Ireland. Indeed, the chairmen of the four health boards made their concerns clear to the Secretary of State for Northern Ireland when he met them a week ago today. Mr. Needham, the Minister, knows that he has a problem. To his credit, in his press statement of 22nd January he said:
"obviously we would like more money. I am fully aware that next year will be difficult for the Board. For my part I will do what I can to help Boards meet the pressures which inevitably arise in-year".
As a matter of interest, in that connection it has not escaped our notice that the Health Department has made an additional £150,000 available to the well-known charity, the Northern Ireland Voluntary Trust. Significantly that has been earmarked to meet the cost of setting up a number of projects to help local communities support vulnerable people at home. One does not require a great deal of foresight to anticipate that the demands of the vulnerable people in the communities in Northern Ireland will grow. In a small way, the department is anticipating that demand by the additional allocation of £150,000 to the Northern Ireland Voluntary Trust. But that is a trifling sum compared with the £7 million which the NHS in Northern Ireland has lost because the yearly percentage increase has been held at 5·5 per cent. instead of 6·3 per cent.
The Minister mentioned the themes which the department is encouraging the boards to adopt. Can
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he tell the House whether the department proposes to give some guidance to the boards as to whether they should be affording protection to some of the services on the department's long list of priorities and targets, or are they to be left to get on with it as best they may?
I think we have to ask why the health service in Northern Ireland is being denied the full 6·3 per cent. yearly increase. This is a reasonable question which we from these Benches must ask. Again, Mr. Richard Needham has given us the Government's explanation. It is this:
"The health service in Northern Ireland has been denied the additional 1·1 per cent., because more money has to be spent on law and order in Northern Ireland and everybody in Northern Ireland has to accept some responsibility for that".
Those were the Minister's words and this is the explanation which is on offer. It is in my submission a most peculiar justification and one which is simply not convincing.
To keep the yearly percentage increase on health expenditure at the lower level of 5·2 per cent. in order to spend millions more on law and order is not a convincing argument for adding to the disadvantage of the sick, or adding to the totality of the disadvantage, which is precisely what this does. Moreover, I think it questionable whether everybody is being asked to accept the same responsibility for the increased law and order bill. It seems to me that it is a burden which the sick in particular are being asked to shoulder, if there be anything to the Government's explanation. As I understand the appropriations order, the increase in all the other 21 Votes has not been held back 1.1 per cent. right across the board. I suggest that the people of Northern Ireland should not be fobbed off with a law and order explanation.
So what is the explanation? I have an uneasey feeling that the important health Vote—and the Minister acknowledged that it was an important Vote and an important department—has suffered this penalty because it is felt by the powers that be in the Treasury that the Province could do much more to help itself, as the Government are already spending 23 per cent. more per person on the health service in Northern Ireland than in England and Wales. I have a feeling that that is what the department has been told by the Treasury. Therefore, if that is right, the fault would appear to be that of the Treasury. If the fault be that of the Treasury, perhaps I may ask the Minister whether the Department of Health for Northern Ireland has commissioned a detailed study of morbidity in Northern Ireland and its relationship to resource allocation. If that has not been done, it ought to be done.
The NHS in Northern Ireland employs 63,000 staff. Perhaps I may ask the Minister whether it is being suggested that some of the staff are surplus to the real requirements of an efficient health service in the Province. I ask this question because it would appear to some people in high places that Northern Ireland should now be exporting abroad some of its skilled staff in the NHS. This is another remarkable development. The Department of Health, jointly with the Industrial Development Board, commissioned a company called United Medical

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Enterprises to consider whether areas of expertise within the health care sector could be marketed profitably outside Northern Ireland. The company confirmed that this was an area which could be developed or exploited. These glad tidings were brought to the people of Northern Ireland just before Christmas.
Moreover it was thought, and it was said in the press handout, that this opportunity of serving in foreign lands would provide the staff with the opportunity to broaden their horizons. It might be so interpreted by some people but it can also be seen as a piece of effrontery to the staff. Perhaps the Minister can tell the House when the Secretary of State hopes to come to a decision on the remarkable recommendations contained in this document. Can he also tell the House on whose initiative this remarkable study was commissioned?
We on these Benches do not want to see highly trained, highly skilled medical and nursing staff being encouraged to sell their services in the foreign market unless the department is fully satisfied that the standards of health in Northern Ireland are such that they will not suffer if it exports its skilled personnel. Otherwise, the decision would be foolish in the extreme and would add to the already wide range of deprivation and disadvantage which has been a burden of the Province for generations and continues to be a burden.
Before moving on to my next subject, and I shall be brief, I would add that I warmly welcome the publication last week of the long overdue proposal for a draft housing order to introduce homeless legislation into Northern Ireland. Before I sit down I want to ask a few questions about the University Education Board. I trust that there will be no point of great difference between us and the Government on this topic. I think it is opportune that I should be asking this question, because last week the main committee of the University Grants Committee was visiting Northern Ireland for the first time in 15 years.
Vote 2 of the Education Estimates provides an extra £3·2 million which will be used in part to support the two Northern Ireland universities in accordance with the recommendations of the UGC. It is this reference to the recommendations of the UGC which caught my eye. We are interested to learn more about the role of the UGC in Northern Ireland. I would therefore be grateful if the Minister when he comes to speak could explain to the House the relationship both in theory and in practice between the department and the UGC. Are the powers of the DES in relation to the UGC exercised in Northern Ireland by the Secretary of State for Northern Ireland on his own or jointly by the two Secretaries of State?
Is the level of Treasury funding for the Northern Ireland univeristies determined by the UGC? What role does the Secretary of State for Northern Ireland play in the allocation of Treasury funds to the Northern Ireland universities? I understand that a Northern Ireland sub-committee of the UGC has recently been established. Am I right that its members will be appointed by the UGC, and is the Secretary of
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State for Northern Ireland involved in making these appointments?
These questions are important. The role of the UGC is important because the universities in Northern Ireland, as indeed throughout the United Kingdom, are facing a crisis as a result of the Government's determination that they produce value for money. Therefore we want to know who at the end of the day is responsible for the allocations to universities in Northern Ireland. Is it the UGC or is it the Secretary of State for Northern Ireland?
I have taken far too much of your Lordships' time. I have concentrated on the one main Vote and by doing so I am sure that I have overlooked significant adjustments which are contained in the draft order. As only very few Members in another place who have the honour of representing Northern Ireland constituencies took part in the debate in another place on this important order—and whose contribution based on their detailed knowledge of constituency conditions and pressures would have been so valuable in illustrating the nature of the problems in Northern Ireland—there is a risk that one may have failed to spot a hidden problem. But fortunately I am to be followed by at least five other speakers who I am sure will do justice to the order.
8.31 p.m.
Lord Hylton: My Lords, I am sure that my noble friend and I are both grateful to the Minister for his care in explaining tonight's order. I shall start by glancing briefly backwards to the appropriation order debate which took place in your Lordships' House on 16th July 1987.
I have to thank the Secretary of State for so promptly organising a new community relations unit reporting directly to him. I also underline and repeat what I said at cols. 1223 to 1225 of the Official Report in July concerning the ACE scheme and the most effective and appropriate methods of funding voluntary bodies and community effort.
This is a matter which affects community relations and there is scope for improvement, among other reasons because many people suspect that the ACE scheme and some other forms of government aid are used as a means of social control. I hope that those suspicions are unfounded, but Her Majesty's Government could do more to show that this is the case.
British-Irish relations have been, I regret, in sad disarray since the New Year. In Northern Ireland, from where I returned last week, there was more than usual tension in the air. Dramatic political progress may therefore not be possible but I ask the Government please to keep on thinking about returning greater political responsibility to the people. Would they, for instance, work out the implications of having a proportion of elected members on the statutory boards—for example, the Housing Executive board, the education and library boards or the health and social service boards? Would not a mix of perhaps one third appointed, one third nominated by district councils and one third directly elected be an improvement on the present

