Sitting of 4 May 1988

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

    ASSOCIATED BRITISH PORTS (BARROW) BILL [Lords]
    Order for Second Reading read.
    To he read a Second time Tomorrow.

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Bophuthatswana
    Mr. Watts: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the consequences of his policy of non-recognition of Bophuthatswana for those who live within its boundaries.
    The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): Bophuthatswana is part of the Republic of South Africa and we treat those who live within its boundaries accordingly.
    Mr. Watts: Why does my right hon. Friend persist in treating Bophuthatswana as an integral part of South Africa? Bearing in mind this country's historical responsibility for the absorption of Southern Botswana into South Africa, why does she refuse to assist the development of a democratic, free enterprise, multi-racial and apartheid-free society in Bophuthatswana?
    Mrs. Chalker: We do not refuse to help those from Bophuthatswana. They are helped by the schemes that go to all black South Africans. Bophuthatswana's claim to independence is hardly borne out by the recent coup and the South African Government's response. The words of the South African President are particularly apt. After that coup he said:
    "We are back in charge. I mean, the President of Bophuthatswana is back in charge."
    Rev. Martin Smyth: Does the Minister agree that the present policy, which allows discrimination against a school for deaf children in Kutlwanong and permits the students to go to the Silent Games as spectators rather than participants, is not in keeping with a caring community and the world at large?
    Mrs. Chalker: I regret to say that the hon. Gentleman is right, but that is part of apartheid. It was under the system of grand apartheid that the homelands were set up.
    Mr. Andy Stewart: Is my right hon. Friend aware that after five years of drought Bophuthatswana has been able to feed its population every year? With a little aid the
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    people of Bophuthatswana could expand their irrigation system and feed the people of Mozambique, who are starving.
    Mrs. Chalker: Food is growing well in Mozambique, but it is part of the policy of the Government of South Africa, as they have clearly revealed, to keep Bophuthatswana part of the South African Republic. On that basis, I hope that the people of Bophuthatswana will feed themselves, but there is no question at the present time of the South African Republic sending food to Mozambique.
    Mr. Anderson: Will the Minister accept that we agree with her—[HON. MEMBERS: "The hon. Gentleman would."]—that any claim to Bophuthatswana being independent and sovereign has been wholly exposed and exploded by the military intervention by Pretoria? Does the right hon. Lady agree that it would be wrong to give any hint of recognition to this gerrymandered creation of President Verwoerd's Bantustan policy?
    Mrs. Chalker: It is clear from everything that has occurred in recent months that the South African Republic regards Bophuthatswana and the other homelands as part of its territory. Although it may not be particularly appealing to my colleagues on the Conservative Back Benches that the hon. Gentleman agrees with me, I am going on the basis of what the South African Government say, the way in which the homelands were set up and the way in which people may mix in the homelands, but those black people from the homelands do not have the same rights to mix in the Republic of South Africa outside the homelands.

    Kuwait
    Mr. Gerald Howarth: To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Kuwaiti relations.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): Our relations with Kuwait are long established and very good.
    Mr. Howarth: Does my right hon. and learned Friend agree that the Kuwaiti Government showed commendable courage in standing up to the terrorists who hijacked their 747? Will he say what success the Kuwaitis and his Department have had in bringing those despicable terrorists to justice? Do the Government know whether Iran was involved in that outrageous attack on civil liberties?
    Sir Geoffrey Howe: I agree entirely with my hon. Friend in commending the firm line taken by the Kuwaiti Government throughout the hijacking. The House would commend in particular the magnificently courageous conduct of the captain of the aircraft.
    The House will share my concern that the hijackers appear to have been allowed to go free, which is why we are putting forward a series of proposals to tighten international co-operation against hijacking. There has been much speculation about the degree and nature of Iranian involvement. We continue to examine that evidence closely, because it gives rise to grave concern.
    Mr. Campbell-Savours: I raise a question that I have repeatedly raised on the Floor of the House. Does the

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    Secretary of State recall the undertaking given by the Kuwaiti Investment Office in London, when its holding in BP was but 14 per cent., that it would not increase it? Is it not clear that it has breached undertakings given to the Government? What do the Government intend to do? Will they ignore those breaches and allow the Kuwaiti Investment Office to secure a takeover, perhaps into hostile hands, of a major British company?
    Sir Geoffrey Howe: The hon. Gentleman will realise that, essentially, that is a matter for my right hon. and noble Friend the Secretary of State for Trade and Industry.
    Mr. Campbell-Savours: And the right hon. and learned Gentleman, as it affects foreign affairs.
    Sir Geoffrey Howe: Wait for it. My right hon. and noble Friend has decided to refer the Kuwaiti shareholding in BP to the Monopolies and Mergers Commission. That was announced by the Office of Fair Trading at 9 am today.
    Mr. Pawsey: Notwithstanding the previous question and answer, will my right hon. and learned Friend bear in mind that the friendly relations to which he referred between the United Kingdom and Kuwait are being undermined by the referral of the Kuwaiti stake to the Monopolies and Mergers Commission? Does he agree that the calling in of the planning application for London Bridge City, despite the fact that it had been approved by the London Docklands Development Corporation, is also to some extent undermining his efforts?
    Sir Geoffrey Howe: I am afraid that at such short notice I am not qualified to comment on activities affecting a planning application, even in relation to one of my favourite statutory corporations, the London Docklands Development Corporation. As to the more substantial point understandably raised by my hon. Friend, we see no reason why the decision taken by my right hon. and noble Friend should affect Anglo-Kuwaiti relations, which have always been very close. That was clearly demonstrated during the Kuwaiti hijacking, and we hope that they will remain so.

    Guatemala
    Mr. Patchett: To ask the Secretary of State for Foreign and Commonwealth Affairs what instructions were sent to the British embassy in Guatemala in connection with the return of the Guatemalan exiles on Monday 18 April.
    Mr. Ron Davies: To ask the Secretary of State for Foreign and Commonwealth Affairs what instructions were sent to the British embassy in Guatemala in connection with the return of the Guatemalan exiles on Monday 18 April.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): Her Majesty's ambassador was requested to monitor the situation carefully and to keep us informed of developments.
    Mr. Patchett: Is the Minister satisfied that the right action was taken on 18 April with regard to the Guatemalan exiles, bearing in mind the Guatemalan Government's shocking human rights record?
    Mr. Eggar: Yes, I am entirely satisfied that the right action was taken. Two of the returning exiles were arrested, examined and released by the examining magistrate.
    Mr. Ron Davies: I am surprised that the Minister did not have the courtesy to notify me before Question Time that my question was being linked with question No. 3. I am sure that it was an oversight.
    When the exiles returned they were under the impression that human rights had not improved in Guatemala. Inasmuch as the Arias peace plan puts emphasis on human rights as well as other matters, does the Minister not think that he should make strenuous representations to the Guatemalan Government to ensure that the peace plan, particularly the part relating to human rights, is implemented?
    Mr. Eggar: I apologise unreservedly to the hon. Gentleman. I remember being annoyed when I was in a similar position, and I shall look into the matter.
    The question of human rights in Guatemala is raised regularly at ministerial level with our Guatemalan counterparts. Human rights violations decreased sharply in 1986, but there has been a regrettable increase in murders and kidnappings over the past 15 months. It is not clear how far these incidents are politically motivated, but we pay considerable attention to the United Nations special expert who reported in March that there had been an improvement in the human rights situation and noted that the present Guatemalan Government do not sanction violations of human rights.
    Mr. Jacques Arnold: Would it not be rather unfortunate if the House took a partisan opinion on the internal politics of Guatemala, particularly when the democratic Government of Guatemala, under President Cerezo, is having to take a delicate line between the military on the one hand and the Left wing on the other?
    Mr. Eggar: My hon. Friend draws attention to some of the complexities that have to be taken into account when one is considering events in Guatemala. None the less, I know he will agree with me that we have the right, under the various UN conventions, to comment on human rights abuses.
    Mr. Colin Shepherd: Will my hon. Friend outline to the House the measures that Her Majesty's Government are taking to promote the survival of democracy in Guatemala?
    Mr. Eggar: My hon. Friend is aware that there were democratic elections, and since that time we have been able to resume diplomatic relations with Guatemala for the first time in 24 years. We have had regular contacts with Guatemalan Ministers and with the ambassador here.
    Mr. Tony Lloyd: The Minister may be aware that I went to Guatemala with those returning exiles. Does he accept that there is a considerable body of opinion inside Guatemala, not from those who have a political bias but from those such as Church groups who operate on the ground, which says that the human rights situation and the atrocities and murders, once one is outside the urban areas and into the rural areas, are just as bad as ever, and that those atrocities are committed by the forces of the state, particularly the army? Will he make sure that the British Government note that fact, because the Minister has given

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    the impression that he wants to distance himself from the view that the violence is Government-inspired? The reality is that agencies of the Guatemalan Government are still actively involved in the atrocities.
    Mr. Eggar: I recognise that the hon. Gentleman has the advantage of having visited Guatemala, and I trust that he did so with an open mind and talked to a number of people right across the spectrum. I would expect no less from him. I must ask him to take account of the United Nations' special expert's report on human rights in Guatemala. He reported to the United Nation's Commission on Human Rights in Geneva and, as I have already made clear, he noted some improvement in the human rights situation and stated that the present Government do not sanction violations. If we believe in furthering the cause of human rights through the United Nation's machinery, we must pay attention to reports from its experts.

    Hanover Summit
    Mr. Gow: To ask the Secretary of State for Foreign and Commonwealth Affairs what issues are expected to arise at the forthcoming Hanover summit.
    Sir Geoffrey Howe: The agenda for the European Council meeting in Hanover will be set by the German presidency. No formal proposals have yet been made, but completion of the single market is expected to be the main item of discussion.
    Mr. Gow: Is my right hon. and learned Friend aware that many hon. Members on both sides of the House view with dismay the prospective replacement of the British passport with the European Community passport? Is he also aware that the day of the nation state is not yet over, and that some hon. Members view with equal dismay the prospect of the submersion of our country into a European superstate? Will he raise those matters at the Hanover summit?
    Sir Geoffrey Howe: I am aware that there is a wide range of feeling about the different pace and pattern that can be followed in the development of the European Community. My hon. Friend will know that the original agreement that there should be a common format passport was made as long ago as 1975 by the then Labour Prime Minister. The common format was agreed as long ago as 1981.
    The idea of having a common format, machine-readable passport is that it will substantially speed up movement across frontiers. No fewer than 25 million British citizens travel abroad every year now—about five times as many as 20 years ago. The new machine-readable British passport is a national passport. It will continue to be issued under the royal prerogative. I think that it would be undesirable to try to operate the old and new systems together, as that would greatly increase costs and reduce efficiency.
    Mr. Benn: Will defence questions come up at the Hanover summit and will the Foreign Secretary clarify the view of Her Majesty's Government on whether Denmark's policy of refusing to allow ships with nuclear weapons into its ports is compatible with membership of NATO?
    Sir Geoffrey Howe: It is quite possible that questions affecting European security will he discussed between
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    heads of state at the European summit, because such questions form part of the agenda of the European political co-operation agreement. There is even closer interest in Denmark because of our common membership of NATO, and we have made it plain that any policy adopted by the Danish, or any other, Government that makes it impossible to maintain our "not confirm—not deny" policy on Royal Navy vessels would result in serious consequences for possible further co-operation within NATO.
    Mr. Aitken: Is my right hon. and learned Friend aware that his first answer will give considerable disquiet in the House and the country, because it is a long time since we heard a British Conservative Foreign Secretary sheltering behind the combination of Sir Harold Wilson's coat tails and pure Eurowaffle? Will he reconsider the whole question of the loss of the British passport, which will strike a chord far wider than EEC enthusiasts may recognise?
    Sir Geoffrey Howe: I really must invite my hon. Friend to consider the matter in a rather wider perspective. There is no question of my sheltering behind anyone's coat tails —least of all Sir Harold Wilson's.
    Mr. Robertson: Lord Wilson.
    Sir Geoffrey Howe: I am sorry. I mean Lord Wilson of Rievaulx—the right hon. and noble Lord.
    The matter has been part of the agreed agenda of the EC for 12 years, and work has been proceeding on it for seven years. It will lead to a very substantial advantage, and the passport will remain a British passport issued under the royal prerogative.
    Mr. Kaufman: Will the right hon. and learned Gentleman ensure that consideration is given at the Hanover summit to the Community programme for assistance to victims of apartheid, to which 25 million eon has been allocated for this year and which would be vitiated by the orderly internal politics Bill now before the South African Parliament? That Bill would allow the South African Government to declare organisations to which the Community provides money to be restricted organisations and to seize Community money. Does the right hon. and learned Gentleman agree that it is essential that such a measure be opposed by the Community? Does he also agree that if the measure goes through, thus vitiating a peaceful Community programme of assistance to the anti-apartheid movement, the only alternative—even for him—will be mandatory economic sanctions?
    Sir Geoffrey Howe: It is a pity that the right hon. Gentleman spoilt an otherwise quite sensible questions by his irresistible urge to advocate sanctions in his last phrase. That matter has nothing to do with the substance or merit of his argument. I entirely agree that if legislation came into effect in South Africa that would vitiate positive measures initiated under the Community programme or any other, it would be a result much to be deplored. As soon as the matter became known to us—some weeks ago —the Foreign Ministers of the Community did, indeed, discuss it, and we have been engaged in close consultations ever since, with a view to making representations to the South African Government to prevent the outcome that the right hon. Gentleman fears. We shall continue to do that.

    Air Piracy
    Mr. Nicholas Bennett: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet the Foreign Ministers of the European Community, the United States of America and other countries to discuss measures to combat air piracy.
    The Minister of State, Foreign and Commonwealth Office (Mr. David Mellor): My right hon. and learned Friend raised the question of the Kuwait airlines hijack and its aftermath with his European Community colleagues in Luxembourg on 25 April. We shall also be discussing this in the Summit Seven machinery. The British delegation to the International Civil Aviation Organisation raised the issue there on 26 April.
    Mr. Bennett: I thank my hon. and learned Friend for that reply. Does he agree that one of the problems facing the international community is the lack of an international force such as our own SAS, the GSG9 or Delta Force, that could tackle piracies when they occur? It is vital that either such a force is set up under the control of the United Nations or that such a force could be called upon by the UN to deal with piracies.
    Mr. Mellor: I understand why my hon. Friend suggests that, but our view is that such a force would not be a practical proposition. My right hon. and learned Friend put forward a number of ideas in the five-point plan and one development that we are working towards is the establishment of a group of experts who would be able to advise a Government who find themselves in a situation such as that which confronted the Government of Cyprus on the best practice to handle a hijacking. We do not believe that the international force that my hon. Friend advocates is a practical proposition at this time.
    Mr. Corbett: Given that the talks are likely to consider other aspects of terrorism, will the Minister explain to his colleagues why his right hon. and learned Friend is today trying to lean on the chairman of the BBC to try to stop BBC Ulster Television showing a programme about events in Gibraltar which involved Irish terrorists, which follows the heavy-handed—
    Mr. Speaker: Order. The question is about air piracy.
    Mr. Cyril D. Townsend: Will my hon. and learned Friend give serious consideration to making available to the public the recordings that the British authorities presumably took in Cyprus of conversations between the air pirates and the authorities in Iran?
    Mr. Mellor: I shall think about what my hon. Friend has said.
    Mr. Robertson: We welcome the initiative that has been taken, especially on the possibility of a specialised negotiating force. When the Minister has the opportunity to discuss air piracy and terrorism with his colleagues, will he also ponder the effect on controlling terrorism in Europe of any wholesale abolition of frontier controls in the 1992 package? Should we not re-examine any such impossibilist idea? Why on earth should we seek to make it easier for terrorists to float around from country to country and escape any form of justice?
    Mr. Mellor: I agree with the hon. Gentleman. Indeed, I recall being extremely troubled about the similar issue of
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    the flow of drugs through the European Community, given that, unfortunately, one or two of our neighbouring states have not had the same success in controlling the warehousing of drugs in their countries as we have had. I am glad to say that we retain complete power to intervene at our frontiers, and after 1992 we will continue to have the power to check for imports of drugs or terrorism or for anything that is a criminal offence in this country.

