Sitting of 17 March 1988

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

  LONDON REGIONAL TRANSPORT BILL (By Order)
  Order read for resuming adjourned debate on Question [10 December], That the Bill be now considered.
  Debate further adjourned till Thursday 24 March.

  SOUTHERN WATER AUTHORITY BILL (By Order)
  Orders for Second reading read.
  To be read a Second time upon Thursday 24 March.

  BRITISH RAILWAYS (No. 2) BILL (By Order)
  Order read for resuming debate on Question [15 March], That the Bill be now read a Second time.
  Debate to be resumed upon Thursday 24 March.

Oral Answers to Questions
  HOME DEPARTMENT

    Police Cells (Remanded Persons)
    Mr. Matthew Taylor: To ask the Secretary of State for the Home Department how many unconvicted prisoners were remanded in police cells in England and Wales on 1 March; and if he will make a statement.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): On 1 March there were 1,535 prisoners in police cells in England and Wales. Most of these would have been unconvicted prisoners.
    Mr. Taylor: Does the Home Secretary accept that conditions in police cells are far worse than those in remand prisons, and that it is barbaric for a civilised society to keep people in conditions that are often little better than those in which animals are kept in the zoo? When does he plan to introduce European minimum standards into our prisons?
    Mr. Hurd: The Government have made an unparalleled commitment to the prison service in terms of new building, modernising existing buildings up to standard and staffing. The position to which the hon. Gentleman has drawn attention, which is certainly deeply unsatisfactory, is the result partly of industrial action in two large London prisons and partly of the increase in the prison population. That increase is caused not by an acceleration in the growth of crime—which has actually been slowing down—but by more cases going through the Crown courts, and the increasing severity of sentences passed by those courts.
    Mr. Lawrence: Although I accept what my right hon. Friend has said about the Government's actions in the prison sector, is not the overcrowding of prison cells quite unacceptable? Is this not the moment to press ahead with the introduction of private contract prisons for remand prisoners?
    Mr. Hurd: My hon. and learned Friend knows that there is no magic in that suggestion. For example, it does not automatically deal with the planning permission problems, which are one of the bugbears of the prison building programme. My hon. and learned Friend also knows how constrained I am by existing law. I agree, however, that we cannot afford to neglect new ideas simply because they are new, and I shall bear that in mind in making the reply that I owe to the Select Committee on Home Affairs.
    Mr. Grocott: Why do we find it necessary in this country to imprison more people for longer periods, whether in police cells or in ordinary prisons, than any other country in western Europe?
    Mr. Hurd: Neither the hon. Gentleman nor I send people to prison. The courts do so, after considering each case. I think that most hon. Members would welcome the fact that there are now more severe sentences for the more severe crimes of violence. In the case of lesser crimes, we want to build up ideas of punishment in the community in which the courts can have confidence.
    Mr. Bowis: In the light of the escape from court cells of prisoners on remand in Battersea, will my right hon. and learned Friend give an undertaking that in future no prisoners on remand on charges of murder and crimes of violence will be held overnight—or, in particular, over weekends—in such cells under the tutelage of the police rather than of prison officers?
    Mr. Hurd: My hon. Friend rightly looked into the incident in his constituency, which is a classic example of the dangers that we run as a result of industrial action in certain London prisons. I entirely agree with him that it is highly undesirable for dangerous people to be lodged, even temporarily, in police cells, and we do our best to avoid that.

    Deportation
    Mr. Madden: To ask the Secretary of State for the Home Department if he will make it his policy not to remove or deport any person from the United Kingdom who has been granted a judicial review of the circumstances of their case.
    The Minister of State, Home Office (Mr. Tim Renton): Those who obtain leave to apply for judicial review of a decision about their immigration status cannot expect automatically to be allowed to stay here until proceedings are completed.
    Mr. Madden: Will the Minister reconsider that reply and give a clear undertaking that anyone who has sought to apply for a judicial review, or has been granted one, will not be removed or deported until those procedures have been exhausted? I urge him to reconsider, following the passing of the Immigration Bill, because it will impose important new restrictions. I believe that the implications of my request are most important, in terms of natural justice, for those who are faced with very great difficulties.
    Mr. Renton: There is nothing new about this. In his statement to the House on 3 March 1987 my right hon. Friend the Home Secretary made it plain that this would be our procedure in cases of those applying for asylum, for example. There may he cases in which the interests of maintaining proper immigration control will make early removal necessary. I am sure that the right approach is to deal with each case carefully according to its individual circumstances.
    Mr. Irvine: Are not applications for judicial review sometimes used by illegal immigrants simply as a delaying tactic? Will my hon. Friend tell the House the average time span between an application for judicial review and the eventual decision?
    Mr. Renton: My hon. Friend is absolutely right. Leave to move for judicial review can be used simply as a means of delaying removal and thus of staying longer in this country. If a case is taken to the Court of Appeal or to the House of Lords, delays of four to five years may occur before removal takes place. Even in the case of an application to the Divisional court, the time taken to bring the case to a hearing can often be as long as two years.
    Mr. Randall: Is the Minister aware that the Master of the Rolls in the Swati case indicated that premature removal of a person might deprive the courts of jurisdiction in such cases? Bearing in mind that the powers of Members of Parliament to make representations are
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    under continual threat from the Government, and that the Home Secretary has said that not all cases will be referred to the United Kingdom Immigrants' Advisory Service referral system, what effective safeguards does the Minister intend to introduce to ensure justice for genuine visitors or asylum seekers who wish to appeal?
    Mr. Renton: I have no doubt that there is genuine justice at the moment. We have a superstructure of appeals in this country which has little parallel in other Western countries. That superstructure is such that, through using the system, people are often able to abuse it and to stay for much longer in this country than is justified. I assure the hon. Gentleman that we have not yet had cause to remove or deport anyone in the circumstances that I outlined in my original reply. It is correct to reserve the right to do so in future and to have regard to individual cases.

    Mentally Disordered Offenders (Release)
    Mr. Cran: To ask the Secretary of State for the Home Department what further discussions have taken place since January concerning the release into the community of mentally disordered offenders.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): Discussions are continuing between Home Office and Department of Health and Social Security officials, and within the DHSS, to seek ways of promoting good practice in the case of patients with chronic mental illness who have a history of offending. The objective is to ensure that such patients remain in contact with psychiatric services and do not find their way back into prison. The DHSS also intends, later this year, to lay before Parliament and to publish a code of practice for the guidance of people involved in the treatment of mentally disordered offenders.
    Mr. Cran: I am extremely grateful to my hon. Friend for that reply. Is he aware that the option of remand to a psychiatric unit for some convicted prisoners awaiting sentence and who have psychiatric problems is sometimes frustrated by the unwillingness of medical and other staff to accept individuals who have behavioural problems?
    Mr. Hogg: Yes. My hon. Friend's interest in this matter is well known and greatly to be welcomed. Officials of the Home Office and of the Department of Health and Social Security are proposing to undertake urgent talks to see whether it would be possible to persuade the regional health authorities to increase the number of beds available for the kind of persons to whom my hon. Friend has referred.
    Mr. Cryer: Will the Minister persuade the DHSS to slow down the programme of community care because of the problems that have been highlighted today of the release of people into the community? Will he tell the DHSS that many of us are very suspicious about the programme, which involves the closing of hospitals for the mentally handicapped and selling the sites for private development? It is important that this sort of attitude should be stopped and that plenty of money should be made available for local authorities to provide community care before any changes are made.
    Mr. Hogg: That question is really a matter for my right hon. Friend the Secretary of State for Social Services. The

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    hon. Member for Bradford, South (Mr. Cryer) will, I think, welcome the Government's policy on this matter, which is, first, to try to divert from the prison system those who are better off in hospital, secondly, to try to provide better care for those in the prison system; and, thirdly, to provide better support for prisoners who are discharged back into the community.
    Mr. Nicholas Winterton: Is my hon. Friend aware that his remarks will be very welcome indeed? Is he further aware that many of those in our prisons at present are there because there is not a bed or a place for them in a psychiatric hospital? When someone is discharged from a psychiatric hospital in the first place and commits some minor offence in the community, the court often has no alternative but to send him to prison because of the lack of a place in a long-stay psychiatric hospital. Therefore, will my hon. Friend seek to ensure that his Department's views are drawn forcefully to the attention of the Department of Health and Social Security, which is carrying through an over-rapid closure of psychiatric hospitals, in some cases for the reasons advanced by the hon. Member for Bradford, South (Mr. Cryer)?
    Mr. Hogg: My hon. Friend has made a very important point, as one would expect of him. The Home Office recognises that in some areas there is a need for more beds of the kind described and intends to have talks urgently with the Department of Health and Social Security to see what can be done to persuade the regional health authorities to make such provision.
    Mr. Speaker: Before I call the hon. Member for Dundee, West (Mr. Ross), I remind him and others who may be called that the Birmingham bombings case remains sub judice. If questions are confined to later events concerning Dr. Skuse's retirement, they will be in order.

    Dr. Frank Skuse
    Mr. Ernie Ross: To ask the Secretary of State for the Home Department when the first staff report was made which referred to the deterioration in the performance of Dr. Frank Skuse.
    The Minister of State, Home Office (Mr. John Patten): Staff reports for 1981 and 1982 showed a pattern of deteriorating performance. Dr. Skuse was, therefore, removed from reporting cases to court in January 1983.
    Mr. Ross: Why is the truth about Dr. Skuse being covered up? Is not the truth that we have another Dr. Clift on our hands? If so, would it not be better for Ministers to own up rather than our having to drag it out of them?
    Mr. Patten: The hon. Gentleman's conspiracy theories are totally unfounded. Dr. Skuse was the subject of adverse reports from his line managers in 1981 and 1982. He was immediately removed in January 1983 from performing his duties and he retired voluntarily from the Civil Service in 1985. All Dr. Skuse's cases, dating back to 1966 — some 350 in number — were examined by the director of the Chorley forensic science laboratory in 1985 and 1986.
    Sir John Farr: May I suggest to my hon. Friend that it might be a fairer course to adopt if all the cases with which Dr. Skuse was associated before his retirement were looked into, in case there is any association between the
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    activities in which he took part and those in which, for example, Dr. Clift took part, with the result that so many cases had to be reviewed?
    Mr. Patten: The director of the Chorley forensic science laboratory has already looked at some 350 cases dating back to 1966. If any right hon. or hon. Gentleman, or anyone else for that matter, has evidence of any possible miscarriage of justice based on forensic evidence placed before the courts by Dr. Skuse, my right hon. Friend the Home Secretary will, of course, be prepared at any time to examine that evidence.
    Mr. Mullin: Is the Minister aware that while Dr. Skuse was giving evidence recently he was in telephone contact with the other principal Crown witness, Superintendent George Reade? Will he organise an investigation—
    Mr. Speaker: Order. I think that the hon. Gentleman is sailing very close to the sub judice rule.
    Mr. Mullin: Is the Minister aware that this was in direct contravention of the instructions of the Lord Chief Justice?
    Mr. Patten: I am not aware of the facts that the hon. Gentleman suggests. However, there is no evidence at all of which I know thus far of any collusive or collaborative arrangements between any of the private citizens to whom the hon. Gentleman refers. It is incumbent on him to take to the police and lay before them any evidence of alleged collusion or collaboration.
    Mr. Alex Carlile: On the more general question arising from the Clift and Skuse cases, does the Minister agree that competent forensic scientists play a crucial role in the detection of criminals? Does he recognise that the salaries offered to forensic scientists by the Home Office are now so low that they are failing to attract the best forensic scientists out of industry and are actually encouraging Home Office scientists to go into the private sector?
    Mr. Patten: There is no evidence whatever from the figures of excessive wastage from the forensic science service or of problems of recruitment. I can assure the House that all forensic science laboratories are most rigorously checked, and have been since 1979, by a system of trials, including blind trials, and we now have the very important scientific advisory committee under the chairmanship of Sir Ronald Mason, Fellow of the Royal Society, to ensure that the highest possible scientific standards are maintained throughout.

    Metropolitan Police
    Mr. Corbyn: To ask the Secretary of State for the Home Department if he will call for a report from the Commissioner of Police of the Metropolis as to how many Metropolitan police officers above the rank of chief inspector are currently suspended on suspicion of misconduct.
    Mr. Hurd: I understand that one such officer is suspended.
    Mr. Corbyn: Is the Home Secretary aware that the existing legislation concerning complaints about the conduct of senior officers calls into question the credibility of the Police Complaints Authority and the procedures agreed for it by the House? What steps is the right hon. Gentleman taking to review the Police (Discipline) (Senior

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    Officers) Regulations 1985 and section 83 and 84 of the Police and Criminal Evidence Act 1985 so that proper investigations can take place into allegations of misconduct by senior officers?
    Mr. Hurd: That was precisely the purpose of the sections to which the hon. Gentleman draws attention. That Act, which is fairly recent on the statute book, established the Police Complaints Authority and gave it the role of supervising investigations as they take place rather than simply receiving reports afterwards. That is a great step forward, as I believe that the cases that the hon. Gentleman has in mind show.
    Sir Anthony Grant: Rather than calling for a report, as the hon. Member for Islington, North (Mr. Corbyn) suggests, which is a thinly disguised attempt to smear the police, will my right hon. Friend send a message to the Commissioneer saying that the police, wherever they are, are doing a magnificent job in defending democracy, despite the impediments placed upon them by the loony Left?
    Mr. Hurd: I entirely share and endorse my hon. Friend's message. I am glad to note that, despite the efforts of the hon. Member for Islington, North (Mr. Corbyn), the influence of the loony Left in these matters seems to be diminishing.

    London Traffic (Policing)
    Mr. Adley: To ask the Secretary of State for the Home Department if he will seek an early meeting with the Commissioner of Police of the Metropolis to discuss the effect on the policing of London's traffic of recent legislation on this subject.
    Mr. Douglas Hogg: My right hon. Friend expects to meet the Commissioner after Easter to discuss a range of London policing issues. These will include traffic matters.
    Mr. Adley: Is my hon. Friend aware that the Metropolitan police have written to me describing the effect of coach deregulation in London as horrendous? As ours is supposed to be the party of law and order, does my hon. Friend agree that we may find ourselves with a tarnished image unless we can satisfy the Metropolitan police that we are prepared to listen to the problems that they are suffering as a result of the legislation? As I am simply asking my hon. Friend to raise the matter, and as he has already agreed to meet the Commissioner, will he ensure that this item is on the agenda?
    Mr. Hogg: These are essentially matters for the Commissioner, but if the Commissioner wishes to discuss them with my right hon. Friend, he will be very willing to oblige. My hon. Friend is well known for his support for and interest in railways, but the railway service will improve only if there is an alternative. Coaches provide a useful and proper alternative.
    Mr. Tony Banks: What discussions has the Minister had with his colleagues at the Department of the Environment and at the Department of Transport, which between them are turning London into a dirty, pot-holed car park? In a recent parliamentary answer we were informed that at 31 December 1983 there were 1,789 traffic wardens, but that at 31 December 1987 there were only 1,527. Is the Minister aware that Government policy is
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    reducing London to chaos in traffic terms and that the Metropolitan police and the Home Office are not doing enough to enforce traffic regulations?
    Mr. Hogg: I am surprised that the hon. Gentleman does not give greater support to Government policies on this matter. He will know of our policies on wheel clamping and the improvements that have taken place as a result of fixed penalties, registering parking tickets with fines, and so on. I am surprised that he did not take this opportunity to pay tribute to what we are doing.
    Mr. Adley: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the answer to my question and its inappropriateness from a Home Office Minister, I beg leave to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Television Licences
    Mr. Wigley: To ask the Secretary of State for the Home Department what recent representations he has received concerning providing television licences free of charge, or at lower prices, to pensioners and disabled people; and if he will make a statement.
    Mr. Winnick: To ask the Secretary of State for the Home Department what further representations he has received regarding concessionary television licences for pensioners.
    Mr. Renton: Since 1 January this year four petitions forwarded by hon. Members have been received, and 42 hon. Members and 72 members of the public have written seeking either free or concessionary television licences for pensioners and disabled people.
    Mr. Wigley: Is the Minister aware that that is a significant number of representations? Does he accept that pensioners and disabled people in residential care get the television licence for 5p under the 1978 regulations, whereas if they come out of residential or institutional care into the community they must pay a thousand times as much for their licences? In view of the Government's policy of trying to move people into the community and of bolstering community care, is that not a contradiction? Is it not time to look again, at least in part, at those regulations?
    Mr. Renton: I accept the hon. Gentleman's point and the similar points that have been made to me by other hon. Members on both sides of the House. There are anomalies in the scheme and we are currently examining whether it would be appropriate to amend it.
    Mr. Winnick: Is the Minister aware that pensioners and many others in the community are bound to ask why, on Tuesday, the Chancellor could give substantial tax concessions to the super-rich while the Government deny free television licences to the elderly? Does the hon. Gentleman not know that most pensioners live on a small income and that television plays an important part in their lives? When will the Government end this mean-spirited squalid attitude towards our elderly?
    Mr. Renton: I shall take no lectures from the hon. Gentleman about the treatment of pensioners, given that the last labour Government cancelled their Christmas bonus two years out of five. After the Budget, the average single pensioner will be more than £68 a year better off and

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    married pensioner couples will be £147 a year better off. That compares with an increase in the television licence of only £4·50—the first for three years. If we gave a free licence to all pensioners, many better-off pensioners would receive one at the expense of some non-pensioners who are on low incomes.
    Mr. Latham: Is my hon. Friend aware that it is now more than 12 months since the Melton borough council wrote asking him to sort out the problems of concessionary licences following the Kirklees judgment, and five and a half weeks since I brought a deputation to him on this matter? May we have a decision in weeks, rather than months — to use Lord Wilson's famous phrase?
    Mr. Renton: I am aware of this. I told my hon. Friend when he brought the deputation to see me that there were anomalies in the scheme. That is why I told the hon. Member for Caernarfon (Mr. Wigley) that we are considering ways of amending it.
    Mr. Patrick ThompsonI agree that the Labour party has nothing to be proud of on pensions, but does my hon. Friend accept that there are anomalies in expenditure on television licences in sheltered accommodation and the like? He will recall that there was recently a court case in Norfolk about this matter and that I have corresponded with him on behalf of the residents of the Felbrigg Green residents' home in Hellesdon in Norwich. Does he accept that this anomaly must be sorted out?
    Mr. Renton: I agree with my hon. Friend, and I am aware of the case to which he refers. It is because of that and other cases that we are now considering why those in sheltered housing and accommodation provided by housing associations or councils should receive this substantial benefit while others in other types of sheltered housing in the private sector do not. That is why we are now considering ways of amending the scheme.
    Rev. Martin Smyth: Although I welcome the Minister's answer to the hon. Member for Caernarfon (Mr. Wigley), on further consideration will he assure the House that the amendment will not take away that which has already been granted, instead of extending it to other disabled people?
    Mr. Renton: I am afraid that the hon. Gentleman will have to bide his time and exercise his patience, because if we are to reform a scheme that is clearly full of anomalies, we wish to come up with one that is fairer and more just.
    Mr. Patnick: Will my hon. Friend quantify the number of people who could have a licence at a reduced fee, how it would be paid for, what its cost would be and the effect of that cost being included in the licence fee?
    Mr. Renton: My hon. Friend is absolutely right. Following the Kirklees judgment there is a considerable inclination for local authorities—one understands why—to try to change their existing sheltered accommodation housing schemes to bring them within the ambit of the scheme. The fact is that if all pensioners were able to obtain that benefit it would cost about £350 million per year, which would have the effect of increasing the licence fee by 50 per cent. for everyone else.
    Mr. Corbett: Before the Minister starts lecturing us about pensioners, does he accept that the problem would not arise for millions of pensioners if his Government had not snapped the link between rises in incomes and rises in
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    pensions? Will he now think again about the answer that he gave about refusing to give an undertaking to the House that, as part of the review of the anomalies, he will not withdraw the treatment that those now living in sheltered accommodation receive? Can he explain to the House why it would be an anomaly to offer all pensioner households free television licences, irrespective of levels of income, when every state pensioner is entitled to the Christmas bonus?
    Mr. Renton: The hon. Gentleman should not forget that during the five years when the Labour Government were in power pensioners' average annual incomes increased by only 3 per cent. in real terms — that was over the entire five-year period—whereas since we have been in office pensioners' average incomes have increased, after inflation, by the same figure—by 3 per cent. every year that we have been in Government. It is for that reason that one cannot accept lectures from the hon. Gentleman.

    Violent Crime (Prevention)
    Mr. Paice: To ask the Secretary of State for the Home Department what recent measures his Department has taken to combat crimes of violence.
    Mr. Hurd: We are further strengthening the police, we have put before Parliament proposals which will increase certain penalties, strengthen existing controls over the possession of guns, prohibit the sale of specified offensive weapons, and make it an offence to possess a knife in a public place without good reason. Our present crime prevention campaign is aimed at the 4 per cent of crime committed against the person, as well as the 96 per cent. committed against property.
    Mr. Paice: Bearing in mind that crimes of violence in Cambridgeshire rose by almost 20 per cent. last year, will my right hon. Friend agree to reconsider his decisions regarding Cambridgeshire constabulary's request for extra police officers? Will he take steps to ensure that the Government's policies are co-ordinated across all Departments to try to encourage a sense of responsibility among parents and other people to try to stamp out violence where it begins?
    Mr. Hurd: I agree entirely with my hon. Friend's second point. He will have seen what we are doing about that. If we could reduce the crime figures simply by increasing the number of police, we would have solved the problem long ago, because the manpower available to the police has increased by 20,000 since 1979. No public service has had a bigger increase in resources. As my hon. Friend knows, we are in the middle of a further expansion of the police. We met the Cambridgeshire request, but only in part, last year. I am considering the latest application that I have received from that constabulary, alongside many other applications, before deciding on the increase for this year.
    Mr. Boyes: The Home Secretary will be aware that the Northumbria police have one of the highest rates of serious crime per policeman and that the chief constable identified a need for between 500 and 700 extra policemen. In fact, there has recently been a shotgun attack on a sub-post office in my constituency. Why does the Home Secretary not produce the money that is needed to employ those extra policemen, because if he does not, does that not

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    demonstrate that his party's claim to be the party of law and order is bogus and just empty words? It is action that we want. Why will he not cough up the cash?
    Mr. Hurd: I cannot take that from the hon. Gentleman. I have given the figure for the immense increase both in resources and in numbers available to the police since the right hon. Member for Morley and Leeds, South (Mr. Rees) was the Home Secretary. No other service has had a comparable increase. Now we are faced with a series of applications from different police authorities throughout the country. I test those in the light of the advice that I receive from the Inspectorate of Constabulary. It is partly a matter of population growth and partly a matter of the incidence of crime, but we must also ask whether a particular authority and force are making the best use of the resources which they already have, given that it now costs between £2,000 and £2,500 a week to keep one police officer permanently in post.
    Sir Bernard Braine: My right hon. Friend will know better than most of the increasing volume of under-age-drinking in public houses and the connection between that, the fracas and the consumption of police time and energy. Will he resist any suggestion that there should be further liberalisation of drinking hours until the problem of under-age-drinking has been tackled energetically and successfully?
    Mr. Hurd: My right hon. Friend is perfectly right to make that link. He will know that that is why my right hon. Friend the Prime Minister set up a committee under the chairmanship of the Lord President to consider this and other problems related to alcohol abuse. He will also know how, in the Licensing Bill, we have strengthened the precise proposals about under-age-drinking, with which he is concerned. He may be referring to a change made in that Bill in another place and there will, of course, be an opportunity to discuss that when the Bill returns to this place.
    Mr. Rees: Would the Home Secretary be happy to have the crime rate that he inherited from me in 1979? Does he remember all those specious policy promises made in 1979, all of which have gone wrong?
    Mr. Hurd: I thought that I might flush the right hon. Gentleman out. As he knows, although violent crime has continued to increase, it has been increasing under this Government at about half the rate of increase over which the right hon. Gentleman presided. The main difference between the two sides is not that crime has increased under the one and not under the other, but that we have done something about it by way of a substantial strengthening of the police force.
    Mr. Dickens: Does my right hon. Friend accept that the state has a duty to protect its citizens, that the public demand a country where women are safe to walk without fear of being molested and raped, where the elderly — [Interruption.]
    Mr. Speaker: Order. The hon. Gentleman must have his say.
    Mr. Dickens: —where the elderly can feel safe in their own homes and where children can play safely without fear of being abused and killed? Will my right hon. Friend state firmly that that is the objective of the Government?
    Mr. Hurd: Of course, my hon. Friend is entirely right. That has been our objective and is reflected in the proposals that we put before the House and in the way in which we spend taxpayers' money.
    Mrs. Ann Taylor: Will the Home Secretary turn his attention from the sensational to the serious problem? Will he accept that one of the best hopes for crime prevention is the proper rehabilitation of offenders? How does he think that this can happen when conditions in prisons are such that, for a whole weekend recently, only eight prison officers were left in charge of D wing at Wormwood Scrubs, where there were over 200 life prisoners?
    Mr. Hurd: The increase in the staffing of our prisons has been more rapid than the increase in the prison population. The hon. Lady is perfectly right to say that prisons have to be staffed as well as built. That is why I have obtained the resources from the Chancellor to increase the staffing in our prisons by 1,960 this year, of which only 600 are to replace normal wastage. I hope that the hon. Lady will also share with me the thought that, whatever the difficulties of the prison service and its members at present, it cannot be justified for the staff in two major London prisons, Pentonville and Wormwood Scrubs, to intensify those difficulties by refusing to accept prisoners.

    Satellite Television
    Mr. Sumberg: To ask the Secretary of State for the Home Department what representations he has received in connection with the control of television broadcasting by satellite; and if he will make a statement.
    Mr. Hurd: A small number of representations on this subject have been received from hon. Members, members of the public, and interested organisations.
    Mr. Sumberg: I thank my right hon. Friend for that reply. We all welcome greater choice on our television screens, but is my right hon. Friend aware of the widespread public concern that the advent of satellite television could bring into our homes more pornography and violence? If my right hon. Friend shares that concern, what steps will he take to prevent it?
    Mr. Hurd: We are proposing to bring the broadcasters of domestic television under the Obscene Publications Act, from which they are at the moment exempt. But my hon. Friend is perfectly right about the possibilities of satellite broadcasting from abroad, and that is why we are engaged in negotiations in the Council of Europe on a draft treaty on that subject and also in discussions in Brussels on the possibility of a draft directive. We recognise the need that my hon. Friend has identified and are working to meet it.
    Mr. Grocott: Will the Home Secretary explain to the Prime Minister, who does not seem to understand these things, that the proliferation of television channels, far from increasing real choice for the viewer, can, by reducing programme standards, diminish real choice? Will he also make it plain to her that the increased commercialisation of broadcasting under the Government is a real threat to a public service broadcasting system that was once the envy of the world?
    Mr. Hurd: That is a distinctly old-fashioned view. There is no reason to suppose that, by offering the British people greater choice in the variety of their television,

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    which is what we propose to do because it is now technically possible, that leads to a lowering of standards. It means that people have a greater choice to listen to and view what they want.

    Dr. Alan Clift
    Mr. Cohen: To ask the Secretary of State for the Home Department how long elapsed between the discovery that the Home Office forensic scientist Dr. Alan Clift was unsatisfactory and the first quashing of a conviction based on Dr. Clift's evidence.
    Mr. John Patten: Dr. Clift was suspended from duty on 9 September 1977, and on 8 June 1978 three men had their joint convictions for robbery and burglary quashed.
    Mr. Speaker: Before I call the hon. Member for Leyton (Mr. Cohen) I say again that the case of Dr. Skuse is sub judice and supplementary questions should be confined to events in which Dr. Alan Clift as involved, not to other matters.
    Mr. Cohen: Are there not remarkable similarities between the cases of the forensic scientists Dr. Clift and Dr. Skuse? Were not both retired early by the Home Office for unsound forensic work and, in Dr. Clift's case, did not Home Office procrastination mean that many innocent people had to wait a long time before they were released? Does not the same apply to Dr. Skuse? Does not the fact that the Home Office is not clear about the errors in his work confirm that many unsound judgments have taken place in the courts?
    Mr. Patten: The Home Office acted quickly after unsatisfactory reports about Dr. Clift's performance and he was retired on the date that I have just given. The hon. Gentleman really must recognise the improvements that have been made to Britain's forensic science service since 1979: first, by the introduction of continuous checking, including blind trials, by scientists from other areas; secondly, by a full review which was undertaken by scientists in 1986; and, thirdly, by the important oversight now given to the forensic science service under the chairmanship of Sir Ronald Mason FRS.
    Dr. Reid: Is my hon. Friend the Member for Leyton (Mr. Cohen) not correct when he says that there are now increasing and uncanny echoes of the case of Dr. Alan Clift when we consider Dr. Frank Skuse? Is the Minister aware that, after the departure of Dr. Clift, no fewer than 16 cases were taken to the Court of Appeal and the sentences were quashed? Would it not be better for the public, the police and those who may be the innocent victims of mistaken forensic evidence if the Minister were to order a public inquiry now into the cases dealt with by Dr. Skuse?
    Mr. Patten: We should be concerned, not with echoes, but with evidence. If anyone has clear evidence of collusive or collaborative activity on the part of anyone, or of failures in a forensic scientist's judgment, that evidence or allegation should be taken to the police.

    Proceeds of Crime (Confiscation)
    Mr. Charles Wardle: To ask the Secretary of State for the Home Department what progress is being made in negotiating new arrangements with other countries for the reciprocal confiscation of the proceeds of crime.
    Mr. Hurd: On 9 February my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I signed an agreement with the United States of America on the investigation and confiscation of the proceeds of drug trafficking. We hope to conclude further such agreements this year. Part VI of the Criminal Justice Bill will, if it is passed, enable us to seek agreements on confiscation of the proceeds of other serious offences.
    Mr. Wardle: I am grateful to my right hon. Friend for that encouraging reply. Does he agree that that matter should be resolved urgently with our European neighbours, and can he assure the House that rapid progress will be made in that direction?
    Mr. Hurd: I agree with my hon. Friend. We believe it is wrong that a drug trafficking crook should be able to serve his sentence, comfortable in the knowledge that he is hanging on to the fruits of his crime. I am in touch with several European Governments and I hope that, when they have their domestic legislation in place, as we have ours, we might be able to have a European treaty which will bring this forward.

    Engagements
    Ql. Mr. Malcolm Bruce: To ask the Prime Minister if she will list her official engagements for Thursday 17 March 1988.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Bruce: Will the Prime Minister, in the light of the welcome decision for a stay of execution for the Sharpeville Six for four weeks, use the intervening time to intervene direct with President Botha to impress upon him that that kind of action is intolerable? Will she indicate that she is willing, if necessary, to withdraw the British ambassador, or to re-open the case for sanctions, if the South African Administration go ahead with an action that shows them to be barbarians who show contempt for fundamental human rights?
    The Prime Minister: No. Full and correct representations have been made by myself, by Chancellor Kohl and by President Reagan, which expressed our views extremely clearly and asked for clemency. As the hon. Gentleman will be aware, there was a further Supreme Court hearing in South Africa today and the Supreme Court there has ruled that there should be a stay of execution for one month while the appellants prepare an application for a retrial.
    Mr. Ashby: My constituency has just received £500,000 in derelict land grant to overcome the problem from the dereliction of mines in north-west Leicestershire. Will my right hon. Friend visit the Coalfield Communities Campaign exhibition in the Upper Waiting Hall and reaffirm the Government's commitment to improving land which has been made derelict by the coalfields?
    The Prime Minister: We are very anxious to see that derelict land is restored and that it is the subject of new enterprise and jobs. I will of course endeavour to visit that exhibition in the Upper Waiting Hall.
    Mr. Kinnock: Today's reduction in interest rates is very welcome, but of course they need to go lower—just a little bit. In pursuit of what the Chancellor on Tuesday called the explicit role of "greater exchange rate stability", does the Prime Minister now understand that, when necessary, one can, and indeed must, "buck the market"?
    The Prime Minister: My right hon. Friend, in a most excellent speech on Tuesday, which would have been even better had it been heard in quietness the entire way, made it perfectly clear that
    "Short-term interest rates remain the essential instrument of monetary policy. With a continuous and comprehensive assessment of monetary conditions, I will continue to set interest rates at the level necessary to ensure downward pressure on inflation."— [Official Report, 15 March 1988; Vol. 129, c. 997.]
    That is what the Chancellor did today.
    Mr. Kinnock: I am glad, and I am sure the country will be, to know that No. 10 and No. 11 Downing street are one big happy family again. I am also happy to welcome the right hon. Lady's reconversion to managed floating. Is not the real problem that while the Chancellor is now a manager, she is still a floater?
    The Prime Minister: Why does the right hon. Gentleman not include the whole Cabinet in the big happy family?
    Mr. Kinnock: Perhaps the right hon. Lady should discuss that further with the Secretary of State for Education and Science. On the matter of domestic stability, did not the right hon. Lady say a week last Tuesday that she was against a cut in interest rates because it
    "would not be in the interests of inflation at the present time,"
    or by the present time did she just mean a week last Tuesday?
    The Prime Minister: I know precisely what I said last Tuesday. I said:
    "The only way to deal with that is either to have excessive intervention … or to deal with the matter by interest rates, which would not be in the interests of inflation at the present time."—[Official Report, 8 March 1988; Vol.129, c. 184.]
    [Interruption.] That was precisely what I said, but of course the right hon. Gentleman does not understand. He did not understand the significance of the last Budget, in so far as he was listening. [Interruption.] He does not understand because he does not listen—[Interruption.]
    Mr. Speaker: Order. I hope the House will listen.
    The Prime Minister: Had the right hon. Gentleman listened, he would have noted that on Tuesday we had an excellent Budget that demonstrated, with debt repayments of £3 billion, a strong and prudent fiscal position, the full strength of which was not known to the world until that time. Since then there has been a strengthening of exchange rates, which has tightened monetary conditions, all of which make possible the reduction of interest rates, but I do not expect the right hon. Gentleman to understand.
    Mr. Tebbit rose—
    [Interruption.]
    Mr. Speaker: Order. Mr. Norman Tebbit.
    Mr. Tebbit: Does my right hon. Friend agree that, despite the ill-informed attack on expenditure cuts and a give-away Budget, we are living in a period of the highest ever levels of public expenditure, the highest ever tax takes in terms of revenue, the lowest tax rates, the best ever record of inflation, falling interest rates and the repayment of debt instead of the increase of debt? Does she agree that that is the hallmark of a successful Chancellor, a successful Government and a successful economy?
    The Prime Minister: I agree with my right hon. Friend, who has put it in his own inimitable way. No one could have put it better.
    Mr. Wigley: To ask the Prime Minister if she will list her official engagements for Thursday 17 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wigley: Is the Prime Minister aware that my county, along with many others, is facing a programme of hospital closures, including five community hospitals, for reasons spelt out in the health authorities' consultative document a few weeks ago as clearly arising from under-funding by central Government? In view of the Budget surplus announced on Tuesday, of £3 billion, will the Government reconsider their funding policy towards the Health Service and stop the forced closure of such hospitals?
    The Prime Minister: No. The increase in expenditure for the Health Service was announced as part of the £4·5 billion increase in programmes, and £1·1 billion is to go to the Health Service. As the hon. Gentleman is aware, we shall consider the nurses' pay—when we know what is recommended—in the usual way, as we always have in the past.
    For Wales, the output of the Health Service and the improvement in it has been enormous. The number of in-patient cases treated per year has risen by some 76,000 to over 435,000, an increase of 21 per cent. The Health Service in Wales is like the Helth Service elsewhere, greatly improved and performing many extra services over and above the position eight years ago.
    Mr. Patrick Thompson: Bearing in mind the importance of engineering activity and manufacturing industry to wealth creation in this country, which is fully recognised by Conservative Members, is my right hon. Friend surprised to learn that at the recent full-scale engineering debate in the House last Friday only one Opposition Member cared to turn out to listen and take part?
    The Prime Minister: I am grateful to my hon. Friend for making it plain to the House that that was the case. My right hon. Friend the Chancellor explained that the enormous success in manufacturing industry during the past year has greatly contributed to the increased prosperity of the country, the health of the whole economy and the standard of living of our people.
    Mr. Haynes: To ask the Prime Minister if she will list her official engagements for Thursday 17 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Haynes: Is the Prime Minister aware that many people in my constituency have bought their own homes, and that obviously fits in with her Government's policies?

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    However, is she further aware that hundreds of those properties are being destroyed by mining subsidence? Also, is she aware that many building firms in my constituency — small firms that the Government encourage—have gone to the wall because that work is no longer available? Will she call in British Coal and do something about the problem and give the people in my constituency a fair deal in the matter of damage to their property? The board is saying that they are out of time, yet it was the board that was responsible for the damage.
    The Prime Minister: The hon. Gentleman must, of course, take that matter up with the National Coal Board, which I fully expect he has done. I notice that of the questions I am being asked today, not one dares to criticise the excellent Budget that we had earlier this week.
    Mr. Burt: To ask the Prime Minister if she will list her official engagements for Thursday 17 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Burt: Will my right hon. Friend acknowledge that the latest unemployment figures show that the enterprise economy is continuing to provide prosperity and jobs, particularly for the long-term unemployed in regions and constituencies such as the north-west and Bury, North in particular? Will she confirm that the measures taken in the recent Budget will continue to improve that position further?
    The Prime Minister: Yes. The latest employment figures show that unemployment is falling for the 19th month in succession. We have had a reduction of 400,000 since the election. The reductions in unemployment are among the greatest in the north-west, north-east and the west midlands. The Budget that my right hon. Friend announced on Tuesday will continue the increasing success of enterprise, the increasing number of jobs and the rising standard of living of our people.
    Mr. Bell: If it is right to support General Secretary Gorbachev in withdrawing Russian troops from
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    Aghanistan when they were invited there by the Afghan Government, what has the Prime Minister to say to President Reagan for sending 3,000 troops to Honduras at the invitation of the Honduran Government?
    The Prime Minister: The hon. Gentleman surprises me if he thinks that the Russian forces in Afghanistan were anything other than an occupying force. [HON. MEMBERS: "Honduras".] I will come to Honduras. I must say that we deplore the reported incursion by Nicaraguan forces into Honduras. At 11 o'clock on 16 March the Foreign Minister called a press conference to call world attention to the possibility of a Nicaraguan attack. President Azcona also called on his Central American opposite numbers to restrain the Sandinistas. It is only the Labour party that condemns America.
    Mr. Malins: To ask the Prime Minister if she will list her official engagements for Thursday 17 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Malins: Will my right hon. Friend accept that in my constituency in Croydon, which has a thriving business and commercial centre, this week's Budget has been greatly welcomed and that, in particular, the cuts in income tax and the increase in thresholds, which benefit everyone, not just the wealthy, will be seen as a real stimulus to our local economy?
    The Prime Minister: Yes, the Budget contains something for everyone. [Interruption.]
    Mr. Speaker: Order. The Prime Minister has been asked a question.
    The Prime Minister: All 25 million taxpayers benefit from the double indexation of allowances. Three quarters of the total cost in 1988–89 of income tax reductions is due to increased allowances and the reduction in the basic rate. Age allowance has been increased by twice the indexed amount so that it is now at its highest real level since its introduction in 1975–76.

Sharpeville Six
3.32 pm
Mr. Gerald Kaufman(by private notice): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on whether any reply has yet 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): I have nothing to add to the answer that I gave the right hon. Member yesterday. I am informed that the Supreme Court has ordered a stay of execution until 18 April. Full details are not yet available.
Mr. Kaufman: May I first thank you, Mr. Speaker, for granting this private notice question, which, of course, you considered before the latest developments regarding the Sharpeville six.
Is the right hon. Lady aware that we welcome the news that these obscene hangings will not take place tomorrow, but that the shadow of the gallows still hangs over those six people, as it has now for more than two years, and even if the stay of execution is maintained they may face the prolonged ordeal of a second trial?
Has the right hon. Lady seen that President Botha said yesterday, after his meeting with Archbishop Tutu, that he might consider a reprieve if something new emerged from the court process? Clearly, something new has emerged from the court process.
A few minutes ago the Prime Minister said that full and correct representations for clemency had been made by President Reagan, as by her. Is the right hon. Lady aware that yesterday Secretary of State Shultz followed up those full and correct representations by making a personal telephone call to Pik Botha asking for clemency?
Will the Prime Minister now follow that laudable example of President Reagan, whom she called in aid a moment ago, and herself pick up the telephone and ask President Botha once and for all to end the agony of the Sharpeville six?
Mrs. Chalker: The granting of this stay of execution until 18 April is to enable the lawyers to lodge an application for the case to be reopened. Whether the right hon. Gentleman is right is saying that something new has emerged, I cannot tell him at the present time, and I would not have thought that he had had the evidence either. Whatever telephone calls were made to President Botha or anybody else, we shall continue to make representations just as we have done and to bring to the notice of the South African Government at every possible opportunity the need for clemency in this case. Of course, we are glad that the stay of execution has been granted.
Mr. John Carlisle rose—
Mr. Jeremy Corbyn: Botha's boy.
Mr. Speaker: Order. Every hon. Member has a right to be heard in the House.
Mr. Carlisle: Will my hon. Friend agree that there are two lessons to be learned from this sorry affair? The first is that if the west had been more sympathetic to the understandable difficulties that South Africa face there
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might have been a more sympathetic response from President Botha; and, secondly, it is none of our business anyway.
Mrs. Chalker: We have been over all this ground before. I do not think that there is anything to be added.
Mr. David Steel: Does the Minister's earlier answer mean that once the court proceedings are finished Her Majesty's Government will not resume their masterly inactivity but will continue to make representations at the highest level possible; a failure to reply to the British ambassador is surely not acceptable?
Mrs. Chalker: There has been constant activity, not masterly inactivity. The right hon. Gentleman has his facts wrong, yet again. We shall continue to make sure that the views of the House and this country and of the free world are well heard in South Africa.
Mr. Tim Rathbone: Will my right hon. Friend appreciate that the countries which are behind this Government in the submissions that they have made to the South African Government pleading for clemency in a situation where justice has obviously gone awry will continue to maintain those pressures? The world will be watching South Africa, hoping that it will give some indication of fairness in this matter, and we hope in other matters as well.
Mrs. Chalker: Yes, Sir.
Mr. David Winnick: Is the Minister aware that, far from this not being part of our business, it would indeed be a bad and disgraceful day if the House of Commons was ever indifferent to the racial situation existing in South Africa, where the overwhelming majority of the population continue to be denied the right to vote or to take part in their government? Is it not the case that if the hangings had gone ahead tomorrow it would have been just a few days before the 28th anniversary of the day when a large number of Africans were put to death at Sharpeville by the South African authorities?
Mrs. Chalker: I am very well aware of what the hon. Gentleman says, but I have really nothing to add to what has already been said by my right hon. Friend the Prime Minister and by myself.
Mr. Bowen Wells: Does my right hon. Friend agree that the best way to proceed in this terrible matter is quietly, by diplomatic means, and by firm and constant purpose to bring to the attention of the South African authorities the abhorrence of us all? Does he further agree that dramatic measures such as lifting telephones and other actions that have been suggested are very likely to be counter-productive? I congratulate my right hon. Friend and the Prime Minister on their conduct of the matter.
Mrs. Chalker: I have many times sought to point out to the House that we shall try to take the most positive steps to make sure that the needs of the Sharpeville six are well heard. I believe that some of the suggestions that we have heard from the Opposition Benches would go positively against the interests of the Sharpeville six.
Mr. Paul Boateng: Given the Minister's commitment to diplomatic means, and the use of the British ambassador for the Government's purposes in

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South Africa, will she now reconsider the decision not to recall the British ambassador from South Africa, so that he can apprise her at first hand of the current situation in South Africa, not only in relation to the Sharpeville six but the equally serious matter of banning all democratic means of presenting a real alternative for the creation of a non-racial southern Africa?
Mrs. Chalker: The hon. Gentleman is well aware that we are working through dialogue for non-racial representation in South Africa We have constant daily contact with our ambassador in South Africa and I believe that that is the right way to proceed. We can get information from him at first hand. He is on the spot and able to get information in Pretoria or Cape Town at first hand. That is the best way to proceed at present.
Mr. Roger Knapman: Would my right hon. Friend agree that we are far more likely to have influence over the South African Government because we do business with that country than we would have if we had introduced sanctions?
Mrs. Chalker: Yes, Sir.
Mr. Corbyn: Is the Minister aware of the absolute hell that the six condemned prisoners and their families are going through at the present time, and that this is likely to continue for at least another month? Will she not now, once again, absolutely and emphatically demand of the Government of South Africa that they drop the charges and release those prisoners? Will not the Government take some concrete action, such as imposing economic sanctions or withdrawing our ambassador, to demonstrate that they are serious in their condemnation of the racism of the South African Government?
Mrs. Chalker: We are absolutely serious in our condemnation of the South Africans in their pursuit of apartheid, but the suggestions that the hon. Gentleman makes simply receive the answers, no, no and no again.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that we have business questions and a further statement, followed by a very heavy demand to take part in the Budget debate. I will take one more question from each side.
Mr. David Ashby: Will my right hon. Friend convey to President Botha that the independence of the South African judiciary is not in doubt, but that what is in doubt is the sentence — not the conviction, but the sentence? Will she convey to President Botha that no civilised country indulges in hanging and that it is that which is so wrong, the hanging?
Mrs. Chalker: Whatever one's individual views may be, it is up to the Government of South Africa to decide on their own judicial penalties. Now that the application for the case to be reopened has been made, we hope that the facts will come to the fore and that a sensible, fair and just decision will be reached.
Mr. John Hume: Given the Prime Minister's correct description of the regime in South Africa as an evil regime, and given that the victims of that regime, the black people of South Africa, cannot take even the most elementary step of casting a vote in order to change that regime, and given that the international community has either failed or refused to implement effective pressure, including sanctions, on that regime, what would the Minister or her colleagues do, if they were black South Africans, to change the regime and prevent the bloodshed that stares everyone in the face?
Mrs. Chalker: We shall continue to work through dialogue and to open the channels for dialogue to change the totally unacceptable situation in South Africa. There is no other way to change a system which we find repugnant and detestable, and we shall go on working to that end.
Mr. Dennis Skinner: I thought that everybody had the right to be heard. Does that only apply to—
Mr. Speaker: Order. I am not having the hon. Gentleman shouting at me like that.

Business of the House
3.42 pm
Mr. Frank Dobson: Will the Leader of the House—[Interruption.]
Mr. Speaker: Order. If the hon. Member for Bolsover (Mr. Skinner) continues to shout from a sedentary position, I shall have to order him to leave the Chamber.
Mr. Dobson: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Yes, Sir. The business for next week will be as follows:
MONDAY 2I MARCH—Conclusion of the Budget debate.
TUESDAY 22 MARCH—Progress on remaining stages of the Education Reform Bill (1st Allotted day).
Motions on the Income Support (General) Amendment Regulations and the Family Credit (General) Amendment Regulations.
WEDNESDAY 23 MARCH—Progress on remaining stages of the Education Reform Bill (2nd Allotted day).
Motions on housing benefit regulations. Details will be given in the Official Report.
THURSDAY 24 MARCH—Progress on remaining stages of the Education Reform Bill (3rd Allotted day).
FRIDAY 25 MARCH — Motion for the Easter Adjournment.
Motion to take note of EC document on the establishment of a court of first instance. Details will be given in the Official Report.
MONDAY 28 MARCH—Completion of remaining stages of the Education Reform Bill (4th Allotted day).
The House will wish to know it will be proposed that, subject to the progress of business, the House should rise for the Easter Adjournment on Thursday 31 March until Tuesday 12 April.
[Relevant documents:
Wednesday 23 March: Housing Benefit (Supply of Information) Regulations 1988; Housing Benefit (General) Amendment Regulations 1988.
Friday 25 March: European Community Document 8770/87, Court of First Instance; Report of European Legislation Committee, HC 43—viii (1987–88), para 2.]
Mr. Dobson: I thank the Leader of the House for his statement. I think that we could go on record as saying that we object to the content or the timing of practically every item of business for next week.
May I ask the right hon. Gentleman to postpone consideration of the Education Reform Bill, on which there has been so little time for consultation? In particular, will he postpone consideration of the clauses to abolish the Inner London education authority — for which the Government have no mandate—at least until we know the outcome of the ballot being conducted by parents in inner London?
Will the Leader of the House move the debate on the social security regulations scheduled for Tuesday, so that they are considered at least earlier in the day—rather than late at night—to give his right hon. Friend the Secretary of State for Social Services a better opportunity to explain why he is taking money from the poor at a time when the Chancellor is giving £2 billion to the very rich?
In view of the criticism by the Joint Committee on Statutory Instruments of the Scottish poll tax registration
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regulations, which try to give the registrar extra-statutory, extra-parliamentary snooping powers not included in the original Act, will the right hon. Gentleman withdraw the regulations and ensure that they do not come back to the House until they are properly drafted? Such behaviour by the Scottish Office makes it all the more important that the Select Committee on Scottish Affairs is established to keep an eye on what is going on. We have heard a great deal in recent days about party discipline on the Tory side of the House. When will it extend to discharging their duty to the people of Scotland?
Does the Leader of the House expect the Select Committee on televising the House to meet before Easter? It is now more than five weeks since the House voted, against his advice and that of the Prime Minister, to set up the Select Committee. Hon. Members on both sides of the House are becoming concerned about the delay, and are wondering whether it is evidence of the Prime Minister's continuing resolve to keep the cameras out.
Finally, will the Leader of the House arrange for an early debate on the Griffiths report on care in the community, which was placed in the Library of the House yesterday, and which deserves wide and deep consideration?
Mr. Wakeham: The hon. Gentleman has raised five subjects. The first was about delaying the Education Reform Bill from next week's business. I regret to say that I do not believe that there is a case for doing that. All the stages of the Bill have passed through the House up to now by a substantial majority, and the timetable motion was approved by the House.
The hon. Gentleman asked about the social security regulations, and regretted that they were to be dealt with late at night. I too regret that, but it is necessary—particularly at this time of year — to have some important debates later in the evening.
The hon. Gentleman asked about the Community Charges (Registration) (Scotland) Regulations 1988. Those regulations are already in force. The points at issue are minor and technical, and relate to a supplementary inquiry form. They do not challenge the fundamental framework of the registration system established by the regulations, and there is nothing to prevent that system from starting to operate next month, as planned. My right hon. and learned Friend the Secretary of State for Scotland is considering the points raised in the Joint Committee's report.
I share the hon. Gentleman's regret that we have not been able to set up the television Select Committee. As the House will know, the motion on the Order Paper has attracted two amendments, one from members of the Official Unionist party and the other from members of Plaid Cymru. I had hoped that it would be possible—and I still believe that it should be possible—to reach an agreement on the composition of the Committee through the usual channels. I regret that the two parties have not yet been able to reach agreement, and I hope that they will seek to do so as a matter of urgency. If they fail to reach agreement, the House must be invited to determine the issue. I hope that that will not be necessary, but if it is, I hope to make a statement in my business statement next week.

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The Griffiths report is an important report which has just been published. I feel that it would be best for us to study it, but I shall refer the hon. Gentleman's request to my right hon. Friend the Secretary of State.
Mr. Cranley Onslow: Does my right hon. Friend agree that the disgraceful scenes towards the end of the Budget speech earlier this week underline the need for the appointment of a Select Committee on Procedure—a need that is constantly brought to our attention by the persistently boorish behaviour of Opposition Members sitting below the Gangway? Will he bring forward a motion to do this, however reluctant the usual channels may be to co-operate?
Mr. Wakeham: I have a great deal of sympathy for my right hon. Friend. It is necessary to set up the Procedure Committee and discussions are going on through the usual channels to see if we can do that as soon as possible.
Mr. James Wallace: Does the Leader of the House agree that, if the Community Charges (Registration) (Scotland) Regulations 1988 are unlawful, it is not a minor or a technical matter? Does he approve of the Secretary of State sending registration officers out when they are being asked to undertake an illegitimate task? Would it not be much better to withdraw the regulations — [HON. MEMBERS: "No — the Act"] — preferably withdraw the whole Act, but at least ensure that if there is to be an Act it will be operated lawfully?
Does the right hon. Gentleman also accept that certainly we on this Bench endorse the comments that have just been made by the right hon. Member for Woking (Mr. Onslow) about the setting up of a Procedure Committee? Some issues have been raised in recent weeks that we would like to see referred to that Committee, and we hope that that can be done as soon as possible.
Mr. Wakeham: I cannot add anything to what I have already said about the Scottish regulations. I understand that the points are minor and technical. My right hon. Friend the Secretary of State is considering the points that have been raised, and I do not think that I can add anything to what I have said about the Procedure Committee.
Mr. Ivor Stanbrook: Is my right hon. Friend aware that no fewer than 344 hon. Members have signed early-day motion 6 calling for the removal of the anomaly whereby public service pensioners may get war service included in their pensions provided they did not serve overseas?
[That this House deplores the fact that, alone among public service pensioners, those whose service was overseas cannot count pre-appointment service towards their pensions; and calls upon Her Majesty's Government to remedy this injustice to a dwindling group of elderly people whose working lives were spent in adverse conditions while dedicated to the service of British interests overseas.]
That is a majority of hon. Members and a far greater number than have signed any early-day motion in this Parliament or the last. In all those circumstances, surely some extraordinary measure should be available to enable my right hon. Friend to provide time for a debate on the subject.
Mr. Wakeham: I recognise the strength of feeling and the support that my hon. Friend has. While I shall keep the matter under review, I regret that I have nothing to say
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to him today, except that it seems to be a point that could well be made in today's debate or in the debate on Monday. That might help my hon. Friend.
Mr. Stuart Holland: Will the Leader of the House ask the Minister of State responsible for Channel fixed link matters to come to the House and make a statement next week on how he intends hon. Members to be able to make representations on this matter? Ministers constantly say that they are not responsible for the answers, that British Rail is. When, as the Member for the constituency of Vauxhall, which includes Waterloo, I went to put questions to British Rail at a seminar on the Channel link, I was refused access by the manager of British Rail. Short of barging my way through the doors to a committee room in Waterloo station, when can I actually get answers to questions on these matters, and get them here in the House of Commons?
Mr. Wakeham: I recognise the hon. Gentleman's concern in these matters, and I shall certainly see to it that this matter is brought to the attention of my right hon. Friend the Secretary of State for Transport. If there are matters properly for him to answer, I shall see that the answers are given to the hon. Gentleman.
Mr. James Hill: My right hon. Friend the Home Secretary mentioned the Council of Europe, and the work that it is doing in preparing a structure for possible legislation in this House. Would this not be a good time to have a debate on the work of the Council of Europe in its many forms and also, perhaps for the information of its members, to discuss one of its responsibilities—the European Court of Human Rights?
Mr. Wakeham: I recognise the work that my hon. Friend and others do in Europe on these matters. I should like to find time for a debate on the very important issues about which they are concerned, but I cannot promise a debate at the moment. I shall bear the matter in mind.
Mr. James Molyneaux: Following what the Leader of the House said about the difficulties over the establishment of the Select Committee on televising the House, is he aware that we on this Bench, and I think I speak for the two national parties on the Bench in front of me, would be happy to see an amicable settlement to this problem? May we suggest that the easiest way is to increase the membership of the Committee by one to 22?
Mr. Wakeham: The trouble is that there are fairly well-established and long-standing rules about the size and composition of Select Committees; all parties have to agree with those as far as it is possible to do so. The right hon. Gentleman will recognise that we chose a Committee of a size that would enable two representatives of the smaller parties to serve, which I thought was helpful. Unfortunately, we have run into difficulties, but I shall bear the right hon. Gentleman's suggestion in mind.
Mr. Michael Latham: Will my right hon. Friend arrange for the Secretary of State for Defence to place in the Library, and make a statement next week on, the internal Ministry of Defence document "Learning from Experience" which shows that up to £4 billion of Ministry of Defence expenditure every year is accounted for by overspending on missile procurement? As that document was wrongly called confidential—it is apparently in the possession of The Guardian—it ought to be placed in the Library forthwith.
Mr. Wakeham: I recognise my hon. Friend's interest in these matters. I have communicated with my right hon. Friend the Secretary of State for Defence who is aware of the interest in the report and who is considering whether it would be appropriate to make it more widely available. I have taken my hon. Friend's point on board.
Mr. Dick Douglas: Will the Leader of the House reflect a little further on what he said about the poll tax regulations for Scotland? This is the second occasion on which the Joint Committee on Statutory Instruments has found the documents to be defective in drafting and indeed ultra vires. Will he reflect that the right thing to do is to withdraw the whole Act?
Could we have a statement next week from either the Secretary of State for Energy or the Secretary of State for Scotland on the negotiations that are due to take place very soon between the South of Scotland Electricity Board and British Coal in relation to coal burn from Scottish coalfields? This is a very important issue affecting thousands of jobs in Scotland.
Mr. Wakeham: I have already said that I shall refer the first point to my right hon. and learned Friend the Secretary of State for Scotland and I have nothing further to add on that. The second point, too, I shall refer to my right hon. and learned Friend; I have no statement to make on it today.
Mr. Andrew Rowe: Will my right hon. Friend reflect on the fact that, when Lady Wagner's committee produced its report last week, it had the courtesy to invite hon. Members to hear what it had to say before it met the press? By contrast, now that the Griffiths report has been presented to his right hon. Friend the Secretary of State for Social Services, it proves impossible for hon. Members to obtain copies of it because it is not held in the Vote Office. Will my right hon. Friend do something about that and, when there is a debate on the Griffiths report, will he link it with the Wagner report, which clearly hears closely upon it?
Mr. Wakeham: I shall bear my hon. Friend's latter suggestion in mind. I regret that he has not been able to get hold of a copy of the report and I shall see what I can do to help him.
Mr. Bob Cryer: Will the Leader of the House arrange for a debate on the Register of Members' Interests so that we may see how it is operating? Will he bear in mind the fact that today's Daily Mirror carried a story about Morgan Grenfell and the hon. Member for Berkshire, East (Mr. MacKay)? Apparently, Morgan Grenfell is inviting clients to have the hon. Gentleman representing them. That represents a serious undermining of the job of a Member of Parliament. Surely we should have a debate to see how the register is operating and how it is being abused, rather than allowing the House to be brought into disrepute by the publication of internal memoranda that seem to suggest that some Members of Parliament are operating as Handy Andies for the clients who pay them, which is quite wrong.
Mr. Wakeham: I have not seen the report to which the hon. Gentleman refers, but I have noted the Select Committee's proposals about the changes to be made in the registration of directorships and the further look that it proposes to take at lobbying. However, I do not foresee the need for a debate in the immediate future.
Mr. Richard Holt: Notwithstanding the excellent unemployment figures today, there remains a disproportionate number of people out of work in the north of England. Is my right hon. Friend aware that in the Ministry of Defence alone there are 500 clerical vacancies? Would it not be in the interests of the Government and the people if more Government Departments — including parts of the Ministry of Defence—were moved to the north-east of England?
Mr. Wakeham: I recognise that that would be helpful, but I would also remind my hon. Friend that four fifths of the civil servants employed by central Government are located outside the Greater London area. That is a good record, but we shall continue to try to do better.
Mr. Tony Banks: May I draw the right hon. Gentleman's attention to early-day motion 759 on the current situation in Panama?
[That this House congratulates Manuel Solis Palma on being elected by the National Assembly as the new President of Panama; calls upon the British Government to recognise President Palma as the new Panamanian Head of State; condemns the continuing attempts by the Reagan Administration to de-stabilise Panama because of that country's refusal to withdraw from the contradora peace process; and further calls upon the United States Government to give a clear undertaking to abide by the terms of the 1977 Carter-Torrijos Treaty which requires all United States military personnel to withdraw from the Panama Canal Zone by 31st December 1999.]
Is the right hon. Gentleman aware that Panama is close to civil war due to the sanctions imposed by the United States Administration on the Government of Panama? Is he further aware that serious British maritime interests will be involved if there are difficulties around the canal zone? In view of all those facts, can the right hon. Gentleman say when there is to be a debate on foreign affairs, especially one that will enable us to discuss the situation in central America — Panama, Guatemala, Honduras and Nicaragua?
Mr. Wakeham: In recent weeks I have said to one or two hon. Members who have raised the question of a foreign affairs debate that I am hoping to arrange one in the not too distant future, but I cannot tell the House today when it will be. I have seen early-day motion 759. We do not agree with that motion. The British Government recognise states, not Governments, in accordance with international doctrine. Relations between Panama and the United States are matters for those Governments.
Mr. Nicholas Fairbairn: Following the matter raised by my right hon. Friend the Member for Woking (Mr. Onslow), if the usual channels cannot agree to set up a Committee on the subject of defiance of the Chair, may we have a debate in the Chamber, with proposals from all parties for appropriate punitive and deterrent penalties for those who defy the Chair and are in deliberate contempt of the High Court of Parliament?
Mr. Wakeham: My hon. and learned Friend is quite right. These are ultimately questions for the House. I sympathise very strongly with what my hon. and learned Friend has said. All that I can usefully say is that I hope that every hon. Member will, on reflection, acknowledge that support for your authority, Mr. Speaker, is

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fundamental to the work of the House, and that support for the principle of free speech is worth having only when it is expressed without qualification.
Mr. Andrew Faulds: Does the right hon. Gentleman recollect that I asked him last week to demand of the Home Secretary that he come to the House to make a statement as to what he is going to do about the appalling backlog of naturalisation representations which are clogging up the works at Lunar house in Croydon? Is there any truth—the House needs to know this and the country needs to know this—in the story that the people who put in these applications are going to be asked to have them back and put them in as their initials come up on some list? Will he arrange for the Home Secretary to come down and make a statement?
As to the Select Committee on the televising of the proceedings of the House, is the right hon. Gentleman aware that there is a general feeling that both sides could not have got together a more flaccid collection of right hon. and hon. Gentlemans than this bunch comprises? Will he accept that there is a need for the House—
Mr. Speaker: Order. There must be moderation in language in this place.
Mr. Faulds: Will he accept that there really is a need for the House to debate the composition of this Committee or to increase the numbers so that some hon. Members with backbone can be put on it?
Mr. Wakeham: When the hon. Gentleman rose, I thought that he was about to thank me for trying to help with the problem that he raised last week, but that must have escaped his memory. With regard to the composition of the Select Committee, I consider that there are some very fine right hon. and hon. Members on it and I think that we shall deliberate very successfully on the matter in hand once we get over the minor difficulty, which may have to come to the House, regarding membership of that Committee.
On the more serious matter of the difficulties at Lunar house, my right hon. Friend the Home Secretary is aware of the difficulties, which have been caused by the success of the campaign to encourage people to register for British citizenship before the deadline of 31 December 1987. A long-term plan for processing applications is being developed and my right hon. Friend will report to the House in the appropriate way as soon as it is the right moment.
Mr. Eric Forth: Will my right hon. Friend arrange an urgent debate on the arrangements being made between the Fees Office of the House of Commons and the Inland Revenue so that Opposition Members, especially the Leader of the Opposition and the Opposition Chief Whip, who find the budgetary proposals on top rates of tax so objectionable, can arrange to repay any reductions in tax that they receive as a direct contribution to any element of Government expenditure that they favour? Will my right hon. Friend also help people outside the House who are embarrassed at the amount of their own money that they will be allowed to keep to decide the best way to treat that money, to help the Health Service or any other area of Government expenditure?
Mr. Wakeham: My right hon. Friend has made proposals in the Budget which will help all who wish to
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give money to charity to do so more effectively. I hope that hon. Members in all parts of the House will take advantage of that concession.
Mr. Andrew Welsh: Will the right hon. Gentleman allow the Select Committee considering the televising of our proceedings to consist of 22 members so as to allow representation from all parts of the United Kingdom and be satisfactory to the parties involved? Is he aware that it has been suggested that it would ease the Government's problem if the matter were solved by tossing a coin? May I urge him to recognise that that would be a totally unacceptable way to deal with matters affecting the whole United Kingdom? Does he agree that a membership of 22 would allow all parties and all parts of the United Kingdom to be represented?
Mr. Wakeham: Unfortunately, the hon. Gentleman does not take on board the fact that increasing the Committee to that size and putting a third member for the minor parties on it would make the Committee disproportionate. That is a way in which we can proceed only if there is general agreement on all sides. I am trying to find a method that is generally acceptable to everyone, but most of my suggestions so far seem to have fallen on stony ground. No doubt the minor parties will have to content themselves with the matter being resolved by the major parties in the House, which I should have thought that they would wish to avoid.
Mr. Tony Marlow: In the light of Tuesday's hooligan behaviour by what has been aptly named the provisional wing of the Labour party, which significantly has not been condemned by the Leader of the Opposition who in any event is powerless to do anything about it, could my right hon. Friend say what discussions he has had through the usual channels to allow this House to discipline itself? Further, could he say, in the light of the possible advent of television cameras into this House, whether he feels that the animal excesses to which we were subjected on Tuesday will be further exaggerated by the cameras, in which case could we have an urgent and further debate on that subject?
Mr. Wakeham: I cannot promise an urgent and further debate on the subject in the near future. I fully recognise the concern that my hon. Friend has expressed about the behaviour in the House last Tuesday and I know that he is fascinated by what goes on through the usual channels. All that I can tell him is that what goes on through the usual channels is an attempt to be constructive. That has always been our approach to these matters and it will continue to be so. Unfortunately, Tuesday was not a very creditable day for the House of Commons, in my view.
Mr. Frank Cook: Is the Leader of the House aware that my most honourable and apparently flaccid Friend the Member for Jarrow (Mr. Dixon) today met a delegation from Belfast who came here to discuss implications for the shipbuilding industry? As the only shipbuilding in which the Cabinet seems to be interested concerns directorships and receiverships, will the Leader of the House ensure that there is a debate on the shipbuilding industry in the near future?
Mr. Wakeham: That is one of the subjects on which I know that many right hon. and hon. Members would like a debate, but I cannot promise one in the immediate future.
Mr. Robin Squire: Will my right hon. Friend consider providing time in the near future for a debate on the affairs of London, as I understand was the practice in previous years? Will my right hon. Friend bear in mind that there are 84 Members representing greater London—more than the number representing Scotland—and that many of them will wish to contribute to such a debate?
Mr. Wakeham: My hon. Friend raises an important matter. I believe that we should have such a debate and I will see what I can do, but I cannot promise one immediately.
Mr. Tam Dalyell: Are we right in supposing that, in the considered reply to the considered question of his right hon. Friend the Member for Woking (Mr. Onslow), who is Chairman of the 1922 Committee, the Leader of the House has promised a debate on behaviour? Should it not be a wider debate on public behaviour considering, for instance, the actions of the right hon. Gentleman's former service, MI6, and what Mr. Anthony Cavendish had to say in his book about the smearing of the right hon. Member for Old Bexley and Sidcup (Mr. Heath)? Would not such a debate be an ideal occasion on which to discuss early-day motions 228, 253, 272, 273 and 286, all on the subject of Westland?
[That this House notes in the book, Campaign, by Rodney Tyler, the Selling of the Prime Minister: from behind the doors of Downing Street and Conservative Central Office—A unique inside account of the Battle for Power that the author on page 1, chapter 1, paragraph 1, sentence 1, states 'It was an extraordinary turnaround in fortunes from the moment on 27th January 1986 when Mrs. Thatcher secretly confided to a close associate that she might have to resign …' and on page 3 that 'On the eve of the crucial Westland debate she herself felt shakey enough to doubt her future' though some around her later sought to dismiss this as late evening anxieties of the sort that had disappeared the following morning). It is certainly true that if Leon Britton had chosen to, he could have brought her to the brink of downfall, by naming the real culprits inside Number 10. Instead, he chose to remain silent', and calls on the Prime Minister to give a full account of what transpired between 3rd January and 27th January 1986, at Number 10 Downing Street, in relation to the selectively leaked Law Office's letter concerning the Westland Affair.]
[That this House notes that the Member for Aldershot on page 136 of his book Heseltine: the unauthorised Biography, states in relation to the Westland Affair that 'John Wakeham issued an order of the day which contained the trite, if effective message, that it was time for all good men to come to the aid of the party. We did and calls on the Leader of the House, The Right Honourable Member for South Colchester and Maldon, to explain when he first knew the role of the then Trade and Industry Secretary, The Right Honourable Member for Richmond, Yorks, in the matter of the disclosure of a selectively leaked Law Officer's letter.]
[That this House notes that in his book Mrs. Thatcher's Revolution, published this week by Jonathan Cape and Co., Mr. Peter Jenkins writes, on page 200 'Britton himself refused to enlighten the Select Committee on any point of substance. However, he is reputed to have told close friends subsequently that not only has she known perfectly well what had happened but that, on the day following the leak, had expressed her satisfaction to him at the way things had been
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handled. However at that time, the downfall of Heseltine had not been achieved. … He (Mr. Britton) might point the finger at her (Mrs. Thatcher). Potentially he now had the power to destroy her'; and calls on the Prime Minister to give the House a full account of her conversations with the then Secretary of State for Trade and Industry, the Right honourable Member for Richmond, Yorks, over the period from 3rd January and 27th January 1986, in relation to the selectively leaked Law Officer's letter concerning the Westland Affair.]
[That this House notes that in The Thatcher Years—A decade of Revolution in British Politics, published by BBC Books, Mr. John Cole, on page 170, considering the selectively leaked Law Officer's letter in the Westland Affair, writes 'why did he (Sir Robert Armstrong) not give her a quick interim report when he discovered that the leak was an inside job, authorised by her office? Why did Leon Britian not tell her? Or the private secretary concerned? Or his chief, who sits in the same room? Or her press secretary? And why did she never ask?'; and calls on the Prime Minister to inform the House of the answers to these questions.]
[That this House notes that, in the book 'Not with Honour—The Inside Story of the Westland Scandal', on page 142, Magnus Linklater and David Leigh write that 'Instead, following Havers's complaint, she spoke privately to Brittan about the leak. Although this is something the Prime Minister has failed to disclose, to widespread disbelief the evidence comes from an authoritative source, who told us: "The Prime Minister knew about the leak. She was pleased it had been done. There was a meeting between Britton and her after the complaint from Mayhew. Only the two of them were present … Britton assumed she knew of [the leak's] origins. You must draw your own conclusions." One of Brittan's friends adds, "Nobody thought it was a problem. The complaints were out of the public domain and any inquiry was expected to be a formality. Leon wasn't worried at all about it."; and calls on the Prime Minister to give a full account to the House of the meeting between herself and Right honourable Member for Richmond, Yorks, referred to therein.]
Moreover, at what stage in next week's proceedings on the Education Reform Bill will there be a full explanation from the Prime Minister as to why, if the Cabinet is such a happy family, Downing street authorised the leaking of the correspondence between Mr. Paul Gray and Mr. John Jeffrey? That was not the action of a very happy family, was it?
Mr. Wakeham: The hon. Gentleman lives in a world of his own. I have nothing to say to anything that he raised.
Dr. John Reid: Does the Leader of the House accept that there is no way in which I can follow my hon. Friend the Member for Linlithgow (Mr. Dalyell? However, on the community charge — [Interruption.]—the poll tax—does he understand that it is utterly unsatisfactory that he should come here today on the occasion of the second imposition of unlawful regulations to do with the poll tax on the people of Scotland and describe them as "minor and technical" matters? Does he understand that that is particularly galling as his colleagues in Government are the first to scream when anyone suggests unlawful action on the poll tax? Why are we not having a debate to discuss the vital distinction between unlawful action in imposing the tax and unlawful action in opposing it, which Conservative Members find so difficult to accept?
Mr. Wakeham: When I first met the hon. Gentleman when he arrived in the House, I thought that he was one of the more sensible of the new hon. Members from Scotland, but he seems affected by some of the weaknesses of some of his colleagues. He gets very excited about points which are minor and technical and which relate to a supplementary inquiry form. I have promised to refer them to my right hon. and learned Friend the Secretary of State for Scotland, and that is what I shall do.
Several Hon. Members rose—
Mr. Speaker: Order. I will call the hon. Members who have been rising, including those who were rising previously; but I remind them that we have a statement and a heavy demand on the subsequent debate.
Mr. Alistair Darling: Further to that point, does the Leader of the House realise that these poll tax regulations impose major obligations and severe penalties on people in Scotland, and that he cannot deliberately override the fact that there has been criticism of their drafting and that they are virtually incomprehensible to lay people? Is it not time that these regulations were debated, or, at the very least, that the Secretary of State came to explain to the House why he was prepared to brush aside these niceties in order to have his way with the people of Scotland?
Mr. Wakeham: I am not getting high-handed or overbearing, or anything of the sort. I am merely saying that the points have been raised, and I am referring the matter to my right hon. and learned Friend the Secretary of State for Scotland. I should have thought that that was helpful and that the hon. Gentleman would have thanked me for it.
Mr. David Wilshire: If my right hon. Friend is willing to have a debate on the behaviour and conduct of Members of the House, will he undertake to hold it before the House further considers whether it wants television cameras here? After Tuesday's disgraceful scenes, a growing number of us have great reservations about whether that decision was the right one.
Mr. Wakeham: I have already said that I do not see the possibility of a further debate on televising the House until some later time when we have a Select Committee report to consider. I very much hope that we do not need a debate on the behaviour of hon. Members, as I hope it will improve.
Mr. Jeremy Corbyn: Is the Leader of the House aware that the United States has today ordered 3,000 troops into Honduras, which can only exacerbate the dangers of war in that region and deliberately undermine the progress of the Arias peace plan in the central American conflict? Is he further aware that, as my hon. Friend the Member for Newham, North-West (Mr. Banks) said earlier, the United States is imposing the most vicious sanctions on Panama, thereby causing great hardship to its people? In the circumstances, does not the right hon. Gentleman believe that there should be an urgent debate on central America and the need for a
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concrete peace plan there, which can only be achieved if the United States withdraws all its forces and stops its aggression against the Government and people of Nicaragua?
Mr. Wakeham: My right hon. Friend the Prime Minister has answered a question on this. I have answered the question of the hon. Member for Newham, North-West (Mr. Banks), and I have nothing further to add.
Mr. Tom Clarke: Following the right hon. Gentleman's reply to my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) on the Griffiths report, is it not unacceptable that that report is available in the Library but not in the Vote Office? Is not that consistent with the Government's approach to this recent report? In contrast with Sir Roy's report on the Health Service, which was widely publicised and warmly welcomed, this report on community care was published in the aftermath of the Budget, with no ministerial statement or press conference and, it would appear, in the absence of a debate. As Sir Roy identifies an important role for local government and the disgraceful state of community care provision, does not that make it all the more important that the House be given the facts and the opportunity for an urgent debate?
Mr. Wakeham: I have already told my hon. Friend the Member for Mid-Kent (Mr. Rowe) that if there are difficulties in getting hold of copies of the report I shall see what I can do to help. The Government are giving careful consideration to Sir Roy's report, which makes wide-ranging recommendations about the future of community care. We need time to study them and take account of reactions to the report. The Government will bring forward their own proposals in due course. At this stage we are keeping an open mind and considering all possible options.
Mr. Dennis Skinner: If the Leader of the House wants to persist in drawing up the membership of Conservative Members on the new Procedure Committee looking into the conduct and behaviour of hon. Members, will he bear in mind that the conduct of many Conservative Members will be blighted by the fact that they may well be Freemasons or moonlighters, like the right hon. Member for Chingford (Mr. Tebbit), who has five directorships and chairmanships already? Perhaps they will also be blighted by the fact that they go trotting off on freebies to South Africa in the pay of the Botha Government. Will that allow Conservative Members to be members of this great Procedure Committee? Will he allow on to the Committee people who are emotional and tired during the course of the day, having escaped from the Bars? Will they be breathalysed before attending the Committee? What a farce it all is.
Mr. Wakeham: The Committees of this House are determined by the House, not by me. The procedures that we have used over the years have produced some funny results sometimes, but by and large the results have been satisfactory.