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position? If these new elections coincided with European elections, general elections or local government elections this would avoid unnecessary proliferation of voting.
My next question concerns the Payments for Debt (Emergency Provisions) Act 1971. This is an old Stormont Act designed for the emergency situation arising from the rent and rates strike of 1971. The Minister will, I am sure, confirm that it was intended to be a temporary measure. The evidence for this is in the Title and also in Section 18, which enables the emergency period to be ended by Order in Council. There is no need therefore for legislation. I have to ask the Minister why, if the Act was intended to be temporary, it is still in force. Also why are the procedures for recovering debts due to statutory bodies totally different in Northern Ireland from those which apply in the rest of Great Britain?
I come now to housing. I should perhaps tell your Lordships that it was questions of housing aid and housing associations that took me to Northern Ireland as long ago as 1968 during the civil rights era. Since then survey after survey has shown that Northern Ireland has housing problems and arrears of work as bad and probably worse than those in the worst affected parts of Britain.
Visiting elected members and officials from the European Community agreed that Belfast and Naples should have equal priority for the regional and social funds. Much progress has been made since then. The Housing Executive and housing associations have done a very good job and no one would deny that. It is really encouraging to see rebuilt areas as diverse as the Markets or Sandy Row or to drive up the Crumlin, Antrim or Old Park Roads. Much however remains to be done. The doing of it is essential to public health, to employment and the local economy, to community relations and above all to public morale, especially in the most deprived urban and rural areas. Those are the hardline areas where traditional sectarian passions are strongest and where the fewest leading politicians, civil servants and professional people actually live. Housing has a contribution to make to peace.
It was therefore with the deepest disappointment that I learnt of a cut of £19 million in this year's capital provision for housing. This was followed by a further cut of £5 million only last week, apparently to bolster up the beleaguered health service.
I beseech the Minister to realise that these are false economies particularly in view of yesterday's Budget Statement about which I say no more. Will the Minister urge his right honourable and honourable friends to make compensating increases in the provisions for 1988 to 1989?
Belfast has earned some entries in the Guinness Book of Records. It has, for example, the largest girls' comprehensive school in Western Europe and perhaps anywhere. It also has one of the largest system-built groups of dwellings in the Divis flats. This can only be called a housing and health disaster area. Whatever could go wrong has gone wrong. The roofs, the walls, the windows, the ventilation, the lifts, the rubbish chutes, the access decks and the
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sewers have all gone wrong. There is penetrating damp, condensation and periodic flooding. The stairways remind me of a cross between the Middle East and Dante's Inferno. I have not so far risked the lifts.
In 1987 the University of Ulster studied Divis and Twinbrook, which are two areas of Belfast comparable for poverty and unemployment. The study however showed adult mental health to be four times worse in Divis, while long-term child illness was 10 times worse.
I visited the blocks that still stand both by day and by night. I hope that the Minister who is responsible for housing will do the same and take the chairman of the Housing Executive with him. They have only to ring the chairman of the residents' association and I am sure they will be most hospitably welcomed.
They will find that the inhabitants of Divis are normal human beings who endure bad conditions with cheerfulness, patience and resourcefulness. Their pre-school play project won a recent Ewart-Biggs award. They put on nativity and Easter plays. Their drop-in teenage centre fields football sides in local youth leagues. The residents' ACE scheme employs 70 people in a situation of about 85 per cent. unemployment.
In efforts to cope with such problems as a probable 50 per cent. glue-sniffing rate among some young people there is a welfare advice centre, country outings and a variety of training workshops. Young residents have graduated in word processing, hairdressing, driving and other marketable skills. Adult education takes place on site and some people cross the road to the Conway Mill education centre, which was highly commended by inspectors of the Department of Education in Northern Ireland.
These are all signs of a local community wanting to give hope, purpose and meaning to peoples' lives and seeking to prevent despair, alienation and vandalism in near impossible circumstances. Experience shows that vandalism almost disappears when people move into new houses with their own private space; for example, in the area immediately adjoining Divis in and around Albert Street.
After long campaigns and with the help of the Town and Country Planning Association in London, and since the demolition of five blocks in the original complex, the decision has been taken to demolish all the flats and maisonettes. That is an excellent decision. However, the Housing Executive believes that rehousing and demolition will take seven to 10 years. That is too long. I ask the Government whether they will provide the resources for a more rapid programme. A shorter programme would save significant health and welfare costs and avoid additional expensive repairs. I do not expect a full answer tonight. The question is far too big for an off-the-cuff response.
Finally, I ask the Government to discuss with the Housing Executive the use of every available and potential housing site in the Lower Falls area. I have noted vacant areas both withnn the Divis complex and in Grosvenor Road. I shall write to the chairman of the Housing Executive about them. I repeat that

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humane housing has a big contribution to make to that peace which we all so much desire.
8.40 p.m.
Lord Moyola: My Lords, I am most grateful to my noble friend for his introductory remarks and his explanation of the appropriation order. I hope that it will not be taken as slightly frivolous, against the events in Northern Ireland, if I address my remarks this evening to the subject of salmon and salmon fishing. It is an important subject because it is an important element of the tourist trade and it has a spin-off importance in many other fields.
Before going further, I declare an interest, in that I own a small amount of fishing on what could be described as a modest fishing river. My noble friend will remember that in December he kindly came to my home, where we had a meeting with various fishery authorities to discuss the reasons for the acute shortage of salmon in Northern Ireland rivers throughout the 1987 season. The main subject of discussion at that meeting was offshore netting, which was held to be to blame for the bad season and was thought to be done on a massive scale mostly outside the 12-mile fishery limit. That limit is the area within which the United Kingdom, Ireland and other countries operate fishery protection.
As I understand it, based on the information given by experts, the problem is that fish coming from the north of Ireland approach down the west coast of Scotland. Because of the bulge created by the island of Islay, they are pushed far to the west and to the north-west coast of the Republic of Ireland and County Donegal, where they do an "S" bend, come east again and then enter the rivers of Northern Ireland. They are thus fair game for any form of legal or illegal fishing which may take place off the coast of the Republic of Ireland.
A bigger problem is that, while no one knows exactly what the fish do, they are thought to go into the area running roughly in a line between the southern tip of the Hebrides and Malin Head in the Republic of Ireland. That is a large sea area, all of it well outside the 12-mile limit and well out of sight of land. One hears terrible rumours—they may be nothing more than that—that last year there was 55 miles of continuous monofilament net stretching from the Bloody Foreland in County Donegal down to the north-west coast of the Isle of Man. I do not know whether that is true. However, there is usually some element of truth in such stories. If that is so, it is obviously a serious matter.
Added to such stories is the fact that such fish as we are catching are netmarked and that they are very small and would therefore have been the only fish able to get through the nets. Many of the fish which are caught offshore are never landed in Ireland at all. It is thought that they are sold to the trawlers of foreign powers outside the 12-mile limit. They are never landed in Ireland, the United Kingdom or the EC.
At our meeting my noble friend agreed that he would endeavour to set up a meeting of the Royal
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Navy, the Royal Air Force and the Department of Agriculture and Fisheries in Edinburgh to see whether some plan of campaign could not be worked out. We are now into another fishing season and so far nothing has happened. I therefore ask whether he has been able to make any progress in that field and whether there is any prospect of co-operation between the services and the various fishing industries. I should also like to ask, if that is not the case, whether there is any hope that the EC will take a hand in the matter. As I understand it, jurisdiction is claimed within 200 miles of the coasts of EC countries.
I also ask my noble friend to take the matter up with the Government of the Republic of Ireland. That would seem to be an appropriate subject for discussion within the context of the Anglo-Irish Conference. I also ask whether he has read a publication from the Government of the Republic of Ireland entitled Framework for the Development of Ireland's Salmon. It is a document which makes very interesting reading. It indicates that the Republic of Ireland is keen to provide greater protection, to put quotas on the numbers of fish landed and to introduce tagging, among many other things. For the Republic, that would be enormously expensive and a mammoth task. I suspect that it would also not be very politically rewarding, because fishing is probably the main industry in many communities in the West of Ireland. I hope that my noble friend will encourage the Republic in every way possible to do something about the offshore netting problem.
The other major subject at our meeting was the question of farm slurry which is being let into the rivers and which damages fish. At various times there have been grants to farmers to build slurry tanks. I think that at the moment those are withdrawn. They have been on and off on at least two occasions in the last year. As I understand it, something on the order of £1 million was set aside for that particular grant and it was oversubscribed about 10 times. I ask my noble friend: will those grants be renewed and, if not, is there any chance that help could be obtained from the EC? The matter is worth pressing, since the fact that so many farmers applied for those grants means that they are now taking an interest and are willing to play a part. That should be encouraged in every way possible.
Poaching is a serious matter in Ireland. I shall not go into a lot of poaching stories. I have been making inquiries about the penalties, and I am told that by and large they are satisfactory. The problem is that they are not always enforced. While I do not wish to be rude in any way about the judiciary or to criticise it, perhaps it could be conveyed to its members that, when dealing with poaching offences, they are dealing with what is in fact a national asset. I hope that that will be in the forefront of their minds.
Could there not be a tagging system? This is no more than a system whereby a bona fide fisherman or anybody obtaining a fishing licence acquires with it a number of tags. The tags have to be put immediately into any fish caught. The system contributes to establishing the history of where fish came from. Any fish that is untagged may be assumed to be an illegally