    Middle East
    Mr. Dykes: To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to meet the Secretary of State of the United States of America to discuss middle east problems.
    Sir Geoffrey Howe: We keep in very close touch with the United States Administration on middle east affairs. I next expect to meet Mr. Shultz at the North Atlantic Council meeting on 9–10 June.
    Mr. Dykes: I thank my right hon. and learned Friend for that answer. Will he confirm that the Shultz initiative for Israel and the Palestinians is very much on the table and alive? Despite the recent depressing developments on both sides the best opportunities lie in those initiatives, supported by the European powers, because the choice for Israel and the Palestinians remains starkly between the dead end myopic tunnel of Mr. Shamir's outlook and the possibilities and ideas of Mr. Weizman, Secretary Shultz and others for a real breakthrough and a real, durable peace and negotiations with the Palestinians.
    Sir Geoffrey Howe: I entirely agree with my hon. Friend that the status quo holds no answers for either side in a dispute which has lasted for so long. It is important to accelerate progress towards a just, durable, negotiated settlement. United Nations Security Council resolution 242, which embodies the "land for peace" principle, is an essential element. I discussed these matters briefly with Mr. Shultz when I met him in Brussels on 25 April. We fully support his vigorous efforts to inject new impetus into the peace process.
    Mr. Ernie Ross: The Foreign Secretary knew, because I made the point clear during Foreign Affairs Question Time in March, that the mission of Secretary of State Shultz would grind to a halt because he and the Foreign Secretary refused to speak directly to the Palestine Liberation Organisation. There is no way that the peace talks can move forward unless Her Majesty's Government and, more important, the United States Government, are prepared to talk to one of the main parties involved in the dispute. Instead of referring continually to a resolution that does not mention the Palestinians, the Foreign Secretary and Secretary of State Shultz should speak direct to the Palestinians and their representatives, the Palestine Liberation Organisation.
    Sir Geoffrey Howe: Our position on this matter is clear. There is regular dialogue at official level with the PLO. The PLO is aware of those aspects of its policy which make renewed ministerial contact difficult. We do not accept that the PLO will be the sole representative of the Palestinians. We accept its right to be associated with the peace process and have taken a number of steps to bring that about.
    Mr. Walters: Is not the position in the Lebanon extraordinary? Does Israel have some unique dispensation to invade and maraud in the lands of its neighbours, to slaughter civilians in the territories that it occupies, and to assassinate its opponents in sovereign countries, such as Tunisia? Is it not time that this behaviour was brought to a halt? Given that the Shultz initiative appears to have failed, will my right hon. and learned Friend look sympathetically at Signor Craxi's suggested European initiative to see how it could be advanced?
    Sir Geoffrey Howe: I think that it is premature to conclude that the injection of new energy into the peace process initiated by the United States Administration has run its course. I share my hon. Friend's anxiety that it should be maintained. I agree with his judgment that the latest Israeli raid into Lebanon should be condemned. So, too, should the Palestinian incursions into Israel which preceded that raid. Violence offers no solution. It is essential that both sides address themselves to the matter on the basis of the well-known principles.
    We share the widespread sense of horror at the senseless act of terrorism that led to the death of Abu Jihad in Tunis on 26 April. The Israeli Government have offered no comment on who was responsible for that act.
    Mr. Kaufman: Will the Foreign Secretary, together with Mr. Shultz, make it clear to the Israeli Government that the current incursion into the Lebanon will have no greater success than the three-year ill-fated Israeli invasion of the Lebanon in ending Palestinian action against the Israelis? The only way in which Palestinian action against the Israelis can be ended is through a peaceful settlement involving the Palestinians. The only way to achieve that is by the Israelis having the good sense to follow the advice of their Foreign Minister, Mr. Peres, who wants an international conference. As has been put to me strongly, a conference is also wanted by King Hussein of Jordan, the President of Egypt, the Secretary General of the Arab League and all the other Arabs to whom I have spoken. Is it not about time that Mr. Shamir was told that the secure future of Israel can be obtained only by his stepping aside from his policy and agreeing to an international conference?
    Sir Geoffrey Howe: I am glad to agree with all that the right hon. Gentleman has said. It is important that there should be complete realisation that the Israeli military presence in the Lebanon is provocative and wholly contrary to Israel's long term interests. It is necessary for Israel to withdraw completely from south Lebanon and allow UNIFIL to deploy to the international border in accordance with Security Council resolution 425. Beyond that, it is of the utmost importance that Israel, together with the other participants, should seek a settlement of this long-running tragic conflict on the basis of the principles that have been endorsed time after time by the international community. I say that as a staunch friend of Israel throughout the 40 years of her history and as someone who wants nothing better than to see the survival of Israel in prosperity and security within borders that are universally respected. That can be achieved only if Israel, applying the same principles, is ready to extend similar recognition to the rights of the Palestinian people.

    Ethiopia
    Mr. Andrew Mitchell: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent ministerial contact there has been with the Ethiopian Government.
    Mrs. Chalker: The most recent occasions were when I visited Ethiopia in April 1987 and when my hon. Friend the Minister for Overseas Development did so in January this year. At the request of the Ethiopian Government, his return visit this month has been postponed.
    Mr. Mitchell: When my right hon. Friend next meets representatives of the Ethiopian Government, will she make clear the widespread concern in the House and country about the escalation of the civil war in Ethiopia? In particular, will she express our deep concern about the way in which aid and relief agencies are being treated, particularly the United Nations and the Red Cross, the latter of which has been banned from doing the valuable work that it was previously undertaking in that country?
    Mrs. Chalker: We greatly regret the escalation in fighting. It is truly a tragic situation. As the hon. Gentleman rightly said, there are serious implications for the famine relief operations. We have urged the Ethiopian Government to reconsider their decision. Other donors have made similar representations, and, following the visit to Ethiopia last week of the United Nations Secretary General's envoy, Mr. Ahtisaari, we understand that some expatriate staff of the United Nations world trucking operation in Ethiopia are to be permitted to return to Eritrea to restart operations. We hope that the Ethiopian Government will soon permit a full resumption of relief activities, including those by Red Cross officials. We must remember that half the 7 million people who are at risk from famine are in Eritrea and Tigré.
    Mr. Menzies Campbell: Will the Minister confirm that the Ethiopian Government are in possession of the nerve gas Tabun and that Her Majesty's Government will make representations to the Ethiopian Government that it should not be used or deployed against the Eritrean People's Liberation Front in any circumstances?
    Mrs. Chalker: I am interested to hear what the hon. and learned Gentleman says, and I shall look into it further, but we have no evidence that the Ethiopian Government have used or intend to use the weapons. The United Kingdom would unreservedly condemn the use of chemical weapons. I am pleased to say that my hon. and learned Friend was assured by the Soviet ambassador last week that his Government will not supply chemical weapons to Ethiopia, or, we hope, other similar weapons.
    Sir Bernard Braine: My right hon. Friend will be aware that, for 13 long years, 10 members of the former imperial family of Ethiopia—seven of them women and most of them in bad health—have been held without trial. So far the military regime has been deaf to pleas from Heads of State and Governments, including our own. Will my right hon. Friend give the House an assurance that every step will be taken, in conjunction with other Governments, to bring home to the military regime the iniquity and cruelty of what is being done and not hesitate to bring every pressure to bear to end this gross injustice?
    Mrs. Chalker: I congratulate my right hon. Friend on all his efforts to secure the release of the royal prisoners in Ethiopia. He has made many humanitarian efforts, now with the Addis relief campaign, to focus attention on the prisoners. We have made, and we continue to make, repeated representations. That has been going on throughout the years. We very much regret that, in spite of official Ethiopian indications that the royal prisoners would be released last year, they still remain in prison. I can give my right hon. Friend a full assurance that we shall continue to take up the plight of these unfortunate royal prisoners at every suitable opportunity and in conjunction with other Governments.

    Sharpeville Six
    Mr. Pike: To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations Her Majesty's Government have made to the Republic of South Africa with regard to the case of the Sharpeville Six.
    Mrs. Chalker: A defence application for a retrial is currently under consideration. We continue to follow the progress of the case closely and with great concern.
    Mr. Pike: As only two of the Sharpeville Six cases hinge on the evidence, which is now suspect, of one witness, will the Government continue to make it clear to the South African Government, and especially their President, that the execution of any of the six will be condemned in the strongest possible terms by the British Government? Will that also be accompanied by a plea for mercy to be shown by the President of South Africa?
    Mrs. Chalker: I think that it would be helpful to the House if I stated where we now stand on this issue. The legal process has been reopened. The Transvaal district attorney has stated his intention to oppose. The stay of execution has been extended indefinitely. I do not rule out further representations, but I believe that we should await the outcome of the current legal process, which I understand is proceeding.
    Mr. John Townend: Will my right hon. Friend tell the House when the Government will apply the same standards and principles to their relations with other African countries, most of which are non-democratic, one-party states, as those to which they seem to apply in their relationship with South Africa?
    Mrs. Chalker: I have described the situation of the Sharpeville Six on many previous occasions. We believe that the Government of a nation—we recognise states, not Governments—should bring about humanitarian rule. We protest when non-humanitarian actions are taken by the Governments of any countries. Executions in South Africa have meant that we were prepared to consider joining appeals for clemency, but only in cases which were clearly political and in which there were strong humanitarian grounds. That is why we have pursued this path with the Sharpeville Six. I have said this before, and it may be that I shall have to say it again. Matters that come before the courts of South Africa are for the South African Government, but where there are strong humanitarian grounds we have a right to make our views known.
    Mr. Tony Banks: Will the Minister explain why there are so many Conservative Back Benchers who seem not to
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    care whether the Sharpeville Six hang or do not hang? Will the right hon. Lady explain why this is the position of so many Conservative Back Benchers?
    Mrs. Chalker: I am not responsible at the Dispatch Box for Government policy on these issues. It may be that some of my hon. Friends have their own views, which have been formed as a result of their visits to various parts of southern Africa. In trying to make a judgment on these most difficult issues, I shall continue to try to base all my comments and answers on the facts that are before me.
    Mr. Forth: Has my right hon. Friend congratulated the South Africans on the patent independence of their judiciary? In the light of her previous comments, has she made a list of all the states and Governments which execute people for political reasons? Has she led the Foreign and Commonwealth Office in making vigorous representations to all those countries along the same lines as those that she has described in the context of the Government's relationship with South Africa?
    Mrs. Chalker: When a country has a legal process, we expect it to be followed. That applies to South Africa and to any other African or other country in the world. I am glad that the South African Government followed the due legal processes of their country, but the issue has not yet been fully resolved. I say to my hon. Friend that it is easy to stand on the sidelines and to criticise; but it is much more difficult to form a view on the facts of a case and the situation that exists in individual countries, which vary so much. These are matters that warrant much more careful study than some Members of this place sometimes give them.

    Israel
    Mr. McTaggart: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has given consideration to applying economic sanctions against Israel; and if he will make a statement.
    Mr. Mellor: Economic sanctions would not help to bring about a solution of the problems of the region.
    Mr. McTaggart: Given the increasingly dangerous position for civilians in that troubled part of the world, does the Minister agree that Britain, as a member of the European Economic Community, should follow the EEC example and consider introducing economic sanctions against Israel in order to put pressure on Prime Minister Shamir to attend an international conference to try to find a peaceful solution of the problems of that area?
    Mr. Mellor: There is no disagreement between the Government and the hon. Gentleman on what we want to see coming out of this, but we certainly disagree with the method that he proposes. We believe that we should try to influence events in the area by working in partnership with fellow members of the European Community. That is why repeated statements have been made by the Foreign Ministers of the European Community condemning the quite indefensible methods that the Israeli defence forces are using in the occupied territories and calling for a political solution based on a recognition of the right of the Palestinians to self-determination as well as a recognition of the right of Israel to exist behind secure boundaries. Statements have also been made to try to promote and

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    enhance the economic well-being of the people in the occupied territories by allowing their produce access to the European Community on favoured terms, which, I am sad to say, the Israeli Government, in breach of undertakings given to the Community in December, continue to block.
    Mr. Lawrence: Apart from the manifest absurdity of taking economic sanctions against a friendly democratic nation, is not the economic sanction of the Arab boycott a substantial obstacle to the settlement of the Arab-Israeli problem?
    Mr. Mellor: That is a further manifestation of the regrettable situation and one that we would like to see changed. That can be changed only if there is a sensible recognition on the part of all states in the region that, sooner or later, they will have to coexist as good neighbours.
    Ms. Short: Does the Minister agree that we all have a duty to use our influence to stop the immoral and terrorist behaviour of the Israeli Government in the occupied territories, which distresses hon. Members on both sides of the House? The European market is of great importance to the Israeli state. Israel is currently breaching Europe's request that produce from the occupied territories should have access to the European market. Should we not therefore tighten the screw and use our economic pressure to force the Israeli Government to behave more reasonably?
    Mr. Mellor: The hon. Lady was quite right in one thing that she said. I do not know of any hon. Members, no matter what they disagree about on other issues, who have visited the occupied territories and not returned with precisely the same point of view as the hon. Lady. That says something about the lamentable situation.
    I have already set out the action that we think it proper to take with regard to the European Community. We do not agree that economic sanctions would be appropriate. However, we take very seriously the fact that the Israeli Government are apparently flouting the undertakings that were given to allow produce from the occupied territories to enter Europe unhindered. It was agreed by the Council of Ministers that the new protocols favouring Israeli produce should go forward, but the European Parliament continues to block that, presumably because of the Israelis' failure to keep their side of the bargain. I doubt whether that position will be resolved until there is some movement on the introduction of produce from the occupied territories into the European Community on those proper terms.
    Sir Ian Gilmour: I appreciate my hon. and learned Friend's attitude towards sanctions, but there is nothing democratic about Israel's occupation of the West Bank and Gaza or about her behaviour there. In view of America's proven uselessness in this matter, how will my hon. and learned Friend ensure that the views of the Government and of the European Community have some influence on events in the occupied territories?
    Mr. Mellor: We have no basis on which to command attention. We can only continue to make our views known in the forums open to us, and we do that. I believe that an increasing number of people in Israel are only too well aware of the grave and, I fear, lasting damage that is being done to Israel's international reputation—not least the
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    lasting damage caused to the prospects for young people in Israel to live a full span in peace—as a result of the shortsighted policies pursued by Mr. Shamir and others.

    Nicaragua
    Mr. Galbraith: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Government of the United States of America concerning the Nicaraguan Government's negotiations with the Contras.
    Mr. Eggar: We have regular discussions with the United States Government on a whole range of issues, including the situation in Central America. They are well aware of our support for a negotiated solution to the problems of the region.
    Mr. Galbraith: In his discussions with the American Administration, does the Minister impress on them always that the Contras are terrorists? Has he asked the American Administration to use their influence with the Contras to settle with the Nicaraguan Government and not hang on in the hope that there will be a change in the Administration, so that the Contras may continue their murderous activities?
    Mr. Eggar: The hon. Gentleman is not a regular attender at Foreign Affairs Question Time— [Interruption.] I am sorry if I have offended the hon. Gentleman. If what I have said is not right, obviously he cannot have listened very carefully to the explanations that we have given of our policy towards Central America. We have consistently advocated a peaceful, negotiated solution to the region's problems, and we have made our views very clear to the United States Government.
    Sir Peter Blaker: Has my hon. Friend seen recent reports that a large number of political prisoners—up to 1,000—have been released by the Nicaraguan Government? If they are such a paragon of democracy, why were there so many political prisoners to release, and how many are still in prison?
    Mr. Eggar: As usual, my right hon. Friend makes a very good point. The Nicaraguan Government have not always lived up to the Guatemalan accord, which they signed. We are heartened by the progress that has been made and look to the Nicaraguan Government to make even more rapid progress.
    Mr. Foulkes: I am astonished that the Minister is unaware that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) is not only a regular attender at Foreign Affairs Question Time but is an expert on Nicaraguan affairs. He has personally given medical aid in Nicaragua, which is more than any Conservative Member can say.
    Will the Minister acknowledge that the progress of the dialogue with the Nicaraguan Government is being blocked by extremists among the Contras, egged on by extremists in the United States—including the President? As the Minister has repeatedly said at the Dispatch Box that the problems of Central America cannot be solved by force but only by peaceful means, will he say what the British Government are doing to help the peace process?
    Mr. Eggar: I fully recognise the hon. Gentleman's need to maintain good diplomatic relations with his Scottish colleagues, and I congratulate him on the elegant way in which he has done that.
    I say to the hon. Gentleman that it does not do him, the Labour party or the House any good to describe the United States President in the way that he did. I hope that on reflection he will withdraw the words that he used.
    The hon. Gentleman should take a more balanced view of the problems of Nicaragua. He might, for example, have criticised instead President Ortega's statement on 13 December that the Sandanistas would not hand over power if they were defeated in an election.

    Human Rights
    Mr. Ian Taylor: To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made on human rights at the CSCE.
    Mr Mellor: So far, advances have been distinctly modest. When I addressed the Vienna CSCE meeting on 15 April I made it clear that we would not conclude business without much more progress on human rights issues.
    Mr. Taylor: Will my hon. and learned Friend convey to Mr. Gorbachev that it is all very well talking about glasnost and perestroika, but that if he wishes to make progress on conventional arms stability talks and on nuclear arms reductions he had better pay attention to the human rights issues at the Vienna review conference and instruct his negotiators to make distinct progress? We are holding ourselves armed against the Soviet Union because we distrust that country's callous disregard for human liberties.
    Mr. Mellor: I agree with my hon. Friend. That was the burden of what I said. In particular, there is a gap between what Mr. Gorbachev has said—much of which is very welcome—and what has been carried into law. We look to him to deliver on what he has said he wants to do, and he will have every support from the West in so doing. What we cannot accept is an unbalanced outcome at Vienna. That would sell short all the reasonable aspirations of people in the East who were given such hope by the Helsinki accord.
    Mr. James Lamond: Is it not a fact, however, that the Soviet Union has done its very best to make progress on humanitarian affairs by suggesting that the Soviets themselves host a special international conference on the matter? Has not the West dragged its feet and answered that request by suggesting that every non-governmental organisation that wishes to go along should have the right to go to such a conference—and even that the Voice of Free Europe should be allowed to participate?
    Mr. Mellor: The hon. Gentleman is an astonishingly tolerant observer of the Soviet scene. I can only say that if he really thinks that it is an answer to the sustained and continuing human rights abuses in the Soviet Union for people to go to Moscow and just talk about it, his tolerance does him little credit.

    Ethiopia
    Mr. John M. Taylor: To ask the Secretary of State for Foreign and Commonwealth Affairs what advice he is giving to British citizens intending to visit Ethiopia in the light of the information available to him about the internal conflict in that country; and if he will make a statement.
    Mrs. Chalker: We advise British citizens not to visit the rural areas of Tigré and Eritrea, where hostilities continue.
    Mr. Taylor: I thank my right hon. Friend for her reply. Do not those who would excite Western liberal guilt about Ethiopia miss the point that the principal scourge of its rural people is the Ethiopian Government?
    Mrs. Chalker: My hon. Friend is absolutely right. That has been a serious problem in Ethiopia, particularly for those who have tried to make a way of life for themselves and been prevented from doing so. At present, while some areas are indeed safe, others are suffering from attacks by the Ethiopian Government on their liberation fronts. I believe that the continued military position, with sporadic fighting in places all over the country, but mainly in the north, can do no good for the people of Ethiopia, and certainly will not advance the cause of the Ethiopian Government one iota.