Belfast Funeral (Shooting Incident)
4.17 pm
The Secretary of State for Northern Ireland (Mr. Tom King): With permission, Mr. Speaker, I wish to make a statement about the attack yesterday upon mourners attending the funeral in Milltown cemetery, Belfast, of the three terrorists killed in Gibraltar.
Before the funerals, the Roman Catholic Church, local politicians and community leaders had appealed for the occasion to be orderly and without violence. The police had made it clear that they wished it to happen, and would do all they could to assist. Against this background, and in the trust that neither the families nor the community wished to see any exploitation of the funerals for paramilitary purposes, the Chief Constable decided his dispositions accordingly. His aim was to police the whole area in a sensitive manner, and to avoid intervening in a private and solemn occasion. I would emphasise that the funerals were proceeding in a peaceful way until the attack took place.
At about 13·40 hours, a man on the fringe of the crowd in the cemetery opened fire with a handgun, and started to throw grenades among the mourners. He was identified, and as he made his retreat he threw further grenades and continued to fire. He was pursued by members of the crowd, who caught him at the nearby motorway, where he was subsequently arrested by the RUC. He is at present under police guard in hospital, recovering from the injuries he received at the hands of the crowd. A second man, subsequently arrested by the police at his home, is now helping them with their enquiries.
In the course of this vicious attack, three people were killed, and 68 injured, of whom four have been detained in hospital, one in intensive care. The House will wish to express its sympathy with the relations and friends of those killed and injured in this appalling incident.
A telephone call was made to the BBC, purporting to be from an organisation calling itself the Protestant Action Force, and claiming responsibility for the outrage, but the accuracy of this claim is not yet clear.
It was an obscenity that an occasion which, whatever its origins, should have been one for private mourning and grief was brutally and savagely interrupted by such an attack. The events of yesterday serve only to underline the total futility of violence in all its forms. The day began with a blast bomb attack by the IRA on an Army patrol, in which, fortunately, there were no fatalities, but in which one soldier was injured.
Even after the incident at the cemetery, and notwithstanding the professed appeals for calm, the IRA tried to launch a mortar attack on a police station in Belfast which was fortunately forestalled by the security forces. There was further violence last night, with hijacking and burning of vehicles, petrol bomb attacks, and a sectarian attack on some Protestant houses. We can only be grateful that the violence of last night did not lead to still more deaths and serious injuries.
Nothing could have demonstrated more clearly that if people's thoughts are only of revenge and retaliation after any incident, this awful cycle of killing and murder and violence will continue; yet nothing showed more clearly the total futility of violence and the fact that it offers nothing to any part of the community in Northern Ireland.
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There are likely to be funerals every day this week in Belfast as a result of recent events, at which the human suffering, sadness and heartache will be all too plain.; and the ultimate tragedy for all the bereaved is that it is all to no purpose. Two thousand five hundred people have been killed in Northern Ireland in the past 20 years. We know how many of those deaths flow from terrorist action and we know that those killings have not advanced any cause whatsoever. Instead, they serve only to deepen the bitterness and hatred that can divide the communities.
At this time of great emotion, it is now incumbent on everybody in the Province to play their part in ending the cycle of violence and retaliation and further violence.
It is not just the politicians, the Church and community leaders, crucial though their role is—everybody in the Province has a responsibility, to heal, and to calm and to mind what they say as much as what they do. The need once and for all to repudiate violence in speech as well as in action and the determination to work positively to build a tolerant and caring society is the message that this House should send today. It is a message that does not seek to judge, or to distinguish between one section of the community and another, but one that is deeply important for the future of every single person in Northern Ireland.
Mr. Kevin McNamara: You will recall, Mr. Speaker, that on 9 November, in the aftermath of the obscene bombing at the cenotaph at Enniskillen, I said:
"In the past, even the most barbaric have accepted that people should be allowed to honour their dead in peace." —[Official Report, 9 November 1987; Vol. 122, c. 20.]
That view is still held by Opposition Members, and it is shared by hon. Members of all parties. Our sympathies and condolences must go out to the families of the three young men killed and to all those who suffered physical and emotional injury yesterday. Would that yesterday would see the end of all that in Northern Ireland.
I thank the Secretary of State for coming to the House so soon to make a statement concerning the appalling scenes of carnage at Milltown cemetery yesterday. I should further like to support the Secretary of State in the comments that he made in the immediate aftermath of the shooting and bombing. I am sure that the whole House will wish to echo his words and warnings that there should be no retaliation, otherwise the mad and
"awful cycle of killing and murder and violence will continue".
We agree with that. The perpetration of such an outrage can lead only to feelings of revulsion in all who saw the scenes on television last night.
I feel certain too that this House would wish to associate itself with the calls made throughout these two islands by my right hon. Friend the Leader of the Opposition, the Prime Minister, the Taoiseach in the Republic, the leaders of Churches on both sides of the divide, and political and community leaders—that no matter how understandable the feelings and desires for revenge, retaliation and retribution, firm self-control and discipline should be exercised. What is needed is for those with influence or in positions of authority to seek to prevent further violence. Cool heads are required—the spirit that followed Enniskillen and the voice of the common people.
One of the tragic facts of yesterday's events is that, until the gunman appeared and threw his grenades, the funerals

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had passed off calmly, with dignity, peacefully and with no hint of trouble—giving due respect to the wishes of the families of the dead.
The security forces have been left in a position where they can do no right. I am sure this House would not wish to see the "blanketing" of funerals again. Decisions on the security measures at funerals should be taken case by case. We believed that the security forces were right to hold back at Milltown yesterday, and we still believe that that was the right decision.
However, there are questions that the House deserves to have answered. First, there is a set of questions concerning the van parked near the cemetery. We are told that the white van parked on the M1 was a police vehicle belonging to the traffic division, which was to be used to prevent access to the cemetery from the motorway. Some reports have said that it was an old and battered van. If so, was it of the usual standard used by the police traffic division? What were just two policemen doing in the vicinity of thousands of Republicans? At what stage did the police in the van see the gunman? Did he get in to the cemetery the same way as he got out? When the police in the van saw the gunman and the mayhem in the cemetery, what did they think was happening? Why did they drive away and when, or if, did they summon support or alert other members of the security forces? Can the Secretary of State shed any light on the story in today's Irish Times that other vehicles were seen in convoy with the van half an hour before the arrival of the funeral at the cemetery?
Secondly, there is a set of questions concerning the helicopter, which is alleged to have been over the gunman as he made his attempted escape. When did the troops in the helicopter first see the man — if they did? What action did the troops in the helicopter take when they saw him? If the gunman entered the cemetery the same way as he left, did the crew of the helicopter see him? Why was no action taken before the carnage, if they did see him?
Lastly, there are questions relating to the nature of the weapons used in the attack. Have the type and origin of the fragmentation grenades and the gun or guns used in the attack been established? Is there any truth in the reports that the weapons used were of the same type as those seized by the security forces in County Armagh in January — supposedly destined for the Ulster Defence Association and similar to weapons believed now to he in the hands of the Ulster Volunteer Force and Ulster Resistance, which were 150 anti-personnel fragmentation grenades, 30 Browning pistols and 60 Kalashnikov rifles? As those are sophisticated weapons, do we know when and how the man who has been detained obtained his training?
In conclusion, we feel that there is a great need for the elected and other leaders of both communities in the North to engage in a constructive dialogue, seeking to make the strength of democratic institutions more important than the strength of arms. The catalogue of events in Northern Ireland since November—the deaths and the political misunderstandings—have shown us all, on both sides of the water and in both parts of Ireland, that we must take the constructive opportunities that are available to us. They do exist.
Tragic though yesterday's events have been, today on St. Patrick's day we must still, as democrats, have hope. We must still work for a democratic, peaceful, political solution to the problems of the North. Violence only begets violence. As democrats, we must say that it must stop.
Mr. King: I am grateful to the hon. Member for Kingston upon Hull, North (Mr. McNamara) for his opening comments and for associating with me in the call for no retaliation and for people to exercise responsibility at this time. I appreciate that. I also appreciate his endorsement of the Chief Constable's decision regarding the approach to the policing of the funerals. I believe that the Chief Constable's decisions were absolutely right and I am pleased to tell the House that he took exactly the same view about the funeral that took place today. According to the latest reports that I have received, that passed off peacefully and without violence. I am sure that that will be a great comfort and relief to all hon. Members.
The hon. Gentleman then raised a number of queries. After any incident in Northern Ireland, the air is thick with rumours, stories and allegations of who saw what and who might have done this, that or the other. That is precisely what I mean when I say that the right authority to investigate the matter is the police. That is precisely what they are doing at present. I have promised to make clear the assurance of the Chief Constable that there will be the most thorough investigation of all the matters. Obviously, I cannot respond to the individual points that have been raised. Those are matters for the police, and anyone who has any information that can assist the police in the proper conduct of the investigation should make that information available to them.
Mr. James Molyneaux: In joining unreservedly in the condemnation of this insane and dastardly outrage, can I ask the Secretary of State whether he will refute the truly monstrous allegations that the Army and the RUC engaged in a stand-off tactic to enable such an attack to take place? Does the Secretary of State agree that he can exonerate the security forces by explaining precisely how the stand-off decision was taken and what wider considerations and discussions preceded the Chief Constable's directive?
Mr. King: I am grateful to the right hon. Gentleman for his opening comments. I am certainly grateful to him for giving me the opportunity, with all the information available to me, to repudiate utterly the disgraceful allegation that there was collusion and that the purpose of proceeding with sensitivity in the area of west Belfast during the tense and difficult period of the funerals was to enable such an outrage to take place. I do not think that any reasonable person gave a moment's credence to that absolutely monstrous and demonstrable lie. It revealed quickly and immediately the hypocrisy of Sinn Fein in these matters. When the security forces seek to prevent illegality and are provoked by Sinn Fein or the IRA in many of the activities that they seek to police, they are accused of gross interference and violation of personal rights, yet, when they seek to respond to representations, from both the Church and the families, they are alleged to be exposing the people concerned to the risk of violence. It is a monstrous charge, and I am grateful for the opportunity to repudiate it entirely.
Sir John Biggs-Davison: At this distressing and dangerous time, would it not be helpful if certain Catholic priests considered more carefully some of their words and the effect of those words on other people? Should not such people as Father Raymond Murray realise that a priest is called to be a pastor, not just to

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Republicans, but to Catholics of all opinions, including Catholics loyally serving in the armed forces and the police?
Mr. King: My hon. Friend will have noted that I referred in my statement to the crucial role not just of politicians, but of Church leaders. I do not think that I was the only person who found deeply distressing the content of some of the addresses given at the funerals, and I know that there are many throughout the Catholic community who are equally distressed by those statements. Everyone has a responsibility to avoid any language which may itself help to stir up violence and hatred in that way. At present, there is a need to heal and to calm, and people should mind what they say as much as what they do.
Mr. Seamus Mallon: I take this opportunity of associating myself with the remarks about the police. I was one of those people who have consistently requested that, at those funerals, the police adopt the position that they adopted yesterday. They should continue to do so. What they did was right, and they should not be under attack from any quarter. As anyone who lives in the North of Ireland knows, if someone wants to commit an attack, no amount of security will prevent it.
Will the Secretary of State agree — I note from his statement that he does—that the business of politics is about creating consensus, binding wounds and healing the terrible divisions that we have had over so many years? Will he accept, with the best grace that I can offer, that the perception of this Government's approach in the North of Ireland is one of confrontation and that that has in some ways contributed to a climate in which confrontation has become the order of the day? Will he take this traumatic opportunity to assure the House that, from now on, the thrust of Government policy should be towards compassion, reconciliation and creation of a just and peaceful society?
Mr. King: I am grateful to the hon. Gentleman for his opening remarks about the conduct of the police yesterday. I know that he has held his views very sincerely for many years. The Chief Constable's decision yesterday was correct in the circumstances and it was a tragedy that the incident destroyed what would otherwise have been a peaceful and orderly funeral.
On the other hand, I do not accept the suggestion that the Government's approach is confrontational. The Government are genuinely seeking to try to heal the wounds in Northern Ireland. Over recent months and years, people have recognised that the security forces have sought to police impartially and to stand against violence and extremism, from whichever side it may come, with the full support of the Government. We have taken progressive steps to try to deal with the problem of inequality and discrimination in housing, electoral practice and employment. Surely our record shows our determination to see fairness and equality of opportunity in Northern Ireland, as we expect to see it throughout the United Kingdom.
Mr. James Kilfedder: After each obscene atrocity committed by the Provisional IRA during the past 20 years, when innocent men, women and children and
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members of the security forces have been murdered and maimed, I have appealed for restraint and for no acts of retaliation—even when my own cousin, a mother with a family, was murdered by the Provisional IRA, and her husband subsequently died from a heart attack. I agree with the comments of the Secretary of State. We need calm, and the right hon. Gentleman will agree that the vast majority of people in Northern Ireland want nothing better than good community relations. They want to see political and constitutional progress in the Province, but, sadly, the bloodletting that has been going on for so long hinders that progress. It is now up to everyone to appeal unequivocally to the people of Northern Ireland to give 100 per cent. support to the police and the Army, so that we shall no longer have such deplorable incidents.
Mr. King: The hon. Gentleman has consistently called for restraint on these occasions. His comments clearly bring out the fact that what is really obscene about these incidents is that they betray the vast majority of decent, hard-working people in the Province who want exactly what everybody else throughout the United Kingdom wants—a future for themselves and for their families to grow up in peace, with some prospect of happiness for the future. It is the men of violence who stand in the way of that opportunity for the whole community in Northern Ireland, and this is a time for that community to make its feelings felt in the most effective way.
Several Hon. Members rose—
Mr. Speaker: Order. I accept that these are serious matters and of great concern to all hon. Members, particularly those representing Northern Ireland seats, but I must again draw attention to the fact that we have a heavy day in front of us, and I ask for single questions to be put to the Secretary of State. I hope that we may be on the next business by 5 o'clock.
Mr. David Alton: May I associate myself and my right hon. and hon. Friends with everything that the Secretary of State has said from the Dispatch Box this afternoon? Does he agree that we shall see an end to the cycle of sectarian violence and the tit-for-tat, blood-for-blood revenge killings only when all organisations and people involved in the political process in Northern Ireland repudiate the use of violence to achieve their objectives? Does he also agree that the best course for the British Government now is to continue steadfastly pursuing the policies that have been pursued over the past two years, especially the consolidation of the Anglo-Irish Agreement, and full support for the security and police services in Northern Ireland?
Mr. King: There is no question but that violence is a threat to the island of Ireland. Indeed, the welcome news of a further arms find by the Garda in the Republic yesterday is further confirmation of the importance of cross-border security co-operation. That might prove to be a significant find, but full details have not yet come through. The Irish and British Governments, as confirmed by the Taoiseach in discussions with my right hon. Friend the Prime Minister, share a determination to work closely together in the fight to eradicate from the island of Ireland the violence which does such damage and against which the problem of political progress becomes so difficult.
Sir Eldon Griffiths: Does not a heavy responsibility lie upon those who stage these highly

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charged political funerals for their own unscrupulous purposes? Do not those who glorify them on television, and to that extent almost incite violence, bear some responsibility?
Mr. King: I certainly agree, and my hon. Friend will excuse me if I do not repeat the remarks that I made earlier. The way in which funerals have been exploited over recent months and years is a great obscenity. It does no service to the Province and it poses appallingly difficult problems for the police, who do not wish to get involved in any way but who do have a duty to uphold the law.
Mr. Ken Maginnis: Will the Secretary of State accept from me, representing as I do the constituency which contains the town of Enniskillen, that my constituents will fully understand the tragedy of yesterday? It is a tragedy for the entire community, but does he agree that it cannot be swept away with a few platitudes and clichés, and that active measures must be taken to ensure that all the paramilitaries who live off each other's violence must be dealt with, and it can only be dealt with by firmness and resolve and by ensuring that the ordinary citizen can continue with his day-to-day life? The hon. Member for Newry and Armagh (Mr. Mallon) has called for the proscription of one paramilitary organisation —
Mr. Mallon: Proscribe them all.
Mr. Maginnis: Many of us recognise the need to proscribe them all, as the hon. Gentleman now says.
Mr. Mallon: It is what I have always said.
Mr. Maginnis: Will the Secretary of State now acknowledge that there are practical difficulties, but that we could make a start by taking out of the community the known godfathers? Will he please, on behalf of the innocent people of Northern Ireland, again consider the possibility of the selective internment of those evil leaders?
Mr. King: I know that the hon. Gentleman has consistently held that view, and I respect it. I recognise that platitudes are no measure of the response that is needed to such a serious issue. With regard to the two particular approaches that he described, we keep such matters under review. Powers were retained in case there might at any time be such a need, but he will be aware—I do not want to mislead him—of the real difficulties that exist in either of those courses and the need to consider carefully whether they would contribute to a solution or add to the problem. Those are issues that the Government must consider seriously, but we keep such matters under review.
Mr. Michael McNair-Wilson: Further to the question of my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths), may I press my right hon. Friend to say whether there is any way in which funerals relating to the perpetrators of violence can be prevented from becoming media opportunities for demagogues and others to stir up still further sectarian hatred?
Mr. King: If the organisations concerned are sufficiently unscrupulous and uncaring of the attitudes and feelings of families and virtually shanghai the privileges and rights that should belong to the families of the deceased, it is extremely difficult to prevent this sort of exploitation. There is some evidence, certainly in the
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case of one of the families concerned on this occasion, that they find themselves swept up in something way beyond anything that they would have wished to see.
Mr. John Hume: May I join in the expression of sympathy to the bereaved families and the injured and welcome the unanimous, right-across-the-board condemnation in Northern Ireland of this atrocity, and the equally unanimous call for restraint? May I repeat the call that I made yesterday — that, despite the extreme provocation of this particular act, I hope that the Catholic community will respond with the same dignity and restraint as did the Protestant people after Enniskillen?
Have the weapons, ammunition and other equipment used in the attack been found, and is there any evidence to suggest their source or previous use?
Mr. King: I am grateful for what the hon. Gentleman says. I welcome the statements that he made yesterday which, undoubtedly, were helpful and were in marked contrast to the statements coming from Sinn Fein. While pretending to such an approach, as I made clear in my statement, the IRA was at that moment planning further attacks for that evening.
My understanding is that two handguns were concerned and that neither has been recovered. However, I think that ballistic tests have identified the type of weapons concerned. The source of the grenades is under investigation at the moment and further information about that may become available shortly.
Mr. Ian Gow: Will my right hon. Friend confirm to the House that he has already proscribed certain paramilitary organisations in the Province? Bearing in mind my right hon. Friend's consistent arid proper commitment to impartial policing in the Province, and to the even-handed administration of justice, will he please consider once again with his security advisers whether it would not be in the best interests of protecting the innocent from further tragedies if he were to proscribe all — I repeat, all—paramilitary organisations in the Province?
Mr. King: My hon. Friend has made, with his usual sincerity and concern, an important statement on his own behalf. I do not wish to add to the answer that I gave to the hon. Member for Fermanagh and South Tyrone (Mr. Maginnis), but, as I made clear to him, we keep these matters under review.
Rev. Martin Smyth: I join those who condemn the atrocity of yesterday, associating with some of my own constituents who are bereaved today as a result of it, as I did with the families of the members of the UDR in my constituency a fortnight ago. I ask, following the Secretary of State's answer to the hon. Member for Newbury (Mr. McNair-Wilson), whether it is time that the British Government followed the lead of the Government of the Republic of Ireland and banned the media from promoting the actions, activities and policies of terrorists? Is it not time that that is done, even by proscription? I make the point, which friends in the media have confirmed, that the other night, when the IRA had a firing party at a new "shrine" to commemorate the dead, coincidentally a television camera and crew were there, ready to proclaim it to the nation. Is it not time that such things were stopped?
Mr. King: I have to say that we have no proposals in that specific direction, and I think the hon. Member is aware of the obvious disadvantages and unattractiveness of seeking to ban political parties, if they seek to stand as political parties, from access to television. I certainly echo the sense of what he said. I am in no doubt that in a free society the media, particularly the television cameras, have a great responsibility for what they decide to broadcast.
Mr. William Cash: Will my right hon. Friend accept that we feel very strongly that he has exercised his functions as Secretary of State with dignity and statemanship in relation to this whole affair, not only on this occasion but on many others? We believe that the work he is doing in Northern Ireland is anything but confrontational, and we congratulate him on everything he has done to help to solve this very difficult and tragic situation.
Mr. King: I am very grateful to my hon. Friend; I appreciate his comments very much.
Mr. Tam Dalyell: In the light of the decision by the Home Office to transfer a written question of mine, prompted by the Stalker book, in relation to Michael Tighe and the hayshed, does one assume that all the responsibility for any covert operations is now in the hands of the Northern Ireland Office and no longer has anything to do with the Home Office?
Mr. King: I fail to see how that remotely arises out of the statement I have just made.
Mr. David Heathcoat-Amory: If the gunman at the funeral had been intercepted and shot by the security services before he committed that appalling massacre, does my right hon. Friend think that the security forces would have been thanked or condemned by the IRA and their friends? Might not the answer to that question reveal the sanctimonious hypocrisy of the IRA and its apologists in its attitude to the deaths recently of three acknowledged terrorists in Gibraltar?
Mr. King: My hon. Friend and neighbour takes me into wider country than I would wish to go in response to the statement, but we recognise the demands we place on the security forces. We recognise clearly from the incident the way in which irresponsible elements can seek to abuse the security forces, from whichever position they choose to take, and the very difficult task they have to pursue in their proven and bounden duty to seek to protect the whole community from the abuse and foulness of terrorism.
Ms. Clare Short: Does the Secretary of State accept from the lesson of the dreadful events yesterday, the killings in Gibraltar, the shoot-to-kill policy, the conspiracy to pervert the course of justice and Enniskillen that his hope to bring peace to Northern Ireland is a hopeless quest because Britain's presence there prevents the people of Ireland from having the political stability that will take them forward to a better future? The view of the people of Britain is increasingly that it is time for the troops to go. Next year will be the 20th anniversary of British troops going into Northern Ireland and what have we achieved? I put it seriously to the Secretary of State that he must cease to pretend that this route will bring peace to Northern Ireland, and should look to what the British people are saying, which is that we must start to organise a withdrawal.
Mr. King: The hon. Lady, on the occasion of this statement—which is proof, if ever it was sadly needed, of the depth of hatred and bitterness that can exist in the Province — should remember that British troops first went to the Province at the request of the hon. Member for Mid-Ulster as she then was, Bernadette Devlin, to protect the Catholic community at that time. That was the original reason, and the troops have sought since to deal impartially and protect the community against terrorism.
How out of date can the hon. Lady get? Is she not aware that successive Irish Governments recognise that there is no solution to the problem by the withdrawal of British troops? They have recognised, as does the right hon. Member for Lagan Valley (Mr. Molyneaux) and his party, that the way forward is not by some arbitrary withdrawal of British troops but by both countries standing together to defeat terrorism and by letting the democratic views of the people of Northern Ireland be heard.
Hon. Members: Hear, hear.
Mr. Tony Marlow: Is there any truth in the statement on BBC television lunchtime news that security at today's funeral was provided by the IRA —in which case, with whom was this negotiated? Were those purporting to be providing security armed, and is this the way ahead for funerals in the future?
Mr. King: As I said in answer to the hon. Member for Kingston upon Hull, North (Mr. McNamara), my hon. Friend has fallen prey to just the sort of damaging and pernicious propaganda that people seek to put out to stir up trouble. That is exactly the point I made—when we have appeals for sensitivity and for funeral processions to be able to proceed without intervention by the security forces, somebody will step forward and say, "We are now providing security ourselves." I hope that my hon. Friend the Member for Northampton, North (Mr. Marlow) will not fall for that sort of propaganda.
Mr. Ken Livingstone: While joining in the condemnation of this act of horror and all the previous acts of horror, irrespective of from where they come, will the Secretary of State reflect that over the past 20 years eight Governments have successively failed to win the war or win the peace? Is it not time that the people of this country had the right to decide what to do? Is it not time for a referendum of all the population of Great Britain and Northern Ireland to decide whether we should continue to remain in Northern Ireland?
Mr. King: I am not sure what contribution the hon. Gentleman has made in recent years to try to help to tackle some of these very difficult issues. He may not be aware of his party's policy and the support it has given, which is that the determination of the future of Northern Ireland should be a matter for the people of Northern Ireland. If he is in disagreement yet again with his party's policy, perhaps he will sort it out with the party.
Dr. Norman A. Godman: May I associate myself fully with the sentiments expressed by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara)? In view of the immutable connection between the killings in Gibraltar and the funerals yesterday, when can we expect a ministerial explanation concerning the involvement of police officers in that sad affair in Gibraltar? I severely condemn the murderous intent of those shot down in the colony, and

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believe that such a statement would, at the very least, acknowledge the very deep concern felt by many people about that affair.
Mr. King: I appreciate the fact that the hon. Member included in his question some recognition of the murderous intent of the people who lost their lives in Gibraltar. Some people do not appreciate that the potential impact of the bomb in Gibraltar would have been some 50 times more damaging than that discharged at Enniskillen, and the possible carnage and loss of life that could have resulted hardly bears thinking about. In some of the reports, some people have lost sight completely of that. Having said that, my right hon. Friend the Foreign Secretary has made it absolutely clear that the due process will now be gone through, and there will be an inquest in Gibraltar, so obviously that is the next stage in the matter.
Mr. Dennis Skinner: Would it not be fair to say that, in the course of the 18 years that I have been in the House, a succession of Ministers representing Northern Ireland have given reports of what is taking place? Several times a year one of those Ministers comes along and talks about the need to get together, about unity and all the rest of it. It has struck me, as one who has not intervened in Irish debates over the years, that the statements are being repeated constantly, without any effect upon what is happening over there.
Would it not be sensible to put the Anglo-Irish Agreement on the back burner? Would it not be sensible to consider some of the other options, such as withdrawal? Surely it is time, bearing in mind that the British people are getting fed up to the back teeth with what is taking place, to start considering all the other options?
Mr. King: The hon. Gentleman was candid enough to include in that question a statement that he had no close acquaintance with the problem. The longer he went on, the more I agreed with that sentence.

Orders of the Day

  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [15 March].
  Mr. Speaker: Before I propose the Question, I remind the House that for very good and understandable reasons we are very late in starting the debate. There is great pressure to take part in it, so may I appeal for brief contributions from the Front Benches and the Back Benches today?

  WAYS AND MEANS

    AMENDMENT OF THE LAW
    Motion made, and Question proposed,
    That it is expedient to amend the law with respect to the national 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).]
  5.1 pm
  The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke): The Opposition's campaign against my right hon. Friend's Budget so far seems yet again to be based on the false belief that there is a choice between enterprise and compassion. I do not believe that there is necessarily any conflict between the two. The Government firmly believe that enterprise and compassion must go hand in hand. The successful creation of an enterprise economy enables the country to give practical expression to its compassion, as the Government have been doing during the past 12 months.
  The Chancellor has shown admirably in his Budget, for the second successive year, before and after a general election, that it is possible to increase public spending substantially in the autumn, to reduce taxation substantially in the spring and still be able to pay back public borrowing. That has been achieved because the climate has been created for the economic growth that enables that unique trio of achievements to be repeated for the second year.
  When I listen to the remarks of Labour Members it is clear that they are still rooted in the belief that the country can pay for public services only by imposing incredibily high taxation on every working person. We all recall that at the last general election the Labour party was committed to increasing the basic rate of taxation by 2p if it was elected. The Labour party believed that the country can pay for good public services only if it raises

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  particularly high levels of taxation from the most successful and talented people in our society. That lies at the root of all its arguments so far on the Budget.
  We do not accept that. We believe that we can best pay for the good public services which we all require by creating the conditions for sound economic growth. We believe that it is necessary to encourage people to earn the wealth that the country needs to pay for personal prosperity and good public services. One way in which we can encourage people to engage successfully in the wealth-creating process is to reduce taxation generally, and particularly on the most successful people who provide the leadership of British industry.
  The idea that reducing taxation enables the country to generate wealth and is beneficial to public services, particularly in the medium term, has never been accepted by Labour Members. I do not understand that. They should look back at their own experiences, particularly at the year which should have scarred the Labour party for ever—1976. At that time, they were levying taxation on earnings up to the absurd maximum rate of 83 per cent. In 1976, the maximum taxation on capital was 98 per cent. —a quite nonsensical level. In that same year, when they were levying punitive taxation on the rich, they were obliged to cut spending on the National Health Service in a way which has been done only once, by one Government since 1948, since the National Health Service started. When imposing that punitive taxation on the rich for their own political purposes, they cut revenue spending on the National Health Service by 3 per cent. in real terms. They cut capital spending on the National Health Service by no less than one third and delayed new hospital building throughout the country.
  In contrast, this tax-reducing Government are steadily increasing resources. Since last autumn in particular, we have increased resources substantially for health, education and, above all, for social security, for the benefits that are paid to pensioners, the disabled and the poor. We have steadily increased those resources because we were taking the benefit of the growth produced by the enterprise economy which the Government have created. We are able to sustain those improvements in our public services as a result of the success which has been won by the men and women who work in British industry and commerce who have taken advantage of the climate which we have created.
  Against that background, today I propose to examine the implications of my right hon. Friend's Budget for commerce and industry, on whose well-being practically everything else with which the House is concerned depends. I could hardly have chosen a better day. Things have improved even since my right hon. Friend sat down after his Budget speech on Tuesday.
  It is not a very difficult task to address the House about the conditions of industry and commerce when interest rates have fallen this morning, as I am sure all hon. Members were delighted to hear, and unemployment has fallen by another 33,000 to its lowest level for six years. Hon. Members may not realise that this morning it was announced that capital expenditure by the manufacturing, construction, distribution and financial industries in the fourth quarter of 1987 was more than 6 per cent. higher than in the preceding quarter, and more than 12 per cent. higher than in the fourth quarter of 1986.
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  I do not envy the hon. Member for Livingston (Mr. Cook). He must try to address the House on the subject of commerce on a particularly bad day from his point of view when so much good news has been flowing in.
  Mr. Eric Forth: Does my right hon. and learned Friend agree that there are only about eight Labour party Members in the Chamber—probably because he has had so much good news to impart, and they have no answer to what he is saying? Does he think that it has scared them all away?
  Mr. Clarke: It is remarkable that the Labour party does not seem to be able to sustain its campaign against my right hon. Friend's Budget for more than 24 hours and that the three items of extremely good economic news this morning have driven practically every Labour Member back to his or her constituency. They are probably already back in their constituencies getting the judgment of the general public.
  Mr. Eric S. Heffer rose—
  Mr. Clarke: This year, at the time of this debate, the economic environment for business is extremely favourable.
  Mr. Heffer: Will the right hon. and learned Gentleman give way?
  Mr. Clarke: I shall give way in a moment.
  It is not merely that the economy has continued to prosper during the past 12 months which is part of the enviably solid record of economic achievement and growth which is behind us. The economy has grown steadily for seven years, the longest period of sustained growth since the war. We are seeing the end of the caution and scepticism that was understandably ingrained in the British business community by so many years of comparative failure. Most of us with any contact with managers and leaders in British industry and commerce can sense the increased self-confidence and competitive-ness that is now felt by those who lead our businesses.
  We have not achieved that splendid result simply by riding a wave of international economic prosperity. For the period since 1981, since recovery has been under way, we have recorded the fastest sustained growth of any of the major European economies. The contrast with the 1960s and 1970s when we were stuck firmly at the bottom of every league table could hardly be more striking. British economic achievement is now a subject of envy and admiration internationally and is a source of pride that we all feel when we are congratulated on it by our colleagues overseas.
  The principal duty of my right hon. Friend the Chancellor on Tuesday was to maintain the climate to sustain as much economic growth as possible in uncertain world conditions. I believe that he can do so. The House will see that my right hon. Friend's Industry Act forecast predicts continued growth in GDP of 3 per cent. in the present year. The House will recall that the prediction for 1987, which he made this time last year, proves to have erred on the side of caution.
  Opposition Members often emphasise the particular importance of manufacturing performance. To some extent, when we make comparisons between manufactur-ing and services, we rather overlook the extent to which developments in technology and in the organisation of business are making the old clear-cut distinction between

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  manufacturing and services a thing of the past. Given that we have a traditional definition of manufacturing and service activity, I know that pretty well everybody in the House will share my satisfaction that manufacturing output, as traditionally defined, rose by no less than 5·5 per cent. in 1987. Again, my right hon. Friend the Chancellor was modest last year in the expectations of what he was then doing. His forcast of 4 per cent. growth in manufacturing industry in this country has been exceeded.
  The volume of manufacturing output now stands higher than when the Labour party left office, having risen by more than 20 per cent. since the trough of the most severe recession since the 1930s.—[Interruption.] I can sense a little scepticism. It may be that Opposition Members are aware that we still have a little way to go before the somewhat higher level is reached at which the previous Labour Government entered office in 1974. However, we are nearly there and, if my right hon. Friend's forecasts of a further 5 per cent. growth in manufacturing output in 1988 is realised, that level will be attained very soon and we will be on to record-making levels.
  In addition to that improvement in our manufacturing performance, I trust that the House welcomes the sharp fall in unemployment that has now continued for more than 18 months. This morning's news simply underlines the benefit for the unemployed of economic success. The total number out of work and claiming benefits is now some 680,000 lower than its peak in 1986. The House knows that no one finds it possible to forecast future levels of unemployment. I certainly leave the House in no doubt that the existing figure of about 2·5 million is higher than anyone would wish and higher than anyone can tolerate, and a continued fall is desirable. In the present climate, there is every reason to expect a further reduction in the coming year, provided that pay increases are kept at a sensible level. I shall come to that subject shortly.
  The hope for the remaining unemployed must come from the continued ability of British industry to continue to create additional jobs. Here, again, recent experience is encouraging. The improvement in the number of people in employment is dramatic. There are now more than 1·5 million more jobs in the economy than there were in 1983. The main contributors to that turn-round have been self-employment and employment in the service industries. Even in manufacturing, despite the historic and continuing trends against labour-intensive manufacturing, the long decline in the numbers employed has slowed almost to a halt in recent months.
  When I look at the employment picture of the past 18 months, I cannot help remembering last year's major attack on the Budget by the right hon. and learned Member for Monklands, East (Mr. Smith). He was laying his principal emphasis on the problems of unemployment. The right hon. and learned Gentleman was putting forward the preposterous proposals of the Labour party for a great spending programme to bring down unemployment. That is what he said we should have done before the election. The Labour party was saying that a public expenditure programme of about £6 billion—that was the figure advocated last year—devoted largely to creating more public sector employment, principally in local government, could seek to reduce unemployment levels by 1 million over the next two years.
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  Following our approach, encouraging an enterprise economy and not putting £6 billion into the pockets of public authorities to create artificial jobs, seasonally adjusted unemployment has fallen by 535,000 over the past year and by 506,000 since last March, which is when the right hon. and learned Member for Monklands, East made his assertions. Therefore, after one year, we are half-way towards the Labour party's ambitious two-year target, which was set by the right hon. and learned Gentleman in his speech on the Budget last year. However, in my opinion, what he was setting out —tax increases, massive public spending and artifical public sector jobs — would have failed. More people would have been unemployed today. The right hon. and learned Gentleman was right to say that unemployment was a principal problem, and we have achieved his laudable aims. We have hit his targets for reducing unemployment but we have done so by adopting much more sensible and successful policies.
  Mr. John Smith: While the right hon. and learned Gentleman is in this confident mood, can he say whether unemployment, by the end of this period of Government, will be higher or lower than when the Government came into office in 1979?
  Mr. Clarke: Of course I cannot. I said that no one can successfully forecast the level of unemployment. I do riot believe any forecasts of unemployment more than three or four years ahead. It depends on the success of British industry in continuing to expand and create jobs. I am saying that the more we create an enterprise economy, the more prospects we have of increasing the total number of jobs and reducing unemployment. I am also saying that our record is as good as anything the right hon. and learned Gentleman aspired to and it has been achieved by our successful policies.
  Mr. Heffer: Is the right hon. and learned Gentleman aware that in February 1987 unemployment in my constituency, in real figures, was 10,929 and that this year, February 1988, it is 10,031? It has gone down by about 800. Is that a great success? Is that the success that the Government talk about?
  Mr. Clarke: It is a substantial step in the right direction.
  Mr. Heffer: Only 800 people?
  Mr. Clarke: The hon. Gentleman represents a depressed part of the country. We all know that. There are many other depressed towns. The fact is that a drop of 800, down to 10,000, is a substantial move in the right direction. My right hon. Friend the Chancellor is seeking to sustain that by creating the right conditions for economic growth. I trust that the hon. Member for Liverpool, Walton (Mr. Heifer) shares with me the special pleasure of the fact that the improvement in employment has extended throughout the whole country. The sharpest reductions over the past year in the numbers out of work have been recorded in the west midlands, Wales, the north-east and, the hon. Gentleman's own area, the north-west. The least prosperous regions have, most encouragingly, shared fully in the recent growth in employment, particularly in self-employment.
  Mr. Max Madden: The right hon. and learned Gentleman has been talking about new jobs. Is he concerned about the proportion of those new jobs that often involve long hours of work, including night and

  1255
  regular weekend work, for rates of pay which, in many cases, are less than £2 an hour? Is he concerned that there are allegations that jobcentres are advertising jobs, which are affected by wage councils, at rates that are below the legal minimum for those jobs? What action is being taken to ensure that jobcentres do not collude with unscrupulous employers and advertise jobs below legal minimum rates? What is being done to improve the rates of pay and the conditions of work of many of the new jobs being created in this enterprise culture?
  Mr. Clarke: If jobs are being advertised in job clubs at below the legal minimum rates, those allegations will be investigated. My right hon. Friend the Secretary of State for Employment has just told me that the one allegation of that sort that he has received has been dealt with.
  The idea that the increase in employment is a low-wage increase is absurd. The general level of earnings in the British economy is rising rapidly. Indeed, if there is one cause for concern about the continuing fall in unemployment in this country, it is that we are beginning to slip back into the practice of paying ourselves rather too much, a little too quickly, which will slow up the fall in unemployment.
  As far as I can see, the shadow Chancellor said that the excellent climate, which I have just described, is threatened mainly by the adverse balance of payments. The allegation is being made that we are facing a slow-down in growth because of the balance of payments problems that are being foreseen by some of our critics. His predecessor as shadow Chancellor, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), was making exactly the same predictions of a serious balance of payments crisis 12 months ago. In early 1987 he was saying that the balance of payments deficit would be £14·5 billion for the coming financial year. Last year's current account deficit is now estimated at £1·7 billion. Again, my right hon. Friend the Chancellor erred on the side of caution. His estimate last year was rather more than the outturn for the balance of payments deficit. It is not too surprising that we are facing a slightly adverse balance of payments. The principal reason is that the United Kingdom economy is growing faster than that of most of our main competitors. This is making the British market the one to go for as far as most of our competitors are concerned.
  The volume of visible exports that we achieved was 5·5 per cent. higher in 1987 than in 1986, but at 7·5 per cent. visible imports rose somewhat faster because our market was expanding faster than the markets abroad to which we were selling. But those imports were not all, or even mainly, consumer products; a high proportion of imports were raw materials and intermediate goods for industry. That is the kind of increase in imports to be expected at a time of more rapid growth of our own industry. My right hon. Friend has predicted a rather larger current account deficit of £4 billion for 1988, which is easily sustainable by our present performance.
  Mr. David Ashby: Does my right hon. and learned Friend also agree that the reason for part of this deficit may be that companies, foreseeing a great future for this country, have been looking for new machinery for their companies and much
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  of this machinery is foreign—German or Japanese—so that it is really investment for the future that we are seeing as well?
  Mr. Clarke: I agree with my hon. Friend that the majority of the imports that we are seeing are raw materials, semi-manufactured goods and machinery —capital investment. That is an inevitable consequence of the current expansion of our economy.
  Of more lasting significance last year was the very strong performance of our invisible earnings.
  Mr. Bryan Gould: I have been trying to follow the right hon. and learned Gentleman's argument that the rapid rate of growth by which he is so pleased inevitably means that we should move into balance of payments deficit. How does he reconcile that with the experience of more successful and stronger economies than our own — notably the Japanese economy — for which rapid growth has invariably meant the building up of very substantial surpluses in their balance of payments?
  Mr. Clarke: That was true of the rapid growth of the Japanese economy because of the then exchange value of the yen and the way in which the Japanese expansion was particularly export-led.
  What I am saying is that we are currently expanding far faster than most of our competitors. It is in the nature of the British economy that we tend to import semi-manufactured goods, materials and machinery as we expand. What is being produced is a very modest balance of payments deficit, which is of no concern whatever as a percentage of our GDP.
  If hon. Members wish to be reassured, I suggest that they look at the very strong performance of our invisible earnings. These contributed a surplus of almost £8 billion to the balance of payments, much of it in the form of net income from our portfolio of overseas assets, which is now second only to that of Japan. Members of the Opposition have objected strongly to our building up our portfolio of overseas assets. They would probably dissipate those overseas assets by higher discriminatory taxation and politically controlled investment in the country. But that overseas portfolio is of very great assistance to us in financing our balance of payments deficit.
  Productivity has been the main key to industrial success. The strong growth in productivity has been maintained for another year throughout the economy. This, again, has been particularly striking in manufactur-ing, which should be encouraging for us all. Output per man in manufacturing industry has now risen by more than 50 per cent. since 1981 and by over 40 per cent. compared with the year when the Labour party left office. The growth in manufacturing productivity over the past seven years has exceeded that achieved by any of our main competitors, including Japan. The basis of that improved productivity has been the fundamental changes in working practices in very many industries and the ending of outdated demarcations between different trades. We still find that on the ground, throughout the country, in many industries those very necessary changes are still being opposed by some of the Labour party's allies in the trade union movement. We need to go still further. The levels of productivity in the United Kingdom still have some way to go before they match the best achieved by our competitors. Our aim must be nothing less than to achieve the best achieved elsewhere.

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  In my opinion, the Labour party is complacent about these improvements in productivity and about the need to stimulate still further the performance of the enterprise economy. It fails to realise that international circum-stances are becoming more competitive. We have to succeed in the single European market in 1992. That is now the biggest single change facing British industry. I cannot help reflecting on what a disaster it would have been had the single European market been achieved in the mid-1970s when the Labour party was in office; it would have been a very major threat to British industry. It is now a considerable opportunity. And we have not only to succeed in the single European market; we have to aspire to compete with Koreans, Taiwanese and Japanese—the new strong performers in the world economy—in what is increasingly becoming a global market for a high proportion of goods and services. I believe that with our present sustained growth we are on target to do so.
  Last year our sustained improvement in productivity meant that in manufacturing our unit costs remained virtually unchanged in 1987 despite a 7·75 per cent. increase in average earnings. The most recent figures suggest that in 1987 our performance on unit costs was better than that of Germany, although less good than that of Japan or the United States, where the figure for unit costs was negative. However, the present trend of increases in earnings is running at around 8·5 per cent. and that is of some concern. The biggest stimulus to that was quite clearly the rather disgraceful level of settlement achieved by largely Labour-dominated local authorities with their own trade unions. Any continuation of the upward trend that that settlement seems to have provoked would be bound to put severe pressure on unit costs over the next 12 months.
  Fortunately, the private sector figure is an increase of 5·5 per cent., but in all parts of the private sector people must appreciate still more the direct link between moderate pay increases and improved employment prospects, which is still not fully recognised in this country.
  I hasten to add, before any hon. Member takes up the point in a later speech, that the Government are most emphatically not in favour of a low-wage economy; that is quite plainly not what we are creating in the United Kingdom at the moment. We are in favour of a situation in which higher pay is achieved by higher productivity and better performance that generates the profits to finance the higher wages that everybody understandably wishes. It is unearned pay increases that raise costs and cost jobs.
  The tax reductions in this Budget enable employers to create jobs. The improvement in industrial performance has been fully reflected where it matters—in the bottom line. The profits of non-oil companies have grown steadily from the beginning of the decade and the real rate of return among these companies in 1987 reached 11 per cent., which is its highest level for 20 years. The increased profitability of manufacturing industry made a major contribution here. With three quarters of capital investment funded from retained profits, business is at last freeing itself from the shackles of inadequate profitability. The benefits of this are not confined to the shareholders; they extend to the employees, the customers and the whole community.
  My right hon. Friend has encouraged us by producing a situation in which we now have, I am glad to say, one of the lowest rates of corporate taxation in the developed world. Our small company rate is particularly low, at 25
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  per cent., because my right hon. Friend has lowered it in line with the reduction of base rate income tax. The low level of corporate taxation is having the effect that we have always forecast on business investment, and particularly the quality of business investment, in this country. The year 1987 saw a rise of 4 per cent. in business investment, to a record level. It was made clear in the DTI's investment intentions survey, published last December, that we can expect an even sharper increase of about 9 per cent. in business investment in 1988. The increase in the volume of manufacturing investment was resumed in 1987 after a pause in 1986. The forecast for 1988 is of another increase of no less than 11 per cent. in the level of manufacturing investment. If that level is achieved, it will bring manufacturing investment also to an all-time high.
  It is not only the Government's word and my word that says that the economy is thriving under the kind of treatment that my right hon. Friend the Chancellor of the Exchequer is giving to the British economy. The CBI industrial trends survey in February was merely the latest in a line of reports on the buoyant state of business confidence. Output is expected to grow strongly. Both home and export order books remain healthy. The latest chambers of commerce regional survey for the last quarter of 1987 also shows that any effect of the stock market crash was confined to a narrow circle of financial institutions, and that confidence has remained at a high level through the rest of the economy.
  Just look at the warm welcome that my right hon. Friend's Budget on Tuesday has received from industry. The president of the CBI, Sir David Nickson, said that it will help to maintain the momentum of our economic recovery and will give a great boost to business confidence. The director general of the Institute of Directors, Sir John Hoskyns, has also given his strong support. I listen to people like that rather than to Opposition Members, as such people have a proper understanding of the needs of industry upon which our prosperity depends.
  If the Opposition do not like domestic praise for the present situation, perhaps they will look abroad for some evidence that people believe that the progress of the British economy is solidly based. I have no doubt that they all know of the recent speech of the Japanese ambassador, who spoke of the "British miracle". He not only talked about the British miracle, but he gave his reasons for saying so. He attributed our performance to the policies of deregulation, privatisation, tax and trade union reform, and to the encouragement of competition, all of which have contributed to the revival of an enterprise culture.
  There is not only praise in speeches. People abroad are showing their confidence in the British economy in the most important and practical way. Nissan has decided to undertake a further major expansion at Washington new town, to accommodate the production of a second car model. Only this week, Nissan announced that it was going to locate a new design centre in the United Kingdom. Sanyo announced last week a major new investment in the north-east for the manufacture of microwave ovens and magnetrons. There was an announcement in January by the Finnish paper manufacturer Kymmene-Stromberg of the largest new investment in Scotland by an overseas company. So our policies are being imitated abroad and attract investors from abroad. We are setting the fashion in how to create the right climate for an enterprising economy.
  Mr. Nicholas Fairbairn: Does my right hon. and learned Friend recall that when the "Locate in Scotland" survey was done in the United States, 80 per cent. of all firms that proposed to locate in Europe said that they would rather come to Scotland than elsewhere in Europe, provided that the Government stayed in power and that their policies were continued?
  Mr. Clarke: I entirely agree with my hon. and learned Friend. Most of those who are responsible for the investment decisions that I have just mentioned themselves cite the economic climate that the Government have created as one of their principal reasons for coming here. Alarm is expressed nowadays about the activities of overseas companies looking to locate in this country only when, for example, Ford contemplates a major investment in Dundee and encounters the last echoes of the sort of attitude encouraged by the Opposition, with threats of curious industrial activity being imposed upon that company. There was resistance to its sensible proposal for a single union agreement.
  My right hon. Friend's Budget will increase business confidence still further. By aiming for a substantial Budget surplus for a second successive year, my right hon. Friend has made clear his determination to pursue a prudent fiscal strategy. This confirms the priority that is given by the Government to the reduction of inflation. By doing so, they set the scene for continued steady growth in the economy in a way that does not put the achievements of the past nine years at risk. In its overall fiscal stance, this Budget is for the long haul. This is just what is needed for business and for wealth creation if we are to take still further the change in attitudes and improved performance.
  This Budget is also a Budget for enterprise in its detailed measures. First and foremost, the increase in the tax thresholds of double the rate of inflation and the reduction of 2p in the basic rate of income tax are worth almost £5 to a married man on average earnings. There is nothing wrong with all working people keeping a larger share of increased prosperity. Labour always objects to ordinary working people taking a larger share of increased prosperity via tax reductions. The Labour party consistently prefers a situation where each section or group fights for a particularly large share of prosperity, for themselves, as on the picket lines at Land Rover or wherever, where they prefer the nation's wealth to be divided up.
  The abolition of the four highest rates of personal tax had become necessary if Britain was to retain her hard-won status as an enterprise economy. The energy generated by these lower rates will produce more wealth for the whole country, from which the whole community will benefit. We last reduced the higher rates of taxation nine years ago. At that time, our tax rates of up to 60 per cent. were among the most competitive in the industrial countries; but the world has moved on since our reductions of nine years ago. Our top rates of taxation were becoming once more among the highest in the developed world, until my right hon. Friend's Budget.
  Not only have the United States reduced their higher levels of taxation, but a Labour Government in Australia have recently cut their higher rates. A Labour Government in New Zealand too have recently cut their higher rates —if the hon. Member for Dagenham (Mr. Gould) is tempted to return there. In my opinion, because there is plainly a prevailing mood throughout the world that is in
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  favour of getting rid of punitive levels of taxation, most of western Europe will follow this fashion in the next few years.
  The entrepreneurs and managers who will benefit from such changes in fiscal policy are vital to our economic success. Again, in modern conditions, more and more leading managers, scientists and engineers are becoming internationally mobile, and they are not tied to this country. We cannot isolate our tax structure realistically any longer from those of our competitors, even if we wish to do so.
  Changes in capital taxes will be of particular benefit to business. The exclusion from capital gains tax of all gains dating from before 1982 will enable companies of all sizes to realise their gains on assets that were acquired before then. This will release substantial amounts of capital for more productive new investment. In addition, the extension of capital gains tax retirement relief to half of all gains between £125,000 and £500,000 will be of major help to proprietors of small businesses wishing to provide for their old age. It will make it particularly easy for such proprietors to hand on their businesses to the next generation as a going concern, which also helps the creation of an enterprise economy.
  This is the Budget of a Government who understand the fundamental importance of enterprise and wealth creation to all of the other objectives that we have for the whole community, for our public services and everything else of importance to us. The overall fiscal policy, and the economic strategy of which it forms an integral part, is cautious; but within that prudent framework is a radical and reforming tax package that complements the earlier reform of corporate taxation, whose benefits we now see in the performance of industry. Indeed, changes in personal taxation in particular will continue to change the attitudes and actions of those individuals who do most to make the economy dynamic.
  The community as a whole benefits from the creation of a more prosperous economy. That fundamental truth is sometimes questioned, albeit subconsciously, by some on the Opposition Benches. In my opinion, it is not true that if a person becomes wealthier, he necessarily becomes less generous. [Interruption.] It is certainly not true that, if a society becomes more prosperous, it becomes meaner. The Labour party frequently tries to claim that the greater prosperity of the past few years has been somehow divisive or has created a meaner spirit in this country. There is no evidence for that. Indeed, my right hon. Friend's concessions will make it even easier for charitable giving and will, among other things, reinforce the huge increase in charitable giving that the British public have been undertaking in recent years. If we look at the state of society today, and if the Labour party's fundamental message is that it does not like the new, healthier, Conservative society because it is less attractive than the poorer one over which it presided, it has a rosy recollection of conditions in society when it was in office.
  Let us look at how wealth was created and shared out by the Labour Government in the 1970s, applying Labour principles. What happened then was that every section of society took it in turn to strike against the other. Every section of society took it in turn to deprive the wider public of transport, of heat, of essential services. There was a nasty mean streak in British society in the 1970s, as people tried to get their 17 per cent. increase over and above the 16 per cent. increase of their neighbours.

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  The Labour party has not understood that today's society is not only a more prosperous but a more attractive one, and that reducing the level of taxation to redistribute greater prosperity to those who have earned it is the way to stimulate further growth of an altogether more prosperous and better society. Not only are we creating wealth; we are re-acquiring confidence. This is a one-nation country that now believes in itself again. The two Conservative Chancellors that we have had in the past nine years have played a major part in that, not least my right hon. Friend with the most successful Budget produced so far, which he gave us last Tuesday.
  5.40 pm
  Mr. Robin Cook: The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry has addressed the House for three quarters of an hour, preening himself and his Government on their economic record. The stream of consciousness was broken only for one passage in which he had the sheer gall to describe Opposition Members as being complacent. We had nothing but 39 minutes of complacency in the rest of his speech. If the right hon. and learned Gentleman wants to talk about complacency, no innocent listener to his speech could have imagined that he was a member of a Government who had managed to combine a surplus in oil with a deficit on visible trade—an achievement that they share only with Iraq and Venezuela—and had managed to achieve between 1979 and 1987 zero growth in manufacturing output — a distinction that they share with Malawi and Barbados. I grant the right hon. and learned Gentleman, magnanimously and generously, that yesterday's figures mean that we have now pulled ahead of Malawi and Barbados.
  On investment, the figures from the Organisation for Economic Co-operation and Development, published earlier this month, show that on all capital formation we are currently 21st out of the 24 member states of OECD. We are producing less fuel than Poland, fewer motor cars than Spain — and all this against a background of unemployment still more than double the level that the Government inherited. Even when measured by all the fiddles that they have used, all 23 of them, the Government still cannot bring that down to less than the figure that they inherited.
  The right hon. and learned Gentleman represents this to the House as a unique economic success. It is unique certainly: as a success, it is rather less recognisable. To be fair though, the Chancellor did not invite us to judge his Budget by its contribution to commerce and industry and business. His Budget did absolutely nothing for business and industry, unless we count the business expansion scheme for Rachmans setting up for the first time in the centre of London. Perhaps it was the absence of any scheme for business or industry which led the right and learned Gentleman, wisely, to refer to the Budget as little as possible in the course of his speech. It certainly was not the need for brevity that caused him to leave out the references. It would, therefore, be unfair to judge the Budget by what it has done for business and industry.
  Let us judge the Budget by the standard that the Chancellor himself set for it. He invited our applause because he had presented a balanced Budget. Let us then judge it as such. I am bound to say that to myself and to many of my hon. Friends this Budget does not appear balanced at all. It is a lopsided, cock-eyed, warped Budget.
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  The Chancellor had £4 billion surplus this year to spend; he will apparently have a full £6 billion to play with next year. All of that sum he chose to put into private pockets; none of it did he put into the public services.
  That is not a balanced judgment at all; it is a triumph of prejudice and dogma over common sense. It is a Budget for private affluence and public squalor; and nowhere do we see public squalor more clearly under this Government than in the National Health Service.
  It is, of course, charming to have the right hon. and learned Gentleman speaking to us, and we are grateful to him for being able to spare us so much time, but the member of the Cabinet that the Opposition really wanted to hear, trying to defend the Budget, was the Secretary of State for Social Services. What we wanted to hear from him was how he defended the balance of this Budget— one that gives more to the rich but no more to the Health Service and even less to social security.
  The Secretary of State for Social Services has not even been allowed near the Dispatch Box—something that we might have expected from the earlier proceedings of the House this week. On Monday we had a debate, when the House guillotined the Minister's own Social Security Bill, in which he did not take part. Yesterday he produced what, by any standards, was a major statement on community health care on which he made no statement to the House and held no press conference for the public. We are, therefore, familiar with the pattern that today he is silent again, and even absent from the Chamber. No doubt, another engagement was arranged for him in case he was tempted to interrupt.
  We can conclude only one thing from his absence: that the National Health Service, in the Government's judgment, is adequately funded. We are obliged to conclude this because the Budget contained not a single extra penny for the Health Service.
  Let me say straight away that I understand the Government's problems in identifying the financial difficulties of the National Health Service. We know that they have problems in identifying these difficulties because, in the December statement, the Minister for Health electrified the House with the observation that the Government's monitoring arrangements had identified a cash shortage in the Health Service. That was after Six weeks in which every television bulletin had identified a cash shortage.
  I regret to say that it would appear that the Government's monitoring arrangements have gone on the blink again. Yesterday, in the course of the debate, there was some play on the part of the Chief Secretary to invite my right hon. Friend the shadow Chancellor to intervene in his speech. As challenges appear to be the name of the game of this particular debate, let me issue a challenge to right hon. and hon. Gentlemen on the Treasury Bench. I challenge them—and I will willingly give way if they can produce one—to name a single organisation represent-ing the people who work in the National Health Service, who administer the National Health Service, who represent the consumers of the National Health Service, which shares their view that the Health Service is adequately funded and that priority should be given to tax cuts. There is not one.
  Yesterday my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) referred to the British Medical Association survey, but he could equally well have referred to similar statements from any of half

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  a dozen royal colleges — from the Association of Community Health Councils of England and Wales, the National Association of Health Authorities in England and Wales and the Chartered Institute of Public Finance and Accountancy, whose survey only a fortnight ago identified the £400 million of bad debts of the health authorities, which they cannot pay and which must go forward into next year.
  Even those Conservatives who have listened to those who work in the Health Service have come to the same conclusion as the workers. We have the Conservative majority on the Select Committee for Social Services, which came out in support of a request for an immediate transfusion of £1,000 million. Our absent Secretary of State responded immediately by describing that figure as arbitrary, which produced the second report of the Select Committee, with the stinging observation:
  "The only arbitrary aspect of our recommendation for £1 billion was that it was less than the £1·896 billion shortfall that we had identified."
  Yesterday, the Chief Secretary informed the House that we were spending more on the Health Service.
  Mr. Jeremy Hanley rose—
  Mr. Cook: Let me finish this passage and then I will give way to the hon. Gentleman.
  Let us look at how much more the Government are spending. I put down a parliamentary question to the Secretary of State a couple of months ago, inviting him to express the required increase in expenditure on the Health Service, applying the pay and prices rate of inflation. That is a fair test. We know that it is fair because, after only a couple of weeks, the Government used the same rate of inflation as a test of the amount by which they should increase prescription charges. Prescription charges had to go up by 8 per cent., they said, because that was the rate of inflation in the price of medicines. If that test is fair for deciding how much prescription charges should rise, it is fair for deciding by how much the funding of the Health Service should increase. The answer showed that since 1982 the total increase in spending on the Health Service was a niggardly £50 million—half of I per cent. That is why the Health Service is in crisis today.
  Mr. Hanley: Will the hon. Gentleman tell the House in how many Budgets between 1974 and 1979 the Labour Government announced increased expenditure on the Health Service?
  Mr. Cook: In the last Labour Budget, in 1978, the Chancellor announced a significant increase in the health budget. If the hon. Gentleman intended to help his hon. Friends, he would have been wise to consult them in advance. They would have pulled him down before he made precisely the contrast between the way that previous Labour Chancellors behaved and the way in which the present Chancellor has run away from the real needs of the Health Service. Because he has done so, operations are being cancelled at a rate of 300 a week, 20 cancer patients on the waiting list for operations in the west midlands die every month and beds are closing at three times the rate of the 1970s. That is why, on six separate occasions in October, women in labour had to be taken from central London by ambulance to Brighton, because that was the nearest place with an empty maternity bed.
  Mr. Kenneth Clarke: The hon. Gentleman has complacently defended his Government's record by relying on 1978. Let me remind him of what the president of the Royal College of Nursing said on 6 June 1978 to the then Secretary of State for Social Services:
  "I can tell the Secretary of State what is wrong with the Health Service. It is basically suffering from a shortage of cash with which to train and employ nurses and other personnel."
  She said that those involved in the service were "at breaking point". Before the hon. Gentleman calmly claims that Labour financed it properly in 1978, he should recall the strikes, crisis and turmoil that his party left behind in 1979.
  Mr. Cook: I welcome that interruption. The reason why the previous Labour Chancellor was quoted yesterday by my right hon. and learned Friend the Member for Monklands, East, and today by me, is that we were reminded specifically of that precedent by members of the Royal College of Nursing, who drew it to our attention with plaudits and warm, nostalgic affection, in com-parison with their treatment under the present Government.
  If hon. Members wish to talk about nurses, let us do so. There are now fewer nurses in the wards. We know that because we have seen the Government's submission to the pay review body. Their own evidence admits that there are now 6,000 fewer nurses in general nursing wards than in 1982—not that there were enough to go around in 1982. An article in the Nursing Times and Nursing Mirror in that year stated:
  "We follow with a brief tour of the hospital and I note again how easy it is to construct buildings, yet fail to provide the staff, particularly nurses."
  The author of that article was a councillor Mrs. Currie, chairman of central Birmingham district health authority. I took the precaution of looking up central Birmingham to find out how well it is doing now that councillor Mrs. Currie is Parliamentary Under-Secretary of State for Health and Social Security. I can report that the authority now has a shortage of 350 nurses, and the number of beds for children has halved since the general election. As a result, consultant surgeons are being told to take every seventh week off. They are told, "Go away. Go to the golf course. Take the family to the seaside. Do anything but operate and involve us in extra cost." Where is the cost-effectiveness there?
  Lest it be thought that central Birmingham has fallen into neglect because its former chairman is now concentrating on the affairs of southern Derbyshire, I can also quote from last month's Burton Daily Mail, which reports:
  "Local health chiefs are predicting the worst cash crisis in the history of Southern Derbyshire Health Authority … The only hope may be to get out the prayer mats", according to the district treasurer.
  Mr. Nicholas Bennett: So that we can keep the nursing position in perspective, perhaps the hon. Gentleman would like to note the international comparisons. He will find that there are 34·5 nurses per 10,000 of the population in West Germany, 51·4 per 10,000 in France, 46·9 per 10,000 in Japan, 54·3 per 10.000 in the United States of America and 84·2 per 10,000 in this country.
  Mr. Cook: I suggest that the hon. Gentleman gets in touch with whoever put the Minister in touch with the Royal College of Nursing, because that person can put

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  him right on the figures. The British figures count all nurses—auxiliary, state-enrolled and student nurses—and weigh them against people of graduate experience in foreign countries. If the hon. Gentleman bothers to go around the hospitals in central London, he will find that it is the student nurses who are keeping those hospitals open.
  Yesterday, as we debated the Budget, Bloomsbury district health authority debated its budget for next year. It was a very different story. There is no surplus in that health authority; there is not even a balanced budget. The authority faces a £5 million deficit next year, and the only way that it can see of closing the gap is to shut its hospitals to all but life-and-death emergencies.
  To wipe out the deficits of central Birmingham, south Derbyshire and Bloomsbury would take less than half of what the Chancellor gave away yesterday in capital gains tax alone. The deficits of all the district health authorities in England could be wiped out with one third of what he gave away in capital transfer tax. There are jobs in this. Three quarters of the expenditure on the Health Service goes on staff. The Minister lamented the passing of labour-intensive industry, but there is still one labour-intensive industry around—the Health Service. There is no surer way of creating jobs than investing in the Health Service.
  That means not just jobs for Health Service workers. On Friday at a conference of the National Association of Health Authorities in England and Wales, a staggering figure was produced. It was revealed that the backlog of maintenance and repair work in our hospitals is now £4,000 million. Tackling that backlog would mean contracts for the private sector; it would mean real jobs in construction and labouring; it would mean profits for the small business man — the very person whom the Goverment claim to encourage. There is an opportunity to tackle unemployment there.
  I understand that the Government defend tax handouts on the lofty ground of freedom: that people should be free to spend their money as they choose. Poll after poll shows that the people of Britain want their money put into the Health Service. The NOP found that 95 per cent. wanted more funds for the Health Service. The MORI poll found that 79 per cent. wanted it. Monday's "You and Yours" programme on the BBC found that only 1 per cent. supported tax cuts before the NHS.
  That is the sort of result that gets the BBC into trouble with the Government. But that is how the people of Britain want their money spent. They have the sense to know—unlike the Chancellor— that it is no good getting a couple of pounds in your hand today if you have no hospital tomorrow. The NHS is a cost-effective service that provides value for money, and it is time that the Government provided it with money to the value of the service that it provides.
  In part, I must admit that the Health Service is so cost-effective because it is held together by low pay. That brings us to the other measure of the imbalance of this Budget —the gap between the rich and the poor. I am grateful to the hon. Member for Derby, North (Mr. Knight), who has a question for answer today on the rates of tax among the Group of Seven. It shows that, after the Budget, Britain has the lowest top rate of tax in the group. It also has the highest starting rate of tax in the group.
  This is a low-tax country only for some people. We know how well the rich have done out of the Budget. We know that Sir Ralph Halpern, knighted by this
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  Government, got £265,000 out of the Budget. When the Minister tells Opposition Members to warn the trade unions that we should not pay ourselves more than we can afford, he should suggest that to the Chancellor who is giving £265,000 to Sir Ralph Halpern. I hope that Conservative Members had the sense to celebrate with gin and tonic. The Government put up the duty on beer but not on gin.
  Last autumn in the uprating statement the Secretary of State for Social Services froze child benefit. The reason he gave for doing that was that child benefit was not well targeted. He said that the problem with child benefit was that it did not help only those who needed it most. References were made to the Duchess of Westminster. We were told that child benefit could not be increased by 30p because the Duchess of Westminster would get it as well. As a result of freezing child benefit the Government saved £120 million. In his Budget the Chancellor gave away £270 million to people in the top rate bands. That money was solely and entirely targeted to give help to those who need it least. Why is it wrong to give the Duchess of Westminster an increase of 30p but entirely right to slash the top rate of income and inheritance tax which will give her thousands of pounds?
  Each person on the top tax rate has gained, on average, £3,300 from Tuesday's tax cut. Under the new social security scales, that is more than a single parent with two young children will get to live on for a year. That brings us to the real contrast in the Government's policy—the contrast between cuts in taxes in March and cuts in welfare benefits in April.
  Yesterday the Chief Secretary to the Treasury claimed that there were very few losers. That was certainly an advance on his performance on "Newsnight" the previous night when he said that there were no losers. The Government are putting up the package of social security changes under the heading, "Shouldn't you know the facts?" Taking that heading entirely seriously, let us try to explain to Conservative Members the facts about the gainers and losers from the Government's package. First, there are some spectacular losers, such as the one that my hon. Friend the Member for Bristol, South (Ms. Primarolo) told us about on Monday. My hon. Friend has a constituent suffering from multiple sclerosis. Under the new rules that constituent will lose her entire entitlement to social security and will, therefore, lose £48 a week. She is losing £48 a week while someone on four times average earnings is gaining £48 a week from the Budget.
  The irony is that the people who lose most are those who are in work, because the cuts are focused on housing benefit. A family of four paying average rent are worse off on any income between £60 and £140 a week. When we put that to the Minister for Social Security and the Disabled a week or two ago, he said that it was a purely hypothetical, fanciful example. When pressed to say why it was purely hypothetical and fanciful, he said that it was because we assumed the family were paying average rent. I plead guilty, because we were assuming that. If they were paying more than average rent the losses that they would incur would be even greater.
  There is a link here with the National Health Service. We cannot have a healthy population when children are being brought up in poverty. The best promoters of disease are low income and bad housing, and the cuts in April will drive more children further into poverty. Yesterday the Chief Secretary said that 88 per cent. of people were no

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  worse off. That 88 per cent. includes 2·25 million who will not get a penny more in April and who will, therefore, be worse off in real terms. Of the remainder, another 2·25 million will get a cash increase that is lower than the rate of inflation. Collectively, that means that 4·5 million households face a decline in their standard of living in real terms. Even that flatters the figures, because it takes no account of the abolition of single payments.
  On Monday the Under-Secretary of State for Health and Social Security told the House that my constituents will benefit from the social fund to the tune of £51 per claimant. That is the allocation to my constituency, and I concede that the figure is correct. Two years ago the expenditure on single payments in my constituency was £154 per claimant. The new figure represents a cut of £2 per week per claimant in my constituency.
  I shall conclude with two stark contrasts. This Budget will be remembered for what it does for the super-rich. The top rate of tax that anyone can now pay is 40 per cent. The funny thing is that that cut to 40 per cent. is taking place at a time when more people on benefits will have to face a higher rate of deduction.
  Dr. Norman A. Godman: Is it not the case that with the social fund we now have public provision for money-lending and the state system for money-lending will take place within local DHSS offices? The only difference between the state money-lending service and the loan sharks who infest many of the schemes in the west of Scotland is that this heartless, inhumane Government offer no-interest loans.
  Mr. Cook: As the previous Secretary of State observed, the social fund is to be a banking facility for the poor. Of course, it differs from other banking facilities because the bank manager is guaranteed repayments. He will make the deductions at source from a subsistence level income that will, logically, leave families with children on an income that is below subsistence level.
  Yesterday I interrupted the Chief Secretary to tell him that the number of people on benefit who would face a deduction of over 70 per cent. would double in April. The Chief Secretary said that he suspected that I had got my figures wrong. It is quite likely that the figures are wrong. I confess that I do not have a high degree of confidence in them, because I got them in a parliamentary answer from the Government. The figures show that the number of people facing a deduction of over 70 per cent. will increase from just over 250,000 to 550,000. That is a clear coincidence because Britain has 600,000 top tax payers, all of whom have seen their tax rate fall in the Budget. They are to be weighed against the 550,000 welfare benefit claimants, some of the poorest people in our country, who face a deduction in their benefit of over 70 per cent. This is indeed redistribution with a vengeance.
  The Budget marks a massive shift in the burden of taxation from the rich to the poor and a massive shift in benefits, both by way of tax handouts and in terms of welfare benefits, from the poor to the rich. The Government have mastered the advice of Ivan Boesky who said :
  "You do not need to feel guilty about being greedy".
  I am sorry to say that I have not yet achieved that state of moral anaesthesia. I find it difficult to relish these tax cuts.
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  Yesterday the Chief Secretary said that the tax cuts were not just of value to the super-rich. I accept that. I have a personal involvement, as has every hon. Member, in the tax handouts. To my embarrassment, I find myself a gainer from the tax cuts because my income tax will go down by about £6 a week.
  Mr. Frank Haynes: Will my hon. Friend give way?
  Mr. Cook: Perhaps my hon. Friend would let me finish.
  Next year I will benefit from the poll tax when it is introduced in Scotland. The poll tax demand on me and on my wife will be £600 less than our current payment in rates. Therefore, we will benefit from the Budget and the poll tax. When I contemplate those benefits I do not relish them. I feel a sense of shame, because I expect to pay my fair share for public services. I am conscious of the poverty of some of my constituents whom I met this winter, such as the unemployed family of six who during the winter had to live on cold meals because they could not get a single payment to replace their cooker. The single mother of an incontinent child spent this winter hand-washing sheets because she cannot get a single payment to buy a washing machine. A constituent with a curved spine spent most of the winter lying in bed because the reclining chair is broken and she cannot get a single payment to replace it. That is the true face of poverty in Britain today. By the way, I do indeed make donations in my constituency; I do give to welfare organisations to help my constituents. But I do not believe that my constituents should depend on charity. I believe that they should get that benefit as of right.
  The Government have chosen to cut the top tax rate rather than help people in poverty. They have chosen to cut inheritance taxes instead of helping the Health Service. This is not a balanced Budget. It is a dangerously, disturbingly unhinged Budget which is an affront to decency, to justice and to fairness. Long after the Minister's and my names are forgotten, the Budget of 1988 will be remembered. It will be remembered as a Budget for the greedy paid for by the needy.
  6.10 pm
  Mr. John Biffen: A Budget debate inevitably involves such a pervasive coverage of the economy that I think it appropriate to declare an interest. The Register of Members' Interests will show that I am a director of the engineering company, Glynwed.
  Let me say at once that I hope I shall not trespass upon the privileges of privy councillorship and detain the House overlong, but there are two aspects of the debate upon which I wish to touch. The first is the tax changes themselves and the formidable challenge that they represent. The longer the debate proceeds, the more discomfort Opposition Members will suffer, because they will be confronted with the challenge of deciding whether they would reverse the changes if they were in government. Secondly, I wish to talk a little about the economy to which the Budget is related.
  I accept the broad philosophy embodied in the tax changes, and I should like to make three comments upon them. First, the hon. Member for Livingston (Mr. Cook) talked about the Budget lasting in memory. I think it will. I think it will compare with the Budgets before 1910 and Lloyd George, and I think that my right hon. Friend the Chancellor will be remembered as much as anything for

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  his reforms in husband and wife taxation. Those reforms will be long-lasting and will retain their message long after the arguments about the rates have settled into near consensus between the two sides of the House.
  Secondly, from what I have just observed, it will be clear that I am not outraged by the concept of two rates of taxation, with the higher rate at 40 per cent. I understand that that is the New Zealand practice, so we have thus validated the hon. Member for Dagenham (Mr. Gould) as a reverse tax exile. But when the door is opened, it is amazing what opportunities begin to arise.
  I commend to my hon. Friends the reinforced potency of the arguments of my hon. Friend the Member for Ealing, Acton (Sir G. Young) that a community charge could he based upon a graduated system—a proposition further reinforced by the fact that my right hon. Friend the Chancellor has not altered the national insurance rates. That is not to argue here the alternative to the present near-universal flat-rate poll charge unhappily proposed by my hon. Friends on the Treasury Bench but to say that my hon. Friend the Member for Acton has argued his case with great diligence. I think we shall hear more from him.
  Thirdly, in the debates about the rates of higher tax, I am sure that a great deal will be said about alleged incentive. I use the word "alleged" because I am tolerably agnostic about all this; I am prepared to be open-minded in considering these matters. These things operate not only at the top end of the income scale but also at the lower end. We should not be so elitist in our view of lower-paid wage earners as to suppose that they do not have a shrewd idea where their marginal rates come into effect. My right hon. Friend said that he hoped we would proceed to a basic rate of 20p. I am not too happy about such long-range targets, which then begin to exercise a clammy embrace on all intermediate policy.
  However, if we are to have that objective, it might be worth while for the House, in a calm and unpartisan way, to consider the possible reintroduction of the reduced rate band, for all its administrative difficulties. We should ensure that the question of thresholds, of the reduced rate band and of the basic rate can all be related to provide as effective a counter as we can achieve against the ravages of the black economy and the relationships between taxation and benefit. I hope that, when the noise of the battle that will take place over the next few weeks about hither rates of tax has abated, consideration can be given to that issue. However, there is enough reform in this Budget without bringing such considerations before the House on this occasion.
  My second point concerns the economy more generally. Every Budget has its characteristics, and this Budget has been stuffed with drama. The Budget itself is heroic; as I said, I am sure that it will command comparison with Lloyd George. The reaction on the Floor of the House, to use the most moderate language, was vigorous. I understand that the sentiments were genuine, deeply felt and spontaneous, although I think we might just as well make our arrangements to avoid such exuberance.
  Underlying everything was the prologue to the Budget which was an everyday story of Downing street folk. It seemed as though there were nuances of difference about how the exchange rate policy should be operated. We have put all that into happy context, although it would be a heroic judge indeed who decided that the issue might not yet arise again at some time in the future. I was very
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  impressed by the way in which my right hon. Friend the Prime Minister dealt with the matter in her exchanges with the Leader of the Opposition. She said :
  "It is absolutely vital to try to keep inflation down." —(Official Report, 10 March 1988; Vol. 129, c. 517.]
  I do not think that that was just philosophical reflection or abstract comment. I believe that my right hon. Friend believes that the price of stability is external vigilance and that there are plenty of signs in the economy to require us to be conscious of the inherent challenge of inflation.
  I should like to detain the House for a moment on the subject of how such matters used to be regarded when inflation was much more to the forefront of our economic debates. Those who worshipped at the ancestral shrine of money supply were very much in vogue—born again—in the 1970s and early 1980s. Alas, my hon. Friend the Member for Wolverhampton, South-West (Mr. Budget), who is still keeping alive that faith, is not here. I always think of him as a 1660 Prayer Book monetarist.
  I have observed my right hon. Friend the Chancellor for a while. At first he seemed to have gone to series 3 and now I think he walks his monetary dog on the heath on Sunday mornings, so some of the more familiar landmarks for the debate have become somewhat fudged. It is undeniable that practically every monetary measure now shows a money supply expansion at an annual rate of something like 20 per cent. One or two odd measures, which tend to be picked up for their providential use, might falsify that proposition. When I see the Chancellor's Parliamentary Private Secretary scribbling down every word, I know this must be good stuff. If I had to summon experts, I should call Mr. Tim Congdom who knows that the Treasury still trembles a little at the thought of such representation.
  I have managed to stumble through life without one day of formal education in economics, so I belong to the instinctive school of economics. My judgments are thus more prosaic, but none the less effective in that they are based on certain signs in the economy which I believe are trying to tell us something. At present, there is no shortage of such signs. The Bank of England says that lending is up by 20 per cent. over the year. The Building Societies Association and the Department of the Environment say that United Kingdom house prices generally are up by 16 per cent. and those in greater London by 24 per cent. over the year. The Department of Employment says that earnings are up by 8·5 per cent.
  Anecdotal evidence comes from the Association of British Chambers of Commerce survey, which has just been published. The ABCC states:
  "Skill shortages in London, the Thames Valley and East Anglia have reached 'crisis levels', according to Chambers' 4th Quarter Regional Business Survey, published today (14 March) by the Association of British Chambers of Commerce…
  The ABCC was so concerned by the sheer scale of the skills gap reported by 8 of the 12 regions surveyed that it double-checked the figures."
  Unemployment figures are probably the most difficult to interpret. I acknowledge that this is anecdotal, but my right hon. and learned Friend the Chancellor of the Duchy of Lancaster reported sharp falls in Whitehall-recorded unemployment. One way or another, all the signs point to a tightening in the labour market. Treasury statistics and privately collected statistics all show that we are

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  uncomfortably close to an overheated economy in many selected but substantial areas. Rodney Lord wrote in The Times on 24 February:
  "Last year saw the fastest growth in the economy since 1973, the year of Lord Barber's boom."
  That was a very happy reference to Lord Barber. I hope that references to him will not become less happy as time goes on. Politically, I am a child of the late 1960s and early 1970s. I know what has been the consequence of inflation, socially and politically. I know how easy it is in the early stages to convince oneself that it will all come right and that there is no need to do too much about it.
  On Tuesday, we had a very ambitious Budget which has understandably overlain this aspect of economic argument. How could the House do otherwise than feel passion about the proposed tax rates and the implied social and political judgments? Behind all this, however, lies the problem of the economy out there, which is showing signs of incipient inflation. I have to ask myself — it is a personal question and I do not invite my hon. Friends to share my agonies about it—whether tax cuts of such an ambitious character are the appropriate response to what I believe to be incipient inflationary conditions. I believe that their magnitude implies risk, about which I wish to register unease.
  Therefore, if I can thread my way through the melee of Budget resolutions on Monday night, I shall vote specifically against the reduction of the basic rate of taxation by 2p. I shall do that as a personal gesture. It is not perverse, and it carries not an iota of disenchantment. Indeed, I applaud my right hon. Friend the Chancellor for what I believe to be an imaginative and thoroughly welcome Budget. But inflation is not a challenge to be put aside until more comfortable times when one can choose more politically congenial company. I shall make my judgment and expect to be judged by it.
  6.25 pm
  Mr. William Ross: The right hon. Member for Shropshire, North (Mr. Biffen) reminded us of the words uttered by the hon. Member for Wolverhampton, South-West (Mr. Budgen) yesterday. I wish to remind the House of something else that the hon. Gentleman said. He pointed out that the present Administration were elected first to control and then to eliminate inflation. Like the right hon. Member for Shropshire, North, I detest inflation as the theft of people's work, their thrift and their efforts to provide for the future, and I applaud any Government who succeed in bringing it down.
  The Government were also elected on a pledge to reduce Government expenditure, but that pledge seems to have vanished into the mists of time and to have been replaced by calls for greater efficiency in the way in which the expenditure is used. To give credit where credit is due, the Government have brought inflation down to 4 or 5 per cent. for the past several years. As that seems to have been deliberate policy, I wonder when they intend to squeeze the last 5 per cent. out of the economy. If they were letting it run at that rate to ease the financial pain of those who overreached themselves in the late 1970s, that need has passed and it is time to bring inflation down still further to give more protection to those on fixed incomes who are hardest hit by inflation.
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  When I first came to the House, the air was full of arguments about the public sector borrowing requirement. The Chancellor told us the other day that that problem had been relegated to history. I hope that he is right, but I am not sure that he is. We must see what happens next year. I was pleased that the Chancellor used some of the surplus to repay debt, as the Prime Minister put it. I do not wish to hurt anyone's feelings by talking about selling the family silver, but if the family silver has to be sold, the proceeds should certainly be used to reduce the overdraft. If that has been the case to some extent in the past year, so much the better. Page 58 of the Red Book shows that 10 per cent. of Government expenditure goes to pay interest charges on this country's existing debts.
  It is perhaps not a fair analogy, but if I were running a household and constantly had to use a large part of my income to pay the interest on my overdraft, I would expect my bank manager to be very worried. Over a long period, balanced or surplus budgets should gradually reduce interest payments. That too is money saved, although I have not heard any economists making that comment. If I am wide of the mark, I hope that the Minister will take this up when he replies to the debate. As I foolishly took on a very early morning engagement in Northern Ireland tomorrow, I must apologise for the fact that I shall not be here for the winding-up speeches, but I shall read with great care the Official Report of the Minister's response.
  If the Government wished to make massive tax cuts, they were wise to do so on this occasion. If one does not get round to doing it in the first Budget after an election, it will certainly not be done in the last Budget before the next election, so this is indeed the time to do it. The Government have, by so doing, got rid of what is bound to be most offensive to their principal political opponents at the earliest stage of this Parliament and taken all the flak that will come in order to get it over and done with.
  I quibble with the statement that we are down to two levels of income tax. We still have differing rates of national insurance contributions, which can be considered part and parcel of income tax. If they are taken into account, we still have five or six rates. Perhaps the Government made a serious error in allowing national insurance contributions to cut off, rather than carrying them through all levels of income. That would have diminished, to some extent, large tax decreases for the highest paid, and made them rather more acceptable to many people in the country.
  Given that the Government have made a commitment to get income tax down to 20 per cent., we can look forward to certain adjustments in coming years, with the Government perhaps tying together national insurance contributions and the basic tax rate, so that there will be a reduction in one and an increase in the other. In that way, when we get down to a basic rate of 20 per cent., people will pay a basic rate of 25 or 26 per cent. in real terms, taking national insurance contributions into account. Most people would like that, as they would know where they stood.
  The Government must also face the fact that the cut of 20 percentage points in the top rate of income tax is equivalent to a massive pay increase for people on very high incomes. I have been a Member since 1974, and I remember endless rows about people receiving huge pay increases of £10,000 or £12,000 a year, so as to put a few hundred pounds in their pockets at the end of it all. Can we be assured that there will not be such increases for those