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taken fish. Could there not also be a register in which fish merchants, hotels, restaurants—indeed, anybody who sells salmon in any form—must record where the fish came from? In this way they too could help to reduce the poaching incentives. Incidentally, both those measures are recommended in the Republic of Ireland document to which I have referred.
I turn now to the Fishery Conservation Board, which looks after a large part of the Northern Ireland fisheries and does a very good job. I hope that it will be reasonably well funded. It has only one fishery protection boat, and there is a rumour that this is about to be withdrawn because of shortage of funds. The board has been told that it must protect the offshore fishing by means of someone sitting on a sandhill with a pair of binoculars. However, that may be an exaggeration. I hope that the Minister can confirm that the boat will not be withdrawn.
Another point arises in regard to the Fishery Conservation Board. Unlike most fishing authorities, it does not have in its whole system—and it is the largest system in Northern Ireland—a single fish counter. If it is to monitor the progess of fish, whether in an upward direction or in decline, it is vital that it should have the means to monitor properly and so take the necessary action in time.
I have one final point on fishing. Can the Minister say what is being done about restocking the rivers? I know that an experimental programme is taking place. I know too that efforts are being made to identify the eggs in various rivers with a view of transferring for fertilisation the female eggs of fish that have been taken from other rivers. Can the Minister say how this is progressing? Is there any guarantee, bearing in mind that salmon are supposed always to return of the river of their birth, that fish produced in this way will return to the river of their birth?
I deal finally with the drainage of rivers. I have always been an advocate of this, particularly in regard to many of the small rivers—what in Northern Ireland are called minor watercourses. A great deal of very good work has been done and much farmland has been improved by this means. Many farmers, I am sure, would say that they are enormously grateful. However, the wheel seems to have turned almost full circle and a new problem has arisen. The rivers that have been drained now rise so rapidly and come down so fast that not only are they tearing away banks and trees and bringing down masses of silt and gravel, thus creating other obstructions, but in several cases they are flooding the lower waters. In some rivers the upper waters have been beautifully drained and the farmers are very happy, but the flood waters have been transferred to the lower waters. From my own experience, I can name the river from which I take my name, the Moyola, as one of them. I know that the same thing is happening in the Blackwater, and I hear quite a lot of grousing about some other rivers. I do not know whether there is an answer—I doubt it—but some consideration should be given to this in planning future drainage.
Years ago when drainage schemes were first started, and certainly throughout all my political life,
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when a waterway or minor watercourse was going to be drained the farmers who owned the banks and the land beside them were asked to sign a consent to allow the Ministry to take its machinery on to the land and to do whatever was necessary. In return for their signing the consent, it was agreed that henceforth, after the completion of the drainage, the Ministry would accept responsibility for the maintenance of the banks and for keeping the river clean. As I understand it, this undertaking has been withdrawn. Has this been done with the consent of the Minster or of the department? If so, I think that it is a reprehensible step; in effect, the department is breaking its undertaking.
That is probably enough on fish and drainage. These things all cost money, and I shall certainly support the order.
8.58 p.m.
Lord Blease: My Lords, I join other noble Lords in welcoming the order and in thanking the Minister for his explanatory statement.
I am acutely aware of the huge sums of financial expenditure to which the appropriation order directs attention. Indeed, I was quite bemused for a while as the Minister metaphorically tossed across the Floor of the House millions of pounds in expenditure terms. At the same time, one is compelled to acknowledge that the amount the Minister quoted—£1,674 million—is only part of the total amount required by Northern Ireland public expenditure plans for 1988–89, which is in the region of £4,910 million. The Government's public expenditure plans account for some 70 per cent. of the gross domestic product of Northern Ireland. That means that in relation to the public expenditure per head of population in the United Kingdom the Northern Ireland figure is some 40 per cent. Higher.
I am not nor have I ever been an apologist for the Conservative Government's economic policies. Indeed, as my noble friend on the Front Bench, Lord Prys-Davies, has to some degree claimed when dealing with the National Health Service, I would say that there are some reasons for that relatively high percentage of public expenditure which are to be explained as a direct result of the Government's economic policies that have compounded chronic unemployment and deprivation in the Province.
However, in making any critical analysis of the situation in Northern Ireland, to be honest with myself I am concerned at least in facing up to the practical realities of the position in the Province as it comes within the context of the United Kingdom. I realise that in Northern Ireland there are distinctive historical, social, political and economic problems. The noble Lord, Lord Prys-Davies, has already referred to the fact that explanations are being offered for the public expenditure particularly in connection with the health services, which has been explained away as reductions because of the larger amount of money being spent on efforts to maintain law and order in the Province.
For those who are involved, however marginally, in public life and the parliamentary processes, there

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is nothing to be gained by ignoring economic facts. A more positive approach than the sulky walk-out attitude adopted when these crucial financial programmes were being debated in another place is expected from representatives and those in positions of public responsibility. In these matters the Northern Ireland people are in need of and indeed deserve a better form of representation than mere negative protest. That does not mean that I approve of the present parliamentary processes for the consideration of such appropriation orders, which have vital financial implications and policies for the Northern Ireland people.
I repeat what I have said on previous occasions in debates in this House. Surely there must be more effective and better ways of embracing and encouraging general public interest and corporate accountability in Northern Ireland as regards the need for efficient and socially relevant policy decisions about public expenditure of this kind. The Northern Ireland people must have the opportunity for a direct and representative involvement and influence at all stages of these appropriation orders, which should not merely be rubber stamped.
Along with other noble Lords, I wish to compliment the Northern Ireland Department of Finance and Personnel on the publication of the first commentary on public expenditure plans for 1988–91. The publication has been well presented and is worthy of Province-wide study and debate, which I think could achieve the active and informed public association with and accountability for financial policy matters which I have already mentioned.
In that connection, I ask the Minister whether he will request the Secretary of State to consider suitable ways in which this publication could be discussed at various departmental levels and also by statutory bodies, local district councils and other industrial and community organisations within the Province. I believe that it would serve a very good purpose in conditioning the minds and attitudes of the citizens of Northern Ireland.
I should also like to ask the Minister to use his good offices to urge the Northern Ireland Economic Council to undertake an updating of its report on the financial system in Northern Ireland published in April 1982. I understand that that report was a most useful publication. It is now somewhat out of date and it is suggested that a new issue should be undertaken by professionally competent people who are directly acquainted with business and financial matters in Northern Ireland, rather than for a report to be commissioned that will be compiled by outside consultants.
I turn to matters in the order under a few headings. Because of the time factor I shall not argue the points at issue. I hope that the Minister will accept the questions raised as reasonable, and feel that they merit consideration and a reply. Under the heading of agriculture I should like him to consider the subject of research and development and the encouragement given by DANI to agricultural
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producers to undertake new viable enterprises. When is DANI likely to respond to the recent report of the Northern Ireland Economic Council on Horticulture in Northern Ireland, in which there are a number of excellent recommendations about the need for cooperation and development?
Secondly, will the Minister indicate the number of applications from Northern Ireland that have been submitted to the farm diversification scheme that is being instituted by the International Fund for Ireland, which the Minister himself has already mentioned? I understand that submissions and requests for financial aid for some help with farm diversification approaches were to be in by the end of February.
How best can DANI assist in the marketing and promotion of the slurry digester project for fertiliser and methane gas production? The project has been pioneered jointly by the University of Ulster and the Bethlehem Abbey in County Antrim. I understand that the project has excellent financial export prospects as well as tremendous benefits for pollution control.
As regards the Department of Economic Development, I know that a few days ago the Secretary of State for Northern Ireland announced the sale of the 200th factory by the Northern Ireland Industrial Development Board. This is indeed a welcome sign of confidence in industrial investment in Northern Ireland and an encouraging commitment to the economic growth of the Province.
While management and workers in Northern Ireland are confronted with similar technological changes and world-wide competition as in England, Scotland and Wales, they sadly have the additional burdens of coping with various forms of terrorism and the untoward problems it creates at home and overseas.
We have only to reflect on the sad and serious events reported today in Belfast to realise the immediacy of the critical situation that exists there. I pass over that because I do not believe that there should be instant comment in this House on such events as occurred today. I hope that the Minister can inform us whether an early Statement on the events will be made by the Government, because the longer these events exist in limbo the more they gather rumour and momentum beyond the bounds of reality.
I should also like to mention the acute political schisms that tend to divert corporate community efforts in support of the common objectives required for prosperity and economic wellbeing. However, I am glad to say that management and trade union relationships in Northern Ireland have largely succeeded in gallant and practical measures to rise above the intercommunal strife and to keep the wheels of industry turning in productive employment. Both sides of industry are an anchor of safe sanity in a troubled sea. At the same time it must be openly admitted that the future for industry and commerce, for earnings and for jobs, and for human happiness in the Province, largely depends on steady improvement and stability and on the upholding of