    Afghanistan
    Mr. Harry Greenway: To ask the Secretary of State for Foreign and Commonwealth Affairs what are the implications for Her Majesty's Government's policy towards relations with Afghanistan after the Afghanistan settlement; and if he will make a statement.
    Sir Geoffrey Howe: We welcome the Geneva agreement of 14 April and the prospect of withdrawal of Soviet troops from Afghanistan, but the regime in Kabul remains a Soviet client. We therefore have no plans to raise the level of our dealings with it.
    Mr. Greenway: Does my right hon. and learned Friend agree that the remarkable generosity and steadfastness of the Pakistani Government in giving homes to no fewer than 5 million Afghan refugees should now be recognised? What can he do to establish the reintegration of those people into Afghanistan, as they wish to be integrated, but on their own terms as practising Muslims, not as Communist sympathisers? What account will he take of Amnesty International's serious condemnation of the present dealings of the Afghan and Soviet Governments with Afghans seeking to leave Afghanistan in recent years?
    Sir Geoffrey Howe: I agree that we must admire the generosity and steadfastness of the Pakistani Government in providing homes for the millions of refugees who fled the brutal war that resulted from the Soviet invasion.
    I have, of course, seen the reports of the latest allegations by Amnesty International, and it must be said that they echo the reports of the United Nations special rapporteur in 1988. He portrayed a betrayal of basic human rights on a dramatic scale, with over 14,000 civilian deaths last year, 3,000 political prisoners admitted by the regime, and torture still being used in interrogations. The Soviet withdrawal is directed towards bringing an end to that. Plainly, that withdrawal must be followed by the best

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    possible way of enabling the Afghan people—including the refugees—to exercise their right of self-determination and of establishing a Government acceptable to them all.

    EC Internal Market
    Mr. Wigley: To ask the Secretary of State for Foreign and Commonwealth Affairs what measures his Department intends to take in the near future to increase the awareness among the general public of the implications of the completion of the European Community internal market in 1992.
    Mrs. Chalker: We are playing a full and active part in the single market awareness campaign, launched on 18 April. We shall continue to make the single market a major theme of speeches both at home and abroad and to raise this in regular contacts with business men.
    Mr. Wigley: Is the Minister aware of the considerable worry among milk producers in Wales, and, indeed, in south-west England and Scotland, about the effect of the single market in 1992? Are any discussions taking place between herself and the three Agriculture Ministers for
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    England, Wales and Scotland about transitional arrangements? Is her Department, the Ministry of Agriculture, Fisheries and Food, the Welsh Office or the Scottish Office responsible for arranging consultations, seminars and conferences in the United Kingdom on that matter?
    Mrs. Chalker: That is really a question for my right hon. Friend the Minister of Agriculture, Fisheries and Food. Guided by him and the Secretaries of State for Scotland and for Wales, we are doing our very best to ensure that excess production comes down and that there is a sensible move towards the new funding of agriculture which the Community needs.

  BILL PRESENTED
    CEMETERIES (CONTROL OF SALE ETC.)
    Mr. Harry Greenway, supported by Mr. Robert G. Hughes and Mr. Tony Banks, presented a Bill to control the sale or disposal by local authorities of any land consecrated or used for burials and to terminate the practice of burying more than one person in a single grave: And the same was read the First time; and ordered to be read a Second time upon Friday 8 July and to be printed. [Bill 158.]

Right to Live
3.31 pm
Mr. Denis Howell: I beg to move,
That leave be given to bring in a Bill to provide that where two consultants employed within the National Health Service declare that a patient's life will be in grave danger or seriously impaired unless admitted and treated in hospital it shall be the duty of the appropriate Regional Health Authority to immediately provide for the admission to hospital and for the treatment of the said patient; and to make it an offence not so to provide the necessary hospital admission and treatment.
The proposed Bill is concerned with the sanctity of human life—the sanctity of every human life. It seeks to assert in law the ethical proposition that the medical needs of every citizen should be the only criterion for hospital care. In so doing it reverses the existing situation within the NHS where the needs of the patient are secondary to considerations of financial stringency, administrative convenience or Government policy.
It also reverses what I believe to be the uncivilised judgments of the courts that patients who would otherwise die or whose health would be seriously impaired have no right of demand on hospital services because of finite resources. That is not an Act of Parliament passed in this place; it is a judicial precept which I seek to correct.
The need for such an Act of Parliament became apparent in Birmingham when a hospital chairman was instructing consultants not to admit to hospital or to operate upon hole-in-the-heart babies and kidney dialysis patients. That situation still persists in the west midlands, not provoked by direction of hospital chairmen but continued by the imposition of financial rationing. In fact, it is happening all over the country. People are being left to die or to suffer agony while doctors and surgeons are not allowed to work, hospital beds remain empty although they are ready for patients and nursing care is available.
I can give the House some examples from Birmingham and from the west midlands, but I am told that they apply nationwide. At the Queen Elizabeth hospital in Birmingham, 80 operations per year for heart bypasses and valve replacements are being postponed. Patients are being discharged prematurely from intensive care units, with very serious consequences. For example, four weeks ago a lady, who was discharged from the intensive care unit had to be readmitted, and I am told that she is now suffering from permanent brain damage.
Every morning in the Queen Elizabeth hospital in Birmingham the five consultants in charge of the intensive care unit meet at 8 o'clock and have to decide which patients to discharge prematurely from their unit so as to make room for other seriously ill patients. That is a scandal. No consultant should be placed in that position. I am told that one patient suffering from cancer of the gullet was prepared four times for an operation and on each occasion the operation was postponed. The cancer is now incurable.
All surgeons in the Queen Elizabeth hospital are, by official decree, forced to down tools for one week in seven while 146 beds remain empty. That is the most massive Government-imposed lock-out we have seen in this country for a long time. Surgeons and nurses are being prevented from working on patients who are desperately ill.
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At the Sandwell hospital 32 orthopaedic beds have been closed and elderly patients have been left in great pain. The surgeons cannot work but 32 beds are left empty and operating theatres and nursing staff are available. The reason for that is that the hospital cannot afford the cost of the artificial hip joints. That is unforgivable.
In the central district in Birmingham there is an eight-week waiting list for radiotherapy, which is so vital for cancer patients. The Birmingham Daily News reported this morning that Dr. Alan Bond, one of the specialists at the Queen Elizabeth hospital, has started to tabulate cases that cannot be dealt with in intensive care. In April alone in that one hospital 15 life-saving operations were cancelled—seven open heart operations, two liver transplants, one kidney transplant, two major vascular operations and three major abdominal operations.
It is reported that one patient was kept waiting for two and a half hours for admission to the intensive care unit. During that time the patient had to be ventilated by hand by the anaesthetist using a pumping bag. That is a condemnation of conditions in the NHS in 1988 under this Government.
As I have said, in the central district there is an eight-week waiting list for radiotherapy. In the North Birmingham and Sutton Coldfield Good Hope hospital it takes 75 weeks before an orthopaedic case is even seen by a doctor before they start waiting for treatment. In the West Birmingham Dudley Road hospital, of which I used to be chairman, the closure of services is intended to achieve contemptible savings. For example, there has been a 20 per cent. reduction in physiotherapy treatment in order to save £13,000. The cervical cytology programme, so much the baby of the Under-Secretary of State for Health and Social Security, has been severely reduced in order to save £5,000. How contemptible can we be in this day and age?
I am told that the Dudley Road hospital has had to inform the region that it has stopped all cancer therapy until further funds are available. I can disclose to the House that one consultant has told me that things are so bad that a consultant received a letter from a solicitor asking for treatment for his client and when the matter was taken up with the chairman of the regional hospital authority he was told, "I shouldn't worry about that. I have 1,000 letters or more from solicitors acting on behalf of their clients demanding attention in the west midlands area hospitals." Those letters show how people are plumbing the depths of despair when they require serious treatment.
I have to tell the House that we have a new word in the vocabulary of the west midlands. I had not come across it before. The word is "triage". I am told that it comes from the battlefields of Europe. It is now in common currency among doctors in the west midlands. Triage means looking at the wounded and the ill and putting them into three categories: immediate treatment, to be deferred, or not worth treating. That is the atrocious system now being operated in the west midlands. It means in practice that people over 65—pensioners—are put at the bottom of the queue.
We all sympathise with the dilemma facing the consultants; we do not blame them, but we assert in this measure that every citizen, pensioner and child has a right to equal treatment in the Health Service and in law. The triage system is the classic case of the doctors' dilemma

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which I thought had been outlawed since the time of George Bernard Shaw, but it is now, apparently, hallowed practice in our hospitals.
The purpose of this Bill is to assert that when any patient is desperately ill or suffering serious physical pain, be he parent or grandparent, he is of equal worth under the law. The Bill seeks to assert that every citizen is equal in the sight of God and must therefore be declared to be of equal worth in the National Health Service. I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Denis Howell, Mr. Roy Hattersley, Mr. Barrymore John, Mr. Tam Dalyell, Mr. Giles Radice, Mr. Joseph Ashton and Mr. Terry Davis.

RIGHT TO LIVE
Mr. Denis Howell accordingly presented a Bill to provide that where two consultants employed within the National Health Service declare that a patient's life will be in grave danger or seriously impaired unless admitted and treated in hospital it shall be the duty of the appropriate Regional Health Authority to immediately provide for the admission to hospital and for the treatment of the said patient; and to make it an offence not to provide the necessary hospital admission and treatment: And the same was read the First time; and ordered to be read a Second time upon Friday 13 May and to be printed. [Bill 159.]

Anglo-Irish Conference (Meeting)
Mr. James Molyneaux: On a point of order, Mr. Speaker. You will be aware that there is today a meeting of the Anglo-Irish conference and that the agenda is such that the discussions and decisions taken will affect the constituents of every hon. Member. Do you, Sir, know whether it is the intention of the Secretary of State for Northern Ireland to make a statement as soon as possible; or, if not, is it possible for that request to be conveyed to the Leader of the House?
Mr. Speaker: I am sure that the Leader of the House, who is present, will have heard what has been said.

Legal Aid Bill [Lords]
Order for Second Reading read.
3.44 pm
The Solicitor-General (Sir Nicholas Lyell): I beg to move, That the Bill be now read a Second time.
The legal aid White Paper, published in March 1987, began with the words:
"The purpose of legal aid is to ensure that people of small or moderate means receive access to proper legal advice, and to justice."
The Bill gives legislative effect to the main decisions announced in the legal aid White Paper. Its central objective is to improve the arrangements for making legal aid and legal advice and assistance available. Efficiency, effectiveness and value for money are the key concepts which underlie the Bill.
Legal aid in England and Wales is one of the fastest growing areas of Government expenditure. The legal aid scheme is now approaching its 40th year. For the first 20 years expenditure never exceeded £10 million a year and help was provided for a maximum of about 150,000 people. Expenditure on legal aid in England and Wales today is running at an annual rate of about £450 million a year, compared with only £100 million just nine years ago in 1979–80, an increase which far outstrips anything attributable to inflation. In the past year, about 2 million people have received help under the civil or criminal legal aid schemes, or the advice and assistance scheme. That is a measure of the growing importance of the legal aid scheme, and a measure of the importance of the Bill.
The scheme as it exists in England and Wales has developed considerably since its beginnings in the report of the Rushcliffe committee in May 1945 and the Legal Aid and Advice Act 1949, which established the scheme. In 1972, the legal advice and assistance scheme was introduced. In 1974, the legal aid legislation was consolidated, and it is the Legal Aid Act 1974 which the present Bill replaces. Since then, the Legal Aid Act 1979 has established the extension of advice and assistance to cover representation—the system known as ABWOR—and the Legal Aid Act 1982 has made some important changes in the criminal legal aid system, including the establishment of statutory magistrates court duty solicit or schemes, which were joined in 1986 by the 24-hour scheme to give assistance to those held in police stations.
The Bill is intended to replace and consolidate all the existing legal aid legislation. In many ways, it also improves on the drafting and presentation of the existing legislation. There is, however, much more to the Bill than that. The aim of the Bill is to provide the litigant who might not otherwise be able to afford it because of his means—and the taxpayer—with a system that is efficient and effective and gives not only the best possible service but the best possible value for money. It must also be a system which is able to evolve to meet changing needs and new methods of giving advice as they develop.
Mr. Keith Vaz: Has the hon. and learned Gentleman seen the results of the Law Society's survey which was published on Monday this week and which showed that, since 1983, 40 per cent. of the solicitors doing legal aid work either have decided to give up the work because of the remuneration, or are considering giving it up? What effect will the Bill have on those solicitors who are left administering the legal aid system?
The Solicitor-General: I read the survey with some care and we shall continue to study it. Nearly two thirds of solicitors did not even bother to reply to the questionnaire. The number of solicitors carrying out legal aid services has increased pretty steadily over the past five years, from about 9,700 to 11,500. That is not to dismiss the points made in the questionnaire. They deserve careful study.
The principal new feature of the Bill is the establishment of the legal aid board. The Government believe that the legal aid scheme has outgrown the structure which was appropriate for it in the early 1950s and which has remained the same ever since. What we now consider is needed is one central body, including among its membership a whole range of expertise—not only barristers and solicitors but experts in management, finance, personnel, administration and the broader forms of advice giving. The aim is to provide a central body which can co-ordinate and manage all aspects of the legal aid scheme with a proper sense of order and strategic direction.
This decision to establish the board is not in any way a criticism of the existing administration. In particular, I wish to place on record in this House the Government's appreciation of the role played over the past 37 years by the Law Society. The close involvement of the legal profession has been one of the strengths of the legal aid scheme in the past, and it is the Government's wish that it should continue to be so in the future. The decision to establish the board is rather a reflection of the different needs of the future. If legal aid is to develop properly in response to the challenges of the 1990s and beyond, it must have the right legislative and administrative framework.
The key to this will be the board, assuming a central role in all aspects of the adminstration of legal aid. Before that can happen, there is a great deal of work to be done, and the sooner it can begin the better. Last December the Lord Chancellor announced that he intended to set up what is known as a shadow board to begin preparatory work as soon as possible. Today he will announce to Parliament the name of the new chairman of the board and of its initial membership. The objective is that the shadow board will begin work straightaway, preparing itself to take over from the Law Society, and planning for the future. It is the Lord Chancellor's hope that the board will be able to take over from the Law Society early in 1989.
The Government are determined that the changeover to the board should be conducted with the minimum disruption. The board will, therefore, initially do no more than take over those functions currently performed by the Law Society's legal aid administration. However, the Governmant's longer term aim is that the board should have overall responsibility for all aspects of legal aid, unless there are strong arguments to the contrary. It will, therefore, be invited to look also at aspects of the scheme not currently administered by the Law Society, such as means assessment for civil legal aid, consideration of applications for criminal legal aid and the determination of all legal aid bills.
There are problems involved and the Government are fully alert to them. For that reason, no decision has yet been taken to transfer any of those functions to the board. Responsibility for civil legal aid means assessment, criminal legal aid grant and any other functions will be given to the board only if it appears to the board and the
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Government that that is a sensible way of proceeding and that it is in the best interests of the legal aid scheme as a whole.
Some concern has been expressed that the legal aid board will not be independent of Government. I believe that the names that the Lord Chancellor is announcing today will go far to meet those concerns. However, the concept of independence must be put into context. The present legal aid administration is not simply free to do what it likes, and nor will be the new board. The Government will continue to set the broad framework of the legal aid arrangements and will retain their present role over such matters as financial eligibility limits. The Government have responsibility to the taxpayer and to Parliament to ensure that money is spent wisely and for the purposes for which it was voted. It is a responsibility that no Government can abdicate. But within the overall constraints set by Parliament the board will have considerable freedom to manage its affairs in the way that it considers best.
Mr. Paul Boateng: It would considerably allay the fears that have been expressed by the professional associations and the public in relation to the independence of the board if the hon. and learned Gentleman would be prepared to give an unequivocal assurance that the legal aid advisory committee, which over the years has done such sterling work protecting the public interest, will be retained. Will the hon. and learned Gentleman give that unequivocal assurance?
The Solicitor-General: I am grateful to the hon. Gentleman for his kind remarks about the legal aid advisory committee. The Bill provides and the proposal is that the legal aid advisory committee should remain in being for at least a year but that its position should then be reviewed. The hon. Gentleman has anticipated remarks that I proposed to make later in my speech. It will be reviewed with an entirely open mind by the Lord Chancellor.
Mrs. Gwyneth Dunwoody: The Solicitor-General appears to be trying hard to help. Does he realise that many people are concerned about the position of women, who will continue to need legal aid for cases of domestic violence? There is considerable worry that this change, if any attempt is made to restrict applications for legal assistance, will make matters very difficult for people.
The Solicitor-General: I quite understand the hon. Lady's anxiety, but I hope that I shall be able to set her mind at rest. I have seen nothing in the new structure to give her cause for concern. I know from my own not all that distant experience in the courts that many women make use of legal aid for that purpose. I foresee no reason why they should not continue to do so.
A further sector that the board will be invited to consider at an early stage is the provision of advice and assistance. This has grown enormously over the past nine years. Since 1979, expenditure on advice and assistance—which is usually referred to as the green form scheme —has risen from £12 million to £60 million per year, and the number of people receiving help has likewise increased from 300,000 to 1·2 million. Such growth looks set to continue.