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  people this or next year? They have already had their 20 per cent., and not many people in the country will get 20 per cent. — mighty few will have 20 per cent. more in real terms in their pay packets.
  It was all very well for Governments to give these massive increases when inflation raged at 15 or 20 per cent., or even 26 or 27 per cent. But now inflation is down to 5 per cent., and all the chickens that were let loose in those days of high inflation by those paper increases have come home to roost. I appreciate that this Administration were not responsible for that inflation —the Labour Government were — but the Government must take account of the problem. We cannot forget the consequences of that inflation. I abhor allowing inflation to get out of hand to that extent.
  In the coming months and years, more thought must be given to, and more action taken for, people who are truly unemployed — there are many of them —and whose weekly income is tiny. They suffer real hardship. My hon. Friends have objected strongly to many of the things that the Government are bringing into operation in April. I hope that, although those changes will be rushed through now, they are only the beginning of a serious look at how to care for those who are unemployed, chronically ill and unable to work. There is real hardship in that section of the community. We should recognise that, and do our best to help them.
  The Chief Secretary told us—truthfully—that lower taxes create jobs. In the long term, provided that we manage to defeat terrorism—there has not been much evidence of that lately—that will be of great benefit to Northern Ireland whenever foreign firms, especially the Americans, are looking around for places in which to put their money. Such firms will compare Northern Ireland not with Scotland, Wales and England but with what else can be found on the island of Ireland.
  The Republic's corporation tax was reduced this year from 50 per cent. to 47 per cent., going down to 43 per cent. So even Mr. Haughey, who has not yet been mentioned, is following the taxation policy of the Government. The rate of income tax in the Republic, which a comprehensive article in The Economist recently pointed out was driving the best people out of the Republic, still starts at 35 per cent., rising to 58 per cent. The comparison between the Republic and Northern Ireland will be wholly to the advantage of Northern Ireland when people look for places in which to site their factories and jobs in the future. I welcome that, and I hope that the Government will maintain that gap for a long time.
  Finally, I refer to the enormous help that reforms in recent Budgets have given to capital taxation, especially for small family-owned firms and, above all, for owner-occupier farmers in places such as Northern Ireland. The teeth of capital transfer tax were drawn when its name was changed to inheritance tax 14 or 15 years ago. This year, the re-basing of the capital gains tax from 1965 to 1982 will have an astonishing effect on farmers' liability to the tax. In 1982–83, and just before, land prices were at their highest and if anything they have declined since then. That means that many small owner-occupiers and family farms will wind up paying no tax on that score. I hope that that is a long step on the road to the end of that tax.
  The increase was a paper increase in value, which the person concerned never got his hands on. The farmer who worked all his life to build up his farm to a reasonable size
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  and left it to his son or daughter was leaving a burden of debt to them that they found it difficult to meet. It is welcome that the Government have got rid of that devastating burden on the agricultural community. These two taxes have been the cause of much heartbreak in small family firms and in the farming community. I am glad that they have been so diminished in scope.
  Although we do not like some parts of the Budget very much, there is much in it that we welcome and I am glad that the Government are trying to reduce taxes. That can only be good for the economy in the long run.
  6.38 pm
  Mr. John Butterfill: My right hon. Friend the Member for Shropshire, North (Mr. Biffen) said that he grew up as a political child of the 1960s. I, by contrast, was probably a political infant at that stage. I joined the Conservative party in 1957 and my abiding recollection of our economic performance since the last war has been our relative economic decline compared with our western competitor nations. Not until the Government came to power and my right hon. Friend became Prime Minister was that economic decline correctly arrested.
  My right hon. Friend the Member for Shropshire, North was clearly concerned about the growth of money supply. His speech echoed many of the fears expressed yesterday in our debate by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). He drew a parallel between the expansion of the money supply today and that of the early 1970s, at the time when my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) was Prime Minister. That parallel is badly drawn, although it reflects the concern about broad money, M3, and the growth of debt.
  The circumstances applying today are different from those applied in, for example, 1972. I have taken the trouble to look at the economic background to the 1972 Budget and should like to draw some of those comparisons to the attention of the House. It is true that in 1972 the productivity of British industry was rising by about 5 per cent., compared with a 7 per cent. rise today, but it is also true that unit labour costs were also rising, whereas today they are falling significantly, and have been falling for some time—by 20 per cent. since 1980. It is also true that our gross domestic product was growing in 1972. Indeed, in 1971 it had grown by more than 1·5 per cent., but that compares with 3·5 per cent. today, using the non-oil figure. That shows that we are now growing much faster than our western competitors whereas in 1972 we were growing considerably more slowly. Similarly, business investment is up today by 9 per cent., but was falling in the period immediately prior to the 1972 Budget. Non-oil exports rose — we must take oil out of the equation—by 5 per cent. in 1971–72, but are now rising by 7 per cent. Today our share of world trade is increasing faster than ever. However, more important than anything else, we need to consider the public sector borrowing requirement. Only now, in this last Budget, have we achieved a balanced Budget and a debt repayment, rather than a borrowing requirement.
  All those circumstances are materially different from those that prevailed in 1972. I advise my right hon. Friends the Members for Chesham and Amersham and for Shorpshire, North that, although it is right to draw parallels with the past — how else can we learn — the

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  fears that they expressed are no longer as valid as they would have been in the early 1970s. If we do have a growth in the money supply, that is a reflection of an underlying healthy economy, which is expanding, rather than a reflection of one that is incipiently unhealthy.
  I should like to pay tribute to the amazing reforms that have been brought about in our economy by the present Chancellor of the Exchequer. Those reforms have been striking. We have had a growth in home ownership, a wider ownership of shares, and reforms in company taxation. Those have been followed this year by the very important reform of the taxation of married couples. I know that that reform will be widely welcomed in my constituency. Indeed, that is perceived throughout the country as having been long overdue.
  My constituency is one in which there is a considerable housing shortage at the moment. Many people are moving into Bournemouth from the north, seeking employment, because we have a thriving and buoyant economy in southeast Dorset, in which many people from all over the country would like to participate. Therefore, I am especially pleased that my right hon. Friend has proposed to include the provision of assured housing schemes within the business expansion scheme. That will contribute materially to the provision of rented housing for those who would otherwise be unable to afford it. It is an excellent use of the business expansion scheme which has done so many good things elsewhere in the economy. One hopes that that will carry forward into housing. It is an innovative measure that I heartily applaud.
  My constituency also has a large number of small businesses. I know that they will be particularly pleased that the Chancellor has been able to raise the VAT threshold to the maximum now permitted by the European Economic Community. One can only hope that negotiations within the Community in the near future will enable that ceiling to be raised still further. I am sure that my right hon. Friend will maintain his efforts in that direction.
  Small businesses will also be particularly pleased at the reliefs given in capital gains tax, especially those relating to retirement relief. That will enable many small family businesses to continue to thrive and not suffer the penalties that they have in the past. It will enable the people who have built up those businesses to enjoy the fruits of their lifetime of labour. Small businesses will no doubt also welcome the reductions in the small business rate of corporation tax to 25 per cent.
  I should like to turn to a particular problem that affects my constituency with its high number of elderly people who have retired and who have relatively low incomes. Many people in my constituency retired on what might have appeared to be good pensions some years ago and bought small homes, but they now find that the effect of inflation over the years has eroded the value of their pensions or savings. They now find that they can no longer afford to enjoy the standard of living that they thought that they might be able to. My right hon. Friend the Chancellor will no doubt be aware that to address that problem I have proposed that annuity schemes secured upon the home of an elderly person should be afforded additional tax relief by allowing the interest to be rolled up and repaid after death if a mortgage is taken out to purchase such a scheme. That kind of proposal has met
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  with a good deal of support in the House. The early-day motion that I have tabled, which recommends such a scheme, has now been signed by 233 hon. Members. That illustrates the degree of support in the House for the proposal.
  There is no doubt that such a proposal would give a significant advantage to elderly people, and especially to those in my constituency. I shall give an example of the difference that such tax relief would make. If we consider an elderly widow, aged 75, living in a house that is worth about £100,000—that may sound an awful lot, but it is not a great deal of money in my constituency, given the inflation in property values, and it is certainly not a great deal in London today — if that lady were to borrow £30,000 on the security of that property to purchase an annuity, under current tax law that annuity would yield her a net spendable income of £1,908 per year. If my right hon. Friend were to permit the interest to be rolled up while allowing tax relief to be given, that income would more than double to £4,120 per year.
  We must make a choice when considering the position of elderly people, many of whom have worked hard throughout their lives, but whose savings are locked up in their sole residence. We must decide what we want them to do with the savings that they have worked so hard to accumulate over their lifetimes. Do we wish those savings simply to be passed on to their heirs, affording no benefit to the elderly person, or do we think that we should make arrangements that would enable the elderly to make some use of those savings during their lifetimes? It seems enlightened self-interest as far as we are concerned to do the latter. If we do not, it may well be that the incomes of those elderly people will fall to the point where we may be obliged to offer them support — as we often do —through housing benefit or income support. Therefore, enabling them to remain independent in their own homes is to the advantage of the community as a whole and also enables them to do what they would most like — to remain independent and to stay where they have chosen to retire.
  Such a scheme poses certain problems. My right hon. Friend the Financial Secretary has written to me only recently outlining some of the difficulties that will arise if we pursue such a scheme. He has told me that the principal difficulties that he envisages are, first, the problem of a level playing field between annuity schemes and other similar schemes, for example, where the elderly person sells part of his home or part of the equity in his home to purchase an annuity. Any improvement or reform that we make in that respect will inevitably change the levels in the playing field in one direction or another, although that should not necessarily deter us from going down that route.
  My right hon. Friend has also pointed out that the accumulation of interest would lead to a diminution of the estate of the annuitant and, therefore, a loss to the annuitant's heirs. However, most heirs whom I know would be happy to accept a reduction in the value of what they might receive upon the death of a relative if it meant that that relative could live in much greater comfort.
  My hon. Friend has also pointed out that this would not target particularly well on poorer pensioners, because only those with relatively large house values could afford to borrow a significant sum to purchase an annuity. If interest is not paid but rolled up, the accumulated debt would, over a period of years, grow larger and it would be

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  necessary to restrict quite severely the proportion of value of a home that was given by way of loan. To some extent, that is true. Indeed, it is inevitable that those people with larger value homes could afford to borrow larger amounts of money on them but, nevertheless, it would be valuable for all the elderly to be able to borrow in that way.
  It does not necessarily follow that home values have a direct correlation with income. Indeed, in many cases, it is clear that they have not. Many people from all over the country retire to my constituency. When they retire, their income may be high, but 10 years later their income may be relatively low. However, at the same time, house prices in my constituency have risen enormously over the past 10 years, so it may well be possible for people to have high value homes but low incomes. The final point made by my right hon. Friend—this is a more valid point—is that, if annuitants are encouraged to take out such schemes when they are relatively young, and if they live a long time, the debt will become an unacceptable proportion of the value of the home. That is true and such annuity schemes would, therefore, be unsuitable for younger retired people and might need to be restricted to those aged at least 70 or perhaps even 75.
  Finally, I should like to turn to one other matter which, to my disappointment, was not covered in the Budget speech, but to which I hope we shall turn during the forthcoming Finance Bill — single property ownership trusts. During the proceedings on the Financial Services Bill 1986, the Government agreed that single property ownership trusts would be a good thing because they would particularly assist urban renewal schemes which had high values. The idea behind a single property ownership trust is that a group of investors can get together and own a large property between them in the same way that they would if they were direct single owners with all the advantages of single ownership. There are problems in many of the large urban redevelopment areas because the schemes proposed are so large that they are beyond the resources of one institution or even of a consortium of institutions. They involve an unacceptable level of risk for, for example, pension funds, but by allowing a group of institutions each to take a small part in the scheme, the risk is spread and schemes become possible that could not otherwise have gone ahead.
  Such schemes require some changes to the Finance Acts to enable such trusts to become tax-transparent. I very much hope that my right hon. Friend will bring forward amending legislation in his forthcoming Finance Bill.
  6.55 pm
  Mr. Andrew Smith: Like my hon. Friend the Member for Livingston (Mr. Cook), who made such a fine speech, my theme is the unbalanced Budget. I make no apology for repeating that theme because never before in a Budget can the word "balance" have been so callously misused. Where is the balance between the Government's obsession with some monetary and fiscal targets, on the one hand, and their neglect of the real world of economic, industrial and public expenditure policy, on the other? Speaking of contrasts, I was amazed at the gall of the Chancellor of the Duchy of Lancaster in opening the debate, when he spoke about paying ourselves a little too much, a little too quickly. There are some people not a million miles from here who are paying themselves a great deal too much, a great deal too quickly. I am staggered that such hypocrisy is not recognised.
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  There is no balance in the Budget in the huge benefits to the well-off, not just in the massive 50 per cent. of concessions available which have been concentrated on the richest 10 per cent., but in the increased thresholds in inheritance tax and in the absence of any proposal to tackle the gross inequities of national insurance, which becomes increasingly regressive. Nor is there any balance in the failure to limit tax deductible allowances to the basic rate. There is no balance in the extension of opportunities for untaxed capital gains.
  There is no balance between the interests of the few who can afford to pay for private medicine and the view of the vast majority of British people that Health Service funding should have top priority. Knowing that that is his weak spot, the Chief Secretary yesterday made something of a meal of Labour estimates of the cash injections needed to bring the NHS back from the brink of utter collapse. He appeared to be overlooking the fact that the figures that he mentioned referred to different things.
  The first figure of £200 million was the absolute minimum immediate cash injection that we advocated in the current financial year to avoid the worst of the cuts, just to keep the NHS ticking over in its present inadequate state. The second figure of £1·3 billion referred to the cumulative underfunding of the NHS, based on the assessment of the Select Committee on Social Services. That figure merely showed the money needed to make good the underfunding of the NHS to date and was quite separate from the Labour party's additional commitment to improve the current levels of service. So my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) was perfectly correct to identify the Government's gross misuse of £2,000 million in tax handouts to the super-rich as the figure which Labour says should have been put into health care.
  The Chief Secretary would have served the country far better, as would the Chancellor, if, instead of his mealymouthed sniping at Labour's commitment to the NHS, which commands overwhelming public support, he had come clean on how far the Government are prepared to dig into the £3 billion reserve to fund the Health Service and to meet the nurses' pay review. The important point is that the Government have the money. Why will not they give it to the nurses and the NHS?
  Given the vast amounts of money at the Chancellor's disposal, the continued underfunding of essential services is nothing short of obscene. Indeed, it is becoming increasingly obvious that the only possible explanation for the Government's fiscal intentions, even more so in the light of the savaging of social security benefits in April, may be found in an extreme Right-wing ideology which raises Galbraith's nightmare of public squalor and public affluence to the level of a deliberate policy objective, the better to undermine the public services by starving them of funds.
  We can see who the Government are looking after best in the Budget by examining the benefits of just a couple of the Prime Minister's friends. Sir Ralph Halpern will get £5,134 extra a week, and Lord Hanson £4,728 extra a week. While some richly-paid bosses receive £5,000 per week, some of our nurses barely take home £5,000 a year. Where is the balance or the justice there?
  There is no balance either when we examine what he April social security changes will mean in practice. The Government's and DHSS's press releases talk about roughly equivalent numbers of gainers and losers, but a

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  detailed survey undertaken in Oxford for the welfare benefits research team of the department of social and administrative studies has provided shocking new evidence of just how far from the truth that is.
  Previous studies, including those by the DHSS, of the effects of the social security changes were based on estimates of the effects of 20 per cent. rates contributions and the loss of single payments, but this one study has recalculated the effects using actual claimants and known levels of rates. They show that 79 per cent. of those submitting a claim after 11 April will be worse off than at the moment.
  Those groups who will especially lose are pensioners, single people under 25 and, in sharp contrast to what the Chief Secretary said yesterday in the House and the day before on television, even people with disabilities. Some of the losses are significant. Overall, between 37 and 38 per cent. of the sample will lose more than £4 a week. That might not seem much to some Conservative Members, but it is £4 out of a weekly benefit of just £50 a week. That is the real obscenity of the Budget.
  On Budget day the Chancellor had a clear choice on how to spend the £11 billion windfall. He chose to give it to those who are already doing nicely. It is a Budget for the healthy and the wealthy, for those with a high-paid job, not one for unemployed or retired people or those on low pay. When one takes into account the increase in electricity prices and other charges, it provides literally nothing extra for those who, through no fault of their own, now find themselves lodged in an underclass of this callous Government's creation. It must be becoming clear, even to some Conservative Members who may have had doubts before Tuesday, that the creation of that underclass has become a clear objective of Government policy. The Government say, "It is all a question of mind over matter. We do not mind and you do not matter."
  Basically, the Chancellor's message is that the person who earns £2,000 a week can have a tax handout of £250, less a few extra quid, of course, for the company car. The low-paid person needs only a couple of quid and those who do not have a job can make do with even less.
  Even the Chancellor's much vaunted tax changes for married couples has its greatest impact in effectively doubling the capital gains allowance for those rich enough to realise £10,000 of capital gains in a year. Paying the proposed married couple's allowance to the man, albeit with transferability, is a pretty strange way of going about eliminating sexism in the tax system.
  Finally, perhaps most serious of all are the effects on the economy in the long term. Whatever effects the Chancellor was expecting his decision to have, one thing is sure : the Budget will do nothing for the economy's industrial strength and nothing for long-term future employment.
  The agonies of 1980 and the subsequent years were, we were told, necessary to transform British industry. We were to cut the fat and become a modern economy, able to export in good times and in bad. What happened to that supply side revolution? I draw attention to the remarks made yesterday by the right hon. Member for Chesham and Amersham (Sir I. Gilmour). He said that the question of the so-called "transformation" of the economy must be examined in its proper context in the period snce 1979. When we do that, we find that production in
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  manufactured goods is barely higher than when the Government took office. That should not surprise us because the Government's figures show that gross domestic fixed capital formation in manufacturing was down 5 per cent. in 1986—lower than in 1980.
  That shows, and also explains, the widespread scepticism, even in the City, about the Budget's impact on industry—that the much vaunted boom simply has no foundations. The worry is that we are in a boom and bust situation, with increased output coming about not because of investment in new machinery, but because of massive amounts of overtime. The Government's own statistics acknowledge that. The "Financial Statement and Budget Report 1988–89" on page 27 says :
  "It is difficult to discern a reliable trend in recent private sector pay settlements. They have been markedly lower tjan the recent high growth in earnings, which reflects record overtime working and bonus payments."
  What is all the suffering, hardship and unemployment, and all the grand talk and excitement of Conservative Members about our booming economy and the spirit of enterprise based on? At the first hint of a downturn the overtime will stop, our so-called competitiveness will crash through the floor and the tired machinery which is being flogged to death will come to a halt.
  What have the Government done in the Budget? Where is the balance in investments in the future of science and technology and industry in Britain? When one compares what the Government put into research and development in industry with our competitors, one sees that the United States is spending £9·3 billion, and it is rising; West Germany is spending £4·3 billion, and it is rising; Japan is spending £3·6 billion, and it is rising; and Britain is spending £2·2 billion, and—hon. Members have guessed—it is falling.
  Despite the fact that the Chancellor's friends in the City are cock-a-hoop at their personal good fortune as a result of the Budget, there is no sign that it will affect or help the future of British industry and competitiveness and employment in the future. Shorn of its pretensions, of which there are many, it boils down to a purely partisan Tory Budget for the rich. The Chancellor has intoned the final requiem of what was once called one-nation conservatism.
  The Chancellor may delight in fiscal balance and in the sickening greed of those gloating in the City, but the Budget is divisive beyond belief, contemptuous of the common good and ignores with deliberate disdain the nation's need for investment in health, education, housing, science and industry. It will serve the country and ultimately the Conservative party badly, because, judged against the standard of future opportunities for all citizens, it is not just unbalanced; it is morally bankrupt.
  7.10 pm
  Sir Anthony Grant: I disagree with everything in the speech of the hon. Member for Oxford, East (Mr. Smith) except for two points. I agree with him about the importance of research, as Cambridge is in my constituency, and I agree with him about nurses' pay. As I am married to a nurse, I very much hope, like him, that a substantial increase in pay is given to nurses, after the report of the review which was set up by the Government in April.
  When I sought to intervene in the speech of the hon. Member for Livingston (Mr. Cook) to suggest that he

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  should give some of his new-found largesse to one of my charities, as I sought to encourage him to do, it was not meant personally. I have a very high respect for the hon. Member for Livingston, having been to the Council of Europe and the Western European Union with him for many years. I wanted to make the point not that people should depend upon charity, but that if we take away the characteristic of voluntary giving and receiving, we lose part of the fabric of a decent, civilised society.
  I enjoyed very much the speech of my right hon. Friend the Member for Shropshire, North (Mr. Biffen). He will become one of those very rare hon. Members to whom Back Bench Members come in to listen, and we shall do much of that in the future. It was a little whimsical of him, as it was charming, to praise the Budget and then announce that he will vote against its main thrust, but he is a whimsical man.
  For a nation which is as dependent as we are on international trade, it is immensely important to ensure that the Budget takes account of trade. If we do not get that right, we can forget about the National Health Service and everything else. The Chancellor anticipated that this year there would be pressure on the balance of payments, but that we should be able to sustain it because of the strength of our economy and the substantial overseas assets that the Government have built up. We should be able to sustain pressure on the balance of payments provided, first, that there is no return to protectionism. I hope that the Chancellor and his colleagues in the Government in all the forums—the EEC and GATT—will strongly resist attempts by other nations to resort to protectionism, which would be disastrous for the whole world. Secondly, we should be able to sustain pressure if there are no wild fluctuations in the dollar.
  Like my right hon. Friend the Member for Shropshire, North, I find it difficult to understand what, if any, debate took place within the Government about our currency. I was abroad at the time, so I could not possibly know, but the strength or weakness of sterling is determined ultimately by the confidence with which it is regarded by the rest of the world. Interest rates are important, and I am delighted that they have been reduced today, as I do not like high interest rates, but it is equally absurd to pretend that one can opt out through a return to fixed exchange rates.
  I remember when Lord Callaghan came to the House and announced, when he was Chancellor, the devaluation of the pound sterling. It was a traumatic experience for the House and for the nation. It provoked Lord Wilson of Rievaulx to reassure the nation that the pound in their pockets had not been devalued, but we know how misleading that proved to be.
  It is essential that the Treasury and the Government use all the weapons at their disposal to prevent excessively wild fluctuations in currency. If I have rightly interpreted that as the view of the Chancellor and his Ministers on the Treasury Bench, I share that view, if that is any consolation to them. The CBI and other such organisations sometimes whine too much about the value of the pound. If it is too low, they give us a lecture on inflation; if it is too high, they moan about export difficulties. Businesses want reasonable stability, not artificial stability, from our currency so that they can plan ahead. If I am right in assuming that my right hon. Friend the Chancellor believes that we should fairly soon be members of the EMS, he has my agreement and support.
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  I have just returned from a visit to Japan and the United States with the Select Committee on Trade and Industry. In Japan I saw amazing opportunities for our exports and industries. Since I was last in Japan some 17 years ago, a remarkable but not perceived change has taken place, in that the people are becoming a consumer society and they are encouraging imports. There are many subtle non-tariff barriers which must be overcome, and there is constant argument and debate, but I doubt whether many hon. Members realise that Japan has introduced favourable interest rates for the import of certain goods.
  It would be better if we heard less from industrial bodies, businesses, Parliament and the press about how difficult it is to export to Japan and how appallingly the Japanese behave, and instead just got on with the job in the new climate. Many people are getting on with it by exporting textiles, chemicals and even motor vehicles and motor vehicle components. Substantial exports are earned in this country, but we do not talk about them; we talk about the difficulties, snags and impediments. That is a national characteristic.
  Much the same situation prevails in the United States, but in both countries I found enormous admiration and even envy of Great Britain's economic performance. I was pleased to discover some praise for Cambridge, which is still held in high esteem throughout the world for the original research work that goes on there. The economic transformation was described, perhaps rather boldly, as the British miracle. I do not call it a miracle; it is a triumph of common sense and good housekeeping, as evidenced by the Chancellor in balancing his Budget. If the Prime Minister were to run in the presidential election, she would win by a landslide, with or without primaries.
  People in the United States find our tax system and the level of taxation inexplicable when they contrast it with other EEC countries and with Socialist Australia and Socialist New Zealand. They said, "You seem to be keen on exports, but why are you so keen to export your best brains and ability?" That is why the principles of the Budget are absolutely right — to reform and reduce taxation.
  I have only one complaint about the Budget. I would have liked the Chancellor to tackle stamp duty, perhaps by raising the threshold level to help housing, but apart from that the principles in the taxation proposals are absolutely right.
  I urge the Government to disregard whining, egalitarian fanatics who would level us down to the state of the lowest. It has been our clear policy for many years to reduce direct taxation. That has been overwhelmingly endorsed by the people at no fewer than three general elections. I am delighted that the Government and the Chancellor are fulfilling that pledge.
  One of the great illusions of our age is that there is some peculiar merit in extracting more taxation from the public—including nurses, teachers and fairly humble people—swirling it about in a vast, expensive bureaucracy, and doling it out in response to the latest and loudest clamours. Another illusion is that there is a choice between giving more to the National Health Service and reducing taxation. That is an illusion. We can have both. No one wants more funding for the National Health Service more than I do, as Addenbrooke's hospital and Papworth hospital are in my constituency.

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  That bunkum of soaking the rich as a viable policy that we have heard in speech after speech of Opposition Members was really debunked by the late Anthony Crosland as long ago as the 1950s. He pointed out that there was no substantial overall increase to be achieved in the standard of living merely by distribution through the taxation system. I know that Anthony Crosland is no longer fashionable among Opposition Members, so I suppose that they disregard him.
  I believe that the Budget will be good for British international trade, good for Britain and, ultimately, good for the health of the nation.
  7.21 pm
  Mr. Eric S. Heifer: Many years ago, just after the war, an Italian partisan who I knew came to this country and gave me the watch that I now wear. He looked around the country and said, "How civilised Britain is." I thought that he was referring to our manners and willingness to hear the other chap's point of view. He was not referring to our manners; he was referring to our society, to the things that we had done, to the fact that we had raised the living standards of the poor and had actually tackled the problems of poverty by creating a National Health Service and a social security system that removed the fear of poverty.
  At the same time, if one went to Rome, Milan or Turin, one still saw people huddling in alleyways, out in the cold, because they had nowhere to shelter, and one saw the shanty towns. Therefore, he was contrasting the civilised behaviour of our Governments and people in dealing with those problems.
  The Budget has been described by some newspapers, by the Chancellor and by other Conservative Members as a radical Budget. I think that that is a misuse of the term "radical". It is not a radical Budget; it is a reactionary Budget. In some respects it puts us back in history, before the days of a genuine radical Budget, as far back as the radical Budget of Lloyd George. This Budget is not radical at all.
  If hon. Members do not believe me, perhaps they should read what was said in the Financial Times. I will not bore the House with the full editorial of the Financial Times, but I think it would be very good if hon. Members were to read it. It starts with the headline "A one-sided budget." The heading on another page is, "Impact On the Taxpayer," with the sub-heading "Dramatic gains for the rich". It says :
  "The 1988 Budget is one for the rich to a much greater extent than any of the Conservative Government's previous Budgets."
  Apparently, that is radical, as far as the Financial Times is concerned. The fact that it is the worst Budget we have had and puts more and more money into the pockets of the super-rich means that it is radical. I thought that the term "radical" meant that one was helping those at the lower end of the scale.
  When I hear all the talk about those who earn a great deal of money getting more money back or assistance initiatives of one kind or another, I want to ask one question : who really creates the wealth of this country? The wealth of this country is created by ordinary men and women at the point of production. The wealth comes from the application of their labour, together with the
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  machinery which they have produced over the years. The wealth is not being distributed to those at the lower end of the scale; the money is going to the top end of the scale. That is what is happening. The Budget is a redistributive Budget to the rich.
  I think that the Financial Times was absolutely right in stating :
  "The Thatcher Government swept to power in 1979 promising incentives and opportunity in place of old-fashioned egalitarianism."
  That point was made by the hon. Member for Cambridgeshire, South-West (Sir A. Grant). The Government do not say any more about the egalitarian society. They do not worry about the bottom end of the market; they do not concern themselves with the unfortunate. They only look after the rich. They are a Government of the rich for the rich, and nothing else.
  There is an old saying in our movement that goes back a long way : that the Conservative party does not preach the class war, it carries it out. The Government are certainly carrying it out in this Budget, not on the streets, not in a violent way, not with the jackboot, but in the form of the new Finance Bill this year, and they are redistributing the wealth of this country to those who are already doing very well under the system. That is the biggest criticism that we should make of the Government.
  The Chancellor of the Duchy of Lancaster spoke about unemployment coming down. It would be hilarious if it were not so serious. The "Financial Statement and Budget Report" states :
  "The objective of the Government's economic policy is to defeat inflation and to maintain a vigorous and enterprising economy, with sustained growth of output and employment."
  That sounds all right until one examines the Government's record over the years. The right hon. and learned Gentleman talked about unemployment falling recently. In my constituency in the course of a year it has gone down by approximately 800. I welcome that.
  We have heard much criticism of that terrible Labour Government. Conservative Members never seem to get off their seats and vote against their own Government when they do not agree with them. I have never known such a lily-livered lot of hon. Members on the Government Benches. When the Labour Government cut the amount to be spent on housing and cut the money for the National Health Service, Labour Members made it quite clear where they stood. We traipsed through the Lobbies and voted against the Government. On one occasion my Chief Whip said to me, "It would be very nice, Eric, if you actually voted with the Government on occasion." We did that because we disagreed. Compared with the present Government, the Labour Government were angels; they were wonderful people.
  When some of us were being critical of that Government from January 1979 until the election in May 1979, in Liverpool alone they reduced unemployment by over 2,000. They were actually bringing unemployment down when we lost the election. Now look at what has happened. Unemployment in Liverpool was 57,000 in May 1979 when the Government took office. Today, despite all that is being said about bringing unemployment down, unemployment in Liverpool—and remember that thousands of people have moved out seeking jobs elsewhere—is 89,366.
  Certainly, there has been a small decrease in unemployment over a period of time, but that is nothing. As long as the capitalist system is in existence there will be

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  booms and slumps. At the moment, we are in a mini boom. The Government can come along and say, "Look, we have modernised our industry. We have done a great job and really shown what can be done with our competitive capitalist system. Unemployment is going down and employment is going up." All I have to say is, "Yes, OK, that is expected to a certain degree, but it does not get away from the fundamental fact that as long as this system exists things will not really improve." If the Government continue to put private profit before the interests of the community or the interests of the people as a whole, and if they do not build the things that are required or put money into the NHS or the regions or invest in new industries, preferably publicly owned, the improvement will be an illusion. It will last for a time, but, when the crash comes, it will be even greater than anything we have experienced up to now. That is the reality.
  This is a kidology Budget; it is a deceiver's Budget. In fact, although it talks in terms of reducing taxation, the amount of taxation will be about the same as it was before. [HON. MEMBERS: "Oh!"] Not for you lot; you will be doing very well indeed.
  Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman must not bring me into this.
  Mr. Heffer: I apologise, Mr. Deputy Speaker. I would certainly not put you in the same category as Conservative Members. Having battled with you against the Conservative party on previous occasions, I know that that would be a gross insult to you and I would not wish to do that. I do not want to insult that lot either. I simply think that what I am saying is the truth. I am not insulting Conservative Members; I am simply telling the people of this country, through the House of Commons, what is happening.
  I will not make a long speech, but I wish to refer to one other point. The Government have hit their supporters. For example, the change in the rules concerning covenants will affect many people. What will happen to the lower middle classes who accept the terms of the Government and do something about financially supporting their young people through school and university? They will be worse off.
  This time—I am thankful about it—the Government have gone over the top. At the same time as they are handing out money to the super-rich and to the new millionaires who have grown up under this Government, they are putting the worst possible pressure on the people at the bottom end of the scale. After 1 April those people will suffer cuts. At the moment they do not understand what will happen. However, when they do understand, they will be hurt and will suffer tremendously. All people with a conscience will wake up to the fact that it is time that the Government were ended once and for all. They have three more years before going to the polls, but I predict that this time they will have had it. One Conservative Member boasted about them having won three general elections. However, they did not win the majority of votes. They are a minority Government. They may have more seats in the House of Commons, but they have never had the majority of votes. Next time people will understand what has happened to the Social Democratic party, the Liberal party and the new party. Their day has gone. [HON. MEMBERS: "Where are they?"] They have gone from here and they are gone politically.
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  Next time there will be a Labour Government, and I trust that the Labour Government will reverse what this Government have been doing. There will be another redistribution of wealth in this country, but it will be to the people who create the wealth—the working people. We will get back to the position that the Labour party has always advocated of creating a decent and civilised society.
  7.37 pm
  Mr. James Hill: It seems rather strange that my right hon. Friend the Chancellor is not receiving more congratulations this evening from the Opposition. After all, I can recall no Chancellor in this House who has spent more than £2·5 billion, cut taxes by £4 billion and cut borrowing, overseas borrowing in the main, by £7 billion. To balance those three things is the finest art of financial management.
  We are lucky to have my right hon. Friend as our Chancellor. I hope that there is no hesitation in all of us insisting that, certainly for the lifetime of this Parliament, he should stay as our Chancellor. Whatever the Opposition may say, he has got the formula and he is beginning to deliver the goods. I believe that the Budget will make the Conservative party, not the party in opposition, the party that will easily win the next general election.
  Mrs. Maria Fyfe: Will the hon. Gentleman give way?
  Mr. Hill: I am sorry but cannot give way. There are still several hon. Members who wish to take part in the debate.
  My right hon. Friend the Chancellor has created two tax bands. He has simplified the tax system and, whether one would call it radical or otherwise, he has reformed it. He has done that by many methods.
  This country has been notorious for its tax system for many years. At one time the top rate was 83 per cent. and there was even an extra little prod to take it up to 98 per cent. I remember saying to a Labour Chancellor of the Exchequer, when he was proposing a 2 per cent. wealth tax—I am sorry Mr. Deputy Speaker, but it was from a seated position — "Don't you realise that that is everything?" I began to wonder what would happen to the economy, to industry and to our progress if that happened.
  The hon. Member for Livingston (Mr. Cook) devoted almost his entire speech to the National Health Service, regardless of the fact that tonight is industry night, and I should like to say a few words about the NHS. First, all staff in the NHS will benefit from this Budget. The nurses' pay review is under way and I have already written to the Royal College of Nursing saying that I am anxious that they should get an extremely good review. And I hope that we shall carry forward a good training programme in the skills that we need in the nursing fraternity.
  Although NHS spending has risen substantially both in real terms and as a share of total public expenditure, it is clear that all is not well in the National Health Service, and I am pleased that there is to be a fundamental review. I hope that we shall all take part in the debate on that review to find out how to improve the NHS. I do not support the blinkered approach according to which only another £2 billion this year and perhaps another £2 billion next year will solve all the ills; that is not the problem with the National Health Service. It has been proved conclusively

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  over the past three of four months that there are radical faults connected with the NHS and that this review must be carried out.
  When I go further into the Chancellor's speech, I begin to understand what he means by raising the thresholds. This time he has taken another 750,000 people out of paying any income tax at all. There has not been a word about this from the Opposition, yet it must be an enormous benefit to those three quarters of a million people.
  Then there is the inheritance tax. My constituency is not a wealthy one and for the inheritance tax threshold to be raised from £90,000 to £110,000 is a real bonanza for a working-class person whose mother or father may have died. That is a first-class move.
  The Chancellor also dealt with one of the greatest anomalies in the tax system—the capital gains tax. Once again I quote my constituency. One of my constituents is a corner shop newsagent who lives over the shop. He has not been able to sell his business because he has been afraid that the capital gains tax would not leave him enough to buy a little home. The Chancellor has looked at that and when I get back to my constituency I shall expect to find a nice letter from that newsagent thanking me for what the Chancellor has done. Capital gains provide one way of getting the business community moving. How many people realise that, until the present Budget, it has been almost impossible for anyone to sell property, regardless of the fact that by selling that property he or she could expand the business in other directions?
  Another very good thing that the Chancellor has done, as Opposition Members who are worried about the homeless and residential accommodation must agree, is to enlarge the business expansion scheme to allow firms that are letting residential property to borrow from £0·5 million to £5 million to produce homes for rent. I cannot see that there can be any argument against the Chancellor on these scores.
  The only thing that I am a little disappointed about is that the Chancellor has increased the tax on petrol and diesel, because that will add to delivery charges and cut down some people's motoring. Apart from that, however, I can see no reason why he should have acted in any other way than he has.
  I represent a part of Southampton, which is well known as a seaport. We have gone through some very bad times and have had strikes that even Liverpool could not duplicate. At the end of the day we privatised and Associated British Ports is now in being. The port is flourishing. There is a great deal of building going on and a great deal of interest. These lower rates of tax will obviously encourage more investors, and my area wants investors as much as Liverpool does. This Budget will give the people in the business world confidence. It is not only a good Budget but the threshold of many more years of Conservative rule. It will give people in all regions, not just Southampton, confidence to invest and will mean a tremendous amount of business activity over the next year or two.
  Mr. Robert N. Wareing: I was interested in what the hon. Gentleman said about Liverpool, because my constituents live in the city of
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  Liverpool. Can he tell us what the strike record has been in the Liverpool docks during the last five years compared with the situation in the Southampton docks?
  Mr. Hill: I was talking about the period in the early 1980s, when everyone who knew the shipping world realised that there were not only strikes in Liverpool, Southampton and London but a general feeling that there was unrest in the ports and docks of our country. I am not saying that we are any better or any worse than Liverpool; I am merely pointing out that we went through a very bad spell. Casting one's mind back to the early 1980s, what investor would have invested in the port of Southampton? Even the shipping companies were avoiding us. So there has been a complete change of atmosphere. Confidence has returned, and this Budget will increase that confidence.
  My right hon. Friend the Chancellor has done a magnificent job and I hope that he will give us many more Budgets like this one. When we talk about taxation, we mean everyone's taxation, and the fact that some people, by paying less tax, will be able to employ more staff. [Interruption.] The hon. Member for Islington, South and Finsbury (Mr. Smith) disagrees. What does he think running a company is all about? If a company pays low tax it can expand and if an investor pays low tax he can help the company expand. This is a Budget that is going to get us off the ground almost rocket-propelled to a more prosperous future.
  7.48 pm
  Mr. John Battle: Government Members have suggested that tonight is "industry night", and I should like to suggest that the debate tonight should he about investment. [HoN. MEMBERS: "Hear, hear."] Hon. Gentlemen say, "Hear, hear," but we have not heard in this Budget proposals for investment in either the private or the public sector, which we would insist on and want to see.
  I want first to draw the attention of the House to the analysis in The Times today headed
  "Cuts give most benefit to the top 3·7%".
  That makes it absolutely clear that the Budget is for the richest. The Minister may well want to rebut those figures in detail and deny that the Budget benefits have gone to such a tiny group in our society, because for 3·7 per cent. to receive most of the benefits is targeting with a vengeance.
  The Financial Secretary to the Treasury (Mr. Norman Lamont): Is the hon. Gentleman aware that 70 per cent. of the cost of the Budget in the first year will go on the basic rate of tax, and to increase personal allowances? How does he square that with what he has just said?
  Mr. Battle: I will be coming to that. I am happy to answer the Minister. Most of the .commentators on the Budget have made it clear that this is an inegalitarian Budget for the rich. Yesterday, the Chancellor said, in an apparently throwaway line, that most of those who were complaining were rich men themselves, who could always send the money back. Remarks like that provoke real anger in my constituency, where I estimate that more than 30 per cent. of those I represent will not benefit at all from the Budget. They are still unemployed and they have to survive on benefits or are on low pay and still caught in the poverty trap. The Minister ought to take that into account in analysing the figures.

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  Even in television interviews, some Conservative Members seem to be saying that everyone will gain. Do they not realise that about 30 per cent. of people in our society earn too little to pay tax in the first place? Are they really unaware that 13 million live in families that are below the threshold for untaxed benefits? In other words, they will get not tax cuts at all.
  For 2 million people living on low incomes, the benefit cuts due on 11 April will cancel out any tax cuts. I hope that Conservative Members will condemn that. There must be real contempt on the Government Benches for Tory Members to condemn those who cannot pay tax and have no share in this new-found national wealth, which the Government have chosen to distribute to so few in our society.
  The Times leader on Monday 14 March announced:
  "The Chancellor … has the best opportunity for many years to make Britain's tax system both fairer and more efficient."
  The Treasury's press release says—we have heard this repeated often—that the Budget is a radical, reforming Budget. There has certainly been a clear shift of resources from the poor to the rich, but there has not been an attempt radically to restructure the relationship between taxation, national insurance contributions and benefits. Whereas, as a result of tax cuts, some people may not have to think twice before they buy a new microwave oven, others in our society will have to struggle to get the assistance even to buy a second-hand cooker. That is the reality when we compare the Budget with the budget for the poor that will come on 11 April.
  Here I am responding to the hon. Member for Southampton, Test (Mr. Hill), who asked why the Labour party was not applauding the tax cuts. In practice, although the reduction in the basic rate, coupled with a reduction in tax allowances, will float some families out of poverty, the interaction between family credit and housing benefit, which will be based on net income after 11 April, will mean that the income tax cuts for the poorest families will have little effect on the poverty trap or on their poverty. I pointed that out in the Consolidated Fund debate last Thursday, very late at night.
  When the Budget for the rich is compared to the budget that will take from the poor on 11 April, it will be as plain as day that there has been a massive redistribution of wealth from the poorest to the rich. Many of the poorest in our society will lose out altogether from the benefits changes, and they will feel cheated by the priorities of a Government who have set their course on targeting their resources directly on those who are least in need of them. People in such a position will feel rightly insulted at the Chancellor's remark that they might like to give the money back.
  Last Monday night, I heard the hon. Member for Northampton, North (Mr. Marlow) highlight the connection between the freezing of child benefits and the expected tax cuts. He said:
  "by combining these two measures, we are taking money from those with children and giving it to those without. That cannot make sense."—[Official Report, 14 March 1988; Vol. 129, c. 928.]
  I have to say, for once, that I absolutely agree with the hon. Gentleman, and perhaps the hon. Member for Test will agree with his hon. Friend as well.
  If the Minister's concern to improve incentives is genuine, it obviously does not reach out to many of the poorest in our society. Many of them face a marginal
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  adjustment of their tax rate. They will have to pay more taxes, as their rate of payment will be twice as high as that of the highest paid. The line in the poem by Samuel Johnson, "The Vanity of Human Wishes"—
  "Slow rises worth by poverty depress'd"—
  has never rung truer. The poor will have no chance, as they have been effectively priced out of the benefits of our society—as the Government heralds them. There has not been a radical change, or a reform in the tax system. There has been a crude operation of the ratchet mechanism, which gives proportionately the most to those with the most. That is why a nurse earning £6,250 a year will get £1·82 a week, whereas someone earning £65,000 a year will get £129 a week. The Chancellor has adjusted the ratchet by a few notches to direct even more income to the richest.
  What is notable about any ratchet mechanism is that it is set for the purpose of preventing reversible action: it is one-directional. In this case, the direction is from the poor to the rich. When the common treasury of our society is geared to funding the better-off at the expense of the poor, surely the ratchet mechanism should be changed and the tax, benefits and National Insurance system should be changed radically to ensure that the poor, albeit a minority of only 30 per cent. of our society, are not priced out of our society.
  Surely tackling that would have warranted a radical and reforming Budget. What happened on Tuesday was in effect a tampering with the tax system to gear it further towards the richest. The Government seem to fall back regularly now on the dictum of Bentham, that the greatest happiness of the greatest number is the foundation of our morals and legislation. That statement has a superficially democratic ring to it, but the problem is that such a dictum completely excludes minorities.
  Is the purpose of the Budget to price out the poor, not only excluding them from the benefits of the Budget but putting them out to live at the margins of our society in dehumanising poverty? They are not offered incentives but condemned to continuing hopelessness. How many people in Britain will be unable to get a break before the Government are prepared to write them off politically?
  In terms of the future, I shall refer briefly to the Budget proposals for housing, and the changes in capital gains and inheritance tax. The housing proposals make it apparent that not only is this not an investing Budget; it is a "cashing in on the assets" Budget. It withdraws mortgage tax interest relief on home improvement loans. That clearly is a case of throwing out the baby with the bath water.
  If the abuse of that system was that people were buying second-hand cars with the loans, why not tie such loans to specific home improvements? If the Chancellor wished to prevent luxury improvements, the relief could have been retained for basic improvements and essential repairs, such as the installation of damp-proof courses, inside bathrooms and toilets. Could we not have had the relief limited to the lower tax bands, on the ground that those in the higher tax bands already had a tax windfall? That would have been targeting on those in real need.
  It is interesting to note that the National Council for Home Improvements is amazed at the proposals for housing contained in the Budget. How will it ensure that basic improvement of the housing stock in Britain, which some could claim to be our country's greatest asset—

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  people's homes? Yet £29 billion has been estimated to be needed to improve and enhance the housing stock in the private sector alone.
  How can this Budget tackle that? How can this Budget be an investment Budget, in that context? What has the Budget to do with investing in housing as our key national asset? At a stroke, the Government-backed building society scheme which would enable key workers, such as nurses, to get together to buy a home is crossed out by the pen of the Budget. Do the Government propose to step back from that policy now?
  The hon. Member for Southampton, Test (Mr. Hill) referred to the business expansion scheme proposal. It is all of a piece with the Housing Bill which has been heralded as a means of extending the private rented sector. The proposals in the business expansion scheme for housing are the clearest signal yet of the Government's intention to give a direct subsidy to individual landlords. Yet what an outcry there is about public subsidies to local authorities. Why is a subsidy to an individual landlord right, and a subsidy to a public body wrong? The effect of the business expansion scheme proposal will be to give a tax advantage to the landlord. It will encourage the individual Rachman rather than the institutions, the building societies and the pension funds that the Minister himself said would become—it is his term—the new "social landlords" of Britain. Those very people will now be priced out.
  Mr. Ian Taylor: Does the hon. Member not realise that this piece of legislation is tied to assured tenancies, which will give him the comfort that he seems to lack?
  Mr. Battle: I am sure that the hon. Gentleman will be interested in the debate—I invite him to participate in it—on Report and Third Reading of the Housing Bill, which has just gone through Committee, a debate in which we will make it plain that the assurances in the Bill are no assurances at all. If these proposals for housing go through, how on earth can the Government claim, as they did in their manifesto proposals, that they will make Britain the best housed nation in Europe? That claim now rings hollow, because the Government have totally withdrawn from investment in housing.
  The selfish generation who presently rule us seem intent not only on personally pocketing the nation's oil benefits but even pocketing the income from taxes levied on the worst off. The Budget is socially divisive, economically unsound and morally unjust. The people of this country are already almost universally condemning it.
  8.1 pm
  Mr. Ray Whitney: The hon. Member for Leeds, West (Mr. Battle) complained about a lack of investment. He seems unaware that investment is scheduled next year to increase by 9 per cent. He seems not to understand that investment is made not only by Government but by companies and individuals. He complains about the social security budget. He seems unaware that in the lifetime of this Government social security spending has increased by something like 35 per cent. That has been made possible by the strength of the economy.
  Mr. Battle rose—
  Mr. Whitney: Yes, I know what the hon. Member is going to say—I will give way to the hon. Gentleman.
  Mr. Battle: I am grateful to the hon. Gentleman. Will he tell me whether the increase is due to the fact that those on benefit are now better off or to the fact that more people need benefits?
  Mr. Whitney: Both are correct. Benefits are higher in real terms and there are more people. That is to say, there are now nearly one million more elderly pensioners, and that is where more than half the social security budget goes.
  Mr. Jeremy Corbyn rose—
  Mr. Whitney: No, I will not give way. There are too many people wanting to speak.
  That is where £46 billion in the social security budget goes, and we are able to make those payments because of the strength of the economy.
  The hon. Gentleman also complained about Health Service spending and, if I have your permission, Madam. Deputy Speaker, I will return to that in a moment.
  I would like to join in the congratulations of nearly all my hon. Friends to my right hon. Friend the Chancellor and his colleagues in the Treasury on what they have achieved, both in the Budget and in the stewardship which they have carried out on the nation's behalf, which has created the wealth of this economy, and, in turn, enabled the Budget measures to be put into place.
  I have some concern about the inflationary tendencies which still exist in our society, and I believe that we must exercise careful monetary control in the months ahead against that danger, so that we can ensure that the steady growth of the economy, now into its eighth year, will be sustained. Of course, I stop a very long way short of the concerns expressed by my right hon. Friends the Member for Shropshire, North (Mr. Biffen) and the Member for Chesham and Amersham, (Sir I. Gilmour). I believe that my hon. Friend the Member for Bournemouth, West (Mr. Butterfill) did the House and the nation an excellent service by pointing out the significant differences, the beneficial differences, between the situation now and the situation in, for example, 1972–73. We could very well not be in the dangerous situation that my right hon. Friends fear—the positive signs greatly outweigh the others—but we must have regard for the inflationary pressures that are still present.
  Much has been said by Opposition Members today and earlier in the debate about the National Health Service. I would like to offer a few thoughts on that very important issue. What we have had of course, is no thinking, or no new thinking, on this subject from either the Labour party or our absent friends from the Liberal-and-whatever-their-other-names-are-now Benches. We have had a string of figures plucked out of the air. I know that some hon. Members on the Opposition Benches have displayed some sensitivity because their figures increase as it becomes clear that the money available for the Government is increasing. Not many weeks ago the official figure of the official Opposition for our extra requirements in the National Health Service was £200 million. The figure then went up to £500 million. Then we reached £1 billion and £1·5 billion. Today's figure seems to be £2 billion.
  This is, of course, typical of the Labour attitude. Labour Members have no thoughts at all to offer on any

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  area of our national life, least of all here. They have no new ideas and are wedded to the old ideas which have failed the British people. The Government are absolutely right to reject the Opposition's charges and their demands, not least because of the Government's own record of provision for the National Health Service. My right hon. Friends, however, are also right to make a review of the whole question of health care provision in this country. Such a review must be careful and thorough, but must not be delayed.
  Mr. Heffer: The hon. Gentleman says that we have no new ideas. Is he suggesting that the Conservative party, based on the views of Adam Smith, Samuel Smiles and Professor Hayek, is putting forward bright, modern ideas?
  Mr. Whitney: If the hon. Gentleman will bear with me, I will offer him some new ideas about the National Health Service. The tragedy of the hon. Gentleman, who is almost invariably the authentic voice of the Labour party—and we heard him in typical flow tonight—is that he speaks as the uncomprehending, out-of-date voice when all the Labour and socialist parties in the rest of the world have learned the lesson. The Labour parties of Australia and New Zealand and the socialist parties of France and West Germany understand that if one wishes to look after the poor and needy one can do so only if one has the resources, and that the way to produce resources is the way we have chosen to use, a way that is being copied by Labour and socialist parties in other parts of the world.
  Mrs. Fyfe rose—
  Mr. Whitney: I will give way for the last time, if the hon. Lady wishes—no, she does not.
  The Labour and socialist parties in these countries have new ideas—I see that the hon. Lady is rising again.
  Mrs. Fyfe: I thank the hon. Gentleman. So many hon. Members on the Government Benches have produced these figures on taxation from other countries described as socialist that I can only imagine that they have all been reading the one brief and very little else.
  Is this by any chance the Tory party's application to join the Socialist International, since they feel that their policies are to some extent in line with those of other, socialist Governments?
  Mr. Whitney: The hon. Lady showed diffidence in getting to her feet and I now understand why.
  I return to the essential point of introducing new thinking into the National Health Service. If the hon. Member for Liverpool, Walton (Mr. Heifer) has any new ideas, they would be most welcome, although I think its very unlikely that he has. It is essential that we look in a serious and open-minded way at our own historical experience of the provision of health care and that of other countries. When we look at the latter, there is no doubt that we shall find that a significant number of countries now provide a substantially higher standard of health care than our National Health Service does.
  The simplistic answer to that—the Pavlovian response that we are likely to receive from Opposition Members: the simplistic reaction of those who still have not woken up to the fact that the National Health Service, sadly, is not and never has been the envy of the world—is "Let us have another £1 billion, another £2 billion, another £3 billion."
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  Such an attitude reveals a total failure to understand the nature of the problem, which is that we were led down a cul-de-sac by Aneurin Bevan in 1946. He went against the thinking that had been put into health care by parties of all complexions and experts of all types: thinking enshrined in the 1944 White Paper on health introduced to the House by the then Conservative Health Minister, Henry Willink, on behalf of the wartime coalition. The aspirations of that White Paper were the same as all our aspirations. It called for a comprehensive Health Service, free at the point of delivery. But there is no doubt that there are alternative methods of achieving that laudable objective—not just the method that Aneurin Bevan foisted on the House and the country.
  Mr. Corbyn rose—
  Mr. Whitney: No, I am sorry. I shall not give way.
  Aneurin Bevan could, for instance, have built on the insurance-based system that had been in place since 1911. Our absent friends from the Liberal Benches referred last night to Lloyd George. The Lloyd George National Insurance Act 1911 gave the country—for a time—a structure that was progressive and highly beneficial. By 1945 or 1946, it would have provided the opportunity of advancing to an insurance-based system. Sadly, however, we did not go down that route, which was adopted by most countries that now provide their people with a higher level of health care. Bevan did not accept the views of the Labour party at the time, which may come as a surprise to some Opposition Members. The Labour party conference at the end of 1944, just before the general election, endorsed the Henry Willink White Paper objectives, and said that there should be regional or locally funded hospitals. That, too, was thrown out of the window by Bevan.
  The third resistance that Bevan overcame was that of Herbert Morrison, who warned against the Bevan plan. He said that it was overly centralised and overly bureaucratic, and who is to say that he was wrong? For 40 years, the health issue has been in the political bear garden that it has so notoriously occupied for the past few months. For 40 years, we have tried to meet the resource implications, and we have failed.
  Only a few months after Bevan launched his scheme—after he had, as he said, stuffed the doctors' mouths with gold—he was complaining to the late Hugh Gaitskell about what he described as cascades of medicine pouring down British throats. It took him by surprise, and year by year it has taken every Health Minister by surprise. Over the past 40 years, averaged out against inflation, spending on the Health Service has risen by 3·7 per cent. a year. Of course, it has risen much more in years when the Conservatives have been in charge of the economy than when Labour has been in charge of it. But I do not want to make this a party issue; it is a national issue, which we should now approach coolly and with knowledge that has been ignored.
  We have had 40 years of struggling with the structure. We have had 40 years of committees, Royal Commissions, inquiries and reorganisations, and it is still a mess. Every Minister who has been in the DHSS knows that it is a mess. Every Minister who has stood at that Dispatch Box seeking to answer for something that has been done, or riot been done, in some district general hospital knows that the

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  structure is ludicrous. We have created the ultimate in the sense of responsibility without power, and for 40 years we have tried to change that.
  The Government must understand that, after 40 years of attempted change and 40 years of increased funding, the system cannot be reformed; it must be changed. I hope that they will regard this as a new opportunity. They must recognise how different we are as a society from the society in which the Health Service was born; the society of 1946, when Britain was weak and worn out, not only from the war but from the inter-war years; a society accustomed to rationing and queues.
  We see that reflected now, as we always have, in the waiting lists of the Health Service. There have always been between half a million and three quarters of a million people on our waiting lists. That is virtually unknown in many advanced industrialised countries, countries with which we rightly like to compare ourselves. Those countries have different systems, and we must learn from them.
  I would offer my own solution, Madam Deputy Speaker, but I think that you would rule me out of order, as this is not a debate on the Health Service. Nevertheless, although we must fund properly the present structure and the nurses' pay review, I beg the Government to understand that there is no thinking on the Opposition Benches, and very little—sadly—among Health Service professionals. The Government must provide that thinking, and I assure them that it is available.
  I hope that in the near future the Government will produce a new Health Service, truly worthy of a modern Britain: a Britain that is economically sound, where the people can look after themselves and where we are now rich enough to ensure that those who need proper care can receive it.
  8.17 pm
  Mr. Gerald Bermingham: I listened with amazement to the speech of the hon. Member for Wycombe (Mr. Whitney), who, I know, served as a Minister for Health. He had no faith in the system, and that may well explain some of the problems of the system today. It may be why the medical practitioners' committee in my constituency, which is not overtly political, writes to tell me that orthopaedic consultancy appointments involve a wait of about 152 weeks. How am I to go home to St. Helens and explain that it will still be 152 weeks next week, next month and perhaps even next year?
  We are not a poor nation; we are a rich nation, as has been shown time and again. We have the skills—inventive, manufacturing and economic skills—to make the products and provide the services that the world wants. We have the skills and the manpower, but we waste them. Our priorities are wrong.
  When I examined the Budget, I asked myself, "What am I to say to the guy in Corporation street, St. Helens, on Saturday morning? How am I to explain the Budget? That man will want to know what it means for him." The average person in St. Helens does not earn much more than the average wage, and probably earns a bit less. What does it mean in terms of investment and what will it do for the town that I represent? The more that I considered that question, the more difficult I found it to answer.
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  In St. Helens we do not have vast numbers of people earning £30,000, £40,000 or £50,000 a year, so not many people will be affected by the top rate tax cuts. Many people earn £120 to £130 a week. I looked at their tax cuts, but they did not seem very high. Then I looked at what would happen to the not-so-well employed in my constituency, those on low wages or on benefits. I looked at the workers in the glass industry who have been made redundant because of modern technology. Over the last five years the coal mining industry in the area has shrunk from a work force of about 4,000 to 400 or 500. I looked at those who had been employed in the chemical industries that have moved away or closed down and the industries that have modernised and shed labour. Many small engineering companies, which fed off the large companies, have gone out of production. Their ex-employees are now in their 40s and 50s and are on benefit.
  What will the Budget mean to all those people? Much of what I have heard in the debate about what will happen on 11 April I need not repeat. We know that the benefit system will change and that for many people benefits will decrease. The Budget means little to those people because they are unemployed. As regards people on low pay, one newspaper quoted a saving of £90 a year in tax. I am not the world's best economist but I can do my arithmetic, and I know that if 5p is put on a gallon of petrol it will affect the people of St. Helens because we are landlocked and, as we do not make most of our consumer durables, they come in by road. That increase in the price of petrol will push up costs.
  I looked at how interest rates stood until today. I welcome the cut of half a per cent., but they need to go down much more. All those who understand anything about these matters would agree on that. Interest rates are still high.
  I examined other factors in the Budget. The Government have put 1p on a pint of beer and increased the price of cigarettes. Those are things that matter to ordinary working people. Effectively, the Government have put up the cost of living. That is a simple and straightforward fact. They have written off any benefit for those who are employed in St. Helens. As income tax has been reduced, it follows that mortgage repayments will go up slightly—depending on one's tax position. There is a balancing effect. But for many people in employment in St. Helens, there is no real benefit in this Budget.
  I looked at the Budget again from a completely different aspect—from the point of view of what is in it not for the citizens of St. Helens but for the economy. How will it affect the production of motor cars? We do not make them in St. Helens but we make the glass that goes into English motor cars. I asked myself how the Budget would affect the motor industry and found the answer was simple: it will hurt it. People asked me why I thought that, and I said that we have only to use our common sense. It is because the great perk of the motor industry, the car allowance, has been affected. Many people in the middle order band of industry and management will no longer want a company car because it will cost an extra £700, or whatever the figure is, per year. It will be more economical not to have a company car and to rely on the wife's car or the small family car.
  There is something quite fascinating about motor cars. When people buy a car for themselves they tend to buy the

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  cheapest foreign little model that they can find, but when fleets of cars are bought by companies they are English motor cars.
  Mr. David Shaw: No.
  Mr. Bermingham: The hon. Member says no, but he ought to do his research before he hops on the bandwagon. They buy Vauxhall, Ford—
  Mr. Shaw: Porsche.
  Mr. Bermingham: I know where I am, Madam Deputy Speaker, so I shall not say what the hon. Member is, but I will treat his remark with contempt. It is the sort of stupid remark that has led to the economy and our manufacturing industry being in the state that they are in.
  Mr. Corbyn: Have hon. Members seen the patriotism of the car park?
  Mr. Bermingham: My hon. Friend is right. That is an example of how the Government have not thought through what they are doing, and it is by such means that one can see the Budget for what it is. It will not induce people to invest in industry. I am no great lover of capital gains tax or of anything that goes with it, but even that aspect of the Budget is a disincentive to the small saver, the person who might have money out of this Budget—with which I fundamentally disagree—that he might want to invest. That is a disincentive because the Government have not thought it through.
  At the end of the day one asks: who will gain from the Budget? The answer: a tiny minority. The Government have made no secret of their sectional interest or their belief in a divided nation. They make no secret of the fact that they believe that those who have shall have more, and if someone can crawl over the guy ahead of him to get more, so be it, and the Government will support him. They make no secret of the concept of greed as their dominating feature. The Budget is a reflection of that. It says to the guys who have a lot, "Here you are; have a lot more." To the guy who has nothing, the Government say, "We are not really interested in you, and you will not get very much."
  The British people are a strange race. They will take it and take it, and then one day they will decide that they have had enough. This Budget displays blatant divisionism—that is about the best word that I can find. It divides the rich from the poor. The majority of our people—the poor, those on social welfare benefits or on low incomes—are ignored and will get nothing from the Budget. The nation has seen demonstrated in the Budget the triumph of greed over need, and the Government will pay for that.
  8.27 pm
  Mr. Jeremy Hanley: I shall be as brief as possible, although hon. Members might imagine that, as a chartered accountant, I find that there is a great deal in the Budget that I should like to speak about. I have a sneaking suspicion that the abolition at a stroke of the attraction of many tax havens in the world will mean that there might be a slight reduction in the income of many chartered accountants who give tax advice. I welcome that!
  Sir Humphrey Appleby, that well-known Secretary to the Cabinet, said that the three most unreliable things in public life were political memoirs, official denials and manifesto promises. After this Budget the list should be
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  reduced, at least for the Conservative party, because our manifesto commitment was to reduce income tax to 25 per cent. and my right hon. Friend the Chancellor has done that on this historic occasion. He said that it was a historic occasion and it certainly has been. It will be seen as a new dawn, not only this year by people in Britain, but by people throughout the world. It will be seen as a major watershed for investment in Britain. In one fell swoop, money, effort and talent will return to this country and those are the things that would have been exported because of our previous tax rates. No greater contribution could be made to Britain than a Budget that will retain our doctors, scientists, engineers, teachers, qualified people and, indeed, nurses.
  The change will be so deep-set that these tax cuts will be difficult for any other party in government to reverse. The tax changes are the successful culmination of nine years of prudent management of the economy and the background to them is clear. Only this week The Independent said that manufacturing output supports optimism. The article in The independent says, contrary lo the argument of the hon. Member for St. Helens, South (Mr. Bermingham):
  "Mr. Lawson's Budget forecast of continuing firm economic growth was supported earlier yesterday by figures showing that manufacturing output, led by the motor industry, is increasing at its fastest for 15 years."
  The article says that manufacturing output, even excluding North sea oil, is higher than it has been for many years. The Guardian, not usually quick to praise the Government, says:
  "The last economic indicators before the Budget confirm a picture of strong economic growth".
  The article in The Guardian concludes:
  "The sectors which have grown most rapidly comparing the latest three months … are metals … plastics, toys, jewellery and other manufacturing (up 11.5 per cent.)".
  In other words, it is an extremely healthy economy that the Chancellor has to play with, and he has earned that play.
  In this Budget we have given something to those who have provided the increased wealth needed to produce the increased expenditure from which all our people have benefited. Even socialist Australia and New Zealand have seen the light, but then they have at least had the responsibility for running an economy in the modern world—something that Opposition Members have not done for many, many years, thank goodness.
  We should remember that almost every aspect of government is now receiving more in real terms than ever before. In the National Health Service, pensions, the police, even in Scotland, Northern Ireland and Wales, more money is spent by this Government in real terms than has ever been spent before. Only in housing and energy do we spend less and that is because the expenditure is matched by increased private sector expenditure. All that expenditure is paid for by increased growth. Let us consider increased expenditure on the Health Service. When the Government came to power we spent £8 billion on the National Health Service whereas the sum is now nearly £24 billion—an increase of £16 billion. That is nearly five times as much as the total tax cuts in this Budget.
  All that the Labour party can say is that the Chancellor did not use the Budget to make an Autumn Statement. Either Opposition Members have short memories or it is gross incompetence. It is the wrong time of year to talk about expenditure. I sometimes wish that it was called not

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  the Budget but the income debate and that the Autumn Statement was called the expenditure debate. I wish people understood when is the time to talk about which. It is no good blaming the Chancellor for not taking enough wickets or scoring enough runs when he is meant to be playing football.
  Our economy is now so strong that we have increased the take through reducing tax rates since 1978–79. The total tax taken in 1978–79 at today's prices was nearly £119 billion. This year it is £156 billion. In other words, we have taken nearly one third more through cutting tax rates. In 1987– 88, we shall spend £46 billion on social security and in 1988–89 it is estimated that we shall spend £48·5 billion. Therefore, at the same time as announcing a cut worth £1 billion to top taxpayers we have announced an increase of £2·5 billion in social security, which will benefit the least well off. I think that that is perfectly fair. That does not represent the reduction that the Opposition claim. But then Opposition Members have always preferred the cynical gesture to the genuine solution.
  I have every confidence that, because of the healthy economy and because of the extra boost given, even more will be spent on the National Health Service and all the Government's responsibilities. I believe that as tax rates fall the tax collected increases. One of the simplest examples that one can give is of the supermarket manager who cuts prices not to sell less but to sell more. In the United States, the top rate is between 33 per cent. and 40 per cent. when federal and state taxes are taken into account. For the first time there, the majority of millionaires are self-employed people. Those are the people who create the jobs. They create sub-contracting and enhance the local economy. That is the sort of success that flows from wealth.
  If Opposition Members want to soak the rich, I remind them that in 1978–79, the last tax year for which they were responsible, the top 5 per cent. of taxpayers paid 24 per cent. of our total revenue, whereas in 1987–88—before the present tax changes—that top 5 per cent. contributed 29 per cent. of revenues. Even after the tax reductions, the top 5 per cent. will pay 27 per cent. of the revenue. In other words, the top 5 per cent. have increased their contribution to the total taxes taken by 3 per cent. In volume terms, the top 5 per cent. now pay one third more than they did in 1978–79, so the Opposition should not complain.
  It is difficult to forecast the actual rise in revenues. In America, it is said that revenues may now be falling, but that is because the American economy is weaker than ours. Ten years ago we were the sick man of Europe. The Labour party had had to have the International Monetary Fund brought in to look after its affairs. Even three years ago, in 1985, the Opposition tabled a censure motion because the exchange rate was $1·04 to the pound. Opposition Members now complain about the strength of the pound. Opposition Members will remember Westland and Land Rover in 1985 and 1986. People were saying that our economy was crippled. We should remember that at that time British companies in America were buying companies the size of Westland every week and companies the size of Land Rover every fortnight. Now, thanks to the strength of our economy, we are buying companies the size of Westland every other day and companies the size of Land Rover every week. If one asks the man in the street,
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  "Does America own more of Britain than Britain owns of America?", he will say that the Americans own more of British industry. That is not true. British companies now own 25 per cent. more of American companies than American companies own of British companies. Such is the strength of our economy. Alas, next year, following the American general election, our tax rates will probably be lower than those in America. We can then expect a rapid repatriation of those who have fled our shores for America. It will be a strong incentive, too, for Americans to come here.
  The Chancellor's achievement is unique in the world. He has cut taxes and produced a balanced Budget. He has got rid of anomalies and of unfairnesses and discrimination between men and women. He has created a simpler system. I must admit that, for this Chancellor, any other Budget must be an anti-climax but I hope that he will see through his pledge to cut the bottom rate to 20 per cent.
  The problems that might flow from the Budget could be an overheated economy because of the extra money pumped into the system, a rush of imports, a balance of payments problem or an increase in interest rates. Those are the possible problems listed last night at an excellent Budget briefing run by Ernst and Whinney. In fact, interest rates have fallen today and they look as though they will fall further. Furthermore, only £4 billion has been injected into the economy and I do not think that that is inflationary against the total of £160 billion of tax; 2·5 per cent. is not enough to create the rush of imports that some fear. This is not a spending Budget so much as a Budget that will encourage saving and investment. Being a prudent and modest Budget, it should encourage prudence and modesty among those who have benefited from it. I do not believe that consumer spending will go through the roof. I regret that there is no tax on credit card spending, because that would reduce debt. I would also prefer it if the Chancellor did not use the blunt instrument of interest rates to manage the economy, although, as we have seen, they have fallen.
  There are four ways in which the Chancellor could have done a tiny bit better. This may seem like carping after so much success. I think that the top limit on mortgages should have been raised. I represent Richmond and Barnes where house prices are astronomical—unfairly so to many young people. Most young people in dormitory areas of London need to share houses to get a foot on the property ladder. In areas such as the south-east, the increase from £30,000 would not be before time; it should increase to £60,000 or even £100,000, particularly for shared accommodation. I fear accommodation poses problems for nurses. Such a provision would also help with the right to buy. I would have pegged the mortgage rate at the standard rate, but because of the reduced top rates perhaps that is not necessary. Before the Budget, I stated openly that I hoped that the national insurance top limit would increase. I believe that there was justice in the case for that increase. I now understand why the Chancellor did not make such an increase. The generous reductions in all rates of tax have rendered it not only unnecessary but undesirable. Had it been increased beyond the 9 per cent. limit, middle and lower managers would be paying more rather than less tax in total as a result of the Budget, which would have been unjust.
  I am sorry that there are no research and development incentives. I had hoped for more in that respect, but other incentives to industry are greatly improved.