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the rules of law and order in the sadly divided society in Northern Ireland.
The Minister will be aware of the widespread public expressions of concern about the plight of the health and social services in Northern Ireland. My noble friend Lord Prys-Davies has dealt with this matter in much detail and has very forthrightly put forward points to the Minister. I do not intend to speak about the general position. I believe that this subject will be debated in this House soon.
I wish to ask the Minister to deal appropriately with two urgent issues about which I have received considerable representations from individuals and from organisations. The first issue concerns the Joss Cardwell Rehabilitation Unit in East Belfast. This is a purpose built and equipped centre which is unique in that it is the only regional community based rehabilitation centre in Northern Ireland. The Eastern Health and Social Services Board proposes to dispose of this centre and to transfer only part of the services provided to two nissen huts at Musgrave Park Hospital. The alleged cash saving is stated to be about £50,000 per year. The social cost and other factors suggest that to destroy the Joss Cardwell centre would be an ill-advised and costly step for the people of Northern Ireland.
The other matter of concern is the proposed closure of the Shaftesbury Square Hospital which provides in-patient and out-patient treatment for substance abuse—mainly for alcohol abuse. I understand from public remarks and representations that have been made to me that former patients and alcoholics who have been rehabilitated are, together with local government officials, councillors and clergy, utterly astounded by and opposed to this proposed closure. I hope that the Minister will raise the matter urgently with his ministerial colleagues with the intention of having an urgent review of these proposed closures.
Finally, on 23rd February I had a Written Answer from the Minister to my Written Question about the Government's decision to discontinue the publication of the Ulster Year Book. With others in Northern Ireland, I am unhappy about the Government's decision for a number of reasons, not least the lack of readily available, helpful and detailed information about Northern Ireland affairs. However, I have had a look in the Library at the publication Britain 1988—Official Handbook. This publication was prepared by the Central Office of Information on behalf of the Foreign and Commonwealth Office. In this publication there are a number of useful references and some general information about Northern Ireland affairs. This publication, Britain 1988—Official Handbook, does not compensate for the loss of the detailed information contained in the Ulster Year Book.
Perhaps I may ask the Minister to request the Secretary of State for Northern Ireland to make suitable representations to have the title of this official handbook changed to "United Kingdom" rather than "Britain", or to the "Official Handbook of Great Britain and Northern Ireland". I believe that at least that would indicate to the wider world that Northern Ireland is still on the map and is an
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integral part of the United Kingdom. I support the order.
9.15 p.m.
Viscount Brookeborough: My Lords, I am grateful to my noble friend Lord Lyell for the attention that he has given to this order and for the way in which he dealt with it. I too must say how welcome is the commentary on public expenditure plans to those such as myself who find it difficult to understand such colossal figures. I should like to thank the noble Lord, Lord Prys-Davies, for the tremendous support that he has shown in his speech for the welfare of the people in the Province.
I begin by mentioning a few points relevant to the agricultural industry, because it is the largest single industry in Northern Ireland. Farmers will welcome the department's intention to accelerate payments on capital grant schemes which were completed some time ago. I hope that that will actually occur, as bank borrowings by farmers in the Province recently rose to a new record of £281 million. I realise that there is some fault on the part of farmers. Individual farmers may not have appreciated the long delays before payment. However, the build-up of interest on borrowed money seriously undermines the net value of this grant aid.
Sheep producers in the Province are genuinely concerned at what may be in store for them when the operation of sheepmeat stabilisers is being discussed in Europe. If the intention is to reduce the number of regions where separate calculations of annual ewe premium rates are permitted, there may be a very dramatic reduction of premium level in Northern Ireland. There are two sound reasons to justify special consideration for our farmers. The first is that, due to our geographical location, transport costs between the Province and outside markets are much higher than between other EC countries. Secondly, due to the topography and climate there are fewer alternative farming enterprises open to Northern Ireland farmers should the value of lamb production fall. I shall be interested to hear the Minister's reply as regards the number of applications submitted for assistance with alternative farm enterprises. I ask him to assure the House that due consideration will be given to that problem in the Province.
The beef industry in the EC has many problems. However, we in Northern Ireland have in addition one seemingly unnecessary difficulty. The lifestyle of many people living on the border with the Republic has always included petty smuggling; a few bottles of gin, a barrel of beer or even a pig run across the border. That has been normal life, although not necessarily for myself. However, in recent years it has become big business to smuggle cattle. The figures for a recent 12-month period show the extent of this. Sixteen per cent. of all beef cattle produced in Northern Ireland—that is 90,000 animals—were illegally transported into the Republic, this doing the EC out of £5.5 million, or £60 per animal, in MCA payments. That is a colossal amount of money and some action should be taken. It is also having a grave effect on employment in meat processing and related

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industries in the Province. I should like to ask the Minister what is being done about the situation. Is an increase in Customs and Excise staff envisaged?
In Great Britain there are several environmentally sensitive areas where farmers are participating voluntarily and where the assistance scheme is working well. In Northern Ireland one area is designated as such and that is in the region of the Mournes. It is my understanding that this scheme was to be open for applications in September of last year. I believe that that has not happened. I should like to know the cause of the delay and an accurate new starting date. It also appears that assistance in comparable areas in Great Britain may be as high as £100 or £120 per hectare. Yet the proposed rate in the Mournes is apparently to be only £30 per hectare. Those rates do not give a voluntary scheme such as this much chance of being taken up. If that is the case, perhaps the Minister will agree that they should be reviewed.
I should briefly like to bring up the subject of drainage. We have already heard several comments on it. I should like to mention a specific incident. I quote from the commentary issued by the Northern Ireland Office:
"Following the exceptional rainfall and flooding in October 1987 some increase in planned financial provision has been made, most of it to allow the bringing forward of the already planned improvement of the flood protection provisions on both sides of the River Mourne at Strabane".
Will my noble friend please comment on the situation around Maguiresbridge, which was also flooded at other times in addition; for example, on 17th August? I believe at the time of the flooding he flew over it so he knows what we are talking about. What are his plans for doing anything about that?
I should like to draw attention to the recent debate in your Lordships' House on afforestation in Northern Ireland, initiated by my noble friend the Duke of Abercorn. In the debate I pointed out that in two years' time the Forest Service would not be able to maintain its objectives of new plantations due to a shortfall of £250,000. Noting that the total programme for public expenditure in Northern Ireland for 1990–1991 is £5,510 million, surely it is not too much to ask for that increase of £250,000 to ensure the future of the Forest Service. In addition to that, arising from the Budget yesterday, it may well be that there will be a vast reduction in investment in forestry which has been recently taking place due to the tax concessions, which have now been taken away. Therefore, it seems to me that it would be even more important to ensure that the Forest Service is kept up to its targets.
I welcome the special support given to industry in Northern Ireland. However, there is no database in the Province for industrialists to consult. In Great Britain, I understand that there are several and I suggest that they save a great deal of time and money. In the Province there is no quick way of assessing, among other things, market sizes or the source of materials. Also there are many new products appearing and no central register of them. Can the Government not initiate, fund or run such a
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database? It would seem to be very important when investing a lot of money in industry that it should not be wasted on unnecessary research, which could easily occur if there was such a base.
At present there is concern at the reduction in overtime for the RUC. I do not bring up this subject as a result of the events in Belfast today. The Chairman of the Police Federation recently said that he was worried about the 29 per cent. reduction in overtime in the force. I am not aware of all the details or what percentage that is of the total time; but like many people in the Province I am worried about the consequences of a reduction in normal policing—that is, policing other than policing in reaction to terrorist incidents.
The situation is very volatile at present and reaction to the many terrorist incidents, or for that matter the demonstrations resulting from the incidents, is very expensive. Can the Minister reassure the House that when there is an increase in anti-terrorist operations, it will not mean a switch of available finance away from normal police activities? The threat is such at present that routine budgeting may not be sufficient to cover normal policing in times of unpredictable high terrorist activity.
I welcome, and congratulate the Government on, their proposed police building programme and note the fourfold increase in new projects forecast for the next two years. That will result in an additional burden of extra security on the RUC. I hope that my noble friend can tell us that protection of sites, workmen and transport of building materials will not also result in a reduction in normal policing.
I should like briefly to mention public relations. I am not sure that it is really a subject for this debate. However, there are few opportunities in this House to raise such an issue. I believe that in all aspects of the day-to-day government of Northern Ireland good PR leaves a lot to be desired to say the least. The press is sometimes complimentary and often critical of the Government. The true facts about controversial issues, whether housing, the National Health Service or even terrorism and the fight against it, are often never fully known to the public. The misleading and incorrect facts are always available, especially in such publications as An Phoblat, a pro-terrorist Republican news sheet.
We are losing the PR war in Northern Ireland because the correct facts are not easily available to the public. I ask my noble friend to consider that it would be of immense value for the Government to produce a monthly bulletin of facts which could be widely distributed throughout Northern Ireland and perhaps also to people in the Republic. It would be inexpensive and of great value to all.
In conclusion, I support this order but hope that some of these points might be considered.
9.26 p.m.
Lord Dunleath: My Lords, the noble Lord, Lord Moyola, referred to farm effluent and its pollutant effect on water courses. The noble Lord, Lord Blease, referred to slurry digestion. It so happens that the last time we were discussing an appropriation order in