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Both the range of problems for which help is provided has widened and the kind of agency providing such advice has developed greatly. Such bodies as law centres, welfare rights centres, and the invaluable nationwide network of citizens advice bureaux—bodies partly voluntary, partly funded, largely by local government and partly by central Government, have all developed in the field. Many provide high standards of expertise available to clients in accessible and attractive ways. The initial recommendations of the efficiency scrutiny which preceded the legal aid White Paper made radical suggestions which we have rejected, but we see real potential benefit to the consumer in the idea of making greater use of advice agencies in these sectors and it is one of the important areas that the new board will be invited to examine. This Bill provides the powers to enable that to be done.
In legislative terms, the provisions are relatively simple. Part II of the Bill provides that the board shall have the power to make arrangements for the provision of advice and assistance by means of contracts with, or grants or loans to, individuals, organisations or groups.
We contemplate that when the board invites tenders it will specify what is to be provided, by whom and on what terms. The standards which will have to be met will be an important part of the requirements. It will be open to solicitors themselves to submit tenders to do the work, as it will to advice agencies and others. It will be open to the board to make different arrangements in different parts of the country. It follows, of course, that once new arrangements have been made for handling particular categories of case, these will be excluded from the existing green form scheme. Otherwise there would be duplication.
I emphasise two points. First, the Government fully recognise the importance of the level of service to the client. Secondly, the Government have taken no firm decisions on the extent to which these powers should be used nor the areas of work in which they would be appropriate. The Government will await the board's advice. The board will, in any event, be able to exercise its powers by means of contracts only if the Lord Chancellor so directs and only in accordance with his directions.
Mr. Alex Carlile: In assessing the impact of competitive tendering and where it should apply, will the hon. and learned Gentleman look at the impact of competitive tendering upon small towns and rural areas and at the services available to the population in sparsely populated areas? Much free legal advice and basic legal advice is given by small firms of solicitors which fear these provisions.
The Solicitor-General: I am sure that the board will look carefully at the hon. and learned Gentleman's point and keep it carefully in mind in weighing up whether or not to accept the contract, to proceed in that method or to continue with the existing method, or with a combination of the two.
In addition to the power to award contracts, the board is given the power to make grants. This is relevant to the position of law centres. The Government's view of law centres remains as it has been since 1979. Law centres may well provide a valuable service to their local communities, but they are essentially a local service, and as such it is more appropriate that they should receive local, rather than central, funding. There is an exception to this. The Lord Chancellor's Department provides funds to seven
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law centres. The Lord Chancellor now proposes to invite the new legal aid board to take over responsibility for the grants to the seven centres he currently funds. The Department will need to be satisfied that the services provided by those seven centres fit into the general pattern of its plans for advice and assistance. Provided, however, that it is so satisfied, and subject to the Lord Chancellor's agreement, it will be open to it to continue to pay the grants under the powers in part II of the Bill. It will, of course, also be open to those and other law centres to submit proposals for contracts or grants in the general context of the board's plans for advice and assistance.
I should now like to say a word about a class of case that has caused widespread public interest—the type of multi-party action which has recently involved some drugs companies, for example. During the Bill's passage through the other place the Lord Chancellor put forward important amendments which will allow the board to enter into contracts with firms of solicitors for the provision of representation in specified categories of civil proceedings. We envisage that the board would identify particular groups of cases. such as multi-party actions, raising common issues and in which there was no risk of conflict of interest, for which representation might advantageously be provided by particular solicitors. Assisted persons with cases falling within a prescribed category would then be directed to a solicitor under contract to the board, thus securing proper co-ordination of all such cases. That process would involve some restriction on the freedom of choice of solicitor by individuals involved in those cases, but we believe that that price must be paid for greater co-ordination of multi-party actions anyway.
There will obviously be a great deal of work for the legal aid board to do to flesh out the arrangements for the contracting system. For instance, special arrangements for eligibility and means-testing may need to be made for some or all of the litigants falling within the prescribed group. Modifications may be required to the merits test, and separate provision may be appropriate for the statutory charge to be taken from the total sum recovered by all the plaintiffs in a class action. Much detailed work remains to be clone by the board on these and other matters. Nevertheless, I believe that the proposals, which have been widely welcomed, represent a useful way forward for multi-party actions, and perhaps also for other categories of civil legal aid work where the system may be appropriate and cost effective and where it would bring real benefit to the legally aided person.
I have concentrated so far on the provisions in the Bill relating to the legal aid board, to advice and assistance, and to the making of contracts for civil legal aid. because those are the crucial aspects in which the Bill departs from the existing legislation. It may help, however, if I now go briefly through the Bill and outline its main provisions.
Part I begins with a clear statement of the purpose of the Bill, and goes on to provide basic definitions of the terms used throughout the Bill.
Part II contains the provisions relating to the establishment of the board and the power to award contracts and make grants. In part II, the board is given its general power to do such as it considers necessary to provide or secure the provisions of services under the Bill.
Mr. Bob Cryer: Will the Minister confirm that he has today issued a press release on the composition of the board? If so, has he placed it on the

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Table for all hon. Members to see? As the matter is relevant to part II of the Bill, it should be widely available, rather than being given a narrow circulation.
The Solicitor-General: The hon. Gentleman is absolutely right. My right hon. and noble Friend the Lord Chancellor has today answered a parliamentary question —and I have answered a question in this House—giving the names of the new chairman and members of the board. I hope that the House will agree with my right hon. and noble Friend that it is for the convenience of the House to have the information available today rather than waiting until tomorrow when this debate will be over. I confess that I have not yet placed a copy on the Table, but I shall be happy to make amends as soon as I can.
Mr. Vaz: Will the Solicitor-General tell the House how many members of the board are lawyers and how many are former or present consumers of the legal aid system? In other words, how many of them have actually applied for legal aid in the past?
Mr. Boateng: While he is about it, will the Minister tell us how many of the board are black and how many are women?
The Solicitor-General: I shall do my best to oblige. I do not know whether any members of the board have been consumers of legal aid in the past. As to the professions, the board includes two barristers and two solicitors out of a total membership of 11. It also includes people with experience of personnel, a number with experience as justices of the peace and a founder member of the legal aid practitioners group, who should bring to the workings of the board some experience from pretty close to the ground. The board's members include people with management experience and a representative—she is also a member in her own right—of the council of the National Association of Citizens Advice Bureaux. The chairman has long management experience in ICI, and until fairly recently was the chief executive of a large public limited company.
Mr. Cryer: Would it not have been more convenient for the House had the Minister made the press release available in the Vote Office? The business of arranging a planted parliamentary question and answer is not for the convenience of the House as the question will not be published in Hansard until tomorrow. As the Minister pointed out, the debate will be over by then. At 7 o'clock or thereabouts we shall be reaching a conclusion on the matter. I urge the Minister not to trample on the rights of Parliament. He should make sure that information deliberately published by his Department in conjunction with a Bill is properly made available.
The Solicitor-General: I acknowledge what the hon. Gentleman says, but I think that I should make a little progress.
Mr. Vaz: On this last point—
The Solicitor-General: If I may, I shall make a little progress and then give way if the hon. Gentleman's question is still pertinent.
Part III sets out the provisions for advice and assistance provided by solicitors. This is intended as a restatement of the existing provisions regarding green form and advice by
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way of representation. The terms of the legislation differ from the 1974 Act in a number of respects, but the overall effect is the same.
The Government intend to retain in broadly its present form the current structure of regulations for assessing financial eligibility for all forms of legal aid, at least for the foreseeable future. Even when the board is established, the Lord Chancellor will, of course, as now, retain full control over eligibility levels, subject to the consent of Parliament. It would not be appropriate to delegate such an important factor in access to justice.
Part IV deals with civil legal aid. The proceedings for which that is, and is not, available are listed in schedule 2. This largely reproduces the current position.
Part V deals with criminal legal aid. Once again, the scope of criminal legal aid and the financial conditions will remain as they are now. Part V, however, contains powers that mirror those in part II to transfer functions currently performed by the courts to the new board. The Lord Chancellor will, of course, have to be fully satisfied that this is wise before he agrees to such a transfer, which will be made by regulations subject to the affirmative procedure.
Part VI makes special arrangements for legal aid in care proceedings and contempt proceedings. There has long been criticism that care proceedings were entangled with criminal proceedings in the 1974 Act and the Bill puts that right.
Part VII deals with a number of miscellaneous points, and sets out the regulation-making powers. The only one of those to which I would specifically draw the House's attention is that relating to the remuneration of the legal profession. The White Paper made it clear that the Government will continue to have regard to the principle of fair remuneration for work actually and reasonably done. It is, however, necessary for the Government also to have regard to the other claims on public funds. The Government must be fair to the taxpayer as well as to the practitioner. The aim is to produce a result that is fair overall; but fairness is inevitably a somewhat imprecise concept. Clauses 34(2) and 34(7) help to clarify the approach that will be adopted by setting out the factors, which include time and skill, earnings, overheads, and number and general level of barristers and solicitors available, to which the Lord Chancellor shall have regard when setting rates. The aim of that list, which is not exhaustive, is to ensure that all relevant factors are taken into account.
Part VII also deals with the future of the legal aid advisory committee. As the legal aid White Paper made clear, once the legal aid board has been established, the role and function of the committee will inevitably change. However, the Government believe that the committee will continue to have a useful role to play, at least during the period of transition to the legal aid board, and in the early days of the board's existence. The Bill, therefore, contains power to retain the advisory committee.
As circumstances may well alter once the board has settled into its new role, the Bill also includes a power to allow the committee to be disbanded by regulations if this should seem appropriate. The Lord Chancellor intends to review with an open mind the committee's continuing role 12 months after the board has taken over its responsibilities.
Mr. Vaz: The hon. and learned Gentleman has not answered the question about how many members of the new legal aid board are black and how many are women.
Mr. Humfrey Matins: How many are homosexual?
Mr. Vaz: Indeed, as the hon. Member for Coward Chance asks, how many are homosexual?
The Solicitor-General: I shall have to make inquiries as I am afraid that that information is not immediately apparent from the names of the members. I shall let the hon. Gentleman have an answer as soon as I reasonably can.
Finally, I should mention that, although the majority of the Bill relates only to England and Wales, schedule 4 contains certain amendments to Scottish legal aid legislation.
It is the Government's view that the Bill represents an important step forward in ensuring the future strength and vitality of the legal aid scheme. The legal aid board will have a challenging job to do, but the Government are confident that the end result will be a legal aid scheme that is healthier, more efficient and more effective in the service it provides, to the consumer and to the country.
4.11pm
Mr. John Morris: My sympathies go out to the Lord Chancellor who had to introduce the Bill. It is not a legal aid Bill; it is a money Bill, and the dead hand of the Treasury is seen all over it. It is said that it will consolidate the £10 million savings contemplated in the legal aid White Paper. Its aim is to do much more than that. Its aim is to ensure a firm Treasury rein on growth, to curb any independence and to stifle any additional innovation or expansion that may embarrass the Treasury.
There is much in the Bill that we welcome, especially the setting up of a new legal aid hoard. Although in recent years there has been considerable criticism of some of the Law Society's machinery, especially in some areas of London—basically because of underfunding—it is right for me to join in thanking those who have administered the scheme over the years.
Will the new board be independent? Today the Solicitor-General said that the board will have considerable freedom to manage its affairs. The Lord Chancellor said:
"The stature of those who will be appointed …will ensure that they are independent."—[Official Report, House of Lords, 29 February 1988; Vol. 494, c. 26.]
My hon. Friends and I will study the list of the members to the new board, which we have just received. However, the Lord Chancellor also said:
"The Legal Aid Board is not going to be free to do what it likes, when it likes and how it likes"—[Official Report, House of Lords, 15 December 1987; Vol. 491, c. 608.]
That is a measure of the considerable independence to which the Solicitor-General referred.
The board has wide powers under clause 4, but the key powers to make contracts, grants or loans for the provision of legal services are subject to tight control by the Lord Chancellor. The powers are there, but in practice their operation is held under tight rein.
One of the key tests of the virility of the board will be its desire to carry out research. The record of the Lord Chancellor's Department is lamentable. I need only quote the unhappy predictions of the effect of the cuts in
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dependant allowances in 1986. If we are to start a new era, despite the Treasury clamp, and if the transfer of responsibilities is to mean anything more than a tidying up operation and an abdication to firm Treasury control, the board must be seen to be innovative in thought and ideas. It must be able to test its thoughts and decisions in practice and to evaluate properly the results of its actions.
We would be a great deal happier if the legal aid advisory committee were to be retained for at least five years until we see how the board proves itself. We would be a great deal happier if there was a firm commitment to retain and extend such bodies as the north-west legal services committee. That committee should extend its services to areas such as south Wales, which has demanded them. Other areas may also need such services. It is to the north and west of Watford that we can see fed in the needs and gaps in legal provision.
I was most interested to hear the Solicitor-General's remarks regarding the aims of the Bill. The curious feature of the Bill, as presented to the Lords, was that it was a Bill without a stated purpose for the legal aid scheme. It was only in the other place, after a hard fought struggle and more than one suggested amendment, that the new part I was included in the Bill. Part I states:
"The purpose of this Act is to establish a framework"—
that does not seem particularly encouraging—
"for the provision under Parts II, III, IV, V and VI of advice, assistance and representation which is publicly funded with a view to helping persons who might otherwise be unable to obtain advice, assistance or representation on account of their means."
I can only surmise that the draftsman was a classical scholar and that he used those words "with a view" to reminding himself of the Greek fable of Tantalus. That is what the words amount to. The words are not especially effective or conclusive. Today, the Solicitor-General used, without attribution, the opening sentence of the White Paper, which states:
"The purpose of Legal Aid is to ensure that people of small or moderate means receive access to proper legal advice and to justice."
Why on earth were those words not inserted in the Bill? Perhaps here again the Treasury wanted no hostages to fortune.
We should also consider the original draft of the Bill as regards the remuneration of the profession. In the original draft it was said that the Lord Chancellor, in determining the remuneration of the profession,
"shall be entitled to have regard to a number of factors".
In other words, he may have regard to such factors; equally he can ignore them. The catalogue of matters set out in the original Bill have no greater significance than Webbs catalogue of seeds.
The Bill is now much improved. It is now mandatory that the Lord Chancellor shall have regard to a number of factors—I shall not weary the House by detailing them. We shall return to those factors and examine them in much greater detail in Committee.
It has been suggested that one of the purposes of the draftsman, working on his Treasury brief, was to remove the danger of the Lord Chancellor, in common with his predecessor, being taken to court on an application for judicial review. That suggestion has been hotly denied by the Lord Chancellor. We accept, of course, that that was not the Lord Chancellor's intention. My regard for parliamentary draftsmen is such that that must have been

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a conclusion that they could not miss, given the way that they drafted the original Bill. Be that as it may, a conversion, even on a deathbed, is always welcome.
Of equal if not of greater importance is the failure to retain the principle of
"fair remuneration for work actually and reasonably done".
Why should that hallowed phrase be consigned to the dustbin?
Our judicial system requires the legal profession to be independent, competent and industrious and to have the highest standards of integrity. This is not a plea for more money for lawyers. I suspect that if such a plea were made in this House it would fall on deaf ears. A legal aid service poorly paid will inevitably become a poor service. The result will be two classes of justice: one for those who can afford to pay, and a substantially inadequate one for those who cannot.
Our basic objection to the Bill is that the Government, when setting up new machinery for the administration of legal aid, have failed to will the means. Further, they have sought to limit the opportunity for testing the amount of the means to be provided. Legal aid will become more and more a second-class service.
Under-remuneration over the years has severely pruned the rewards to legal aid practitioners. The Govermment talk of value for money. It is about time that money for value was willed.
Mr. Tony Baldry: Has the right hon. and learned Gentleman read the speech of Lord Denning in the other place? If he has, how does he reconcile his somewhat Doomsday approach to the Bill with the warm welcome that Lord Denning gave to it, when he said that the present legal aid system needed restructuring, which is what the Bill does? There can be few greater champions of the law litigant in history than Lord Denning.
Mr. Morris: I have the highest respect for Lord Denning. He has unique views on many subjects. Perhaps it would have been better if the hon. Member had completed his studies and read also the views of Lord Ackner, Lord Griffiths and every other Member of the House of Lords who deprecated the position that the legal aid service had reached. If the hon. Member reflects on the debates in the Lords—I have read each of them—he will find, not for the first time, that Lord Denning is fairly unique in his views.
It was unfortunate that the former Lord Chancellor but one, Lord Hailsham—they seem to move at an increasing pace in their number and tenure of office—had to be taken to court by the profession. He was the unfortunate puppet who had to dance to the tune of the Treasury. Despite what amounted to victory and the increases in remuneration since, I have no doubt that recruitment to the profession has suffered. We have lost many of the best lawyers who would have headed the profession. They have gone instead to the City and to industry.
Perhaps it is the answer to the hon. Gentleman's endorsement of Lord Denning, but almost on the eve of this debate the Law Society produced evidence on that sector of the profession doing legal aid work. It states, first, that about 40 per cent. of solicitors' offices doing criminal legal aid work are either dropping out of it or considering dropping it altogether. Secondly, in January and February
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41 solicitors' offices gave up criminal legal aid work. If the rate continues, as many as 700 solicitors' offices might have dropped the work by the end of the year. The Law Society further states that it needs a 38 per cent. rise in fees for criminal legal aid work to restore it to the level of remuneration of 1981. This year the increase in London has been 7·4 per cent. When the Solicitor-General replies, will he say how far the Government contest those figures?
The third point made by the Law Society is that 27 per cent. of offices have given up or are seriously thinking of giving up matrimonial legal aid work. Matrimonial legal aid is of the utmost importance to the weakest in the community, who are frequently women. Women will need help more than anyone from legal aid, although thousands of males may be involved, too.
Mr. Kenneth Hind: Will the right hon. and learned Gentleman give way?
Mr. Morris: It is a very short debate, but I am always willing to give way.
Mr. Hind: The right hon. and learned Gentleman says that many solicitors have given up legal aid work. Does he agree that in relation to crime that is understandable as many members of the profession tend to look down on criminal work? As a member of the Criminal Bar Association, I believe that they do so quite wrongly. This is an important matter to those who represent all interests. What view would the right hon. and learned Gentleman take of funding the legal aid scheme if he were in the position of my hon. and learned Friend the Solicitor-General?
Mr. Morris: I am not the steward for the legal aid scheme. The stewardship of the Government is being challenged. I will give the figures later of what has happened since 1979. I put them before the House to find out whether the Solicitor-General accepts them. If he cannot tell us today, I hope that he will do so in Committee. I am worried that more and more people are leaving the profession. The view of the profession is that they are leaving because of poor remuneration.
Whether or not the predictions are right—there is an element of Doomsday involved—it is for the Government to disprove it. For the Government to suggest that all is well is not good enough. Although I cannot vouch for those predictions, there has been so much cumulative aggravation over the years that the profession is becoming conditioned to stopping or cutting down on legal aid work.
I suppose that the production line of newly trained lawyers will keep the system going for some time yet. However, it will be kept going by the young and the inexperienced—until they, too, find something better to do. I repeat that it will become more and more a second-class system. Salary earners, such as the Treasury mandarins, have a blind spot when it comes to considering fee earners.
Several distinguished industrialists have been appointed to the legal aid board, and I would have more confidence in them fixing remuneration than the Lord Chancellor's Department, acting, as it has, as the Treasury's ventriloquist. There should be an independent body to recommend the awards.
Our other anxiety is the steady drip of cutting eligibility for legal aid. The Law Society believes that the number of those eligible for legal aid is declining. Since 1979 a quarter