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  Does the Budget answer the needs of the nation? It certainly answers the needs of the taxpayer. Let us never forget that we are not putting money into people's pockets—we are taking less out. That is an important distinction. The Budget also helps non-taxpayers by creating an even healthier economy. As a result of the Budget, a further 750,000 people will not pay tax at all. The Opposition's envy—a deadly sin—is sickeningly destructive and exploiting it shows up the negativity for which the Labour party is famous, dragging down rather than pulling up helpless people and ignoring the facts and the history of this Government. In terms of meeting the needs of the nation, the Budget deserves a resounding welcome. As for our position in the world, the Budget puts us in the forefront with an exciting economy which should bring people here to trade from all over the world, to the benefit of all our people.
  8.41 pm
  Mr. Andrew Welsh: The hon. Member for Richmond and Barnes (Mr. Hanley) produced various theories and some statistics, but I wish that I could impart to him even a glimmer of knowledge of what life is really like for large sections of the population. He clearly fails to understand the reality of trying to scrape together some quality of life in parts of the north of England, Wales and Scotland. I shall be brief and stick strictly to the points that I wish to make so as to allow other hon. Members to take part in the debate.
  From the Scottish point of view, the Budget is a great disappointment. It is a Budget for the south-east of England—designed, conceived and executed from the viewpoint of the Government's stronghold. As such, it is a disappointment and a wasted opportunity for Scotland. There is nothing in the proposals to hold out much hope for the regeneration of Scottish industry and commerce and nothing to tackle the fundamental social problems of Scotland, such as housing and unemployment, or to wage war on the poverty that afflicts our nation. On the contrary, the Budget gives massive tax handouts to the rich while totally ignoring the imposition of the poll tax on the poor and the needs of the National Health Service. It is a Budget for London—
  Mr. Corbyn: Not all of London.
  Mr. Welsh: It is a Budget for parts of London—for the money market and the rich sectors of the south-east of England economy. Scotland and other areas need a Budget to tackle poverty and promote social justice and an all-out drive to create new jobs and industrial regeneration. We need investment in health, housing and education, but the Budget fails to deliver it.
  There is an air of unreality about this Budget. The London Evening Standard carries stories of individuals who are gaining more than £5,000 per day as a result of the Budget while one in three of the Scottish population lives on or below the poverty line. How can the Minister talk of a one-country economy when tax handouts of that magnitude are made to the rich while many people—if they are employed at all—probably will not earn that amount of money in a whole year? The Budget increases inequality and ignores the economic reality facing large sections of the population.
  The so-called Thatcher economic miracle does not apply to oil-rich Scotland. Throughout 1987 and into 1988
  1302
  we have been told how well our economy is doing. Yet seasonally adjusted unemployment in Scotland has fallen by only 1·6 per cent.—from 349,300, or 14·1 per cent., in January 1987 to 306,200, or 12·5 per cent., in January this year, whereas the United Kingdom rate fell from 11·2 per cent. to 9·2 per cent. The unemployment rate in Scotland is still 35 per cent. higher than the British average. Is that what the Government regard as doing well?
  The index of industrial production in Scotland—the best available measure of output—in the second quarter of 1987 was only 0·1 per cent. higher than the average for 1980, seven years earlier, while in the United Kingdom as a whole it had risen by 11·6 per cent. The Prime Minister's economic miracle does not bear close inspection. For Scotland it represents nine years of wasted opportunity and more than £30 billion in oil revenue poured down the drain in support of unemployment levels unknown since the 1930s. Community programmes, youth training schemes, part-time work and a host of definitional niceties have been used to underestimate the unemployment figures and to hide the fact that almost a quarter of those fit and able to work in Scotland are without full-time employment. According to the latest figures from the Scottish Council (Development and Industry), Scottish manufactured export trade showed an unprecedented decline in 1986, completely out of line with the United Kingdom trend. The Government are now heaping on extra petrol taxes which will directly harm the rural areas and other parts of the Scottish economy.
  I have outlined briefly some of the problems that a true Scottish Budget would tackle in the knowledge that the SNP can offer alternative proposals which have been mapped out and costed in detail and which I commend to the Chancellor. To meet Scottish needs, our proposals would include a massive programme of public works and industrial investment to create 290,000 new jobs in five years. We would propose expenditure of £200 million on house modernisation and insulation, an increase in basic pensions to £60 per week for a single person and £90 per week for a married couple, bringing us into line with European standards and well above the pittance currently offered in the United Kingdom. We would propose a cold climate allowance of £7 per week throughout the winter and a 10 per cent. increase in social security benefits rather than the cuts offered by the Government. We would inject £350 million extra resources into the National Health Service in Scotland. We would propose controls on takeovers of Scottish companies. We would set up a Scottish oil fund for industrial research and investment, a Scottish export unit to boost sales of goods and services, and extended powers and budgets for the Scottish Development Agency and the Highlands and Islands Development Board.
  Those are just a few of the measures necessary for Scotland and they could easily be afforded within a Scottish Budget. Our economists calculate that a Scottish Treasury would have a pre-Budget surplus for 1988–89 of £2·2 billion. The total gross cost of our Budget package would be £2·7 billion. As the net cost would be substantially lower due to increased tax receipts and fewer benefit payments as a result of reduced unemployment, the Scottish Treasury would be left with a modest surplus. We look in vain for such positive proposals for Scotland in the Chancellor's Budget, which fails to provide any such policies and completely fails the Scottish people.
  8.48 pm
  Mr. David Shaw: I welcome the Budget because throughout the 1970s—the start of my working career—I witnessed an economy which went from stop-start to start-stop. The 1970s began with economic growth, but ended in decline. Towards the end of the 1970s, world opinion of us was at an all-time low. Far worse than that, however, was the attitude of the Labour Government towards the Health Service in 1976. The National Health Service suffered badly under Labour, but last November my right hon. Friend the Chancellor announced that £1·1 billion more would be put into it next year.
  Many things are wrong with the National Health Service. There are no satisfactory performance indicators by which to monitor its efficiency. Numbers of administration staff are still rising; on figures that I have seen, it appears that there are more administrators in the National Health Service than in the health service of the United States. I welcome the Government's review, therefore. The Government's approach has to do with value for money, not blank cheques.
  My right hon. Friend the Chancellor gave us all good news about the economy in his Budget speech. He said, among other things, that manufacturing exports were up by 8·5 per cent. and that unit labour costs hardly rose last year, which shows that there is more efficiency and success in the economy.
  Mr. Battle rose—
  Mr. Shaw: I shall not give way. There are others wishing to speak.
  The figures that were announced today should no longer be known as the unemployment figures but as the employment and job vacancy figures. In February alone, 86,000 more jobs were created. There are now 260,000 registered vacancies, which—it is well known—are only a third of total vacancies.
  I was delighted with my right hon. Friend's other announcements of success. He said that we had had six years of sustained economic growth, achieved through tax cuts. We have had six years of sustained increases in public expenditure and of real increases in National Health Service funding. That could only come about through managing the economy successfully. However, I suggest to the Minister that the Government have had one economic failure—they have not yet convinced the Opposition that there is no such thing as a free lunch.
  Mr. Corbyn: The hon. Gentleman has them all the time.
  Mr. Shaw: The Budget was about increasing personal responsibility and putting people's incomes under their own control. It was also about home and share ownership. I am delighted that there are now 9 million shareholders in the country, a number which the Government proposals should increase. The benefits of privatisation are not only to widen ownership but to increase the profits being earned by the privatised companies to levels higher than they earned in the public sector. As a result of those profits, more taxes are paid to the Exchequer than when the companies were in the public sector. The privatised companies are also better at providing consumer services than they ever were in the public sector.
  Budgets are about income and how much the Government take away in taxation. I welcome the proposals on the taxation treatment of wives. For more
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  than 200 years that treatment has been unfair. For much of that time the tax on marriage has been excessive. When I got married, I was charged more by the Inland Revenue on my marriage than my wife's wedding ring cost.
  There are lower taxes for everyone in the Budget. Some will ask, "Why not more lower taxes?" About 750,000 people have been removed from tax altogether and some us might ask, "Why not a million?" The staff nurse who has had a 2·5 per cent. net pay increase as a result of tax deductions is a case in point. Some will ask why she should not be given a 3 per cent. reduction. I want more tax reductions.
  As for the famous business man that almost every Labour spokesman has mentioned, one must ask why the Opposition hate success. Why do Opposition Members hate the people who create jobs and who earn money overseas and bring it back to this country? Why do they hate successful business men who manage companies here and abroad and who bring profits and dividends to this country? The Opposition hate, and will always speak against, success. We should not lose sight of the massive contribution that the higher rate taxpayers have made to the country under the Government. When in government, the Labour party tried to squeeze them until the pips squeaked, but they raised only £800 million from the higher rate taxpayers. Under this Government, higher rate taxpayers pay £3,800 million a year which, even after the reduction of £1 billion, will still be about three times as much as Labour managed to get from them by the end of their years in office. I believe that next year the higher rate taxpayers will still be paying as much as this year because, with the tax cuts, they will be earning more, going in for fewer tax avoidance schemes, putting less money into pension plans and more into creating jobs and new businesses.
  We are going to remove many of the technical requirements that have been holding some share option schemes back, but they have not exactly held back share ownership in this country: 1,500,000 people are now in such schemes. We now have a true capital-owning democracy. I am pleased to say that some of those 1·5 million people are in my constituency. Many secretaries, typists and shop floor workers there are part of share option schemes and have done well out of them.
  I was also delighted by the abolition of yet another tax—capital duty. I have been involved for some time in my business career with helping to raise equity finance for companies and businesses, and capital duty was a considerable expense that hit those companies' receipts right at the start of their new expansion phases. It came in just as the equity finance was being raised, and has proved extremely disadvantageous over the years.
  I wish to draw attention to the business expansion scheme, in which I worked for some time raising money for very small businesses. It has been a success, not as a means of helping the rich to avoid taxes as Opposition Members say—according to one report, more than 20 per cent. of the people who invest in the business expansion scheme pay tax at the standard rate—but in helping 2,200 small businesses, many of them having raised less than £100,000.
  However, there has been one thing wrong with the business expansion scheme. Indeed, four years ago I brought this to the attention of my right hon. Friend, who was then a Treasury Minister and is now the Secretary of State for Social Services. In a paper which is no doubt

  1305
  gathering dust in the Treasury, but which perhaps might have been brought out recently, I pointed out that we should cap the business expansion scheme. I am delighted that the Government are now to do so at £500,000 for any one company.
  However, I draw the attention of my hon. Friend the Economic Secretary to the Treasury to articles in today's newspapers and to representations that have been made to me that that policy, as announced, could be unfair. There are several prospectuses out at the moment for the purpose of raising money under the business expansion scheme. The case of one small company has been brought to my attention. Although only about £600,000 is being raised to help expand the business and to create more jobs, that company may lose the whole of the money subscribed for shares because it may not he able to close the issue. That company has had to spend between £70,000 and £100,000 in legal and advisory fees, which will be lost if the issue cannot be closed. The problem of costs is caused by the Financial Services Act 1986, which is correct and proper in protecting shareholders but which has made more expensive the legal and professional advice that is required for the issue of prospectuses. I hope that my hon. Friend will be able to consider that, if the date of the issue of a prospectus is after Budget day, then that date could be the closing date for investment under the business expansion scheme being limited to £500,000 or so. I would advise him that some relief is needed on this point.
  I realise that time is getting on and conclude by saying that I welcome the Budget and the tax changes that have been made. This Budget is about increasing the number of jobs in our economy and the prosperity of individuals and businesses. I believe that the nation will be a lot better off with the many years of sustained economic growth that lie ahead of us because of this Budget.
  9 pm
  Mr. Robert N. Wareing: The hon. Member for Dover (Mr. Shaw) has just repeated many of the myths that we have heard since the beginning of this afternoon's debate. When I listened to the Chancellor of the Duchy who opened the debate, I was troubled not so much by what he said about the so-called buoyancy of the British economy, but by whether he actually believed it. If he is only saying those things, he is a fool, but if he really believes that the British economy is doing as well as he argues, he is more than a fool—he is a dangerous man and we shall have to take cognisance of that fact.
  The tax cuts that have been made in the Budget are not simply the way in which the rich will be fed from the tables of the needy, but the way in which the consumer boom will receive a boost. In the context of the British economy at present, that consumer boom means an increase in this country's trade deficit.
  It was interesting to hear the hon. Member for Dover talk about the percentage increase in exports. However, he never mentioned the percentage increase in imports, which is the true guide to whether the economy is moving in the right direction. Therefore, let us look not at what the Labour party says about exports and imports, but at the Treasury's forecast. The Treasury forecasts an increase of 3·5 per cent. in exports next year, but it also forecasts a 7 per cent. rise next year in imports. Again, according to the Treasury, that will lead to a manufacturing trade deficit of £8·5 billion next year.
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  What would be the deficit in our balance of payments next year if we did not have North sea oil? There has not been a single mention in any of the Tory speeches this afternoon—or indeed yesterday—about North sea oil. When Conservative Members talk about the then Government running to the International Monetary Fund in 1976, they should ask where this Government would be running if they had not inherited the bonanza of North sea oil. Britain is the only oil-rich country in the European Economic Community.
  This afternoon the Minister talked about the top rates of income tax and gloried in the fact that, in giving largesse to the richest people in this country, the top rates have been reduced to 40 per cent. He is happy about that and tried to snipe at the Labour party by saying that Labour Governments in New Zealand and Australia have relatively low rates of taxation. However, he has forgotten that in capitalist countries such as Japan the top rate of income tax is 60 per cent. In both Holland and Belgium the top rates are 72 per cent. In Germany the top rate is 56 per cent. —nearly as high as it was in this country before the Government came along with their giveaway Budget to the rich. In France, the figure is 58 per cent. and in Sweden, which has a Labour Government, it is 77 per cent. The Government might say that the figure in the United States is as low as 33 per cent., but they forget that United States federal Government taxation is supplemented by taxes from the state and local authorities. The Minister had the gall to refer to workers paying themselves too much too quickly, yet he is a member of a Government who are giving large sums of unearned income to many rich people, as my hon. Friend the Member for Livingston (Mr. Cook) illustrated earlier.
  In his Budget speech, the Chancellor of the Exchequer said:
  "During the 1960s and the 1970s, Britain's growth rate was the lowest of all the major European economies. During the 1980s, our growth rate has been the highest of all the major European economies."—[01ficial Report, 15 March 1988; Vol. 129, c. 995.]
  The true test of whether a country is building an economy for the future is whether it is modernising its equipment, building factories and providing the most up-to-date equipment in those factories. On 2 March, I asked the Chancellor of the Duchy of Lancaster about Britain's standing in comparison with OECD countries in respect of the proportion of gross domestic product spent on fixed investment. He gave me a comparison between this country and OECD countries. In Australia, Austria, Canada, Denmark, Finland, France, West Germany, Iceland, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Turkey and the United States—that is 20 out of the 24 OECD countries—fixed capital investment in relation to GDP is greater than in the United Kingdom. The Government have nothing to be proud of there.
  That proportion is also reflected in the fact that the United Kingdom spends the lowest percentage of GDP on health of all EEC countries, with the exception of Greece, Spain and Portugal. The Government claim that there has been a 30 per cent. real increase in health spending since 1979, but that takes no account of the fact that pay and price levels have risen faster in the Health Service than in the economy as a whole. It takes no account of the need

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  for NHS resources to grow in real terms each year to keep track of the rising number of elderly people and advances in medical technology.
  Even the former Minister for Health, the right hon. Member for Brentford and Isleworth (Sir B. Hayhoe), has said that NHS funding needs to rise by at least 2 per cent. every year to keep up with prices. That has occurred only once since 1979, in 1981–82. The Government insist on keeping expenditure low in the essential services. The Minister said that Labour Governments would have contributed to local authority expenditure as if there were no tomorrow, suggesting that local authority expenditure was of no importance. Without investment in our infrastructure — roads, schools, the Health Service, the lighting of our streets and the provision of homes — there is no modern civilised economy. Those who think that public expenditure is a waste should look to the private contractors who feed off the contracts of local authorities. Ask them how they have suffered from the cuts in local authority expenditure.
  This is a rich man's Budget. It was Benjamin Disraeli who once said that the Conservative party is the party of the rich. He also said, as Conservative Members in their speeches have attempted to confirm tonight, that the Conservative party is an organised hypocrisy.
  9.10 pm
  Mr. Ian Taylor: I am delighted to catch your eye, Madam Deputy Speaker, and I promise that I shall take no more time than a long wink.
  The Budget is to be welcomed. I have sat through many Labour Members' speeches. They seem to forget that for many years the great economic objective of many of us was to see a balanced Budget which at the same time released resources to individuals to spend as they would wish.
  This is a balanced Budget which gives us tax reform and simplification, for which many of us have been searching for many years. It removes the worst excesses of tax as a weapon of so-called enforced egalitarianism.
  No longer can it be regarded as immoral to have unearned income from capital or savings as opposed to the so-called superiority of earned income. Many people who are dismissed as being rich by Labour Members are ordinary working people who have scrimped and saved to achieve an unearned income, only to find that the Labour party points a finger at them as if they had descended into some deep immorality.
  The Labour party's thinking on that issue has stultified since the 1970s. It is the policy of envy to call rich anybody who has worked hard and thriftily.
  The Conservative party has given people an opportunity. It is we who have enabled them to buy their council houses and to buy shares so that there are now as many shareholders as there are members of trade unions.
  The Budget has kept the level of taxation as a stable percentage of the gross domestic product but made radical shifts in the rates that are payable. It has taken 750,000 people out of tax altogether. That is not something of which we need be at all ashamed.
  There are one or two anomalies in the Budget which I should like my right hon. and hon. Friends on the Treasury Bench to consider, including the fact that there now seems to be a bias against incorporation. If one adds up the national insurance paid by employers and
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  employees, it comes to 19·45 per cent., payable by companies which are owned by their directors. The self-employed pay only a 6·3 per cent. rate. I do not have time to amplify the implications this evening, but I hope that it will be looked into.
  In broad terms, the Budget gives us all an opportunity to look forward to a sustainable growth in the economy, the creation of jobs and a thriving Britain.
  9.13 pm
  Mr. Chris Smith: Our debates yesterday and today have revealed the Budget to be fundamentally uncaring, divisive, inegalitarian and based on an utterly misplaced sense of priorities.
  My hon. Friends the Members for Oxford, East (Mr. Smith), for Liverpool, Walton (Mr. Heffer), for Leeds, West (Mr. Battle), for St. Helens, South (Mr. Bermingham) and for Liverpool, West Derby (Mr. Wareing) have made a powerful case for the uncaring nature of the Budget that the Chancellor introduced on Tuesday.
  Conservative Members have stressed the prudence with which the Chancellor has approached his task. "Prudence" has been a favourite word this week. It was used frequently by the Chancellor. It was used again yesterday by the Chief Secretary and it was used by the Financial Secretary to the Treasury. Doubtless it will be used by the Economic Secretary when he replies to the debate.
  How should we rate the Chancellor for prudence? What would a prudent Chancellor, faced with the economic circumstances of this country, have done in a prudent Budget? He would have looked, first, at the worsening balance of payments. The Government predict a deficit of £4 billion on our balance of payments next year. The scale and trend of the deficit ought to be worrying the Government, because the trend is in the wrong direction.
  The Chancellor, in considering the deficit, should have decided to make his Budget choices in ways best designed to encourage and stimulate exports, not to suck in imports; yet he has done precisely the opposite. The Budget has been designed to fuel personal consumption of durables, which is the highest import content of economic activity.
  The Chancellor should have looked at interest rates. He should have given a much clearer signal than he gave today to the markets, first, about the need for a stable but competitive exchange rate, which at the moment is desperately uncompetitive; and, secondly, about a substantial reduction in interest rates, because we have one of the highest real interest rates, in real terms, in the developed world. The Chancellor today has gone some way towards restoring his credibility and a better policy direction, but it is too late and the reduction is not sufficient. We must have lower interest rates and a more stable and competitive exchange rate to improve the competitive edge for business and trade.
  If the Chancellor were being prudent, he would have considered the value of United Kingdom-owned assets abroad. The Government have given the game away at page 22, paragraph 3·29, of the Red Book:
  "The value of the UK's stock of net overseas assets is provisionally estimated to have been about £90 billion at the end of 1987, some £20 billion down on end-1986."
  The reduction in value is due to the exchange rate with the dollar and to the fall in the equities market last October. The Chancellor ought to have thought carefully

  1309
  about avoiding actions which would lead inevitably to the accumulation of further assets abroad. The combination of available liquid resources for the rich and an overvalued pound is guaranteed to do precisely that.
  The Chancellor should have looked also at the disturbing level of growth in personal consumer credit and he would have noticed that from 1979 to 1986 mortgage borrowing rose as a proportion of GDP from 3·2 per cent. to 7·1 per cent., and personal credit other than mortgages rose from 7·3 per cent. of GDP to 13·5 per cent. of GDP. If the right hon. Member for Shropshire, North (Mr. Biffen) is worried about the economy overheating in the south and south-east, he should look carefully at the figures for personal debt and personal savings. Personal savings are at their lowest since 1959, which is indicative of the current real state of the British economy. Instead of a Budget for personal spending, largely by the rich, a prudent Chancellor would have gone for a Budget spending money on investment. He did not do that, so I fear that the Chancellor has not done terribly well by the prudency test.
  What other tests should we apply to test the Chancellor? Let us be charitable to him, to start with, and consider him in his new guise as an environmentalist. He has done one or two sensible things in the Budget for the environment. For example, the differential way in which he has approached lead-free petrol is much to be welcomed. We strongly applaud that. But what steps are the Government taking to make it worth while for the manufacture or conversion of vehicles which take lead-free petrol?
  The Chancellor has also taken one or two sensible steps in regard to the taxation regime for commercial forestry. We welcome the removal of tax relief on planting and maintenance. I note that he has also removed taxation on sale, but, of course, hardly anyone paid tax on sale anyway, because it was easy to avoid. The introduction of grants for small-scale planting, especially of broadleaves and deciduous trees, is also to be welcomed, and the guidelines issued for England and Wales by the Forestry Commission are indeed worth while.
  However, we are entitled to ask further questions. First, what is the Scottish Office up to? The Scottish Office has yet to issue the same sensible guidelines for Scotland that the Forestry Commission has issued for England and Wales. In Scotland, the principal environmental concern about forestry planting being damaging to the environment is at its height. We are also entitled to ask about the 100,000 hectares of land which currently have forestry approval, but which have not yet been planted. That land includes four environmentally sensitive sites totalling 2,000 hectares in the flow country in the far north of Scotland. We do not have the details of the Chancellor's changes, so we do not know whether his changes will still permit those areas to be planted under the previous taxation regime, as that would be environmentally damaging.
  We are also entitled to ask why the Government have not taken the most environmentally sensible step in relation to forestry, which is to bring maintenance within the planning system. Perhaps "Mr. Lawson the environmentalist" deserves one and a half or two cheers.
  What then of "Mr. Lawson the feminist"? The Chancellor, in his Budget provisions, has made much of the relationship between a husband and wife. In particular, he brought in, from the introduction which he gave them,
  1310
  what sounded to be extremely valuable proposals. The principle of independent taxation for a husband and wife and the end of aggregation and the disgracefully demeaning process whereby a wife's income automatically counts as her husband's income is very much to be welcomed. If the Chancellor's scheme as proposed in the Budget actually did all that, we would be applauding it to the echo, but of course his scheme does not really do that at all.
  The present system operates the married man's allowance which is worth something like 0·6 the ordinary personal allowance. If the wile goes out to work, there is the earned income allowance to be added to that, so that 2·6 times the personal allowance is made available to the husband.
  Under the Chancellor's new scheme the husband will have one personal allowance, the wife will have one personal allowance, and there will be a floating married couple's allowance worth 0·6 of a single allowance. That married couple's allowance will go, in the first instance, to the man. The press handout from the Inland Revenue gives the game away. It says:
  "The married couple's allowance will go in the first instance to the husband, so he will see no reduction in his tax allowances as a result of the change to the new system. But if he does not have enough income to make full use of the allowance he will be able to transfer any unused portion to his wife."
  The transfer of that allowance to the wife will take place only if the husband's income is insufficient to make full use of the allowance and only if the husband decides to transfer it. I do not call that independence for married women.
  Of course, some people will gain by the changes that are proposed to the married man's allowance, especially about three quarters of a million pensioner couples with savings. However, their gain will come not because of the new independent principle that the Chancellor claims he is instilling into the system, but because of the change in the wife's earned income allowance into an earned or unearned income allowance. It is not the principle of independence that produces the financial gain, but the change in the nature of the allowance that the Government are introducing.
  Of course, a substantial number of people in higher income brackets will gain from the new extra allowance that will effectively be given for capital gains or investment income. So "Lawson the feminist" does not come out terribly well from the Budget.
  We should look at the other things that the Chancellor is doing. For example, the changes in maintenance will, in our view, almost certainly lead to lower maintenance provision being made by the courts. The Chancellor has failed to take the three principal decisions that he could have taken which would have transformed the economic and taxation status of women. The first decision would have been a substantial improvement in child benefit — not just removing the refusal to uprate fully in line with inflation but to go further. Child benefit is far and away the best targeted means of improving the ability of women to bring up children. The second decision would have been proper taxation relief for workplace nurseries. The third decision would have been to persuade his colleagues to remove the poll tax. On precisely the same date as the Chancellor's much trumpeted taxation independence for

  1311
  a man and his wife takes effect, the man and his wife will become jointly and severally liable for the payment of the poll tax.
  What about "Nigel Lawson the battler against perks and loopholes"? There are one or two bits of tightening up in the Budget which are to be welcomed. However, it is hardly a great package of reforms. Of course, some additional anomalies are being included in the Budget. For example, we have only to look at the pre-1982 provisions on capital gains tax. Some Conservative Members—for example, the hon. Member for Southampton, Test (Mr. Hill) —made considerable play of the small shopkeeper who is likely to benefit from the proposals. Who will really benefit from the changes in the capital gains tax regime?
  It is no accident that while the Chancellor was making that announcement on Tuesday the value of property companies on the stock market was going up dramatically, and it has continued to go up since. Warburg's analysis of the Budget, for example, says:
  "The change in the base date … for both companies and individuals will have an enormous impact on contingent tax liabilities. For many older established property investment companies, the change in the base date together with the benefits of indexation since then will virtually eliminate the tax liability."
  If I were a Chancellor aiming at targeting £290 million of tax relief I would not particularly target Peachey Property, Town Centre and Chesterfield to benefit.
  One of the most outrageous decisions in the Budget is the extension of the business expansion scheme into the private rented sector. It is bad enough that the Chancellor has left the business expansion scheme more or less intact, with one or two minor changes at the margin, but here a massive and highly lucrative new loophole has been created. Under the present terms of what the Chancellor is proposing there is no guarantee that the property that is to be let by the newly established companies will have tenants. They need only have property available for letting. I hope that when we get the detailed rules there will be a provision that the property must be let to tenants.
  Conservative Members have said that there is security in the fact that they are going to be let on assured tenancies, but assured tenancies have open-ended rent provisions. In addition, according to schedule 2 to the Housing Bill, there are 12 ways in which a landlord can get rid of a tenant under an assured tenancy, and the tax relief that will be available under the business expansion scheme will be not only on the initial investment but on the capital gain after five years.
  The financial pages of the Evening Standard are perhaps not the normal place that one would look for evidence to back up a case mounted by the Labour party, but in yesterday's edition there is a quotation from accountants Grant Thornton, who say that such residential property could become Britain's number one tax shelter. The article concludes by saying:
  "Rachman, one suspects, would not have been slow to take advantage of the scheme if it had been around in the 1960s."
  That is the real nature of the business expansion scheme change that the Chancellor introduced on Tuesday.
  So, "Lawson the prudent Chancellor, Lawson the environmentalist, Lawson the feminist and Lawson the plugger of loopholes" does not get a very high rating on any of those tests.
  1312
  What of "Lawson the fair-minded maker of choices and priorities"? On this count, above all, the Budget stands roundly condemned. Any Budget is about making choices: where to raise money, where to return money, where, indeed, to spend money. It becomes increasingly clear, if we look at the figures in this Budget—£2,195 million on top-rate taxpayers, £40 million on the business expansion scheme extension, £10 million on capital gains tax retirement relief, £290 million on the ending of the early capital gains tax liabilities, and £200 million on inheritance tax — that those are the decisions on priorities that the Chancellor has made in this Budget, and those decisions have been made just three weeks before major changes in social security and housing benefit will savagely hit the poorest people in our society.
  What are the Government saving by those measures on housing benefit and on social security? If one counts the savings and costs of the transitional arrangements, the Government are saving about £480 million on their changes in social security which are due in three weeks' time. The cost of their 1982 decision on capital gains tax and their inheritance tax decision, taken alone, could have paid for those savings in social security, which will hit the poorest in our society. Nothing could more eloquently highlight the Government's sense of priorities.
  This Budget does nothing for the Health Service and it does nothing to bring about a truly progressive tax system. That would have been a really radical reform by the Chancellor. The Budget merely pretends an interest in the needs and wishes of women. It creates massive new loopholes for tax evasion and makes the wrong decisions about the macro-economic effects of public and personal sector spending. It leaves industry competing internationally with its hands tied behind its back. Above all, the Budget redistributes resources fundamentally from the poor to the rich. As such, it is a wrong-headed, socially divisive and fundamentally unfair Budget. Given what the Chancellor was saying on Radio 2 earlier today, I sincerely hope that it is his last Budget.
  9.36 pm
  The Economic Secretary to the Treasury (Mr. Peter Lilley): I congratulate the hon. Member for Islington, South and Finsbury (Mr. Smith) on his contribution to the debate, which was characteristically lucid, eloquent and constructive. Regrettably, few contributions from the Opposition these days have those features, so I welcome his speech all the more. I will not damage the hon. Gentleman's career any further, however, by saying that I agreed with everything that he said, although I agreed with some of it.
  I often agree with much that the hon. Gentleman says. For example, I am a regular reader of his column in Tribune. I agreed with much of what he wrote in his October column, where he said:
  "There is now widespread agreement, through most parts of the Labour movement, that one of the principal reasons for our election defeat in June was our failure to convince many of our potential supporters that we had it right on economic policy."
  He was right. Unfortunately, after two and a half days of debate, the Labour party is no nearer convincing its supporters, or the House, that it has got it right on economic policy. The party has not succeeded because no one on the Opposition Front Bench who has addressed the House in the past two and half days has endeavoured to

  1313
  spell out an alternative strategy to that laid down in my right hon. Friend's Budget. They have told us what they dislike, but not what they like.
  I have three very simple questions for the hon. Gentleman. One of them picks up a matter that he went on to discuss in the Tribune article. He said:
  "We lost support in the final week of the campaign over taxation and especially on the married man's tax allowance issue."
  I want to know from the hon. Gentleman, or from his right hon. and hon. Friends, what they are going to do about the married couple's allowance, as it will be soon. Will they abolish it, as they said they would during the election campaign? "No answer" came the stern reply.
  Perhaps the hon. Gentleman will answer a second question, which has been raised by several Opposition Members. Will Labour abolish the upper earnings limit on national insurance contributions? Hon. Gentlemen have criticised my right hon. Friend the Chancellor for not doing so.
  Mr. Chris Smith: The Economic Secretary clearly has not been listening to the debate in the past days. We have made it very clear that the existence of a ceiling on national insurance contributions is profoundly regressive in the tax system, and we want to see a properly progressive tax system that does not leave that anomaly in place.
  Mr. Lilley: It is very useful to have that on the record. It would move in the opposite direction to that taken by my hon. Friend in his Budget. Marginal rates of taxation were reduced across the board. He will be increasing the marginal rates of tax and contributions which people face across a broad spectrum of incomes.
  A third question, to which I will also welcome an answer, is this. Will they oppose the reduction in the basic rate of income tax on Monday? They will have to make up their minds on Monday night when the chance will come to choose. We have heard his decision from one of my right hon. Friends, the Member for Shropshire, North (Mr. Biffen). Will they also have the courage to join him? We would like to know. Once again, "No answer," came the stern reply.
  Mr. Whitney: Would my hon. Friend allow me to join him in pressing the Labour party on this? We had an interesting contribution from, I think, the hon. Member for Livingston (Mr. Cook), who complained that 25 per cent. is a high rate of entry to tax. That statement appears to be in some contrast to the Labour party's objection to reducing the tax, when at one point Opposition Members seemed to advocate that 25 per cent. was too high. I hope that my hon. Friend will join me in welcoming this converstion of the Front Bench of the Labour party.
  Mr. Lilley: My hon. Friend is quite right. It is a shame that we have not been able to flush them out on this issue. If they believe in open government, do they not believe in open opposition as well?
  Mr. Robin Cook: I am afraid that the hon. Gentleman —I cannot remember whether he was here at the time— has apparently forgotten that the very first Budget that his Government brought in abolished the reduced rate band, a reduced rate band which was then 8p less than the current standard rate. If one wishes to reduce the starting rate of taxation, one begins with the reduced rate band.
  Mr. Lilley: Since we are all now on what was Labour's reduced rate band, that does not really carry us much
  1314
  further. Would Labour Members reduce the rest of us to the reduced rate band if they had their way on Monday night? That is what we would like to know.
  My right hon. Friend's Budget has many facets — fairness to married women, recognition and removal of penalties on marriage, simplification, the removal of perks —but a major aspect is the range of measures designed to improve the working of the supply side of the economy. As the theme of today's debate is industry, I shall try to concentrate on these supply side measures, but, first of all, I want to respond to a number of comments made by my right hon. and hon. Friends and by Opposition Members.
  I turn first to the contribution of my right hon. Friend the Member for Shropshire, North who made, as he always does, a punchy, witty and excessively modest contribution. He was modest in one respect, in that he said that he had never had a day's lesson in economics.
  I think that my right hon. Friend may have forgotten summoning me round, when he was Chief Secretary to the Treasury, and asking me to explain and elucidate the monetary situation at the time, which was causing him concern, as it apparently does now. I remember the occasion vividly. He sat there behind an otherwise empty desk, containing one book, which faced me rather than himself, a biography of Enoch Powell. When I asked him why it was there, he said that it was to show his officials where his intellectual loyalties lay — where, of course, they still lie.
  But I wonder whether his master, from whom I take many of my own views, would agree with his proposed decision today, because I then pointed out to him — I think that he agreed with me—that, although the money supply figures were showing considerable expansion, one should, as he always does, use common sense and examine the situation as it is. Clearly it was wrong to say that we were being profligate monetarily at a time when unemployment was far too high, when the exchange rate was visibly very strong, and when interest rates had been raised to considerable levels.
  I would ask my right hon. Friend to consider today whether it can really be said that there is a serious danger of overheating from this Budget, which, for the first time for 20 years or so, gives us a substantial surplus; when we have interest rates which, in real terms, are significantly positive and obviously bearing down on inflation; and when there is, regrettably, still a high measure of spare capacity and unemployment in the labour market.
  Surely, with a strong exchange rate, with a surplus and with the capacity and resilience that the economy has shown, we do not need a yet larger surplus, as my right hon. Friend implicitly proposes. Or am I mistaken in thinking that, in voting against, as he has suggested he may —and I hope that he will reconsider it— a cut in the basic rate of income tax, he wants to add that money to the public sector borrowing requirement, the repayment of debt? If not, and if it were merely to be spent by the Government, that must be at least as, if not more, inflationary in its consequences. [Interruption.] If the hon. Members who are making sedentary contributions wish to make more reasoned contributions in an upright position, I shall give way.
  Mr. Nigel Spearing: I am grateful to the Minister for that invitation, because he may be able to give us a lesson, as well as his right hon. Friend the Member for Shropshire, North (Mr. Biffen).

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  If the money was spent on, say, the Health Service, would that necessarily be inflationary?
  Mr. Lilley: It would be just as inflationary as leaving the money in people's pockets and allowing them to spend it themselves—no more, and no less.
  The hon. Member for Londonderry, East (Mr. Ross) welcomed the Budget from the point of view of Northern Ireland. I am sure that, on St. Patrick's day, and after yesterday's tragedy, all of us wish success for any measure that may bring renewed peace and prosperity to Northern Ireland. The hon. Gentleman is absolutely right that the lower tax rates will render that Province more attractive to international business, as well as giving a domestic stimulus to the economy.
  My hon. Friend the Member for Bournemouth, West (Mr. Butterfill) has campaigned effectively and assiduously on behalf of a proposal which he believes would help the elderly to benefit in their retirement from schemes enabling them to raise income from their residential homes. My hon. Friend has received a detailed reply from my right hon. Friend the Financial Secretary. Let me add that such schemes are possible under the present law. He proposes extending extra tax relief not so much to the existing occupants as to their heirs, who would get double relief.
  The proposals as my hon. Friend has suggested them would be of little or no value to those living in houses of modest value—£50,000 or less. They become a serious proposition only if the houses are worth £100,000 or more. There, the case for making such a concession is much less strong, on social grounds. Although we shall respond to the suggestion in greater detail, I do not know whether we shall be able to change our view.
  My hon. Friend was followed by the hon. Member for Oxford, East (Mr. Smith). I look forward to going to his constituency tomorrow, and visiting the Radcliffe hospital. I noticed that, unlike many of his hon. Friends who have berated Conservative Members for using national statistics about the Health Service and have responded with anecdotes, the hon. Member for Oxford, East stuck to the statistics. He told us no anecdotes about his local Health Service. I suppose that that is because his local newspaper — which I just happen to have with me —featured the headline
  "Cash tonics for health service".
  Mr. Andrew Smith rose—
  Mr. Lilley: The hon. Gentleman had his chance to talk about his local Health Service, and refused to do so.
  The hon. Gentleman was followed by my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant), who represents the other great university town, which I visited rather longer ago. My hon. Friend paid a generous tribute to my right hon. Friend the Chancellor. I thought that he was excessively modest, because he too is always eminently worth listening to. I found his report from Japan about the incentives being given to importers very interesting.
  It may be no surprise to my hon. Friend, although it will be to many Opposition Members, that exports from this country to Japan have increased by some 30 per cent. over the past year — from a base that was not high
  1316
  enough, but a 30 per cent. growth rate is surely proof that competitiveness is to the advantage of British firms, and that they are exploiting it.
  The hon. Member for Liverpool, Walton (Mr. Heifer) is not present, so I shall not reply to what he had to tell us.
  My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) was enthusiastic about the Budget, because he believed that it would put one category of people out of work: the tax consultants. I share his view that those gentlemen could turn their brains to more productive use after the Budget is implemented.
  The hon. Member for Angus, East (Mr. Welsh) said that his part of the country needed investment. He will be pleased by the figures in the Red Book, which show that manufacturing investment in the coming year is expected to grow by 11·5 per cent. He will also be pleased at the proposals on the oil industry announced in the Budget. Measures were announced that affect the southern part of the North sea, but there was also one that did not receive so much publicity. It is about the disposal of oil licences throughout the North sea.
  When I spoke last year in the Finance Bill debate, I said that we would look to see whether there were ways in which we could prevent capital gains tax from blocking rearrangements of licence interests, farm-ins and farm-outs and swaps of licences. After helpful discussions with the industry, we succeeded in doing so, and have come up with a proposal that we think will enable a proper market interest in offshore oil licences to take place. It will enable those who are best equipped and best financed, who have the best ideas and are most eager to explore and develop blocks, to farm them without a fiscal penalty. I hope that the hon. Gentleman and his hon. Friend who also spoke about the oil industry will welcome that.
  My hon. Friends the Members for Dover (Mr. Shaw) and for Esher (Mr. Taylor) spoke about the business expansion scheme. They were anxious about schemes that are caught by shares being issued after Budget day. The new limit that we propose is a maximum of £500,000 per company. The press release published by the Inland Revenue on Budget day explained that this limit would apply only to shares issued after Budget day. This follows the normal practice for implementing changes to the business expansion scheme.
  It has been put to us that the £500,000 limit could bear harshly on companies that issued a prospectus before Budget day but did not issue shares before the end of that day. We decided to make a small relaxation in the scheme to help such companies. Provided that a company has issued a prospectus before Budget day and issues the shares before the end of the present tax year, there will be a higher limit. This will be £1 million instead of £500,000. This doubling of the limit should help most companies in this position to raise more than their minimum targets set in the prospectus. It will prevent an excessive amount of money from being channelled artificially into the last of these larger schemes. I am sure that this change will be widely welcomed.
  I make it clear that, if we think it necessary, we shall in future make changes to the BES scheme to apply to shares issued on Budget day as well as afterwards. This is in accordance with our general policy, where there would otherwise be scope for forestalling by doing business very quickly on Budget night.

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  This debate is about industry, which means that we are talking about the supply side of the British economy. There is no doubt that the supply side of the economy has been transformed over the past eight years. After coming bottom in the growth league of major European countries in the 1960s and 1970s, we have come top in the 1980s. Last year, we enjoyed more rapid growth than any other major industrialised country, including Japan.
  In terms of competitiveness, we are on top of the world league, both in manufacturing industry and growth. As a result, the volume of British manufactured exports is up by over a quarter since 1978. Last year, manufactured exports rose by 8·5 per cent. [Interruption.] The Opposition will find a dark cloud in any silver lining. The reflationary fallacy has underlain much of the Opposition's thinking. They used to believe that the prime determinant of economic growth was the level of demand. They believed that demand could be manipulated only by increasing Government borrowing. They thought that, if economic growth was sluggish, it was merely a symptom of deficient demand. I am speaking of the bad old days when the Opposition learned their economics and they have learned nothing since.
  That view was expressed by 364 economists seven years ago this month, in a famous letter to the Chancellor. The experience of the last seven years has proved them wrong, because they said that growth could not occur unless there was increased Government borrowing to stimulate demand. In the last six years, the economy has grown even though we have been reducing Government borrowing. This past year has put the kybosh on Opposition views. We have witnessed the most rapid growth in the British economy for 15 years, in a year when Government finances have finally moved from borrowing to repayment of debt.
  The measures in the Budget that contribute to the supply side improvement of the economy include a whole range of matters, but one of the most important of them is clearly tax reform and tax reduction. It is impossible to distinguish the impact of past changes from the many other supply side changes that have contributed to the improvement of the economy. However, there is no doubt that the changes that we have made have proved that, on the whole, lower taxes tend to be followed by increased revenues.
  For example, in 1984 my right hon. Friend the Chancellor announced a reform of corporation tax involving cutting the rate from 52 per cent. to 35 per cent. Since then, far from declining, the yield of corporation tax has more than doubled. Stamp duty on shares has been quartered and that on houses has been halved, yet their yield in the year now ending is estimated at £2·4 billion, as against £1 billion in 1984. The introduction of indexation and exempt allowances in 1982 reduced the effective rate of tax on capital gains, yet since that time the yield from capital gains tax has risen by more than two thirds in real terms.
  There is every reason to suppose, in the light of that experience and in the light of the experience repeated several times by my right hon. and hon. Friends, that the cuts in the top rates of tax to the more bearable and acceptable level of 40 per cent. will be followed by an increase in tax revenues, as was the cut from 83 per cent.
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  and 98 per cent. to 60 per cent. We can expect a renewed reinforcement of supply side measures that have reinvigorated the economy.
  I want to announce one supply side measure that does not depend on taxation. Competitive and efficient markets rely on the free flow of information. Following the announcement in last year's Budget debate, a consultative exercise was carried out during 1987 on a number of propositions involving the disclosure of information about importers. The main proposal was that Customs and Excise should disclose by sale the names and addresses of importers listed against the commodity codes under which the products they import are classified. A majority of the comments were in favour of the proposals.
  Following an interdepartmental review of the results of the consultative exercise, I announced in a written reply earlier today that the Government have decided to proceed with the proposal. A new provision in the Finance Bill will enable Customs and Excise to extract information from statutory declarations made by importers or their agents on import entries. Customs will provide marketing agents each month with the names and addresses of importers listed against each of the nine-digit commodity codes as published in the integrated tariff of the United Kingdom. There are 11,500 different codes in all. The provision of the information should help all firms to identify markets, so helping to improve the effectiveness of their marketing, market research and product development to the benefit of industry and consumer alike.
  The charge to the marketing agents will be set at a level to cover customs' costs and the marketing agents will be free to publish the information in a form and at a price attractive to their customers. We hope to implement the arrangements from January 1989, subject to the satisfactory conclusion of contractual arrangements with the marketing agents and implementing the necessary changes to computer systems. The arrangements will be kept under review. Customs will continue the current arrangements known as suppressions, under which customs may, for example, combine information for two or more commodity codes when importers can show that the publication of a more detailed breakdown would enable more confidential information about their business activities to be identified, directly or by deduction. I hope that the House will agree that that should prove a useful measure.
  I have illustrated the fact that this is a supply side Budget. And it is a Budget that will powerfully reinforce the measures that have revitalised our economy over the past eight years. That vitality is already bringing us prosperity, generating jobs and restoring national pride. Eighteen months ago exactly, the hon. Member for Dunfermline, East (Mr. Brown), now Labour's shadow Chief Secretary, told The Guardian:
  "The Government simply cannot reduce unemployrnent by present economic policies."
  Since then, unemployment has fallen by nearly three quarters of a million. That is our answer to Opposition Members.
  Our policies are working. The people of this country know that they are working. We were re-elected in June to defend and extend the policies of success. That is what this Budget does, and I commend it to the House.
  Debate adjourned.—[Mr. Maclean.]
  Debate to be resumed upon Monday next.

  Opren (Settlement)
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Maclean.]
  10 pm
  Mr. Jack Ashley: This debate is about Britain's greatest drug disaster. It is about the scandal of a huge United States pharmaceutical company coming to Britain and boasting of Opren, a new wonder drug to treat arthritis — with tragic results. It left a terrible trail of human destruction — adverse reactions were officially reported for 3,963 people, of whom 83 died. The true extent of human suffering is undoubtedly far higher. More than 7,000 people sought help from the Opren action group.
  The agony, disfigurements and deaths are akin to a battlefield. They have been cynically and systematically played down by the company, yet some of them are horrific. They include rashes which blister and bleed, ulceration and haemorrhages of the stomach, bladder incontinence, liver jaundice, kidney damage, acute eye sensitivity, detached finger nails and toe nails, and skin photosensitivity. The widow of one man who died wrote:
  "The drug caused his hair to fall out, his kidneys became infected, dried his toe nails and finger nails on both hands and feet, burst two toes on the left foot which never stopped discharging till his death … he couldn't even bear the weight of a sheet on his feet. It is only those of us who have witnessed the sufferings from this drug who can tell of the agonies it produces on the human body".
  To the 1,300 British people who are claiming compensation for Opren suffering, the company has offered a derisory £2·75 million—an average of £1,800 per person. This breathtaking contempt for victims, insulting attitude and brass-necked insolence can be understood only by appreciating the background of the company and its development of the drug. I hope that every Member of the House of Commons and House of Lords—and every Minister—will take careful note of the following facts.
  The company is distorting the truth. Honest reporting of adverse reactions is essential for drug safety, but Eli Lilly failed to report 26 United Kingdom deaths from Opren to the United States drug watchdog, the Food and Drug Administration, when it was seeking the American licence. It was lucky to get away with a fine of $25,000 for this serious offence.
  The clincial trials, conducted before marketing, were hopelessly inadequate according to some experts. They were too small, conducted for too short a period, the participants were given too low a dose, and there were too few old people. The company also failed to act immediately when the potential dangers of the drug for old people were pointed out. It offered jobs — salary unspecified — to experts whose work revealing the dangers of Opren for old people had been ignored. Eli Lilly knew that their testimony would be damaging in court, as indeed it was. One of those experts, Dr. Hamdy, said in the television programme "World in Action" that even after he warned of the dangers for old people the company continued to recommend the original dosage. He said in "Panorama" that they refused to change because it was "commercially non-viable".
  Putting profits before lives, inadequate research, cheating the record, misleading the people—this is the unacceptable face of the pharmaceutical industry, one
  1320
  which is damaging the good name of responsible and reputable firms and makes a mockery of Ministers who run a mile to avoid involvement.
  British victims approached the company for compensation when the full and horrible effects of this drug were known. They were aware of ICI's fair-minded response after the Eraldin disaster, when that company set up a proper compensation scheme. They found out that Eli Lilly had paid £27 million to 103 United States victims. They were hoping for a fair deal, but they were disastrously disappointed. The derisory offer of some £2·275 million to 1,350 British sufferers shocked them, especially when compared with the United States payment. Many of them had not appreciated that we have an archaic legal system which imposes crippling shackles on any drug-damaged litigant who is not a millionaire.
  The company exploited this system to the full. It imposed unbelievably harsh conditions on disabled people, many of them too old, bewildered and poor to fight. It bludgeoned them into submission—using the euphemism "acceptable" settlements—by the threat of court battles which the individuals could not afford but which this wealthy multinational could. The imposed settlement bound these disabled people with strict legal conditions, gagged them for life, and denied their solicitors freedom to act for other sufferers.
  The reasons why the company got away with this were partly our antiquated legal system, but mainly the financial power of a selfish and rapacious company. It has behaved like a cruel tiger, toying with helpless people, knowing that they lacked the health and the money to fight. It has created an enormous well of frustration and bitterness in Britain by adding this financial insult to the original injury.
  Fortunately, the victims had their champions. The main one has been the admirable Kathleen Grasham, whose mother died from Opren in tragic circumstances. She has been a skilful and persistent leader of the action group for more than five years. David Mason has added his considerable weight, intelligence and energy to the battle. I do not share the political views of the Daily Mail, but it has fought a vigorous, well-directed and sustained campaign on behalf of the victims. I pay my tribute to these campaigners for their distinguised efforts.
  The question I want to put to the House tonight is: where do we go from here? This is the third parliamentary debate on Opren which I have initiated. I have been pressing the issue with debates, parliamentary questions and deputations to Ministers for more than five years. "Panorama" and "World in Action" have done splendid programmes. There has been vast press coverage. The damage to Eli Lilly is incalculable, especially from the television programmes. Yet when over 100 Members of this House, and the House of Lords, last week put a reasoned and moderate proposal to the United States chairman urging the setting up of a trust fund, it was turned down flat.
  That contemptuous dismissal of a reasonable settlement, which would have avoided further legal wrangling, does not mean that Eli Lilly has won. The fight will certainly continue. New cases are being prepared, new initiatives are being launched, and the company must expect a renewed onslaught.
  Even at this moment, the Department of Health and Social Security is investigating allegations against Eli Lilly of non-reporting of serious adverse reactions made by the

  1321
  telvision programme "World in Action". I might add, in parenthesis, that when the Under-Secretary of State for Health gave me this news, she said that she could give me no undertaking to let me know the outcome. If she thinks she can keep this kind of thing secret, and treat the House of Commons with contempt, she had better think again.
  An international boycott of Eli Lilly's products has already been launched by Ralph Nader. The British Government have declined to act on this, but, in view of the company's rejection of the suggested trust fund, I would ask the Government to consider what helpful action they can take. They cannot simply wash their hands of the whole affair while British citizens are being discriminated against, especially as Opren was distributed by the NHS. I do not believe that they should sanction the provision of non-essential Eli Lilly drugs, knowing that if any new disaster should occur the British victims would almost certainly face the same harrowing ordeal as the Opren victims. Surely, other things being equal, an ICI drug is better than a Lilly one.
  I know that, as a representative of the licensing authority, the Minister will claim to be part of the legal action. Nevertheless, Ministers wear many hats and there is no reason why Ministers should not act.
  The Association of the British Phamaceutical Industry should also take a hand in this tragedy. It is being seriously damaged by the affair and ought to step in with some constructive suggestions.
  Community health councils should put Opren on their agendas, and work with the Opren action group. There is always the risk of adverse reactions with every drug, and it is surely unwise to add the danger of inadequate compensation from using a Lilly drug if others are available.
  Trade unions should also consider the very serious disadvantage to their members of using Eli Lilly drugs, and should ask for alternatives when available. In particular, those trade unions working in Lilly companies, which include Dista Products, should consider what action they can take.
  The sooner Eli Lilly recognises that this issue will not go away, the better for all concerned. Drug accidents can happen to anyone while millions of prescriptions are given every year. The top priority is to avoid them, but, when they happen, people in Britain expect fair play. They will not tolerate unscrupulous disregard for people suffering so terribly as a result of Opren. As their collective concern and anger grow, so the prospects of fairness will improve. It is in the interests of the company, no less than of the victims, that even at this late hour a fair and honourable settlement is reached and a trust fund set up. The next step lies with the company, and, after that, with all of us.
  10.13 pm
  Mr. Michael McNair-Wilson rose—
  Mr. Deputy Speaker (Sir Paul Dean): Does the hon. Gentleman have the agreement of the right hon. Gentleman and the Minister to intervene?
  Mr. McNair-Wilson: I have not asked, Mr. Deputy Speaker, but I hope that I might be allowed one minute.
  Mr. Deputy Speaker: Mr. Michael McNair-Wilson.
  Mr. McNair-Wilson: First, I congratulate and support the right hon. Member for Stoke-on-Trent, South (Mr.
  1322
  Ashley) on the speech that he has just made and on bringing to the attention of the House the important and deeply tragic situation facing Opren sufferers.
  Secondly, I should like to ask my hon. Friend one question relating to the principle that the right hon. Gentleman has enunciated. It is a fact that many people become the victims of drug-related medical accidents, especially in the early years of a drug's introduction. I suggest that it is time that the Department of Health and Social Security brought the major drug companies together to create an effective, equitable and properly managed compensation scheme.
  10.14 pm
  The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): May I begin by extending to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) the usual courtesies on his success in the ballot. I am sure that he would agree that neither he nor I would ever treat this House, nor indeed each other, with contempt.
  I also listened to the comments of my hon. Friend the Member for Newbury (Mr. McNair-Wilson). I refer him to a written question from the right hon. Member for Stoke-on-Trent, South to which my right hon. Friend the Minister for Health replied. The right hon. Gentleman asked
  "the Secretary of State for Social Services if he will initiate discussions with the Association of British Pharmaceutical Industries regarding the establishment of a no-fault drug compensation scheme."
  My right hon. Friend replied by saying:
  "It must be for the pharmaceutical industry to decide whether it wishes to set up its own no-fault drug compensation scheme"—[Official Report, 8 March 1988; Vol. 129, c. 172.]
  However, I have no doubt that the industry will have taken note of my hon. Friend's remarks.
  This debate concerns the non-steroidal anti-inflammation drug benoxaprofen, Opren, and the settlement recently negotiated between the manufacturers of the drug Eli Lilly and the plaintiffs concerned in the current litigation. It follows, as the right hon. Gentleman said, an earlier Adjournment debate on Opren just eight months ago on 20 July 1987, to which I replied.
  On that occasion, I outlined for the House a brief history of the drug to help place the subject of that particular debate in perspective. The history that I related then is clearly still relevant to today's debate but, in view of the comparatively short period since we last debated Opren, I will not prolong matters unnecessarily by repeating the bulk of what I said then. I will, however, repeat that both the Licensing Authority—that is, the United Kingdom Health Ministers—and the Committee on Safety of Medicines are co-defendants in the action with the manufacturers of the drug. In the light of all the evidence held and the advice of the Government lawyers and leading counsel, all claims of negligence against the Government defendants are and have been denied categorically. I said on that occasion that Ministers felt considerable sympathy for those who feel that they have suffered and for their relatives and I am content to repeat that now. The right hon. Gentleman and my hon. Friend the Member for Newbury will know that I mean it.
  As I said towards the end of the previous debate on this subject, the right hon. Gentleman places me in a difficult position in answering this debate. My up-to-date legal

  1323
  advice is that it is still inappropriate for Ministers as co-defendants in this case to debate any of the issues involved, including the privately agreed settlement. Although in many cases the plaintiffs have, I understand, accepted the offer made by Lilly, there still remain cases before the courts in which members of the Licensing Authority—that is, Ministers—and the CSM are defendants.
  The previous debate was conducted in the early hours of a Tuesday morning in July 1987 and the Hansard report of it was published on the morning of Wednesday 22 July. On that day, Mr. Justice Hirst gave a strong public warning about the propriety of a publicity campaign and called for due restraint. The right hon. Gentleman will know exactly what the judge said on that occasion as it was widely reported and I see no reaason to repeat it here. However, on 9 December 1987, the judge was able to announce details of a proposed settlement between Lilly and the plaintiffs. During that judgment he said:
  "It may be that certain individuals will be disappointed with the way the proposals affect their own claim. In coming to a conclusion, they will all I am sure, with the benefit of legal advice, balance their prospects of success in pursuing a claim outside the settlement proposals against the risks involved in proceeding individually if unsuccessful at the end of the day.
  Fairness and justice demand that each individual one of these plaintiffs should have the opportunity to consider the offer calmly on its merits, without being subjected to outside pressure of any kind, whether through national publicity or from private groups or individuals.
  Last July I had occasion to give a warning as to the propriety of a campaign which was then afoot. Happily that campaign immediately died down, and this I am sure contributed to the successful progress of the settlement negotiations. I wish to stress that the case is still sub-judice, and so my July warning still applies. The success of negotiations of this kind greatly depends on continued confidentiality."
  Subsequently, on 3 February 1988, Mr. Justice Hirst stated that approximately 1,104 Opren plaintiffs at that date had accepted the offer unconditionally; approximately 125 had accepted subject to arbitration, only a handful of those being non-qualifying plaintiffs; 43 had refused the offer; and approximately 72 had still not replied. There has been no official announcement since in court, but I understand that all but a handful have now replied. I also understand that arbitration is not yet complete.
  I must stress that the settlement is the result of private negotiations between representatives of the plaintiffs concerned and the manufacturers of the drug. The Government defendants have not been involved in any way in those private discussions, nor in the negotiations on the terms of the settlement.
  My right hon. Friend the Minister for Health met the right hon. Member for Stoke-on-Trent, South and a small group whom he led on 15 February 1988. Subsequently, my right hon. Friend the Minister for Health wrote to the right hon. Member for Stoke-on-Trent. South on 18 February and pointed out once again that it would be
  "wholly inappropriate"
  for the Government
  "to intervene in the settlement freely negotiated by solicitors representing the Plaintiffs."
  I fully recognise the right hon. Gentleman's concern, and that of other hon. Members, but it remains wholly inappropriate for the Government to intervene.
  The right hon. Gentleman has the right to call the debate and, Mr. Deputy Speaker, on two occasions
  1324
  recently, you have agreed that the subject should be debated. As always, the right hon. Gentleman has expressed his views with vigour and sincerity. As a former Minister, he knows exactly in what difficulty he places me in attempting to answer him tonight. I hope that he will understand and accept the points that I have made.
  Let me finish by quoting once more from Mr. Justice Hirst's statement of 19 December. Perhaps this will also be a sufficient response to the point made by my hon. Friend the Member for Newbury. The judge said:
  "once the Opren litigation is finally disposed of, those who have worked so hard on it will have, I feel sure, a great contribution to make in the future in finding solutions to the problems which have come to light in the handling and financing of litigation of this kind and on this scale under our present legal system".
  On that basis, I wish to conclude my remarks.
  10.22 pm
  Mr. Ashley: I am glad to have the opportunity to say a few further words. I have raised some important issues in the debate and the Minister, according to the notes that I have received, has made little effort to answer some of the profoundly important points that I have made—profoundly important to severely disabled people damaged by this ruthless company. It is wrong that she should come here and read a brief without making one essential point when thousands of British people are suffering. That was a disgraceful response to the debate.
  I put to the Minister a clear and specific point that I raised which she either did not hear or follow. If she wants to listen, I repeat it. Can the Minister confirm that she wrote a letter to me on 1 February 1988 in which she said:
  "Officials are currently investigating the allegations made in the recent 'World in Action' programme against Eli Lilly and will take account of documents sent with your letter. Once the investigation is complete the facts will be considered and, if warranted, appropriate action will be taken. I can give no undertakings to let you know the outcome".
  I contend that is deeply insulting to the House of Commons. For a Minister to conduct an investigation into a matter of profound importance to hon. Members and then to tell the Member of Parliament who raised it that the House of Commons will not be told the outcome of those investigations is deeply insulting.
  This is not a secret society; this is a democracy. The Minister is not playing fair with the victims of Opren by keeping secret this information. I will give her five minutes to respond to those points. The debate does not finish until 10.30 pm, so she has five minutes if she wants. I could speak for an hour, but I rushed my speech to give the Minister an opportunity to reply. The hon. Member for Newbury (Mr. McNair-Wilson) wanted to intervene, but I gabbled my speech so that we could get a decent answer. But what did we get? We got absolute rubbish from the Minister.
  The problem is very grave and people are suffering appallingly. They need someone to fight for them. They should not have to rely on a voluntary group, a few Members of Parliament and a few campaigners to fight for their rights from the Government. The Government ought to step in and fight Eli Lilly, and say: "Be as fair to British citizens as you have been to American citizens."
  Why is there a vast discrepancy between the treatment of one lot of victims and another? It is outrageous that the British Government should turn away and do nothing, while the American Government made damn sure that their people were looked after. No wonder we are

  1325
  becoming a second-rate country, with Ministers such as this one. The Minister now has five minutes to respond. Let us hear her answer.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes past Ten o' clock.

THE ARTS

  Museum Training
  Mr. Baldry
  To ask the Minister for the Arts what developments there have been on museum training following the publication of the Museums and Galleries Commission working party report on museum training and career structure.

  Mr. Luce
  The Museums and Galleries Commission working party report on museums training and career structure was published in July 1987.

  I am grateful to the working party and to its chairman Sir John Hale for the thoughtful and detailed consideration which they have given to the important subject of the training which is required by those who work at all levels and in all sectors and all aspects of our museums. At a time of opportunity for museums, and when the number and diversity of museums, and the number of those who visit and use them are increasing, it is important that staff employed in museums are equipped with the skills they need, in management and marketing as well as in the more traditional and still essential areas of museum activity.

  The Hale working party produced a wide-ranging report, and I thought it appropriate for my Department to consult widely on its findings. I am grateful to all those who submitted their views. I have now considered the report's recommendations in the light of the comments and advice which my Department received.

  There is general agreement about the need for a fresh look at training for museum work to make that training better reflect the skills which are needed and will be needed by those working in museums. The necessary first step in this process is an examination of the needs of the museum industry for key skills and competences. It is desirable, in order to facilitate the development of new provision for museums training, for such a study to proceed quickly and on an industrywide basis taking account of the needs of the main sectors of the museum world and of the relevant areas of the heritage sector. I am pleased to announce that my Department with the Manpower Services Commission will be providing support and financial assistance for a needs assessment study for which the principal agent will be the Museums Association. This six-month study will represent phase I of a programme which is intended by the Museums Association to result in the production of new modules for the training of those currently or prospectively working in museums.

  The needs assessment study, to be carried out by consultants experienced in the field of training assessment and provision, will be overseen by a steering committee on which the major interests in the museum community—the Museums and Galleries Commission, the Museums Association, the area museum councils, the national museums and galleries, the independent and the local
  624
  authority museums—will be represented. The steering committee will be chaired by the Office of Arts and Libraries.

  Beyond the first phase of this programme, I shall take a continuing close interest in the development of museum training. I think it right, however, that the primary responsibility for museums training should rest with the museums industry itself, and that the continuing developments in this area should be overseen and guided by a consortium representing the main sectors of the museums industry. It is not my intention to set up a museums training council with regional panels in the form recommended by the Hale report. I shall be consulting further about the composition of the consortium of interests which I have in mind, with a view to its establishment later this year. I should be prepared to provide limited funding on a pump-priming basis for a museums training consortium, for a period of up to five years, but I should expect the museums industry and employers to contribute an increasing share of the costs of this group and, following a substantial public investment by my Department and the MSC in an initial programme of development of museum training. I shall expect the provision and further development of museum training to become self-financing. I attach importance to the development and application of skills in management and marketing within the museums sector, and to the transfer of skills between institutions. I hope that the development of new training modules which are relevant to all sectors of the museums industry will help to increase the scope for mobility and exchanges of staff between museums.

  The Museums and Galleries Commission working party report on museums training has provided a useful foundation on which the various sectors of the museums world, with the Government's help, can build in partnership. I am pleased that an ambitious but realistic programme of development of museums training, with the Government's backing, is now under way.

TRADE AND INDUSTRY

  VAT (Greece)
  Mr. Sims
  To ask the Chancellor of the Duchy of Lancaster what action he proposes to take following the introduction on 1 January by the Government of Greece of a value added tax structure which increases rather than diminishes discrimination in favour of locally produced spirits and against imported products.

  Mr. Alan Clark
  The discriminatory VAT rates operating in Greece are already under challenge in the European Court of Justice: the EC Commission has brought proceedings under article 169 of the treaty. The Commission is in no doubt that the United Kingdom attacahes the greatest importance to this case.

  Inner City Initiative (Publicity)
  Mr. Beith
  To ask the Chancellor of the Duchy of Lancaster what was the cost to public funds of the press conference and associated publicity for the Government's inner city initiative announced on 7 March; what part of the charge to public funds is attributable to the cost of providing a blue stage setting and furniture; and how many persons other than civil servants took part in the arrangements.
  625
  Mr. Kenneth Clarke
  About £34,400, including £4,238 for the stage setting. The document "Action for Cities" costs about £68,970 for a print run of 37,000. The press conference was arranged by the Central Office of Information. This represents a very small part of the Government's expenditure of around £3,000 million on inner cities programmes and the presentation of those programmes is an important part of the process of establishing a partnership with the private sector and local government to help deliver them.

  "Action for Cities" (Breakfasts)
  Mr. Tony Banks
  To ask the Chancellor of the Duchy of Lancaster if, pursuant to his answer of 14 March, he will provide a detailed breakdown of his estimate of the cost of the six working breakfasts planned.

  Mr. Kenneth Clarke
  The estimated expenditure on the working breakfasts covers all the production and management costs of a professional presentation to senior industrialists and business men, whose commitment and support we are seeking. The total costs will include the preparation of audio-visual material, the hire of halls, printing and the issue of invitations, transport and storage. Catering will cost under £5 per person.

  City Action Teams
  Mr. Madden
  To ask the Chancellor of the Duchy of Lancaster if he will consider setting up a new office in Bradford, staffed by officials of the Departments of the Environment, Employment and Trade and Industry, to administer that part of the recently announced city action team programme of benefit to Bradford.

  Mr. Kenneth Clarke
  No. City action teams are operating successfully from the regional offices of the three Departments, including in those areas where the city action team also covers an adjacent city.

  Mr. Madden
  To ask the Chancellor of the Duchy of Lancaster how much he plans to spend on giving breakfasts in Bradford under his city action team programme; how many such breakfasts he intends to organise in Bradford,; who is to be invited; where the breakfasts will be held; and when the first breakfast will take place.

  Mr. Kenneth Clarke
  My present plans do not include a presentation in Bradford. However, a working breakfast will be held in Pudsey on 26 April for about 250 senior business men and industrialists from the west Yorkshire urban area, including Bradford in order to seek their commitment to and support for the Government's programmes of urban regeneration in Leeds and Bradford.

  Mr. Madden
  To ask the Chancellor of the Duchy of Lancaster, pursuant to his reply of 14 March, if he will list broad expenditure heads for the estimated expenditure by the city action team in Bradford of about £50 million in 1987–88; and if he will specify how much of the money to be spent in Bradford is a new allocation of funds.

  Mr Kenneth Clarke
  As I indicated in my reply to the hon. Member's question of 14 March at column 434, the total estimated expenditure in Bradford of the three city action team departments in 1987–88 is about £50 million. The broad areas of expenditure are:
  626

  million £

  Housing

  13

  Regeneration of land and buildings

  6

  Employment, Training and Industry

  34

  Total

  53

  This is existing expenditure through main departmental programmes. In addition, the Government are making a further £0·79 million available to the Leeds/Bradford city action team to be spent in the area the team covers, without prior allocation to particular districts.

DEFENCE

  Military Personnel (Wales)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Defence if he will list the location and number of(a) military personnel and (b) non-military personnel employed in (i) Pembrokeshire, (ii) Dyfed and (iii) Wales.

  Mr. Freeman
  It would not be in the public interest to provide details of the number of personnel in individual defence establishments. The total numbers of personnel, military and non-military, in the areas specified are shown in the table. The figures relate to 1 July 1987, and those for Pembrokeshire cover establishments in the Preseli and South Pembrokeshire local authority areas.

  Total

  Service Personnel

  Civilian Personnel

  (i) Pembrokeshire

  1,884

  797

  1,087

  (ii) Dyfed

  3,040

  831

  2,209

  (iii) Wales

  12,040

  6,076

  5,964

  European Fighter Aircraft
  Mr. Rogers
  To ask the Secretary of State for Defence what progress has been made on deciding on the radar system for the European fighter aircraft; and if he will make a statement.

  Mr. Sainsbury
  As my hon. Friend the Parliamentary Under-Secretary of State for the Armed Forces said on 11 February 1988 at column 592, revised bids for the EFA radar have been received. The assessment of these bids is in hand, but will take some time and a decision is unlikely until the summer.

  Trident
  Mr. Cohen
  To ask the Secretary of State for Defence if he will give details of the sub-headings of expenditure in the Trident miscellaneous budget.

  Mr. Sainsbury
  The sub-headings of expenditure in the miscellaneous element of the Trident budget are functional machinery, logistic and other support costs, and additional intramural costs.

  Soviet Weapons
  Mr. Anthony Coombs
  To ask the Secretary of State for Defence what assessment his Department has made of Soviet modernisation of their conventional weapons; and if he will make a statement.

  Mr. Ian Stewart
  I refer my hon. Friend to the statement made by my right hon. Friend the Prime
  627
  Minister on the NATO summit on 4 March at columns 1279–80 which emphasised that there has been no let-up in the Soviet Union's extensive military modernisation programme, covering both the improvement of existing platforms, weapons and equipment and also the introduction of new ones. For example, among major items a new version of the T-72 tank has recently appeared and a new heavy lift aircraft has been introduced, while new attack helicopters and a range of new missiles are under development. Further information is given regularly in the annual "Statement on the Defence Estimates".

  Territorial Army
  Mr. Baldry
  To ask the Secretary of State for Defence if he will make a statement on current levels of recruitment and retention into the Territorial Army.

  Mr. Freeman
  Recruitment arid retention figures for the Territorial Army are, of course, subject to seasonal variations. The overall strength reached a temporary peak of over 78,000 in May 1987. Essentially the main concern lies in retaining experienced volunteers, rather than in attracting new recruits, although the latter is, of course, closely monitored. We have implemented a number of initiatives aimed at improving retention, most recently agreement to the funding of a major media campaign recommended by the National Employer Liaison Committee, details of which I gave in the answer to my hon. Friend the Member for Hampshire, East (Mr. Mates) on 29 February 1988 at column 142.

  Army Trucks
  Mr. Eastham
  To ask the Secretary of State for Defence what refurbishing work is to be carried out on the Army's existing 4-tonne trucks; and when he plans to order a replacement.

  Mr. Sainsbury
  We have no plans to refurbish the Army's existing 4-tonne truck fleet. A competition to select a new 4-tonne vehicle is currently in progress. The new vehicles will be ordered in 1989 and will begin to enter service in 1990. Consideration is also being given to a further order for the existing model as an interim measure.

  Chemical Weapons
  Mr. Cohen
  To ask the Secretary of State for Defence what consideration and discussions have taken place within the North Atlantic Treaty Organisation in respect of the possibility of retaining safety margins of chemical weapons; and if he will make a statement.

  Mr. Ian Stewart
  There are no chemical weapons declared to NATO, although the United States possesses a minimal retaliatory capability. It is the aim of all NATO states to achieve a comprehensive, verifiable and global ban on all chemical weapons, as was confirmed at the meeting of the Heads of State and Government of the North Atlantic Treaty Organisation in Brussels on 2–3 March.

  Bearer Parties
  Mr. Marlow
  To ask the Secretary of State for Defence under what circumstances bearer parties are provided for the coffins of deceased military personnel on arrival in the United Kingdom from overseas.
  628
  Mr. Freeman
  Bodies returning to the United Kingdom from overseas normally arrive on scheduled aeroplanes at civil airports where provision of a bearer party might cause difficulties or be inappropriate. In those cases the body is met and taken from the airfield by a civilian undertaking. Whether or not to supply a bearer party in other circumstances rests with the regiment and the wishes of the family.

  Mr. Marlow
  To ask the Secretary of State for Defence whether bearer parties were provided for the officers killed on duty off Portugal on the return of their bodies to the United Kingdom.

  Mr. Freeman
  The bodies of Lt. Cdr. Davies and S/Lt. Cawthorne, who were tragically killed while on duty on 10 March, were returned to the United Kingdom on board the RFA Engadine. The ship docked at Portland naval base. The bodies were piped from the ship in accordance with naval custom. Royal Navy personnel were used to deliver the bodies into the custody of the coroner for Dorset. The question of bearers does not therefore arise until the funeral service where a naval bearer party will be provided if the next-of-kin so request.

  Loan Service Personnel Programme
  Mr. Hinchliffe
  To ask the Secretary of State for Defence if he will list the names of countries to which Britain has military personnel on loan currently under the loan service personnel programme.

  Mr. Ian Stewart
  Members of Her Majesty's armed forces have served in the following countries and territories on loan or secondment terms during the current financial year:

  Australia

  Kuwait

  Bahrain

  Lesotho

  Bangladesh

  Mauritius

  Barbados

  New Zealand

  Belize

  Nigeria

  Bermuda

  Oman

  Brunei

  Qatar

  Dominica

  Saudi Arabia

  Fiji

  St. Lucia

  Gambia

  St. Vincent

  Ghana

  Sudan

  Hong Kong

  Swaziland

  Indonesia

  Uganda

  Jordan

  United Arab Emirates

  Kenya

  Zimbabwe1

  1 Since January 1986 a wing of the British military advisory and training team has been specifically allocated to train Mozambican troops within Zimbabwe.

  HMS Tireless
  Mr. Cohen
  To ask the Secretary of State for Defence what is the purpose of the visit of HMS Tireless to the port of Southampton; how often visits of this type are made; what are the criteria for deciding the timing and location of such visits; and if he will make a statement.

  Mr. Ian Stewart
  HMS Tireless made a routine visit to Southampton from 9–15 March in order to give her crew a period of rest and recreation and an opportunity to meet local organisations, including the sea cadet corps. The timing of such visits is largely determined by the operational programme of HM submarines and the availability of suitable port facilities. In my reply to the
  629
  hon. Member for Cardiff, South and Penarth (Mr. Michael) on 9 March at column 216, I gave the number of United Kingdom nuclear powered submarine visits to United Kingdom non-naval ports since 1970.

  Mr. Cohen
  To ask the Secretary of State for Defence whether the local public safety scheme was activated in response to the visit of HMS Tireless to the port of Southampton; what class of berth the submarine is using; and if he will make a statement.

  Mr. Ian Stewart
  The procedures for notifying the appropriate local authorities, emergency services and other civilian agencies of an impending visit of a nuclear submarine, specified in the Southampton special safety scheme, were carried out prior to the recent visit of HMS Tireless to the port. The berth used by HMS Tireless is categorised as a Z berth.

TRANSPORT

  Road Maintenance (Northern Region)
  Mr. Boyes
  To ask the Secretary of State for Transport what is the expected increase in real terms to be allocated for road maintenance in the northern region.

  Mr. Peter Bottomley
  We have increased the 1988–89 allocation for the maintenance of motorways and trunk roads in the northern region by 3·2 per cent. in real terms compared with the initial allocation for 1987–88. We are maintaining provision for local road maintenance in England at £1,264 million for 1988–89. This represents an increase of 8·4 per cent. in real terms on what local authorities have budgeted to spend in 1987–88. This provision is not broken down by region.

  Dual Carriageways (Central Reservations)
  Mr. Robert Banks
  To ask the Secretary of State for Transport what mileage of steel barriers was erected in the central reservations of dual carriageway roads and motorways during the last financial year; and what mileage has been contracted for in the present financial year.

  Mr. Peter Bottomley
  The information requested is not held centrally. I shall write to my hon. Friend.

  Highway Authorities (Underspending)
  Mr. Latham
  To ask the Secretary of State for Transport what representations have been made to his Department by the Federation of Civil Engineering Contractors regarding alleged underspending by highway authorities on road building or maintenance; what statistical evidence is available to him in that regard; and what action he is taking.

  Mr. Peter Bottomley
  The Federation of Civil Engineering Contractors wrote to my right hon. Friend the Secretary of State on 16 September enclosing a copy of its submission to the Chief Secretary to the Treasury on roads and bridges expenditure. This contained representations on expenditure by highway authorities on road building and maintenance. The issues raised in their submission were discussed with my right hon. Friend on 26 November.

  Statistical evidence on highway authorities' spending on roads comes from their budget and expenditure returns
  630
  to the Department of the Environment. In the last three financial years public expenditure provision for local authority roads capital spending was not underspent. Local authorities' budgets for 1987–88 show £148 million underspending on road maintenance, despite the poor state of local roads. Public expenditure provision for 1988–89 allows for a 13 per cent. increase on these budgets. If 1988–89 budgets show continuing underspend, we shall need to consider, with the local authority associations, what further steps may be needed to ensure adequate road maintenance by local authorities.

  Panama Canal
  Mr. Tony Banks
  To ask the Secretary of State for Transport when his Department last consulted British shipping interests concerning the situation in the Panama canal zone; and if he will make a statement.

  Mr. David Mitchell
  I refer the hon. Member to the reply I gave on 4 March, at column 740. We continue to keep the situation under review in close consultation with British shipping interests.

  Al2 Bypass (Emergency Telephones)
  Mr. Burns
  To ask the Secretary of State for Transport what representations he has received regarding the installation of emergency telephones on the Al2 bypass at Chelmsford; what proposals there are to install such telephones; and if he will make a statement.

  Mr. Peter Bottomley
  Representations have been received from two local residents. The A12 Chelmsford bypass is one of a number of lengths of trunk road identified by the Department as meriting installation of emergency telephones when funds can be made available.

  I hope to announce shortly a list of sites at which installation is proposed in 1988–89 and 1989–90.

  Arms Shipments
  Mr. Foulkes
  To ask the Secretary of State for Transport what information he has on the cargo of arms carried by an aircraft owned by Great Southern Airways which stopped over at Prestwick airport on a flight from France to the United States of America on 24 November 1987; what notification is required of such arms shipments; and if he will make a statement.

  Mr. Peter Bottomley
  Great Southern Airways sought routine permission for a technical refuelling stop at Prestwick on 14 November 1987 under articles 43 and 44 of the air navigation order. The application was fully in order and permission was granted.

  Breeches Buoy Equipment
  Mr. Steen
  To ask the Secretary of State for Transport how many coastguard stations have breeches buoy equipment; when it was installed; why he has decided to remove existing equipment from use; if he will make a statement as to the cost involved of(a) withdrawal of the equipment and (b) leaving it in place; and how the need formerly met by breeches buoy will henceforth be met.

  Mr. David Mitchell
  There are 263 coastguard stations which hold breeches buoy equipment. The majority of this
  631
  equipment has been in place since the mid-19th century, although some modifications have taken place in the intervening years.

  The existing equipment is to be removed because its use as a method of rescuing stranded mariners has progressively declined and its retention for use by Her Majesty's coastguard can no longer be justified.

  The only costs involved in withdrawing this equipment will be in transportation. These costs have not been calculated although they are expected to be minimal. Any time spent by coastguards on this task will be part of their everyday working and no extra expenditure will be incurred.

  The costs involved in retaining the equipment would be in the region of £230,000 per year. This includes replacement, maintenance costs and care of equipment payments to auxiliary coastguards. However, development costs for replacement of obsolescent rocket apparatus would also have to be incurred in the near future.

  The need formerly met by breeches buoys is now met by search and rescue helicopters provided by my Department and the Ministry of Defence and lifeboats provided by the Royal National Lifeboat Institution. The cliff rescue capability which is also provided by my Department may also be appropriate in certain cases.

  Manchester Airport
  Mr. Alfred Morris
  To ask the Secretary of State for Transport what representations his Department has received from British airlines on the matters to be negotiated by the British and United States Governments in regard to United States carrier access to Manchester international airport; what response he has made; and if he will make a statement.

  Mr. Peter Bottomley
  A number of representations have been received from British airlines in regard to wider access for United States carriers to serve Manchester international airport. Their representations, together with all other representation received on this issue, will be taken into account in the forthcoming negotiations with the United States Government, scheduled for 17–18 March.

  Wortley (Rail Services)
  Mr. Madden
  To ask the Secretary of State for Transport what representations he has received to the effect that the notice, published by the British Railways Boad on 10 March, concerning a proposal to discontinue railway passenger services between Wortley South and Wortley West junction, is invalid in that it fails to meet the requirements of section 56 of the Transport Act 1962; and if he will make a statement.

  Mr. David Mitchell
  None. That is not a matter for me.

  Vehicle Number Plates
  Mr. David Nicholson
  To ask the Secretary of State for Transport whether proposals have been made to impose a common design vehicle number plate throughout the EEC.

  Mr. Peter Bottomley
  It has been made clear to the Commission that any proposals which prejudiced the high standards of clarity and readability of the current United Kingdom design would be opposed.
  632
  Officials in the Commission are considering the possibility of harmonising the size and design of number plates throughout the Community as part of a common transport policy. The Government have not received any formal proposals for harmonisation.

OVERSEAS DEVELOPMENT

  United Nations Children's Fund
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs what contribution was made by Her Majesty's Government to the United Nations Children's Fund in each financial year since 1978–79 in both current and actual prices.

  Mr. Chris Patten
  The information is as follows:

  Contributions at current prices

  1986–87 prices

  (£ million)

  (£ million)

  Year

  General fund

  Special appeals

  Total

  General fund

  Total

  1978–79

  4·5000

  0·664

  5·164

  8·8

  10·1

  1979–80

  15·800

  1·751

  7·551

  9·7

  12·6

  1980–81

  4·300

  1·456

  5·756

  6·0

  8·1

  1981–82

  5·900

  0·083

  5·983

  7·5

  7·6

  1982–83

  5·900

  0·069

  5·969

  7·0

  7·1

  1983–84

  6·000

  0·025

  6·025

  6·8

  6·9

  1984–85

  6·000

  1·000

  7·000

  6·6

  7·6

  1985–86

  29·550

  1·338

  10·888

  9·8

  11·2

  1986–87

  3·250

  6·570

  9·820

  3·3

  9·8

  1 Special increase to mark International Year of the Child

  2 £3·25 million, originally planned to be paid in April 1986, was paid in March.

  Departmental Grants
  Mr. Hinchliffe
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the non-governmental organisations in receipt of grants from his Department during 1987–88; and what is the size of each grant.

  Mr. Eggar
  Current information about the total of grants committed in 1987–88 by the Overseas Development Administration to particular nongovernmental organisations under arrangements for the joint funding of development projects, support to volunteer and other agencies and support for refugee relief and related development projects is given below.

  £

  Accord

  410,000

  Action Aid

  434,876

  Afghan Aid

  370,000

  Aga Khan Foundation

  39,287

  Appropriate Health Resources and Technologies Action Group

  90,194

  Aid for India

  33,345

  Boys Brigade

  10,996

  British Executive Service Overseas

  306,000

  British Red Cross Society

  728,966

  Care (UK)

  138,465

  Cerebral Palsy Overseas

  28,500

  Catholic Fund for Overseas Development

  440,000

  Catholic Institute for International Relations

  811,152

  Centre for World Development Education

  100,000

  Christian Aid

  1,197,283

  Christians Abroad

  16,000

  Christian Outreach

  30,000

  Commonwealth Ecology Council

  7,666

  Commonwealth Trade Union Council

  32,332

  633

  £

  Concern

  250,000

  Cooperation for Development

  17,250

  Duke of Edinburgh's Award

  64,233

  Euro Action Accord

  289,539

  Food Agriculture Research Mission

  18,189

  Friends Urambo Mwanhala

  8,832

  Hand in Hand

  15,000

  Health Unlimited

  23,500

  Help the Aged

  8,000

  Institute of Cultural Affairs

  4,168

  International Extension College

  50,000

  International Medical Relief

  54,500

  International Planned Parenthood Federation

  6,600,000

  Intermediate Technology Development Group

  1,242,000

  International Voluntary Service

  657,108

  International Year of Shelter for the Homeless Trust

  57,775

  Leonard Cheshire Foundation

  37,000

  Leprosy Mission

  15,748

  Mission Aviation Fellowship

  15,000

  National Children's Homes

  33,150

  Ockenden Venture

  230,000

  Overseas Development Institute

  245,000

  Oxfam

  2,055,704

  Plan International

  108,500

  Population Concern

  88,957

  Population Services

  146,903

  Quaker Peace and Service

  30,000

  Regional Conference on International Voluntary Service

  4,400

  Royal Commonwealth Society for the Blind

  147,394

  Richmond Fellowship

  87,000

  Ryder Cheshire Mission

  25,000

  Save the Children Fund

  1,265,000

  Sandy Gall's Afghanistan Appeal

  49,000

  Scottish Catholic International Aid Fund

  79,318

  Scottish Education and Action for Development

  6,000

  Scouts

  25,000

  SOS Sahel International

  10,318

  Sport Aid

  45,000

  St. John's Ambulance

  4,476

  Tanzania Development Trust

  8,000

  Tear Fund

  289,170

  Uganda Society for Disabled Children

  127,644

  United Nations Association International Service

  400,000

  Universities Educational Fund for Palestine Refugees

  13,000

  Voluntary Service Overseas

  7,114,000

  Water Aid

  269,929

  World Vision

  134,000

  World University Service

  95,000

  World Wildlife Fund

  251,800

  Y-Care

  33,500

  You and Me

  20,000

  Young Womens Christian Association

  3,000

  Total

  28,098,067

  Note: excludes disaster relief and food aid channelled through nongovernmental organisations.

EDUCATION AND SCIENCE

  Departmental Grants
  Mr. Sedgemore
  To ask the Secretary of State for Education and Science if he will list those voluntary organisations in the current financial year in receipt of grants from his Department including the amount of grant in each case and the work for which the grant has been made available.

  Mrs. Rumbold
  The following grants were given towards the headquarters activities of national voluntary youth organisations under section 20(1)(b) of the Education (Grant) Regulations 1983:
  634

  Organisation

  Grant in 1987–88

  Army Cadet Association

  5,160

  Association for Jewish Youth

  25,260

  Baptist Union of Great Britain and Ireland

  24,420

  Boys' Brigade

  34,920

  British Council of Churches

  24,000

  British Red Cross Society

  9,780

  British Trust for Conservation Volunteers

  35,700

  Campaigners

  13,620

  Catholic Youth Services

  18,000

  Church Army

  12,240

  Church Lads' Brigade and Church Girls' Brigade

  11,040

  Church of England Board of Education

  37,920

  Co-operative Union

  4,320

  Council for Environmental Education

  22,680

  Covenanters

  4,920

  Da'watul Islam: United Kingdom and Eire

  6,780

  Drake Fellowship

  27,420

  Duke of Edinburgh's Award

  66,600

  Endeavour Training

  28,920

  Forest School Camps

  1,620

  Frontier Youth Trust

  11,940

  Girl Guides Association

  47,460

  Girls' Brigade

  21,060

  Girls' Venture Corps

  23,640

  Horse Rangers Association

  1,800

  Inter-Action

  17,460

  International Voluntary Service

  1,200

  Jewish Lads' and Girl's Brigade

  5,520

  JMB Development Training

  4,920

  Lubavitch Foundation

  5,040

  Methodist Association of Youth Clubs

  87,540

  National Association of Boys' Clubs

  149,160

  National Association of Muslim Youth

  15,360

  National Association of Youth Clubs

  255,360

  National Elfrida Rathbone Society

  22,800

  National Foundation of 18+ Groups

  32,640

  National Federation of Gateway Clubs

  35,340

  National Federation of Young Farmers' Clubs

  78,960

  National Organisation for Work with Girls and Young Women

  17,760

  National PHAB

  49,080

  National Youth Assembly

  7,500

  National Youth Choir

  1,020

  National Youth Orchestra

  4,560

  National Youth Theatre

  40,380

  New Testament Church of God

  10,080

  Ocean Youth Club

  12,300

  Outward Bound Trust

  13,680

  Quaker Home Service

  13,560

  Reform Synagogues of Great Britain

  7,740

  Royal Society for the Protection of Birds

  4,440

  Sail Training Association

  5,580

  St. John Ambulance Brigade

  7,200

  Salvation Army

  12,720

  Scout Association

  49,800

  Sea Cadet Association

  14,220

  SPLASH

  4,740

  Union of Maccabi Associations

  6,600

  UK Federation of Jazz Bands

  6,300

  United Reformed Church

  35,940

  Woodcraft Folk

  10,020

  Young Christian Workers

  24,240

  Young Men's Christian Association

  149,160

  Young Women's Christian Association

  88,080

  Youth Hostels Association

  41,640

  In addition, grants have been allocated to the following national associations under section 19 of the Regulations in respect of expenditure incurred in providing educational services:

  Association

  Grant in 1987–88 (£)

  British Chess Federation

  36,400

  British Theatre Association

  13,900

  635

  Association

  Grant in 1987–88 (£)

  Educational Centres Association

  6,200

  National Association of Women's Clubs

  26,400

  National Federation of Community Organisations

  25,300

  National Federation of Women's Institutes

  15,600

  National Housewives' Register

  5,700

  National Union of Townswomen's Guilds

  13,600

  Pre-Retirement Association

  71,800

  University of the Third Age

  3,800

  Workers' Educational Association National Office1

  104,300

  1 Of which £53,500 is allocated for in-service training.

  Under section 17 of the regulations grants were given to the following voluntary organisation in support of their activities:

  Organisation

  Grant in 1987–88 (£)

  Association for All Speech Impaired Children

  11,000

  British Association for Early Childhood Education

  4,610

  Community Service Volunteers: Advisory Service

  26,960

  Council for Education in World Citizenship

  37,000

  National Educational Resource Centre for Hearing Impaired Pupils

  37,000

  Pre-School Playgroups Association

  108,000

  National Association for Gifted Children

  10,000

  National Bureau for Handicapped Students

  30,750

  Students (Records)
  Mr. Kirkwood
  To ask the Secretary of State for Education and Science when he intends to issue a consultation document on the keeping and disclosure of records concerning students in further education establishments; and when he intends to table regulations.

  Mr. Jackson
  My right hon. Friend plans to issue a consultation paper on this subject later this year and will deal then with the making of regulations.

  Mr. Kirkwood
  To ask the Secretary of State for Education and Science when he intends to issue a circular to local education authorities on the keeping and disclosure of pupil records; and when he now expects regulations to be tabled in Parliament.

  Mrs. Rumbold
  Our intention is to make regulations by the end or 1988. Guidance will be issued at the same time to local education authorities.

  Primary and Secondary Schools (Expenditure)
  Mr. McLoughlin
  To ask the Secretary of State for Education and Science if he will show the amount spent per pupil on education in(a) primary schools and (b) secondary schools in the counties of Staffordshire and Derbyshire.

  Mr. Dunn
  The latest information is provided in the table.

  Net institutional recurrent expenditure1 per pupil—1986–87

  Primary Schools £

  Secondary Schools £

  Staffordshire

  878

  1,257

  Derbyshire

  877

  1,304

  Note:

  1 Net institutional recurrent expenditure covers the cost of salaries

  636
  and wages, premises and certain supplies and services. It does not include the cost of school meals, central administration and inspection, debt charges or revenue contributions to capital outlay.