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your Lordships' House, I mentioned both those matters.
My mention of slurry digestion evoked voluminous correspondence. In response to the Minister's usual kind letter soliciting points that we might want to raise in the debate, I copied that voluminous correspondence to him. I hasten to assure the Minister that I did not do that with a view to discouraging him from writing to me again in a similar vein. However, he has the information now, so I shall not take up your Lordships' time by going over the appetising details contained therein other than to say that perhaps the last time we discussed the matter of slurry digestion we were not entirely fully informed. There is more information than that of which I have been aware.
It seems that Bethlehem Abbey at Portglenone—or Port Glen One as the Americans called it when they were here during the war—pioneered this system but, despite representations, received a grant equivalent to only 6 per cent. of the total amount of the project. However, others who have taken advantage of the example shown by Bethlehem Abbey, in the less favoured areas, qualify, I believe, for 60 per cent. grant while, in other areas, not less favoured, the grant is 30 per cent. On the face of it, that seems to be somewhat inequitable. Perhaps the noble Lord will be good enough to look into the position in the light of this new information.
Under the Department of Agriculture Vote 1, on the matter of forestry, I should be interested to know why, three years after I raised the matter in the Northern Ireland Assembly Agriculture Committee, the Department of Agriculture nurseries still do not have adequate supplies of broadleaved young plants for those land owners who wish to establish hardwood plantations which the department is rightly trying to encourage.
On Vote 3 of the Department of Economic Development, I should like briefly to say how strongly I support Mr. John Parker, the chief executive and chairman of Harland and Wolff, who deplores those who make apprehensive and warning statements about the long term future of the shipyard. It may be that the labour force will have to be streamlined further and that the shipyard will have to rationalise itself to a certain extent to meet current and future market conditions; but anyone who casts doubt on the future of Harland and Wolff is doing nothing but a disservice. I entirely support Mr. Parker in deploring that.
I am glad to say that since I last raised the matter under Department of Environment Vote 1, the Strangford Ferry has been more dependable in its record of service. I wonder if the time has not come when the noble Lord might consult with his people to see if plans should be laid for providing a new vessel in view of the age of the two now in service. It is very seldom that both are available for service simultaneously. If one breaks down, very often the other is not in a position to stand in for it. Also, the recently imposed fare increases have proved quite a heavy burden on those who need to use the ferry on a regular basis for business. It is also used every day
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by children going to school—again, quite a considerable financial strain.
I ask once again why it is that the new bridge over the Foyle at Londonderry—which entailed very much heavier capital expenditure than the ferry—is regarded as being an extension of the road service with no toll payable whereas there is a charge for crossing from Portaferry to Strangford on the boat. That charge is regularly increased.
Also under the heading of the Department of Environment Vote 1, I warmly welcome the commitment of Her Majesty's Government to construct a new bridge over the Lagan for both road and rail. I understand this will be in six years' time. Looking back at previous issues of the Official Report, I believe this to be the fourth time that I have mentioned it. I am very glad and grateful that at last we have this good news. In anticipation of that and the fact that it will help to integrate the rail network in Northern Ireland, perhaps I may ask the noble Lord whether he has given any consideration to reopening the old Belfast and County Down railway line between Belfast and Comber.
I can remember trying to reason with the grandfather of the noble Viscount, Lord Brookeborough, in the late 1940s. I recall saying that even if the line to Newcastle or the extension to Ardglass is not economic, why not keep open the section to Comber to serve commuters as the population increases around the periphery of Belfast, and also in view of the increase in the number of private cars. The transport tribunal ruled that the line should be closed and that is the way it was. I honestly believe that the matter would justify a new look now.
That subject also touches on the general principle of trying to provide every incentive for people to use public transport in city centres as a whole and not only in Belfast. It is a tragedy when one sees a city centre being gutted for the sake of the motor car and becoming an extended car park. The centre of Liverpool has been sadly carved up in the interests of urban motorways.
Department of the Environment Vote 4 and the subject of the disposal of domestic waste is a matter that I have raised on a previous occasion. Since then further evidence has come to light of this problem. I believe I mentioned to the noble Lord the problem of Drumnakelly near Seaforde, County Down, which I believe is the subject of a public inquiry. The issue has aroused considerable controversy. As time goes on the problem of disposal is going to become greater and greater. I honestly believe that this is something which the department ought to address rather than leave it to individual councils to try to cope on an ad hoc basis. They lurch from one unsatisfactory expedient to another.
Turning to the Department of Education Vote 2, since Lagan College started seven years ago—and I must declare an interest because I was founding president of the college—there has been almost an explosion in the demand for integrated education in Northern Ireland. There are now seven schools either functioning or preparing to open. Such integrated schools save the Government money; they save

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money for the public purse because they meet their establishment costs from voluntary subscription.
Charitable foundations all over the world have been extremely generous, but one cannot expect them indefinitely to continue giving subventions for this purpose. Therefore I sincerely urge Her Majesty's Government to see whether they cannot act more expeditiously in granting maintained status to integrated schools. Of course they will have to ensure that each school will be a viable proposition before granting maintained status, but it is a very heavy burden for those schools to have to bear until such status is granted. Under the heading of the Department of Education I also wish to raise the question of the Linen Hall Library, which is under considerable financial pressure at the moment. In the year 1983–84 a grant of £54,000 was made from public funds, but this declined to £36,000 in the year 1986–87. Since then there has been an increase of £1,000 per annum, but that is not sufficient to keep pace with inflation. As I am sure the noble Lord is aware, the Linen Hall Library is an historic foundation which dates back to the 18th century and has a unique collection of books, documents and records. It provides facilities for research which are not available in the public libraries. Therefore I sincerely hope that the noble Lord may be able to use his good offices to bring about a more generous grant to the Linen Hall Library so as to ensure its future and if possible its development.
I turn now to the Department of Health and Social Security, Vote 1. Since I raised the topic of homoeopathy on April Fool's Day last year a professional survey of general practitioners for the Homoeopathic Society of Northern Ireland has been conducted. (I ought to say that only 28 per cent. responded, but that, apparently, is a normal response under the circumstances). Of those who responded, 50 per cent. said that they would refer patients to a homoeopathic clinic for treatment and diagnosis were there one available. The society has now opened a private clinic on one day per week and it is overwhelmed with customers. The clinic is to open on another half day a week because that is all that can be afforded, but it appears that it could open four or five days a week if money were available.
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I know that an additional £5 million was recently granted to the health boards by the department. It would take only £10,000 of that £5 million to enable the homoeopathic clinic to run on a full-time basis. I know—though perhaps it is rather difficult to understand in view of yesterday's Budget—that the health service is stretched for money. Even so, if the noble Lord were able to assist in that way it would make a tremendous difference. I believe that it would also help to save money, because the drugs which are prescribed in conventional medicine are very expensive indeed.
Also some of the recent reports we have seen about the side effects of those drugs really do make frightening reading. I commend that point to the noble Lord most strongly.
Finally, reference is made in Vote 4 to the Department of Health and Social Security's miscalculation in the retail price index increases. I am told that throughout the United Kingdom that resulted in an underspend of £109 million. Looking at the United Kingdom overall, if £5.2 million of that figure could be devoted to the war widows' pensions and age allowance, that would enable them to benefit by another £2 a week. Futhermore, if an additional £2 million out of that underspend was similarly allocated, it would enable the minimum age to be reduced from 65 to 60.
I realise that this is a United Kingdom problem; but, nonetheless, there are war widows in Northern Ireland whose husbands were killed between 1939 and 1945 who do not receive the same benefits as the widows of servicemen who have been killed since that time. I warmly commend that suggestion to the noble Lord, because I think that it would be a most humane and appropriate way of using some of the money which was underspent as a result of that miscalculation.
I should like once again to thank the noble Lord for his presentation of the appropriation order. We appreciate the interest that he takes in Northern Ireland and I have often sympathised with him, saying to myself, "Thank heavens it is him, not me, who has to carry out this thankless task, with the constrictions that are laid upon him, in situations where he can't always do what he would wish". Nevertheless, we appreciate his efforts and the close interest he takes in our affairs.
9.42 p.m.
Lord Fitt: My Lords, in view of the awful events which took place in Belfast today in my former constituency, I decided not to take part in the debate. Although there are many facts of life that one could discuss within the context of this order, I am sure that there are not many people in Belfast tonight, certainly not in West Belfast, who are worrying about the discussions taking place in this House.
However, I rise for one or two minutes to reinforce what has been said by my noble friends Lord Prys-Davies and Lord Blease in relation to the health service in Northern Ireland. Throughout my lifetime Northern Ireland has always had a health service of which one could be justifiably proud. I have always believed that we had some of the best, if not, indeed, the best hospitals to be found anywhere in the world. We have always had dedicated staff who have served the community in Northern Ireland and given a service such as no one would have received in any other part of the United Kingdom.
Although I do not live in Northern Ireland I am nevertheless in daily communication with people there. I receive many letters. From the mail that I receive I could be persuaded that Northern Ireland's health service is in something of a crisis at present. I have had representations made to me from almost every major hospital in the Province: first, the Royal Victoria Hospital in relation to its ophthalmic unit, where there are to be severe cutbacks; secondly, the Mater Hospital, where again there are to be severe cutbacks in the staff and the nurses; thirdly, the Shaftesbury Hospital. Here I strongly support what has been said by my noble friend Lord Blease in relation to the proposed closure of that hospital. It would have an awful effect on many people if the alcoholic unit of the hospital is closed. It has been there for many years and I believe it has given sterling service to those who have been unfortunate enough to seek treatment there.
Finally, there is yet another hospital in North Belfast, the Throne Hospital, which is scheduled for closure. It has been there for over 100 years and has looked after many geriatrics, especially from the North and West Belfast area. If it is closed those who would otherwise have become patients within its walls will be transferred to Dundonald Hospital, which is at the other end of the city of Belfast.
As I said, there are problems in every major hospital in Northern Ireland. I have had representations from Downpatrick in County Down. People are worried about the extent to which the health service in Northern Ireland will be affected by what would appear to be government policy. Living here in London as I do I am only too well aware of the great crisis affecting hospitals in the United Kingdom, especially in London. I should have hoped that the same crisis would not affect hospitals in Northern Ireland. It is.
I rise this evening only fully to reinforce and support the pleas that have been made by my two noble friends and to ask the Minister to ensure that in any future appropriations priority is given to the
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Northern I eland health service to ensure that it can maintain the standards it has set over so many years.
9.45 p.m.
Lord Lyell: My Lords, as is traditional on occasions such as this, we have had a full and detailed debate on the complicated figures that I presented to the House. I compliment and am grateful to your Lordships for the patience with which you listened when I dealt with some of the salient points of the Estimates. Judging by the questions that I have been asked, your enthusiasm for figures never diminishes.
The noble Lord, Lord Prys-Davies, had a number of queries. I shall attempt to answer most of them tonight. He will appreciate that I may want to examine one or two points more carefully. I shall write to him quickly and I hope fairly briefly. He asked about the amount of subsidy to the manufacturing sector in recent years. In 1987–88, the current financial year, the planned level of expenditure per employee in manufacturing industry was equivalent to about £1,640. At this stage, within three weeks of the end of the financial year, it seems likely that the actual figure will be about £1,840 per manufacturing employee. That is a rise of about 12.5 per cent. over what we planned. Assuming that the pattern of employment stays as at present, the planned level of expenditure on support for manufacturing for 1988–89 will be about £1,740 per employee. As your Lordships can see, that figure is likely to vary during the course of the year.
The noble Lord also mentioned the dependency of industry. I wish to reassure him about the Government's policy with regard to reducing industry's dependence on public funds. He asked whether it masks an intention to reduce public investment in economic programmes in Northern Ireland. I can tell him that in November last year my right honourable friend the Secretary of State in his public expenditure Statement made in another place, in which he gives details of expenditure in Northern Ireland, confirmed that the strengthening of the economy would remain a key priority within the overall public expenditure strategy for the Province. That is contained in the booklet at which we have been looking this evening.
The noble Lords, Lord Prys-Davies, Lord Blease and Lord Fitt, in their short remarks, raised the question of expenditure in the health service. As regards that capital expenditure I would spell out straight away and honestly that there are other pressures on the health and social services budget as well as on the Northern Ireland block overall. We had intended to reduce capital spending on the health service by £5 million in the next financial year, 1988–89. However, we held detailed discussions with the various chairmen in the health and social services board and decided to restore the capital budget to its normal level of £29 million in the next financial year. My honourable friend the Minister who has responsibility for that aspect of life in Northern Ireland is consulting the hoard as to how the additional funds can best be supplied. I would not be