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of the population have lost their right to legal aid. Is that accepted or challenged by the Government? Is it the Government's policy to whittle down legal aid year by year, or do they intend to arrest the decline and, if so, how? That goes to the very heart of my observations. A clear statement on this would be helpful before we started our Committee discussions.
The information provided by the Law Society is a serious challenge to the Government's stewardship of the legal aid system. It is because of that stewardship that we are profoundly dissatisfied with the Bill. Legal aid needs to he expanded and not restricted. We shall return to the concern of the Law Society about the proposal to remove wills and conveyancing from the scope of the legal aid green form, but many cases of hardship will be caused.
There is a need for legal aid to cover representation in coroners' courts, applications to the European Court—such applications are frequently made against the Government and are, more often than not, successful—statutory tribunals and industrial, immigration and social security tribunals. In many instances, there is a tremendous imbalance in a tribunal, with one party being represented by experienced and expensive advisers fighting against an unrepresented individual. Proceedings at such tribunals may involve complex questions of the law and consideration of both oral and documentary evidence. It is not true to say that tribunal procedure and practice is straightforward or that it permits the layman to represent himself.
Trade unions perform an invaluable task. In my younger days at the Bar in south Wales, one of the most eminent of the National Union of Mineworkers' experts was known as Dai Common Law because of his expertise. He performed a wonderful task. However, when our constituents come to our surgeries on matters such as mobility and constant care allowances and a whole host of other allowances which involve the claims of hundreds, if not thousands, of pounds over the years, when no legal aid is available, we can only look at their papers and know that they will be going alone and unrepresented the following day before a tribunal.
When I see that legal aid is available for comparatively small claims in our county courts, yet thousands of pounds over the years are involved in those tribunals, I regard it as manifestly unjust that our constituents are not represented in litigation of the utmost importance to them. It has also been argued, although it is not of the highest priority, that defamation cases should be covered.
The Bill has important proposals for contracting out to which the Solicitor-General referred. Before we go down that road, we must be satisfied that it does not lead to a worse service and does not restrict the freedom of choice. If a monopoly is created in any area, be it in subject matter or regarding geography, that will be a retrograde step. It was my impression from the Solicitor-General's remarks that, if there was contracting-out in that area, the green form would he excluded. That would be a diminution of the right to freedom of choice.
We need a great deal of clarification. What is the Government's thinking on the matter? I presume that it does not include representation as well as advice. Have the Government satisfied themselves that there is no danger of inadequate advice leading to greater cost when litigation may follow? When contracting-out is determined for a particular area, what happens when the subject is raised ancillary to other matters when there is green form advice?
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Will the cheapest tenderer win the contract? What additional funding is envisaged for the agencies that will do the work? How will they ensure a proper geographical spread for contracting-out?
The citizens advice bureau in my area, which does invaluable work, is already having to close a valuable part of its service. Law centres are under constant threat. What is the Government's policy on the funding of law centres, and what will be the statutory basis for the funding of those centres still funded by the Lord Chancellor? Is there to be no change, or are we to see any advance?
Great concern has been expressed about some aspects of the Bill's proposals for civil legal aid contributions and we shall return to that matter in Committee. The power to spread the cost of legal aid contributions throughout a case is of particular concern. The bottom line of the amount of contributions will depend not on the depth of the pocket, but on the length of the case, and opposing parties will have an interest to delay so as to increase financial pressure on the legal aid litigant. In any event, the litigant will not be able to know at the outset what his commitments will be. He will be at the mercy of procedural delays and of his well-funded opponent.
There is much dissatisfaction with many aspects of civil legal aid and the Bill, without curing some problems, may aggravate others. Against that background, we believe that this is both a Bill of missed opportunities and a means of tying the Lord Chancellor hand and foot to the Treasury. In the last century, the jurisdiction of equity was criticised as being dependent on the length of the Lord Chancellor's foot. In the latter part of this century, access to justice for people of small or moderate means will depend upon how the Lord Chancellor's feet are made to dance to the tune of the Treasury. The Bill is the poisoned chalice that he has inherited, his damnosa hereditas, his cursed inheritance. It will cut expenditure in legal aid. It is an enabling Bill with still far too many regulation-making powers subject only to negative resolution.
The Bill has been much improved in the other place in that respect, but, in the absence of an indication of the Government's thinking on so many parts of the Bill, that aspect could have been corrected if the Government had furnished us with draft regulations when the Bill was presented or even at this late stage. At least we would have been able to debate the appropriate clauses, not in a vacuum but with a clear understanding of the Government's thinking. It is not too late for the Law Officers to go back to the Lord Chancellor and ask whether we can have such clarification for the Commons, which, after all, wills the means, so that we can examine how those means are to be spent and ensure that draft regulations are presented to us so that we can properly discuss the Bill.
The future operation of the legal aid board is unknown. We know that the future shape and content will be even more subject to the clammy hands of the Treasury. Although it is an enabling Bill, we do not know what the Government really want to do, except to cut costs. We wish the Lord Chancellor well. His task has been made more difficult by the Bill. He will want to use his discretionary powers in the best way possible, but he may not be allowed to do so. We oppose the Bill because of its uncertainty and the shackling effect of the Treasury and because, having been given valuable legislative time, it is a Bill of lost opportunities.
4.40 pm
Mr. Ivan Lawrence: I declare an interest, because when I can find a spare moment I am a practising lawyer at the criminal Bar, which means that I could well be affected by the provisions of the Bill. I am also the chairman of the joint all-party parliamentary barristers' group.
The right hon. and learned Member for Aberavon (Mr. Morris) has said that this is a money Bill that has the dead hand of the Treasury all over it. The dead hand of the Treasury needs to be all over it. The philosophy of financial freedom in Government affairs died with the previous Labour Government. The secret of the success of the present Government, apart from sound leadership, has been financial control. There is nothing wrong with the principle of financial control provided that the operation of the legal aid scheme is independent of the Government.
There is no doubt that the tender plant of free legal advice and assistance for those who could not otherwise obtain such advice has grown over 40 years into a large and unruly tree. The tree has now to be trimmed, as any plant needs to be trimmed. It has to be attended to and made more productive. The Bill is therefore timely and the Government's main proposals are sensible and necessary.
It is alarming that there should be so much opposition to the Bill from those who are most intimately concerned with the issues that it raises—for example, the Bar, the Law Society and assistance agencies such as the National Association of Citizens Advice Bureaux. Have the Government got it all wrong or have they got it more or less right, the experts having misunderstood it and got it all wrong? The Government cannot be accused of malice towards the legal profession, still less to those who need legal services. The Government are advised by those who have day-to-day knowledge of the working of the system and its needs, people whose very purpose is to analyse the working and to improve the operation of the legal system.
It is possible for men and women of good will to start by fearing the worst and then to find elements that confirm their fears and thereby to come to wrong conclusions. We know how that human process works from our experience in this place.
Two things emerge thus far from the Bill. First, it contains a number of provisions that understandably alarm those who are looking to be alarmed. Everything is to become more centrally controlled with future action left largely to regulations. From Ministers' speeches it is clear that the Government are worried about the lack of proper financial control of spending on legal aid. This issue was brought out clearly in the 1986 interdepartmental scrutiny of the efficiency of legal aid. Such worry usually presages cuts—that is the experience of parliamentarians—and that would be at a time of greatly expanded activity due to the avalanche of legislation that the Government have perpetrated.
Who will suffer if there are cuts? The very poorest may not suffer, but what about those who are not desperately poor? What about the legal profession? The circumstances are certainly there for lawyers to fear the worst.
That leads me to the second conclusion that the passage of the Bill draws from me. The legal profession and those who are concerned with legal advice require reassurance on the likely effect of the Bill on their work and upon the sort of service that it will do so much to provide for those who will need to use it. There is a need also for reassurance
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about the independence of the scheme from the Government. My hon. and learned Friend the Solicitor-General has given some reassurance this afternoon, but I think that more needs to be given. It is not unreasonable to expect that further reassurance to be forthcoming.
I shall draw attention to issues that I know are concerning the Bar, some of which have been alluded to already by the right hon. and learned Member for Aberavon, who is a vice-chairman of the joint all-party parliamentary barristers' group and who has a close understanding of the legal professions.
First, at a time when welfare state activity is proliferating and people's rights are increasing and expanding, it is no longer good enough for tribunals dealing with social security and employment, for example, to be outside the legal aid scheme, so that poor or poorer people do not get the advice or support that they need to guarantee their civil rights. If we are to overcome this shortcoming, of course, there will be a need for more expenditure. But there is no point in giving individuals rights that cannot be protected or ensured.
Secondly, if there are to be enough lawyers to do the job that is required, the work must be attractively enough paid to make their work worth while. It may be that there have never been so many lawyers and that lawyers have never been so well paid, but if the removal of the principle of "fair remuneration for work actually and reasonably done" means that the result will be a reduction in the payments that are made, we shall soon see fewer lawyers and a worsening service. There are doubts partly because the White Paper made no recommendation to remove the phrase "fair remuneration for work actually and reasonably done," nor was ther any consultation between the Government and the Law Society or the Bar Council. It is easy to understand why the worst is feared.
If my hon. and learned Friend the Solicitor-General says that there is no intention to reduce the service or the pay, we will be driven to ask why it is necessary to remove something which has always been perceived as a safeguard against any Administration's change of mind. No one doubts for a moment the bona fides of the distinguished and eminent individuals who represent the legal profession as members of the Government, but what if the spokesmen change? It is precisely to remove that sort of fear that I say that it is unnecessary to interfere with the existing provisions and to tamper with words that provide reassurance.
Thirdly, why is it necessary to change the method of introducing changes in civil legal aid by secondary legislation from the existing method of affirmative resolution to one of negative resolution, which weakens parliamentary control over such changes? What is the point of that? How can the professions be reassured? How can the advice industry be reassured if such adverse changes are made without any obvious purpose?
Fourthly, why is it necessary to give the Lord Chancellor the power under clause 20(9) to remove the control of the courts to grant legal aid in criminal matters? The court has the evidence before it and sees the applicant. It has dealt traditionally and speedily with applications for criminal legal aid in a way that has caused the minimum of delay before trial. Is not the court the best judge of whether legal aid is necessary and the extent of it?

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Fifthly, should not a defendant have the right of appeal if he is refused legal aid? Sometimes a decision is manifestly unjust and cries out for a reverse decision. It appears that such an appeal is no longer to be allowed.
I have highlighted five matters—perhaps there are others—that cause concern and upon which reassurance is necessary. However, I thank the Government for the assistance that they have given so far as the Bill proceeds through Parliament. First, it has offered the opportunity for two barristers to serve on the legal aid board, which is what the Bar Council requested. Secondly, there is the inclusion of the five Widgery criteria in clause 22(2) by which tests representation should be granted in criminal trials. Thirdly, there is the promise to enable groups of litigants to obtain legal aid to bring class actions, which will help alleged victims of drugs such as Opren to obtain justice. Fourthly, the legal aid advisory committee will remain in place for at least a year, and then it may well continue if it is seen to be useful after a full review has been completed. I might also add my thanks for the general good nature and helpful attitude adopted by my right hon. and hon. Friends when approached by intended groups about various worries.
The publication of the Bill was greeted with shrieks of horror in many quarters. With the Bill's passage through another place, there has been some reassurance and the shrieks have largely become little more than loud grumbles. Concessions have been made and hopefully more will be made. The use of the citizens advice bureaux as a filter for legal action provided by those who best know about the way in which the benefit system works has grown on everyone provided that there will be adequate resources for those organisations to do their job properly. I hope that my hon. and learned Friend the Solicitor-General will give that assurance clearly today as he was not able to give it in his opening remarks.
At the end of the day, the Government have established their bona fides in the matter. My hon. and learned Friend the Solicitor-General has reminded us that legal aid represents one of the fastest growing areas of Government expenditure. The number of people helped has risen from 150,000 some 25 years ago to more than 2 million today, with a fourfold increase in spending since 1979. That greatly exceeds the rise in the cost of living.
But the Government still have work to do on the Bill. They must still continue to reassure its critics. They can do that by helping with further amendments in answer to the anxieties that will be expressed. It is important that the Government do that so that lawyers will want to join the scheme. The service will remain of a high standard only if that happens and only then will my hon. and learned Friend's statement of the aims of the legal aid scheme—to ensure that people with small or moderate means obtain access to legal advice and justice—continue to be fulfilled.
4.51 pm
Mr. Peter Archer: When the hon. and learned Member for Burton (Mr. Lawrence) began to speak, I thought that he was making a bid for succession to the portfolio of his hon. and learned Friend the Solicitor-General. However, as he warmed to his theme, I fear that he fouled his prospects. Perhaps he did not really relish the thought of introducing Bills such as this.
There are many aspects of the Bill that should have been debated if the Government's business managers had
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afforded adequate time for this debate. One particular aspect was mentioned by my right hon. and learned Friend the Member for Aberavon (Mr. Morris), who expressed concern about the future funding of law centres. I would have liked to pursue that, if only because the first proposal for law centres in this country came from the Society of Labour Lawyers of which I have the honour to be chairman. I remember attending the conference 20 years ago which resulted in the production of the pamphlet entitled "Justice for All". That is how it all began.
I would also have liked to tempt my right hon. and learned Friend the Member for Aberavon to embark on a discussion of Labour's Charter for Legal Rights which also originated from the Society of Labour Lawyers and the Law Centres Federation. But I refrain from embarking on that course, because other hon. Members want to take part in the debate. If I may borrow a forensic expression, I am content to adopt the arguments of my right hon. and learned Friend the Member for Aberavon. Who knows, at a later stage in the proceedings on the Bill, I might have an opportunity to add something of my own.
I want to confine my contribution to the matter which has occasioned the greatest anxiety and which has already been a subject in every contribution to the debate. I want to consider the Bill's effect on levels of remuneration in legal aid cases. Anxiety on that issue has been expressed very cogently already by hon. Members on both sides of the House. Indeed, it was expressed very cogently in another place by many noble Lords and in particular by Lord Ackner, Lord Griffiths and Lord Templeman. They were concerned that the principle of fair remuneration is not expressed in the Bill. It is not simply absent from the Bill, it has not simply been ignored, it has been dispatched. As the Solicitor-General reminded us, the existing legislation is the Legal Aid Act 1974. Section 39(3) of the 1974 Act—which is still the relevant legislation —contains those words.
Until now the Government have not expressed any doubt about the principle of fair remuneration. Command 9077 issued in 1983, which was the Government's first considered reaction to the Benson report after four years of reflection, staled:
"The Government accepts that legally aided work should be reasonably remunerated."
There was no suggestion that the existing statutory formula was in question. Now those words are not in the Bill.
As the Solicitor-General reminded us, clause 34(7) of this Bill lists the matters to which the Lord Chancellor originally "may" and, as my right hon. and learned Friend the Member for, Aberavon reminded us, now "must" have regard in making provision for remuneration. Of course those are all relevant considerations. The Lord Chancellor said in another place, and the Solicitor-General repeated here today, that the word "fair" is vague. I am not sure whether I accept that, but I will let it pass for the moment. The courts deal with words like "fair" every day of the week, but the Solicitor-General said that the list is more specific. What I do not understand is why it is not possible to write in the principle of fairness as an objective, yet still retain that list as relevant considerations in achieving that objective.
That would have a number of advantages. In the admittedly unlikely event of the courts being troubled again about the levels of remuneration, there would be a statutory standard to which they could have regard,

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whether that was intended or not. It would also remove public anxiety, which is not really surprising in an atmosphere in which the Government have cut the funding of all public services. And, as my right hon. and learned Friend explained, it would provide the Lord Chancellor with a provision to which he could have reference in arguing with the Treasury. He can now point out that he must have regard to the considerations in the list. But the Treasury may reply that he must also have regard to the availability of resources. If the obligation was to provide for fair remuneration, the availability of resources would be a relevant consideration when considering for what purposes to make provision for legal aid, but not relevant when deciding a fair rate of remuneration for specific work. That is as it should be.
If a private company arranges for the supply of some commodity, it will consider the availability of resources when it decides how much to word order. But when the invoice is delivered, it cannot be heard to say that it will pay less than the appropriate price because it does not have adequate resources.
I want to explain why some of us feel so passionately about this. The Legal Aid and Advice Act 1949 was a great step towards the realisation of the principle of equality before the law. That is a fundamental constitutional principle. It has never been questioned as a major objective even though it has not always been attained in practice. It is the nearest that we have approached in this country to a general recognition of the social contract. It is the basis for saying that the law is equally available to us all and we are all therefore under an obligation to respect it.
So it is important that we should be clear what the principle means. The principle does not mean that we all have the same right. Judges, policemen, and tax collectors have rights that are not shared by the rest of us. The principle does not mean that all our rights have the same content. Someone who owns 30,000 acres has rights the content of which are so different from the content of your rights, Madam Deputy Speaker, or mine, that we cannot begin to call them the same rights.
People's respective rights are a matter for political debate. Whether it is fair that some people's rights should be limited to living on £26·05 a week while the managing director of the Burton group has an unfettered right to live on 60 per cent. of £1·3 million a year is a political question. It has nothing to do with legal theory. It shocks the sense of fairness of any decent person, but it does not infringe the principle of equality before the law—[Interruption.] There seems to be some agreement across the Chamber on that and we are obviously making progress.
The principle means that the legal system accords us all equally an opportunity to enforce such rights as we have. Just as the rich family can defend the integrity of its mansion, so the poor family can expect the law to uphold its right to occupy its council house or its bedsit. If we are not all equally afforded the protection of the law in that sense, every new right for which the House legislates will merely widen the inequalities.
One major source of inequality is that some people cannot afford to engage the services of lawyers when they need them. There are other causes. Some people, because of inequalities of education, find it more difficult than others to understand complicated official documents.
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Some, because of social inequalities, can telephone their solicitor at home or invite their accountant to dinner, or can consult a legal friend on the golf course. Others think of seeking legal advice in the same way that many of us regard a visit to the dentist. Some, because of economic inequalities, can drive to their solicitor's office in a few minutes, while others have to travel by public transport, perhaps changing buses three times in the process.
There will be other opportunities to address those questions. Today, we are concerned with eliminating inequalities that derive from an inability to pay. When the Legal Aid and Advice Act 1949 was introduced, the principle was that in matters covered by its provisions someone who needed legal aid should have available to him the same standard of services as someone who could afford to pay privately. So far as I know, that principle has never been expressly challenged.
One consequence was that the lawyer who acted or appeared for a legal aid client would receive the same remuneration as a lawyer who was privately instructed. True, as Lord Hailsham pointed out in another place, some of us are old enough to remember when the Bar suffered a reduction in its fees of 10 per cent. That was the Bar's agreed contribution to the funding of legal aid, perhaps in order to make it possible in the first instance. But the baseline of remuneration was the same, whether or not the lawyer's client received legal aid. And that arrangement was later considered unfair and was abolished.
But over the past few years, two levels of remuneration have been developing, according to whether or not the client receives legal aid—which has meant that lawyers with enough private work to keep them occupied have not wanted to take legally aided cases. That is confirmed by the results of the Law Society survey published on Monday, to which reference was made by my hon. Friend the Member for Leicester, East (Mr. Vaz).
There are beginning to be two kinds of lawyers—those available for legal aid work and those whose expertise and experience make it possible for them to confine their services to privately funded clients. In another place, the Lord Chancellor referred to idealism in the legal profession. I am sure he did not mean to imply that if someone is motivated by a social conscience it is right to take advantage of him, in the knowledge that such a person would not withdraw his services—that was the argument applied by the Government in respect of nurses.
It is true that many legal practitioners have been prepared to accept legal aid work if they could afford to do so, by way of taking the rough with the smooth. There are some who want the majority of their work to be from aided clients, because then they feel that they are meeting a social need. However, the number of solicitors' firms working on that basis which find that they cannot meet their overheads has been increasing. Some have ceased to practise while others are having to cut corners to survive. The principle that legal aid clients should receive the same standard of advice and representation as those who can afford to pay privately is no longer realised. In many areas, people find that they cannot obtain any legal advice or representation at all. All that has taken place while the words "fair remuneration" are in the Legal Aid Act.
I accept that the Lord Chancellor would like to remedy the situation—I do not dispute that for a moment. But it will not encourage the profession to hope for better things