PRIME MINISTER

  Church Lawford
  Mr. Pawsey
  To ask the Prime Minister if she has any plans to make an official visit to Church Lawford, near Rugby.

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

  NHS Hospital, Bradford
  Mr. Cryer
  To ask the Prime Minister when she next expects to pay an official visit to a National Health Service hospital in Bradford.

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

  West Berlin (Bomb Alert)
  Mr. Dalyell
  To ask the Prime Minister if she will discuss with President Reagan the statements of Secretary of State Schultz and Secretary Weinberger that there was a bomb alert in West Berlin on 14 April 1986, in the light of the statement by the duty head of the United States military police in Berlin, Major Ruth La Fontaine, that there was no such alert; and if she will make a statement.

  The Prime Minister
  No.

  West Berkshire
  Mr. Michael McNair-Wilson
  To ask the Prime Minister when she next intends to visit west Berkshire.

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

  Agricultural and Industrial Support
  Mr. Ralph Howell
  To ask the Prime Minister if, on the same basis as the reply to the hon. Member for Norfolk, North on 16 March 1987,Official Report, columns 425–26, she will show the cost of agricultural support for each year since 1960 at 1988–89 prices, and in real terms; and how much has been paid out, at 1988–89 prices and in real terms to (a) the motor industry, (b) the coal industry, (c) the steel industry, (d) the shipbuilding industry and (e) the aircraft industry; and if she will also show the total amount paid to industry as a whole for each year since 1960.

  The Prime Minister
  The table sets out the public expenditure cost of supporting agriculture as compared with the public expenditure cost of support to manufacturing industry over the period since 1977. The presentation is not identical with that on previous occasions. Because many industrial support schemes, such as support for innovation, operate across industries, disaggregation into individual industries is not possible. However estimates are made by the Central Statistical Office for manufacturing, mining and construction taken as a whole. These figures have been set alongside comparable figures for agriculture, forestry and fishing. Data prior to 1977 are not available on a consistent basis because of changes in industrial classifications. On these figures, support for agriculture as a proportion of its
  637
  contribution to value added is about 20 times that provided to manufacturing industry. The figures for support to agriculture in the United Kingdom relate solely

  General government expenditure on

  Gross domestic product arising from

  General government expend as percentage of GDP in each sector

  Agriculture forestry and fishing

  1Manufacturing

  Agriculture forestry and fishing

  1Manufacturing

  Agriculture forestry and fishing

  1Manufacturing

  £ million

  £ million

  £ million

  £ million

  Per cent.

  Per cent.

  1977

  1,059

  1,582

  3,353

  45,892

  31·6

  3·4

  1978

  1,121

  2,051

  3,590

  52,795

  31·2

  3·9

  1979

  1,163

  2,487

  3,922

  59,448

  29·7

  4·2

  1980

  1,633

  2,683

  4,303

  65,170

  38·0

  4·1

  1981

  1,688

  3,467

  4,837

  66,972

  34·9

  5·2

  1982

  2,000

  2,766

  5,530

  72,555

  36·2

  3·8

  1983

  2,472

  2,662

  5,365

  76,985

  46·1

  3·5

  1984

  2,194

  2,423

  6,222

  83,108

  35·3

  2·9

  1985

  2,725

  2,265

  5,627

  91,457

  48·4

  2·5

  1986

  2,397

  1,856

  5,902

  99,172

  40·6

  1·9

  1 Including mining and mineral resources and construction.

  Source: United Kingdom National Accounts 1987 (CSO). Tables 2.1 and 9.4.

  Civil Servants
  Mr. Ron Davies
  To ask the Prime Minister what advice is given to Departments about the promotion within executive officer and higher executive officer grades of persons who are already members of or intend to stand as candidates for membership of local councils; and what restriction is placed on their promotion.

  The Prime Minister
  The rules governing political activities by civil servants are set out in the Civil Service pay and conditions of service code (paragraphs 9923 to 9957), a copy of which is available in the House of Commons Library. Promotion is solely on merit in accordance with the general principles of fair and open competition. The grades referred to fall in the category of civil servants who need to apply for departmental permission to take part in local political activities, under the provisions set out in paragraphs 9929–9932 and 9934.

  Mr. Ron Davies
  To ask the Prime Minister what functions and roles are restricted to those who are not members of, or candidates for, local councils within the Departments of the Environment and Transport at executive officer and higher executive officer grades.

  The Prime Minister
  There are many posts in the Department of Environment and the Department of Transport which could not appropriately be held by officers who are members of, or candidates for, local councils, because it is important that the staff concerned should be seen to be politically impartial. All applications for permission to take part in local political activities are dates considered on a case by case basis, as is the posting of officers who have received such permission.

  I also refer the hon. Gentleman to the reply I am giving him today to another question.

  Engagements
  Ms. Ruddock
  To ask the Prime Minister if she will list her official engagements for Thursday 17 March.

  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Thursday 17 March.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 17 March.
  638
  to amounts financed by the Government and by the European Community budget and do not include costs to the consumer of holding food prices above world prices.

  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Thursday 17 March.

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

WALES

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

  Mr. Peter Walker
  The Welsh Development Agency's contribution to the development of the tourism industry is mainly indirect through key programmes such as land reclamation, environmental improvement and investment.

  Since the agency's inception, tourism-related projects costing in the order of £20 million have been completed or are in progress. This is equivalent to about 3 per cent. of total mainstream Welsh Development Agency spending over the same period. A broad estimate of tourism-related expenditure at 1988 prices is £32 million or 3·5 per cent. of total spending since 1976. Comparable information is not available for individual financial years.

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

  Mr. Grist
  The amount of surplus land held and disposed of by district health authorities in Wales in the years in question is as follows:
  639

  District

  Surplus land held as

  Surplus Land Disposed

  as 31 March 1987

  1974–1979

  1979–1987

  (acres)

  (acres)

  (acres)

  Clwyd

  100

  5

  677

  East Dyfed

  12

  37

  35

  Gwent

  30

  43

  187

  Gwynedd

  99

  100

  5

  Mid Glamorgan

  30

  18

  234

  Pembrokeshire

  1

  122

  1

  Powys

  81

  Nil

  79

  South Glamorgan

  23

  37

  10

  West Glamorgan

  13

  9

  38

  The value of surplus land currently held is not available centrally.

  Exports
  Dr. Thomas
  To ask the Secretary of State for Wales to what extent he has been able to participate in spearheading export drives for products made in Wales since June 1987.

  Mr. Peter Walker
  On 26 June 1987 I launched a public awareness campaign of the exporting services offered through the Welsh Office. I have also decided to provide staff reinforcement to the export branch to improve the service to Welsh exporters.

  Since then, I have on several occasions spoken to industrialists both individually and collectively about the need to increase the level of Welsh exporting. I have set in motion plans for two overseas trade missions which will be led by me and will later this year take Welsh business men to explore new opportunities in Russia and Saudi Arabia.

  Tomorrow I am giving an exporting breakfast in the St. David's hall Cardiff, and next week I will host a similar event in north Wales. I have also arranged that later this year a series of seminars on individual markets will visit west, mid and north Wales. Towards the end of the year I will hold seminars on the theme of the single European market in Cardiff and Wrexham.

ATTORNEY-GENERAL

  Conveyancing
  Mr. Nicholas Bennett
  To ask the Attorney-General what representations he has received concerning delays in conveyancing procedures; and if he will make a statement.

  The Attorney-General
  From time to time the Lord Chancellor receives representations from hon. Members and others about delays in conveyancing procedures. Through its practice recommendations, explanatory guides and consultation papers the Conveyancing Standing Committee, set up in 1985 by the Law Commission at the Government's request, seeks to promote changes in practice and procedure to make conveyancing simpler, cheaper, quicker and more effective.

ENERGY

  Margam Pit
  Mr. Nicholas Bennett
  To ask the Secretary of State for Energy what discussions have taken place between his Department, British Coal, the National Union of 640
  Mineworkers and the National Association of Colliery Overmen, Deputies and Shotfirers concerning the proposed Margam pit; and if he will make a statement.

  Mr. Michael Spicer
  This matter is for discussion between the management and unions. British Coal has kept me informed of developments. It also consulted my right hon. Friend's predecessor when he was Secretary of State about the project. British Coal reached the view that because of the high capital cost the project could be viable only if flexible working was introduced. My right hon. Friend's predecessor agreed with this assessment. My right hon. Friend and I fully support his view and hope that working arrangements can be agreed and the project can proceed as planned.

  British Nuclear Forum (Contracts)
  Mr. Ashdown
  To ask the Secretary of State for Energy what percentage of contracts over £1 million awarded by the Central Electricity Generating Board, Nirex, British Nuclear Fuels Ltd., and the United Kingdom Atomic Energy Authority went to members of the British Nuclear Forum; and if he will list the firms to which these went, together with the contract values.

  Mr. Michael Spicer
  These are commercial matters for the bodies concerned.

  Pressurised Water Reactors
  Mr. Ronnie Campbell
  To ask the Secretary of State for Energy what are the schedules and time scales for building each of the six proposed pressurised water reactors; and where it is proposed to site them.

  Mr. Michael Spicer
  Consent for the Sizewell B PWR was granted in March 1987. The CEGB applied in August 1987 for consent to construct, a PWR at Hinkley Point C. A public inquiry will be held, following objections from local planning authorities.

  No other applications to build nuclear power stations have been received. The timing of applications and the choice of sites are matters for the CEGB.

  Renewable Energy Sources
  Mr. Ronnie Campbell
  To ask the Secretary of State for Energy if he will make it his policy to remove current constraints on renewable energy sources to enable them to compete on equal terms with nuclear power sources for the reserved percentage of electricity generation.

  Mr. Michael Spicer
  It is the Government's policy that there should be no constraints on renewable energy sources which would handicap them in competing with other fuels in supplying electricity to the grid.

  British Coal (Enterprise) Ltd.
  Mr. Boyes
  To ask the Secretary of State for Energy how many jobs have been created in the Houghton and Washington constituency by British Coal (Enterprise) Ltd.

  Mr. Michael Spicer
  This is a matter for British Coal (Enterprise) Ltd. and I shall ask the chairman to write to the hon. Member.

  British Coal
  Mr. Meale
  To ask the Secretary of State for Energy if he will list the names of all private firms contracted to British Coal, stating their type of work and areas covered.

  Mr. Michael Spicer
  This is a matter for the British Coal Corporation.

  Coal Products Limited
  Mr. Neil Hamilton
  To ask the Secretary of State for Energy whether he has reached a decision about the capital reconstruction of the British Coal Corporation's subsidiary, Coal Products Limited; and if he will make a statement.

  Mr. Parkinson
  In recent years the British Coal Corporation's (BCC's) coal derivatives subsidiary, Coal Products Limited, has incurred heavy losses, particularly as a result of the NUM strike in 1984–85. Since 1984–85 its cumulative losses have exceeded its capital of £100 million. At the end of March 1987 they stood at £143 million.

  These losses were funded by British Coal, with the Government's consent, largely in the form of loans. It is clear, however, that there is no realistic prospect that BCC will recover this money, and I have therefore agreed that it has to be written off by means of a waiver of the loans due to BCC and by cancellation of the company's £22·5 million preference share capital.

  I am pleased to report, however, that the management of Coal Products has now carried out a vigorous and fundamental reconstruction of its business; substantial progress has been made to eliminate loss-making activities and to make the company viable. The management is determined that the company should establish a profitable track record on normal commercial terms with BCC.

  Apart from any non-deficit grants for which it might be eligible, it is intended that neither the Government nor BCC will provide further support, either by injecting further loans or capital into the company, or by way of further guarantees.

EMPLOYMENT

  Loan Guarantee Scheme
  Mr. Boyes
  To ask the Secretary of State for Employment what plans are being considered further to develop the loan guarantee scheme for inner city investment and development.

  Mr. Cope
  One of this Government's principal aims has been to encourage the establishment and development of businesses in the inner city areas. As part of the action for cities initiative launched on Monday 7 March 1988 we have increased the guarantee available under the loan guarantee scheme to businesses based or wishing to be 642
  based in the 16 inner city task force areas from 70 per cent. to 80 per cent. I hope that this increase in the guarantee will make it easier for businesses in inner city areas to take advantage of the scheme.

  Construction Industry (Fatalities)
  Mr. Heffer
  To ask the Secretary of State for Employment how many fatalities of self-employed persons and illegally employed persons took place whilst carrying out work covered by the construction regulations of the Factories Act in the years 1985, 1986 and 1987.

  Mr. Nicholls
  The table gives the available information for reported fatalities of those self-employed persons in the construction industry from 1985 to March 1987. Accidents to illegally employed persons cannot be distinguished in the records.

  Fatalities of self-employed persons in the construction industry1

  Year

  Number

  1985

  22

  1986 January-March

  2

  1986–19872

  27

  Notes:

  1 As defined by division 5 of the 1980 standard industrial classification.

  2 Year commencing I April 1986. More recent information is not yet available.

  In addition, the Health and Safety Executive knows of other fatal accidents to self-employed persons engaged in construction work outside the construction industry. For 1985 the number was 1; for 1986–87 it was also 1.

  Wages (Underpayment)
  Mr. Wray
  To ask the Secretary of State for Employment what information he has on the distribution between age groups of cases of illegal underpayments.

  Mr. Nicholls
  I regret that the information requested is not available.

  Mr. Wray
  To ask the Secretary of State for Employment how many cases of illegal underpayment of workers by their employers there were in each year since 1974.

  Mr. Patrick Nicholls
  The numbers of workers found to be underpaid under wages council legislation were as follows:

  Number

  1974

  15,368

  1975

  22,604

  1976

  24,831

  1977

  26,920

  1978

  22,671

  1979

  22,457

  1980

  28,373

  1981

  24,117

  1982

  20,406

  1983

  20,832

  1984

  18,043

  1985

  16,948

  1986

  15,533

  1987

  9,129

  Mr. Goodlad
  To ask the Secretary of State for Employment how many cases of underpayment the wages inspectorate investigated in the north-west division in each
  643
  of the past five years; how many were the results of complaints by staff; how many were the results of routine spot checks; and what were the outcomes.

  Mr. Nicholls
  [pursuant to his reply, 15 February 1988, c. 472]: In my earlier reply I undertook to give information for 1987. This is as follows:

  Outcome of checks of pay carried out at establishments in north-west division, 1987

  Number

  Checked by visit (routine)

  2,267

  Found to be underpaying

  254

  Checked by visit (complaint)

  440

  Found to be underpaying

  287

  Member's Correspondence
  Mr. Pawsey
  To ask the Secretary of State for Employment, pursuant to his answer of 25 February,Official Report, column 293, if he will now reply to the letter from the hon. Member for Rugby and Kenilworth dated 3 December 1987.

  Mr. Lee
  I have now written to my hon. Friend.

  Small Businesses
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment if, pursuant to his answer to the hon. Member for Stretford of 1 March,Official Report, column 543, he will place in the Library copies of the report of the results of the surveys containing evidence that some employers are reluctant to recruit additional staff because of employment protection legislation; if he will list the surveys in the Official Report; and if he will give details of his assessment of the total national job loss caused.

  Mr. Nicholls
  Results of two studies by this Department were published as Research Papers 6 and 53 and placed in the Library. It is not possible to estimate the effect on job opportunities since the employment legislation is one of many factors to be considered by an employer.

  Authority

  Description of work concerned

  Date special report requested

  Action taken and Date

  Brent

  Major construction

  7 May 1985

  Council informed no further action — 20 February 1986

  Greenwich

  Major construction

  7 May 1985

  Council informed no further action — 10 April 1986

  Haringey

  Major and minor construction

  7 May 1985

  Council directed to cease using DLO — 5 March 1986

  St. Helens

  Major and minor construction

  7 May 1985

  Council informed no further action — 21 January 1986

  Hammersmith and Fulham

  Maintenance and highways

  22 October 1985

  Council informed no further action — 25 March 1986

  Bristol

  Maintenance, highways and minor construction

  1 April 1986

  Council informed no further action — 28 October 1986

  Newham

  Major construction

  1 April 1986

  Council directed to cease using DLO — 4 November 1986

  Wigan

  Maintenance

  1 April 1986

  Council informed no further action — 28 October 1986

  Liverpool

  Major and minor construction

  13 May 1986

  No decision taken yet

  Hackney

  Major and minor construction

  17 October 1986

  No decision taken yet

  Lambeth

  Major construction

  18 February 1987

  Council directed to cease using DLO — 4 August 1987

  Lambeth

  Minor construction

  4 August 1987

  No decision taken yet

  Burnley

  Maintenance

  18 February 1987

  No decision taken yet

  Hull

  Major construction

  23 March 1987

  Council informed no further action — 5 August 1987

  Camden

  Major construction

  23 March 1987

  Council informed no further action — 5 August 1987

  Waltham Forest

  Maintenance and highways

  22 June 1987

  Council informed no further action — 26 January 1988

  Bath

  Maintenance

  22 June 1987

  Council informed no further action — 17 November 1987

  Three Rivers

  Maintenance

  31 July 1987

  No decision taken yet

  Watford

  Maintenance

  6 August 1987

  No decision taken yet

  Bolton

  Maintenance

  20 January 1988

  No decision taken yet

  Hotel and Catering Industry (Wages)
  Mr. Speller
  To ask the Secretary of State for Employment, how many cases of underpayment in the hotel and catering industry the wages inspectors investigated in 1987; how many were the result of complaints by staff; and how many were the result of routine spot checks.

  Mr. Nicholls
  [pursuant to his reply, 2 February 1988, c. 558]: In my earlier reply I undertook to provide some additional information. This is as follows.

  In 1987, wages inspectors visited 1,311 establishments in the hotel and catering trades to investigate complaints. Underpayments were found at 780. Inspectors also visited 6,932 establishments to carry out routine checks. Underpayments were found at 892.

ENVIRONMENT

  Direct Labour Building Departments
  Mr. Latham
  To ask the Secretary of State for the Environment whether he will list by date all cases in which he or his predecessors have used their restrictive powers under the Local Government, Planning and Land Act 1980 in respect of local authority direct labour building departments; what were the reasons for the exercise of powers in each case; and what was the outcome in each case.

  Mr. Chope
  The table lists the 20 occasions on which, following serious failures to meet the required financial objectives, my right hon. Friend has directed an authority to prepare a special report under section 17(4) of the 1980 Act, and the action taken as a result. In three cases closure directions have been made. In 10 others the council has been informed that no further action will be taken apart from careful monitoring of future performance. In the other seven no decision has yet been taken.

  Football Matches (Attendances)
  Mr. Heffer
  To ask the Secretary of State for the Environment what information he has as to how many people attended all association football league and cup matches in England and Wales, from the commencement of the football season up to and including 29 February.

  Mr. Moynihan
  Information held by the Football Association and the Football league shows the following attendances at league and FA cup matches from the beginning of the current season up to 29 February 1988:

  Million

  League matches

  12·77

  Football Association Challenge cup

  11·72

  1 Up to and including fifth round.

  Figures for the three cup competitions run by the Football League are available only up to 31 January 1988 and are as follows:

  Million

  Littlewoods Challenge Cup

  1·34

  Simod Cup

  0·17

  Sherpa Van Trophy

  0·18

  GLC Heritage Collection
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what information he has regarding the disposal of the items held by the London residuary body termed the GLC Heritage Collection.

  Mr. Chope
  I understand that the board of the London residuary body has made a decision to transfer most of the artefacts to the Greater London record office, where they will be available for public inspection. Other artefacts will be transferred to successor bodies such as the London fire and civil defence authority and the Thames water authority. Pending completion of agreements, the artefacts are in secure storage.

  GLC Dais (Badges of Office)
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what information he has regarding the present location of the badges of office previously worn by members of the GLC dais.

  Mr. Chope
  The badges of office of the former chairman, vice-chairman and deputy-chairman are in secure storage at county hall pending their eventual transfer to the Greater London record office.

  Chlorofluorocarbons and Halogens
  Mr. Wray
  To ask the Secretary of State for the Environment what information he has as to how many research projects on the impact of chlorofluorocarbons and halogens upon the environment and, specifically, the ozone layer are at present being carried out in the United Kingdom.

  Mr. Moynihan
  I listed in my reply to a question by the hon. Member on 2 November 1987, column 437, the establishments funded by the Department, and the stratospheric ozone research topics on which they are engaged. In addition, the Department co-operates closely
  646
  with the programmes supported by the Meteorological Office, the Natural Environment Research Council, the Science and Engineering Research Council, the Department of Trade and Industry and the Chemical Manufacturers Association.

  Privately Rented Accommodation
  Mr. Neil Hamilton
  To ask the Secretary of State for the Environment what information he has as to the amount by which the supply of privately rented accommodation in the Greater Manchester area has declined in the past 10 years; and what indications there are that demand exceeds supply.

  Mrs. Roe
  No statistics for Greater Manchester are kept, but nationally private rented dwellings as a proportion of the total declined from 12 per cent. in 1979 to 8 per cent. in 1987.

  We have no information on part two of the question.

  County Rate Precepts
  Mr. McLoughlin
  To ask the Secretary of State for the Environment if he will list the county rate precepts in order, from the highest to the lowest.

  Mr. Chope
  Following is a list of the county precepts for 1988–89:

  County

  Precept (p)

  Derbyshire

  297·50

  Cleveland

  282·00

  Humberside

  261·00

  Cumbria

  260·00

  Nottinghamshire

  253·00

  Avon

  246·50

  Bedfordshire

  246·40

  Durham

  246·00

  Northumberland

  1244·50

  Hertfordshire

  240·40

  Oxfordshire

  238·60

  Essex

  235·00

  Lancashire

  234·00

  Cheshire

  232·00

  Northamptonshire

  229·00

  Buckinghamshire

  227·70

  Isle of Wight

  227·23

  Warwickshire

  227·10

  Somerset

  224·00

  Leicestershire

  221·20

  Wiltshire

  219·30

  Gloucestershire

  217·30

  East Sussex

  217·10

  North Yorkshire

  217·00

  Cambridgeshire

  216·00

  Staffordshire

  215·00

  Devon

  209·75

  Cornwall

  207·70

  Lincolnshire

  204·00

  Suffolk

  204·00

  Dorset

  203·00

  Surrey

  202·70

  Hampshire

  200·30

  Shropshire

  200·00

  Berkshire

  193·60

  Kent

  192·00

  West Sussex

  192·00

  Norfolk

  190·90

  Hereford and Worcester

  185·00

  1Includes Northumbria police authority's precept of 14·40p

  647
  Mr. McLoughlin
  To ask the Secretary of State for the Environment if he will provide a list showing for those county councils which changed control in 1981 their county precept(a) in 1981 and (b)

  County

  Precept 1981–82 (P)

  Precept 1988–89 (P)

  Increase (Percentage)

  Avon

  120·60

  246·50

  104

  Bedfordshire

  122·60

  246·40

  101

  Berkshire

  112·00

  193·60

  73

  Cheshire

  126·00

  232·00

  84

  Cleveland

  140·00

  282·00

  101

  Cumbria

  131·00

  260·00

  98

  Derbyshire

  111·00

  297·50

  168

  Gloucestershire

  120·00

  217·30

  81

  Humberside

  107·00

  261·00

  144

  Isle of Wight

  113·50

  227·23

  100

  Lancashire

  121·50

  234·00

  93

  Leicestershire

  101·50

  221·20

  118

  Northamptonshire

  117·00

  229·00

  96

  Northumberland

  125·00

  1244·50

  96

  Nottinghamshire

  109·00

  253·00

  132

  Staffordshire

  112·50

  215·00

  91

  Warwickshire

  116·55

  227·10

  95

  1 The 1988–89 precept for Northumberland includes the Northumbria police authority's precept of 14·40p.

  Merseyside Development Corporation
  Mr. Frank Field
  To ask the Secretary of State for the Environment if he will list the members of the Merseyside Development Corporation.

  Mr. Trippier
  The members of the Merseyside Development Corporation board are:

  Mr. Philip Carter—Chairman

  Mr. John Smith CBE—Deputy Chairman

  Professor Graham Ashworth

  Mr. Brian Thaxter

  Professor Patrick Minford

  Mr. Clive Lewis, FRICS, FSVA

  Councillor Thomas Glover

  Councillor John Hale

  Dr. John Ritchie.

  Public Health Consultants (Medical Assessments)
  Mr. Brandon-Bravo
  To ask the Secretary of State for the Environment what consideration he has given to the recommendation in the Acheson report that public health consultants should no longer undertake medical assessments on behalf of housing departments; and if he will make a statement.

  Mr. Newton
  I have been asked to reply.

  We are currently studying all the recommendations of this report. It would not be appropriate for me to comment on any one of them at this stage. As my right hon. Friend indicated in his reply to my hon. Friend the Member for Sevenoaks (Mr. Wolfson) on 14 January 1988, at column 401, we hope to make a further announcement on implementation in the near future.

  Chlorofluorocarbons
  Mr. Fraser
  To ask the Secretary of State for the Environment whether he will introduce legislation to compel prominent labelling of products containing chlorofluorocarbons.

  Mr. Atkins
  I have been asked to reply.
  648
  Mr. Chope
  Following is a list of precepts for the counties which changed political control in 1981:

  I refer to my reply to the hon. Member for the City of Durham (Mr. Steinberg) on 5 November 1987 at column 802.

  Market forces also operate for the very wide range of other products which contain chlorofluorocarbons and for which in many cases there is no suitable alternative.

FOREIGN AND COMMONWEALTH AFFAIRS

  Chemical Weapons
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what date discussions were first(a) proposed and (b) commenced between Her Majesty's Government and the Soviet Administration with a view to achieving an agreement on chemical weapons; and if he will make a statement.

  Mr. Mellor
  Both we and the Soviet Union are members of the 40 nation conference on disarmament in Geneva, where negotiations for a comprehensive and verifiable global chemical weapons ban are taking place. British and Soviet officials have met frequently since July 1985 to discuss progress at these negotiations.

  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what date he was first notified by the United States Administration that they were going to commence production of binary chemical weapons.

  Mr. Mellor
  The United States proposal to commence production of binary chemical weapons was contained in legislation passed by Congress in May 1985. The United States Government have kept us fully informed of their plans.

  Torture Convention (Ratification)
  Mr. Win Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he expects the United Kingdom to be in a position to ratify the European convention against torture.
  649
  Mrs. Chalker
  We hope to ratify the convention in the near future.

  Panama
  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs if any requests have been received from the United States' authorities for co-operation in actions being taken against the Government of Panama; and if he will make a statement.

  Mr. Eggar
  We have not been asked by the United States authorities to co-operate in actions being taken against the Government of Panama.

  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government in respect of current United States' actions towards Panama; and if he will make a statement.

  Mr. Eggar
  Relations between the United States and Panama are matters for the two Governments concerned.

  Hotels (Fire Safety)
  Dr. Glyn
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what action he is taking with the Bulgarian Government to inquire into the fire precautions in the Hotel Moussala following the fire of 22 February; and if he will make a statement;

  (2) what action he is taking as the result of the fire which occurred on 22 February at the Hotel Moussala in the resort of Borovets, Bulgaria, to inquire into the minimum fire standards required by tour operators in hotels into which they book their clients overseas.

  Mr. Eggar
  The Bulgarian Government have appointed a special commission to investigate the fire. A report should issue within 60 days of the event.

  Her Majesty's embassy in Sofia has requested a copy of the report, and has sought the assurance of the Bulgarian Government that any recommendations for improvements to safety procedures will be implemented without delay.

  The consular department of the Foreign and Commonwealth Office raised the matter at a meeting with the tour operators study group (TOSG) on 15 March 1988. The TOSG informed officials that they had sent a message to some 50 Governments, including the Bulgarian Government, seeking an assurance that local fire safety regulations will be fully implemented.

  Military Training (Foreign Students)
  Mr. Hinchliffe
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the names of countries currently sending students to Britain under the military training assistance programme.

  Mr. Mellor
  The countries which have sent students to the United Kingdom for military training in 1987–88, whose costs have been wholly or partially paid for from the United Kingdom military training assistance scheme are:

  Algeria

  Belize

  Antigua

  Botswana

  Bahamas

  Brazil

  Bangladesh

  Burma

  Barbados

  Cameroon

  650

  China

  Nepal

  Colombia

  Nigeria

  Congo

  Pakistan

  Cyprus

  Philippines

  Djibouti

  Portugal

  El Salvador

  Senegal

  Egypt

  Sierra Leone

  Fiji

  Singapore

  Gambia

  Somalia

  Ghana

  Spain

  Greece

  Sri Lanka

  Guyana

  St. Vincent

  India

  Sudan

  Indonesia

  Swaziland

  Ireland

  Tanzania

  Ivory Coast

  Thailand

  Jamaica

  Tonga

  Jordan

  Trinidad and Tobago

  Kenya

  Tunisia

  Korea

  Turkey

  Lebanon

  Uganda

  Lesotho

  Uruguay

  Malaysia

  Venezuela

  Malawi

  West Samoa

  Maldives

  Yemen Arab Republic

  Malta

  Zaire

  Mauritius

  Zambia

  Morocco

  Zimbabwe

  Mozambique

  Refugees (Visas)
  Mr. Meale
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise within the Council of Europe France's revocation of the Council of Europe agreement of 1959 on the abolition of visas for refugees travelling within EEC states.

  Mrs. Chalker
  No. The French acted in accordance with article 7 of the agreement on the abolition of visas for refugees.

  DNA Testing (Islamabad)
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations have been made by the ICI subsidiary responsible for the commercial development of DNA testing about current arrangements at the British embassy at Islamabad for blood samples to be collected.

  Mr. Eggar
  No formal representations from ICI have been received.

  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs on how many days in each month the British embassy in Islamabad makes arrangements to take samples in connection with DNA tests; if there are plans to increase the number of days; how many blood samples have been taken in the last two years, to date; and if he will make a statement.

  Mr. Eggar
  On average the British embassy in Islamabad arrange for two daily DNA testing sessions each month. Since DNA tests commenced sessions have taken place as follows:

  October 1987 — 1 Day

  November 1987 — 4 Days

  December 1987 — Nil

  January 1988 — 1 Day

  February 1988 — 1 Day

  March 1988 — 4 Days

  651
  There are no plans to increase the number of sessions each month. Including the pilot scheme, 218 blood samples have been taken from mid-1987, when the local facility became available, to date.

  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many people have applied to the British embassy in Islamabad to offer blood samples in connection with DNA tests; what is the average waiting time for a person awaiting an appointment to offer blood; and what action is being taken to reduce waiting times.

  Mr. Eggar
  No records of people applying direct to the British embassy in Islamabad have been kept, but they are few in number. It is more common for the sponsor to initiate action with Cellmark in the United Kingdom. The latter forwards lists to the embassy. An average of five weeks then elapses before the appointment. This period could be reduced only at the expense of other work.

HOME DEPARTMENT

  Dr. Alan Clift
  Mr. Sedgemore
  To ask the Secretary of State for the Home Department if he will list the convicted prisoners whose convictions were found to be unsafe following the dismissal of Dr. Alan Clift from the Home Office Forensic Service, giving in each case the date of their release.

  Mr. John Patten
  Nine persons in whose cases Dr. Clift gave evidence had their convictions quashed at various times between 1978 and 1984. Some were released on completion of their sentences, some on licence, and some at the time their convictions were quashed. I shall write to the hon. Gentleman with the further details which he seeks. Copies of the letter will be placed in the Library.

  Mr. Harry Barnes
  To ask the Secretary of State for the Home Department if he will list all statements made, following the dismissal of Dr. Alan Clift, by his Department's Ministers on the safety of convictions obtained as a result of his evidence.

  Mr. John Patten
  Dr. Clift was prematurely retired on 1 March 1982. Since that date, Ministers of this Department have answered questions or made statements on matters related to the safety of convictions in cases in which he gave evidence on the following occasions (all references are to Official Report).

  Date

  Section

  Column number

  14 July 1983

  Oral Answers

  1016

  1 December 1983

  Oral Answers

  982

  19 January 1984

  Oral Answers

  439–440

  26 January 1984

  Written Answers

  625–27

  7 February 1984

  Written Answers

  518–19

  (three questions)

  13 February 1984

  Written Answers

  7

  17 February 1984

  Written Answers

  334

  (two questions)

  1 March 1984

  Written Answers

  279–80

  6 June 1984

  Written Answers

  170–71

  21 June 1984

  Written Answers

  218

  24 July 1984

  Written Answers

  586–87

  31 July 1984

  Written Answers

  220–21

  (two questions)

  15 November 1984

  Written Answers

  303

  15 November 1984

  Adjournment Debate

  886–94

  27 November 1984

  Written Answers

  418–19

  Crime Statistics
  Mr. David Nicholson
  To ask the Secretary of State for the Home Department what proportion of crime in 1987 was accounted for by theft of or from cars; what were the comparable figures for the five previous years and if he will make a statement.

  Mr. John Patten
  In the last five years, about a quarter of all recorded crime has been theft of or from vehicles. In the first nine months of 1987, it was 26 per cent., but thefts of vehicles fell, while thefts from vehicles increased. We expect the full year figures to reflect this pattern. Many of these offences can be prevented. We believe that 20 per cent. of motorists do not always regularly lock their cars.

  Mr. Chapman
  To ask the Secretary of State for the Home Department if he will make a statement about the level of crime in the Metropolitan police area in 1987 and the previous year.

  Mr. John Patten
  The Commissioner of the Metropolitan Police has reported that in 1987 there were, in total, 4 per cent. fewer crimes recorded in the Metropolitan police district than in 1986. There were falls in recorded offences of rape, autocrime and burglary. Recorded offences of robbery and violence against the person increased although they still formed less than 6 per cent. of total recorded crime in 1987.

  Gambling Machines
  Dr. Reid
  To ask the Secretary of State for the Home Department if he has received any representations regarding the current review on the abuse of gambling machines.

  Mr. John Patten
  Yes. In the course of our review of the law on amusement arcades, we have received representations from a wide range of organisations and individuals.

  Mr. Dunnachie
  To ask the Secretary of State for the Home Department if he will make a statement on the representations made to him regarding his review on the abuse of gambling machines.

  Mr. John Patten
  I refer the hon. Member to the reply given on 4 March to questions from my hon. Friend the Member for Taunton (Mr. Nicholson) at column 722, and to replies I gave today to questions from my hon. Friend the Member for Birmingham, Hall Green (Mr. Hargreaves) and the hon. Member for Motherwell, North (Dr. Reid).

  Mr. Andrew Hargreaves
  To ask the Secretary of State for the Home Department what representations he has received on the positioning of fruit or other gambling machines in fast food outlets where children and young teenagers congregate; and if he will make a statement.

  Mr. John Patten
  In the course of our review of the law on amusement arcades we have received representations that additional restrictions are required on amusement-with-prizes machines wherever they are provided. The suggestion most frequently made in these representations is that access to places providing the machines or use of the machines themselves should be restricted to people aged over 16 or 18 years. It has also been represented to us that the current law is adequate. Under that law, local authorities already have power to ban the machines from premises other than amusement arcades and may pass a
  653
  resolution limiting the machines to a particular class of premises or limiting the number of machines on any premises.

  We hope to be able to reach conclusions on our review in due course.

  Solicitors (Client Information)
  Mr. Archer
  To ask the Secretary of State for the Home Department how many cases have occurred since 1972 where solicitors have been found to have passed on to a third party or parties, from clients now in police custody, information which has interfered in the police investigation of the case or any subsequent prosecution.

  Mr. Douglas Hogg
  I regret that this information is not available.

  Tamils
  Mr. Fearn
  To ask the Secretary of State for the Home Department what information he has received regarding the treatment in Sri Lanka of Tamils deported from the United Kingdom during the last month; and if this will be taken into account when decisions on future deportations are made.

  Mr. Renton
  There is no obligation under the United Nations convention on refugees to monitor the treatment of unsuccessful asylum seekers after return to their country of origin, and we have no mechanism for doing so. I understand, however, from our High Commission in Colombo that Tamils recently returned there have not been harassed in any way on arrival and that one has specifically stated that he has encountered no problems since his return.

  So far as future cases are concerned, each will be considered on its merits in the light of all the relevant circumstances.

  Television Licences
  Mr. Holt
  To ask the Secretary of State for the Home Department how many television licence evaders in Cleveland were prosecuted in each of the past 10 years.

  Mr. Renton
  The readily available information is as follows:

  Number

  1979–80

  1,762

  1980–81

  1,852

  1981–82

  2,451

  1982–83

  2,587

  1983–84

  2,001

  1984–85

  1,983

  1985–86

  2,181

  The figures have been supplied by the national television licence records office, which instigates all prosecutions for television licence evasion.

  Mr. Skinner
  To ask the Secretary of State for the Home Department what recent representations he has received calling for legislation providing free television licences for all pensioners; and if he will make a statement.

  Mr. Renton
  Since 1 January this year, one petition forwarded by an hon. Member has been received and three hon. Members and 17 members of the public have written seeking free television licences for pensioners.
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  Mr. Latham
  To ask the Secretary of State for the Home Department whether he is now in a position to announce his decision on applications for concessionary television licences, following the Kirklees judgment.

  Mr. Renton
  We hope to do so shortly.

  Fraud
  Mr. Campbell-Savours
  To ask the Secretary of State for the Home Department what proposals he has for reforming the law in relation to fraud.

  Mr. John Patten
  Provisions giving effect to the main recommendations of the Roskill committee on fraud trials have been either enacted in the Criminal Justice Act 1987 or included in the current Criminal Justice Bill.

  London (Parking Control)
  Mr. Bowis
  To ask the Secretary of State for the Home Department what steps he is taking to transfer responsibility for parking control and enforcement from the Metropolitan police to the London boroughs; and if he will make a statement.

  Mr. Douglas Hogg
  The possibility of giving local authorities, including those in London, more responsibility for the enforcement of parking regulations is among the matters being considered by a working party of representatives from the Home Office, Department of Transport, police and local authority associations. We hope to receive their report in the autumn.

  Day Fine System
  Ms. Quin
  To ask the Secretary of State for the Home Department if he has given further consideration to the introduction of a day-fine system.

  Mr. John Patten
  We have no plans for legislation to introduce a formal day-fine system, but we are setting up experiments to see whether mean assessment can be improved so that fines can be linked more closely to the capacity of less well-off offenders to pay them.

  Hampshire Constabulary
  Mr. Hunter
  To ask the Secretary of State for the Home Department if he will reconsider his decision not to increase further the establishment of the Hampshire constabulary.

  Mr. Douglas Hogg
  As indicated in my reply of 15 February at column 437 to an earlier question from my hon. Friend, further consideration will be given to the application for an increase in the establishment of the Hampshire constabulary in 1988–89.

  Commercial Radio Stations
  Mr. Jack
  To ask the Secretary of State for the Home Department what representations he has received on the obligations of commercial radio stations to include news in their programming under his proposed new arrangements for broadcasting; and if he will make a statement.

  Mr. Renton
  Some comments on the radio Green Paper published last year suggested that commercial stations
  655
  should continue to be required to include in their broadcasts a certain amount of news. We have, however, taken the view that stations should be able to decide for themselves on the basis of their own judgment of listeners' wishes how much, if any, news to provide and in what form. The legislative proposals we shall bring before Parliament will however include a provision requiring that any news that is broadcast by a licensed station must be presented with accuracy and impartiality.

  Child Abuse Trials (Video Evidence)
  Mr. Butler
  To ask the Secretary of State for the Home Department what representations he has received seeking the possibility of the use of pre-recorded video evidence in court of children in abuse cases.

  Mr. John Patten
  Two thirds of those who responded to our consultation paper issued last May on the use of video technology at the trials of alleged child abusers expressed some support for the wider use of video recordings. Since then we have also received a small number of letters of support from some hon. Members and members of the public. Recently I met a deputation led by the noble Baroness Faithfull, and one from the Police Federation led by my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) and in each case had useful discussions on the issue.

  Autocrime
  Mr. Greg Knight
  To ask the Secretary of State for the Home Department what plans he has for seeking to reduce car crime.

  Mr. John Patten
  Last November, the Home Office standing conference on crime prevention set up a working group to consider the prevention of car crime. Austin-Rover, who are represented on the working group, have offered to produce a thief-proof concept car, incorporating a range of the latest technology in car security, for display at this year's standing conference in December.

  Three parts of a British Standard on vehicle security (mechanical locking systems, security of in-car entertainment equipment, and window etching) have been published and further parts are due to be published shortly. We are seeking to have the British Standard adopted as a European Community directive.

  Our new crime prevention publicity campaign launched earlier this month includes information on car crime and the scope for preventing it.

  Litter
  Dr. Michael Clark
  To ask the Secretary of State for the Home Department if he will call for a report from the Commissioner of Police of the Metropolis on the priority accorded by the Commissioner to the detection or prevention of litter offences.

  Mr. Douglas Hogg
  The Government are concerned about the effect of litter on the environment. We do not regard this problem as one to which the primary response should be enforcement of the law by the police. Nevertheless, I understand from the Commissioner that his officers have been made aware of the provisions of the Litter Act and that the detection and prevention of litter offences are accorded as much priority as is compatible with other demands placed upon the Metropolitan police.

  Olympic Games (Shooting Disciplines)
  Sir John Farr
  To ask the Secretary of State for the Home Department if he will take steps to assess whether the provisions of the Firearms Bill will prevent British participation in all the shooting disciplines in international events, such as the Olympics; and if he will make a statement.

  Mr. Douglas Hogg
  We have met representatives of shooting organisations with an interest in rifle shooting to assess the effects that the Government's proposals to prohibit high-powered, self-loading rifles will have on British participation in international shooting competitions. I understand that full bore self-loading rifles are not used in any of the Olympic disciplines, or in international competitions organised by the Union International de Tir. Although some international "practical" rifle competition take place, the number of British shooters is limited. The Bill does not otherwise affect British participation in international events.

  Drug Trafficking
  Mr. Sackville
  To ask the Secretary of State for the Home Department what further progress has been made in his campaign to prevent trafficking in cocaine and other illegal drugs.

  Mr. Douglas Hogg
  The Government continue to attach the highest priority to our comprehensive strategy aimed at tackling both the demand for and supply of drugs. The strategy is co-ordinated by the interdepartmental ministerial group on the misuse of drugs which I chair.

  We are playing a leading role in drawing up a new United Nations convention on drug trafficking, and continue to encourage improved international co-operation (for example, by signing last month a memorandum of understanding with the Soviet Union). We provide development aid and bilateral assistance to producer and transit countries for crop substitution measures and to combat drug production and trafficking. In addition, the Home Office programme for drug-related enforcement projects overseas will increase from £0·5 million to £2 million per year as from 1988–89, some of which will be targeted on coca producing countries in South America. We plan to add to our existing network of customs and police drug liaison officers at strategic points abroad.

  We have strengthened domestic enforcement by both customs and police and will be providing increased resources to the national drug intelligence unit in 1988–89. Since the Drug Trafficking Offences Act 1986 came into force a year ago, some £7 million in assets has been frozen and substantial sums confiscated. We are now seeking reciprocal agreements with other countries to make these powers even more effective and the first such agreement with the USA was signed last month.

  Chief Constables (Meeting)
  Mr. David Porter
  To ask the Secretary of State for the Home Department when he next expects to meet representatives of the non-metropolitan chief constables; and what subjects he expects to discuss.
  657
  Mr. Douglas Hogg
  My right hon. Friend plans to meet representatives of the Association of Chief Police Officers in the near future to discuss a number of topics, including prisoners held in police cells.

  Immigration Policy
  Mr. Marlow
  To ask the Secretary of State for the Home Department on what basic principles he bases his immigration policy.

  Mr. Renton
  In broad terms, the basic principles of the Government's immigration policy are to allow genuine visitors and students to come here; to give effect to the free movement provisions of European Community law; subject to that, to restrict severely the numbers coming to live permanently in this country or for employment, but to continue to admit the spouses and minor dependent children of those already settled here, provided they satisfy the requirements of the immigration rules. These principles are to be pursued firmly but fairly with the efficient use of resources.

  Broadcasting (White Paper)
  Mr. Leigh
  To ask the Secretary of State for the Home Department when he proposes to publish a White Paper on the future of broadcasting.

  Mr. Renton
  We intend to publish a White Paper within a few months.

  Identity Cards
  Mr. Andrew MacKay
  To ask the Secretary of State for the Home Department if he will consider introducing identity cards in the United Kingdom.

  Mr. Douglas Hogg
  No. This question has been considered from time to time, but we are not persuaded that there is a sufficiently strong case for reintroducing identity cards.

  Homicide
  Mr. Nicholas Bennett
  To ask the Secretary of State for the Home Department what was the total number of homicides in 1958, 1968, 1978 and 1987.

  Mr. John Patten
  The information up to 1986 is published in table 4.1 of "Criminal Statistics, England and Wales, 1986" (Cm. 233), a copy of which is in the Library. Corresponding information for 1987 is not yet available.

  Lunar House (Post Room)
  Mr. Ian Bruce
  To ask the Secretary of State for the Home Department when he now expects the post room to be cleared at Lunar house; and what proposals he has to remove the delays to the processing of passports and naturalisation papers.

  Mr. Renton
  I refer my hon. Friend to the announcement which I made on 16 February at column 863.

  Shops Act 1950
  Mr. Tim Smith
  To ask the Secretary of State for the Home Department if he has any plans to seek to amend the Shops Act 1950.
  658
  Mr. Renton
  We are considering how best the law can be amended to bring sense and consistency to the present situation on Sunday trading.

  Child Homicide (Sentences)
  Mr. Anthony Coombs
  To ask the Secretary of State for the Home Department what representations he has received regarding the minimum sentencing of offenders convicted of child homicide; and if he will make a statement.

  Mr. John Patten
  We receive many letters about sentencing policy, some of which propose the introduction of minimum sentences. There is a mandatory sentence of life imprisonment for murder. In exercising discretion over the release of offenders sentenced to life imprisonment, my right hon. Friend follows his predecessor's policy under which sexual or sadistic murderers of children can expect to serve at least 20 years in custody. The maximum penalty for manslaughter of infanticide is also life imprisonment; the circumstances of such offences vary considerably, and statutory minimum sentences would be an unjustifiable interference with judicial discretion.

  Gwent Police Force
  Mr. Flynn
  To ask the Secretary of State for the Home Department if he will make a statement on the manning of the Gwent police force.

  Mr. Douglas Hogg
  My right hon. Friend approved an increase of eight posts in the Gwent constabulary with effect from 1 January 1988, bringing it up to 986. Gwent police authority has applied for an increase of a further 42 posts for 1988–89. This application will be considered, along with others in the light of advice from Her Majesty's inspectors of constabulary.

  Exeter Prison
  Mr. Speller
  To ask the Secretary of State for the Home Department how many persons Exeter prison is designed to accommodate; how many were held there on the first days of January and February; how many of them were on remand awaiting trial and sentence; and if he will make a statement on the future of Exeter prison.

  Mr. Douglas Hogg
  The certified normal accommodation of Exeter prison, including the remand centre, is 307. On 1 January the prison held 461 prisoners of whom 266 were sentenced, 62 were convicted but unsentenced and 133 were unconvicted. On 1 February the figures were 495, 305, 27 and 163 respectively. Refurbishment work currently in progress on the prison's D wing is due to be completed at the end of this year. That will enable 40 places to be brought back into use.

  Butane Gas
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department if he has any proposals for changes in the law affecting the sale of butane gas canisters and other substances used for sniffing to children and young persons; and if he will make a statement.

  Mr. John Patten
  The Government supported the passage through Parliament of the Intoxicating Substances (Supply) Act 1985, which penalises a person
  659
  who supplies (or offers to supply) a substance, knowing or having reasonable cause to believe that it is likely to be inhaled by somebody under the age of 18 to achieve intoxication. We have no plans to amend this Act, but we will continue to encourage voluntary co-operation by retailers in controlling the supply of volatile substances to young people.

  Independent Broadcasting Authority
  Dr. Thomas
  To ask the Secretary of State for the Home Department when he last met the chairman of the Independent Broadcasting Authority; and what matters were discussed.

  Mr. Renton
  My right hon. Friend last met the chairman of the IBA on 19 January to discuss the Government's proposals for the future of commercial radio.

  Telephone Tapping
  Mr. Cryer
  To ask the Secretary of State for the Home Department when he expects to receive the next review of telephone tapping; and if he will make it his policy to publish the review.

  Mr. Hurd
  I expect my right hon. Friend the Prime Minister to present Lord Justice Lloyd's next annual report to the House later this month. As was the case last year, the report will be published and copies will be placed in the Library.

  Victim Support Schemes
  Mr. Burt
  To ask the Secretary of State for the Home Department if he will make a statement on the results of his Department's funding for local victim support schemes.

  Mr. John Patten
  We are making available up to £11 million over the next three financial years for the benefit of local victims support schemes. We have made 155 awards to enable local schemes to employ paid co-ordinators, and 54 awards to help schemes meet running costs. We are also sponsoring three projects aimed at developing improved support for the families of murder victims, children as victims, and victims of racial harassment.

  Crime Prevention
  Mr. Brazier
  To ask the Secretary of State for the Home Department whether Her Majesty's Government will take steps to improve co-operation against crime between the United Kingdom and other Western European countries.

  Mr. John Patten
  We are committed to strengthening the United Kingdom's effectiveness in the fight against international crime, and are taking forward a number of initiatives. The Drug Trafficking Offences Act 1986 enhances international co-operation by providing for the seizure of the profits of drug trafficking wherever it takes place. The extradition of people accused or convicted of serious crimes abroad is also a vital weapon: the reforms contained in the Criminal Justice Bill will, if enacted, enable the United Kingdom to accede to the European convention on extradition, the principal extradition 660
  arrangement in western Europe. At the level of operational co-operation the United Kingdom police participate in the International Police Organisation (Interpol). In other international organisations such as "Trevi" we continue to play a leading role in strengthening and improving co-operation against terrorism.

  For the future, we published on 24 February a discussion paper on international mutual assistance in criminal matters, copies of which are in the Library. The paper is based on the report of an official working group which endorsed proposals for amending the law to enable the United Kingdom to participate in mutual assistance treaties and conventions (including the European convention on mutual assistance). Such participation would allow our prosecuting authorities to obtain evidence from abroad for use in criminal proceedings here, and enable us to provide similar facilities for other countries.

  Mr. Stevens
  To ask the Secretary of State for the Home Department what plans he has for encouraging new crime prevention schemes.

  Mr. John Patten
  On 7 March my right hon. Friend announced the safer cities programme, under which it is intended to establish 20 crime prevention projects in high crime inner city areas over the next three years. After the necessary local consultation has taken place, a further announcement will be made about the location of the first of these projects.

  On 9 March we launched a new crime prevention publicity campaign. A central feature of the campaign is a handbook entitled "Practical Ways to Crack Crime". This offers a wide range of advice and information to individuals and organisations about what they can do to help prevent crime against themselves and their communities, including advice about how to join or start up local crime prevention schemes.

  We hope to make a further announcement shortly about the formation of a national organisation to support local crime prevention and initiatives.

  Commissioner of Pollice of the Metropolis
  Mr. Evennett
  To ask the Secretary of State for the Home Department when he last met the Commissioner of Police of the Metropolis; and what was discussed.

  Mr. Douglas Hogg
  My right hon. Friend last met the Commissioner on 4 February at a luncheon when they talked about a number of policing issues.

  Prison Service
  Mr. Soames
  To ask the Secretary of State for the Home Department if he will make a statement on industrial relations in the prison service.

  Mr. Douglas Hogg
  The national executive committee of the Prison Officers' Association has expressed concern about certain aspects of the new working practices introduced under fresh start and about manpower resources. Following a national ballot in favour of industrial action, it instructed its members not to complete a form required by management in connection with the control and allocation of staff hours. Talks are being held between officials and members of the NEC and some progress has been made. We urge the POA NEC now to recommend all industrial action be suspended in view of
  661
  the progress. Local action is currently taking place over manpower issues surrounding the introduction of fresh start at Wormwood scrubs and Pentonville. The prison population at those establishments has been reduced and the numbers held in police cells has risen.

  The fresh start working arrangements represented a major change for the prison service. No one doubted that the change would be difficult to achieve but a good start has been made and a recent study confirms that we are moving in the right direction. We are determined to see the task through to completion. We remain committed to achieving these crucial goals in the spirit of constructive collaboration with prison service trade unions.

  Marriage Agencies
  Mr. Allen Adams
  To ask the Secretary of State for the Home Department if he has any proposals to change the laws governing the control of agencies that advertise marriage arrangements between male British nationals and women from overseas, especially the Phillipines.

  Mr. John Patten
  We have no plans at present to introduce legislation to control marriage agencies.

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

  Mr. Hurd
  No. There would be practical difficulties in arranging for inspection in this way in my Department. But in keeping with our policy of promoting greater openness in Government, I shall continue to look for ways in which more information about the work of the Department, and the measures it introduces, can be made publicly available.

  Prisons (Syringes)
  Mr. Cohen
  To ask the Secretary of State for the Home Department in how many prisons syringes have been discovered in the last year; what was the number for each prison; how many were discovered to contain the AIDS virus; and if he will make a statement.

  Mr. Douglas Hogg
  During 1987, finds of syringes were reported in the following 13 establishments:

  Number

  HMP Bedford

  3

  HMP Bristol

  1

  HMYCC Castington

  1

  HMP and YCC East Sutton Park

  1

  HMP and YCC Exeter

  1

  HMP Holloway

  1

  HMP Liverpool

  2

  HMP Manchester

  5

  HMP Preston

  2

  HMP Reading

  2

  HMP Shepton Mallet

  4

  HMYCC Thorn Cross

  1

  HMP Wandsworth

  3

  TOTAL

  27

  662
  In addition, seven syringes were found in a visitor's bag at Brixton. It is not normally the practice to have such items tested for HIV antibody.

  Prisoners (Transfer to Northern Ireland)
  Mr. Cohen
  To ask the Secretary of State for the Home Department how many requests for transfer to Northern Ireland prisons were received from prisoners serving their sentences in England and Wales during 1986 and 1987; and how many were granted.

  Mr. Douglas Hogg
  In 1986, 25 requests for permanent transfer were received, two of which were granted; in 1987, 31 such requests were received and three were granted. A number of these requests are still being considered by the Home Office and the Northern Ireland Office.

  Metropolis (Access to Streets)
  Mr. Austin Mitchell
  To ask the Secretary of State for the Home Department, pursuant to his answer of 4 March,Official Report, column 725, on Downing street, what other streets in the metropolis have had similar permanent restrictions placed on their use for the reasons given in respect of Downing street.

  Mr. Douglas Hogg
  I am informed by the commissioner that access to no other streets has been similarly restricted.

  Downing Street (Access)
  Mr. Austin Mitchell
  To ask the Secretary of State for the Home Department, pursuant to his answer of 4 March,Official Report, column 725, on Downing street, the decision of the commissioner was made after consultation with, or application by, the residents of Downing street.

  Mr. Douglas Hogg
  The decision was made after consultation with the Prime Minister's office.

  Remand Prisoners
  Mr. Skinner
  To ask the Secretary of State for the Home Department how many prisoners are being kept on remand in prisons more than 20 miles from their families' homes.

  Mr. Douglas Hogg
  The information requested is not readily available and could be obtained only at disproportionate cost.

  Civil Defence
  Mr. Gerald Bowden
  To ask the Secretary of State for the Home Department if he proposes to publish the conclusions of his review, of the role of the civil defence college, Easingwold.

  Mr. John Patten
  The results of the review are under consideration; no decision has yet been taken on publication.

  Mr. Gerald Bowden
  To ask the Secretary of State for the Home Department, pursuant to his answer to the hon. Member for Eastbourne (Mr. Gow) of 10 July,Official Report, columns 307–8, if the review of the United Kingdom warning and monitoring organisation will take into account the need for the introduction of measures to alert the public against local peace time emergencies.
  663
  Mr. John Patten
  The review is principally concerned with wartime arrangements, but their possible relevance to peacetime emergencies is also being considered.

  Mr. Gerald Bowden
  To ask the Secretary of State for the Home Department, pursuant to his answer to the hon. Member for Eastbourne (Mr. Gow) of 10 July,Official Report, columns 307–8, when the review of the United Kingdom warning and monitoring organisation will be complete; and if the conclusions will be published.

  Mr. John Patten
  The review is expected to be completed in the next few months, and consideration will then be given to the extent to which its conclusions can be made available.

  Football Matches (Arrests)
  Mr. Heffer
  To ask the Secretary of State for the Home Department what information he has as to how many arrests there have been(a) inside football grounds and (b) outside football grounds arising from football matches during the current season.

  Mr. Douglas Hogg
  There were 2,297 arrests arising from Football League matches up to 31 October 1987, the latest date for which figures are available for this season. The figures do not distinguish between arrests occurring inside and outside football grounds.

  National Identification Bureau
  Mr. Hunter
  To ask the Secretary of State for the Home Department why the name of a constituent of the hon. Member for Basingstoke, the name of whom has been forwarded to him, whose conviction by court martial was quashed by the Courts Martial Appeals Court in 1963, has not been removed from the criminal records of the national identification bureau.

  Mr. Douglas Hogg
  As my noble Friend Lord Ferrers explained to the hon. Member in his letter of 9 March 1988, the conviction of his constituent by court martial has been retained on the records of the national identification bureau because it has not been notified of the result of any appeal. The bureau is now seeking further information from the prosecuting authority, following my hon. Friend's representation on behalf of his constituent.

  Mr. Hunter
  To ask the Secretary of State for the Home Department what individuals, organisations or authorities have, since 1963, had access to the criminal records of the national identification bureau; and in what circumstances.

  Mr. Douglas Hogg
  The national identification bureau does not release details of criminal records to outside organisations except where disclosure is clearly in the public interest. On this basis, such information may be released, from time to time, depending on the particular circumstances of the case, to any of the following organisations:

  Central Government Departments

  Local Authorities

  Foreign Governments (under Interpol arrangements)

  Police Forces

  Prosecuting Authorities

  Courts

  Judges

  Magistrates

  Prison Service

  Probation Service

  664

  Hospitals

  Banks

  Lawyers

  Research Organisations

  British Telecom

  British Broadcasting Corporation

  Civil Aviation Authority

  Post Office

  Police Complaints Authority

  General Medical Council and other similar professional organisations

  Official Receiver

  Traffic Commissioners

  Criminal Injury Compensation Board

  Crown Agents

  Crown Estate Commissioners

  National Museums and Galleries

  Royal Mint

  United Kingdom Atomic Energy Authority

  Information is also released on application to individuals under the subject access provisions of the Data Protection Act 1984.

  Citizenship
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department what has been the total number of applications received for British citizenship by(a) adults and (b) children in each of the last five calendar years; and in each category how many were granted.

  Mr. Renton
  The number of applications received in caseworking groups in the years 1983–1986 is shown in the table.

  Adults

  Minors

  1983

  70,416

  9,433

  1984

  33,857

  8,136

  1985

  41,905

  10,666

  1986

  45,885

  11,598

  We estimate that about 290,000 applications were received in 1987.

  Figures for grants of citizenship in 1983 to 1986 were published in table 2 of Home Office statistical bulletin "Citizenship Statistics, United Kingdom 1986" (Issue 29/87). Provisional figures for 1987 indicate that grants of citizenship were made to 55,600 adults and 9,200 minors. Final figures for 1987 will be published later this year.

  Meridian
  Mr. Kaufman
  To ask the Secretary of State for the Home Department if he has sent to the Secretary of State for Social Services correspondence with regard to Meridian referred to in his letter of 5 October 1987 to the right hon. Member for Manchester, Gorton, stating that he was sending this correspondence to that Secretary of State.

  Mr. Hurd
  A check with records held in the Department indicates that, as the right hon. Member was notified on 5 October 1987, the correspondence was forwarded to my right hon. Friend the Secretary of State for Social Services. As the right hon. Member will know from my right hon. Friend's reply of 14 March at column 470, his Department has been unable to trace the correspondence despite extensive inquiries and he has therefore undertaken to look into the matter immediately on receipt of a copy of the correspondence.

  Lincoln Prison
  Mr. Tony Lloyd
  To ask the Secretary of State for the Home Department if, pursuant to his reply of 8 March,Official Report, column 111, he will give details of the number of prisoners currently held in the remand wing of Lincoln prison; if he will give the number of urinals and water closets normally available and in use, and presently available and in use in Lincoln prison; if he will give details of the arrangements presently in operation for prisoners on remand in Lincoln prison to use urinals and water closets; and if he will make a statement.

  Mr. Douglas Hogg
  On 15 March 1988, a total of 103 prisoners were in the remand wing of Lincoln prison. Prior to the commencement of the present refurbishment work on the toilet facilities in Lincoln prison there were 16 urinals and 31 water closets available and in use by prisoners (four urinals and eight water closets being situated in the remand wing). As a result of the refurbishment so far completed there are 28 urinals and 34 water closets available and in use (two urinals and four water closets being in the remand wing). Refurbishment of toilet facilities is in progress on two floors of the remand wing and, while this work continues, prisoners from these floors will use the facilities available on the other two floors of the remand wing and in the adjacent B wing.

  DNA Testing
  Mr. Madden
  To ask the Secretary of State for the Home Department when he proposes to publish the feasibility study into DNA testing; and what are the broad conclusions of the study, including recommendations about establishing funding arrangements to enable those with limited financial resources to take DNA tests.

  Mr. Renton
  Officials have been consulting the scientists concerned on the text of a draft report. We expect the report to be published shortly.

  Victims of Crime
  Mr. Franks
  To ask the Secretary of State for the Home Department what action the Government are taking to improve the treatment of the victims of crime.

  Mr. John Patten
  The Criminal Justice Bill will strengthen the arrangements for victims to obtain compensation, will extend anonymity for rape victims and will enable children under 14 to give evidence by live closed circuit television link. We are making available up to £11 million over the next three financial years for the benefit of local victims support schemes. More than 200 awards have been made to local victims schemes as a result of our substantial new programme of funding. We shall shortly be issuing advice to police forces on further ways of helping victims. We shall also produce new leaflets advising victims on compensation and victims support and on attending court.

  Party Conferences (Police Costs)
  Mr. Pike
  To ask the Secretary of State for the Home Department what recent representations he has received regarding the funding of additional police costs in respect of national annual party political conferences.

  Mr. Douglas Hogg
  We have received recent representations from seven hon. Members, one local 666
  council, one police authority, one constituency Labour party and one chamber of commerce about the funding of police costs of national annual party political conferences in a number of areas.

  We have considered all these representations carefully but have concluded that we would not be justified in departing from normal police funding arrangements in these cases.

  Passports
  Mr. Riddick
  To ask the Secretary of State for the Home Department when he intends to seek parliamentary approval to replace the British passport with a European passport as planned for 1992: and if he will make a statement.

  Mr. Renton
  British passports are not being replaced with a European one. Rather, a new version of the British passport, machine-readable and in a common format agreed in 1981 with other member states of the European Community, will start to appear from this July when the Glasgow passport office is computerised. By the end of 1989 all six passport offices in the United Kingdom should be issuing British passports in the new format. Prototypes of the new passport and an explanatory note were placed in the Library in July 1984, and supplemented in December 1987 with updated versions of both.

  Mrs. Sherbanu Dharas
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department when he intends to reply to the letter sent to him on 7 December 1987 by Councillor Mike Jackson in respect of Mrs. Sherbanu Dharas.

  Mr. Renton
  [holding answer 3 March 1988]: A reply has now been sent to Councillor Jackson.

SCOTLAND

  South of Scotland Electricity Board
  Mr. Dunnachie
  To ask the Secretary of State for Scotland when he last met the chairman of the South of Scotland Electricity Board; and what matters were discussed.

  Mr. Lang
  My right hon. and learned Friend meets the chairman of the South of Scotland Electricity Board from time to time to discuss a wide range of matters affecting the electricity supply industry.

  Pupils (Records)
  Mr. Kirkwood
  To ask the Secretary of State for Scotland (1) when he intends to issue a circular to local education authorities on the keeping and disclosure of pupil records; and when he expects to table regulations in Parliament;

  (2) when he intends to issue a consultation document on the keeping and disclosure of records concerning students in further education establishments; and when he expects regulations to be tabled in Parliament.

  Mr. Michael Forsyth
  My right hon. and learned Friend will honour the undertaking given to the hon. Member in April 1987 and will make regulations dealing with access to education and social work records, if possible by the end of 1988.

  Councils of Social Service
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will make a statement on the funding of local councils of social service in rural Scotland, showing the amount paid to each local council of social service from public funds and the overall total paid to individual councils and to the Scottish Council for Voluntary Organisations in each of the last five years and for the coming year; and if it is his policy that these councils should be financed from(a) central or (b) local government.

  Mr. Michael Forsyth
  My right hon. and learned Friend continues to attach importance to the claims of local councils of social service operating in rural areas in the allocation of grant assistance, under the Social Work (Scotland) Act 1968, to voluntary bodies in the social work field. The amounts of grant paid to individual councils for each year of the five-year period ending 31 March 1988 are in table A.

  Total grant to local councils will be increased in 1988–89 to £504,000. That sum will be distributed to

  Central Government grants paid to local councils of social service

  Table A

  Council

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  Isle of Arran Council of Social Service

  8,011

  8,907

  8,653

  9,275

  12,812

  Voluntary Action in Badenoch and Strathspey

  —

  —

  —

  13,680

  17,230

  Barra and Vatersay Council of Social Service

  6,962

  9,642

  10,353

  16,734

  14,611

  Berwickshire Association for Voluntary Service

  8,402

  8,334

  8,486

  9,079

  8,824

  Bute Community Links

  —

  —

  —

  —

  11,247

  Association for Community Action (Clackmannan District)

  9,953

  10,943

  11,780

  14,372

  —

  East Lothian Council for Voluntary Service

  7,314

  7,401

  7,524

  7,477

  7,252

  East Sutherland Council of Social Service

  5,881

  8,567

  7,882

  8,827

  11,040

  Ettrick and Lauderdale Association of Voluntary Service

  7,188

  6,333

  7,371

  8,506

  7,876

  Federation of Borders Councils of Social Service

  884

  1,179

  1,240

  1,366

  1,827

  Federation of Voluntary Community Development Organisations in the Highlands and Islands

  1,810

  1,990

  1,782

  1,623

  2,264

  Gordon Rural Action and Information Network

  8,272

  9,634

  10,867

  11,749

  11,727

  Harris Council of Social Service

  6,120

  7,884

  7,510

  9,816

  10,706

  Inverness Voluntary Organisations Group

  13,184

  13,700

  13,690

  12,318

  6,683

  Islay Council of Social Service

  10,710

  10,924

  14,940

  14,085

  16,190

  Association of Local Voluntary Organisations (Lanark)

  8,905

  7,907

  8,485

  11,566

  9,966

  Levenmouth Council of Social Service

  1,883

  2,581

  16,232

  114,051

  113,955

  Lewis Council of Social Service

  17,038

  16,892

  18,242

  22,703

  19,548

  Lochaber Voluntary Organisations Group

  —

  —

  2,100

  12,794

  14,596

  Midlothian Council of Social Service

  2,977

  3,373

  4,309

  4,193

  3,657

  Musselburgh and District Council of Social Service

  455

  388

  —

  —

  —

  The Voluntary Association of Nairn Groups

  —

  —

  3,000

  10,319

  8,700

  Nithsdale Council of Voluntary Service

  —

  —

  4,269

  6,971

  9,379

  North and West Sutherland Council of Social Service

  5,810

  6,636

  6,898

  10,007

  9,617

  Voluntary Services Orkney

  12,948

  11,435

  11,911

  17,337

  18,411

  Perth and Kinross Association of Voluntary Service

  9,473

  10,554

  10,972

  10,787

  10,959

  Ross and Cromarty Council of Voluntary Service

  13,122

  12,418

  13,130

  14,871

  14,808

  Roxburgh Association of Voluntary Service

  6,885

  8,110

  7,988

  8,600

  10,751

  Shetland Council of Social Service

  18,524

  16,157

  16,704

  18,680

  19,398

  Skye and Lochalsh Council of Social Service

  13,117

  12,078

  12,181

  16,425

  14,853

  Speyside and District Council of Social Service

  11,074

  11,229

  12,114

  11,969

  12,608

  Stewartry Council of Voluntary Service

  5,139

  5,697

  7,061

  7,541

  7,849

  Council of Social Service (Stirling District)

  15,290

  16,683

  17,255

  18,438

  17,339

  Tweeddale Association of Voluntary Organisations

  5,247

  5,669

  6,866

  6,538

  9,325

  Uist Council of Social Service

  11,834

  11,845

  16,055

  14,711

  15,927

  West Lothian Council of Social Service

  6,354

  9,197

  10,616

  12,421

  12,159

  Total

  260,766

  274,287

  308,466

  389,829

  393,464

  1 Payments recorded include urban aid grant.

  668
  existing councils and three or four new councils which are expected to enter the grant arrangements for the first time. Allocations to individual councils will be indicated shortly.

  Grant is paid in each case as a percentage of proposed total expenditure and councils are required to find the balance of their income from other sources. They are riot required to obtain assistance from local authorities though this is in practice the source from which most additional funding is obtained.

  Grants paid to the Scottish Council for Voluntary Organisations during each year of the same five-year period are set out in table B.

  The council has been informed that, following the reassessment of priorities which led to the proposed increase in the level of support for local councils, grant for 1988–89, under section 10(1) of the 1968 Act, in respect of headquarters expenditure will be reduced to £250,000. In addition grant, amounting to £28,100, under section 9 of that Act, will be made towards the council's training activities. The council is free to seek additional income from other sources.
  669

  Table B

  Central Government grants paid to Scottish council for voluntary organisations

  1983–84

  1984–85

  1985–86

  1986–87

  1987–881

  Core grant under section 10 of the Social Work (Scotland) Act 1968

  312,369

  320,205

  363,072

  353,183

  346,986

  Payroll giving grant under section 10 of the Social Work (Scotland) Act 1968

  —

  —

  —

  33,265

  30,201

  Training grant under section 9 of the Social Work (Scotland) Act 1968

  18,211

  15,810

  20,549

  256,645

  29,168

  Community Education grant under the Further Education (Scotland) Regulations 1959–79

  1,660

  1,709

  1,000

  —

  —

  Tenants Participatory Advisory Service grant under the Housing (Scotland) Act 1987

  42,874

  42,616

  37,302

  21,835

  —

  TOTAL

  375,114

  380,340

  421,923

  433,928

  406,355

  1 Estimated to be paid.

  Coatbridge Project
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland when he intends to meet the appropriate local authority, hon. Members representing Monklands and other interested parties, to discuss the funding of the Coatbridge project or its successor project.

  Mr. Lang
  The funding of the Coatbridge project or any successor project is a matter for the partners in the project. My right hon. and learned Friend plans to visit Coatbridge on 18 March, when he expects to meet many of those with an interest in the project.

  Scottish Health Management Efficiency Group
  Mr. Galbraith
  To ask the Secretary of State for Scotland, pursuant to his answer of 14 March,Official Report, column 171, if he will list the members of the Scottish Health Management Efficiency Group; when it was set up; where it is located; and what is its remit.

  Mr. Michael Forsyth
  I assume that the hon. Member is referring to the answer I gave to the hon. Member for Edinburgh, Central (Mr. Darling) in the Official Report at column 333.

  The present membership of the Scottish Health Management Efficiency Group is as follows:

  Mr. J. D. M. Robertson, OBE (Chairman), Chairman, Orkney Health Board;

  Mr. D. Adams Jones, Director, Information Statistics Division Common Services Agency;

  Dr. C. M. Brough, Chief Administrative Medical Officer, Lothian Health Board;

  Mr. F. Clark, General Manager, Lanarkshire Health Board;

  Mr. I. G. Dorward, Acting General Manager, Fife Health Board;

  Mr. J. M. Eckford, General Manager. Ayrshire and Arran Health Board;

  Mr. C. W. Ellis, Chairman, Grampian Health Board;

  Miss I. I. Gordon, Deputy Chief Nursing Officer, Scottish Home and Health Department;

  Mr. J. R. Hudson, Treasurer, Tayside Health Board;

  Mr. L. J. M. Hynd, OBE, Chairman, Forth Valley Health Board;

  Mr. K. MacAskill, Chief Work Study Officer, Common Services Agency;

  Miss W. R. MacPherson, Chief Area Nursing Officer, Grampian Health Board;

  Professor I. W. Percy-Robb, Department of Pathological Biochemistry, Western Infirmary Glasgow;

  Mr. L. E. Peterken, General Manager, Greater Glasgow Health Board;

  Mr. D. Stevenson, Assistant Secretary, Scottish Home and Health Department;

  670

  Mr. R. B. Weatherstone, TD, Chairman, Lothian Health Board;

  Dr. D. Steel, Secretary.

  The group's secretariat is located at Trinity Park house, Edinburgh.

  The group was established in September 1985 with the following remit:
  "To plan and co-ordinate arrangements to implement by December 1987 the national review programme proposed by the Efficiency Programmes Group; to make recommendations to the Minister for Education and Health, Health Boards and Common Services Agency on the implementation of review results; to review progress, including the level of savings achieved, by Health Boards and the Common Services Agency in implementing recommendations; to indentify and pursue future priorities for resource savings, to consider other matters relevant to efficiency in the Scottish Health Service; and to report progress."

  Simplified Planning Zones
  Mr. Tom Clarke
  To ask the Secretary of State for Scotland what is the Government's policy in respect of simplified planning zones; how he intends to apply it to Monklands district; and if he will make a statement.

  Lord James Douglas-Hamilton
  The Government believe that simplified planning zones will help to ease the burden on business, provide a more secure climate in which businesses can plan ahead, assist in generating confidence in the areas designated and stimulate investment and development activity.

  It is primarily for planning authorities to come forward with proposals for simplified planning zones and Monklands district council has been quick to respond, by identifying a site in Coatbridge for potential designation as a simplified planning zone.

  Forestry
  Sir Hector Monro
  To ask the Secretary of State for Scotland what is his policy on the location of forestry in Scotland.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend's policy remains that of encouraging the expansion of forestry in Scotland in suitable locations, so that the economic and social life of rural areas may continue to benefit from forestry activity, with suitable environmental safeguards so as to protect Scotland's natural beauty and wildlife. The new tax and grant arrangements will offer scope for more people to invest in forestry and will increase the incentive to plant in lowland areas.
  671
  The present consultation arrangements for forestry planting grant, whose effectiveness will be enhanced under the proposed new grant regime, ensure that any significant planting proposal which is the subject of an unresolved objection from the local authority or, in respect of specially protected areas, from the statutory conservation agencies, is referred to the Secretary of State before any decision is taken to pay grant. My right hon. and learned Friend currently has before him proposals on forestry from the Countryside Commission for Scotland and from the Convention of Scottish Local Authorities and will be considering in that context whether there is scope for further improvement in the present arrangements.

  Private Medical Projects
  Mr. Galbraith
  To ask the Secretary of State for Scotland if he will give, for each year since 1979, the amount of assistance given by the Scottish Development Agency to private medical projects.

  Mr. Lang
  [holding answer 22 February 1988]: The information is given in the following table:

  Year

  Assistance Given

  Number of Companies/Individuals Assisted

  £

  1979–80

  —

  —

  1980–81

  —

  —

  1981–82

  —

  —

  1982–83

  —

  —

  1983–84

  101,500

  3

  1984–85

  90,000

  2

  1985–86

  139,000

  4

  1986–87

  180,000

  4

  1987–88

  —

  —

  The projects identified above comprise nursing or residential homes where one or more medically qualified staff are involved.

  Financial support was provided by way of loan and/or equity as appropriate.

  The agency is also active in supporting Scottish companies which provide goods and services in the health care sector; for example, medical instrumentation and drug delivery systems.

NATIONAL FINANCE

  Gross Domestic Product
  Mr. Barry Field
  To ask the Chancellor of the Exchequer when he last reviewed the allowance of 1¼ per cent. of the expenditure measure of gross domestic product to take account of(a) tax evasion and (b) self employment.

  Mr. Major
  A "net allowance for evasion", equal to 1¼ per cent. of the expenditure-based measure of gross domestic product (GDP) since 1981, is added to the income-based measure of GDP. This allowance represents the extent to which expenditures which are not concealed from statistical sources result in factor incomes (mainly of the self-employed) which are concealed. The allowance is necessary to ensure the conceptual equivalence of the two measures of GDP. The basis of the assessment, which is examined regularly, is described in "United Kingdom National Accounts: Sources and Methods" (paragraphs 3.32 to 3.36).

  Economic Statistics
  Mr. Barry Field
  To ask the Chancellor of the Exchequer (1) what steps he intends to take to improve the economic statistics published by his Department;

  (2) if he will list the measures taken to improve the accuracy of his Department's economic statistics since 1981.

  Mr. Major
  Steps are constantly being taken to improve Treasury statistics.

  Vote Bundle (Printing)
  Miss Emma Nicholson
  To ask the Chancellor of the Exchequer if he will make a statement on the printing of the Vote bundle.

  Mr. Brooke
  Since Wednesday 2 March, all amendments and proceedings have appeared in printed form. This represents a substantial achievement by Her Majesty's Stationery Office, given the volume of overnight printing. The printed Vote bundle distributed on 3 March is believed to be the largest in the history of the House of Commons.

  Banking Act 1987
  Mr. David Shaw
  To ask the Chancellor of the Exchequer when section 38 of the Banking Act 1987 will come into force.

  Mr. Lilley
  The Treasury has now made the commencement order for section 38 of the Banking Act 1987 to come into effect on 1 April. This section requires authorised institutions to report large credit exposures to the Bank of England. Exposures to a single borrower or group of connected borrowers above 10 per cent. of a bank's capital base must be reported after the event; proposed exposures above 25 per cent. of capital must be reported before the event. The main provisions of the Act came into force on 1 October 1987, and the date for implementing section 38 was announced at that time.

  Importers' Details (Disclosure)
  Mr. David Davis
  To ask the Chancellor of the Exchequer if he will announce the Government's decision on the question of disclosure of importers' details, on which the Government consulted interested parties in 1987.

  Mr. Lilley
  The Government intend to legislate in the 1988 Finance Bill to permit disclosure by sale of the names and addresses of importers. This follows the public consultation announced in last year's Budget debate in which a majority of those asked were in favour of the steps being taken. Customs and Excise will provide marketing agents monthly with the names and addresses of importers as shown on import declarations. The names will be listed against each of the nine digit commodity codes as published in the integrated tariff of the United Kingdom. The charge to marketing agents will be set at a level to cover Customs' costs. The marketing agents will be free to publish the information in a form and at a price attractive to their customers. The current arrangements known as suppressions will be continued. It is hoped to implement the arrangements from January 1989. This proposal should add significantly to the free flow of information on
  673
  which competitive and efficient markets rely. Both industry and customers should benefit through improvements in the effectiveness of marketing, market research and product development.

SOCIAL SERVICES

  1991 Census (Ethnic Origin)
  Mr. Bernie Grant
  To ask the Secretary of State for Social Services when he will make a decision on the inclusion of an ethnic origin question in the 1991 census; and if he will make a statement.

  Mrs. Currie
  Proposals on the content of the 1991 census will be published as a White Paper later this year. It is planned to test the proposed questionnaire in early 1989 and thereafter to lay before Parliament a draft Order in Council prescribing the content of the census.

  AIDS
  Mr. Cohen
  To ask the Secretary of State for Social Services what proposals the chief medical officer made to

  Regional and Special Health Authorities Capital Expenditure (England)

  Year

  Expenditure1 (cash) £million

  Percentage Change over previous year

  Expenditure at constant prices2 £ million

  Percentage Change over previous year

  1974–75

  267·5

  —

  935·7

  —

  1975–76

  331·7

  +24·0

  923·5

  -1·3

  1976–77

  334·5

  +0·8

  822·7

  -10·9

  1977–78

  316·0

  -5·5

  682·4

  -17·1

  1978–79

  367·4

  +16·3

  716·6

  +5·0

  1979–80

  416·4

  +13·4

  694·9

  -3·0

  1980–81

  563·2

  +35·3

  792 8

  +14·1

  1981–82

  671·4

  +19·2

  860 6

  +8·6

  1982–83

  686·4

  +2·2

  820·4

  -4·7

  1983–84

  713·9

  +4·0

  815·3

  -0·6

  1984–85

  795·4

  +11·4

  869·5

  +6·7

  1985–86

  891·8

  +12·1

  920·1

  +5·8

  1986–873

  936·3

  +5·0

  936·3

  +1·8

  Source:

  1 Annual accounts of Regional, District and Special Health Authorities as submitted to the Department.

  2 Constant prices arrived at by using GDP Deflator.

  3 Latest year available.

  Park Lane Hospital
  Mr. Alton
  To ask the Secretary of State for Social Services when he expects to receive the report of the review of security at Park lane hospital; and if he will make it his policy to publish the report's conclusions in the Official Report.