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able to comment this evening on the total programme.
The noble Lord, Lord Prys-Davies, also asked about the report by the United Medical Enterprise. We are very grateful to him for drawing attention to the report commissioned earlier last year by the Industrial Development Board for Northern Ireland. The board and the DHSS issued the report jointly to a wide range of interested bodies for comment on 10th December last year. I am afraid it was rather inconvenient before the start of the Christmas holiday period, but in issuing the report to as wide a range as possible both the IDB and the DHSS welcomed the prospect identified by it for creating jobs and generating additional income by marketing the very interesting and sophisticated Northern Ireland health services, as well as their expertise, all over the world. The comments which we have received have indicated broad support for this concept.
Of course there has been some concern that the level and quality of services presently available to the population in Northern Ireland should not suffer as a result. Certainly I should want to assure the noble Lords, Lord Prys-Davies and Lord Blease, about their concern that the valuable health services and resources might be diverted in this plan. That will be taken fully into account when we decide how we take forward the United Medical Enterprise report, as well as the current capital expenditure in the Province.
The noble Lords, Lord Prys-Davies and Lord Blease, and others will want to know about the large amount of expenditure on health and personal social services in Northern Ireland. Next year, 1988–89, it will amount to £850 million, an increase of nearly £40 million on spending in the current year. Per capita expenditure in Northern Ireland will continue to be over 20 per cent. higher than in England and Wales, as the noble Lord, Lord Prys-Davies, will know. Pace Wales I am not able to give the precise details for England, and I think my figures say higher than England, so if I say England and Wales noble Lords will agree with me. There are certainly areas within this figure where the factors for morbidity and other problems are virtually the same as for Northern Ireland. But this gap in per capita expenditure in Northern Ireland over and above that of England and Wales reflects the response of the Government to the needs of the Province.
In a perfectly fair aside, the noble Lord also took the Government to task for the fact that the health programme has been very slightly constrained by the need to put additional resources into the law and order programme. The resources which we have to place in any particular aspect of life or particular department in Northern Ireland are finite. However, the needs of Northern Ireland in health and social services are recognised in the comparatively high levels of public expenditure which are enjoyed in the Province. The figure of 20 per cent. is one particular aspect of that.
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The noble Lord, Lord Prys-Davies, raised another query about education and the universities. The relationship between the University Grants Committee and my right honourable friend the Secretary of State is somewhat unique as regards Northern Ireland. In line with my right honourable friend's overall responsibilities for the allocation of the Northern Ireland block, he takes decisions about the funding of higher education on the basis of advice he receives from the UGC. My right honourable friend takes the final decision. I wish to stress, however, that he takes the decisions with the full knowledge of what is required on the basis of very strong advice from the UGC.
Are the powers of the Department of Education and Science in relation to the UGC and its successor body exercised solely by Northern Ireland or jointly with Northern Ireland? Education in Northern Ireland is a transferred matter. As such it is the responsibility of the Department of Education in Northern Ireland; it certainly is nothing to do with the Department of Education and Science in London.
Treasury funding for the Northern Ireland block of higher education rests with my right honourable friend the Secretary of State. Of course he acts again on the basis of advice that he receives from the UGC. The noble Lord, Lord Prys-Davies, asked about the reduction in the housing budget for next year, 1989. There was a reduction and I think my noble friend Lord Brookeborough had one particular query about it. Certainly, the Housing Executive was consulted before the housing budget was reduced.
I understand that the honourable Member for Wiltshire North, who is responsible for the health and environment departments did in fact consult and inform the chairman of the Housing Executive of the proposed transfer of resources before it was made public. However, I could not say how far or how deeply my honourable friend was able to take those consultations.
The noble Lord, Lord Hylton, raised a number of points. I was grateful for the clarity with which he set out his questions. As regards the election of members to statutory boards and the noble Lord's ideas on that aspect, I hope that he will accept that that is not something that I would like to answer tonight. I shall certainly bring his suggestions to the attention of my right honourable and honourable friends. If I can add anything to the remarks or enlighten him at all, I shall certainly do so but in writing, not tonight.
On the question raised about the payment of debts and the 1971 Act, your Lordships will be aware that in Northern Ireland there is a history of some quite longstanding debts, some of which have been incurred as a demonstration of political protest. That has happened in recent years as well as in 1971 and before. The continuing high levels of public debt in the Province coupled with the action taken by one or two members of the Loyalist community to withhold payments for such things as rent, rates and above all car tax as a political protest gives some illustration of the need to maintain an adequate debt recovery system.