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now that those words have been removed, and it will not facilitate the Lord Chancellor's task in his discussions with the Treasury.
Other issues in the Bill also cry out for debate. I have never found it easy to understand why someone who suffers physical injury as the consequence of another's wrong doing should be entitled to legal aid in pursuing a remedy, whereas someone whose reputation is destroyed by a libel should be denied redress, unless he happens to be rich. I have never understood either why someone whose remedy lies in a tribunal hearing should be in a different position from someone whose redress lies in the courts. I endorse what was said by my right hon. and learned Friend the Member for Aberavon.
I am not clear why eligibility for legal aid should be defined by a single, rigid cut-off point, while there are many who could afford to fund a county court action or a day in the High Court—but who would be ruined if they found themselves involved in a series of appeals. In the Law Society's Gazette for 9 March, Mr. Cyril Glasser asked how the Government can be satisfied with a situation where between 1979 and 1986 something like one quarter of households in England and Wales ceased to be eligible for legal aid.
Mr. Alex Carlile: I agree with what the right hon. and learned Gentleman has said, but perhaps he should also address the question that exercises me. Why did the Labour Government, of which he was a member, not make the necessary changes to allow people to be represented at tribunals? Is it not also correct to say that the number of people eligible for legal aid fell dramatically during the period of the last Labour Government?
Mr. Archer: No. I do not know where the hon. and learned Gentleman obtained that information, but it is totally false. I say that from my own experience, because I was the Minister who introduced the 1979 Bill into the House. It was that legislation which restored levels of legal aid to those which existed initially.
Mr. Carlile: What about between 1976 and 1979?
Mr. Archer: It is true that a number of steps had to be taken to adjust for that situation. There was, for example, a change in the way in which undefended divorces were dealt with, as I am sure the hon. and learned Gentleman will remember. I am happy to defend the record of the Labour Government. We would like to have done a number of other things. Perhaps I should not divulge to the hon. and learned Gentleman the contents of my private diaries—I shall publish those later!—but they record a number of discussions aimed at redressing certain problems. However, I have one eye on the clock and I know that other right hon. and hon. Members wish to contribute. If the hon. and learned Gentleman will forgive me, I am content to deal with those other arguments in Committee.
They are all matters which should be raised, and which we ought to have debated today had we had more time. However, I can promise the Solicitor-General a lively time when we come to the Committee stage.
5.7 pm
Mr. Humfrey Matins: I am grateful for this chance to contribute briefly to the debate. I begin by declaring an interest as a solicitor in private
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practice. None of us doubts that the pressures on the legal aid system have increased dramatically in recent years. The amount spent on the system has also dramatically increased, though little of that is reflected in the fees paid to lawyers. That increase is a reflection of the larger number of people eligible for legal aid, the increased volume of crime, the higher number of divorces, and so on. The cost of providing legal aid has risen alarmingly and the Government are right to concern themselves with that development. The machinery is badly overburdened and without doubt restructuring is needed. Therefore, I broadly welcome the Bill.
I look at the question of legal aid, first, from the applicant's point of view. The position varies depending on whether the applicant applies to a magistrates court in connection with a crime with which he has been charged, or makes an application in respect of an action in a civil court or for divorce. As to the first, the present system appears to work very well, with magistrates' clerks able to grant or refuse applications for legal aid within a few days, or even quicker. At Dorking court, at which I have practised, the clerk, Mr. Kimnell, and his deputy, Mr. Hall, deal with applications within a matter of hours, and never take more than a day. That is good news for the applicant, who is given a decision quickly.
One may contrast that situation with applications for legal aid in a civil action or in respect of divorce. The legal aid office at Brighton, which works very hard and is greatly overburdened, currently takes upwards of three months to determine an application for legal aid. That is bad news for the whole system and is very bad news for the applicant, whose position may often be prejudiced as a result of such unreasonable delays. I do not criticise the staff. Far from it. They work terribly hard. The system, however, is in need of a major overhaul. That is the position of the applicant.
But, at the end of the day, the solicitor needs to get his costs taxed. Here again, the system, in both criminal and civil law, is out of date and in need of reform. The forms which must be filled up for criminal costs to be taxed are becoming more difficult to understand. The duty solicitor forms are almost impossible. In civil law, the bill of costs is prepared by a costs draftsman. The laborious process of taxation takes time and is old-fashioned, involving the allocator, for instance. It is a difficult system and it costs money itself, because there is no remuneration for all the work involved in sorting out the costs.
Three problems that I see in the Bill have been dealt with in earlier speeches. First, I am a little concerned about the possible cutback on the green form scheme. The green form has been a great blessing for many people who have been in need of legal advice in the past few years. A good deal of money has been spent on it, but perhaps we should blame ourselves. We pass so much legislation that the poor chap in the street has a bewildering sense of rights and remedies, and he needs to be looked after.
Let me give an example. A poor man on social security found himself tempted to send for a book advertised in a magazine. It was one of those offers involving "no obligation", and he sent off a couple of pounds. He then found that the company had him by the throat, so to speak: book after book and bill after bill turned up.
That man could go to a solicitor and take advice under the green form scheme. He did so, and the solicitor was able to put him on the same level as the rich company, writing a hard solicitor's letter and getting the company off

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his back. If that remedy is taken from the poor man—for a solicitor's letter does help—he will be put at a disadvantage compared with the big battalions, and I do not believe that any of us wants that to happen.
The second point that concerns me slightly is the proposal to put out parts of the law to competitive tendering. Will that mean a continuing high quality of service, or will the standard drop? I rather fear it will be the latter.
There is also the question of fair remuneration. Lawyers are often the subject of much ridicule for earning vast fees, but most of us in practice know that legal aid itself does not pay very well, and the rates have not risen substantially in past years. Without a system of fair and proper remuneration, there is a danger that solicitors will stop doing legal aid work. If they do not stop outright, they may not see the client; they will arrange for secretaries and junior clerks to do so. I have already seen that operating in firms in Surrey. The junior people see the clients, who do not receive the necessary advice because the solicitors' practices cannot afford to arrange for a partner or qualified person to deal with them.
I ask my hon. and learned Friend the Solicitor-General to take on board the question of remuneration. I congratulate him on the way in which he has put over the points in the Bill. I know that he will consider what I have said, but I feel that the profession has a right to be slightly concerned.
We could all offer advice on how the legal aid system could save money. Undoubtedly much money is wasted. There is a tendency for some solicitors—and, dare I say, some members of the Bar—to encourage those on criminal charges always to go for trial. That, of course, is not a good thing. Some solicitors, frightened to take a case in the magistrates court, say, "Go for trial. We will sort out the plea later." That means double pay. My hon. and learned Friend says, quite rightly, that barristers would never do such a thing, but solicitors sometimes do, which is a pity. I do not know whether we should consider limiting the right to jury trial, but I feel that we must concern ourselves with the amount spent on duplication by the profession.
Sir Nicholas Bonsor: I feel that the Government should be extremely careful before taking the course suggested by my hon. Friend. In the days when I used to practise at the Bar, I fear that it was true that anyone who was convicted of shoplifting and appeared before a stipendiary magistrate stood absolutely no chance of acquittal. It was like a sausage machine. One after the other, the same excuses were trotted out, and one after another they went down. We must be very careful about taking the right of jury trial away from such defendants.
Mr. Matins: My hon. Friend is absolutely right to mention the importance of jury trial, particularly for those charged with offences of dishonesty. I recognise that right, but I express my concern about the costs.
We must also reform the system in the civil courts. Civil legal aid bills get bigger and bigger. For instance, in the present state of divorce law, practitioners end up with files 12 in thick before they ever get into court. If the parties in a divorce action could be brought to court more quickly or
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brought before the registrar for a conciliation appointment, the correspondence could be shortened and the enormous costs cut down.
Mr. William Cash: My hon. Friend has not referred to public inquiries. Such a case may involve a local authority or water authority with immense resources, QCs galore and considerable administrative back-up. The issue may be one of major regional or national importance. Yet the people on the other side—the objectors—are more or less on their own, as they cannot afford to do much, although there is a legitimate public interest.
Has my hon. Friend any sympathy with the idea of a certificate of public interest being issued by a Minister or a judge in chambers to enable legal aid to be granted to an amenity group? We could then be satisfied, in cases such as the Sizewell inquiry, that a proper and fair hearing had been provided by the opportunity given to the objectors to be represented with the help of legal aid.
Mr. Matins: Typically, my hon. Friend makes an excellent point, which I am sure my hon. and learned Friend will have taken on board.
We have twin aims. One is to ensure that spending on the legal aid system does not get out of hand. There are signs at present that it is going up too fast. Secondly, a vital part of our democracy is that the poor are not disadvantaged and can start on an equal footing with the rich.
I shall support the Bill, because I think that the Government are right to tackle the problem and they have done so in a sensible way. However, a number of us will watch the position with great interest in the months and years ahead in the hope that those twin aims will be achieved.
5.18 pm
Mr. Alex Carlile: I start by welcoming the good parts of the Bill. Without repeating the list of four specific items enumerated by the hon. and learned Member for Burton (Mr. Lawrence), with which I agree—
Mr. Lawrence: There were five.
Mr. Carlile: I think that there were four, but we can consider that later.
The right hon. and learned Member for Aberavon (Mr. Morris) listed some of the deficiencies in the existing legal aid scheme. I agree that those deficiencies exist, and have become starker as the years have passed. On the whole, however, it can be said that the legal system has been available over the years to the very poor and to the very rich. It has been available to the very poor because generally they have been able to obtain legal aid. It has been available to the very rich because generally they have been able to buy their legal advice without its causing them too much anxiety. Generally speaking, it has not been available readily to those in the large middle income group which predominates, because they cannot afford to undertake the burden of lengthy litigation.
It seems to me that the Bill highlights a difference of philosophy, a difference between two strongly held opinions. The first, to which I would adhere, is that all citizens should have equality before the law. That means having a widespread legal aid system which enables individuals who are wronged to have their wrongs righted. The alternative view, to which the Bill seems to adhere, is

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that legal aid should become less available and eventually should be reduced to the level of a safety valve for the poorest in society and in respect of only some aspects of our law. That is the philosophy behind the Bill and I regret it very much.
I should state my professional interest in this matter as a practising barrister working in the criminal and civil common law with which we are principally concerned and also as one of the secretaries of the joint all-party barristers group. Having said that, I should like, as it were, to remove my wig and look at the Bill from the viewpoint of the consumer.
The Bill sets up a legal aid board. From the consumer's point of view there is nothing wrong with a legal aid board. It would be fine if what was being set up was an independent board which was able to consider the merits across the law and what legal aid was required to deal with which items of legislation. That is not what the Bill provides. In my view, it is quite likely that the independent members of the legal aid board will find that they are part of a paper tiger. It will be a paper tiger for one clearly identifiable reason which I would suggest was more or less confessed to by the Solicitor-General; and if he did not confess, his denial was distinctly muted.
The reason is that legal aid is now, for the first time, to be cash limited by the Treasury; for the Bill is principally about the cash limitation of legal aid by the Treasury. That is bound to affect the performance and effectiveness of the legal aid board. This cannot be satisfactory for the consumer or for the organisations representing consumers.
Mr. David Martin: Is the hon. and learned Gentleman suggesting that no cash limits should be applied to legal aid?
Mr. Carlile: I shall answer the hon. Gentleman by asking him if he thinks it is right that legal aid should be available to enable those who cannot afford to go to the law to enforce the law in their interests whatever the legislation with which they are concerned. If he believes that to be the case, the answer to his question is yes, and I am not ashamed of saying so. It seems to me to be the equitable and correct answer to the question.
A further matter which will concern the consumer very greatly if he considers the Bill is that the Bill merely sets out a legislative framework. Most of the legislation on legal aid will be made by statutory instrument. It will be made on the drip. That will enable the Treasury to tighten its grip on the tap from which such money as is available for legal aid flows. That seems to me to be profoundly unsatisfactory.
The hon. Member for Croydon, North-West (Mr. Marlins), who is a very experienced solicitor, dealing with everyday legal problems, spoke about the green form scheme. The green form scheme throughout England and Wales has provided all citizens with ready access to straightforward legal advice on simple issues which a lawyer can solve easily but which a citizen may find extremely baffling. The dismantling of the green form scheme will mean that expert advice provided for the citizen will be less readily available.
I believe that with the best will in the world some of the agencies that will be required to provide first-step advice may not be able to-give the same level of expertise. In the long run, the removal of the green form scheme will not reduce significantly the cost of legal aid.
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In an intervention I raised the problems which many rural and small town solicitors feel that they will face as a result of the changes in contracting-out and tendering. In my constituency in mid-Wales, solicitors provide an immense range of services for the public, and when they do not know the answers they obtain counsel's opinion. Despite popular myth, one can obtain an opinion from a competent junior counsel at very little cost and present it to the client. The client will know or at least will believe that the advice is right. I hope that the legal aid board, the Lord Chancellor's Department, the Solicitor-General and the Attorney-General will not allow anything to happen which will dismantle the fundamentals of the legal system throughout the shire counties of England and Wales.
The Solicitor-General spoke about fair remuneration as an acceptable principle and I accept his belief in that view. He then went on to describe his understanding, and the Government's expression, of the meaning of parts of the Bill dealing with the remuneration of lawyers. It is clear that, although the Government undoubtedly believe in giving lawyers fair remuneration, as the right hon. and learned Member for Warley, West (Mr. Archer) said, they have decided deliberately to reject that principle and give them a little bit less than a fair remuneration.
If the Government start a scheme with this new piece of legislation with a little bit less than fair remuneration, and the Treasury gets its mucky paws on the scheme—as it will, sure as eggs is eggs—one can guarantee that a little bit less will turn into a fair amount less and a fair amount less will turn into a lot less than fair remuneration.
From the consumer's viewpoint, the consequence of that will be very serious. Under the existing system someone may apply through his solicitor for legal aid and if the case becomes more complicated he can apply on an objective basis for the extension of legal aid. Under the existing legal aid scheme he has been able to obtain legal advice of an equal quality compared with the other side.
Despite the 10 per cent., and later the 5 per cent. reduction, the lawyers have been pretty fairly remunerated, and in civil disputes for which legal aid has been available there has been broad equality of representation. That will no longer be the case because the principle of fair remuneration will be removed, and because of one further reason. The new regime for cash contributions to legal aid will penalise those whose cases are complex. I shall give an example. If a man is brain damaged in a road traffic accident, it can take years, however hard the solicitors work for him, for the case to be resolved. It can take years for all sorts of reasons, such as listing difficulties in London, tracing witnesses, but, above all, because of the time it takes to obtain a certain medical prognosis of the injury. In my experience, that can often take five or more years in a case where serious personal injury has been caused.
If cash contributions are to be made throughout the period for which the case continues, it will mean that the plaintiff will be less able to afford to make the contributions. Those of us who have appeared for and against insurance companies in personal injuries cases know that insurance companies understand litigation at least as well as anybody else. This proposal will encourage insurance companies to be dilatory and to deny liability until the last possible moment. They will not pay money into court and will put up every possible obstruction. Some insurance companies do that already and those of us in practice know who they are and so do they. The others