  Mr. Newton
  The review team will be reporting to hospital management and the Department in August this year. Security arrangements at the hospital are not made public so as not to prejudice their effectiveness. It will not, therefore, be our intention to publish the findings of the review.

  Community Health Councils
  Mr. Pawsey
  To ask the Secretary of State for Social Services what is the annual cost of community health councils.
  674
  the recent world conference on AIDS on facing up to the spread of the virus within prisons and after a prisoner is released.

  Mr. Newton
  The chief medical officer addressed the world summit on "Modes of transmission of HIV as a basis for prevention strategies". The purpose of his speech was to draw attention to problems that need to be addressed in this area, including that of HIV infection among prisoners, and not to make specific proposals.

  Hospital Capital Programme
  Mr. Nicholas Bennett
  To ask the Secretary of State for Social Services what was the hospital capital programme, in cash and constant prices, together with the percentage increase or decrease over the preceding year, in each year since 1974–75.

  Mr. Newton
  Capital expenditure by regional and special health authorities, in the form requested by my hon. Friend, is given in the table.

  Mrs. Currie
  The total cost of community health council expenditure in 1986–87, the latest available figure, was £7·2 million. This figure includes staffing, premises and other costs.

  Fraud
  Mr. Cummings
  To ask the Secretary of State for Social Services 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. Portillo
  Estimated benefit savings achieved in the year ended 9 February 1988 were £260,000.

  Urgent Cases
  Mr. Redwood
  To ask the Secretary of State for Social Services if he has any plans to introduce new consultant,
  675
  senior registrar or other senior posts in general surgery, ear, nose and throat, traumatic and orthopaedic and gynaecology, where the waiting lists are urgent.

  Mr. Newton
  Government policy is that new consultant posts should be set up to meet the needs of patient care as determined by health authorities in the light of the Government's broad priorities. Currently consultant expansion is averaging 2 per cent. per annum over all specialties. In addition, the Government are funding centrally 100 new posts targeted on specialties with particular problems of structural imbalance, including general surgery and traumatic and orthopaedic surgery.

  Amenity Beds
  Mr. Redwood
  To ask the Secretary of State for Social Services what efforts are being made to promote amenity beds.

  Mrs. Currie
  Existing instructions to health authorities are for amenity beds to be offered routinely to National Health Service patients when they are given a date for admission.

  We are currently seeking powers in the Health and Medicines Bill to enable health authorities to charge for amenity beds on a commercial basis. Later in the year we will issue guidance to promote the use of amenity beds under these new powers.

  Surgical Treatment
  Mr. Redwood
  To ask the Secretary of State for Social Services if the new senior posts, one rank below consultant, carry the right to sole responsibility for a patient for surgical treatment without the necessity of reference to a consultant.

  Mr. Newton
  The new staff grade is a non-training grade intended for doctors who do not wish or are unable to train for consultant status. The staff doctor will be clinically responsible to a nominated consultant for all tasks and duties of the post although the degree to which these are delegated will be a matter for consultants' clinical judgment.

  Community Care
  Mr. Sheerman
  To ask the Secretary of State for Social Services (1) what sum has been spent or budgeted for in

  NHS directly employed staff by main staff group1 at 30 September Whole time equivalents2

  England

  1971

  1972

  1973

  1974

  1975

  1976

  1977

  1978

  Nursing and midwifery (including agency)3

  285,400

  303,200

  308,500

  314,100

  336,600

  341,700

  343,200

  351,000

  Medical and dental (including locums)4

  29,500

  30,800

  32,300

  33,000

  34,800

  35,900

  36,900

  37,800

  Professional and technical (excluding works)5

  38,500

  40,600

  42,600

  43,600

  46,800

  52,500

  54,800

  57,200

  Works professional

  4,300

  4,600

  4,700

  4,700

  5,000

  5,300

  5,500

  5,600

  Maintenance

  17,500

  17,500

  17,000

  17,600

  19,100

  19,700

  19,900

  19,900

  Administrative and clerical

  70,400

  74,300

  77,100

  82,800

  91,900

  98,500

  99,000

  100,300

  Ambulance (including officers)

  15,900

  16,300

  16,600

  16,600

  17,500

  17,200

  17,400

  17,500

  Ancillary5

  168,000

  167,800

  165,100

  163,400

  167,800

  173,600

  172,800

  172,200

  Total directly employed (including agency and locums)

  629,500

  655,000

  664,100

  675,800

  719,500

  744,400

  749,500

  761,500

  676
  each of the district health authorities for the training and preparation of staff for the shift to the provision of care in the community;

  (2) what sum has been spent and budgeted for in each of the district health authorities for the purpose of preparing patients for the shift into care in the community.

  Mr. Newton
  The information requested is not available centrally.

  Nurses
  Mr. Kirkwood
  To ask the Secretary of State for Social Services what is his estimate, for each regional health authority, and for the United Kingdom as a whole, in the last year for which figures are available, of how many National Health Service nurses left the Health Service for(a) private hospitals, and (b) private residential homes; and how many rejoined the National Health Service from the private sector.

  Mr. Newton
  The information is not collected centrally.

  Recently published research estimated that, in 1985, the annual number of nurses joining the private health care sector direct from the NHS was 1,474. This represents approximately seven nurses per district health authority. Annually an estimated 477 nurses rejoin the NHS from the private sector.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Social Services if he will give the total number of nurses employed(a) in the National Health Service and (b) in the private sector in each year since 1958, together with the annual turnover rate; and if he will give the equivalent information for other occupational groups within the National Health Service.

  Mr. Newton
  [holding answer 8 February 1988]: Such information on staff employed as is available is shown in the tables.

  Information on NHS staff employed in England is not available on a consistent basis prior to 1971.

  Information on private sector nursing staff is not available prior to 1982.

  Information on turnover rates is not available centrally for NHS or private sector. However the most commonly accepted estimate for qualified nursing and midwifery staff leaving the NHS is 10 per cent. a year.
  677

  England

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  Nursing and midwifery (including agency)3

  358,400

  370,100

  391,800

  397,100

  397,100

  397,500

  401,200

  402,700

  Medical and dental (including locums)4

  39,000

  40,200

  41,000

  41,500

  42,300

  42,300

  43,000

  43,200

  Professional and technical (excluding works)5

  60,100

  61,900

  65,200

  67,200

  68,700

  72,700

  74,300

  76,100

  Works professional

  5,600

  5,900

  6,200

  6,100

  6,000

  6,000

  6,100

  5,800

  Maintenance

  20,100

  20,600

  21,000

  21,000

  20,800

  20,200

  19,800

  19,100

  Administrative and clerical

  103,000

  105,400

  108,800

  108,800

  110,000

  110,300

  111,000

  111,400

  Ambulance (including officers)

  17,100

  17,800

  18,200

  18,300

  18,400

  18,100

  18,200

  19,000

  Ancillary5

  171,900

  172,000

  172,200

  170,500

  166,200

  152,200

  139,400

  124,300

  Total directly employed (including agency and locums)

  775,300

  793,800

  824,400

  830,600

  829,400

  819,300

  812,900

  801,600

  Source: DHSS (SR7) Annual censuses of NHS medical and non-medical manpower.

  1 Due to the effects of the 1974 NHS reorganisation figures for the years prior to 1974 are not directly comparable with those for 1974 and later years.

  2 Figures are independently rounded to nearest one hundred (100) whole time equivalents.

  3 Not adjusted to take account of the change in nurses contractual hours—from 42 to 40 per week in 1972, and from 40 to 37·5 per week during 1980–81.

  4 Includes all permanent paid, honorary and locum staff.

  5 On 1 April 1984 operating department assistants transferred from ancillary to professional and technical staff group. Figures not adjusted to take account of this change.

  Nursing staff in post—private sector at 31 December Whole time equivalents1

  England

  1982

  1983

  1984

  1985

  1986

  22,620

  25,670

  29,430

  36,080

  44,950

  Source: DHSS (SR2) SBH 212 returns.

  1 Figures are independently rounded to nearest ten (10) whole time equivalents.

  NHS Review
  Mr. Spearing
  To ask the Secretary of State for Social Services which outside bodies he has invited to submit evidence to his current review of the National Health Service; and what account he proposes to take of the reports of Royal Commission and Select Committees on this or allied topics.

  Mr. Moore
  We have made it publicly clear that we shall consider carefully any submissions which are put to us. We shall also take into account any relevant reports and other published material.

  South East Thames RHA
  Ms Ruddock
  To ask the Secretary of State for Social Services what was the percentage change in (i) National Health Service funding in real terms and in cash terms and (ii) employment of medical staff from 1978 to 1988 in the South East Thames regional health authority.

  Mrs. Currie
  The latest available information for hospital and community health services in the South East Thames region is shown in the table.

  Percentage change in revenue and medical staff

  Per cent.

  Net revenue expenditure 1978/79 to 1986/871

  Cash terms

  116·55

  Real terms

  11·01

  Medical staff from 1978 to 19862

  8·1

  1 Figures are based on health authorities' summarised income and expenditure accounts: adjusted by the Gross Domestic Product deflator.

  2 Includes whole time equivalent permanent paid, honorary and locum staff.

  678
  Ms. Ruddock
  To ask the Secretary of State for Social Services if he will list(a) the number of private beds and (b) the total income from private beds in National Health Service hospitals in 1986–87 for the South East Thames regional health authority.

  Mrs. Currie
  There were 341 authorised pay beds within the South East Thames region at 31 December 1986. The 1986–87 annual accounts of health authorities in the region show that total income from private patients, under section 65 of the National Health Service Act 1977, was £5,732, 413.

  Lewisham and North Southwark DHA
  Ms. Ruddock
  To ask the Secretary of State for Social Services if he will give the nurse-patient ratio in the Lewisham and North Southwark district health authority for each of the last 10 years.

  Mrs. Currie
  Information on nursing and midwifery staff and hospital activity levels in Lewisham and North Southwark health authority from 1982 to 1986 is provided in the tables. Prior to 1 April 1982 the authority's predecessor health districts formed part of the Lambeth, Southwark and Lewisham area health authority and district-based figures were not collected centrally. The nursing and midwifery staff figures cover a wide range of Health Service activity, not just those related to hospital activity, and calculation of a nurse-patient ratio would be simplistic and might be misleading.

  Nurse and midwifery staff in post: 30 September1 Lewisham and North Southwark health authority2

  Year

  Number

  1982

  3,710

  1983

  3,650

  1984

  33,840

  1985

  3,540

  1986

  3,470

  Source: DHSS Annual Census of NHS Non-Medical Manpower.

  Notes:

  1 Includes agency staff.

  2 All figures are independently rounded to the nearest 10 whole-time equivalents.

  3 Merging of two pay-roll systems, used to calculate staffing figures, likely to have caused some double-counting.

  679

  NHS hospitals activity in Lewisham and North Southwark HA

  1982

  1983

  1984

  1985

  1986

  In-patient cases

  55,171

  58,130

  59,680

  60,259

  56,493

  Day cases

  6,227

  8,308

  5,885

  5,036

  5,899

  New out-patients

  102,066

  105,401

  113,894

  112,096

  108,031

  Total out-patient attendances

  532,772

  532,546

  540,652

  529,590

  530,467

  Health Index
  Mr. Robin Cook
  To ask the Secretary of State for Social Services which indicators will be included in the health index; who has been consulted about which indicators to include; if he will publish the existing list for wider consultation; if he intends to make additional resources available to(a) administer the index and (b) collect any additional data which may be required to compile the index.

  Mr. Newton
  We have asked officials to consider the feasibility of creating a portfolio of health indicators (health index). Consideration of such points as those raised by the hon. Member will of course depend on the results of the feasibility study.

  British Oxygen Company
  Mr. Hood
  To ask the Secretary of State for Social Services how much has been paid to the British Oxygen Co. by the National Health Service, for each year since 1974, at current prices.

  Mrs. Currie
  I regret that this information is not available. The information which is readily available is as follows. All figures are for England and are at current prices.

  Expenditure on medical gases by health authorities

  £ million

  1978–79

  12·2

  1979–80

  12·5

  1980–81

  12·3

  1982–82

  12·6

  1982–83

  12·3

  1983–84

  12·4

  1984–85

  12·4

  1985–86

  11·6

  1986–87

  12·0

  Basic prices of masks and oxygen provided by pharmacists and doctors under the Family Practitioner Services

  £ million

  1984–85

  4·0

  1985–86

  4·4

  1986–87

  4·2

  BOC is believed to supply over 90 per cent. of the medical gases used in the NHS.

  Drug Companies
  Mr. Hood
  To ask the Secretary of State for Social Services what is, for each year since 1974, the amount of prescription payments made to drug companies by the National Health Service, at current prices.

  Mr. Newton
  The cost of drugs to the NHS in England, at 1987–88 prices, is set out in the table:
  680

  Family Practitioner Services £ million

  Hospital and Community Health Services

  1975–76

  805

  1197

  1976–77

  926

  223

  1977–78

  1,038

  242

  1978–79

  1,127

  260

  1979–80

  1,101

  271

  1980–81

  1,125

  272

  1981–82

  1,171

  286

  1982–83

  1,257

  305

  1983–84

  1,345

  317

  1984–85

  1,358

  318

  1985–86

  1,371

  319

  1986–87

  1,436

  332

  1987–88

  31,538

  20

  Notes:

  1 Data not available prior to 1975–76.

  2 Data for Hospital and Community Health Services drug costs are not yet available for 1987–88.

  3 Latest FPS estimate.

  Member's Correspondence
  Mr. Pawsey
  To ask the Secretary of State for Social Services when he expects to give a definitive reply to the letter from the hon. Member for Rugby and Kenilworth dated 23 December 1987 concerning W. D. Caddern of York street, Rugby.

  Mr. Portillo
  I apologise for the delay.

  I wrote to my hon. Friend yesterday.

  Cook-chill Catering
  Mr. Hinchliffe
  To ask the Secretary of State for Social Services when, pursuant to his answer of 7 March,Official Report, column 51, he expects to reach a conclusion on the request of Wakefield district health authority for an investigation into the introduction of the cook-chill system of catering.

  Mrs. Currie
  Wakefield health authority's request was for a public inquiry"into the lengthy decision making process prior to the implementation of the cook-chill system of catering in Wakefield".
  After careful thought I decided I could not agree to the authority's request and wrote to the chairman to that effect on 8 March, copying my letter to the regional chairman.

  The authority in effect sought an inquiry into its own management of business. This seemed neither necessary nor appropriate, particularly when events were at all times fully within the authority's control. Yorkshire regional health authority at its annual review meeting with the district raised a number of concerns. These are being pursued through the normal accountability and review process between RHA and DHA and it seems entirely appropriate that the handling of the implementation of cook-chill should be considered in the same way.

  Cancelled Operations
  Mr. Watts
  To ask the Secretary of State for Social Services how many operations have been cancelled as a consequence of disruptive action by National Health Service employees on Monday 14 March and Tuesday 15 March.

  Mr. Newton
  The information we have so far received from health authorities show that the number of operations cancelled as a result of industrial action in the National Health Service was 156 on 14 March and 55 on 15 March.

  Mildmay Mission Hospital
  Mr. Favell
  To ask the Secretary of State for Social Services what assistance he intends to provide to the Mildmay mission hospital to provide help and hospice care for people with AIDS and HIV-related illnesses.

  Mr. Newton
  The Government have approved a further grant of £171,000 towards the capital cost of converting two wards at the hospital to provide help and hospice care for people with AIDS and HIV-related illness and a further revenue grant of £29,000 for the current financial year. This will bring the total capital grants approved for the Mildmay hospital this year to £321,000 and total revenue grants approved to £79,000.

  Haemophiliacs (Financial Assistance)
  Dame Peggy Fenner
  To ask the Secretary of State for Social Services what progress has been made since the Minister for Health's statement on 16 November 1987,Official Report, column 773, concerning financial assistance to haemophiliacs infected with the AIDS virus.

  Mr. Newton
  My announcement indicated that the Government would make an ex-gratia grant of £10 million to enable the Haemophilia Society to establish a special trust fund to provide financial help to haemophiliacs infected with the AIDS virus and their families. A charitable trust fund to be known as the Macfarlane Trust has now been established. Letters exchanged with the Haemophilia Society and the trust deed incorporating the objects of the trust have been placed in the Library.

  It will be the duty of the trustees to ensure that payments from the trust are made in the most effective way and take into account the differing circumstances of those affected. However to ensure that all the £10 million reaches those in need, regulations have been laid which disregard any payment from the trust fund when deciding entitlement to housing benefit and which also protect the confidentiality of the individual by making it unnecessary to report payments to the local authority. Similar regulations and arrangements have been introduced for income support and family credit. Because the Macfarlane Trust is charitable, beneficiaries will not be liable to income tax on payments made to them. Now that the Macfarlane Trust has been estalished, the £10 million is being paid to the Haemophilia Society.

  Surgery Statistics
  Mr. Lofthouse
  To ask the Secretary of State for Social Services if he will list in order of frequency the five most common forms of surgery for which patients are admitted to hospitals in(a) the Yorkshire regional health authority and (b) the Pontefract district health authority.
  682
  Mrs. Currie
  [holding answer 1 March 1988]: The information requested is given in the table.

  Estimated number of the five most common forms of surgery (in order of frequency) performed in NHS non-psychiatric, non-maternity hospitals, Yorkshire Regional Health Authority and Pontefract District Health Authority, England 1985

  Condensed1 list operation number

  Operation

  Estimated Number of operations

  Yorkshire RHA

  1.

  080

  Dilatation, Curretage, Biopsy and Excision of Lesion of Cervix

  10,630

  2.

  093

  Treatment of Fracture by Operations

  8,770

  3.

  061

  Cystoscopy (with Destruction of Lesion)

  8,180

  4.

  023

  Tonsils and Adenoids

  7,750

  5.

  078

  Hysterectomy

  6,090

  Pontefract DHA

  1.

  080

  Dilatation, Currettage, Biopsy and Excision of Lesion of Cervix

  640

  2.

  093

  Treatment of Fracture by Operations

  530

  3.

  044

  Operations on Appendix

  340

  4.

  016

  Incision of Ear Drum

  310

  023

  Tonsils and Adenoids

  310

  1 OPCS condensed list of surgical operations.

  Source: Hospital In-Patient Enquiry (HIPE).

  Hospitals
  Mr. Boyes
  To ask the Secretary of State for Social Services what has been the average cost per patient treated over each of the past five years in(a) the Northern regional health authority and (b) the Sunderland district health authority hospitals.

  Mrs. Currie
  [holding answer 7 March 1988]: Tables showing this information by type of hospital and type of patient for the northern region and by individual hospital and type of patient for the Sunderland district have been placed in the Library.

  Radiation
  Dr. Thomas
  To ask the Secretary of State for Social Services if he will initiate a departmental evaluation of the paper, a copy of which has been sent to him, by Professor Emeritus E. J. Sternglass and Dr. J. Scheer entitled "Radiation Exposure of Bone Marrow Cells to Strontium 90 during early development as a possible co-factor in the etiology of AIDS", as presented at the first global radiation victims' conference in New York City in October 1987.

  Mr. Newton
  [holding answer 11 March 1988]: When a copy of this paper is received, officials will consider whether it warrants evaluation.

AGRICULTURE, FISHERIES AND FOOD

  Sheep (Radiation)
  Mr. Roy Hughes
  To ask the Minister of Agriculture, Fisheries and Food what provisions the Government have adopted for a confirmed scientific source for radiation safety levels in sheep.

  Mr. Donald Thompson
  [holding answer 16 March 1988]: In setting the limit of 1,000Bq/kg, the Government took account of the published advice of the National

  683
  Radiological Protection Board in the United Kingdom and of the interim guidance issued by the group of international experts set up under article 31 of the Euratom treaty. The Government also had to take note of the views of other countries with whom it was important for the United Kingdom to protect trading links.

  Environmentally Sensitive Areas
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what staff and monetary resources are being made available for the monitoring of existing environmentally sensitive areas.

  Mr. Gummer
  [holding answer 8 March 1988]: We are making sufficient staff and monetary resources available, but it is not possible to separate accurately the staff time devoted to monitoring from other duties related to environmentally sensitive areas.

NORTHERN IRELAND

  Driving Licences
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland why it is necessary for the holder of a valid Great Britain driving licence to replace it with a Northern Ireland driving licence before it expires.

  Mr. Needham
  When the holder of a driving licence issued either in Great Britain or Northern Ireland permanently changes address, the law requires that change to be notified to the relevant licensing authority to have the change recorded and a new licence issued. Holders of a licence issued in Great Britain who take up permanent residence in Northern Ireland must have their new address recorded on a licence issued by the Department of the Environment for Northern Ireland, which is responsible for the issue of Northern Ireland driving licences.

  Teachers of the Deaf
  Rev. Ian Paisley
  To ask the Secretary of State for Northern Ireland what is the number of qualified teachers of the deaf employed to teach hearing impaired children in schools and units in Northern Ireland.

  Dr. Mawhinney
  Fifty full-time and two part-time.

  Housing Waiting Lists
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many people are currently listed on waiting lists to be allocated houses by the Northern Ireland Housing Executive; and how many people are currently on transfer waiting lists.

  Mr. Needham
  This is a matter for the Northern Ireland Housing Executive. I understand from the chief executive that the numbers on the Housing Executive's waiting list and transfer waiting list at 29 February 1988 are as follows:

  Number

  Waiting list

  124,136

  Transfer list

  22,801

  1 Of whom 11,117 are regarded as being in urgent housing need.

  War Memorials
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what facilities exist to have the names of members of the Ulster Defence Regiment who have been murdered by terrorists placed on war memorials in Northern Ireland.

  Mr. Needham
  Anyone can apply to have a name added to a war memorial, but the decision whether this will be allowed rests with those in whose charge the memorial has been placed. In most, but not all, cases this will be a district council.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury): THE LORD CHANCELLOR on the Woolsack.

Transport: EC Ministers' Council
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they will make a statement on the main items discussed at the meeting of the European Community Transport Ministers' Council on 14th and 15th March, including any decisions taken and whether any items on the agenda were not discussed.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the main items discussed were: the width of refrigerated vehicles; road haulage tariffs; procedures for checking recording equipment used in road haulage vehicles; and road haulage drivers' hours and related matters; charging transport infrastructure costs to heavy goods vehicles; access to the market for the carriage of goods by road between member states; and the weights and dimensions of commercial vehicles. Reports and statements included one by my right honourable friend the Secretary of State for Transport pressing for progress on shipping cabotage. Two secondary items were not taken.
Baroness Burton of Coventry: My Lords, is the Minister aware that it seems quite incredible that air matters were not discussed at this meeting? Is he further aware that it is difficult to comprehend that no time, however inadequate it might be, was found to discuss competition rules, fares, capacity or access? Can he tell the House whether these matters will be raised at the informal meeting of the Council on 25th and 26th April, or do we have to wait until 20th and 21st June?
Can I furthermore ask him whether he recalls telling the House on 3rd March that he understood that Air Europe would be filing its Paris application shortly? Has that been done?
Lord Brabazon of Tara: My Lords, there are other transport matters that have to be discussed by the Transport Ministers' Council. Aviation has been discussed extensively over the last few years. We finally had agreement to the package only last December. While we still remain committed to making further progress, and we have a commitment from the Transport Ministers' Council to make progress by 1990, other matters sometimes have to be dealt with.
Whether further discussions on aviation will take place at either the informal meeting in April or at the June Council I cannot yet say. It is of course up to the presidency to formulate the agenda.
1248
On Air Europe's application, that is not a matter for the Transport Ministers' Council. However, I understand that Air Europe is still considering its fare structure for the Paris route.
Baroness Burton of Coventry: My Lords, I am glad that the Minister mentioned the word "package". Is he aware that the four items I mentioned that were not discussed are all included in, and indeed are the main part of, that package?
Perhaps I may ask about one other matter that I hope will be of interest to the House. Is the Minister aware that this morning I spent a long time with his department discussing whether the point concerning any items on the agenda not being discussed could be answered as they were in my Question? I was told that it was not possible to give any response to that because to do so would have extended the length of the Answer beyond 100 words. Is he further aware that I told whoever I was talking to that I was not prepared to be bound by such Civil Service red tape, if he was, and if the matter was not put right I should raise it in the House today. May I ask the Minister—
Noble Lords: No, no!
Noble Lords: Yes, yes!
Baroness Burton of Coventry: My Lords, may I ask the Minister—
Lord Hailsham of Saint Marylebone: My Lords, on a point of order, did not the House only the other day pass a resolution supporting the Procedure Committee in saying that supplementary questions should be limited to two points only?
Noble Lords: Hear, hear!
Baroness Burton of Coventry: My Lords, I am on the continuation of my second point. Perhaps I may ask the Minister this. In connection with the last part of his remarks today which stated that two secondary items were not discussed, why would it have been longer to say that two items, X and Y, were not discussed?
Lord Brabazon of Tara: My Lords, we have a convention that replies should not be longer than 100 words, I think it is, in order not to take up too much of your Lordships' time at Question Time. However, I am happy to tell the noble Baroness and the House the two secondary items that were not taken. When the House hears them, perhaps it will not feel that they were of such great importance.
They were the questions raised by the Belgian, Irish and Netherlands delegations concerning the Community quota for carriage of goods by road between member states. They were concerned with quota allocation among member states. There was also a Commission report on overcapacity in inland waters. The Commission is not yet ready to report.
Lord Taylor of Blackburn: My Lords, perhaps I may ask the Minister who made the rule that an Answer should be no more than 100 words.
Noble Lords: The House!
Lord Brabazon of Tara: My Lords, the House made the rule, I understand, but I merely try to adapt to the wishes of the House.
Lord Underhill: My Lords, in the light of what the Minister said about other important matters that the Transport Ministers' Council has to consider, perhaps I may ask him two questions in his very important role as Minister responsible for shipping. In a very detailed Written Answer on 3rd March his right honourable friend the Secretary of State stated that last October he wrote to the shipping ministers of 10 other European countries proposing co-operation on ferry safety. Can I ask whether that subject was intended to be considered at the last meeting of the Transport Ministers' Council or whether there was any intention that it should be on the agenda of a very early meeting?
Lord Brabazon of Tara: My Lords, we are involved in discussions with other European countries on ferry safety. That extends beyond our EC partners. It involves two countries which are not members of the EC. It is not therefore a matter that was on the agenda for the Transport Ministers' Council, but I can assure the noble Lord that we are still talking with those European countries that have ferry services between ourselves and them.
Viscount St. Davids: My Lords, perhaps I may ask one question on an issue that is raised in the main Question. Can the noble Lord expand his Answer on the subject of cabotage? The present position seems to be a long way from that which is necessary if Europe is to be united. Do we not need to progress much further?
Lord Brabazon of Tara: My Lords, I could not agree more with the noble Viscount. The Government's views on this are quite straightforward. My right honourable friend notified his colleagues of his intention to seek an enabling power in the Merchant Shipping Bill currently before another place to introduce a test of establishment for shipping companies which engage in cabotage trades in United Kingdom coastal waters. He also urged colleagues to find a formula for the liberalisation of cabotage trades so that agreement could be reached on this subject at a subsequent council. I understand that considerable part of the June Council will be devoted to this and other outstanding shipping matters.
Lord Mellish: My Lords, would it not be possible to send the noble Baroness, Lady Burton, to Strasbourg? She would drive them all frantic!
Lord Brabazon of Tara: My Lords, I do not think that I can give any undertaking on that. It is not a matter for me.
Baroness Burton of Coventry: My Lords, is the Minister aware that it will be within the recollection of the House that a great many ministerial answers, I am sure for most excellent reasons, are considerably longer than 100 words? Is he further aware that although I ask a lot of questions they are concise and call for only a concise answer?
Lord Brabazon of Tara: My Lords, that is the point. I try to give a concise answer. If I expanded into matters I am asked to go on to deal with, my answers certainly would not be concise.

Milton Keynes: Road Extension Protest
3.10 p.m.
Lord Perry of Walton Lord Perry of Walton asked Her Majesty's Government:
What are the total costs incurred by the Milton Keynes Development Corporation in developing the Willen lake and park as a public amenity.
Lord Hesketh: My Lords, Milton Keynes Development Corporation has spent £2,020,000 in developing Willen Park as a public amenity. Willen Lake was constructed as a balancing lake for flood control purposes, funded by the Anglian Water Authority.
Lord Perry of Walton: My Lords, I thank the Minister for that Answer. Can he say what further public expenditure will be incurred by the development corporation in destroying much of the amenity in constructing the H5 Portway Road extension across the centre of Willen Lake against the expressed wishes of more than 9,000—
Noble Lords: Reading!
Lord Perry of Walton:—local inhabitants?
Lord Hesketh: My Lords, the proposed road link to which the noble Lord, Lord Perry, refers was first planned in 1971 and planning permission was granted for it in 1978. It has always been part of the plan for Milton Keynes from before the origination of the park. When planning permission was originally granted in 1978, it was well known that the park was also going to be there.
Lord Kearton: My Lords, is the Minister aware that most people in north Buckinghamshire regard Milton Keynes as a great success story, not least because of the efforts of the noble Lord, Lord Perry of Walton, in establishing the Open University so successfully there? Also, is he aware of the vast amount of both domestic and foreign investment in commercial and industrial enterprises? Can the Minister tell the House how much private investment has been made in Milton Keynes?
Lord Hesketh: My Lords, until the end of March 1987 the total investment in Milton Keynes was £1,002 million. Accumulative public sector capital expenditure was some £853 million. The interesting figure for 1986–87 is that public investment was a net £8 million compared with £155 million of private investment.
Lord Perry of Walton: My Lords, in view of the volume of public protest is the Minister willing to request the development corporation to delay what I understand is the imminent beginning to construction of the road, so that alternative arrangements can now be looked at? Is he aware that the change of attitude in Milton Keynes is already very great?
Lord Hesketh: My Lords, when the road was envisaged in 1971 it was considered important. With the growth of traffic and the success of Milton Keynes, I do not think delay will be possible.

Child Pornography: Additions to Bill
3.5 p.m.
Baroness Strange Baroness Strange asked Her Majesty's Government:
What steps they are taking to safeguard the physical and mental well-being of children in respect of pornography.
The Minister of State, Home Office (Earl Ferrers): My Lords, a provision which will make it unlawful to possess indecent photographs, films or videos of children under the age of 16 has been added to the Criminal Justice Bill this week. This will help to reduce the exploitation of children for the making of child pornography. It is also likely to help to protect potential victims of child abuse. A provision to enable trading standards officers to enforce the Video Recordings Act has also been added to the Criminal Justice Bill today.
Baroness Strange: My Lords, I thank my noble friend for his really useful reply. Is he aware that the NSPCC is extremely anxious that the availability of child pornography should be curtailed as much as possible? Does he not agree that although we enjoy liberty, we must not allow the edges of decency to be eroded into licentiousness? Does he also not agree with the NSPCC that access to child pornography for children should be curtailed as much as possible and also the use of films? Does he not further agree—
Noble Lords: Only two questions!
Earl Ferrers: My Lords, I am grateful to my noble friend for pointing out the views of the NSPCC. I agree entirely with her that the availability of child pornography is totally obnoxious. That is why we are endeavouring, with our amendments to the Criminal Justice Bill, to make it an offence to possess, as opposed to just to trade in, pornography. I agree with my noble friend that the availability of pornography to children encourages those children unwittingly to become involved in pornography.
Lord Mishcon: My Lords, is the noble Earl aware that he has the full support of Members on the Opposition Benches in regard to the clause that he mentioned? Indeed it was with pleasure that we agreed to this clause being added in the Commons, even though it did not appear in the Bill here in the Lords despite an undertaking to the contrary.
Earl Ferrers: My Lords, I am most grateful to the noble Lord, Lord Mishcon, for that most helpful intervention. I hope that all other amendments which the Government intend to introduce, not only on this Bill but on all others, will have the sympathetic consideration of the Labour Benches.
Lord Mishcon: My Lords, is the noble Earl aware that he is the greatest optimist in this House?
Earl Ferrers: My Lords, that is a happy position in which to be and in which I shall continue to be.
Lady Saltoun of Abernethy: My Lords, in view of the fact that much of the child pornography on sale in this country comes from the Netherlands, can the Government put any pressure on the Dutch Government to try to curb the trade?
Earl Ferrers: My Lords, I do not think this is a question of a government putting pressure on another government. It is a matter of the law being such that infringement of it can be enforced.
Baroness Faithfull: My Lords, may I ask the Minister whether there has been any research or any survey carried out into the exact effect of pornographic literature, films and books upon children?
Earl Ferrers: My Lords, such research is always very difficult to quantify. I can tell my noble friend—this is not entirely the answer to her question—that in the last two years 42 people have been prosecuted for offences under the Protection of Children Act and 35 of them have been found guilty. In that respect, the amount concerned is not very large. I cannot tell my noble friend of the total effect throughout the country.
Lord Nugent of Guildford: My Lords, is my noble friend aware that one of the most obnoxious aspects of child pornography is the circulation of material among paedophiles and that it is therefore of vital importance to see that this is completely suppressed?
Earl Ferrers: My Lords, I am grateful to my noble friend, Lord Nugent. I entirely agree with him. That is the reason why we believe that the additions to the Criminal Justice Bill will help a great deal. It will now be an offence for anyone to possess any such material and not just to trade in it.
Lord Swinfen: My Lords, may I ask my noble friend whether the Government are satisfied with the workings of the Indecent Displays Act?
Earl Ferrers: That, my Lords, is a totally different question. I should be perfectly happy to answer a separate Question if my noble friend would be good enough to take that course.

Tidy Britain Group: Effectiveness
3.9 p.m.
Lord Hayter Lord Hayter asked Her Majesty's Government:
Whether they are satisfied with the effectiveness of the work of the "Keep Britain Tidy" organisation.
The Minister of State, Department of the Environment (The Earl of Caithness): My Lords, the Government are satisfied with the effectiveness of the Tidy Britain Group, as it is now called, although the group itself would accept that there is always room for improvement.
Lord Hayter: My Lords, as the Government have had this problem in mind for several years, will the noble Earl hazard a guess as to how long it will take before Oxford Street or the King's Road are as clean as all the streets in Singapore, Copenhagen or Moscow?
The Earl of Caithness: No, my Lords, I should not like to hazard a guess. But we have asked the director general of the group to review the group's strategy. We are considering with him the best way forward for the future.
The Earl of Onslow: My Lords, is my noble friend aware that if one drives down any street in Britain the amount of "gunge" on the side of it is quite disgusting? Is my noble friend also aware—I am mindful of the two supplementary questions I am allowed to ask—that if the Oregon bottle law (which means that a deposit is paid on any container) had been introduced into this country, then the urge to throw things on the side of the road would be curtailed and the urge to pick them up and claim the money back would be enhanced, thus making the countryside and the roads much tidier? I have confined myself, I think, to two supplementary questions and one sentence.
The Earl of Caithness: My Lords, I am sure that none of us can be unaware of the litter problem. Had it not been for the community environment programme on which the Tidy Britain Group is working, the problem could be worse because some of the local authorities which have benefited have shown a reduction in litter of up to 30 per cent.
Lord McIntosh of Haringey: My Lords, on a previous occasion the Minister was kind enough to invite me to visit the flow country of Caithness and Sutherland. I should now like to invite him to visit Oxford Circus, which is where I work and where we are frequently ankle deep in litter. Will the Minister consider the degree of support which the Government could give to Westminister City Council in its proposals for a fixed-penalty ticket for dropping litter?
The Earl of Caithness: My Lords, I do not know whether the noble Lord has accepted my offer to visit the flow country but I have already been to Oxford Circus and seen the situation for myself.
Lord St. John of Fawsley: My Lords, I should like to support what the noble Lord said. Is it not right that the best and most immediate solution to the litter problem would be on-the-spot fines for anyone dropping litter in the street?
The Earl of Caithness: My Lords, I know that that view is strongly held by many people including my noble friend. However, there are problems and practical difficulties such as the accounting procedure for fines collected; the risk involved in the police or anyone else carrying substantial cash receipts; and how to deal with offenders who do not have funds available for on-the-spot fines.
Lord Ezra: My Lords, as someone who for many years has been connected with the Tidy Britain Group, I should like to express my appreciation for the kind remarks made by the noble Earl about the activities of the group. Does he not agree that of the many initiatives that it has launched, its community environment initiative and the schools initiative are two especially deserving of support to ensure that local authorities have a clear and defined objective to remove litter and that school children are aware of the problem?
The Earl of Caithness: My Lords, I am grateful to the noble Lord for his remarks. I agree that the community environment programme and the education programme, through which 31,000 primary training kits and science kits have been provided for schools and education authorities, are a good sign of the work of the Tidy Britian Group.
Lord John-Mackie: My Lords, the Minister said that he was satisfied with some of the results. Can he pinpoint an area where one could see the results, because I have not seen any?
The Earl of Caithness: My Lords, I said that I was satisfied with some of the results because of the reduction in litter experienced by local authorities. Had it not been for the action taken we should now be facing an increased litter problem.
Lord Aldington: My Lords, will my noble friend remind British Railways that the tracks running through railway stations are part of Britain and they could be kept tidier and cleaner than they are at present?
The Earl of Caithness: My Lords, I hear what my noble friend has said and I shall pass on his comments to British Rail. However, I am sure that it will read with interest what has been said by noble Lords in respect of this matter.
Lord Monson: My Lords, does the Minister agree that extremely high penalties, whether imposed on the spot or otherwise, are an admirable example set by Singapore, and that because it is easy to avoid dropping litter such high penalties rarely need to be imposed in practice?
The Earl of Caithness: My Lords, the maximum fine under the Litter Act 1983 is £400 and there were 1,500 prosecutions in 1985. It is the duty of us all not to drop litter and there should be no necessity for a fine although it exists.
Lord Hunt: My Lords, does the noble Earl agree that a personal appeal in the form of a public appeal in all appropriate quarters from Mr. Richard Branson, who was appointed by the Prime Minister to head a tidy-up Britain campaign, might have a powerful effect on millions of people who admire his adventurous exploits, some of whom are not among the most tidy in Britain?
The Earl of Caithness: My Lords, there is still a misunderstanding about the role of Richard Branson and the UK 2000 Group, which was established to carry out a wide range of environmental improvement projects. Litter abatement is often an element of the project and, where it is, the Tidy Britain Group, as a participant in UK 2000, has taken the lead on the litter element.
Lord Taylor of Blackburn: My Lords, in view of the number of people putting forward suggestions to the Department of Education and Science as regards which subjects should be included in the core curriculum, does the Minister agree that this subject should be added to the list?
The Earl of Caithness: My Lords, I am sure that my right honourable friend the Secretary of State will look forward to receiving the noble Lord's letter.
Lord Brougham and Vaux: My Lords, is it worth while the Government considering what is done in Germany, where the owner of a property is responsible for the cleanliness of the pavement outside that property?
The Earl of Caithness: My Lords, that suggestion has been made, but difficulties arise in our law and primary legislation would be required.
The Earl of Onslow: My Lords, will my noble friend answer my question about deposit moneys on bottles and so forth?
The Earl of Caithness: My Lords, I did not answer but I shall take the question away and look at it.
Lord Airedale: My Lords, is the noble Earl aware that after Derby Day Epsom Downs looks as though it has been hit by a snowstorm whereas no comparable litter problem arises in the park at Longchamp after the Prix de 1'Arc de Triomphe? Is that not another example of how far we must go in order to catch up with other civilised countries?
The Earl of Caithness: My Lords, yes, but that only serves to prove that there is so much more that we as individuals can do about the problem.

Business
3.26 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Lyell will, with the leave of the House, repeat a Statement that is to be made in another place on the Belfast funerals incident.
It may be for the convenience of the House if I announce that the Committee stage of the Public Utility Transfers and Water Charges Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Reading of the Dartford-Thurrock Crossing Bill will be taken.

Easter Recess
Lord Denham: My Lords, it may also be for the convenience of the House to know that the House will adjourn for the Easter Recess on Thursday, 31st March and return on Monday, 11th April. The House will sit at 11.00 a.m. on Thursday, 31st March.
Matrimonial Proceedings (Transfers) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Court of Session Bill [H.L.]
Read a second time, and committed to the Joint Committee on Consolidation Bills.
Multilateral Investment Guarantee Agency Bill
Read a third time, and passed.

Public Utility Transfers and Water Charges Bill
3.29 p.m.
The Earl of Caithness: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly,
[The LORD ABERDARE in the Chair.]
Clause 1 [Power to act in relation to proposals for privatisation etc.]:
Lord Diamond Lord Diamond moved amendment No. 1:
Page 1, line 6, after ("time") insert ("prior to 1st January 1990").
The noble Lord said: The Committee will recollect that this Bill gives the necessary powers to certain

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utility companies to prepare for privatisation in relation to proposals made by the Secretary of State. The purpose of the amendment is to draw attention to the unnecessarily wide powers taken by the Secretary of State in Clause 1, which provides:
"Where the Secretary of State is at any time proposing".
The powers are not limited even to this Parliament. The provision is totally unlimited and, I suggest, quite unnecessarily so. The Government have made it absolutely clear that they intend to bring in the relevant privatisation legislation at the earliest possible opportunity. We have been told that the Secretary of State has made a proposal and there is every intention on the part of the Government to get on with it, if I may put it in that way.
Why is it necessary for the Government to take powers for the Secretary of State to make a proposal at any time? I suggest that it would be reasonable to give the Secretary of State whatever time he reasonably requires, and I should have thought that the deadline should be 1st January 1990 so that the clause would then read:
"Where the Secretary of State is at any time prior to 1st January 1990 proposing".
I should have thought that that period of time would be more than adequate, and there is no good reason for having the totally unlimited powers which the clause at present provides.
The Bill is about certain privatisation schemes of which we are all well aware. It is not there to provide the Secretary of State with unlimited powers for ever and ever. I beg to move.
Lord Ezra: In supporting this amendment proposed by my noble friend, perhaps I may say that I believe this raises a matter of principle. I do not believe that legislation which comes through this Chamber should give any government unlimited power. If the Government propose to undertake certain measures, they should not only identify the measures but identify the time-span within which they want to take those measures.
This question of being able to introduce the measures indicated at any time does not seem to me to be in line with the normal legislative approach that we should take, and therefore I strongly support the amendment.
Lord Williams of Elvel: This amendment moved by the noble Lord, Lord Diamond, and supported by the noble Lord, Lord Ezra, brings us to the first of a series of amendments designed to modify or in some cases to achieve explanation of the provisions of Clause 1, which I believe is probably the most difficult clause in the Bill.
The noble Lord, Lord Diamond, was quite right to concentrate on this particular point of the time period, because at a later stage, when dealing with other amendments, we shall come to the nature and status of the proposals. We also believe that Clause 1 gives very wide powers and we believe that in some cases those powers need to be curtailed but certainly clarified. We support the two noble Lords who have put their names to this amendment. We believe that
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there should be a time-limit to the powers in the Bill, because if there is no time-limit on the face of the Bill there is no mechanism in the Bill—unless the noble Earl can explain where there is one—for putting a stop to the powers if, for one reason or another, the privatisation measures do not go ahead. That seems to be a good reason for having a timetable in the Bill.
The Earl of Caithness: As the noble Lord, Lord Diamond, said, this amendment seeks to impose a deadline of the end of the calendar year 1989 beyond which the powers to prepare for our proposals, which Clause 1 confers upon the electricity supply industries, would no longer be available. I appreciate the spirit of the amendment, which in effect is telling us, as the noble Lord put it, to get on with the job quickly. That is exactly what we want to do.
We are committed to the restructuring and privatisation of both industries. We intend to introduce the necessary legislation in both cases at the earliest opportunity. If that is during the next Session of Parliament—and we can of course have no certainty of that in advance of the Queen's Speech—then we expect to see the implementation of our proposals under way before the end of 1989. Nevertheless, while we are fully committed to making the best possible progress towards the restructuring and privatisation of these industries, we do not want to reduce the flexibility of this provision by including what would amount to an expiry date which is proposed by this amendment.
Lord Williams of Elvel: The noble Earl referred to a timetable which the Government have in mind. Perhaps he would like to suggest some date other than that mentioned by the noble Lord, Lord Diamond.
The Earl of Caithness: We seek to bring in at the earliest opportunity the Bills which will result from this one. As the noble Lord, Lord Diamond, will know from his experience, I cannot predict whether or not it will be in the Queen's Speech. We hope it will be at an early stage, but we believe that the Bill as drafted gives the Secretary of State the necessary flexibility. However, I assure the Committee that it is something that we wish to get on with quickly.
Baroness Seear: The Minister has not really answered the point. Are the powers to be unlimited in time or does the Minister accept that there must be a limit even if the limit quoted here is not the right one?
The Earl of Caithness: In view of what I said, I do not believe it necessary that there should be a time-limit.
Lord Diamond: This is a very unfortunate situation. Both sides of the Committee are entirely agreed that certain proposals on which the Government have set their heart should proceed. Indeed, both sides entirely agree that these proposals should proceed with due speed. We ask the Government, "How long do you think it is all going to take?" Perhaps they wish to add on a year or two years, but there must be time-limit.

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The Government cannot come before this Committee and ask for powers which will extend to the next government but four, if necessary, with regard to proposals which the present Government have in mind. That is totally unreasonable. Some calculation must be made of what is needed. The Government can add on any possible contingency allowance for time and put that in the Bill, but to say,
"Where the Secretary of State is at any time proposing"
is an affront to the Committee. We are not here to give the Government blank cheques. We are here in order to improve the Bill and to get the business of the Government through. I appeal to the noble Earl to give the matter further thought.
3.38 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 70; Not-Contents, 114.

DIVISION NO. 1

CONTENTS

Airedale, L.

Kilmarnock, L.

Amherst, E.

Leatherland, L.

Ardwick, L.

Listowel, E.

Attlee, E.

Lloyd of Hampstead, L.

Aylestone, L.

McIntosh of Haringey, L.

Banks, L.

McNair, L.

Blease, L.

Mason of Barnsley, L.

Bonham-Carter, L.

Mishcon, L.

Bruce of Donington, L.

Nicol, B.

Burton of Coventry, B.

Phillips, B.

Carmichael of Kelvingrove, L.

Ponsonby of Shulbrede, L.

Cledwyn of Penrhos, L.

Ritchie of Dundee, L.

David, B.

Sainsbury, L.

Dean of Beswick, L.

Seear, B.

Diamond, L.

Seebohm, L.

Donaldson of Kingsbridge, L.

Serota, B.

Elwyn-Jones, L.

Shackleton, L.

Ennals, L.

Shaughnessy, L.

Ewart-Biggs, B.

Somers, L.

Ezra, L.

Stallard, L.

Falkland, V.

Stedman, B.

Gallacher, L.

Stewart of Fulham, L.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Grey, E.

Strabolgi, L.

Grimond, L.

Taylor of Blackburn, L.

Hampden, V.

Tordoff, L. [Teller.]

Hanworth, V. [Teller.]

Underhill, L.

Harris of Greenwich, L.

Wallace of Coslany, L.

Hayter, L.

Wells-Pestell, L.

Howie of Troon, L.

Whaddon, L.

Hunt, L.

Williams of Elvel, L.

Hunter of Newington, L.

Winchilsea and Nottingham, E.

Ilchester, E.

Jeger, B.

Winstanley, L.

John-Mackie, L.

Winterbottom, L.

Kennet, L.

NOT-CONTENTS

Airey of Abingdon, B.

Bessborough, E.

Aldington, L.

Birdwood, L.

Alexander of Tunis, E.

Birk, B.

Alport, L.

Blatch, B.

Arran, E.

Boyd-Carpenter, L.

Auckland, L.

Brabazon of Tara, L.

Beaverbrook, L.

Broadbridge, L.

Belhaven and Stenton, L.

Brougham and Vaux, L.

Beloff, L.

Butterworth, L.

Belstead, L.

Caccia, L.

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Caithness, E.

Lovat, L.

Campbell of Alloway, L.

Lucas of Chilworth, L.

Carnegy of Lour, B.

Lytton, E.

Cayzer, L.

Mackay of Clashfern, L.

Chelwood, L.

Macleod of Borve, B.

Coleraine, L.

Manchester, D.

Constantine of Stanmore, L.

Marley, L.

Cottesloe, L.

Merrivale, L.

Crickhowell, L.

Mersey, V.

Croft, L.

Milverton, L.

Cromartie, E.

Morris, L.

Cullen of Ashbourne, L.

Mottistone, L.

Dacre of Glanton, L.

Mowbray and Stourton, L.

Davidson, V. [Teller.]

Munster, E.

De Freyne, L.

Nelson, E.

Denham, L. [Teller.]

Norfolk, D.

Dundee, E.

Nugent of Guildford, L.

Eccles, V.

O'Brien of Lothbury, L.

Effingham, E.

Onslow, E.

Ellenborough, L.

Orkney, E.

Elton, L.

Orr-Ewing, L.

Faithfull, B.

Pender, L.

Ferrers, E.

Pennock, L.

Fraser of Kilmorack, L.

Porritt, L.

Gainford, L.

Rankeillour, L.

Glenarthur, L.

Renton, L.

Gridley, L.

Richardson, L.

Hailsham of Saint Marylebone, L.

Rippon of Hexham, L.

Rodney, L.

Harvey of Prestbury, L.

St. Davids, V.

Harvington, L.

St. John of Fawsley, L.

Havers, L.

Saltoun of Abernethy, Ly.

Hesketh, L.

Sanderson of Bowden, L.

Holderness, L.

Sandford, L.

Home of the Hirsel, L.

Sandys, L.

Hood, V.

Selborne, E.

Hooper, B.

Selkirk, E.

Hylton-Foster, B.

Sempill, Ly.

Jay, L.

Skelmersdale, L.

Jenkin of Roding, L.

Slim, V.

Jessel, L.

Strathcarron, L.

Killearn, L.

Strathcona and Mount Royal, L.

Kinnaird, L.

Lane-Fox, B.

Thorneycroft, L.

Lauderdale, E.

Trumpington, B.

Layton, L.

Vaux of Harrowden, L.

Long, V.

Vinson, L.

Lothian, M.

Ward of Witley, V.

Resolved in the negative, and amendment disagreed to accordingly.
3.46 p.m.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 2:
Page 1, line 6, after ("proposing") insert ("to Parliament").
The noble Lord said: This amendment questions the status of a proposal by the Secretary of State that the property or functions of an electricity board or water board should be transferred to another body corporate. We believe that the status of this proposal is left unclear and above all that such a proposal ought to come before Parliament.
The amendment is in a very simple form and I have not tried to be at all sophisticated in its drafting. It is up to the Government of course to decide in what form such a proposal might come before Parliament; nevertheless, it is our belief that that should happen.
The powers conferred by the Bill, particularly by Clause 1, are very considerable indeed. Under Clause 1(1) the new functions of the utility or the Electricity Council,
"shall include the power to do anything which in the opinion of the utility … is appropriate for … facilitating the implementation of the proposal for the transfer".

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In practice it appears that the Secretary of State need only form an intention in some manner which is then publicised and which can then be called a proposal for these powers to be triggered without any further recourse to the parliamentary process. As we now know, there is no time limit within which the Bill operates. There is in consequence no guarantee that the powers potentially available will not rest on the statute book for a number of years.
Although the noble Earl said that he wishes to bring forward the privatisation programme as quickly as possible, we on this side of the Committee still feel that it is vitally important that Parliament should have an opportunity to discuss this proposal and, therefore, that the proposal should be laid before Parliament. I beg to move.
Lord Renton: I have some sympathy for the noble Lord, Lord Williams, on this amendment. My problem arises from the fact that the first line of subsection (1) is so uncertain in its expression and effect. It reads:
"Where the Secretary of State is at any time proposing that any property or functions of a relevant public utility should be transferred",
and so on. One wonders to whom the proposing is to take place. Is it to the Secretary of State himself? Is it to his department? Is it to the "relevant public utility" mentioned in the second line of the subsection? Is it to Parliament? Is it to the nation? To whom is it made? We should be given some idea. The noble Lord may have hit the nail on the head but we shall not know until we hear from the Minister.
Lord Ezra: The amendment proposed by the noble Lord, Lord Williams of Elvel, ties in with the previous amendment, which has been rejected by the Committee; namely, that we want to know from this side of the Committee where we stand. The Government are taking such very wide powers under this clause that we feel that some definition is required. Surely it is not unreasonable to suggest under our due processes that the proposal that the Secretary of State might have at any time should be submitted for debate to Parliament. I very much hope that the noble Earl will be able to agree to this amendment.
Lord Diamond: I too should like to fully support this amendment. I am very interested in the comments that have come from the other side of the Chamber. Naturally, we pay more attention to those and I expect that the Government do too. So far as I am aware the only time in which the word "proposing" is used without an object is when the proposer is on his knees with a bunch of flowers and he is making a proposal. I do not know whether that is a further alternative that might be included in the definition of those words. We are all making the same point that the whole of this clause is drafted so widely as to include anything under the sun. We really ought to have some control of it, and the control proposed in this amendment is the natural and obvious one of parliamentary control.
The Earl of Caithness: I should like to thank the noble Lord, Lord Williams of Elvel, and also the noble Baroness, Lady Nicol, for the way in which they have put down these amendments at an early date. Some of his amendments are perhaps more relevant to future legislation and some strike at the very heart of the Bill. The noble Lord said at Second Reading that he dislikes this Bill. These amendments are therefore not surprising. This amendment itself strikes at a fundamental principle of the Bill. The noble Lord, Lord Williams of Elvel, said that it is not sophisticated. If it is not sophisticated, it is done with great charm and it is an absolutely deadly amendment.
The reason why the Bill comes before the Committee is that doubts have been expressed about the powers of the water authorities and the electricity supply industry to co-operate now with the Government as we develop our proposals for privatisation and restructuring. There is a great deal to do in relation to both water and electricity, if the main legislative proposals are to come before Parliament in good order and in good time. We need to be sure that there is no inhibition on the two industries in helping us to draw up that legislation, and in doing so, to anticipate the effects of that legislation. Furthermore, there are matters outside the legislative field where it is important that the industries should be given immediate attention if the privatisation process is to go smoothly and in accordance with our timetable. For example, detailed attention will need to be paid at an early stage to the drawing-up of long-form reports, as a preliminary to preparing prospectuses, well in advance of our introducing the relevant legislation. This will involve expenditure, and quite possibly the exercise of the powers in this Bill.
This amendment is aimed at preventing any co-operation on the drawing up of legislation. It is also aimed at stopping any of the other work from happening until our main legislation is in Parliament. If we were to suppose that the relevant legislation was to be introduced later this year—I said in relation to the last amendment that I cannot anticipate the contents of next session's Queen's Speech—the effect of this amendment would be to delay the planning process on the part of the two industries by some eight or nine months. That would not be acceptable to the Government.
The "proposing" as identified by my noble friend Lord Renton, is proposing to anyone, in particular the utilities. I have given an explanatory statement abut the principle of the Bill which is to clarify the law so that this can proceed. The Committee will know that this was not necessary with the privatisation of other works such as British Telecom and British Gas. Such a Bill was not necessary. It seems that the requirement of this amendment would only seek to delay the process quite unnecessarily.
Lord Renton: My noble friend says that the object is to clarify the law. In doing so, should we not ensure that the law is clear? In view of the statement made by my noble friend that it is not appropriate to insert the words of the amendment—namely, "to Parliament", between now and Report

1263
stage—perhaps the Minister would consider the possibility of inserting after the word, "proposing" the words, "to any utility or body corporate". That seems to be what the noble Lord has in mind.
The Earl of Caithness: Perhaps I may answer the point raised by my noble friend. Of course one of the great strengths of the Committee is to make legislation clear. That is something I am keen to do with this piece of legislation which is now before us. I will take away my noble friend's comments and look at them between now and another stage.
Lord Williams of Elvel: I am glad that the noble Earl has been impressed by the arguments of the noble Lord, Lord Renton. I also hope that he is going to be impressed by some of the arguments that I am going to make. I do not necessarily believe that the formulation put forward by the noble Lord is the exclusive one. We need to have clear laws, as the noble Lord said. We need to know what a proposal is and not merely to know to whom it is made, with great respect to the noble Lord, Lord Renton. We also need to know in what form it is made and how it is made. Then we can say, "This is a proposal under the Public Utility Transfers and Water Charges Act." If the noble Earl is going to look at the suggestion put forward from his Benches, perhaps he will look at the suggestion of introducing some kind of formulation to describe how we can identify a proposal which is under this Bill. If the Minister can give us that assurance I am quite happy.
The Earl of Caithness: The noble Lord, Lord Williams, is being increasingly ingenious in trying to get me to make commitments and to give assurances to the Committee. What I said to my noble friend was that I would look at the point he was making in order to see whether it needs to be clarified. If so, I would then consider how best to do it. In doing that, I shall bear in mind what the noble Lord says. Of course what I have said is without commitment.
Lord Williams of Elvel: I am grateful to the noble Earl for going, I suppose, half-a-step down the road which I believe both the noble Lord, Lord Renton, and I and others would wish him to go. Let us hope that in the course of his reflections between now and Report stage that he can go further along the way. I hope he recognises that there is a major problem. As the noble Lord said, if we are going to clarify the law let us at least try to make it clear. We from this side would certainly wish to have a clear definition of what constitutes a proposal under this particular Bill. I hope that the noble Earl will be able to come up with one before the Report stage. In the meantime, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 3:
Page 1, line 6, after ("that") insert ("as part of a scheme of privatisation").
The noble Lord said: We are essentially on the same point that the Committee has been discussing. I share the view which has been expressed that the
1264
proposal is in terms which are far too wide for it to be recognised or identified. The noble Lord, Lord Williams of Elvel, wants a proposal under this Bill to be capable of being identified. I could not agree with him more. Any proposal of any kind might come under this Bill the way it is drafted at the moment. The rubric gives some hint as to what it is all about. The rubric says:
"Power to act in relation to proposals for privatisation."
Where in this clause is the word "privatisation" mentioned? It appears nowhere at all. The Explanatory Memorandum says that the electricity supply industry and the water authorities should
"have adequate powers to prepare for privatisation."
We all know that is what it is all about. The Government have produced a White Paper and they have made their intentions very clear both at the general election (so I am told) and subsequently. The Bill is to give powers in relation to a proposal concerning privatisation. Why on earth not say so? That would help to identify what kind of proposals we are talking about. That is why I am proposing that there should be inserted the words:
"as part of a scheme of privatisation"
The first line of the clause will read:
"Where the Secretary of State is at any time proposing that as part of a scheme of privatisation any property or functions … should be transferred"
Property or functions could be transferred in any way and not necessarily as part of a scheme of privatisation. They could be transferred as part of a scheme of reorganisation of a public utility company. There is not a word in the clause itself to say that these powers relate to privatisation. Yet the Government say that that is what it is about; the explanatory clause says that that is what it is about; and the rubric says that that is what it is about. It is a new proposition that the country should be governed by rubric. I have never heard of that one before. I am suggesting that the clause itself should make the position clear.
I cannot simply finish on that point. The rubric goes on, very wisely, to say,
"proposals for privatisation etc.".
That final word is a lovely one to use. It can cover anything that occurs to anybody at any time of the day or night. We wonder what "etc." refers to here. The word makes it perfectly clear that the clause as it exists at the moment is by no means limited to proposals for privatisation. It can be directed to proposals for privatisation and to other proposals which have nothing whatever to do with privatisation. In order to help the Government make it clear to the people of this country what they are about, it is proposed that they should say what they have said from the Front Bench opposite and from the Front Bench in another place. It is proposed that they should say in the Bill itself what they are doing. What they are doing is giving powers in relation to a proposal which is part of a scheme of privatisation. I beg to move.
4 p.m.
Lord Ezra: In supporting my noble friend's amendment, I should like to say that we are doing the

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very task that we have to do in relation to legislation. We are trying to make absolutely certain that what passes through our Chamber is clearly and indubitably understood by those who have to carry out the law. Clause 1 of this Bill is very unclear in many respects. The amendments so far moved have been an attempt to introduce clarity. What my noble friend has just said is precisely devoted to that end. Is this; intended to be a move towards privatisation, or is it not? If it is, what is wrong with saying so? We would then all know where we stand.
Baroness Phillips: I should like to support the amendment. I would have spoken on the other two amendments but that was not necessary because my noble friend stated the case so well. This is a frightening piece of legislation. Apparently so simple, it will give the Government great powers. I notice use of the "in" word, "corporate". We are told that everything is corporate and that a body is corporate. There is nothing in the definition clause to say what a "body corporate" is. It obviously comes under "etc.". If the Government are to hand over our water authorities and electricity boards to the private sector, they should at least have the courage to state it in the Bill. That would spell out exactly what this small and apparently innocent Bill is all about.
The Earl of Caithness: I fully understand the thinking that lies behind this amendment which the noble Lord, Lord Diamond, has moved with his usual clarity. Perhaps I may begin by assuring the Committee that the Bill had its origin in our intention to privatise the water industry and the electricity supply industry and the need as we saw it to confer explicit powers on those industries to co-operate with us in developing our privatisation proposals. That is the purpose of Clause 1, and its purpose will be fulfilled, I have no doubt, within the lifetime of this Parliament. Once the industries become plcs there will no longer be—and I quote—"relevant public utilities" within the meaning of Clause 1, so these powers will have become redundant.
I would, however, emphasise that our proposals for the water industry also include proposals to set up a National Rivers Authority. This proposal has a validity in its own right. I fully accept that it had its origins in our thinking about privatisation. When we concluded that it was not possible for one private body to regulate another we were moving inexorably in the direction of having to establish a National Rivers Authority or something like it.
However, we have also, independently, come to the view that it is becoming more and more difficult to justify the continuing role of the water authorities as one of the polluters and also the regulators of our river system. This is sometimes described as combining the roles of poacher and gamekeeper. The results of the river quality survey, carried out in 1985, show that the long-term improvement in the quality of our rivers and water courses has faltered, and in some cases gone into reverse. I am certainly not blaming the water authorities entirely for that. However, the institutional separation of regulatory
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from utility roles will help combat present difficulties. That separation, I repeat, has a validity in its own right.
Subsection (1) is drafted to encompass proposals for the transfer of property and functions of the utilities to other corporate bodies which may be in the private or public sectors. In the case of the water industry these transfers will be to successor companies which will be privatised and to the NRA, a public sector body. The establishment of the NRA is not part of the privatisation proposals but part of the proposals for restructuring the industry. The effect of the amendment would be to confine the preparatory powers of the water authorities to the transfer of water supply and sewerage functions to successor companies and to prevent them from preparing for the transfers of property and their remaining functions to the NRA.
I do not know where the noble Lords, Lord Diamond and Lord Ezra, stand in regard to their thoughts on the NRA, but we believe that it is necessary and is a move in the right direction in view of the poacher-gamekeeper position in which the water authorities find themselves. That is why the clause is drafted as it is and that is why the noble Lord's amendment is so restrictive.
Lord Williams of Elvel: We are grateful to the Minister for expanding his brief on the intentions behind the legislation. Indeed, he said more or less what the noble Lord, Lord Belstead, said at Second Reading. It is perfectly proper that he should repeat what the noble Lord said. However, if I may say so with the greatest respect, that has nothing to do with the problems raised by the proposed amendment.
If the Government do not accept this or a similar amendment we are left with the Bill as drafted which gives the Secretary of State power for an indeterminate period, without further recourse to Parliament, to act in relation to proposals, to propose (perhaps by lying in his bath and proposing to a dog; we do not know how he will propose) that certain things will be done and that powers will be given for acts to be done by other people for unspecified purposes. That is the point we have reached in the Bill and that is why we dislike this formulation. Between now and Report stage I hope that the noble Earl will think about what I and the noble Lord, Lord Diamond, have said because it is a problem for us if we are to act as a House of Parliament.
Lord Nugent of Guildford: Before my noble friend replies to that point I should like to raise a further matter arising from the short speech he has made justifying the very broad terms in which Clause 1 is drafted. He told us that he will set up the National Rivers Authority. Indeed, he has published a document about it. It would seem to me that the Bill is the natural place in which to take powers to do so. Yet the National Rivers Authority rates a mention only in the Explanatory and Financial Memorandum.
We are told that this is to happen. But when and how will it happen? We know, or we think we know, that in the next Session of Parliament there will be

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major legislation which will set up the new privatised structure of the industry. However, it would hardly seem appropriate that the National Rivers Authority should be part of such legislation, especially as my noble friend is relying on the soon-to-become National Rivers Authority to justify part of his position now. It seems to me that he has some obligation to explain where the powers to set it up will come from. People are most interested in the authority. It is going to be responsible for regulatory, environmental and conservation functions which affect the whole community. We should all like to know just how my noble friend intends to set up this organisation, who the people will be who will run it, how they will do it and what will its constitution be.
It is true that there is a broad outline of those functions in the admirable pamphlet which my noble friend has published, but that has to be put into legislative form before it can become a reality. I should stress that I intended to raise this point on Clause 10 stand part, but as my noble friend has been good enough to give me a hook on which to hang my short point by mentioning the National Rivers Authority and what he intends to do about it, I think that now is the appropriate time to ask him how he proposes to set up the NRA and when he will show those proposals to the world in a piece of legislative machinery.
Lord Renton: I should like to follow up the rather important point just raised by my noble friend Lord Nugent of Guildford. When we have a Bill which needs to have a good deal read into it between the lines, as it were, as happens with Clause 1, it is only right and proper that we should refer to the Explanatory Memorandum, although we have no power over its contents. However, I think in this case we should take note of exactly what the Explanatory Memorandum says in its first sentence. I ask the Committee to take note of the following important words:
"The Bill ensures that water authorities in England and Wales, and the electricity supply industry in England, Wales and Scotland have adequate powers to prepare for".
It then goes on to mention two matters. The first is "privatisation"; the second is:
"for the creation of a National Rivers Authority".
Therefore we are in the rather odd position of being asked to prepare for the creation of something which does not exist; it is not on the statute book or in the Bill. I find that situation rather strange and no doubt my noble friend will wish to turn his very diligent attention to it.
Baroness Phillips: Before the Minister replies, perhaps he could clarify one point. In his speech he rather concentrated on water, using the example of the poacher and gamekeeper; dealing with pollution on the one hand and polluting on the other. How would he apply that argument to electricity? Surely an electricity authority does not pollute at the same time as supply. In my view any comment he makes is tied up with those two matters right throughout the Bill. They may in fact be separated in the
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Explanatory Memorandum but each clause refers, on each occasion to the two matters with which we are concerned: water on the one hand and electricity on the other. Can he explain the poacher and gamekeeper argument in relation to electricity?
4.15 p.m.
Lord Diamond: We are most grateful to the noble Earl for what he said by way of explanation but, unfortunately, there is a lot more explaining to be done. I should like to clear the following point straight away because it may help in the argument. He asked where we stood on the NRA. The answer is that we think it is a very good idea, subject to seeing the details of it. The National Rivers Authority is not a piece of privatisation; it is a reconstruction of a public body as part of a scheme of privatisation. That scheme of privatisation has been made clear by the Government and appears, as the noble Lord, Lord Renton, has just reminded us, in the Explanatory Memorandum as the second of two main objects of the Bill.
I must stress that nowhere in the Bill are the words "National Rivers Authority"—at least, certainly not in this clause—and yet it is an essential part of what is contemplated by the powers being sought under the clause. Nowhere in fact is it mentioned. It is of fundamental importance because the Bill is mainly concerned with giving utility companies the powers to prepare for something definite. They know that something will happen to their industry and they had better get on with preparing for it. I have no objection to that. But what are they to prepare for? No doubt they will assume that they are to prepare for what is described in the statements issued by the Government, but there is nothing in the Bill about that aspect. They can only act wisely and cover themselves with regard to the expenditure they incur if they are preparing for matters for which they have power under the Bill.
Let us then examine a little more closely what has happened so far with regard to water to see whether it might happen in respect of electricity. As regards water, what the Government first proposed—to use the important word in this clause—was complete privatisation; that is, everything owned by the water companies was to be privatised and transferred to plcs. However, they then decided to withdraw all their proposals and subsequently decided to re-introduce such proposals in a very different form because they were not to be entirely for privatisation.
It was proposed that certain very important functions should not be privatised but that they should be retained in the public sector under a new body to be called the National Rivers Authority. We think that that was a very wise alteration of plan, but it was a complete alteration of what was in the Government's mind. I ask the Committee to bear in mind that we are talking about an amendment which proposes a scheme of privatisation—not privatisation in the round—so that the public utilities will know what it is that they are intended to do.
I turn now to electricity. At present the Government's plans—I say at present because they may well change them—are to privatise all the

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electricity functions. We know that one of the important and essential functions of the CEGB is electricity generation. We also know that there is a great argument taking place as to whether its powers should be privatised or retained as a single entity under some public body, serving what would then be privatised industries.
It may be that, just as the Government have changed their mind with regard to the National Rivers Authority, they may subsequently change their mind with regard to electricity generation. Then, because there has been no scheme for privatisation, all the expenditure that these utility companies have incurred in preparing for the privatisation of electricity will to some extent be wasted because there is some different proposal for which they have to prepare. Surely they are entitled to have a scheme of privatisation put before them so that they will know where they are. The proper place for that, I repeat, is not in the Explanatory Memorandum; it is in the Bill itself.
While we are on this, I seek the assistance of the Government on how to deal with the problem of the rubric, which talks about power to act in relation to proposals for privatisation. Unless the Government accept this amendment or something like it which talks about a scheme of privatisation, this is a very misleading rubric. It tells the nation that the Bill is about something when there is not a word in the clause itself to justify it. What if we do not like that? What if the Committee decides that it is not right and proper for a Bill to go from this Chamber which gives a totally misleading impression in a rubric? I do not know how one alters a rubric; I have never had to put down an amendment on one. I have always understood that a rubric just followed the pattern of the Bill. We should certainly want to know a great deal more, if the Government are not going to accept an amendment which justifies the rubric, as to why the rubric should appear.
Lord Renton: Will the noble Lord give way? I think the difficulty which he has expressed and which my noble friend Lord Nugent and I also expressed earlier could be overcome by there being a purpose clause at the beginning of the Bill. It would come before Clause 1 and its substance would be very much what is in the first paragraph of the Explanatory Memorandum. On the Legal Aid Bill recently the Lord Chancellor himself introduced a purpose clause. He had one drafted which helped very much in the interpretation of the Bill. I certainly think that the same solution could well be applied to this Bill.
Lord Diamond: I am grateful to the noble Lord, Lord Renton, who is very well informed on these matters of legislation and procedure. It may be that that is an alternative which will suggest itself to the Government. We do not mind in the slightest whether it is done in the form of this amendment, which has stood the test so far in the discussion which has gone on. It has indicated that what we all need is a scheme of privatisation which shows exactly what is proposed. We do not mind whether it is done in this form or in an intentions clause, which is another way round it.
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At all events, under either alternative we want something in the Bill which we can read and know has legislative effect. So I hope that the noble Earl will give this matter very careful consideration and bear in mind our great anxieties about this misleading rubric and also about powers being granted in this way without at any time referring to Parliament for something which may be privatisation or—although it is not likely—nationalisation, both covered by the Bill in just the same way. If the Government want to introduce schemes of nationalisation I dare say they could summon a certain amount of support from all sides of the Chamber. That is what this clause gives them power to do. I am sure I have made my point sufficiently clear. I hope the Government will respond to it.
The Earl of Caithness: I understand the concern of noble Lords and the noble Baroness on this matter. What the clause is designed to do is to permit my right honourable friend the Secretary of State and the utility companies to start work in preparation for privatisation. The noble Lord, Lord Diamond, knows full well that when those proposals have finally been prepared and submitted they will have to come before Parliament. Again, it is a point which I mentioned earlier that matters such as the exact form of the NRA are for the main Bill. If we were to put a reference to privatisation or to the NRA in the main body of the Bill, it would have to be precise in bringing forward what our proposals will do.
Lord Williams of Elvel: I am sorry to interrupt the noble Earl. A moment ago he referred to proposals coming before Parliament in the form of the main legislation. Are we to understand that the word "proposal" as used in this clause means the main legislation when it comes before Parliament and that is the proposal which the Secretary of State will make?
The Earl of Caithness: That is how it will end up. However, until one can have the powers to start discussions formally with the authorities or with the electricity industry on what is going to happen, it is a chicken and egg situation. When we have presented our proposals and worked them up, we can then present a Bill to Parliament. At the moment we cannot do that. It is a problem with the NRA. It is very much a chicken and egg situation. If it were to be written onto the face of the Bill, we should have to be very precise about what was to be privatised and what was to be the NRA. We cannot do that because we do not have the proposals which this clause enables us to put forward.
Lord Sefton of Garston: If the noble Earl will allow me to intervene, perhaps I may say that I am getting rather puzzled. It seems to me that the principle is that somebody on this side of the Committee is saying that the powers accorded to the Secretary of State in this Bill are not specific and they could be applied to situations other than privatisation. That is what is being said on this side of the Committee. What the Minister has to do is to satisfy the Committee that these proposals are a paving Bill only for

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privatisation and the establishment of the National Rivers Authority. That is the issue.
If the Minister will address himself to that and tell the Committee that the powers in the Bill are specific to those two objects, perhaps we shall be satisfied. At the moment the Minister has got nowhere near understanding the point, let alone replying.
The Earl of Caithness: I am very grateful for that invervention. The noble Lord, Lord Sefton of Garston, has hit the nail on the head. It is in order to bring forward proposals, but not all the proposals necessarily include privatisation. This is for the restructuring of the two industries, but until we get the powers to enable us formally to discuss that we cannot discuss the proposals with the electricity industry or the water industry. That is what is delaying matters. It is a chicken and egg situation.
Lord Sefton of Garston: That makes it worse. If I understand the Minister rightly, he is now saying that the powers may not just be accorded in the Act for privatisation which is contemplated by the Government and there may be something else. If this Bill allows the Government to do something else, it may be that if the Government found undue difficulty in getting somebody to buy the water authority or the electricity authority they would want to change their mind and go for a reorganisation. Under this Bill they would be able to do it and start the procedure for that reorganisation. If they were to do that, I am sure that this Committee would want to know what kind of reorganisation it was. So the Minister must satisfy us that it is specific to those powers.
The Earl of Caithness: That is exactly the point of the main Bill. It will come before noble Lords.
Baroness Seear: Why cannot the Minister say, if this is what he is trying to convey to us, that the proposals to be brought to Parliament are for privatisation and the establishment of a National Rivers Authority? Why cannot he put that in, and then we shall know what he is talking about?
The Earl of Caithness: That is one of the difficulties. Until we get the authority to make the proposals, what we have suggested is that the National Rivers Authority should be set up. But, as the noble Baroness knows, there are two White Papers on the electricity industry, one by my right honourable friend the Secretary of State for England and Wales and the other by my right honourable friend the Secretary of State for Scotland. Some of the thoughts in the White Paper may be changed in view of comments, but this clause and the Bill are what enable us to take matters a stage further in order to bring the main Bill before noble Lords. That will be the moment for the Chamber to decide whether or not what the Government propose as a result of the powers conferred in this Bill is acceptable.
I was interested in what my noble friend Lord Renton said on the intention clause. I should like to look into that to see if it is possible to bring that into
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this legislation given the fact that as I understand it, this matter is slightly different from the Legal Aid Bill. This is a chicken and egg situation. That is one of the points I should like to look at between now and the next stage of the Bill.
To be absolutely clear to the Committee I should say that we are seeking powers in order to enable my right honourable friend the Secretary of State to start discussions in order to bring forward the main proposals.
4.30 p.m.
Lord Diamond: I never expected the Government to bring forward as a reason for this Bill and for the wording of this Bill the fact that they are not ready to put their privatisation proposals to the nation. That has happened once already and the proposals were all withdrawn. We all know that that happened with regard to water.
If the Government are not ready to put forward a scheme for the privatisation of water they should say so and wait until they are ready. It is wholly irresponsible when the Government are not ready to invite the utility companies concerned to incur any expenditure which they like and which the Government wish them to incur and to give them the powers to examine proposals which the Government have not yet clarified in their own mind and which may turn out to be quite different. It is quite wrong that that should happen.
The Earl of Caithness: I shall try once again to get the message through to the noble Lord, Lord Diamond. He would be the first to criticise the Government and the water authorities if there were not a long-term prospectus for the privatisation. He would be the first to get up and say, "This is absolutely wrong. It goes against all the Companies Acts". The noble Lord, Lord Williams of Elvel, would he very close on the noble Lord's heels to tell me that. This clause enables us to fulfil those kinds of requirements.
Lord Diamond: To put it politely, I find it very difficult indeed to accept what the noble Earl has just said. The noble Earl has said a number of things. He has said that it is impossible for the Government to start discussions with the utility companies on the details of the proposals. I find that very difficult to understand. I cannot see why the Government should not go and start discussions with the utility companies here and now. They have the full powers to do that.
Is the noble Earl telling us in one sentence that the main purpose of the privatisation of the electricity industry is to stop government interference—as the Government call it—and at the same time telling us that the Government have no power to talk to the electricity industry about their plans for privatisation? I am afraid that that really is just not tenable. The clear situation as we now find it is that the Government do not have the foggiest idea of what they propose to do. If that be so, that is all right; they should give the matter further examination. It is not the first time that the Government have found

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themselves in this position. It is the second time. That is all right. The Government should give the matter further examination but in the meantime they should take the matter away. The Government should not come to the Chamber with a Bill which is intended to give powers in relation to proposals for precise privatisation schemes for the water industry and the electricity industry when they do not have the foggiest idea of what they want to do.
I repeat what I said previously: we are very unhappy indeed about the rubric and we shall seek to support the noble Lord, Lord Renton, in his examination of this matter and in his proposal that some kind of addition to this Bill should be made, possibly at the start, so that the Bill tells the nation what the Government are intending to do and does not conceal it from the nation.
A number of suggestions have been made. The noble Earl was good enough to say that the suggestion made by his noble friend Lord Renton would be looked at. I think that it is so self-evident that something more should be done that the Government, when they think about this quietly, will come to the conclusion that this clause should be clarified. In the hope of that and on the understanding of what was said by the noble Earl and without putting any additional words into his mouth with regard to the noble Lord, Lord Renton, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh: I beg to move that the House do now resume for the Statement.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Belfast Funeral Incident
4.35 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, with the permission of your Lordships, I shall repeat a Statement that is currently being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"With permission, Mr. Speaker, I wish to make a Statement about the attack yesterday upon mourners attending the funeral in Milltown Cemetery, Belfast of the three terrorists killed in Gibraltar.
"Before the funerals, the Roman Catholic Church, local politicians and community leaders had appealed for the occasion to be orderly and without violence. The police had made it clear that they wished this to happen, and would do all they could to assist. Against this background, and in the belief that neither the families nor the community wished to see any exploitation of the funerals for paramilitary purposes, the chief constable decided his dispositions accordingly. His aim was to police the whole area in a sensitive manner, and to avoid
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intervening in a private and solemn occasion. I would emphasise that the funerals were proceeding in a peaceful way until the attack took place.
"At about 1340 hours a man on the fringe of the crowd in the cemetery opened fire with a handgun, and started to throw grenades among the mourners. He was identified, and as he made his retreat he threw further grenades and continued to fire. He was pursued by members of the crowd who caught him at the nearby motorway where he was subsequently arrested by the RUC. He is at present under police guard in hospital recovering from the injuries he received at the hands of the crowd. A second man subsequently arrested by the police at his home is now helping them in their inquiries.
"In the course of this vicious attack, three people were killed, and 68 injured, of whom four have been detained in hospital, one in intensive care. The House will wish to express its sympathy with the relations and friends of those killed and injured in this appalling incident.
"A telephone call was made to the BBC, purporting to be from an organisation calling itself the Protestant Action Force, and claiming responsibility for the outrage, but the accuracy of this claim is not yet clear.
"It was an obscenity that an occasion which, whatever its origins, should have been one for private mourning and grief was brutally and savagely interrupted by such an attack. The events of yesterday only serve to underline the total futility of violence in all its forms. The day began with a blast bomb attack by the IRA on an Army patrol, in which fortunately there were no fatalities, but in which one soldier was injured.
"Even after the incident at the cemetery, and notwithstanding the professed appeals for calm, the IRA tried to launch a mortar attack on a police station in Belfast which was fortunately forestalled by the security forces. There was further violence last night, with hijackings and burning of vehicles, petrol bomb attacks, and a sectarian attack on some Protestant houses.
"We can only be grateful that the violence of last night did not lead to still more deaths and serious injuries.
"Nothing could have demonstrated more clearly that if people's thoughts are only of revenge and retaliation after any incident, then this awful cycle of killing and murder and violence will continue. And yet nothing showed more clearly the total futility of violence and that it offers nothing to any part of the community in Northern Ireland. There are likely to be funerals every day this week in Belfast at which the human suffering and sadness and heartache will be all too plain, and the ultimate tragedy for all the bereaved is that it is all to no purpose. Some 2,500 people have been killed in Northern Ireland in the past 20 years. We know how many of those deaths flow from terrorist action and we know that those killings have not advanced any cause whatever. Instead they serve only to deepen the bitterness and hatred that can divide the communities.
"At this time of great emotion it is now incumbent on everybody in the Province to play their part in ending the cycle of violence and retaliation and further violence. It is not just the politicians, the Church and community leaders, crucial though their role is, but everybody in the Province who has a responsibility to heal, and to calm and to mind what they say as much as what they do. The need once and for all to repudiate violence in speech as well as action and the determination to work positively to build a tolerant and caring society is the message that this House should send today. It is a message that does not seek to judge or to distinguish between one section of the community and another, but one that is deeply important for the future of every single person in Northern Ireland."
My Lords, that concludes the Statement.
4.40 p.m.
Lord Prys-Davies: My Lords, we thank the Minister for repeating the Statement. We are grateful to the Secretary of State for taking the earliest possible opportunity to express his outright condemnation of the appalling atrocity which was committed in Milltown Cemetery, Belfast, yesterday. We also wish to convey our sympathy to the families and friends of those who were killed, to those who were wounded and to the bereaved who wished to bury their dead in dignity.
Sadly, the paramilitary elements in both communities think that they know what is best for the Province. They believe that their aims can only be achieved by mounting fury and violence upon violence. Yesterday's tragedy in Milltown Cemetery may be seen by the Unionist paramilitary forces in Northern Ireland as retaliation in kind or revenge for the atrocity committed by the IRA at the Enniskillen war memorial. But violence from either community is no answer to the problems of Northern Ireland. It is no answer because violence upon violence breeds further violence. Indeed, over time the cycle of violence can eventually lead to the death and become the grave of Ulster itself.
Over the next few days many questions will be asked about yesterday's tragic events. Today, I have only two questions for the Minister. First, while it is appreciated that the RUC and the security forces had been requested by the leaders of the Catholic and nationalist community to adopt a low profile during the funerals—and it appears that they so responded—did the RUC or the security forces have any indication at all that any Protestant paramilitary force or any individuals intended to embark on a course of violence which could in any way disturb the funerals? Secondly, while accepting, as we readily acknowledge, that the problem of Northern Ireland appears to be intractable, do the Government—or indeed both Governments—intend to take any initiative which could bring the cycle of killing and wounding to an end?
Finally, we can only hope with the Secretary of State that all sections of the community in the Province will respond to the earnest appeals from
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Church leaders on both sides of the divide for a period of calm and avoidance of further recrimination.
Lord Donaldson of Kingsbridge: My Lords, first I wish to associate all my friends and colleagues on these Benches with the outrage expressed in the Statement and with the sympathy for the bereaved and the wounded which the Secretary of State and the noble Lord, Lord Prys-Davies, have expressed. Secondly, I wish success to the RUC and the army in their duties, which become more difficult and dangerous with each hateful atrocity committed first by one side and then by the other.
Over the last 12 years, I have had to respond to all too many accounts of atrocities in Northern Ireland. However, this is surely the least excusable, the most inexcusable and the least forgiveable atrocity, even including Enniskillen. I have no questions to ask the Minister. But I stand squarely behind the Secretary of State's brief but powerful statement made over the wireless last night when he appealed to everybody to restrain themselves from the appalling cycle of repeated violence.
That sentiment was gallantly echoed this morning by the mother of one of the dead, as I have seen on the tape this afternoon. She said:
"Please, please, let there be, for once, no acts of revenge, no escalation of these senseless cruelties. Let the ordinary people of Northern Ireland shame their paramilitary factions on both sides into a proper respect for human life".
Lord Lyell: My Lords, the words of sympathy which have been expressed by both noble Lords who have spoken for the bereaved, the dead and the wounded as a result of this appalling incident will be passed to all those concerned. I am sure that those words will be of comfort to everyone in Belfast.
The noble Lord, Lord Prys-Davies, asked if we had had any indication of what might happen and whether it could have been prevented in any way. He also asked whether there was any possibility of an initiative by either the Government of the United Kingdom or that of the Republic of Ireland.
So far as we are aware now, the perpetrator of that appalling deed is presently in hospital and under police guard. The police have been unable to obtain much information from him which is of any use. Nor was there any indication of what might happen. Perhaps it will help the House if I stress that, following assurances that there would be no paramilitary displays at yesterday's funerals, the RUC deliberately kept its distance and did not enter the cemetery. I believe that the House will accept that it is entirely hypocritical of all those who have been loudest in their criticism of the police for the handling of previous funerals to now seek to place the blame for what took place yesterday on the RUC. From the information that we have, there is no indication of how the perpetrator of that foul deed came into the cemetery. However, our inquiries are still continuing.
As regards the second point raised by the noble Lord, Lord Prys-Davies, the Anglo-Irish Agreement is still very much in place. I think that your Lordships will wish to know of the helpful statement which came from the Taoiseach. It was much appreciated.