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But the need for the legislation concerned will continue to be reviewed at least annually by my right honourable friend the Secretary of State. As far as I am aware from figures that I have seen, the overall public debt figure for Northern Ireland is being reduced. It has come down quite sharply since 1984 which was my first year serving in the Province.
Perhaps I may return to the matter of the allocation of the £5 million from the housing programme to the health programme. The noble Lord, Lord Hylton, raised the matter of the importance of housing and how that is perceived in the Province. The decision taken recently to transfer £5 million from the 1988–89 housing programme to the health programme was taken after careful consideration. It was not taken lightly. The money to be transferred will be used for capital projects which will help the health and social services boards to rationalise some services in ways which will help to release resources for other purposes, thus facilitating the implementation of the regional strategy for health and personal social services.
The reduction in the housing programme is something which all of us regret. We wish to provide more resources and would do so if they were available. However, your Lordships will be aware that the Northern Ireland housing programme benefited from the high priority which has been accorded to it in recent years. My honourable and right honourable colleagues in another place will testify to my thoughts when we get together to discuss the Northern Ireland block grant. I believe that agriculture does not receive its fair share and that housing, health and social services must all be taken into account. However, I think all your Lordships will agree that housing has had a priority which it deserves.
Even after the transfer of £5 million for 1989, the gross programme will amount to £545 million. That is a transfer of under 1 per cent. The programme is at a level which is much higher per head of population than is the case elsewhere in the United Kingdom. It is true that the need is greater. However, per capita spending on housing, as well as on health and social services, is a great deal higher than that in England.
The noble Lord, Lord Hylton, raised the matter of the Divis flats. I am advised that five SECTRA blocks—perhaps the noble Lord will be familiar with that—are included in a total which is in the region of 295 units. I am not sure that that is correct. However, I believe that that indicates that there are 59 units per block. Five of those blocks have been demolished since 1984 and further block of 43 units is about to be demolished. The remaining six SECTRA blocks will be demolished over a period in line with the programme of the Housing Executive for phased development in that area. The whole process of demolition of the 12 blocks will take up to 10 years. Progress will be subject to a periodic review in the light of the circumstances and also in the light of availability of alternative accommodation. To date, the majority of tenants have been rehoused in the Lower Falls area. But in the later phases the
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important matter will be the willingness of some residents to accept rehousing outside that area.
The noble Lord, Lord Hylton, raised a query about land. There is little alternative land available in the immediate area around the Divis complex. The Housing Executive is investigating the availability of land in West Belfast generally to meet needs which are mainly short term. Longer-term housing needs in the Belfast area are addressed in the draft Belfast urban area plan that has been published for consultation. It will be the subject of a public inquiry later this year.
My noble friend Lord Moyola was kind enough to entertain me in his home, as he has suggested. Your Lordships will know that when a Minister pays a visit many other people also attend. I, my department and everybody who was involved are grateful to my noble friend, not least for what might be called the feeding of the five thousand. We also had a delicious lunch. That applied not only to me and my immediate entourage but to many people from my department. It was a major meeting, and we are grateful for all that he and his wife did for us.
My noble friend then raised—rightly so—several queries about salmon. As to the co-ordinated service programme of the Royal Air Force and the Royal Navy, I have been unable as yet to obtain any answers to give encouragement to my noble friend. However, I assure him that I shall persist in my efforts to establish whether anything can be done, above all on a cost-effective basis. As he will know—indeed, he raised this in his remarks—there is the question of enforcement of fishing laws in the sea outside the 12-mile limit. This gives rise to some difficulty. Fishing for salmon outside the 12-mile limit is illegal in UK waters. Our fishery protection role ensures that it does not take place within our jurisdiction in respect of fisheries.
My noble friend raised the question of what takes place off the Donegal coast. The recent report by the salmon review group, which was set up by the Minister in the Republic of Ireland, acknowledged the existence of illegal drift net fishing. That will not be news to my noble friend. One of the major recommendations of the report was that there should be an attempt to curtail the activities of drift net fishing, which would include the introduction of a salmon tagging scheme with a quota of tags for every licence. I shall follow with great interest any developments to ascertain whether regulations along this line may be implemented. If so, and if they were successful, they might go some way to rehabilitate the salmon stocking levels in Northern Ireland rivers. However, I must sound one small warning. The tagging of salmon costs quite a lot of money. If more money is to be spent, it will require careful consideration by my department and by my colleagues. We shall bear that aspect in mind.
My noble friend referred to dealers and the trade in salmon. The dealer register system was provided for in the recent salmon legislation covering Great Britain. There has been a dealer register system in Northern Ireland since the passing of the Fisheries Act 1966. I cannot recall whether my noble friend

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occupied the office that I now occupy, but I am given to understand that the system has been operating since then. If I can obtain any further information, I shall write to him.
He asked next about the Fishery Conservancy Board and the possibility of a fish counter. A fish counter is a very useful component in an overall management programme for a salmon fishery. Fish counters are not only sophisticated; they are expensive. They must be carefully sited, installed and maintained. If there is a combination of all three, unreliable results may be obtained. In any large river system, one has to take various counts. There would therefore need to be a number of counters on the various tributaries. Before we embark on counters—and not only on the main river and its branches, but on all the tributaries—it may be necessary to consult the various owners of the fishery systems collectively to develop a management programme in order to include the provision of monitoring equipment and any initial restocking of the rivers
So far as concerns the fisheries protection vessel and the rumours that have come to the ears of my noble friend, I reiterate that one of the recommendations contained in the report of sundry members of my department who had a review team surveying the management of operations of the Fisheries Conservancy Board for Northern Ireland is that the Department of Agriculture and the board together should review the operations of sea patrols to protect salmon. We are still waiting to undertake full discussions with the Fisheries Conservancy Board.
No decision has yet been made as to what should be done about sea patrols. However, I am sure that my noble friend will accept that the board wants to and indeed must carry out its functions in a cost-effective manner. Given that, I hope that he will accept my assurance that I take very seriously the protection of salmon so far as possible by the method of sea patrols.
My noble friend also raised the question of the restocking of rivers. My department continually restocks its own waters and certainly the Movanagher Fish Farm is available to provide any stocks, above all of trout, for sale, which will be able to assist other owners. Certainly there is no more news on that tonight. I hope that that concludes the queries about fish raised by my noble friend. If there is anything else that I have missed I shall certainly write to him—certainly if it concerns salmon or trout.
My noble friend went into the more murky areas of what we might call slurry. In November 1987 additional funds were made available for grants for slurry tanks and the scheme was re-opened for payment of grants to farmers who had had their work completed and claims submitted by 29th February this year. I had to make the announcement of when the scheme was to be opened. I made it clear that it might be necessary to restrict the scheme to ensure that expenditure would not exceed available funds. I am sure that my noble friend and the noble Lord,
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Lord Dunleath, will be aware that disposal of slurry and slurry pits are a particularly important aspect of farming in Northern Ireland.
After I announced the re-opening of this scheme the demand for grant was demonstrated by the very high level of prior notification forms received from farmers. It reached a point where it became necessary to announce the additional requirement that grants would be available only in cases where prior notifications had been acknowledged before 1st January 1988. I indicated that I would make a further announcement about the future of the schemes as soon as possible after 29th February this year. At present I am considering various options which might allow a reintroduction of the scheme, which will be tailored to available funds. I hope to make an announcement on that as soon as possible.
In conclusion, as regards the slurry tanks, I stress to my noble friend that grants for waste and effluent facilities remain available to farmers who are eligible for and undertake a farm improvement plan under the agricultural improvement regulations. The rates of grant are similar to those available under the national agricultural improvement scheme.
My noble friend also raised the question of drainage and above all the right of access. The position may have changed since he was responsible for agricultural matters as the Minister in Northern Ireland, but the department has a right of access to land for the purpose of carrying out drainage schemes, which are now enshrined in the legislation under Article 14 of the Drainage (Northern Ireland) Order 1973.
Before undertaking any works or entering land, the department discusses with individual landowners the work that it intends to carry out and following those discussions it confirms its proposals in writing to each individual who may be affected by the work. Following the introduction of this simplified system, the department no longer asks landowners to sign agreements permitting access across land to river banks. It is empowered to maintain the banks of designated water courses. But I am afraid that the department also has to be satisfied that such works are financially worthwhile.
My noble friend Lord Brookeborough also asked about the effect of drainage upstream. In all the drainage schemes which cover arterial drainage, the department aims to strike an acceptable balance between drainage and flood protection requirements as well as conservation and other interests. To this end detailed surveys and consultations are very closely undertaken before any scheme is finalised. Both my noble friends will appreciate that it is not possible to guarantee immunity from flooding in all circumstances. However, I wish to assure them that my department sets standards of flood protection appropriate to the purposes of its schemes. We take account of the need to accommodate any subsequent changes in what we call the pattern of water flow, but this is within the entire catchment area, as well as taking account of the statistical probability of high river levels which occur every so often and with interesting regularity in Northern Ireland.