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will join them. The settlers will join the delayers because of the fact that a plaintiff has legal aid. The rules governing that legal aid are important considerations in the minds of insurance company general managers dealing with personal injury litigation.
There is not time to address the other deficiencies in the Bill. This is far too short a debate on such a major subject. However, I cannot let this opportunity pass without re-emphasising the fact that I believe that it is wrong that people are not able to obtain legal aid for tribunals or defamation actions. I look forward at some future date to the right hon. and learned Member for Warley, West answering the first question that I asked in my earlier intervention.
As the Bill stands I am afraid that it falls far short of satisfying the standard that I hope all hon. Members will set for it. It should provide for equality before the law for everyone; rich or poor, confident or lacking in confidence, whether they understand the law or whether, as is more often the case, it is a complete and baffling mystery to them.
5.32 pm
Mr. Tony Baldry: The hon. and learned Member for Montgomery (Mr. Carlile) complained about the time for the debate. I imagine that it was agreed between the usual channels. When this day was chosen I assumed that it was because large numbers of Opposition Members wished to be away to campaign in the local government elections. However, having heard the speech from the Opposition Front Bench, I now appreciate that it is because hon. Members for constituencies such as Bolsover (Mr. Skinner) and Bradford, South (Mr. Cryer) could not have stomached hearing their Front Bench spokesman make elegant pleas for more money for lawyers. In fact, all the speeches from Opposition Members could be summed up by the two words, "More money." We have not heard anything about cost effectiveness or efficiency in the system, other than in speeches from my hon. and learned Friend the Member for Burton (Mr. Lawrence) and my hon. Friend the Member for Croydon, North-West (Mr. Malins). We have not heard any suggestion about how in matrimonial legal aid—
Mr. Ieuan Wyn Jones (Ynys Môn): Will the hon. Gentleman give way?
Mr. Baldry: With respect, I have only just started my speech, and this is a short debate.
As I was saying, we have not heard any suggestion about how we can make matrimonial legal aid more efficient. Lawyers are still remunerated on the basis of time spent and unit items, regardless of how many letters are sent and the value of those letters. Members of the Bar, who sometimes have to plough through bundles of solicitor-to-solicitor correspondence, wish that they could take them individually to the taxing master and say, "Large chunks of this are totally irrelevant." There is no discipline in the system and there is no incentive to make the system more effective or efficient.
My hon. Friend the Member for Croydon, North-West mentioned the way in which civil legal aid is administered. There has been no debate this afternoon as to how we can
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make that more efficient. I have grave doubts whether any of the court listing officers have ever seen a computer. It seems that everything is still hand written, and there is no sign of word processors being introduced. Those are areas—
Mr. Ieuan Wyn Jones: Has the hon. Gentleman ever been to a solicitor's office?
Mr. Baldry: Perhaps I should declare an interest. The Chamber now seems to be completely full of lawyers. I am a practising barrister. I have trudged through many far-flung and distant Crown and county courts in the past few months and seen how solicitors operate.
There has been a fourfold increase in legal aid costs since 1979—it has increased from £100 million to £400 million. There has been no suggestion as to how we can ensure that the consumers—it is they for whom we are concerned—receive good value. The poor individual who goes to see a solicitor on matrimonial legal aid does not always appreciate the full meaning of the Law Society's statutory charge. It is only when they come to sell their house that that begins to bite. If they understood that a bit more, we might see more efficiency and more determination to resolve disputes, not by confrontation and litigation but by conciliation. Again, it is only from Conservative Members that suggestions have been made as to how we may more properly conciliate.
It is sad that the only suggestions we have heard this week from the Law Society's professional body could also be summed up in the words, "More money." It mentions that some solicitors have given up doing legal aid work. That has been going on for a number of years, for very good reasons. Some firms of solicitors have set up to do criminal legal aid work and are operating a lot more effectively and efficiently than a generality of common law firms dabbling in and doing a little legal aid work here and there. Some firms specialise in criminal legal aid work. In practically every town on the circuit on which I practise there are now one or two firms of solicitors which are, and have been for the past few years, specialising in criminal legal aid work. That is not a reflection of the fact that they are badly remunerated, but simply that market forces exist in law just as anywhere else and it makes more sense for the service to be concentrated and for them to be able to deliver a service in the magistrates courts and Crown courts. Again, we have had no debate this afternoon about how that system could be improved.
Those of us who are practising barristers or solicitors know that there are areas of the law in which few members of the Bar and few solicitors are competent. Such areas include some aspects of welfare law where citizens advice bureaux have been set up for over a decade and are becoming much more professional. I welcome the fact that the Bill will extend the opportunities given to such agencies to provide a decent service and to ensure that people have the benefit of that advice. We have a variety of responsibilities in the House. We have a responsibility to see that people receive justice. We have a responsibility to see that the consumer is well served. We also have a responsibility to the taxpayer. A simple cry of "More money" is inadequate to meet the requirements of a society that is becoming more complex, where the rights and needs of the individual are becoming more complicated and where the tribunals at which they can appear are becoming more numerous.

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I welcome the Bill because the present structure of legal aid, which has existed for many years, while being worth while, is not watertight. It is time to overhaul that system and introduce different disciplines and elements into the way in which the law is administered. I welcome the fact that on the new legal aid board there will be people with experience of management disciplines. I suspect that that will be a welcome introduction. The presence of people who have experience in personnel management will also be a welcome introduction to the way in which legal aid is administered.
May we, once and for all—although I suspect that it will detain the Standing Committee—hit on the head the debate about fair remuneration? It is, after all, not merely fair remuneration. One should always put it in its full context. It is fair remuneration for work actually and reasonably done. It is always historic; it always assumes a whole host of value judgments. What I might consider fair for a plea at Reading Crown court may well be very different from what the taxing master at Reading Crown court considers fair. There is always argument about value judgments. Under this proposal, such value judgments will be more accurately set out and there will be a greater understanding on the part of all involved of how people will be remunerated, and why.
A simple cry of "More money," without discussion of how we can make the system more cost effective and efficient, how to ensure that county and Crown courts operate more effectively and that time is used to better effect, and how listing officers—I am sure that they work hard—can be better served, with better technology with which to do their work, will mean that we are failing in our duty to ensure that people get justice and failing in our duty to the consumer and the taxpayer.
5.41 pm
Mr. Brynmor John: I shall not follow the hon. Member for Banbury (Mr. Baldry), except to say that he made great play of the issue of failing to ensure that the consumer was well satisfied. I declare an interest as a non-practising solicitor. None of us who has dealt with legal aid cases has had complaints from the consumers of legal aid, except of the normal variety—"I should have won." The complaint behind and genesis of the Bill come from the Treasury because of the amount of money it spends. So some of the cant and sourness that we heard from the hon. Member for Banbury can be safely ignored.
I speak in the debate for two reasons. First, Andrew Roth described me as having the immoderate enthusiasm for the welfare state of a poor man's lawyer, to which I plead guilty. Any just society must provide for equal opportunity for redress of individual grievances, as well as grievances in the mass. The legal aid and advice schemes which have always tried to do that have been not the least significant pillar of the welfare state which, after all, was the historical foundation of the Legal Aid Acts. They aided 2 million people in the past year at a cost of £450 million. We are used to spending billions of pounds in the House without turning a hair, so it is ironic that the Government should cavil at the expense of £450 million to relieve the social tensions that are inherent in an increasingly complex society.
We must accept that it is the welfare aspect of the Legal Aid Acts which has incurred the disfavour of the Government. The Law Society and the noble Lords who
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debated the Bill in another place made a fundamental error in regarding the argument about the Bill as being one about the means chosen to achieve a set number of ends. It is not a debate about means; it is about ends. For all the smoothness and urbanity of the Lord Chancellor, the Government dislike the legal aid and advice scheme and want to destroy it step by step. They will do that not frontally, but with their well-known salami-slicing tactics, in which the Treasury will play an ever greater part. Why else would the Government include in the Bill such wide enabling powers, which enable all the details to be filled in by secondary legislation, much of which will go unconsidered by the House? Even if we consider it under the affirmative resolution procedure it will be unamendable. Either we take it as a whole or we leave it as a whole, but we cannot apply our collective wisdom to what is suggested.
The second reason why I speak is that my relevant experience derives from the area in which I live, in which I was born and which I represent. I have also practised there all my life. It is part of a county which, according to the current Government publication "Economic Trends", is the poorest in England and Wales. It has a GDP per head of £3,200, which is less than half the GDP per head in Greater London. How can there be any notion of justice in such an area without a substantial legal aid scheme? Without such a scheme the notion of justice would be as hollow as it was in the old legal joke, "Justice is open to all, like the Ritz hotel."
The Lord Chancellor, with his commercial and revenue practice, cannot possibly understand the way in which poor areas such as mine must depend on the legal aid scheme for justice in their legal dealings. Even less can the desiccated Brahmins who inhabit the upper reaches of the Lord Chancellor's Department understand that. Yet they are given substantial discretion by the Bill, of which one example will suffice.
No one who has acted in a personal injury case or who has practised in the provinces can think that the length of a case should determine a person's contribution to legal aid. There are three possible reasons why a case can be delayed. First, it can be delayed by the defendants and their insurance companies' solicitors and so on. Secondly, there can be delays because the medical position is not sufficiently clear for the specialist to give a prognosis that is enough to settle the case. The third reason is that the solicitor may be acting for a man who is himself at fault. The only common feature to all three is that they are not the fault of the assisted person. Why then should he be asked to pay more? Are we really to accept the patronising view that underlies this—that little people have little grievances? By making the legal aid contribution so large, the Government are ensuring that people cannot undertake legal action in long complicated cases.
We have already heard how the legal aid criteria have become less generous as time has gone on, and how fewer people are now eligible for aid than the numbers of whom previous Governments proudly boasted. It is the scientific expertise of the last Lord Chancellor that informs this debate. On a previous occasion when he tightened the limit he said that only 1,000 legal aid applications would be affected each year. It turned out that 4 per cent. of all applications were disqualified. That is the sort of scientific basis on which the White Paper rests and which is miserably embodied here in statutory form.

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We should be extending the notion of legal aid, not contracting it. First, we should do so for administrative tribunals. There is a sort of grim humour in the fact that the House is being asked to take welfare rights away from the green form scheme and from legal advice on the day after The Times reported the case of McQuorquadale v. the chief commissioner, in which a lady had to fight her case to the Court of Appeal on legal interpretation to stop the deduction of past maintenance payments from her benefit. That is how legalistic some of the framework of welfare rights is, and why it would be wholly disastrous for it to be detracted from, or for access to legal advice or other advice to be denied. We are, under the bland assumption of informality, doing a grave injustice to the people who have to go before welfare tribunals.
I am sorry to see that the hon. and learned Member for Montgomery (Mr. Carlile) has gone. I argued in Government, as well as in Opposition, that the country should seek a system of administrative law to replace the present chaotic jungle of different procedures and tribunals, and that we should have a proper administrative court. Legal aid will have to be available for that sort of justice.
There should also be legal aid in libel cases. The tabloid newspapers have longer rakes for their muck these days; they travel down into different spheres of society. It is a scandal when television believes that it has the right to try and to condemn people on programmes and legal aid is not available in cases of serious defamation. It means that a person's reputation is sacred only if he has the money to defend it.
I make a plea for the legal services committees. There has been one in the north-west of England for a long time and others have been proposed or started in south Wales and the north-east of England. Professional lawyers and many other people who are interested in the law, including welfare workers, get together to ensure that legal services are accessible to the consumers. The chief weakness in extending the legal services committees is the lack of assurance about funding. I do not mean accessibility of funds for a particular purpose but core funding which enables these committees to exist. Assurance of funding has made the north-west committee successful. I hope that even this Government will commit themselves to funding legal services committees of the south Wales and north-east England variety to secure the future.
Whatever the Government say, my view is that the Bill aims to cut legal aid expenditure significantly. The hon. Member for Banbury told us that all that the Opposition have done is to cry for more remuneration for lawyers. We do that because we want a comprehensive system of legal aid advice.
The new buzz word for activity in the law is commercial law, when one is not quite a business man and, in my view, not quite a lawyer either. These practices are set up around the cities. In my area of Pontypridd and the Rhondda, legal firms are not moving wholesale to commercial law, to advise on company flotations in areas in which sometimes there is up to 25 per cent. male unemployment. These firms are heavily dependent on legal aid but, in the past year, six solicitors—some of partner status—have left firms in the Rhonnda to go to firms elsewhere for higher remuneration and more fashionable work. They will not be replaced
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because of the current remuneration available in areas such as mine. Therefore, the legal aid service to people in my area—I am concerned with this rather than with professional remuneration—who have been injured or suffered matrimonial or other problems will be that much less. I find it offensive to say to my people—the accused, the victims of accidents and the matrimonial casualties —that they are not worthy of the same legal protection as the Ernest Saunders and Jeffrey Archers of this world.
When I decided to become a solicitor, professional status and remuneration were obviously important, but we also had a desire to serve our communities. These days, private practice is more at the whim of the accountants' stopwatch, and the legal profession is less caring. The Bill will signal to many that equality before the law is a hollow sham, a concept not backed up by the means to make it effective and a reality. Only by having a doctrine that is a reality can we have a society that will remain civilised and settle its disputes without regular and increasingly severe explosions of violence. No Government should imperil that concept of justice and equality before the law. Beneath all the fine words, smooth evasions and the bland formulae of the Bill, and the way in which it has been introduced in both Houses, is the underlying concept that the Government do not want to continue universal legal aid and equality before the law. I hope, therefore, that the Bill is denied a Second Reading.
5.45 pm
Mr. David Martin: I speak as what might be described as a lapsed practising barrister. Therefore, I can be one of the few in the Chamber to plead disinterest rather than interest in what comes to the legal profession in remuneration or work. I practised chiefly in the criminal courts, mainly defending and doing legal aid work. I did criminal cases but also civil cases. I felt a sense of déjà vu on hearing today's comments on the lack of remuneration for the legal profession and on the second-class service that one always gets from legal aid cases compared with private funding. That was all said when I was called to the Bar in 1969. When I began practising, there was a Labour Government, followed by a Conservative Government and, in the 1970s, another Labour Government. There were still all the difficulties about remuneration of lawyers and the difference in pay between legally aided cases and those paid for privately.
I was interested to hear the comment of the right hon. and learned Member for Warley, West (Mr. Archer) that the original intention was that there should be the same money for private litigants as for those who were legally aided. That was a myth when I practised, and I suspect that it always will be a myth. That is not to say that there should not be the same standards. I did not consider myself to be a second-class lawyer in the standards and service that I gave. Certainly I was young and not as well paid as many who were hitting the highlights, but by no means did I give a reduced standard of service to those whom I did my best to represent.
I was badly paid. I took dock briefs, which continued even during the so-called generous period of legal aid. I took the advice of Lord Keeper Guildford's grandfather, who said, "If you will be contented to be a great while getting a little, you will be a little while getting a great deal." Unfortunately, I did not stay at the Bar long enough to get the great deal. Since my experience, I have always

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been an agnostic in the face of lawyers' claims that they suffer parsimony in their income, whether from legal aid or not.
Legal aid was in crisis in 1976 when I ceased practising at the Bar. One received far less because of the inflation in the early 1970s. Instead of earning a pound for a pound's work just before 1971 one got 10 shillings, and this became 50p for a pound's work by the time there had been two years of Labour Government. I left the Bar wondering when it would ever be sensibly remunerated. I saw the rebellion against the Lord Chancellor, to which, I regret, he gave way years later. We hear that the Bar is still badly remunerated. According to the practising lawyers, the legal profession is badly remunerated, yet lawyers get more and more and the number of practising lawyers, both solicitors and barristers, increases. It happens all over the country.
We have heard in this debate that some lawyers will cease to do the work. I like the idea of the 40 per cent. — not 40 per cent. who have given up the work but 40 per cent. who have either given it up or are considering doing so. Remember all the fuss—I am sure that you do, Madam Deputy Speaker, because you have a long memory—about how all the sharks and cowboys would take over conveyancing and the lawyers would withdraw from the scene and about how all the Elusian mysteries attached to conveyancing would not he understood by anyone who was not a lawyer. However, even solicitors have gone from strength to strength in conveyancing when competition and, dare I say it, market forces have been introduced. The professional approach of lawyers has been used in the same way, which has been welcome. I welcome the Bill because it carries forward those reforms.
Conveyancing introduced an element of business into the practices of solicitors and barristers, which they very much needed, and a recognition of trade and business, which in their view was not necessarily consistent with the professionalism for which, in my opinion, they overcharged. They now provide a better conveyancing service. We should not listen to the pleas of lawyers that this is the end of the world as they know it. We have heard it all before.
I agree with Opposition Members about the issue of equality before the law. Of course everybody should have equality before the law, but it is difficult to define who should receive legal aid and whether there should be cash limits. The hon. and learned Member for Montgomery (Mr. Carlile) avoided answering my question about cash limits. At first he said that there should not be cash limits, but then agreed that there should be. Whatever service one provides there will always be cash limits. Cash limits should be made while ensuring that there is as much equality before the law as possible. However, there will never be a perfect system because there will always be those who feel hard done by and that they should have had their case heard before a court.
Every Government since 1949 have done their best, but only recently under this Government has legal aid increased in leaps and bounds. The number of people who enjoy legal services through legal aid and the amount spent on them have increased.
Much has changed since 1949; hon. Members' surgeries have changed very much over that period. Reference was made earlier to Dai Common Law. I am a Dai Common Law in my surgery as, I suspect, are other hon. Members. I spend much of my time not referring my constituents to lawyers. They are the last people to whom I refer them
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because I want them to live happy lives free of worry and conflict. People with grievances are often not happy people. I say to them, "For goodness sake, do not pursue this case. Do not feel aggrieved, but try to understand that life is tough. If you can swallow what you feel is a wrong, you will feel much happier. Once you get into the clutches of lawyers, you will never get out of them." I speak from a great deal of experience—perhaps I am the poacher turned gamekeeper. Having fallen, as an honest man, among lawyers many years ago, I speak with some experience.
Where do I send my constituents? I send them to the agencies in my constituency, such as the excellent citizens advice bureau. I want more money to be provided to citizens advice bureaux, and l think that that will happen as a result of the Bill. I send them to other specialist agencies that defend a particular interest. The ordinary people who staff those agencies are committed, as I am and other hon. Members, to helping ordinary people.
We have been hearing for many years that legal aid should be granted for tribunal cases. The problem is that tribunals were established in the 1940s to avoid the need to go to a lawyer. The original intention was to keep matters out of the hands of lawyers. There were to be tribunals where people spoke ordinary English, not Latin—we have heard only one Latin quotation today, thank goodness—that would be understood by all, and there would be no lawyers to make matters difficult. But the moment that legal matters are introduced into any tribunal, lawyers become involved.
Mr. John: Although the hon. Gentleman is speaking eloquently about informality, does he not think that the introduction into tribunals of the doctrine of precedent of commissioners' decisions blows his argument out of the water? The claimant does not have access to reports, but the insurance office and the tribunal do. It is like appearing before a secret society.
Mr. Martin: I am arguing that we should get rid of many tribunals and bring them into the mainstream of the courts. I do not understand why county courts are unable to do much of the work that is done by tribunals. I have much sympathy with what the hon. Member for Pontypridd (Mr. John) said about an administrative law system. At some stage there will have to be a complete reform of the court system so that much of the work done by tribunals is returned to the mainstream of the legal system rather than put into separate compartments.
I hardly dare to suggest a programme for the Government as we have been crowding so much into the first parliamentary year, but perhaps we should be thinking of measures to take over the next three years. Perhaps we should undertake the sort of reforms that took place in the 19th century. We should be bringing more work into the mainstream of the legal system rather than, as we have been ever since 1949, creating ad hoc tribunals to deal with particular matters. Trying to obtain legal redress without involving lawyers is like trying to found a new hell without imps or, dare I say it, a new Parliament without Whips. It cannot be done because there must be one if there is the other.
As to the important matter of costs, I understand that under the Bill, if an unassisted party is sued by an applicant funded by the legal aid board and wins. he has no right to costs. It is a gross injustice that one can win