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He issued his statement at approximately 4.30 p.m. yesterday. Among other things, he stated:
"The anger which this savage attack will cause should not lead to further violence and I appeal to the nationalist people of Belfast and to all the people of Northern Ireland to respond with calm to this outrage and to take no action which might heighten tension or lead to further loss of life.".
Those were the words of the Taoiseach, which I believe should go some way to answering the second point made by the noble Lord, Lord Prys-Davies.
We are grateful for the comments of the noble Lord, Lord Donaldson. I shall see that his kind remarks on the work of the army and the Royal Ulster Constabulary are passed on to the relevant quarters.
Lord Hailsham of Saint Marylebone: My Lords, I do not think that anyone has so far mentioned that this is 17th March, St. Patrick's Day. Is it not possible that the deep sense of shock which all Christians must feel that St. Patrick's Day should be the day upon which we have to record events of this kind and those of the past three weeks could be utilised to bring an end to this appalling reign of hatred and violence?
Lord Lyell: My Lords, my noble and learned friend puts into eloquent words what is felt in your Lordships' House on this day that is so special to Irishmen in Ireland and all over the world, who will feel very much what has been expressed by my noble and learned friend. I am grateful to him for putting that into words. I am sure that it will be noted, not just in your Lordships' House but in Ireland and further afield.
Lord Monson: My Lords, is there any evidence as to the provenance of the grenades used in the cemetery attack? Is there not considerable suspicion that the Libyans have been supplying arms to both sides in the conflict?
Lord Lyell: My Lords, we have no definite information about the provenance nor the types of the weapons that were used in the cemetery. I understand that further inquiries are being carried out by the RUC, but we do not have any definite information on the provenance of those dreadful weapons. They could have come from anywhere.

Public Utility Transfers and Water Charges Bill
4.51 p.m.
House again in Committee on Clause 1.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 4:
Page 1, line 7, after ("transferred") insert ("at fair value").
The noble Lord said: I rise to move Amendment No. 4 standing in my name and that of my noble friend Lady Nicol.
At Second Reading I made a few comments about the principles which will underly the valuation of both the water companies, as they will become, and the electricity companies, as they will undoubtedly
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become. I ventured to put down a marker for the noble Earl when he came to Committee that I should be asking some fairly detailed questions about the nature of the accounting principles and the principles of valuation that the Government propose for both the water and the electricity industries.
The amendment seeks to make operative a restriction on the proposal (which is still undefined) to be brought forward to transfer property or functions of one of the public utilities. If the amendment were adopted the Secretary of State would be obliged to make a proposal for a transfer at fair value. In doing so he would no doubt have to stipulate and make known what fair value meant. At one level this is a wholly uncontentious amendment because no one would suggest that the Secretary of State would transfer at unfair value. Nevertheless, underlying it there is a large slice of the iceberg which is extremely contentious.
Water authorities have had in the past, and continue to have, serious difficulties in deciding the method of accounting to be used in valuing their assets and setting their depreciation charges. That is not surprising because many of their assets are extremely old, particularly underground, sewerage assets, dating back to the 19th century, and to adopt replacement accounting in many instances would be absurd. However, historic cost accounting does not reflect a sensible value of the assets, given that when the transfer to the water authorities was made subsequent to the Water Act 1973 the historic cost was somewhat glossed over. At that time the transfer was within the public sector so that it did not matter very much and no attempt was made to determine a proper historic cost for the assets being transferred.
Although that is understandable in terms of the transfer of assets between one part of the public sector and another, it is less understandable when it comes to transferring assets from the public sector to what will be the private sector. It is at the point of transfer as described by the Bill that I believe the essential criteria for valuation will be set up. Once one transfers into a particular vehicle with the purpose of privatisation and flotation, it is at that point that the balance sheet and the profit and loss is set up and the accounting principles thereby determined.
In replying to the previous amendment the noble Earl referred to long form reports that would have to be made. He is right that long form reports would have to be made on all the companies that the Government would propose to sell in the market. That would be so in order to comply with the Companies Act and with the Financial Services Act. In the case of many water plcs—if I can use that expression—it will be an extremely difficult exercise. The difficulty will not only reside in the fact that the underground assets of the present water authorities are difficult to identify and in many instances have not been identified. It will not only reside in the creation of the National Rivers Authority, which will split off some of the functions of the present water authorities and hence lead to a restatement of the water authorities' own accounts over the past five years, which will be required by the Stock Exchange when we come to flotation.
It will be difficult to decide on the method of accounting for the depreciation of assets and whether that is renewal, replacement, historic or current cost. All these matters will have an impact on the profit and loss account of the companies to be privatised since, as the noble Lord the Lord Privy Seal said at Second Reading, it will be by the profit and loss account that the market will make its valuation of these companies.
The noble Lord the Lord Privy Seal argued at Second Reading that the assets did not matter very much because it is the market which will place a value on the earnings. I do not think that argument will stand up because the depreciation of the assets forms a deduction from the earnings of the company.
All those matters seem to me to be of such importance that in the case of the water industry they have to be established before much further progress is made. Indeed, it is quite possible to conceive of a situation in which the asset register of a water authority is so incomplete—in other words, it does not know where its underground assets are—that it is impossible to get an unqualified audit on that authority should it be transferred to a plc and should it require an audit report for flotation.
The same is generally true of the electricity industry. There are underground assets that the Central Electricity Generating Board still has difficulty in identifying. The problem is exacerbated by the proposed reconstruction of the industry in England and Wales and the scheme proposed in Scotland where parts of various integrated organisations are to be split up. When that is done, serious problems of accounting are introduced which have to be faced now.
Let me take the Central Electricity Generating Board as an example. It is a very complex accounting entity. If it is split into two parts—whether in halves or otherwise makes no difference—one has to determine where the earnings lie, where the assets lie and where the costs lie. And this is on the basis of accounting principles that are at best somewhat sketchy. It does not matter if it is all in the public sector; but it will matter when it reaches the private sector. As I reminded the noble Lord the Lord Privy Seal on Second Reading, Section 47(1) of the Financial Services Act makes it a criminal offence to make any misleading statement knowingly or otherwise to induce an investment. I have said enough, I think, to impress the noble Earl with the seriousness of the problem.
The potential value of these utilities, both electricity and water, will have to be determined at the point of transfer. It is not enough for the Government to say that it can be determined between transfer and flotation. The accounts—the balance sheet—passed across at transfer will determine the balance sheet on flotation. I want to make that as clear as I can in words of one syllable. That is why the fair value concept has to play a part in this Bill and not in the main privatisation Bill.
5 p.m.
Lord Diamond: Perhaps I may expand on what the noble Lord, Lord Williams of Elvel, has referred to.
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I do so without detracting from what he said; I support his sentiments completely.
It is evident that the market will have regard not merely to the value placed upon the assets and to past profit and loss accounts but also to the anticipated return on any investment made by the market. In that connection the market will want to know the extent to which these companies will be allowed to make profits. That in turn will depend on the rules made by the Government at the time of privatisation with regard to the control of prices and other matters that have an effect on profits. I speak here of the profits after privatisation, to which the market will have some regard.
When the Minister is good enough to answer the questions posed by the noble Lord, Lord Williams of Elvel, on balance sheets at the time of transfer to the bodies corporate, which in the main are to be plcs, perhaps he would tell the Committee what is in the Government's mind with regard to the profit potentials of the companies.
The Earl of Caithness: The noble Lord. Lord Williams of Elvel, in introducing the amendment mentioned that it was in his name and in that of his noble friend Lady Nicol. We are sad that the noble Baroness is not in her usual place. I ask the noble Lord to take our good wishes to his noble friend. We look forward to seeing her back in her place fit and well again to participate in other debates.
The amendment seeks to influence our proposals for the restructuring and privatisation of the water authorities. Of course, noble Lords should, and will, have the opportunity to debate those proposals, and to seek to change them, when they come before us in the context of the main legislation. This Bill, however, does not give effect to our proposals. It simply gives an express power to the water authorities, and to the electricity supply industry, to take such steps as they consider appropriate to prepare for our proposals.
Nonetheless, if we look for a moment at the implications of this amendment for our proposals, we can see that the attempt to import the notion of fair value into the proposed transfer of property and functions is misplaced. Let us consider the water industry. There would be considerable difficulties in attempting to establish the value, let alone the fair value, of each of the functions whose transfer we propose. How does one put a value, for example, on maintaining the environmental quality of our rivers?
On the other hand, it is both inappropriate and unnecessary to apply the notion of fair value to transfers of property. It is inappropriate in so far as transfers will take place from one public sector body to another—from a water authority to the National Rivers Authority—since, in accordance with normal practice, there will be no consideration given by the receiving public sector body. The noble Lord referred to this point in regard to the 1973 transfers. It is unnecessary in regard to transfers to successor bodies which will be privatised since the interests of the public purse will rightly be protected by the payment of flotation proceeds into the Exchequer for the benefit of the country as a whole.

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The noble Lord, Lord Williams of Elvel, spoke of the difficulty that he foresaw for the preparation of the accounting information that would be required for the prospectuses for the sale of water services plcs. We are, of course, well seized of the importance of the providing of accurate financial information in the flotation prospectuses, and the accountant advisers to be retained for these privatisations will have this as their objective. We are not less committed to ensuring that we obtain value in transferring utility businesses to the private sector. That value will relate to the business as a whole and will be established by reference to market conditions at the appropriate time, which I understand to be flotation.
I am sure the noble Lord will agree that it would be wrong to seek to settle the value in advance of that moment, but I assure him that we are fully cognisant of the requirements under the Financial Services Act in order to prepare a legal prospectus.
Lord Williams of Elvel: Perhaps I may pursue the argument a little. I think that the noble Earl has not fully grasped what I said. There is of course no intention to set a flotation price at the time of transfers. That would be absurd. I hope that I did not appear to suggest that. Transfers between the public sector bodies— for no consideration, of course as the noble Earl rightly says, are matters that do not require a particular accounting expertise, although a certain expertise is involved.
The point I am endeavouring to get across is that there are two kinds of value. Let us consider a private company—leaving aside flotation—which we want to sell. There are various methods of valuing it: this is not something to sell on the market, but a company that is to be sold from a willing seller to a willing buyer. There are various methods of valuing it. In general, and in normal practice, there is a valuation of the assets—a valuation of the property. There is an audit. As the noble Lord mentioned earlier, there is a long form report, a projection of earnings, and a number of matters which are all wrapped up together. In the end some kind of value is arrived at.
The basis for any valuation that may be arrived at as a result of negotiation between parties is a balance sheet and a profit and loss account. The long form report sets up a balance sheet for the last period—a photograph of the operation as at a certain date—and the setting up of a series of profit and loss accounts over the previous five years. That creates the basis on which the sale can take place. In this instance that will create the basis on which the flotation can take place, and the value, decided by the market, as the noble Earl quite rightly points out. In order to get the latter process right one has to get the former process right. In other words, one has to have a proper balance sheet, with a proper profit and loss account set up according to accounting principles which are clearly understood.
The point that I was making and that I did not get across was that that procedure will be set up under the terms of this Bill inevitably at the point of transfer. It is at the point of transfer that one will have the water authority—less that portion which goes to the National River Authority—going into a
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plc ready for flotation, with a balance sheet and a profit and loss account which have been set up according to certain accounting principles. That will form the basis of the valuation which will subsequently take place on flotation.
The noble Earl argues that one cannot put values on environmental liabilities. But that is what auditors do. There are certain costs associated with this which have to be taken into account. They have been taken into account in the past because water authorities have spent money on these functions. No doubt when they come to make some earnings projections along the lines that the noble Lord, Lord Diamond, has outlined, as they surely will, analysts will seek to include in their earnings projection a cost for the environmental duties that these water authority pies may well have.
The point remains, however, that the initial balance sheet at the point of transfer, and the initial series of profit and loss accounts at the point of transfer, have to be set up according to accounting principles which are understood, and with a register of assets and a register of earnings which are clearly and easily identifiable. It is all very well for the Government to say. "We shall appoint accountants who are fully familiar with these problems". I have talked to a number of accountants who are familiar with these problems. Everyone knows that it is nearly impossible to produce a water authority's balance sheet, even in its present form, before you detach part of the activities to the NRA, because one does not know where a lot of the underground assets are, and the method of accounting, of calculating the depreciation of the assets, is a matter of great controversy in the accounting profession at the moment.
Accepting that these matters have to be resolved at the point of transfer—which is what we are dealing with here—what accounting principles are going to be used? How will all this be established? At the end of the day that is what will affect the fair value at the time of flotation. I hope that the second time around I have made myself clear.
5.15 p.m.
Lord Stoddart of Swindon: My noble friend must surely be right on this point, for two very good reasons. The noble Earl said that these matters can be dealt with when we have the Bill. We passed a Gas Bill and we tried to set out these matters correctly in the Gas Act. We failed miserably in spite of seven long-drawn-out days and nights when we tried to persuade the Government that they should ensure that the taxpayer received a fair and proper price for the assets transferred by the Gas Act. In spite of all our efforts, we made no impression. That is why my noble friend is trying to have an instruction put into this Bill in order that the draftsmen of the next Bill will know exactly what they have to do. That is why my noble friend, with great foresight, is trying to write this provision into this Bill.
He is right to do so (is he not?) because today I believe that the price of a British Gas share stands at 142p for a payment by the shareholder of 95p. Therefore the assets of the gas industry were

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undervalued to the tune of 50 per cent. I feel sure that the Government do not want that to happen. That is why they should take heed of what my noble friend has said this afternoon.
Another reason that we should have these industries correctly valued is that— unlike any other industry which has been nationalised so far—they are both virtually life support industries. There is no way in which people can do without water; and in a modern society there is no way in which they can do without electricity. Civilisation without either would virtually collapse. Those businesses create for private individuals a situation that is virtually unheard of. Whatever happens they are bound to be able to sell their commodity. It is therefore right that the taxpayer should receive a proper and reasonable price for those assets, and for the considerable benefit that will be bestowed on the new owners.
I hope that those comments have been helpful to the Minister in reconsidering his reply to my noble friend. I hope that he will be convinced that there is great merit in this amendment. I should have thought that the least he should do is agree to take it away and reconsider the position.
Lord Diamond: Perhaps I may make one further point before the Minister replies, lest he should be tempted to give us the same reply as last time—that all this can be dealt with in the main legislation.
I am not considering that point, and I am sure that the noble Lord, Lord Williams, is not either. We are asking this. At what stage is it right to trigger off the mechanisms by which utility companies can start preparing for privatisation in the way in which the Government want it done? We are saying that it is no good leaving major questions at large until one is considering the main Bill. One has to know at this stage whether the proposed terms are such as would be considered fair by a vast body of opinion, in particular by parliamentary opinion, before the Government can state with any reliability that they have a scheme which will receive public and parliamentary aproval and that it is therefore appropriate that the utility companies should start preparing for that privatisation scheme.
The noble Lord, Lord Williams, has made it absolutely clear—I am bound to confirm what he said from my minimal professional knowledge—that there are great differences of opinion as to how the assets in balance sheets should be valued in cases such as this. There is enormous difficulty about it. The difference between one extreme of value and the other is enormous. It is one of the major issues—I would not say that it is the whole issue—which has to be taken into account in fixing the price and therefore enabling people to determine whether it is a fair value in terms of the amendment.
The Government should therefore have given great consideration to this and should have decided what kind of basis to use. With the greatest possible respect, in this case as on the previous amendment, if the Government are not ready to do that they are not ready to bring in a Bill inviting public utility companies to go to great expense and upheaval to
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prepare for a scheme which is not a fair scheme and which therefore might not receive approval.
It is the Government's duty to know—not to the last dot on the "i" and cross on the "t"—in fair detail the important parts of the scheme that they are proposing. What the noble Lord has put forward in the amendment is a very important part. I should be grateful if the noble Earl will say whether the Government have given this full consideration and have reached a fairly precise conclusion.
The Earl of Caithness: I agree with the noble Lord, Lord Diamond, that it is important for the Government to know. That is precisely why we seek the powers in the Bill to enable us to know, so that when we bring forward the main Bill—I return to that because that is when the proposals will be laid before Parliament—following the powers under this legislation, we shall be able to bring before noble Lords how the reconstruction is to take place and how the values will be arrived at. However I accept that at vesting the physical separation of assets will be determined as the noble Lord, Lord Williams, suggested.
Accounting for the transfer will be complex but will have as its starting point the accounting procedures which already exist in the water authorities' balance sheet for these assets. When the main Bill comes before Parliament noble Lords will be able to consider it fully, because the proposals in the main Bill will affect the value for the transfer. As a valuer myself, I should tell the noble Lord that to put the word "fair" here is totally inappropriate, if I may humbly say so—
Lord Williams of Elvel: Surely the noble Lord has heard of a true and fair view, which is the normal audit report?
The Earl of Caithness: But that is a combination of valuations of different types. As I have said to the noble Lord, how does one put a value, for example, on maintaining the environmental quality of rivers, let alone a fair value. He carefully listed all the points on which I agreed with him about buying and selling a company where the balance sheets and the profit and loss account are important. The projected earnings are important too because they determine the final value. But we are well aware of our duty to bring the right amount of value by means of money into the Exchequer for the public benefit and for the country as a whole, as we shall seek to do. Much of it cannot be done until we get the main Bill.
Lord Diamond: I am sorry to return to this. We are beginning to realise that the Government put a totally different interpretation on the word "proposal" from our understanding. In fact I would go so far as to say that the noble Earl has misdirected himself in relation to the meaning of the word "proposal".
The noble Earl has said that the Government need these powers to find out all sorts of information so that they can then make a proposal. Not at all. The

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Government have to make proposals before those powers become effective. The Bill says,
"Where the Secretary of State is at any time proposing".
The Secretary of State is making proposals at this time. It is now that he is asking for those powers under the Bill. It is no use the Secretary of State saying that he would like to go on a voyage of discovery to find out what proposals he can bring back to Parliament in a year's time affecting these two public utility industries. He has to make them now and I should be glad if the Minister will direct his mind to that point.
Lord Williams of Elvel: I do not know where we are going in this discussion. The noble Lord, Lord Diamond, has put his finger on the difficult point that we do not quite know what the proposals are. The noble Earl is saying that he cannot make proposals until the Bill is passed. Yet the Bill specifies that the Secretary of State shall make proposals. In these circumstances I do not know what we mean by the word "proposals".
I make a modest suggestion to the noble Earl. Will he tell us, either now or at Report Stage, what principle of accounting— whether renewal accounting, historic cost accounting or current cost accounting—will be used by the water authorities when they are transferred into water authority public limited companies? I start with that simple and basic question.
The Earl of Caithness: As I said, the starting point for the accounting procedure will be that which already exists in the water authorities.
Lord Williams of Elvel: In other words, historic accounting with an addition of current cost accounting. Is that what the noble Earl is saying?
The Earl of Caithness: On that precise point perhaps at Report Stage I shall be able to let the noble Lord know, or even before that time.
Lord Williams of Elvel: Will the noble Earl take my word for it that that is what the water authorities do now? Will he recognise that in historic cost accounting the historic costs which water authorities use in their balance sheets are the historic costs at the time of transfer under the Water Act 1973? Will he also take my word for it that the accounting profession as a whole believes that those historic costs—I will not say that they were mythological or invented—had very litttle to do with the historic costs of the assets being transferred? Will he further take my word for it that the Financial Services Act, no less, will require that if historic cost accounting is to be used, a proper historic cost has to be set up for the assets of the business; otherwise, it will be a misleading document?
Will the noble Earl comment on those few questions?
The Earl of Caithness: This is very interesting, but it brings me back to the comment I made that we are
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well seized of the importance of providing accurate financial information for the flotation procedures. We are aware of these difficulties.
Lord Williams of Elvel: We shall have to return to this at a later stage. I hope that in the meantime the noble Earl will have given a great deal of thought to what we have said this afternoon. As I interpret the mind of the noble Lord, Lord Diamond, and as I know my own mind, I am determined to return to this at a later stage because I am entirely dissatisfied with what the noble Earl has said, however elegantly and courteously he replies. I do not think the content very serious, if I may say so. I believe that before he goes much further the noble Earl and the Government will have to think very hard about the matter. Perhaps the noble Earl will refer to his noble friend sitting on the Conservative Privy Council Bench who probably knows more about water authorities than anybody else and also what historic costs mean in the context of the water industry. I am sure that he will receive benefit and very useful advice. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
5.30 p.m.
Lord Diamond Lord Diamond moved Amendment No. 5:
Page 1, line 8, after ("corporate") insert ("in such a way that the value of the nation's net assets is maintained in one form or another").
The noble Lord said: I was very interested and most grateful to the noble Earl for suggesting—in fact, he said it twice in very similar terms—that the proceeds (we were referring on a previous amendment to a fair value) will be paid into the Exchequer for the benefit of the country as a whole. I tried to get the words down as precisely as I could. The proceeds should be paid in for the benefit of the nation as a whole, and we believe that to be the duty of the Government. The amendment suggests that the procedure laid down in the Bill should not be triggered off except where proposals recognise that the proceeds, to which the noble Earl has referred, are dealt with:
"in such a way that the value of the nation's net assets is maintained in one form or another".
We are interested to know what will happen to the proceeds which will have been paid into the Exchequer for the benefit of the country as a whole. They will be the proceeds of the sale of two of the nation's most valuable assets. They can be sold once but they cannot be sold twice. If a future government wish to assist their budget position by selling assets, it will not be possible for them to sell assets which have already been sold.
The Government are in the fiduciary position of any other trustee in maintaining the value of the country's assets. If the Government are selling an asset and paying the proceeds into the Exchequer for the benefit of the country as a whole, they will justify their action only if those proceeds are invested in another asset; for example, if they are invested in public housing or in any of the numerous capital outlays which are crying out for action. They will not be satisfying their duty as a trustee if those proceeds are used, for example, for the benefit of tax refunds or allowances in the Budget.
We are seeking to make absolutely clear the fact that the Government shall undertake that the assets of the country should be maintained in one form or another. There is nothing wrong with selling the family silver and reinvesting it in pictures, new property or any other capital asset. No one has ever criticised the Government for selling the family silver; the criticism has always been for selling it and using the proceeds to pay the bills for the groceries. It has been done for realising capital expenditure and using the proceeds for current expenditure. That has been the burden of the criticism which I have voiced on many occasions and which has been taken up by more important speakers in the Committee.
In my amendment I am not referring merely to assets but I am trying to help the Government as much as possible by referring to net assets, which are the difference between assets and liabilities. It is just as proper for the Government to pay off liabilities as it is to transfer from one asset to another. If the Government state that they will not use the proceeds of the sale of these assets to buy other assets but will use them to pay off liabilities, it comes to the same point: net assets are maintained. We believe that point to be of immense importance not only for the economic policies of the Government but for the honour of the Government. Once they have sold assets belonging to the nation they must recognise their responsibility in maintaining them in one form or another. I beg to move.
Lord Renton: Although I believe that most Members of the Committee will understand the intention of the noble Lord, Lord Diamond, in moving the amendment, with which most of us would agree, I am afraid that he has used a terribly wide phrase. The net assets of the nation are a very large concept and include the gold reserves, the buildings in Whitehall and every pair of boots worn by every private soldier in the armed forces. It is a vast concept and I do not think that such a wide phrase is suitable for use in the context of this subsection. I cannot contemplate my noble friend's acceptance of the amendment.
It is not for me to suggest an alternative, but one was raised in the previous amendment by the noble Lord, Lord Williams of Elvel, to which I thought my noble friend gave a satisfactory reply. I hope that the Committee will not take up too much time in considering Amendment No. 5.
Lord Ezra: The disposal of assets in this way is a subject which we have discussed on previous occasions. I agree that it is difficult to define the nation's assets. However, in the case of the proposed privatisation of the electricity industry in particular, a vastly greater amount of money will be realised than on any previous occasion. Therefore it is not unreasonable to have an indication of how the matter will be dealt with, whether it be the form of words represented by my noble friend or in some other way.
It is not unreasonable for the Committee to state that this transaction is quite exceptional, and therefore the shareholders in the enterprise should be given more of an indication of what will be done with
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the vast amount of money which will flow as a result of the operation.
The Earl of Caithness: In his amendment the noble Lord, Lord Diamond, has challenged the use to which privatisation proceeds may be put by the Exchequer. I am surprised that he did so. He will know far better than I that this matter is not within my departmental responsibility but that it is for my right honourable friend the Chancellor of the Exchequer. I am sure that the noble Lord will be the first to congratulate my right honourable friend on the use to which he has put the proceeds of privatisation for the benefit of this country. As my noble friend Lord Renton has said, the amendment includes a wide-ranging phrase which covers everything which is owned by the country. It is for those reasons that the country is now so much more prosperous than it was nine years ago.
Lord Diamond: I should like to ask the indulgence of the Committee while I wipe the dust from my eyes so that I can see the position more clearly. I have rarely had more dust thrown in my eyes than by the speech made by the noble Earl. Of course I realise the position. It is that ever since this Government came to power they have underprovided by way of capital expenditure for the maintenance of the nation's assets in their variety of forms. That can be seen by anyone using his eyes and common sense when walking through any city and seeing the ways in which it and its infrastructure are run down wherever he looks.
I do not know what the noble Earl was referring to when he spoke of his right honourable friend the Chancellor of the Exchequer. The figures have been published in the Green Book, where every month in the abstract of statistics one can see what the Government have spent. Year after year the Government have spent less than sufficient in order to maintain the nation's assets in the public sector. The excuse sometimes has been that we should look at how well the private sector is doing. That has nothing to do with it. Through the Government, the public own these assets.
If I may say to the noble Lord, Lord Renton, there is no difficulty about definition. There are accounting procedures and accepted definitions for all the matters he mentioned. I can perhaps say by way of illustration that boots are revenue expenditure and not capital expenditure; that is accepted. When you want to compare one country with another, you must have the same definitions. It is for those purposes that these accounting formulae have been agreed.
It is a new proposal that the Government should be introducing a Bill which is not the responsibility of one Minister in particular. That is an entirely novel idea. The Bill only bears the responsibility of the Chancellor of the Exchequer and not the Government as a whole. That is a new idea to me. I am sure that the noble Earl—when he comes to think about this matter again—will decide that he should not insist on that point. It is no use saying that it is simply a matter for the Chancellor of the Exchequer. It is a simple matter for the honour of the Government. Before the Government trigger off the

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mechanism in the Bill and before the powers are granted to public utility companies to undertake activities and expenditure of that kind, are the Government going to make it quite clear that they are proposing that the assets will be used to maintain the net asset position of the Government? As my noble friend Lord Ezra said, the assets of these two public utility industries are of such magnitude that these issues merit reconsideration. Otherwise, the Government must stand committed of wasting the nation's assets.
The Earl of Caithness: I am staggered by the noble Lord, Lord Diamond. He talked about the Government not maintaining the public estate, if I understood him correctly. While at the Home Office, I learnt with great dismay of the reductions in real terms that the Labour Government had made in spending on prisons and with delight how much that spending had increased in real terms under the Conservative Government.
Let us turn to the present and to the water authorities. Perhaps the noble Lord is not aware that between 1980–81 and 1987–88 investment by the water authorities increased in volume terms by over 40 per cent. whereas it declined under the Labour Government. I am sure that I do not need to remind the noble Lord that under the Labour Government it declined by a third.
5.45 p.m.
Lord Mulley: I am surprised that the noble Earl makes the point about the water industry. Indeed, to a greater extent it is true of electricity. The capital value of these industries has been built up by the industries concerned using their monopoly position, usually at the behest of government. With regard to electricity, one now pays an annual tax contribution as well. The capital is paid by the consumers. No other industry expects its consumers to finance capital development. That usually takes place as a result of loans which are paid off over the years.
As regards the electricity industry uniquely, all its capital has been financed by the consumer. If the industry is not to remain a public utility, then the least the Government could do is to give the shares to the consumer and not put them up for sale.
Lord Renton: Does the noble Lord not agree that a very large part of the magnificent development which the electricity industry, on both the generation and the distribution sides, has carried out over the last 20 years has resulted from successive governments giving consent to their public borrowing powers?
Lord Mulley: My recollection is that those industries borrowed very little and that they have been obliged by governments to finance themselves out of charges. I believe this is a very unnecessary Bill in every respect.
Lord Stoddart of Swindon: My noble friend is absolutely right in relation to the electricity supply industry. By the year 1990 or before it will be
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completely free of debt charges. It has paid a lot of money into the Exchequer.
I am surprised that the noble Earl should go back and criticise the Labour Government's record regarding prison building. That is irrelevant to the amendment proposed by the noble Lord, Lord Diamond. We differ slightly perhaps from the noble Lord in our approach. As my noble friend Lord Williams of Elvel rightly pointed out at Second Reading, the Labour Party is diametrically opposed to government policy in relation to selling off the electricity supply and water industries. We believe that these great industries, which are life support and monopoly industries, should remain in the public sector. That is the best place for them; the consumer will receive the best service from the public sector.
Having said that and having reiterated Labour Party policy, perhaps I could go further. The noble Lord, Lord Diamond, makes a very important point. He asks the Government: when you sell these assets—and the electricity supply industry alone is worth £27 billion—what will be done with the assets? Are the Government going to build up new assets which will bring in at least as much from trading activities to the Government? Or are the Government going to spend the money, perhaps over a period of five years, in reductions in taxation with the population using the proceeds to buy imports from abroad which we can only afford at present because of high oil revenue? The noble Lord, Lord Diamond, is saying, if I understand him correctly, that if the Government sell these industries they ought to build up our industry to meet the day when we shall no longer be able to buy abroad the goods which we can now buy through having great assets in North Sea oil. That revenue will begin to slide away after 1995.
The noble Lord, Lord Diamond, is absolutely correct. I believe that at this stage the Government should give some indication of what they are going to do with these huge sums of money. Used wrongly, they could have a catastrophic effect on our whole economy. We already see that the economy is overheating. The Chancellor has had to take certain measures today. Let us think of the overheating which would occur if the Government pushed those vast amounts from those particular industries into day-to-day expenditure. I believe we are entitled to a serious answer from the noble Earl.
The Earl of Caithness: This is where we have a complete difference of opinion between the two sides of the Committee. We believe these industries will do better for the consumer in the private sector. However, how the proceeds of the disposal to the private sector are dealt with is rightly a matter for my right honourable friend the Chancellor of the Exchequer.
When the water privatisation Bill comes before this Chamber it will be a matter for my department but the proceeds are rightly a matter for my right honourable friend the Chancellor of the Exchequer. The noble Lord, Lord Stoddart of Swindon, was absolutely right to say that there is a complete difference in philosophy as to where the benefit lies. We believe that the benefit for the consumer lies in privatisation of both electricity and water.
Lord Diamond: We have got absolutely nowhere. The Minister has not understood the arguments at all. We are not arguing for or against privatisation. On these Benches we are prepared to consider every privatisation issue on its merits. We are not impressed by the argument from the particular to the general, which is what the noble Earl contented himself with on his last intervention when he said "look at this" and "look at that". He gave two examples and said that perhaps I was not aware of the amount spent by the water industry on leaking pipes, or something to that effect.
That does not prove what is the totality of the figures, and the noble Earl knows that full well. We are concerned with the totality. There is no dispute about the figures and the noble Earl should get himself informed about this. We are concerned about how this huge sum of money will be used by his right honourable friend the Chancellor of the Exchequer. Will it be used in current expenditure via tax cuts or in maintaining the nation's assets? It is a simple issue and we shall certainly have to come back to it when we come to the main Bill. We shall try to raise the matter again at a later stage in the hope that the arguments we have put forward will have been considered with a little more care and understanding than they have been given at present.
I have tried to alert the noble Earl to the fact that we consider this a matter of the honour of the Government in their actions regarding assets of which the Government are trustees on behalf of the nation as a whole. That is the issue. How do the Government intend to deal with those assets? Will they deal with them by fully maintaining the body of assets or by dissipating assets and using the money for current expenditure?
I know that at this time of the night the Government will not welcome a Division so I shall not press the matter at this stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond moved Amendment No. 6:
Page 1, line 8, after ("corporate") insert ("in such a way that the environment and wildlife are permanently protected").
The noble Lord said: We believe that this is a very important issue—so important that it ought to be included in this enabling Bill to make clear the Government's long-term intentions and not wait for the main Bill. We believe it is of enormous importance because, as everyone knows, instead of looking after the public interest the motivation on privatisation is the maximisation of profits and the first victims are the environment and wildlife. Therefore, I have used those terms to cover what we are all familiar with.
There is no dispute that it is in the best interests of this nation that we should maintain our environment. Indeed, there is a Government department charged with the responsibility of maintaining the environment and the wildlife of the country. We all know that there is great anxiety in the country and in those bodies which are mainly concerned with protection. There is great anxiety about what will happen once the responsible attitude of public bodies is replaced
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by the commercial attitudes of private companies to which it is the intention of the Government to transfer these assets.
My amendment has been worded:
"in such a way that the environment and wildlife are permanently protected".
The reason I say "permanently" is that once a utility is in the hands of a private company it is completely out of the Government's control. It may be that the Government will obtain an undertaking from the first purchaser—the first transferee of these assets—that of course they will respect the environment and wildlife to the same extent as the utilities to which they are succeeding have done so. However, that will have no effect on subsequent owners.
There is nothing to prevent a company to which these assets have been transferred in the course of time transferring them to other companies, with continual changes in ownership taking place in private industry and with takeovers of one kind or another. Those eventually in charge may have a totally different view about protection of the environment from those in the private sector who first became entitled to the assets. Therefore, it is essential that the Government should make absolutely clear that the powers in the Bill will become exercisable only when there has been a clear statement of the determination to protect the environment and wildlife in such a way that it is permanent, irrespective of how many bodies are the ultimate owners of the assets which the Government propose to transfer. I beg to move.
Lord Nugent of Guildford: I make one comment which might give some comfort to the noble Lord, Lord Diamond. The concept of a National Rivers Authority will be to safeguard the future. We hope that will be the case but it remains to be seen just how that body will be constituted. However, if it is constituted in the way that we expect, it will have statutory obligations under the Prevention of Pollution Act 1974, which are considerable.
Additionally, there is a range of EC directives for the protection of the environment which we have a legal obligation to observe. Therefore, for the water industry it seems that the safeguards will be substantial and that the new water plcs which will operate the supply and disposal industries will have obligations on standards, and on river quality objectives in particular, which the NRA will be monitoring and will have the power to enforce. The prospects for the conservation of what we already have and its continuing improvement will therefore be greatly strenghtened by this structure when it comes into being.
Lord Diamond: Perhaps the noble Lord will permit me to intervene. The noble Lord knows that I always listen with the greatest care to what he says, and with the greatest respect, especially in this area where his knowledge is deep and wide. I agree that the NRA will be a very helpful body. However, the trouble is that nowhere in this Bill is there a single mention of the NRA.
Lord Nugent of Guildford: I sympathise with the noble Lord, Lord Diamond, on that point. I, too, should like to see the NRA mentioned in the Bill. However, I believe and trust my noble friends that we shall see it enacted in due course and that the NRA will perform the functions that we expect of it. Therefore, the points that the noble Lord rightly emphasises will be adequately catered for.
I just add one footnote, going back to the previous amendment when the noble Lord, Lord Williams, with his great and expert knowledge pointed to the difficulties of valuation. When future purchasers of the water industry try to assess what the cost of the environmental obligations may be in the future—there are always fresh problems arising with regard to pollution—it will be another considerable question as to what the private shareholder is prepared to pay. That situation does not arise here. So far as concerns the noble Lord, Lord Diamond, and the amendment he has tabled, it is really copper-bottomed and far better than in the past. I believe that my noble friend Lord Caithness has a good answer to this.
6 p.m.
Lord Williams of Elvel: I am sure the whole Committee will sympathise with the thrust of the amendment moved by the noble Lord, Lord Diamond. We certainly do. I recognise what the noble Lord, Lord Nugent, has said about the future arrangements for controlling the environment in respect of the water industry and related matters such as sewage. Nevertheless, the Bill covers not only the water industry but the electricity industry as well. Lord Diamond's amendment will embrace both. The electricity industry gives rise to a whole host of environmental problems, and only recently we have had very direct experience with one example. Perhaps I may speak parochially for a moment and mention the subject of Welsh sheep. The explosion of Chernobyl affected us particularly badly in that respect.
It is in this area where I believe the noble Lord has his most serious point. The Government have to take quite a clear stand. The environment and wildlife—perhaps I may also bring Welsh sheep into the amendment—must be properly protected by any measure that the Government make to change the ownership of these particular industries. That is why I support the amendment tabled by the noble Lord, Lord Diamond.
The Earl of Caithness: This Chamber is noted for the concern which it has always shown for the protection of the natural environment in this country, and in particular for wildlife and other conservation. Those members of the Committee who recall the passage of the Wildlife and Countryside Bill in 1981 will recognise the truth of that point. From what the noble Lord, Lord Diamond, said it seemed that he had forgotten some of the powers that the Government have under that Act. It is therefore with some reluctance that I cannot accept this amendment on behalf of the Government. As a Minister for the environment I am very concerned about this area. I fully recognise that the noble Lord has the best of
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intentions in moving it. But my simple point is that this is not the place to debate this issue. The time to do that will be when the main legislation privatising and restructuring these two major industries comes before the Committee. The functions of the water industry are of considerable environmental importance. It is already subject to tough statutory duties in respect of protecting the environment.
My noble friend Lord Nugent of Guildford mentioned the Control of Pollution Act of 1974. I also draw the attention of the Committee to Section 22 of the Water Act 1973, as amended by Section 48 of the Wildlife and Countryside Act 1981, to which I have already referred. Ministers, water authorities and internal drainage hoards are under a duty to exercise their functions, when they formulate or consider any proposals, as to
"further the conservation of flora, fauna and geological or physiological features of special interest".
There are related duties about protecting buildings and so on, taking into account the effect of proposals on natural beauty or amenity and protecting areas of special scientific interest.
I can tell the Committee that it is our intention to retain these duties, and to impose them on the successor plcs and indeed on the National Rivers Authority. We have indicated, in a paper produced in 1986 entitled The Water Environment: The Next Steps, various ways in which we intend to improve protection of the water environment. In particular, we intend to produce a code of practice dealing with conservation as well as recreation matters which will provide more specific obligations on the plcs and the NRA. We are in continuing discussion with the Nature Conservancy Council, the Countryside Commission and others about the preparation of this code. I am pleased to tell the noble Lord, Lord Williams of Elvel, that the Government also recognise the responsibility of the electricity supply industry towards the environment.
I am sure he will have noted with satisfaction that the White Paper Privatising Electricity stated that standards of safety and environmental protection are vigorously enforced now and will be no less vigorously enforced in the future.
Lord Sefton of Garston: I do not believe that anyone in this Committee would wish to detract from the statement which the Minister has given. He said that he was concerned about the environment. That has nicely wrapped up the question of water. I have no doubt that the noble Earl is satisfied that the National Rivers Authority will look after that problem which may arise from privatisation. I am not satisfied. Does that lead us to the conclusion that when the main Bill comes before this Chamber that the Minister will support the idea of a body similar to the river authority and responsible for the protection of the environment in regard to the electricity industry?
If the Minister can give us that assurance, I am sure that all noble Lords in this Chamber would be very happy. I know such an assurance would not be included in any brief which he receives from his advisers. If the Minister is genuine about his desire to improve the environment (in view of the problems of

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fly ash and pylons and other factors which arise from the electricity industry) will he give his personal support to the establishment in the Bill of a body responsible for protecting the environment arising from the privatisation of the electricity industry?
The Earl of Caithness: There is a major difference between the water industry and the electricity industry. I am one of many people in this Committee who is keen to improve the environment. On Monday I go to Brussels to discuss the large plants' directive. It is the emission from power stations that is of concern throughout the whole of Europe. I believe that the water industry is very different. The reason why we have set up the NRA is because not only is the water used by consumers extracted from rivers or reservoirs, but the water is then put back into the rivers or the sea. That is very different from the electricity industry.
Lord Sefton of Garston: I know all about water and of course it is very different from electricity. We are trying to impress on the Minister what our views are. He should not come back and tell us what we have already told him. In view of some of the rumours circulating about the attempt to demolish the shire counties following on the abolition of the metropolitan counties, that means this country will be faced with a situation where there will be no locally elected bodies responsible for the environment over wider areas. With that situation it is important that there should be a body which is given the responsibility of overlooking any damage to the environment arising from the privatisation of the electricity supply.
I make no apologies for putting the question directly to the Minister. Will he give his personal support to the contention that there should be that kind of body responsible for looking after the environment following the privatisation of electricity? I ask the Minister not to come back and talk about water because we are talking about electricity. There is a body responsible for the environment in the water proposals. Will the Minister lend his support to a body similar to that but applicable to the electricity industry?
The Earl of Caithness: I support the proposals that my right honourable friend the Secretary of State has put forward and the commitment that is in the White Paper. Those will be to the benefit of the environment.
Lord Diamond: I thank the noble Earl for what he has said about the environment. There is only one difference between us now. The question is whether the appropriate time and place for dealing with it is on this occasion and in respect of this Bill or during the passage of the later Bill. That distinction is not of such great importance provided we have the same government. We shall take that as one of the unfortunate probabilities; namely, that the same government will be in power in the next few months while it introduces the new Bill. That being so, it is of considerable satisfaction to hear from his own mouth
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how anxious he is about protecting the environment and wildlife and all the powers that already exist.
There are one or two small points that I would ask him to bear in mind before I seek permission to withdraw the amendment. First, the noble Earl said that the Government were going to be good enough to insist on these responsibilities being taken over by the successor companies. I am grateful for that most important statement.
I was also seeking to impress upon the Minister that we are concerned not only about the successor companies but about the successors to those successor companies. I recognise that the Government can impose terms which affect the immediate successor companies, but once they are in the private sector they will have freedom to move around (if I may put it that way) to change their ownership, to amalgamate, to sub-divide, and so on. Therefore it is essential that those responsibilities, which the Minister himself has said the successor companies should undertake, should be of such a form as to be permanent or as near permanent as the law can provide. I am asking him to be good enough to take that point on hoard in considering all these matters.
The Minister heard what the noble Lord, Lord Nugent of Guildford, said about the shareholders perhaps having to consider all the costs of protecting the environment. That is why it is appropriate that it should have been brought in at this stage when it is intended that commercial incentives and the attitudes that go with them shall replace public holdings. It is this drive for maximisation of profits, which is a perfectly proper activity in the commercial sector, that militates against incurring expenditure on maintaining wildlife and the environment. That is why it is so important that at this juncture special attention should be given to that point.
I conclude by repeating my thanks to the noble Earl. He has taken on hoard the main thrust of this amendment and made it clear that he is very interested in seeing that the environment is fully protected. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ezra Lord Ezra moved Amendment No. 7:
Page 1, line 9, after ("Wales") insert ("which takes full account of the long-term interests of the British coal industry").
The noble Lord said: I realise that this issue could be raised on many future occasions during the course through Parliament of the proposed legislation on the privatisation of electricity. Nevertheless, this is a paving Bill. It sets the scene, and it is appropriate therefore to raise what we feel are likely to be the major issues. As the noble Lord, Lord Peyton, made clear in a Question he asked in the Chamber the other day, when one talks about changing the structure and ownership of the electricity industry, inevitably it brings in the question of the future of the coal industry.
I have had certain experience in that sector and there is no doubt that over the years coal and electricity have been closely bound together. Even now 70 per cent. or more of coal production goes into

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the generation of electricity. It is not unreasonable that attention should be drawn to the link between these two great industries.
I have all the more reason for making this proposal because from time to time when the coal industry is referred to in this Chamber the Government say that they fully support it. That is exemplified by the substantial investment made available and by the hopes expressed by the Government, which I fully share, that sooner or later that great industry will become viable and revert to being a profitable enterprise. It is in the spirit of wishing to ensure that its present efforts, which have been very successful in improving productivity, should in no way be impaired by these measures that I seek leave to move the amendment. I beg to move.
6.15 p.m.
Lord Williams of Elvel: We support the thrust of the noble Lord's amendment. In my Second Reading speech I made certain comments about the South of Scotland Electricity Board and its apparent desire to ask for tenders for supplies from foreign coal producers. If those tenders were accepted by the South of Scotland Electricity Board the remaining part of the Scottish coal industry could be put out of business, with a consequential serious loss of jobs.
If it turned out that foreign coal was cheaper for a time and then became more expensive, as the noble Lord, Lord Ezra, will know far better than I, one cannot recreate a coal industry once it has shut down and the mines have tilled in. If an industry such as the electricity generating industry—be it in Scotland or England and Wales—is privatised there may be a temptation to try to reduce the short-term input costs in the hope of making a short-term profit, and in that way damage could be caused to the long-term interests of another great industry in the United Kingdom.
I argued in my Second Reading speech that the proper way for coal-consuming utilities such as the electricity generating industry to behave is to base their input costs on long-term marginal costs rather than short-run marginal costs. My worry and the worry of the noble Lord, Lord Ezra, is that on privatisation there would be a concentration on short-run marginal costs at the expense of long-run marginal costs to the detriment of the British coal industry. That would be a complete disaster. I hope very much that the Government accept that it would be a complete disaster. In either accepting the amendment or by taking some equivalent action I hope that the Government will accept the case made by the noble Lord, Lord Ezra.
Lord Diamond: I should like to add one or two words in support of what my noble friend, with his deep knowledge of the coal industry, has already said. We are concerned with the transfer of assets from the public sector to the private sector. In the public sector it is proper to take account of a variety of costs. For example, it is proper to set down the cost of a public corporation buying coal at a greater price than need otherwise have been the case. It is proper to take into account in that same assessment what would have to be paid in unemployment relief to
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miners who were thrown out of work if mines were closed down as a result of going, as the noble Lord, Lord Williams of Elvel, said, for the cheapest temporary price.
It is proper for those considerations to be taken into account when they are all in the public sector. A country can sensibly carry on a coal industry which at the time is not producing coal quite as cheaply as it is being produced abroad because it can set off against that what would otherwise be the cost to the public purse of paying unemployment relief to miners, quite apart from the human misery of unemployment itself.
Under the Government's proposals the cost of paying unemployed miners would fall on the public purse but the benefit of paying cheaper prices for coal would enure to the shareholder in the private sector. Where you now have that distinction you can no longer set one saving against another additional cost; in other words, it will all be additional cost and the saving would be to the public sector and to the Government. The plc—the privatised electricity industry—would say, "Why should I take account of the cost of paying unemployed miners the wherewithal to live? It is no part of my responsibility. I owe a duty to my shareholders to provide them with a maximum profit and therefore to provide my customers with the cheapest possible coal. I have no interest whatsoever in the cost falling on the public purse—it is nothing to do with my shareholders." So one will get into that difficulty.
Therefore it is right that at this point in time the Government should make it absolutely clear that they take account of the long-term interests of the coal industry, in just the same way as if it were still the case that both industries—the coal industry and the electricity industry—were in the public sector and the same accounting rules applied. Therefore it is for the Government to say, as it has broadly indicated, although it has not come absolutely clean—this. They propose to wash their hands of any responsibility in regard to the future price of coal; that they will leave it for the future privatised owner of the electricity industry to buy coal at the cheapest price and, if the coal industry cannot meet that price, then it is just too bad: "We will buy it elsewhere, without taking account of what is a cost falling on the nation, because we have a public and a private sector which cannot be offset one against the other." I asked questions about this when a recent Statement was made from the Government Front Bench. This is a very serious point and I hope that the Government will make it absolutely clear that they support the amendment.
Lord Stoddart of Swindon: I should like to make one short point. The long-term interests of the coal industry are of course very much bound up with the security of supply in the electricity industry. One has to have an assured supply of fuel in the electricity industry and that, as the Government recognise, is going to be coal in the foreseeable future. As I have understood it throughout my lifetime, an assured supply of electricity in this country is dependent upon an equally assured supply of coal.

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If one starts closing coal mines and thereby reduces the capacity of the coal mines to below, say, 75 million tonnes of coal a year, then one no longer has security of supply; security of supply depends not on activities in this country but on activities abroad, and perhaps the activities of shipping companies. Therefore security of supply is of the utmost importance and in my view it can only be assured providing we have a secure supply of coal.
The question I should like to ask the noble Earl is this: at what point would the Government intervene if the privately-owned generating companies decided to buy their coal abroad? When would the Government say, "Well, now it is our duty, as a Government, to ensure the supply of a life-support service which is electricity."? I have already mentioned that civilisation would be gone without electricity. Furthermore, how many million tonnes would the British coal industry have to decline to before the Government would intervene? Those are important questions which I hope the noble Earl will be able to answer.
Lord Rees: I hope I may briefly intervene on this particular amendment in the light of the insidiously attractive arguments advanced by the noble Lords, Lord Ezra and Lord Diamond. There may be a case for supporting the coal industry as a whole and even a case for supporting an individual pit on social grounds, but I shall not detain the House by debating the merits of that particular proposition. However, what I do suggest to the Committee is that it would be quite wrong that a major subsidy such as has been suggested—either in the coal industry as a whole or to an individual pit—should be borne by the electricity industry by means of an uneconomic pricing policy.
I disregard for the moment the argument put forward by the noble Lord, Lord Stoddart of Swindon, because I can see that there may well be a case for paying a slightly enhanced price for British coal if it is going to secure a long-term supply. Whether it is true in this particular case is of course a different argument and one which I shall not pursue, although I recognise the merits of it. But so far as saddling the electricity supply industry with the cost of subsidising either the coal industry as a whole, or a particular part, I believe that that is quite wrong. However, if the government of the day—whatever particular complexion—feels on social, economic or on any other ground that a particular form of social or economic activity should be supported, then it should be by a clearly identified public subsidy. We can then debate the merits of it.
Over the years, the public sector's performance has been bedevilled by the fact that too many of those concealed social and political costs have been built in. I believe that that has damaged the performance of the public, and to a degree the private sector. For example, the private sector may have had to purchase coal at a price which has been determined by other than economic factors. Therefore I hope that my noble friend, when he replies, will in fact reject those arguments—insidiously attractive though they may be—and perhaps on another occasion we can debate
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the merits of supporting the coal industry in a more direct and open way, when social factors can be taken into account and the economical performance of the coal industry can be judged with greater clarity.
Lord Ezra: Before the noble Earl replies, I should like to comment on the remarks made by the noble Lord, Lord Rees, whose views I greatly respect. However, having said that, in the case of the electricity industry, as the noble Lord, Lord Stoddart of Swindon, has mentioned, it is indissolubly linked with the feedstock; you cannot generate electricity unless you have something to generate it with. The Government have already decided that in respect of one of our national feedstock elements—namely, nuclear—there should be some degree of safeguard. I find it somewhat illogical that in the case of another source of that nature there should not also be written in some safeguard.
The amendment I have moved does not refer in any shape or form to subsidy. The words used are:
"takes full account of the long-term interests".
At present, as the noble Lord, Lord Williams of Elvel, has rightly pointed out, coal can be imported much more cheaply, not only because the world demand for energy is debased but because the rate of the dollar (in which this product is quoted) is very low and the rate of sterling—due to some apparent disagreement in government circles—is very high. That situation is an accident. Should we allow ourselves to lose the long-term benefit of a great national asset on the basis of such a temporary accident? That is the principle behind the amendment proposed. It is not talking about subsidy, or about building a ring fence around coal as the Government propose to do around nuclear; it is merely pointing out that coal and electricity are very closely interwoven. It is implying that the present situation of world coal is of a nature which is probably very temporary and that we need also to have regard for the longer term. That is what underlies the amendment.
6.30 p.m.
The Earl of Caithness: The literal implication of this amendment, as a result of where it would be placed in Clause 1, would be to limit the granting of the express powers under Clause 1 to the Electricity Council to circumstances in which a transfer from an electricity board in England and Wales took full account of the long-term interests of British Coal. It is clear however that in moving his amendment the noble Lord, Lord Ezra, was in fact seeking to give it a somewhat broader application. I believe that it would be quite wrong to restrict the express powers given to the electricity supply industry under Clause 1 by requiring a proposal for transfer of property or functions to take full account of the long-term interests of the British coal industry.
First, the proposed qualification is much too imprecise. It would be impossible to demonstrate what the long-term interests of the industry might be in different circumstances in the future. Even if it were possible to do so, it would then be impossible to demonstrate that those interests had then been taken fully into account.

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Secondly, the amendment is seeking to secure for the British coal industry something which British Coal, like any other business, needs to secure for itself and by its own means. The industry is a commercial enterprise, and it must take its own view of its long-term interests and seek to secure them by commercial means in its own markets.
In the light of the nature of the amendment I hope your Lordships will forgive me if I respond with some brief general comments about the coal industry. Electricity privatisation will present the industry with a challenge, but it is clear that coal will continue to be the main source of fuel for power generation in the foreseeable future. The need for domestic coal production is clear, and the industry needs to respond in securing its interests by providing coal reliably and competitively.
As the noble Lord, Lord Ezra, said, we are investing very large sums in the coal industry, some £2 million a day. This shows that the Government have considerable confidence in the industry's future and that it will be able to compete effectively. We certainly agree that security of supply is vital; that is why we say it is important for British Coal to supply coal reliably. My right honourable friend the Secretary of State for Energy has made it clear that it would not be right to limit coal imports, but in the foreseeable future there will be a substantial market for British coal. The price of coal paid by the electricity supply industry will be a matter for commercial negotiation. I have no doubt that British Coal will be negotiating effectively on that grant.
However, I would agree with my noble friend Lord Rees that it would not be right in the context of this narrow enabling Bill to pre-empt either the debate which I understand your Lordships are likely to have in due course on electricity privatisation or the debates during the passage of the main electricity privatisation legislation. The substance of the amendment is clearly more suited to those occasions, and I do not believe that it is appropriate to this Bill.
Lord Sefton of Garston: On the one hand we have the Minister replying that the amendment is imprecise and then on the other hand he is refusing to reply to a request for some precise information from the noble Lord, Lord Stoddart. The fundamental problem with coal, contrary to what the noble Earl has just said, is that it cannot compete successfully because there are two things which the British coal industry does not have; namely, vast surface mining of coal and the availability of cheap child labour in the exploitation of coal resources. So it is impossible.
However, I have no doubt that the advisers on this Bill and the Government have the figures to hand because they say that British Coal can compete successfully. Perhaps they will give us the real figures for the cost of production and shipping of coal from Colombia or Australia. Perhaps they will compare that with the cost of mining coal in Great Britain. They should have those figures, so perhaps the Minister can be precise instead of criticising the amendment for being imprecise.
Perhaps I may now address myself to the remarks of the noble Lord, Lord Rees. The fundamental
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nature of the amendment is not a question of the electricity industry subsidising the coal industry; it is a question of this community handling its energy resources in a commonsense fashion. If the Government are saying, as they will—and there is no doubt about what the Minister is saying—that quite clearly it will be left to market forces to determine the future of the British coal industry, then there will be a very poor outlook, once all control has gone, for the British coal industry. There is no doubt, if my assessment is right, that there is no way in which the British coal industry can compete with foreign coal mined in the way in which I have described. That is hard luck for the British coal industry.
The real issue is that we are not handling our scarce—and I say "scarce" advisedly—energy resources by going through this exercise at all. The more we go on with this paving Bill the more it proves the stupidity of the main Bill. The real truth is that the whole community must make its mind up as to whether, on the one hand, we shall have an electricity industry which will ultimately be dependent upon the cheapest source of fuel or whether, on the other hand, we are going to plan the proper use of all our resources which include coal. That is the fundamental issue.
Perhaps I may request the noble Earl to reply to the question raised by my noble friend Lord Stoddart on the stage at which the Government will intervene. It concerns whether it is in the form of a subsidy measured in cash or in the form of a limited amount of coal. We are entitled to an answer. The question is: at what stage will the Government intervene to ensure the long-term prospects of the British coal industry, if that is what they have in mind, either by the establishment of a subsidy or by the extent of production insisted upon the Government which should be bought by the electricity industry? We are entitled to that reply and furthermore the Government's own friends in the private sector are entitled to that reply before they start putting the money forward.
The Earl of Caithness: Detailed figures can be provided. Unfortunately I have to say to the noble Lord, Lord Stoddart of Swindon, that I cannot produce them just at the moment. However I shall be glad to do so at the earliest opportunity. I emphasise again to the Committee that these matters are perhaps more appropriate for discussion in another context. As I said earlier, it will be for British Coal to compete in its markets and secure its own future.
Lord Ezra: I think it is right that we should raise this important issue at this stage. Noble Lords have expressed their opinions on the subject and I was glad to note that among his remarks the noble Earl has reiterated the Government's strong support for the coal industry and the strong investment which they intend to continue to put into it. I believe that we should come back to this at a later stage. On this occasion we on these Benches have made known our views on the subject. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 8:
Page 1, line 13, after ("of") insert ("or securing the modification of").
The noble Lord said: I beg to move Amendment No. 8 standing in the names of my noble friend Baroness Nicol and myself. This is a relatively simple amendment which does not contain great complexities of public policy. It is designed to ensure that the utilities or electricity boards which receive proposals from the Secretary of State about transfers can use whatever means they deem appropriate to secure a modification of those proposals. The wording tracks the wording in subsection (1)(a) and (b) where the utilities or boards can use resources to secure modification of related proposals. We shall come soon to the point of what the difference is between proposals and related proposals. But it seems to me to be logical that if they can secure or try to secure modification of related proposals they should be able to secure a modification of the proposals themselves.
I imagine that the schemes that may be put forward by the Secretary of State either in relation to the electricity industry or in relation to the water industry could be the object of serious representations by those who are actually operating the businesses concerned. It would seem perfectly sensible to give them power to use their best efforts to secure modifications they might feel to be appropriate. I beg to move.
The Earl of Caithness: I recognise that this amendment would make the Bill in some respects more flexible, but I do not believe that such flexibility is acceptable in the present case.
What we have in subsection (1) is a distinction between two types of proposal. In subsection (1)(a) we find that the water authorities and the electricity supply industry are empowered to facilitate the implementation of government proposals to transfer property or assets. This means that the Government must first trigger the operation of the clause by making proposals. The proposals in question are what I may term basic proposals—in the case of water that there should be utility plcs and the National Rivers Authority, for example, and in the case of electricity that the CEGB's operation should be divided and that there should be a separate company to look after the national grid and separate distribution companies.
Subsection (1) also empowers the industries to facilitate or to secure a modification of related proposals. These are defined in subsection (2). They are in essence more detailed proposals. For example, under paragraph (a) of that subsection, we may envisage the preparations which will have to be made for transfer of undertakings to successor bodies and for their management after transfer. Under paragraphs (b) and (c) we find references to the regulatory regime, finances and staffing, and flotation issues. The list is not exhaustive. The essence of related proposals, I repeat, is that they are more detailed than basic proposals.
In our view it is quite appropriate for the industries to comment in any way they wish on related
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proposals. If they wish to change them, or rather to persuade us to change them, I have no difficulty with that. We do not pretend that all the proposals we make will be right in every particular.
But it is essential that all endeavours, both of the industries and of the Government, should be bent towards achieving our central objectives which are represented in the basic proposals for privatisation and restructuring. It is for the Government to establish and make clear what those proposals are to be. In due course it will be for Parliament to consider them. The time for major debates with the industries in the shape which, when privatised, they must take is now past. It would not be appropriate for the Government to sanction the exercise of the powers in the way that the Opposition propose, and I may say therefore that the amendment, in the Government's view, is not acceptable and is at variance with the main purpose of the Bill.
6.45 p.m.
Lord Williams of Elvel: I am grateful to the noble Earl. Do I now understand that there are three things: basic proposals, proposals and related proposals? That is what the noble Earl seemed to imply. The basic proposals have already been made. The industries have been consulted and therefore they are not allowed to do anything more about that. The Bill also mentions the Secretary of State making proposals and then there are other things called "related proposals" which are more detailed in the words of the noble Earl. I hope that my understanding is correct. I am bound to say that I am slightly confused about the various natures of the different types of proposals that we now have on offer.
It is perfectly clear that up to the publication of the various White Papers to which the noble Earl has referred representations were made, not least by certain Members in this Chamber, to the Government about, for instance, the structure of the electricity generating industry. Other people, for instance, the chairmen of water authorities, have made representations about the structure of the water industry post-privatisation. As I understand it, the noble Earl is now saying that that chapter is finished and that the basic proposals have now been made in the White Paper.
Nevertheless, I am sure that the noble Earl will concede that in the White Paper on the privatisation of the Scottish electricity industry, which we shall come to in due course, there is a certain amount of vagueness and a number of decisions remain to be reached about the structure of the industry post-privatisation. It seems there that the basic proposal has not fully been made. Part of the basic proposal remains to be made. Under those circumstances, according to the logic of the noble Earl, it seems that it would be proper for the chairman of the South of Scotland Electricity Board or the chairman of the North of Scotland Hydro-Electric Board to make representations.
It is only when we come to a proposal under the Bill in front of us, which is not a basic proposal nor a related proposal, that the same people—it is all the same players in the game—are not allowed to try to

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secure a modification. Given the vague status of the proposal—we do not quite know what it contains—I find this somewhat unfair and somewhat illogical.
I should be grateful if the noble Earl could confirm that my understanding of these three types of proposal: basic proposal, proposal and related proposal is right before I decide what I shall do with the amendment.
Lord Ezra: I, too, feel a certain degree of confusion in trying to understand what the words "proposal" or "proposals" mean. There is an apparent distinction between "proposals" in subsection (1)(b) and "proposal" in subsection (1)(a). I fear that this adds to our sense of difficulty in following the drift of what should be a very simple piece of legislation.
Lord Diamond: The beginning of subsection (1) states:
"Where the Secretary of State is at any time proposing".
The noble Earl has referred to the proposals which the Government have already made. He has referred to the form in which electricity is proposed to be privatised. He has referred to the form in which part of the water industry is proposed to be privatised excluding those elements which go under the NRA. Is the status of those proposals that they are already made so that these powers, once the Bill is passed, are triggered off?
The Earl of Caithness: I am saddened that the noble Lord, Lord Williams of Elvel, is not clear. I hope to clarify things for him and to reduce his problems by a third by saying that there are two proposals and not three. The proposals which I mentioned and enlarged upon I have described as the basic proposals. Those are the basic framework on which we would take forward and hope, in due course, to bring forward legislation. Then there are the related proposals on which further comment is still to be made. Much of that will arise as a result of passing this legislation. A lot of discussion is then triggered. I hope that that clarifies the point for the noble Lords, Lord Diamond and Lord Williams of Elvel.
Lord Williams of Elvel: At this point I must intervene. Do I understand the noble Earl to say that the basic proposals—that is, the proposals that the Government have already made in the White Paper—constitute proposals under this Bill?
The Earl of Caithness: There will be proposals for the restructuring of the industry. But there are indeed additional proposals which we will need to put forward to the authorities and to the supply industry. It is those proposals, as I understand it, that they will obviously be allowed to comment on.
Lord Williams of Elvel: I understand the latter point. I am referring to Clause 1(1)(a) where there is a proposal for the transfer. Can the noble Earl confirm my understanding of this matter? He is trying to eliminate one set of proposals, and I am very grateful because we have enough sets of proposals. Can he confirm my understanding that the suggestions that have been made by the Government
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in the various White Papers that have been published constitute a proposal under Clause 1(1)(a) of this Bill?
The Earl of Caithness: I understand that they do.
Lord Williams of Elvel: I am grateful to the noble Earl. We are now getting somewhere in understanding what this is all about. In other words, we are saying that the period of consultation is over, that the deed has been done and that the proposal—since there is one proposal in Clause 1(1)(a)—has been made in respect of the electricity industry in England and Wales, the electricity industry in Scotland and the water industry in England and Wales. Those proposals are unalterable in the Government's mind because the Bill as drafted does not allow utilities to argue against them. Those proposals having been made, there will be other related proposals which will come and which will be of a rather more detailed nature.
As I read the White Papers, they do not constitute, in plain English, a proposal for a transfer because there is no clear indication in the White Papers of exactly to what entity a transfer will be made and where the transfer is. I may be wrong about that. There may be a general statement of policy. However, it does not seem to me to be a proposal for a transfer.
We shall have to read what the noble Earl has said on the matter, and perhaps the noble Earl will read what we have said about it. We shall make sure that we are absolutely clear and come back to the matter at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 9:
Page 1, line 17, after ("proposals") insert ("of the Secretary of State").
The noble Lord said: I hope with this amendment to clarify the status of related proposals. Under Clause 1(1)(b), related proposals can be modified by representations from the utilities or the electricity board. I assume those are proposals emanating from the Secretary of State and not from anyone else. However, the Bill as drafted seems to allow proposals emanating from someone else which could be related to a proposal from the Secretary of State but not necessarily coming from the Secretary of State. I should have thought that all related proposals should come from the Secretary of State and I think that the Bill should say that. I beg to move.
Lord Ezra: Following on the elucidation for which the noble Lord, Lord Williams, has asked, perhaps I may ask whether the proposals in Clause 1(2) are the related proposals referred to in Clause 1(1)(b).
The Earl of Caithness: As I understand it, the noble Lord, Lord Ezra, is absolutely right. That is why there is no need for the clarificatory amendment of the noble Lord, Lord Williams, in which he wants to insert the words "of the Secretary of State". Clause 1(1)(b) makes it quite clear that related proposals are indeed proposals made by the Secretary of State.
Lord Williams of Elvel: I am grateful to the noble Earl. That was the clarification which I was seeking. This is a confused clause. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 10:
Page 1, line 20, leave out ("or to any matter connected with").
The noble Lord said: Again, this is a probing amendment. Perhaps the noble Earl will expatiate on what the Government mean by "any matter connected with". That is a wide expression, and I should be grateful if we could have some explanation of what the Government mean by it.
The Earl of Caithness: Subsection (2) of Clause 1 deals with the concept of a related proposal which first appears in subsection (1)(b). Paragraphs (a), (b) and (c) of subsection (2) set out examples of a range of matters which it will fall to the relevant public utilities to deal with in the preparations that they will need to make as a consequence of our proposals for the restructuring and privatisation of their industries. An obvious example is the matter of future arrangements for the utilities' employees, which need to be addressed now and on a continuing basis, and not left until the utilities have been replaced by the successor bodies which we propose.
As we make clear in the Notes on Clauses for this Bill, the list of related matters in subsection (2) is not exhaustive. There will no doubt be other matters not listed out here which will also need timely attention from the relevant utilities. The words "or to any matter connected with" indicate that related proposals may be concerned with matters not explicitly itemised in the subsection but which are associated with those matters. To omit these words would create uncertainty as to the extent of the powers of the water and electricity supply industries to prepare for their future.
Lord Williams of Elvel: I am grateful for that response. It does not get us much further. However, I understand that the Minister has difficulty in explaining exactly what "matters connected with" means other than saying that they are "matters connected with". The explanations become slightly tautological.
Perhaps I may return to our earlier discussion and draw the attention of the noble Earl to the fact that we are dealing with very wide powers. They are powers which have no time-limit and which do not come back to Parliament. We are therefore anxious to make sure that every phrase which widens those powers should be explained and that the Government should understand that the Opposition are concerned that we are giving to the Secretary of State powers which are wider than usual. Having said that, I understand that the noble Earl has difficulty in doing any more than he has done in explaining the matter and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh: I beg to move that the House do now resume. We shall not resume the Committee stage of the Bill before eight o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Dartford—Thurrock Crossing Bill
7 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill be now read a second time.
The purpose of this Bill is to authorise the construction of a new bridge across the Thames between Thurrock and Dartford; to transfer the existing two tunnels to the Secretary of State; and to provide for the arrangements for financing the construction of the new bridge and the residual debt on the tunnels.
The Dartford tunnels were completed in 1963 and 1980 and were originally designed to serve local needs. They now form the link between the M.25 to the north and south of the River Thames. The tunnels are owned and operated jointly by Essex and Kent county councils. They provide two lanes of traffic in each direction.
In 1985 the report of consultants appointed by the Government predicted that in the early 1990s there would be serious congestion at the tunnels. In 1985–86 the average daily traffic at the tunnels was 60,210 vehicles. With the completion of the south-eastern part of the M.25, it was predicted that the average would rise to 67,500 in 1986–87 and 77,500 in 1990–91. In practice, the 1986–87 daily average was higher at 69,000, despite the abnormal weather that winter. The latest figures indicate a further increase. The daily average for April to December last year was over 75,600—a 7 per cent. increase over the corresponding months in 1987. Extra capacity across the Thames is needed urgently and the purpose of this Bill is to provide it.
My right honourable friend, the present Secretary of State for the Environment suggested in July 1985 that urgently required infrastructure of this kind might be provided by the private sector. Guidelines to intending promoters were published in March 1986. It was left to bidders to propose the appropriate engineering solution. Bids based on both public and private finance were invited. After careful examination of the bids, on 29th September 1986 my right honourable friend the then Secretary of State for Transport announced that he had selected the proposal by Trafalgar House to build a bridge with private finance, the costs to be recovered from tolls paid by users. To carry out its proposals, Trafalgar House and its financial backers formed a company, Dartford River Crossing Ltd, with which the Secretary of State concluded, last April, a concession agreement.
The bridge will carry four lanes of traffic southbound. The tunnels will then take all the northbound traffic. The bridge will be built just downstream of the present tunnels. At approximately 450 metres, the main span will be one of the longest in the world for a cable stayed bridge.