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The noble Lord, Lord Blease, asked about a Statement on what has happened tonight. I have to ask him to wait and see. He raised one point about the public expenditure commentary in Northern Ireland. We are very grateful for his welcome of the commentary as well as his suggestion that it should be the subject of wider discussion in the Province. I do not know whether this could be done effectively through a formal process, but I wish to assure him that the Government will certainly consider with very great interest any reservations or observations which we receive on the contents of that commentary.
On a point of detail, the noble Lord asked about the Joss Cardwell Centre, as well as the Shaftesbury Square alcoholic unit. The Eastern Health and Social Services Board recently published its range of options for a rationalisation of services in the next financial year, 1988–89, to achieve any valuable service development which would be in line with the strategy for the region and to help the boards to live within the resources available. Two of the options available relate to the closure of the Joss Cardwell Centre as well as the Shaftesbury Square Hospital, but in each case the proposal does not involve any reduction in service. I am afraid that it results in the relocation of current activity to other sites. This gives a concentration of service and a more cost-effective use of resources. I am afraid that that criterion is paramount in all my remarks as well as what we are discussing today. However, the proposals that I have mentioned are possible options at this stage and are subject to consultation with the eastern board.
The noble Lord, Lord Blease, raised three further queries. On the international fund, my department, the Department of Agriculture for Northern Ireland, administers the farm diversification scheme in Northern Ireland on behalf of the international fund for Ireland, but the board, as he will be aware, is independent of both Governments in the United Kingdom as well as in the Republic. He will find satisfaction on any questions in relation to the operation of the schemes under the auspices of the board if he gets in touch with its chairman. I have no doubt that the chairman will note what has been said tonight. If there is a particular query perhaps he might be able to contact the chairman.
The noble Lord raised the question of the Ulster Year Book. The decision to discontinue publication was taken because in terms of staff time its substantial cost could not be justified for a book of which only 500 copies were sold. I understand that there was a considerable number of other copies. However, they were not sold and no revenue was forthcoming to compensate for the heavy costs involved. In addition the statistical and descriptive information in the year book is available from other sources. I shall draw the attention of my right honourable friend to the remarks made about the title of the publication.
I have not seen a copy of the Northern Ireland Economic Council report on horticulture. I shall certainly study with great interest all the recommedations made in it. If the noble Lord wishes to contact me in the near future I may be able to reply. He may wish to do so here or in Belfast.
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My noble friend Lord Brookeborough raised a number of points. The first point concerned the sheepmeat regime. I should like to assure him and every sheep farmer in Northern Ireland that in the discussions on that regime we shall put forward a strong case to ensure that no sheep farmers in Northern Ireland suffer disadvantage. His concerns will be taken into account and I assure my noble friends Lord Brookeborough and Lord Moyola that those concerns are being pushed most strongly with my colleagues representing us in Brussels.
I am delighted to know that my noble friend Lord Brookeborough is one of the few people on the border who does not admit to a few bovines moving hither and thither. It is nice to rejoice when there is one honest man; there must be quite a few sinners in his area. The incentive to smuggle cattle out of Northern Ireland and to evade the monetary compensatory levy has been much less during the last six months for various reasons. The recent strengthening of sterling will be of considerable assistance.
I am not able to confirm the estimate of the number of cattle that were smuggled, although perhaps my noble friend's figures may have a bearing on the truth. He and other noble Lords will know that it is difficult to obtain accurate figures as regards illicit cross-border trade.
My noble friend asked about environmentally sensitive areas. He will be glad to know that I hope to make an announcement fairly soon on the designation of the Mourne Mountains and Sleive Croob, Northern Ireland's first environmentally sensitive areas. He also queried the rate of annual payment, which I believe he thought would be in the region of £30 per hectare. The scheme is voluntary for the farmers who enter into it. They will be required to enter into a five-year management agreement. We wish to wait in order to observe the developments when the scheme is announced and opened.
My noble friend Lord Brookeborough also raised a query much nearer his home about Maguiresbridge. I arrived at Maguiresbridge on the morning after the major floods in October when I flew into the area and visited homes. I also visited Mr. Carey's shop, which had lost most of its stock. However, we managed to purchase sundry items of refreshment for our onward trip to Strabane and Omagh. The problems caused by the flooding in Maguiresbridge and elsewhere were of a different kind to those experienced in Strabane, where the flood wall collapsed and there was a serious risk of loss of life. However, we shall progress with the work in Strabane and take to heart any lessons learnt—and we have learnt quite a few—in all aspects not only in Strabane but also in the Colebrook area and Maguiresbridge, which is close to the heart of my noble friend.
My noble friend raised a particular query about forestry and the planting rate. It may well be a bit below our current target. That is caused by one major problem; namely, the difficulties of land acquisition. However, I hope that we can improve our performance in this area in future years. With regard to yesterday's Budget, as my noble friend will

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appreciate, it is rather early to give any indication of our own planting intentions, let along those of the private sector.
With regard to the database for industry in Northern Ireland, the IDB maintains a capability register which will provide information on 3,500 companies in manufacturing and tradeable services. That will go further and give details of 8,000 products and services available. That is no mere extension of the former trade directory. It incorporates the use of standard, industrial classification codes.
My noble friend asked lastly about the RUC overtime. The particular figure is not covered by the draft order before the House this evening but the budget for RUC expenditure for 1987–88—the current financial year—has been increased to £366 million. That will go up to £384 million next year. That is an increase of 20 per cent. over two years. The chief constable of the RUC allocates overtime on a divisional basis. A reserve is held centrally to enable the force to deal with unforseen events without undue disruption to normal divisional activity. We hope that overtime working will fall. It seems that it will fall by 5 per cent. below current levels as a result of improved efficiency and the expansion of 250 officers in the full time Reserve. However, we are sure that that will not have an impact an operational activity.
The noble Lord, Lord Dunleath, was good enough to say some very kind words about me and I return them to him. His work both here and at Stormont when he was Deputy Speaker of the assembly is much appreciated. We believe that he is a foremost practitioner of the political art both in Northern Ireland and here.
The noble Lord raised a fascinating question of slurry and, I think he called it "the slurry digester", at what he called "Port Glen One" or Portglenone at the Abbey. I should like to make two points about that particular device. Grant aid was paid by the Department of Agriculture on elements of the installation which were eligible under the current agricultural and horticultural grant scheme, which, as I said at the outset of my remarks, is now discontinued. Grants could not be paid under this scheme for investments which attracted other government assistance and I understand that grants were paid to the installers of that particular system where grant aid was available from other sources.
The installation at the Abbey suits a particular set of circumstances which are evident there. I wonder whether the noble Lord knows that only about five out of the 18 installations in England are still operating—not entirely through maladministration or incompetence. These devices are most interesting and could be effective but they are not a panacea, not even for Northern Ireland.
The noble Lord took me to task mildly about planting and broadleaved trees. As I would stress to him, it is not the policy of the forest service to produce all the various species of conifers as well as broadleaved trees which may be required by farmers or, indeed, estate owners and other planters in Northern Ireland. However, we have a surplus of
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some species of trees and these are offered for sale to the public. I hope that the noble Lord will accept that the private nurseries in Northern Ireland can and do supply both conifers and broadleaved forest trees and are very willing to supply whatever is demanded. If the noble Lord has any difficulties and he needs some exotic species, he will perhaps let me know.
With regard to Harland and Wolff, we are fully aware that shipbuilding is a very expensive industry. It absorbs a high percentage of public funds. We keep those funds under review but we have made it perfectly clear—and I do so again this evening—that the future of this firm depends on the company's ability to secure new orders within some rather difficult constraints; namely EC No. 6 Directive on Shipbuilding which limits the government subsidy on merchant shipbuilding to 28 per cent.
The noble Lord asked about Portaferry. Of course, we accept that the Strangford ferry plays a particularly important role in the life of the Ards peninsula as well as the Lecale peninsula. We have had a survey by experienced marine consultants who are satisfied that the existing two vessels can give useful service for some time to come. This is, of course, subject to a carefully planned maintenance programme.
As regards fares, the noble Lord will be aware that the Government have to bear part of the cost of providing this service. I am afraid that reality must be faced. The annual cost of the provision of the service at its existing level, as well as what users would have to pay for the benefit they get from it, has to be taken into account when we look at what the service can achieve.
On the Comber railway, we are delighted that the noble Lord has taken to heart the possibility and the proposal for a cross-harbour railway link between the central station and York Road. As regards the Comber railway, the noble Lord will know that various parts of the track bed of the railway are going to be used as a road. I believe it would be difficult to restore it for rail transport with all the ballasting and track that would be required.
With regard to public transport and car parking in Belfast city centre, the Belfast urban area plan makes a number of proposals for improving and developing both bus and rail services. The Northern Ireland Department of the Environment is engaged in continuing discussion with the transport companies on how to improve the services but perhaps I should not repeat tonight the remarks of the noble Lord in the Northern Ireland Assembly when he became involved in car parks and other facilities—it concerned a lady friend of his. We leave that aspect for another night.
The noble Lord also asked about waste disposal sites and Drumnakelly. He will be aware that this site is the subject of an inquiry into an application by Down District Council for an order and there is nothing more I can say tonight.
As regards the Linen Hall Library, the noble Lord will know that in recognition of the bicentenary in 1988 the Department of Education has been able to provide £50,000 to meet the cost of the

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computerisation plans. Subject to approval we plan to increase the grant to the library next year, 1988–89, by £15,000 to assist in the running costs of the new computerised system.
I will have to write to the noble Lord on the subject of homoeopathy.
On the payment to compensate for the error in the retail price index, a special lump sum payment was made in February this year to cover the loss of benefit for the period April 1987 to April 1989. It covered the categories receiving, I think, 14 or 15 benefits who were entitled to a special payment of £8 for the week commencing in February 1988; but perhaps I may write to the noble Lord on the 15 categories of benefit recipients.
I hope that covers all the questions that have been raised. We have the opportunity for a full discussion of all aspects of Northern Ireland on only two or three occasions during the year. I therefore hope your Lordships will forgive me if I have taken a considerable amount of time to answer the questions that your Lordships were kind enough to warn me would be raised. I hope that I have answered most of them. Doubtless, I shall have to fill in plenty of gaps in writing.
On Question, Motion agreed to.

Imperial College Bill [H.L.]
Committed to an Unopposed Bill Committee.

British Railways (London) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-five minutes before eleven o'clock.

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