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We selected this project for a number of reasons. It offered an earlier solution to the problem than any other project. Its total costs were lower than the other proposals submitted. The major financial risks would be borne by the private sector, which would relieve the roads programme of the burden of paying for it. That means we can use the money we would have had to devote to it for other urgently needed road improvements, thus reducing the risk of delay to the many schemes due to start in the coming financial year. Those advantages could be obtained without extending the period during which tolls needed to be charged greatly beyond what would have been necessary to recoup the cost if the project had been built in the conventional way by the department.
We propose to take the tunnels into the national road network and lease them to DRC so that the company can operate them jointly with the bridge. Essex and Kent County Councils have done excellent work for 50 years or more in getting those tunnels constructed and managing them with prudence and considerable success. But the counties fully accept that the tunnels, which provide an essential link in the M25, should now be made a national responsibility.
The arrangements for financing the new crossing, the dealing with the debt outstanding on the tunnels and costs of maintenance during the toll period are novel. DRC will finance expenditure which is not immediately met from revenue by borrowing privately. It will have a maximum of 20 years to pay off its borrowings, but we expect that to happen after 14–15 years at which point the crossing will be transferred to the Secretary of State and tolls can end.
DRC will not pay dividends on its small equity capital of £1,000. The Trafalgar House construction companies will look to make a profit from the agreed price DRC is to pay them for building the bridge. They have taken on the major risks—costing of the design, delay in completion and unforeseen ground conditions—associated with this kind of project. If they have misjudged these elements, they will see their expected profits reduced. If costs go up for those reasons the motorist will not have to pay for the increases through tolls. The lenders will receive the return specified in their loan agreements with DRC—but only if DRC's revenues are sufficient to meet them.
There has been some criticism that we are trying to cut corners by asking Parliament to approve the construction of this bridge through a hybrid Bill. This is misconceived. Legislation is required to levy tolls on a highway. We need a new tolls regime covering the tunnels and the bridge as a combined crossing. We have to make clear to whom the tunnel undertaking is to be transferred and who will employ the tunnel staff. We cannot leave the counties' ratepayers to pick up the liabilities which are still outstanding from the building of the tunnels. It is necessary to confer on the Secretary of State the special traffic management powers which are necessary for public safety, particularly in respect of the tunnels, and which for normal highways are exercised by the local authority. He must also have power to delegate operation and maintenance of the crossing. All those matters require legislation.
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We are asking Parliament to approve the bridge and the essential approach road works in the Bill as well. Although some of this work could have been authorised by different procedures under existing legislation, it would be inefficient and time-consuming to ask the House to approve a Bill containing some of the necessary powers and to deal with the remainder by external procedures. Since the toll regime should produce sufficient revenue to fund the construction of the bridge, the two ought to be approved at the same time.
We have not, however, neglected to consult all those concerned with the scheme. Although we have had our differences with Essex and Kent County Councils, we have had regular meetings with them and have agreed a whole range of issues. There have been consultations with the borough councils too. The staff at the tunnels were told, by our officials, about the proposals on the day they were announced and their employers consulted the relevant unions very soon thereafter. There have been regular contacts since. In order to inform the public we organised exhibitions in Dartford and Thurrock in January 1987 and we have tried to deal with inquiries promptly and courteously since. There are a number of petitions to this House. We are conducting negotiations with all the petitioners to see how their anxieties can be accommodated and allayed and I hope at least to lighten the load of the Select Committee before it meets. I would rather not say any more about that now.
I should briefly describe some of the detailed provisions of the Bill. It is a surprisingly long Bill but much of it is concerned with technical matters which nevertheless need to be clearly and unambiguously dealt with. Clauses 1 to 3 of the Bill authorise the construction of the bridge and the approach road works and the acquisition of land for those purposes. The bridge itself will be cable stayed—that is with the 450 metre main span suspended from cables affixed to towers. Its total length with approach viaducts is some 2,800 metres. Its original cost was estimated at £86 million at 1986 prices but there will be some additional expenditure as a result of modifications requested by petitioners.
The roads immediately to the north and south of the Dartford Tunnels are not part of the M25. The Bill will make them become trunk roads. They are inadequate for the long term and require widening to four lanes in each direction. It is therefore essential to widen them before the bridge is opened. We have kept the works in the Bill to the minimum. The cost of the work on the approach roads will be met from the road programme, not from tolls.
During the proceedings in Select Committee in another place, Dartford Borough Council made a good case for further work in the mid-1990s to improve access to the borough and to increase the capacity of the A2. The Government persuaded the Select Committee that it would be wrong to do that in this Bill but we accept the commitment. The first stage of studies leading to a solution to this problem had by then already started and was completed by Kent County Council on 18th January. In consultation with them and with officers of the borough council, we are now considering the next

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steps to be taken. It could well be that the improvements will not lie on the immediate approaches to Dartford. The real problem is the capacity of the A2 and the need to remove traffic from it.
Part II of the Bill trunks the highways in the existing crossing and transfers the land in the undertaking to the Secretary of State and the rest of the property to the person he appoints—DRC. It also relieves the councils of all the outstanding liabilities related to the tunnels which would otherwise have been met from tolls. Those costs will be met by DRC as a consequence of the relevant part of the agreement with the company.
We have made provision for the 220 or so staff working at the crossing. They will transfer to DRC. Staff matters in legislation have in the past raised difficult issues. This Bill provides for staff to transfer to DRC on terms and conditions, including pensions, which will be broadly equivalent to those they enjoy at present.
Part III of the Bill deals with the regime for tolls and the operation of the combined crossing. The tolling powers are at Clause 11, revision of tolls is dealt with at Clause 17, and Clause 16 and Schedule 6 deal with the way tolls come to an end.
Our intention is that DRC should take over the tunnels on a day to be appointed by the Secretary of State. That will be as soon after Royal Assent as everyone is ready to transfer the tunnels and to start building the bridge. We expect the gap between Royal Assent and transfer to be no more than a month. The Bill provides that tolls will be levied at present rates and for present classes of vehicle. They will be adjusted to keep pace with inflation, using the tolls at 1st January 1986 as a base. DRC—the person appointed in the language of the Bill—will stop taking tolls for itself after 20 years or when its loans are paid off if that is sooner. The Secretary of State will receive information throughout the concession period enabling him to determine whether tolls should be ended early.
The Bill would give the Secretary of State a power to ask DRC to extend tolling for up to a year in order to provide a fund for future maintenance of the crossing, but he will be able to do this only if the period of extension can be fitted into the 20-year maximum period for tolling. The Bill also provides for what happens after tolls come to an end. At that point DRC's appointment will be terminated. All the property at the crossing will be transferred to the Secretary of State. The staff will be transferred to him on their then existing terms and conditions, including pensions. All this must happen instantly, since there must be no gap in the safe operation of the crossing.
The remainder of the Bill is largely technical. It provides, for example, for the delegation of the operation and maintenance of the whole crossing during and after the toll period, for the management of traffic in the crossing and on the approach roads and for financial information to be available to Parliament about the operation of tolls.
Copies of the agreement with DRC are in the Library. Since the company is providing the finance
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and taking many of the risks, DRC is allowed as much freedom of action as possible in constructing the bridge, running the crossing and managing the affairs of the company. Nevertheless, the crossing will be a vital part of the public road network for which the Secretary of State is statutorily responsible. The agreement gives him powers to ensure that DRC build the bridge that it has promised to build and that any changes of plan are shown to be necessary. He can make sure that DRC maintains the crossing properly and he has powers of intervention if it does not. In return, DRC can expect him not to interfere with what it is doing.
This Bill is designed to fulfil an urgent need. It does so in a novel way. The Government are convinced that the scheme, taken as a whole, is in the best interests of the taxpayer and the motorist. I hope it will receive as swift a passage as possible. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
7.11 p.m.
Lord Underhill: My Lords, I am grateful to the Minister for his explanation of the Bill. I can assure him and the House that the Opposition fully support and appreciate the purpose of the Bill, although we have certain points that I shall raise in the course of my few remarks.
I appreciate the novel nature of the Government's approach to providing this additional much needed crossing. I fully concur with the Minister's figures as to the necessity for it because of the increase in traffic and the present congestion. However, this is the first time that such a procedure has been put before Parliament for private sector financing of what is an important public works project. In view of the Minister's interest in Treasury matters as well as transport, perhaps I may be permitted to say that for a long time many of us have been concerned that publicly-owned industries have been unable to raise finance in the open market. The argument has always been put before us that this raises a problem with PSBR.
This is a public works project that is being financed through private finance. I do not at all decry the methods that the Government are using to get ahead with the project, but in future it may give rise to certain questions when other matters come before Parliament requiring finance by publicly-owned industries.
I appreciate some of the important factors that the Minister has outlined; namely, that the existing liabilities of the two county councils of Essex and Kent are to be discharged by the Government and that both county councils accept that this should be part of the national network. I appreciate also that the maximum period of repayment is up to 20 years. I note the definite statement by the Minister that, in the event of the company having misjudged its costs, it will itself have to bear the liability and there will be no bailing out by the Government. The Minister made the point that the present tolls will continue with increases based on the then RPI.

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I am pleased to note what the Minister said about the transfer of existing staff on their present conditions. When the whole project reverts to the Secretary of State either before or at the end of 20 years, the conditions of reversion to the staff are adequately provided for in the Bill.
The question of tolls is important. The Select Committee appointed by the other place to examine the Bill was not allowed to consider evidence on this matter. However, we know that in 1986 the Select Committee on Transport of the other place recommended the abolition of tolls on all estuarial crossings. In principle I can see the case for removal of tolls on estuarial crossings. I realise that there are some problems. Living as I do in metropolitan Essex, I travel on the M.25 periodically, and it is frequently necessary for me to use the existing Dartford tunnel. To have tolls, whether for a bridge or a tunnel on an important orbital motorway is a matter to which we should give special attention.
On Second Reading in another place on 9th July the question of windshielding arose. The Minister for Roads and Transport, Peter Bottomley, at column 609 said:
"There is little experience of putting windshielding on high bridges".
He continued:
"However, there is insufficient experience to be able to state precisely the type of windshielding that would work."
Nevertheless, the Government went straight ahead on the nature of the crossing to be constructed even though the Minister on Second Reading said that there was insufficient experience. The Minister said that these matters could be discussed during the later stages of the Bill.
The Select Committee of the other place issued a special report on the Bill, which dealt with windshielding. After hearing a substantial amount of evidence, the Select Committee recommended that the construction of the bridge should be changed to provide for windshielding. The recommendation was carried by a majority of five to one. The Committee concluded that the benefits to be gained by windshielding were sufficient to compensate for the delay and increased costs. A matter that your Lordships will wish to consider is whether the problem is so urgent and the congestion so bad that any delay should be avoided. The Government response to the special report devoted a considerable number of paragraphs to the matter. It rejected the Select Committee's decision on the question of windshielding.
On Report in another place, a government amendment to remove the requirement for windshielding was the only amendment considered. There was a three-hour debate on the amendment. By a majority of 131 votes to 34, it was decided that the amendment to provide windshielding should not be made to the Bill.
I refer now to paragraph 7 of the special report regarding the presentation of the case for windshielding, which states:
"We were greatly concerned about certain aspects of the evidence presented to us. We felt there was a lack of readiness by the Promoters—that is to say, the Governent and the concessionaires—to
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make available necessary technical and financial information which would have greatly assisted the Committee in its deliberations, even allowing for the fact that some of this information was of a commercially confidential nature. In view of the above, we request the Secretary of State to enquire into the way this case has been presented to us".
It is very difficult to understand how a Select Committee could go into the question of what kind of project the bridge should be if certain matters were denied to them because of commercial considerations.
In the Government Response, at paragraph 17, it states:
"The Government, as promoters of the Bill, assisted by the concessionaires, presented the case in the way they thought most helpful to the Committee. This reflected the obligation the Government felt to safeguard information which the concessionaires considered would be of commercial value to a competitor. Nonetheless the Government regrets that the Select Committee considered that the handling of the case caused them to experience difficulties in obtaining relevant information. The Secretary of State has already begun an enquiry into the way in which the case was handled and will ensure that this enquiry includes consideration of ways in which difficulties might be avoided on any future occasion".
We have the Government recognising the problems of the Select Committee of another case in considering some of these important matters.
That leads me to quote the final paragraph of the special report of the Select Committee of another place which is rather important. It states:
"We wish to record our concern about the difficulties we faced as a Committee composed mainly of laymen. The evidence produced by both the Government and the Petitioners on the issue of windshielding was highly technical and the expert witnesses fundamentally disagreed with each other on nearly every aspect of the subject. We believe that this Committee is almost unique both in the detail and complexity of the technical evidence given and in the depth of the disagreement between the expert witnesses.".
I shall not attempt to go into the technical matters of windshielding. But it is interesting that at Second Reading in another place the Minister said that there was not sufficient evidence to know what to do. We have the Select Committee saying that the matter was presented to them in a very complex way, and that the people who gave expert evidence disagreed with each other on every point. Yet we now have a firm decision taken by the Government on the question of windshielding—and a three hour debate in another place.
The only other point that I wish to consider is the naming of the bridge. I gather that the Select Committee decided to name it the Dartford Bridge. However, the Standing Committee on the Bill in the other place deleted that amendment, the Government adopting a neutral attitude. I propose to adopt the same neutral attitude; but there are one or two points with which I should like the Minister to deal in his reply.
First, we have to bear in mind that it is proposed that the bridge will consist of four lanes going southwards. People coming from the north of the river will wish to be given directions—but to where? One must bear in mind that they may begin their journey at a point on the north of the river travelling towards Dartford on the south. I do not know what the Government's explanation is. Paragraph 21 of the Government Response states that it is intended to change the signs (which at the moment show "Dartford Tunnel") to simply show "Dartford". As

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the tunnels are to be used by those travelling from south to north, if I am travelling through Kent I wish to know directions to the Dartford Tunnels, and not to Dartford. I wonder whether the Government have considered that aspect.
I appreciate the point made by the Government in their response that there might be times when the bridge has to be closed—perhaps because insufficient attention has been given to this question of wind shielding—and the tunnels may have to be used. But what will be the name of the bridge? I do not believe that it is provided for in the Bill at present. Will this be determined by order? Will there be further discussions? The decision of the Select Committee to name it the Dartford Bridge has been turned down by the Standing Committee on the Bill. Therefore at the moment I gather we do not have a name for the bridge. Is it to be the Thurrock Dartford Bridge? Is it to be the Thurrock Bridge because people coming from the north of the river will wish to go to Thurrock to get through to the tunnel? Will it be called the Dartford Bridge?
Whatever the name of the bridge, there have to be adequate, effective signs so that people who wish to go to the bridge, north to south, will know exactly where they are going, and those who still have to use the tunnels, south to north, will know that they are going to the Dartford Tunnels.
The points that I have made may seem minor criticisms. Many of them refer to the way in which the Bill was handled in the Select Committee. By and large, we support the principle of the Bill. We hope to see this construction at a not too distant date.
7.26 p.m.
Lord Lucas of Chilworth: My Lords, I start at the point at which the noble Lord, Lord Underhill finished: on the question of a name. I would say that a rose—in this case a bridge—by any name would smell very sweet because this matter has been outstanding for such a long time. I do not think the name matters a great deal. The noble Lord, Lord Nugent of Guildford, in a recent Question in your Lordships' House on road signs, illustrated the fact that we have a fairly deplorable system of road signing in this country. Perhaps the Minister's endeavours will be charged with greater urgency when this bridge opens.
I should like to thank my noble friend for his very lucid introduction of this Bill to your Lordships' House. I believe that it is unique. It is certainly unique in modern times that a crossing of this nature—a cable-stayed bridge—has been proposed and is to be financed for the benefit of the public road system by the private sector. Although the Bill provides for the profits, and indeed the losses due to unforeseen circumstances, one is bound to ask who, in the financial field, is the longstop? Somewhere along the line for quite unforeseen, and I hope improbably impossible conditions, there may be a collapse of funding, or a collapse that would be beyond he resources of the Dartford River Crossing Company Limited to fund. We ought to know that answer.
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On engineering design and construction, I listened with interest to what the noble Lord, Lord Underhill, said with regard to wind shielding. From my limited knowledge, the design is tremendously exciting. It is undertaken, and will be confirmed by leading designers and builders—leaders in the world for this type of construction. I do not share the same fears on the pedigree of those designers that the noble Lord, Lord Underhill, and perhaps some Members in another place, may have felt.
I said that the engineering design and construction is exciting. It is exciting in two areas: one is the engineering, purely and simply, but the other excitement is the 5,000 man years' worth of work that will be created. Much of this work, particularly the heavier engineering, such as steelwork, will, I hope, be in areas of the United Kingdom which are desperately in need of work. It is so good (is it not?) that this should be home produced.
I ask a question which may sound frivolous to my noble friend, but it has a serious note. In the contract—of course I do not see it in the Bill—is there any desired local UK content? In other words, I hope that we shall buy our steel and our fixtures and fittings in the United Kingdom and discourage the contracting companies from buying in other competitive markets.
Turning now to tolls, I do not discredit the two county councils, who, admittedly at their own behest some 50 years ago, took on the burden of the costs of the existing tunnel crossings. They have done a very good job. I am glad to see that my noble friend's department has now recognised that the existing crossings, coupled with the new crossing, should be part of the motorway and trunk road system.
I am equally glad that in the Bill—I believe it is in Schedule 6; but perhaps my noble friend will confirm that—there is an absolute cut-off date. It is 20 years' maximum for the tolls, and then the tolls cease. The costs of operation will then fall upon the road programme expenditure. This is welcome because many of us on both sides of the House have been opposed to the principle of tolls where the crossing is part of the major network.
I do not think that there is anything else that I really want to say. What remains is for those involved, the parliamentarians together with the petitioners, to deal with the Bill with as much dispatch as possible because undoubtedly if we delay—either in Select Committee or in proceedings in your Lordships' House which necessitate further consideration in another place—the target date will be missed. In any construction job, as soon as target dates are missed the costs escalate. We shall then be under pressure to increase tolls above the levels of RPI. That would be quite disastrous. We must allow the innovative companies to get on with the job as fast as we can. Like the noble Lord, Lord Underhill, I very much welcome the Bill and hope that Parliament will dispatch it as fast as possible.
7.36 p.m.
Lord Brabazon of Tara: My Lords, I am grateful for the welcome the Bill has been given by the noble Lord, Lord Underhill, and by my noble friend Lord

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Lucas of Chilworth. We have had a useful short debate on the matter. We are certainly all agreed that we want further capacity at this crossing by the earliest possible date.
A number of points have been raised in this short debate. I agree with my noble friend Lord Lucas that the bridge represents an opportunity for British industry to produce much work particularly in those regions which specialise in the production of steel. However, we have not put anything in the contract to say that British-produced steel should be used. I have every confidence that British steel producers will be able to match any competition. We could not put anything in the contract because that would not conform with our EC requirements. However, we look to British firms to tender competitively.
Two main issues have been mentioned this evening, one of which is the policy on tolls. Successive governments have taken the view that these estuarial crossings should be paid for by users who enjoy substantial savings in time and money over untolled alternative routes. The Government's response to the Commons Select Committee in July 1986 rejected the Committee's recommendation that tolls should be abolished and debts written off. It was argued that debts on toll crossings were freely incurred by the authorities concerned and that they could not be written off without financial penalty. Above all, there were more pressing demands on government resources. I should perhaps tell the noble Lord, Lord Underhill, that the Select Committee in another place was not prevented from discussing tolls as such, but they were not opposed in principle by any of the petitioners.
I confirm to my noble friend Lord Lucas that the maximum length of time that tolls can be levied is 20 years, but as I said in my opening speech we expect the time to be considerably less than that.
Wind shielding, as the noble Lord, Lord Underhill, said, was a subject that was dealt with very thoroughly in the other place. The county councils who raised it in their petitions to the other place are satisfied that the matter has been pursued and examined further by the Government. They have therefore decided not to petition in this House. The noble Lord was aware that the Government have published the detailed response to the special report of the Select Committee in the other place explaining why wind shielding was not justified on this bridge. Further consultations are taking place on alternative traffic management measures, in particular the use of the east tunnel on the rare occasions when the bridge is closed to vehicles endangered by high winds.
As to the name of the bridge—I am conscious of the presence of the noble Lord, Lord Irving of Dartford, on the Front Bench opposite—the Government have no strong views. That is why my honourable friend the Minister responsible for roads and traffic abstained when the Bill went to a Division in another place. However, we are content to erect near the bridge a sign bearing the name which is decided upon, if any. That name, however, will not be repeated all over the primary route network. The names on the green primary route and blue motorway signs are chosen to provide navigational
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assistance for the motorist. Confusion would abound if signs directed motorists either to two geographical names, Dartford and Thurrock, or to "tunnel" or "bridge", especially on an orbital motorway.
When the new bridge is built we shall remove references to the tunnel on the present green-backed and blue-backed signs and Dartford will become the key primary route and motorway destination. I do not believe that it would be practical to differentiate between tunnel and bridge. That is the Government's view on that matter.
The Earl of Kinnoull: My Lords, perhaps I may remind my noble friend that the Forth Bridge is called the Forth Bridge with some pride, and it is part of the M.90 as well. From what my noble friend said, the Government have not decided on a name, if any. It sounds as though there will never be a name.
Lord Brabazon of Tara: My Lords, perhaps there will not. As I have said, the bridge does not have to be named. What is important is the signposting on the primary route network. I believe I have dealt with that matter.
Lord Underhill: My Lords, what consultation has the department had with the road user bodies such as the motoring organisations, the road haulage and freight transport associations, on the matter of signing? This will be the most important thing. I agree with the Minister that it is not the name of the bridge that matters but whether people will have correct signs on the roads. If they want to go to the bridge, they should know they are going to the bridge, and if they have to go northwards to the tunnels they should know they are going to the tunnels.
Lord Brabazon of Tara: My Lords, at the moment I cannot answer the question about consultations. However, I should like to remind noble Lords that motorists are used to following signs to Dartford Tunnel, in whichever direction they are travelling. In future the signs will say "Dartford" rather than "Dartford Tunnel" or "Dartford Bridge". I believe that that is a minor adaptation for motorists to make rather than changing the signs to "Dartford Bridge" or "Dartford Tunnel" or to any other name which may be chosen.
My noble friend Lord Lucas of Chilworth asked what would happen if the arrangements fold. We do not expect that the arrangements will fold; but the unexpected could happen. If the DRC should fail in its obligations the crossing would immediately be transferred to the Secretary of State. If, at that point, the Secretary of State faces costs to complete the construction, for example, the Bill allows him to take tolls until he has recouped those costs. He would be subject to the same maximum period for tolls but could come to the other place just once for an affirmative resolution extending the tolling period by five years. Should more time be needed to recover public money he had had to invest in the bridge, the Secretary of State would not be allowed to take tolls if the DRC's appointment came to an end because he was in breach of his contract with the company. This

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is a complicated matter but it is dealt with in the agreement with the DRC. That document is placed in the Library.
The noble Lord, Lord Underhill, asked about private finance in public works projects. This Bill, like the Channel Tunnel Bill, marks one of the first ventures into private sector provision of public works. The new bridge will provide a vital link in our motorway network. We certainly hope that it will pave the way for other projects on similar lines. We have learned lessons from this exercise and I hope that the private sector will also have done so. Most of all, as the Government made clear in the roads White Paper last April, we are interested to hear suggestions for other ventures of this kind, perhaps to supplement the road network in novel and ingenious ways. Some ambitious proposals of that kind have been outlined by one of our major construction groups.
Private investment looks for a way of recovering its money and, in the case of Dartford, earning a return. Therefore, projects financed in this way may involve some form of charge to the user. We have not yet decided whether the second Severn crossing should be provided in the same way as the Dartford project. Our options are still open.
Proposals of this kind must be judged by the criterion: do they represent the most cost-effective way of carrying out the project? We believe that, given the freedom to design, build and operate a piece of infrastructure such as this, the private sector is well placed to do so more efficiently and economically than the traditional method. I regard this bridge as an imaginative concept both in its design and financing. I am sure that it is destined to become a notable landmark in many ways. I join with other noble Lords and hope that the Bill will see speedy progress so that construction can commence. I beg to move.
On Question, Bill read a second time, and committed to a Select Committee.
Viscount Davidson: My Lords, I beg to move that the House do now adjourn during pleasure until 8 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.43 to 8 p.m.]

Public Utility Transfers and Water Charges Bill
House again in Committee on Clause 1.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 11:
Page 1, line 21, leave out ("property, rights") and insert ("assets").
The noble Lord said: I beg to move Amendment No. 11 standing in my name, and it may be for the convenience of the Committee if I also speak to Amendment No. 12. This amendment is in the nature of a probing amendment. It has the effect of narrowing the scope of property or functions in relation to which a proposal from the Secretary of State would activate the clause. The amendment
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would replace "property, rights" with "assets", which in accounting terms is a more precise definition. However, we recognise that the definition of assets, to which I referred earlier in Committee, may well exclude certain legal rights that have no particular value although again that raises accounting problems to which I have referred.
The amendment seeks to clarify the extent of the proposed transfer and there are certain questions which need to be answered by the Government on that matter. To what extent will the Secretary of State have to form a proposal which relates to all property rights and liabilities before the provision of the clause is operative or will its provisions take effect when the proposal is formed in a rather generalised way without relating to specifics such as property rights and liabilities? In other words, can a proposal be partial or must it be total in respect of a certain group of assets? What steps does the Secretary of State propose to establish the extent of property, rights and liabilities before announcing the intention to transfer? Again, we come back to the question of what is the proposal. At what point does the Secretary of State specify exactly what he is proposing to transfer? Will the timing of any such announcement be affected by possible developments in relation to those properties or rights which may take place? Indeed, we discussed some of those earlier in the discussion about the National Rivers Authority.
Subsection (2)(a) of Clause 1 refers to property, rights and liabilities which would be affected by transfer. Can the noble Earl give some clarification as to whether that relates only to the properties and rights which will actually be transferred or to any such property which may need, in some sense, to be accounted for, disposed of or otherwise allocated as a result of loss of functions on the separation of the water authorities from the National Rivers Authority. To put it in another way, what is required to trigger the conferring powers under the clause? Do the property and rights, which are mentioned here, have to be specified in order to trigger the powers in the clause?
"Assets" is a clearly defined accounting phenomenon and one with which we can deal. "Property and rights" is a slightly open-ended expression which needs further clarification in order to see at what point the powers would be triggered. The potential issue raised by my amendment is the degree to which a proposal from the Secretary of State will need to take into account and, indeed, will take into account in the formulation of the proposal, the full consequences in relation to all the property, all the rights and all the liabilities involved; or at what point a generalised intention to transfer whatever may be there, as it were, becomes a proposal which triggers off the powers.
The Earl of Caithness: With the leave of the Committee I shall also speak to both these amendments. I can understand the temptation to attempt to improve the drafting of this provision by using the familiar concept of assets and liabilities instead of the existing wording. However we do not regard the amendment as an improvement to the Bill.

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The objective is that if the main legislation is enacted by Parliament, all the property and rights of the existing water authorities together with liabilities will be transferred to the successor companies or to the NRA.
The noble Lord, Lord Williams of Elvel, said that the words need clarification. I remind him that the words widely used in existing legislation to give statutory authority for such transfers or to describe such transfers are the words "property, rights or liabilities" used in the Bill. I refer the Committee, for example, to Section 60 subsection (1) of the Telecommunications Act 1984; Section 100 subsection (1) of the Local Government Act 1985; Section 3(1) of the Trustee Savings Bank Act 1985 and Section 49 subsection (1) of the Gas Act 1986. It is well-precedented wordage.
The reason those particular words are used is that they are the words with the widest meaning and are legal concepts. The word "asset" is more frequently used in the fields of business and accountancy than in legislation, as the noble Lord, Lord Williams of Elvel, quite rightly said. When it is used in legislation it normally requires to be defined to ensure that it has a precise meaning. Indeed, in that case "assets" needs clarification.
If the Committee were minded to pass this amendment the words would have to be defined to mean "property and rights". Clearly the use of the existing words avoid the need for such a definition. I hope that that clarifies the situation for the noble Lord.
Lord Williams of Elvel: I am grateful to the noble Earl for his response, which clarifies the matter in part. Will he enlarge a little on his response and answer my first question? Let us take the water authorities, and let us suppose that the water authorities and the NRA split up a function and the Secretary of State makes a proposal. In order to trigger the powers under the Bill, to what extent will he have to define those rights and liabilities which are transferred from water authorities to the NRA or alternatively from water authorities to the new plcs?
The Earl of Caithness: Those will be the related proposals which we discussed earlier. The principle is quite clear; all the items that form the property and rights of the existing water authorities must be transferred either to successor companies or to the NRA. The exact split will be much clearer when we come to the main Bill, because that could change as it goes through this Chamber.
Lord Williams of Elvel: I am grateful to the noble Earl. Perhaps I may ask a supplementary question. Given that the relevant utilities are able to influence or secure modifications of the related proposals with which I understand we are now dealing, will the result of their attempts to secure modifications be published in some manner before the legislation comes before Parliament or will we not know what is happening until the main legislation comes before the Chamber?
The Earl of Caithness: The timescale on which we are working is that when this Bill has received Royal
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Assent we will be able to put forward proposals to the water authorities requesting them to give information to the Government so that we can flesh out our proposals. There are bound to be certain assets or properties that are at the moment occupied by a water authority that might have to be jointly occupied by NRA and the plc for a time; or one future plc may take a property and the NRA another property.
This will emerge over time, following the continuation of our proposals. Whether this will be made public, to answer the noble Lord, is something on which I should like to reflect given the timescale on which we propose to work.
Lord Williams of Elvel: I am most grateful to the noble Earl. I understand now—it is only when one gets into the detail of the Bill that one starts to understand—that these are part of the related proposals and, therefore, clearly for discussion and negotiation between the different parties involved.
I hope very much that there will be public discussion of the issues involved. These are matters of interest to the public. I note that the noble Earl will take a note of what we have said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 12 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 13:
Page 1, line 24, after ("function") insert ("or responsibility")
The noble Lord said: The Bill, it seems to us, is not entirely clear on where the responsibilities, at the moment with the water authorities in Wales and with the electricity boards in England, Wales and Scotland, will lie. We have had some discussion but the amendment seeks to make sure that not only the rights but also the responsibilities and functions should be properly transferred.
The Water Act 1973 and the Electricity Act 1957 place very firm responsibilities on authorities and statutory undertakers in regard to conservation of the environment, as we have discussed earlier. In addition, the Water Act 1973 carries forward responsibilities for the use of land and water for recreation; for example, navigation, rights of access and a number of other aspects. It seems from earlier consultation papers that reservoirs and associated land holdings are to be vested in the water plcs. I may be wrong and if so perhaps the noble Earl can correct me.
In our view, it is important that the interests of recreation and conservation, to which I have referred, laid on the water authorities by the Water Act, should be remembered at all stages. Indeed, land owned by the new electricity privatised bodies should be open as under the present boards.
We believe that discussions and consultations on these matters should properly take place before the main privatisation Bills come before Parliament. I hope very much that the noble Earl will confirm that and also that the responsibilities, as I have defined them, are placed in the area that I believe should be the case. I beg to move.
8.15 p.m.
The Earl of Caithness: I fully accept the underlying purpose of this amendment which seeks to ensure that all the powers and duties of the utilities which it is proposed to transfer to the successor corporate bodies are included in subsection (2)(b) as related proposals.
I am advised that the word "function" used in that subsection and elsewhere in the Bill is the right word to cover all the powers and duties of the existing utilities. The word "responsibility" would add nothing to the meaning of the paragraph. It might well have the unfortunate effect of casting doubt on the breadth of meaning of the word "function" where it is used elsewhere in the Bill. I am sure the noble Lord, Lord Williams, agrees that that would be the opposite intention of the amendment.
I can confirm that it is our intention to transfer the reservoirs to the plcs. However, the noble Lord, Lord Williams, went on to mention related land. It depends where that land is. Obviously this will be one of the related proposals that will emerge in further discussions with the utilities. It will become clear, as our discussions continue, in time for the main Bill.
Lord Williams of Elvel: I am grateful to the noble Earl. That clears up the major point that I wished to raise. But, as the noble Earl said, it does not clear up the minor point. That is a matter which will come forward in the main legislation.
I am glad to learn that our interpretation of the word "function" as not including "responsibility" is wrong and that "function" does include responsibility. In the light of the assurance from the noble Earl that that is the case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 14:
Page 1, line 25, leave out ("or otherwise vest in").
The noble Lord said: This amendment is designed to question the wording in subsection (2)(b) which again refers to functions which are transferred and, as the Bill states,
"otherwise vest in that body corporate".
What is the intent of the phrase "otherwise vest in"? Do the Government envisage the creation of new functions for a body corporate to which property rights and liabilities are transferred? Will a vesting process be set up under the provisions of the main privatisation legislation which will perhaps avoid the need, in certain cases, for a transfer order? Is this a different mechanism to the one we discussed earlier?
In relation to the powers conferred by Clause 1, will a proposal—I use that expression in the way that the Bill uses it—to transfer or vest a series of functions over a period give a similar disaggregated conferral of powers on public utilities, or will additional powers flow straightaway on the announcement of a proposal irrespective of the fact that vesting may take place over a much longer timescale depending on the property rights or liabilities involved?
I am afraid there are a number of rather niggling little problems here, but I should be grateful if the noble Earl could clear them up. I beg to move.
The Earl of Caithness: There is a technical justification for the existing drafting of paragraph (b). The main legislation will provide that certain of these existing functions will be transferred to the successor bodies by way of amendment. That legislation will also re-enact certain functional legislation such as the water supply duties. In such cases the technical effect will be not that these functions are transferred but that upon re-enactment they are conferred upon the successor bodies. The amendment would restrict the ability of the water authorities to act in relation to the functions which are to receive this legislative treatment. We have catered for the situation in the broad scope of the amendment in order to cover all the responsibilities, duties and functions.
Lord Williams of Elvel: I am grateful to the noble Earl. I understand him to say that it is a technical necessity to have this particular wording. Can the Minister respond again to my initial question? Do the Government envisage the creation of new functions for a body corporate in which certain property rights and liabilities are vested? That is a possibility. It is not a possibility if a simple transfer takes place. I hope that the noble Earl understands the thrust of my question. We start off with a water authority. The water authority has certain properties, rights and liabilities. These are transferred to a company. That is a very simple and straightforward transaction. The successor company exercises rights over the properties and it fulfils responsibilities. It has rights and liabilities.
When we discussed the question of vesting, that seems to us to open up the possibility that the successor company does not simply accept the activity, property rights, liabilities and responsibilities of the authority, but it does other things and it is allowed to do other things. If that is what the Government have in mind, perhaps they will say so. On the other hand, is it simply a piece of technical drafting as I believe the noble Earl seemed to imply when he responded to my initial intervention?
The Earl of Caithness: I am grateful to the noble Lord for further clarification of his point. There is the technical point and there is also the point that he covered. I would not say that it was so much the transfer of the water authorities to the plcs. Perhaps I may give an example of possibly adding further functions to the NRA. We may very well want to strengthen the role of the NRA by adding other duties which do not exist at the moment under the water authority's responsibilities. That is an added reason for this provision.
Lord Williams of Elvel: I am most grateful to the noble Earl. May I make sure that I have the situation absolutely right so that it is beyond peradventure of misunderstanding. The Government do not envisage other functions for the water plcs other than those

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activities which are transferred as a result of the legislation which is going to come in stages before Parliament. On the other hand, the Government by introducing this wording into the Bill envisage possible other functions for the NRA. The Government may wish it to engage in other activities which we may be unable to foresee at the moment. I agree that they may be necessary for the proper functioning of the NRA. Is that a correct understanding of what the noble Earl has said? It is a very important point.
The Earl of Caithness: It is an extremely important point on which to be absolutely clear. I believe that the noble Lord, Lord Williams of Elvel, was trying to tie me down too much. The wording makes provision to enable us to add other activities. It might well be that when we get into further detail on the proposals, when we receive evidence from the water authorities or there is an amendment in your Lordships' Committee as regards certain aspects of the duties and functions of the plc or the NRA, nothing additional is needed. However, it may be that something is needed. This provision allows us to add that something if the event occurs.
Lord Williams of Elvel: I am grateful to the noble Earl. I would not try to tie him down more than I can possibly achieve at this point. I understand what he is saying. I believe he has added a very interesting gloss to the provisions of the Bill. It is not the intention of the Government at present to do certain things; namely, to widen the functions. Obviously Parliament can pass what amendments it likes to the main legislation to ensure that other functions are added on. As I understand the noble Earl, it is not the present intention of the Government that water plcs should do more than accept the property rights, responsibilities and liabilities that are transferred from the water authorities at present. I am most grateful for that clarification. I will certainly remember it when we come to debate the main legislation as I am sure we will in the course of time. In the meantime—
The Earl of Caithness: Before the noble Lord does withdraw the amendment, the clarification is at 8.25 p.m. on the 17th March.
Lord Williams of Elvel: I was not aware that the Government took such careful note of the time and date in which they made clarification of their own legislation. At whatever time it is, the Government speak for the Government. It is always interesting to hear these particular nuances added to what has already been said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 15:
Page 1, line 26, leave out from ("corporate") to end of line 5 on page 2.
The noble Lord said: The thrust of this amendment is to remove paragraph (c) from subsection (2) and to remove it from the ambit of proposals which give rise to additional powers conferred by Clause 1. In
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particular, this refers to the establishment or flotation of a body corporate to which functions might be transferred. The paragraph as currently drafted also includes within the ambit of the Bill a possible transfer relevant for the purposes of the clause to the creation or flotation of another company such as a holding company or a subsidiary to which functions may also be transferred.
We find difficulty in understanding why the proposals relating merely to the creation of a body corporate to which functions may be potentially transferred should be a relevant consideration in adding additional powers at this stage to the public utilities. Subsection (2) states that proposals for this purpose may relate to any of the property rights or liabilities of the utility or the exercise of any of its functions by virtue of paragraphs (a) and (b) respectively.
Within the context of this legislation, there may be legitimate matters to include within a proposal. They may relate to existing rights, properties, obligations, or functions of an existing body. We are still dealing with a public utility and it is difficult to see why a public utility should require additional powers in relation to the creation of a new body corporate to which—I have to remind the Committee—Parliament has not yet agreed to transfer functions. To a certain extent this is a question of the principle of the Bill.
The problem also arises as to the degree to which it is legitimate to confer functions on public authorities which in practice will be required to be undertaken with a view to promoting the interests of a private company. Subsection (3) refers to a possible private company and a body corporate which may become a member of a group. I believe there is a point where public utilities, given powers to promote the interest of a private company, spending national resources and undertaking activities, could be of doubtful constitutionality. It is certainly of doubtful benefit to the ultimate owners of the utility, who are the public at large in the form of the taxpayer and the nation.
My subsidiary point relates to whether the Bill goes too far in extending to flotation itself the powers that are conferred by Clause 1. It is legitimate in the context of Clause 1, although we would argue against it in the Bill as drafted, to go as far as the transfer. However, subsequent to the transfer, whether or not the transferee company will be floated is another matter entirely. The expenses should properly fall on the transferee company when it comes to be floated.
I recognise that these are slightly niggling points but they need to be clarified by the Government when they are dealing with this Bill. I beg to move.
8.30 p.m.
The Earl of Caithness: As the Notes on Clauses which have been made available to the Committee explain, paragraph (c) lists a number of matters arising out of our proposals for these important industries which the industries will need to act on if their restructuring and transition into the private sector is to be carried out in an expeditious and effective way.

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I have already given the example of the arrangements that will need to be made in respect of the people who will work in these industries after restructuring and privatisation. The 10 water authorities currently employ some 50,000 people. We propose that the water authorities' utility functions should be transferred to 10 water service plcs and their other functions to the National Rivers Authority. The total staff numbers of these successor bodies will be equally large, and it must be right that the water authorities can take timely action to help us ensure that staffing arrangements are sensible and effective.
The noble Lord, Lord Williams, referred again to the fact that we do not have the main Bill and we will not know the full details until we have it. I explained that position in detail earlier this afternoon. Parliament will have the opportunity to debate our proposals when we bring forward the main legislation. What this Bill does is to ensure that, if it is the will of Parliament that these privatisations should proceed, the industries concerned will have been able to make the necessary preparations so that the privatisations can then move ahead quickly and effectively.
Lord Williams of Elvel: I am grateful to the noble Earl. Can he respond to my two points? First, there is a question of doubtful constitutionality in a public utility being given powers to promote the interests of a private company which may at the end of the day become part of a water plc or an electricity plc. Secondly, can he say whether it is right that a public utility, as a public utility and before the transfer takes place, should be preparing the flotation of the transferee company?
The Earl of Caithness: This Bill will clear the way for the public utility to take the necessary action to take forward our proposal. It is quite right that, having received the proposal from the Secretary of State, the public utility should take the necessary action to make the transfer as smooth and as expeditious as possible. That is why the water and electricity supply industries will need to act on all the matters listed in paragraphs (a), (b) and (c) of subsection (2). To strike out any of those paragraphs would create a great deal of uncertainty and so hamper those preparations.
Lord Williams of Elvel: I am sorry to press the noble Earl, but I do not seem to be getting answers to the two questions that I asked. Perhaps I can put them in a different way. Let us suppose that, with the best will in the world, privatisation does not take place. Perhaps the market is not ready and nobody wants to buy. For one reason or another the selling of the water authorities or the electricity boards does not take place. Who will pay for the preparation for flotation of a successor company that is not floated?
Who will pay for the promotion of the interests of a private company which in the event does not become part of the group in which this privatisation scheme is involved? Will it be the Government? Will it be the consumer or the water authority which still
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remains? Who will pay? That is putting the question round the other way. By doing so I hope the noble Earl understands the point that I am trying to make.
The Earl of Caithness: I understand the noble Lord's question. I had hoped that I had answered him specifically. However, I fear that he was not satisfied and I shall try again. If costs are incurred in preparing for full flotation, ultimately they will fall on the Government. If significant, they will be reflected in the flotation proceeds.
Lord Williams of Elvel: I understand all that; but what if the flotation does not take place? Who will then pay? Will the consumer of water or electricity pay, or will the Government offer some form of indemnity and reimburse the utility?
The Earl of Caithness: The costs will be borne by the water authorities and the electricity supply industry. That has happened in all previous privatisations. We do not believe in looking at it in the negative way. I believe that it will be a success.
Lord Williams of Elvel: I am not looking at it in a negative, a positive or a neutral way. I am trying to understand why Parliament should be invited to give powers to utilities to spend money for purposes which may be desirable or undesirable—the noble Earl and I have strong political differences on that point—but which, nevertheless, are in the hands of fate, the stock market, and so on. That is the point I am trying to make.
The Earl of Caithness: I realise that that is the point the noble Lord is trying to make. I think I have answered the noble Lord on that point.
Lord Diamond: The noble Lord himself may be satisfied because his intelligence is immensely greater than mine. However, I could not follow and I have listened to every word. It is a simple point. What will happen if privatisation does not go through? Under the powers of this Bill the utility companies will have done certain things at the request of the Secretary of State and will have incurred costs. Let us assume that the Government change their mind. Perhaps they will say with regard to water, "Sorry, we are not ready. We have considered the matter further and as a result of all the information that has come in we have decided to give the matter another six months' consideration. We are not going ahead with it in this Session". In the meantime all this expenditure has been incurred. My reading of the Bill is that, as one would expect, it is the consumer who will pay. We want to know from the Government whether that is right. Does it fall on the consumer of the relevant utility?
The Earl of Caithness: I answered that question when I said that it was the responsibility of the utility. In the example that the noble Lord gave it might well be that some costs will be the responsibility of the underwriter.
Lord Williams of Elvel: Clearly if there is no underwriter, because there is no flotation, then it cannot be the responsibility of the underwriter.

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Therefore what the noble Earl is saying is that if there is no flotation and no underwriting, then no costs fall on the underwriter and it is the responsibility of the utility; in other words, as the noble Lord, Lord Diamond, rightly pointed out, it is the consumer who will end up paying. I think we have now established that as a matter of fact. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 16:
Page 2, line 11, leave out from ("functions") to end of line 15.
The noble Lord said: I beg to move this amendment standing in my name and that of my noble friend Lady Nicol. This is a slightly complicated area which brings us to the question of holding companies and subsidiaries. The amendment would exclude the requirement for a public utility to exercise its powers with a view to promoting the interests of a holding company or subsidiary—which is in the Bill as drafted.
The amendment would not affect the exercise of powers such as to promote the interests of a body corporate to which the function will actually be transferred. The issue that the amendment seeks to elucidate—it is in the nature of a probing amendment—is why a body to which functions will not be transferred should be a beneficiary by statute as a result of the exercise of additional powers by a public body. Can the Government give examples of situations—before we come to the question of Scotland—where the operation of subsection (3)(b) is necessary and is therefore a desirable use of public utility funds in order to secure the efficient transfer of functions? I beg to move.
8.45 p.m.
The Earl of Caithness: In responding to the amendment, I think it might be helpful if I were to explain a little about the corporate structure which we expect to be adopted by the water service plcs which will take over the utility business of the water authorities.
We envisage that those plcs will not be monolithic entities but that, in line with common commercial practice, they will consist of a holding company standing above at least one subsidiary, and possibly several. It will be the holding company whose shares will be offered for sale at the time of flotation. The holding company will wholly own a subsidiary company which will be responsible for the utility functions to be transferred from the water authority.
It may he that, in time, the holding company will choose to set up further subsidiary companies to handle other activities. The initial pattern, of holding company and so-called "core" subsidiary, is however in our view a necessary and appropriate structure which gives the important water utility functions a distinct place within a group which may well accommodate other activities.
If paragraph (b) of subsection (3) were deleted, as this amendment proposes, the subsection would provide, in the case of water, that the water authorities could act in the interests of the core subsidiary which I have described; but it would not
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similarly provide in respect of the holding company. That would be a lopsided and confusing provision. The amendment would therefore be very detrimental to the proposal for the structure of the plcs. I hope that that explanation clarifies the situation for the noble Lord.
Lord Williams of Elvel: I am sorry to press the noble Earl on this matter but it is possible for a body corporate—which for the purposes of argument we shall call a company—when the water authorities' activities have been transferred to it, to turn itself into a holding company, create subsidiaries and then to create sub-subsidiaries or to engage in joint ventures, because all companies do this. It does not seem to be necessary to provide for this situation before a transfer takes place because, unless there is some catch which I do not understand, a body corporate—properly constituted under the Companies Act—can be any number of things and spawn any number of subsidiaries after the event.
The problem with the Bill as drafted is that there are, or may be, bodies corporate which are not members of the group to which those activities are being transferred whose interests may be promoted by the use of what is still, after all, public money and which subsequently may or may not be used. It may even go off and do something different and ultimately be liquidated. I should have thought that it is possible for paragraph (a) to remain, and for us to understand the normal corporate practice: that any body corporate can become a holding company; spawn subsidiaries; reconstruct itself and do whatever it likes—so long as it does not contravene the Companies Act.
The Earl of Caithness: As I understand it, the Bill is drawn specifically to enable the structure that we propose (the holding company and core subsidiary) which I just mentioned to the Committee. If the noble Lord's amendment is accepted, it would mean that water authorities could act in the interests of the core subsidiary of the plc, but not the holding company itself. That is where there seems to be a difference of opinion between myself and the noble Lord. Therefore, if that is the case, since it is the holding company that is to be floated the amendment would surely hamper the process of flotation.
Lord Williams of Elvel: It is possible—indeed, it happens every day of the week—for a company to turn itself into a holding company and form what the noble Earl has referred as a core subsidiary. It is a very simple procedure, so long as one has 100 per cent. of the shares, and it takes about half an hour. I see no difference in what the noble Earl is saying, that we must have the core subsidiary empowered to be promoted, and so on, and also the holding company. If you put the activities of a water authority or an electricity board—or whatever it may be—into a company, that company (provided it is a company properly constituted under the Companies Act) can turn itself, as long as it has the approval of its shareholders, into whatever it wishes. For example, it can be a holding company; it can form a core subsidiary, a core sub-subsidiary or even form 100 core subsidiaries, should it wish to do so. So in

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that regard the Companies Act is very flexible. I do not see why utility money should be spent on this structure just because the White Paper says that this is the structure that we are going to adopt. However, I am not going to press the noble Earl at this time of night because we should like to get on with the proceedings, although it does seem to be illogical. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 17:
Page 2, line 15, at end insert ("or
(c) consumers.")
The noble Lord said: I think this amendment is almost self-explanatory. I beg to move.
The Earl of Caithness: The purpose of subsection (3) of this clause is not relevant to protecting the interests of consumers. It makes it clear that where new powers are conferred by Clause 1 on the water authorities and the electricity supply industry, those powers extend not merely to protecting or promoting the interests of themselves as water authorities but also to parts of the electricity industry.
The main object of our policy is that the water authorities, the area electricity boards and so on will not exist as such for much longer. Therefore subsection (3) ensures that those bodies can use their new powers to promote the interests of their successors; that is, the water plcs, the National Rivers Authority and the new generating, grid and distribution companies in the electricity industry. Subsection (3) is therefore essentially an internal provision to ensure that the clause gives the industries the powers that they need.
Protecting the interests of consumers is a vital part of our proposals which we shall bring forward in due course. In the water industry, for example, there will be customer service committees appointed by the director general of water services and playing a vital role in the handling of complaints and in the representation of customer interests, both to the privatised utility companies and to the director general, who will have power to follow up many of their recommendations.
That point will not have been lost on the Committee. It is for the Government to protect the customers of those industries and to make sure that the mechanisms for protection are adequate. That is not a function of the water authorities nor of the electricity supply industry as they help us to draw up proposals for the industry. One could not expect these industries to devise a set of proposals which could ultimately be used for their own disadvantage. That is our responsibility, and in due course it will be Parliament's responsibility to ensure that our proposals are adequate.
As I have assured the Committee, the need for customer protection is very much in our minds as we develop our proposals. I can but refer the Committee to Amendment No. 33 in my name. I am sure the noble Lord has looked at it and will approve it with satisfaction. I hope that the assurance I have given the noble Lord will satisfy him on this point.
Lord Williams of Elvel: I am grateful to the noble Earl. As I said, the amendment is self-explanatory. The consumers seem to be rather sadly ignored in much of this legislation. We should like to see them put into Clause 1.
Nevertheless, I found rather odd the noble Earl's submission that it was up to the Government to protect the consumers and that the companies would not be proposing things to their own disadvantage. I understood the virtues of privatisation as put forward by the Government to be that privatised companies paid more attention to consumers, because it was in their interests to do so. Maybe I have the propaganda wrong, but that is what I have been told. It may not actually be borne out by events; witness Telecom and other matters which we have discussed. But I should have thought it was in the interests of the companies themselves to make sure that their consumers were properly protected, as it is with any company which sells goods, products and services, and to make sure that their customers are satisfied. So I do not see any real reason why the noble Earl made the assertion that it was not for the companies to put up schemes to their own disadvantage. I do not believe it would be to the disadvantage of companies to protect their own clients. However, if that is what the noble Earl thinks, that is what he thinks.
I am sorry that the noble Earl feels that consumers should not come in at this point of the Bill but should come in later. I have read the noble Earl's amendment. I am glad that we have some measure of agreement that this subject is important. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 18:
Page 2, line 15, at end insert—
("( ) The powers conferred by this section shall not include the right to advertise other than in the normal course of business, or for the purposes of informing the public of proposals implementing sections 2, 3, 4 and 5 of this Act.").
The noble Lord said: I beg to move Amendment No. 18 standing in my name and that of my noble friend Lady Nicol. This amendment seeks to address the question of advertising. We are concerned that the powers conferred by Clause 1 of the Bill would allow utilities or electricity boards to advertise in a manner which is outside their proper function under the transfer of property rights and liabilities to private companies. In so far as there is information to the public about what is going on, in our view that is a perfectly proper subject for advertisement. In so far as they advertise in the normal course of business, again that seems to be perfectly proper.
However, there have been occasions in the run-up to privatisation when (how can I put it delicately?) public funds, funds of organisations about to be privatised, have been used for extensive advertising campaigns. We should like to make sure that at least in the initial stage—because we understand that we are dealing here with the initial stage—those utilities and electricity boards which are still in the public sector should not be allowed to advertise other than for the purposes specified in the amendment. If the noble Earl can persuade me that that is already in the

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Bill, I shall be very happy about it. Otherwise I think this is quite important matter which we ought to be debating. I beg to move.
The Earl of Caithness: I have to say to the Committee that I found this amendment somewhat confusing. It bears on Clause 1, which gives powers to the water and electricity supply industries, and yet one of its effects would be to state that these industries may advertise to inform the public of the charging and metering provisions of the Bill, which are concerned with the water industry only.
However, I understand the intention of the amendment, as the noble Lord, Lord Williams of Elvel, has explained, to be that the powers conferred on the water and electricity supply industries by Clause 1 should not include the ability to advertise in support of the Government's proposals for the restructuring and privatisation of those industries. It is a standard feature of the privatisation of industries formerly under state control that there is a campaign to advertise the flotation of those industries. Such campaigns take place in the immediate run-up to the flotation, however, and the process of selling the water and electricity industries into the private sector can begin only if and when Parliament has approved the main legislation.
Advertising for the offers for sale of successor bodies to the water and electricity supply industries is therefore not in prospect for some time yet. It may be, however, that those industries will wish to act sooner than that to explain to their customers and to others the way in which they expect their businesses to be run once our proposals are implemented. This amendment would provide that, in exercising the powers conferred on them by Clause 1, those industries could undertake advertising only so far as it served what is termed the normal course of their business. The precise scope of this concept would, I venture to suggest, be very difficult to establish, and I fear that it would lead to considerable uncertainty and confusion. It would certainly be wrong, in our judgment, to exclude the sort of explanatory advertising to which I have just referred.
Lord Williams of Elvel: I am sorry if the noble Earl found this amendment confusing. I hope he understands that when drafting amendments we do not have the services of a battery of civil servants. We try our best to convey to the Government exactly what our intentions are, without having the services of officials. In my introducton I tried to explain exactly what our intention was.
The problem, which I do not think has gone away as a result of what the noble Earl has read out, is that the utilities, as I understand it, can still advertise the way they are going to be run after privatisation. Therefore they spend money—again I have to remind the noble Earl—which if the flotation does not take place and the privatisation does not take place will be recovered in the end from the consumers of the utility. This amendment was seeking to limit that activity. If the Government are determined that consumers of water or electricity shall pay for failed privatisations there is not much I can do about it.
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However, I am disappointed that the point has not been registered by the noble Earl. I may well come back to this and I shall try my best, with the assistance that I can conjure up, to draft the next time round an amendment that is perhaps slightly less confusing for the noble Earl. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Ampthill): Before calling Amendment No. 19, I should remind the Committee that if it is agreed to I cannot call Amendment No. 20.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No.19:
Page 2, leave out from beginning of line 17 to ("shall") in line 18.
The noble Lord said: In view of what the Deputy Chairman has said, and indeed by prior agreement, it would perhaps be for the convenience of the Committee if I spoke to Amendments Nos. 19 and 20 together.
This amendment, as well as the amendment to be moved by the noble Lord, Lord Diamond, goes to the root of the powers conferred by Clause 1. The provisions of subsection (4) are sweeping. They encompass two possibilities. First the situation where Parliament has not been asked to approve the implementation of the transfer proposals or is in the course of doing so but has not given its final approval. Secondly, the situation where Parliament has rejected the legislation which has been put before it.
The possibility would appear to exist that powers available to the public utilities could remain on the statute book even after the rejection of the main legislation. In that situation the Secretary of State would merely need to formulate a new proposal in his bath—as we discussed earlier—for the powers to be triggered under Clause 1.
I accept the good faith of the Government and the noble Earl when they say that they wish to proceed with privatisation as soon as possible. I accept absolutely that there is a majority in both Houses of Parliament for the main legislation to go through. Nevertheless there is many a slip twixt cup and lip. It may be that the legislation does not go through. Under those circumstances we are left with the problem that I have just outlined.
The effect of that, given that the Government have this evening rejected all the amendments moved from this side of the Committee and by those Members of the Committee on my right—amendments which tried to restrict or modify the powers in Clause 1—is that we could have a ludicrous situation where one paving Bill remains on the statute book and the main legislation is rejected by Parliament. That would be a constitutional nonsense. I beg to move.
9 p.m.
Lord Diamond: I wish to add a word in explanation of the amendment which appears in the name of the noble Lord, Lord Ezra, and myself. I am most grateful to the noble Lord, Lord Williams of Elvel, for having explained his amendment and particularly for having underlined the point which must exercise

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the mind of everybody who looks at the wording of the Bill. That is:
"whether or not Parliament has given any approval".
That is fighting language in this place as is evidenced by one glance round the Chamber. We could not possibly allow this provision to go through without being satisfied as to the reason for it.
At the moment I can see no good reason for it. Of course the Government want to get on with their legislation and we want to assist the Government in getting on with good legislation. The matter of whether or not Parliament has given any approval—I know that that refers to the implementation of the proposal—is consistent with the rest of the Bill in being drawn far too widely and unnecessarily so.
As the noble Lord, Lord Williams of Elvel, has said, the provision contemplates not only the negative situation where Parliament has not given approval, but also the positive situation where Parliament has given disapproval. This matter is not only relevant to passing the legislation when it comes along. Let us suppose that there has been a Motion in another place or in this place—One does not have to wait for legislation—or some appropriate procedure which relates to the wisdom of carrying out this measure and Parliament has voted against it. The provision still allows the Government to carry on with this Bill in triggering off the powers of the utility companies to incur expenditure in connection with something of which Parliament has openly voiced its disapproval. Surely that cannot be right?
I repeat that this is not necessary. Of course the Government want to get on with their legislation but it is not necessary that the Government should take these powers immediately and in the face of parliamentary disapproval. Therefore I am suggesting in my amendment a step which I hope the Government will regard as a very constructive attempt to provide a suitable half-way house. I am suggesting in my amendment that there should be inserted the words:
"as soon as the House of Commons has given a second reading to a Bill for the privatisation of the electricity and water industries".
One need not wait, therefore, for the whole process of a Bill going through both Houses. I venture to think that when this Bill comes along it will not have the speediest possible passage through both Houses of Parliament. There is no need for the Government to wait for the completion of those procedures. My Amendment says:
"as soon as the House of Commons has given a second reading"
the principle of a privatisation Bill is approved and the Government would be justified in saying that it is now proper that they should trigger off those powers contained in the enabling Bill and invite the utility companies to give them the information that they want.
In my view that is a very adequate half-way house and the Government should be satisfied with that. It means that Parliament is being consulted, which I know is a novel idea to the Government, but it is a good thing to do from time to time. Parliament will be consulted and also time will not be wasted. The Government will have plenty of time in which to do
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whatever they want to do before the Bill has gone through both Houses and received Royal Assent. That is the reason why I have put down the amendment.
The Earl of Caithness: I regret to have to say to the Committee that there is not much that I can add to what I said when responding earlier to Amendment No. 2. It would be wrong for me to repeat what I said then.
These two amendments, if I understand them correctly, would delay matters even more than the previous amendment. Amendment No. 2 would have provided that before the water authorities and the electricity supply industries could enjoy the powers conferred on them by Clause 1 my right honourable friends would have had to have brought their proposals for privatisation and restructuring before Parliament.
These two amendments would require my right honourable friends not merely to have brought proposals before Parliament but to have obtained a Second Reading or possibly in the case of Amendment No. 19 to have taken their proposals through to Royal Assent.
Indeed I would therefore agree with the noble Lord, Lord Diamond, that his amendment is as I understand it rather less of an Exocet than the first one. For all the reasons which I expounded earlier, this is unacceptable to the Government. We could not be sure of drawing up adequate legislation let alone starting the many processes which will eventually lead to the flotation of these industries without the full-hearted co-operation of the industries themselves. The timetable for those two major proposals, which were in our manifesto and which were endorsed in the general election, would be seriously jeopardised if we were to accept either of the amendments.
Lord Williams of Elvel: I am sorry that the noble Earl does not accept any of the arguments which the noble Lord, Lord Diamond, and I have advanced. If I may say so, he seems to be in a very negative mood this evening. He no doubt has "resist" or "reject" written across all his briefs. It is an important point that if the main legislation is not approved, for whatever reason, we shall have a Bill on the statute book which is complete nonsense if our amendments are not considered. However, I shall not press my amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Lord Diamond Lord Diamond had given notice of his intention to move Amendment No. 20:
Page 2, line 17, leave out from ("exercisable") to ("and") in line 18 and insert ("as soon as the House of Commons has given a second reading to a Bill for the privatisation of the electricity and water industries").
The noble Lord said: Perhaps I may say one further word about the amendment. I hope that the Minister will be good enough to reconsider what has been said about the words:
"whether or not Parliament has given any approval".

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I hope that he will consider that those words mean: "in circumstances in which Parliament may have given direct disapproval". That is the form of the wording. I do not wish to delay the Committee unduly. However, as I see it, that is the interpretation to be placed on those words and I hope that the Minister will take that point into account.
[Amendment No. 20 not moved.]
[Amendments Nos. 21 and 22 not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 23:
Page 2, line 37, at end insert ("related")
The noble Lord said: Perhaps it will be for the convenience of the Committee if, in moving Amendment No. 23, I also speak to Amendment No. 24. They are drafting amendments and the assumption is that a proposal from the Minister of Agriculture, Fisheries and Food is a related proposal and therefore the words should properly be "proposals" and "related". There may be a point of substance in that which I have missed. However, it seems that if MAFF are to make proposals, they are essentially related rather than basic proposals, if I may I use the noble Earl's term. I beg to move.
The Earl of Caithness: The effect of Amendments Nos. 23 and 24 is to provide that related proposals by the Secretary of State shall include proposals by the Minister of Agriculture. The Committee will know that in England ministerial responsibility for the water authorities is shared between the Secretary of State for the Environment and the Minister of Agriculture. The division of responsibilities is set out in Section 1 of the Water Act 1973, under which water authorities were set up. Responsibility for land drainage and fisheries functions rests with the Minister of Agriculture. Responsibility for the other functions rests with the Secretary of State.
That division of responsibilities will continue to obtain after the restructuring which we have proposed for the water authorities. In particular, the functions of land drainage and fisheries will be transferred to the National Rivers Authority as an integral element of the overall transfer of functions which will form the basis of the new structure. Those are our basic proposals for the water industry which have been settled and which the water authorities are empowered to help implement by this Bill. The Bill also empowers them to help implement or to seek to modify related proposals which may include the matters listed in subsection (2) of Clause 1.
The amendments would mean that any proposals by the Minister of Agriculture would be regarded as a related proposal by the Secretary of State. We believe that to be unacceptable as the Minister of Agriculture is responsible for basic proposals for the transfer of functions which are as fundamental to the proposed new structure of the industry as are the basic proposals by the Secretary of State. The noble Lord, Lord Williams of Elvel, has accused me of being rather negative. However, I hope that he will feel, in the light of my explanation, that the provision is beneficial.
Lord Williams of Elvel: I am grateful to the noble Earl for his explanation of the intricacies of ministerial responsibility. It complicates the implementation of the Bill. Nevertheless, I am content to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 24 not moved].
Clause 1 agreed to.
Clause 2 [Charges by statutory water companies]:
[Amendment No. 25 not moved.]
Clause 2 agreed to.
Clause 3 [Provisions regulating the charges of all water undertakers]:
[Amendments Nos. 26 to 28 not moved.]
9.15 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 29:
Page 3, line 47, at end insert—
("(4A) Subsection (6) of section 12 of the 1973 Act (right of statutory water company to reasonable return) shall apply in relation to the giving by the Secretary of State of a direction under subsection (4) above to a statutory water company as it applies to the settlement or variation of arrangements under that section.").
The noble Earl said: During the course of the debate on the Second Reading of this Bill in your Lordships' House, my noble friend the Lord Privy Seal gave notice that the Government would table an amendment to make it clear that the Secretary of State's power of direction under Clause 3(4) does not prejudice the ability of statutory water companies to provide a reasonable return on capital, so long as they remain under their present financial framework. Clause 3(4) as presently drafted requires water undertakers to comply with directions from the Secretary of State about the matters by reference to which their charges are fixed and the methods and principles to be adopted in calculating and imposing the charge. This amendment fulfils my noble friend's undertaking.
During the course of their discussions with my department about the need for this reserve provision, the Water Companies Association pointed out that similar protection is already available to statutory water companies in Section 12(6) of the Water Act 1973. The provision was inserted in the 1973 Act at the Water Companies Association's request because of similar fears that the Secretary of State might settle or vary arrangements between water authorities and water companies which would affect their ability to provide a reasonable return on capital to their stockholders. Section 12(6) was in turn derived from the proviso to Section 40(1) of the Water Act 1945. It was also pointed out that because investors have got used to seeing references to Section 12(6) in the prospectuses of water companies, they will look for similar protection and similar wording in this case.
I am sure the Committee will agree that the drafting of this amendment meets the Water Companies Association's requirements in every way. I beg to move.
On Question, amendment agreed to.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 30:
Page 4, line 5, after ("liable") insert ("if the premises are occupied by another without his permission or").
The noble Lord said: Amendments Nos. 30 and 31 are intended to deal with the problem of squatters and what happens to water charges after the death of an occupier. It may be that the noble Earl can explain that the amendments are not necessary; but certainly in the case of squatters I can see no reason—the noble Lord, Lord Hesketh, finds it extremely amusing but I do not find it amusing because I have had problems with squatters. They use water where premises are occupied without permission. This creates a problem and, in case the noble Lord had not noticed, quite a major problem.
A second problem concerns what happens when an occupier of premises dies and the water bill under the scheme as proposed is submitted and continues to be submitted. Who is liable and what happens afterwards? Is there not an area here which needs to be clarified?
The amendments are probing amendments designed to see what will happen in the real world when the metering schemes or trial schemes are put into effect. I beg to move.
The Earl of Caithness: I should like to deal with Amendment No. 31 first. As I understand it, the purpose of the amendment is to cover the situation where a person quitting a metered property fails to give the undertaker the necessary two working days' notice, then sadly passes away before his liability for future charges under Clause 3(5)(b) is determined. The Committee will be aware that it is a general legal principle that liability of this kind would pass to the deceased's estate; it would not end on the death of the former occupier. Although quite naturally we would not want to increase the distress on such a person's dependants, there are precedents in the legislation of the other utilities, most recently the Gas Act 1986 which did not make a special case of the kind envisaged by this amendment. In any event, as I shall explain later, the potential liability of the deceased's estate is not open-ended but limited in the way set out in Clause 3(5)(b) of the Bill.
As regards Amendment No. 30, provided that water service customers who are due to give up occupation of a property give water undertakers the necessary two working days' notice, they will not be liable for measured charges after they have left, regardless of whether or not new occupiers have their permission to move in.
Even in those cases where the person vacating the property, for some reason, fails to give the two working days' notice of his intention to quit, that person's liability will be determined by the earliest of the following three dates. The first is the 28th day after giving notice, if such a notice is given fewer than two working days before leaving or is given after the occupier has left. The second is the day on which the meter would normally have been read next and the Third is the day on which a new occupier informs the undertaker that he has moved in and wants to be supplied with water services. Although I admit that in the last case it is unlikely that a group of squatters will inform the undertaker of their own accord, it is clear
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that there are are adequate arrangements to prevent an unlimited liability for charges, even where a customer does not follow the quite reasonable rule for giving two days' notice of quitting.
Finally, as a further safeguard, my right honourable friend the Secretary of State intends to make a regulation under Clause 5 of the Bill to require undertakers in the bills that they send out to their measured customers to explain about the need to give two working days' notice of their intention to quit a property if customers are to avoid liability for charges. Given this assurance, the noble Lord may wish to withdraw the amendment.
Lord Airedale: A completely different situation may arise with squatters. The occupier has no intention of giving any kind of notice. He goes abroad for six months. Squatters break in in the winter months. They use a large quantity of water. The weather improves and the squatters leave to live an open-air life. The occupier returns to his property, never having given any kind of notice because he was always going to return. What happens about payment for the water that the squatters used for the period that he was away?
The Earl of Caithness: I should like to check on that, but presumably the same as now.
Lord Williams of Elvel: Does that mean that the occupier is charged for the water that the squatters have used?
The Earl of Caithness: I understand that, if an occupier is away and somebody occupies his premises with or without permission, the occupier can be charged for any electricity, water and gas that may be used by whoever has occupied the premises. It is the occupier's responsibility.
Lord Airedale: Does the Minister think that that is a fair arrangement, or ought better arrangements to be made while we have the opportunity?
The Earl of Caithness: With respect, I think that the noble Lord is opening out a huge new argument that goes much wider than the scope of the amendment.
Lord Williams of Elvel: I am sorry to differ from the Minister; it is exactly the scope of the amendment. The noble Lord, Lord Airedale, has put his finger on the problem. However, I can see that the Minister is not prepared to enter into the discussion now, so we shall have to refer to it again at a later stage.
I am grateful to the Minister for having explained in a serious manner what happens on the death of an occupier. The question of squatters will have to be addressed in some way or other, as it is clearly not addressed here. I hope that the Government will give the matter further consideration before Report, as we shall. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
On Question, Whether Clause 3, as amended, shall stand part of the Bill?
Lord Renton: I wish to raise a small point that may prove be a quite big one. Clause 3(1) refers to Section 30 of the Water Act 1973. The Explanatory Memorandum states:
"Clause 2 confers charging powers on statutory water companies similar to those of water authorities under section 30 of the Water Act 1973".
When considering Section 30 of the 1973 Act, we should hear in mind that a number of cases going right up to the House of Lords the interpretation of the section has caused difficulty. There was one case where the ratepayer objected to paying a water rate merely because the water company took the water off his corrugated iron roof, did nothing about it except to let it run into a sewer, and he was made to pay a water charge for that. That kind of thing has happened under Section 30. Between now and Report stage, as we are extending and amending this part of the law, I was wondering whether we might consider whether it is right, or whether we might improve the Section while this Bill is passing through.
The Earl of Caithness: In view of the legal knowledge that my friend has on these matters, I think that it would be right to reflect on what he has said when I read it in the Official Report. However, when it comes to interpretation, Section 30 of the 1973 Act will be reviewed in the main privatisation Bill. Perhaps that might be the place for such consideration rather than in this Bill.
Lord Renton: If that were done, it would be the next best thing. However, I would prefer to see it considered sooner.
Clause 3, as amended, agreed to.
Clause 4 [Metering trials schemes]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 32:
Page 5, line 14, at end insert—
("(b) any financial disadvantage that such persons incur by virtue of their inclusion in the scheme; and").
The noble Lord said: We are dealing here with metering trials schemes. The purpose of the amendment would be to require the Secretary of State to have regard to the financial disadvantage of any consumer by their inclusion in any metering trials scheme. This is not a permanent metering scheme but a trial one. Certain categories of households are likely to be high users of water for basic personal health needs. The registered disabled, the elderly, the physically or mentally handicapped living in residential, voluntary or local authority homes or hostels are apparently liable to have a water usage two or three times that of the average consumer. It seems to us to be somewhat unfair that a consumer should lose financially during the trial period by an accident of geography, if the trial is selected for a specific area and someone happens to be within the area rather than just outside it. They have obviously not given consent for these trials. The amendment will allow the Secretary of State to ensure that such financial disadvantage is avoided. I beg to move.
The Earl of Caithness: As the Bill is presently drafted, under clause 4(3), my right honourable friend the Secretary of State is required, when considering a proposed metering trial scheme for approval, or any conditions he might impose on it, to have particular regard to the interests of those customers who will be charged under the scheme, and whether certain other matters, set out in subsection (4), have been satisfactorily provided for in connection with the scheme. These matters include in Clause 4(4)(a) the methods and principles on which charges will be calculated and imposed. Taken together, these provisions will enable the Secretary of State to consider the structure of charges to be used in the trials and the implications, including financial ones, for the customers taking part.
Also, as a result of the second limb of Clause 4(5), which incidentally the noble Lord, Lord Williams of Elvel, tabled an amendment to delete, my right honourable friend the Secretary of State, may, in considering a scheme for approval, take into account whether or not the proposed charges are within the constraints of the experimental nature of the trial to be cost-related, or whether a proposed charging system would result in undue preference or discrimination between classes of customers. Thus if the Secretary of State thinks that a proposed experimental tariff would lead to serious inequities to customers taking part in the trial, the Bill provides the Secretary of State with the means either of rejecting the proposed scheme outright or of proposing conditions designed to rectify the inequities. The latter can only be done after consulting the undertaker who submitted the scheme. This ensures that any conditions that the Secretary of State might impose are workable. I hope that goes a long way towards clarifying the situation and also settling the noble Lord's concerns on this matter.
9.30 p.m.
Lord Renton: I support my noble friend in what he has said. I speak from personal experience. Somewhat unusually, the house in which I live in Huntingdonshire, right out in the country, has for many years had a metered supply. The reason is that it is part of the supply to a farm owned by my neighbour. It was found by the water authority, by my neighbour and by me that a joint meter would be convenient. I have no doubt that there are many of these all over the country. The fact that they exist supports the view that conclusions can be drawn from these schemes.
The Earl of Caithness: I am extremely grateful to my noble friend for his support.
Lord Williams of Elvel: I am grateful to the noble Earl for his reply. As he said, he goes a long way towards satisfying our concerns. They are genuine concerns that people who have not given their consent to these trial schemes should be caught up in something that is not their fault. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 33:
Page 5, line 34, at end insert ("and with any bodies representing the interests of those persons").
The noble Earl said: The Government gave an undertaking during Report stage in the other place that they would table a suitable amendment in this Chamber to ensure that consumer bodies representing the interests of those affected by the trials, are consulted.
I now have pleasure in proposing to the Committee that Clause 4 should be amended so that one of the matters to which the Secretary of State must have regard in considering whether to approve a metering trials scheme—in addition to consultation with those affected or likely to be affected by the scheme—should be consultation with any bodies representing their interests. Thus consultation may be extended to include, for example, such bodies as the National Consumer Council, Citizens' Advice Bureaux and such organisatons as local branches of the RNIB, Age Concern and Help the Aged. I stress that these are purely examples. It will be up to each undertaker to consider which bodies it would be appropriate to consult in each case, and for the Secretary of State to decide whether that consultation appeared appropriate. This provides for a commonsense view, in all the circumstances, of which representative bodies it is reasonable to consult.
The amendment, by referring simply to bodies rather than consumer bodies representing the interests of those persons affected by the scheme, goes wider than the amendment originally proposed by Opposition Members in the other place. This is because we felt that the term "consumer bodies" was imprecise, or, to put it another way, a bit woolly. Some important bodies which the Government would expect water undertakers to consult, might not always fit such a description. A notable example is a local authority representing the interests of its tenants. Clearly local authorities are not consumer bodies but they do, or at least I hope they do, represent the interests of their tenants.
This amendment is not complex; nor will it change the Bill radically. It does, however, serve to emphasise the importance that the Government attach to full and proper consultation on the trials. I beg to move.
Lord Williams of Elvel: The noble Earl refered to this amendment earlier. We agree that it is obviously a desirable amendment to make. It does not, of course, fulfil the purpose of the original amendment that we were discussing on Clause 1. Nevertheless, I believe it shows willingness to move in the direction of the general philosophy that the noble Earl was advancing. The Government are sensitive to the requirements of consumers and we shall not oppose the amendment.
On Question, amendment agreed to.
[Amendment No. 34 not moved.]
Clause 4, as amended, agreed to.
Clause 5 [Provisions relating to meters etc.]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 35:
Page 7, line 17, at end insert—
("( ) provide for regular testing of the accuracy and proper functioning of meters;").
The noble Lord said: This is a simple amendment. It is self-explanatory. In our view it should be the duty of the supplier to make sure that the meter is regularly tested and that it functions properly. That should not be the duty of the consumer. I speak as one who has a metered supply of water in Wales. My meter malfunctioned and I had to pay an extra £220. The Welsh Water Authority failed to recognise the fact that it was a malfunction of the meter and claimed that it was my fault because I had had too many baths. I was innocent of that particular charge. I believe that the Welsh Water Authority should have taken the responsibility because the meter was its property. The dividing line—where their responsibility ends and mine begins—is on the house side of the meter.
I do not put forward the amendment for entirely personal reasons. I believe it to be a general principle that if meters are introduced by companies they should be paid for and properly maintained by the companies. With this amendment, I am also speaking to Amendment No. 36. I beg to move.
Lord Renton: Of course, meters ought to function properly. But if they do not appear to do so, it is only right that the water authority, or whichever body is involved, must test the meter when a complaint is made. It ought to be sufficient to leave the matter there rather than to provide for regular testing in a statute. Such testing over a wide area containing many people who have meters may be an expensive excess of zeal. I doubt whether the amendment is necessary or desirable.
If a water authority fails to respond to a complaint, that should be sufficient. In those circumstances, I believe that the consumer would be perfectly entitled to refuse to pay his water rates and that he should make a complaint to a higher authority. At present that would be one of the area boards. I suspect that it might be a little over-zealous to require regular testing of all meters.
The Baroness Seear: Since we are all being reminiscent, perhaps I may mention something that happened to me. Let us suppose that it is not the meter that goes wrong but there is a fault in the water pipe and the water leaks out of the cistern of the house occupant. Obviously if there is a leak in the cistern the water empties out. It empties one's cistern but one is being charged for the water. If the water is metered and the water has disappeared out of one's tank, not because one has drunk it or bathed in it but because there is a hole in the pipe, one should not have to pay for it.
Lord Airedale: I do not join with the noble Lord, Lord Renton, in finding any difficulty with regular testing. I should have thought that regular testing merely means that you have to test the meter at the end of the time when experience shows that an inspection is necessary. No piece of machinery can be

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expected to last forever. I dare say that a good water meter can be expected to run satisfactorily for perhaps seven years, and regular testing in that case would mean testing the meter after it had been in use for seven years. It would not mean testing it every year or at very frequent intervals.
Lord Renton: We do not know about that. Perhaps the noble Lord, Lord Williams, could tell us.
Lord Williams of Elvel: I use the expression "regular" because I mean regular. Regular can mean once every week, every year or every five years; but it must he regular. That is the point I was making—that there should be some sort of mechanism. If the noble Lord, Lord Renton, went into the matter he might find that with modern meters it is possible to test much more easily than with old-fashioned meters. Indeed, that is what will make metering viable, because there are electronic methods of testing.
I believe I can answer the noble Baroness, Lady Seear, because I have had that problem. Anything that is on your side of the meter is your responsibility and you pay, whatever happens. Anything that is on the water authority's side of the meter is its problem and it pays.
I do not intend to press this matter if the noble Earl feels there is a difficulty, but I should like to hear the response from the Government about these various problems which are all part of the difficulties that people have in adjusting to meters. Meters are not the easy solution that many people seem to think and it seems to me that there are serious problems which the Government must address.
The Earl of Caithness: Perhaps I may first deal with the point raised by the noble Baroness, Lady Seear, which was answered for me by the noble Lord, Lord Williams of Elvel. The industry is considering a code of practice for high bills due to leaks that would enable bills to be reassessed according to normal usage. That may be some comfort to the noble Baroness. However, I am sure that she would join me in saying that that must not undermine the customer's responsibility to maintain the pipes in good working order.
As regards Amendments Nos. 35 and 37, in normal conditions modern water meters are reliable and accurate. When they have been proved to be inaccurate they are usually found to be under-reading, thus favouring the customer. Most tests of suspect meters in use reveal that there are problems with the plumbing—for example, dripping taps, over-flowing cisterns and leaking supply pipes—not with the meter, although the example that proves the exception to the rule is of course that given by the noble Lord, Lord Williams of Elvel, in his house in Wales.
Nevertheless, the Government agree that it is very important that customers should have full confidence in the accuracy and reliability of water meters, and that there are proper procedures in place for getting them tested in use and for adjusting bills in the event of meters being proven to be inaccurate. With this in mind the Department of Trade and Industry intends
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to make regulations under the Weights and Measures Act 1985 to control the accuracy of cold water meters used for domestic purposes. Consultation on these regulations has already taken place, and my right honourable friend the Secretary of State for Trade and Industry intends to make them as soon as possible, subject to the necessary clearance from the Commission of the European Communities. All meters used in the metering trials under Clause 4 of this Bill will have to comply with these regulations, which will eventually be extended to cover all meters used for domestic purposes, which includes those used outside the trial areas.
The proposed regulations under the Weights and Measures Act provide for control in two parts. First, the design of each meter type will be approved to ensure inherent reliability, accuracy and general suitability for use. Secondly, each meter made will be tested for conformity with the approved design and accuracy within agreed limits of error then "stamped" to indicate that it conforms. The Committee will want to know that testing of meters under these regulations will be carried out by trading standards officers.
The DTI's regulations will also cover the testing by trading standards officers of meters in use in accordance with a procedure to be set out in the regulations. Trading standards officers may charge for this work. However, the Government and indeed the local authorities' co-ordinating body on trading standards, see the involvement by trading standards officers in carrying out in situ tests of the accuracy of meters very much as one of last resort. Any domestic consumer will be able to ask that a trading standards officer tests his meter, but day-to-day testing will, however, continue to be carried out by the water undertakers themselves. With this in mind my right honourable friend the Secretary of State for the Environment will make regulations under Clause 5 of this Bill covering the procedure for testing meters by water undertakers, which will be consistent with the procedure to be adopted by trading standards officers under DTI regulations.
Regulations will also be made under Clause 5 of the Bill specifying how bills will be adjusted if meters are found to register inaccurately; that is to say, if they register outside specified limits of accuracy. Such regulations will also provide for payment in respect of the meter accuracy test. As regards the latter, I expect that the present arrangements will continue whereby the customer will pay for the tests only if the meter is proven to be accurate.
The Government do, however, recognise the concern expressed by the Committee and by Members of the other place about the need for special arrangements for testing of meters during the course of the trials. I am pleased to announce to the Committee that the industry has agreed that customers taking part in the trials should be offered at least one free "confidence" check of the accuracy of their meters.
The test will be carried out by an employee of the water undertaker. It will consist of a basic check for leaks on the consumers' supply pipe; for example, by checking to see whether the meter still registers

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when all taps are turned off. That will be followed by a basic check on the accuracy of the meter by drawing off a measured quantity of water. The industry expects that such confidence checks will, in the majority of cases where customers have complained about higher than expected charges, identify faulty plumbing rather than faulty meters.
Given these assurances, I hope that the noble Lord, Lord Williams of Elvel, will agree that full confidence is there and will withdraw the amendment.
Lord Williams of Elvel: I am grateful to the noble Earl for what he has said. It certainly goes a long way to satisfying our concerns in moving these amendments. There has been, I am afraid, some confusion on the groupings. My list is different from the list of the noble Lord the Deputy Chairman of Committees, but no doubt that will be rectified in due course. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 36 and 37 not moved.]
Clause 5 agreed to.
Clauses 6 and 7 agreed to.
Clause 8 [Short title, commencement and extent]:
[Amendment No. 38 not moved.]
Clause 8 agreed to.
Schedules 1 to 3 agreed to.
In the Title:
On Question, Whether the Title to the Bill shall be agreed to?
Lord Renton: My noble friend was good enough to say at the start of our discussions on the Bill that he would consider a purpose clause. Probably it needs only to be a purpose subsection to Clause 1. I have already attempted to draft one which I intended to hand to my noble friend on Monday, but in doing so I find that it is not consistent with the Long Title to the Bill. I do not think that my purpose clause is wrong. I believe that the Long Title needs to be reconsidered and I ask the Minister if he will do so.
The Earl of Caithness: When I receive the proposal of my noble friend I shall look at a consequential amendment to the Title.
Title agreed to.
House resumed: Bill reported with amendments.
House adjourned at ten minutes before ten o'clock.

  LONDON WEIGHTING PAYMENTS: RATES
  LONDON WEIGHTING PAYMENTS: RATES
  INHERITANCE TAX AND FAMILY COMPANIES
  INHERITANCE TAX AND FAMILY COMPANIES
  WOMEN'S PRISONS: ALLEGATIONS AGAINST STAFF
  WOMEN'S PRISONS: ALLEGATIONS AGAINST STAFF
  URBAN REGENERATION GRANTS
  URBAN REGENERATION GRANTS
  HAEMOPHILIACS: FINANCIAL ASSISTANCE —MACFARLANE TRUST
  HAEMOPHILIACS: FINANCIAL ASSISTANCE —MACFARLANE TRUST