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case and pay the lawyers, but still find that, even though one's rights have been vindicated, one is left with costs to pay. The only way in which one can obtain costs from the legal aid board is if it can be shown that severe hardship has been suffered or it is considered just and equitable to be paid out of public funds. That is no more acceptable than the present system, under which the costs recovered by a successful party, whether assisted or unassisted, are not in practice fair.
I end with a quotation from Bacon, who likened the law courts to a bush to which a sheep runs for protection in a storm and is bound to lose some of his fleece.
6.7 pm
Mr Gordon Oakes: I shall be brief because a number of my hon. Friends want to take part in the debate.
The hon. Member for Portsmouth, South (Mr. Martin) used a peculiar expression at the beginning of his speech. He said that he was a lapsed barrister. Having listened to his speech and heard the advice that he gives to his constituents, I understand why he used the term "lapsed barrister". One of my great fortunes is that I am not one of his constituents. Surely if a constituent comes to us about a legal matter, as they frequently do, we should send him to a solicitor, not an agency.
My right hon. and learned Friend the Member for Aberavon (Mr. Morris) said that this was a Treasury Bill and a money Bill. I do not believe that. Money is always part of everything and it is a part of the Bill, but the matter goes much deeper than that. We have seen the Government attack local authorities, trade unions, the media and the BBC, but this is an attack on justice. The Bill creates a two-tier justice system, which is something that Britain has never known.
Let us consider some of the fundamental parts of the proposed scheme. Hon. Members have talked about the green form scheme. When I practised as a solicitor people frequently came to see me for advice under the green form scheme. That is the entry point for the legal profession. People do not know whether they have a case, so they come to solicitors for advice. Frequently, they do not have a case and they are advised on the green form scheme that that is so.
The Government scheme will do what the hon. Member for Portsmouth, South already does, which is send people to an agency, presumably something like the citizens advice bureau. I am second to no other hon. Member in my admiration for what the citizens advice bureaux do. Their offices are staffed by dedicated voluntary workers who attend courses to improve their efficiency in advising the public, and they do that without remuneration or financial reward. Another excellent organisation which helps at times of emergency is the medical profession. Do we feel that we do not need doctors? Do we say that they are not the people to deal with medical problems?
At the point of entry, one needs first-class advice. Hitherto we have had that. One can go to virtually any solicitor for advice. However, 40 per cent. of solicitors have decided that they will not be part of the scheme, and that was before this Bill. When the Bill, which excludes fair remuneration, goes through, that number will rise to 80 per cent., not because solicitors are uncaring, but because
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they will not be able to afford to do the work. They have their staffs to pay and their own remuneration to take, and they cannot afford to do legal aid work.
The hon. and learned Member for Montgomery (Mr. Carlile) made an excellent point about fair remuneration. Of course the insurance companies, with their enormous resources and vast experience, will put every possible obstacle in the way if they know that the plaintiff in a case is legally aided. They will wear the solicitor out. It will be like pulling in a fish in a fishing match. So many obstacles will be put in his way that the solicitor will pull out because he cannot afford to go on. He will know that as there will no longer be the fair remuneration clause, although he can say that the defence has put so much in his way, and he has had to deal with all the nonsense that they have introduced, the legal aid board will still be able to tell him that he can have only a fixed fee and that he should have done all the work for less. In a civil defence case, the defence solicitors will know that perfectly well and will use it.
The ordinary citizen will be denied justice at the point of access, and there will be a two-tier system of justice. One will have advice from an unqualified, however devoted, person, as against that from a qualified person such as a solicitor who is accepted among the professions, and who has passed one of the hardest examinations to get into his profession. It is rightly difficult to get into that profession because one has to deal with a person's liberties and rights, so one must be properly qualified. Instead of such a qualified person, a volunteer may make the decision. The volunteer may be in the citizens advice bureau, but if he gives the wrong advice, can the citizen sue? He could sue a solicitor for wrong advice, but he cannot sue an agency. There is no way out. That is two-tier justice.
I deplore the fact that we are debating the Bill for such a short time. I have much to say, but I want my hon. Friends to have an opportunity to speak. This is one of the major Bills of the Session, and it is wrong to have only a three-hour debate on it. This is two-tier justice, which hitherto has been unknown in Britain. The Government are introducing it not merely for financial, but for political and philosophical reasons.
The Bill attacks the poor litigant rather than the rich insurance company which contributes to Conservative party funds. The Bill will attack the immigrant, who tends to be poor and who needs legal advice even more than citizens born here. It is a bad Bill and I hope that Conservative Members, many of whom respect the law, have been part of the law and believe—as I passionately do —in British justice, do not want to live in a country with a two-tier system of justice, with one law for the rich and another for the poor.
6.15 pm
Mr. Michael Irvine: A great deal of the anxiety felt in the legal profession about this Bill stems from the disappearance of the words that were to be found in the previous legislation. They were:
"fair remuneration according to work actually and reasonably done."
The omission of those words causes worry. Solicitors, and my fellow barristers, see matters listed in clause 34(7) which the Lord Chancellor has to take into account. They see nothing particularly exceptionable in them but they ask themselves whether the omission of those words means that the principle of fair remuneration has been

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abandoned. They then look at subsection (8) and see that the Lord Chancellor must consult the general council of the Bar and the Law Society and feel somewhat relieved. However, any such relief is dissipated when they look over the page and see that subsection (11) provides:
"No regulations shall be made under this section which include provision for the purposes mentioned in sub-section (2)(c) or (e) above except with the consent of the Treasury."
The anxiety stems from that.
I concede that inadequate remuneration can all too easily lead to inadequate performance and a fall in standards, but I ask my fellow members of the Bar and solicitors to have regard to the substantial increase in Government money and resources which have been devoted to the legal aid scheme in recent years. In 1978–79, it was running at about £100 million a year. This year, the figure will he close on £450 million. By any standard, that is a substantial increase. It is true that costs have also risen markedly during that period, but both branches of the profession have benefited substantially and it is right that I, as a practising barrister, should mention that I have shared in that benefit.
The trouble is that the demand for legal services, rather like the demand for the National Health Service, is virtually infinite. If demand is unleashed without proper regard to the costs of providing services, it will grow uncontrolled and will increasingly become a burden on the Exchequer. It will lead to the courts becoming clogged and to an increasingly severe strain being put on their operation.
I hope that the new legal aid board will ensure that members of the legal profession doing legal aid work are properly remunerated, and that lack of means does not cut anyone off from legal advice and representation when it is needed. However, it should maintain a far more careful scrutiny than has previously been the case as regards waste and abuse. The vast majority of practitioners are competent and scrupulous in ensuring that abuse does not occur. All of us who have practised in the courts know that some abuse and quite a lot of waste occurs nevertheless. I was glad that my hon. Friend the Member for Croydon, North-West (Mr. Malins) mentioned the question of matters that should be dealt with in the magistrates court finding their way at considerably increased expense to the Crown court. That is an example of how costs could and should be saved.
All of us who practise know that in some cases people obtain legal aid who should not have obtained legal aid. We know that in far too many cases, through delay and inefficiency, proceedings meander on, causing frustration to litigants and unnecessary expense to the legal aid fund. The Legal Aid (General) Regulations 1980 already provide for sanctions in that regard. Regulation 104(1) provides:
"…on any taxation of an assisted person's costs in connection with proceedings (except authorised summary proceedings and proceedings in the Crown Court) any costs wasted by failure to conduct the proceedings with reasonable competence and expedition shall be disallowed or reduced….
I believe and hope that the new legal aid board will make sure that such powers are used more rigorously. It is no good the professions calling for fair and reasonable remuneration unless we are prepared to allow the legal aid board to ensure that the waste and abuse, which to some extent exist, are kept under very tight control and eliminated as far as possible.
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In general, I support the Bill's provisions wholeheartedly, but one important criticism that I have of it is that it leaves untouched the restrictions on the power of the courts to order payment of successful unassisted litigants' costs out of the legal aid fund. That matter was rightly raised by my hon. Friend the Member for Portsmouth, South (Mr. Martin). The grant of legal aid puts the recipient in a very powerful position indeed. I listened with some astonishment to the right hon. and learned Member for Aberavon (Mr. Morris), who spoke of legally aided litigants being subjected to procedural delays and being left at the mercy of well-funded opponents who are privately financed. Far too often the boot is on the other foot, and the legally aided litigant is faced with a not particularly well-off litigant without legal aid. When that happens, the person without legal aid is virtually completely at the mercy of the legally aided litigant.
It is intolerably unfair that a litigant financing proceedings out of his own resources should not only face the disadvantage of conducting a case against a legally aided opponent but in all too many cases should find himself having to bear his own costs, even if he is successful. I am disappointed to discover that in clause 18 the old mistakes are repeated. Subsection (4) provides:
"An order under this section in respect of any costs may only he made if—
(a) an order for costs would be made in the proceedings apart from this Act."
That is obviously fair enough. The sting comes in subsection (4)(b):
"as respects the costs incurred in a court of first instance. those proceedings were instituted by the assisted party and the court is satisfied that the unassisted party will suffer severe financial hardship unless the order is made".
So a successful non-legally aided litigant in a court of first instance has no hope of obtaining an order for costs against a legally aided opponent unless the other party instituted the proceedings and, in addition, he can show that he, the non-legally aided litigant, would suffer severe financial hardship unless such an order was made.
If ever a case demonstrated the unfairness of that provision it was the case of Kelly v. London Transport Executive (1982), 1 WLR, 1055. In that case the plaintiff suffered a very minor accident indeed and concocted a vastly inflated amount of injury and damage flowing from it. The defendants paid £750 into court. The plaintiff did not take it. The defendants made an offer of £4,000 in desperation, to avoid the mounting costs, and he still did not take it. Eventually, he pressed the matter to a conclusion. The judge who heard the case found him to be an unscrupulous liar. His story was shown to be absolutely untrue. He was awarded just £75 in damages. Because the defendants were unable to bring themselves within the ambit of the provisions now contained in clause 18(4)(b), they received no costs at all, in spite of the fact that long before the hearing they had paid £750 into court and had later made an offer of £4,000. That is a grievous injustice.
It may be argued that such a reform would result in a very substantial amount of extra costs being incurred. I acknowledge that that is a risk and that that argument is important. However, it is a reform which should be considered. If the legal aid fund were at risk for costs, it would concentrate powerfully the minds of the legal aid board and of those acting for the legally aided party. That of itself could well lead to a saving in costs that would

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counterbalance to some extent any extra expenditure that would have to be met if the reform that I suggest were made.
I strongly believe that the principle of fair and reasonable remuneration should be retained. However, we lawyers do ourselves no service if we think that by a wave of the hand we can rid ourselves of Treasury control. It is not right that we should do so. It is right that the Treasury should be there and that the legal aid board should bring its forces powerfully to bear on the problem of saving costs and making our legal system more efficient.
6.28 pm
Mrs. Llin Golding: First, let me declare an interest. Unlike all the other hon. Members who have spoken, I am not, and never have been, a member of the legal profession. In the distant past, I was a consumer, and it is as a consumer that I want to speak to the Bill.
Like many hon. Members, I have received representations from many groups of people and many individuals who are worried about the effects of the Bill. They are concerned predominantly about the withdrawal of legal aid and advice from people who are often not able to fight for themselves. There is considerable concern, too, about the wide-ranging powers that the Bill gives to the Lord Chancellor to alter the scheme as and when he thinks fit.
The legal profession has expressed its misgivings at the removal of the administration of legal aid from the Law Society to the legal aid board, which is proposed in part II of the Bill. Incidentally, I do not see a proposal in the Bill for the postal ballot of all solicitors to elect the two solicitor representatives to the new board. Perhaps such ballots apply only to groups of workers in unions who are not allowed to have closed shops.
As a consumer I am greatly interested in the question, "Does the present system of control by the Law Society work and, if not, will the proposed system of a legal aid board be any better?" In what way should the Law Society keep control of the administration of public funds? The basic need is for a list of solicitors who hold practising certificates. As many hon. Members will be aware, subject to certain exceptions, a solicitor is not qualified to act as a solicitor unless he has a certificate issued by the Law Society authorising him to practise. He cannot recover his costs in respect of anything done if he does not hold a practising certificate. Indeed, on 25 November 1987 the Master of the Rolls said:
"A solicitor who practises without a certificate first of all commits a criminal offence and secondly is uninsured."
It should not be too difficult for a practising solicitor to remember to register by 31 October each year. However, it is surprising how many fail to do so and how few seem to be brought to account for that failure. Even when they are brought to account, the action taken is not known to the consumer.
Let us consider the case of a firm of solicitors, Messrs Blair Allison. One of my constituents notified the Solicitors Complaints Bureau that that firm had been practising uncertificated from 1 November 1986 to 28 January 1987. I wrote to the bureau on her behalf and received the following reply:
"practising certificates were only issued with effect from 28 January 1987 (and accordingly they had been practising
922
uncertificated since 1 November 1986). An investigation was undertaken by the Bureau and these matters were considered by the Adjudication Committee at their meeting on 21 October last. Action was taken against the partners but I am afraid I am not in a position to let you know the Committee's decisions in respect thereof."
I asked what had happened about my constituent's complaint, what had happened to the money that the firm had made, and what had happened to any costs that may have been paid out in public money. The answer from the Solicitors Complaints Bureau was that we, the consumers, are not allowed to know.
I tabled a series of written questions to the Attorney-General on 25 January. I asked
"if he will take steps to establish a method of complaints against uncertificated solicitors which is more open to scrutiny than that of the Solicitors Complaints Bureau."
The answer was no. I also tabled a question to ask:
"if he will set up an inquiry into the manner in which the Solicitors Complaints Bureau conducts investigations, with respect to its standards of impartiality."
The answer again was no. I also asked
"what steps he will take to prevent the payment of legal aid moneys to uncertificated solicitors; and whether he will make a statement."
The Attorney-General replied:
"When the legal aid administration of the Law Society receives information that a solicitor has undertaken legal aid work whilst uncertificated, no payment is made for the work concerned. Action is taken to recoup any moneys already paid in respect of the appropriate period.
The next question I tabled asked:
"what was the amount of legal aid moneys recovered in 1983, 1984, 1985, 1986 and 1987 and paid in respect of a solicitor who at the relevant time did not hold a current practising certificate; and whether he will make a statement."
The reply was:
"The information requested is not available, but the practice of the legal aid head office is to recover all legal aid moneys paid in respect of a solicitor who at the relevant time did not hold a current practising certificate."—[Official Report, 1 February 1988; Vol. 126, c. 449–50.]
I studied the legal aid fund accounts for 1983 to 1986 and I could find no identifiable entry of money recovered from uncertificated solicitors. Therefore, how do we know the size of the problem? Indeed, in a written question to the Attorney-General on 5 February I asked:
"under which heading in the legal aid accounts for 1985–1986 are to be found sums recovered from solicitors who at the relevant time did not hold a current practising certificate."
The answer was:
"Sums are recovered by deduction from subsequent payments to the solicitors concerned. Recoupments thus lead to the amount recorded in the legal aid accounts as 'solicitors' charges and counsel's fees being lower than would otherwise have been the case."
What kind of answer is that from an Attorney-General who discovers that solicitors have been acting uncertificated and claiming money from public funds. That was a little out of tune with his reply to my question on 5 February, which asked
"whether he will seek to strengthen the criminal law with the intention of reducing the number of uncertificated solicitors who are acting improperly."
The reply stated:
"I see no reason to do so. Criminal sanctions for an offence under section 20 of the Solicitors Act 1974 are already severe; penalties of imprisonment for not more than two years, a fine, or both may be imposed. Specific offences relating to the commission of certain prohibited acts attract other penalties under the Solicitors Act 1974."—[Official Report, 5 February 1988; Vol 126, c. 772.]
Let us consider claims for payment from the legal aid fund—the so-called green form claims submitted by the

923
legal profession. Is the House aware that green form claims are retained for only 12 months after the end of the financial year in which payment of the claim was authorised? Even if a solicitor was found to have been practising uncertificated, the green form giving the detail of the claim would have been destroyed. Unless the case was considered quickly—the Law Society is not known for its speed—there would be no evidence.
How does one prevent the forms from being destroyed on 31 March each year? How does an ordinary citizen, who wishes the Solicitors Complaints Bureau to investigate a complaint, prevent the destruction of such forms? The answer is to take the matter to the High Court, as did Mrs. Peasgood, one of my constituents who prepared and presented her case. She made an application for an order against the secretary general of the Law Society, last year's president of the Law Society, the current president of the Law Society, the director of the legal aid head office, the regional director of legal aid head office, the Chester area director of the legal aid office, two assistant directors at Chester, the director of the Solicitors Complaints Bureau, a solicitor who dealt with complaints at that bureau and the Law Society.
Mrs. Peasgood asked for an order under section 51 of the Solicitors Act 1974 to require the defendants to answer allegations contained in her affidavit of conduct unbefiting solicitors. Two of those allegations were:
"Conspiracy to conceal illegal conduct and to conceal dishonesty … cheating the public revenue."
My constituent was refused legal aid. She took that action not in an attempt to discredit the system or the individuals named, but to make them answerable to ordinary people whose money they are spending. In the course of her action she considered some of the part-time chairmen of the social security tribunal who are practising solicitors. She discovered that some of them seemed to have been practising uncertificated. Thus there appear to be solicitors sitting in judgment on others while acting criminally themselves.
Are the Law Society and the Solicitors Complaints Bureau the correct bodies to run the legal aid scheme? Surely the answer must be no. Will the new legal aid board under the control of the Lord Chancellor do any better, given that he moves with the wind in whatever direction it sends him? The answer must be no.
The Bill has been presented by a Government who are dedicated to control the trade unions by crippling them and by making unnecessary laws against the workers. They have presented this Bill for their predominantly middle-class solicitor friends, and it offers little control over the distribution of millions of pounds of taxpayers' money. It allows hundreds of solicitors to continue to practise illegally, indeed criminally. The Bill demonstrates that, yet again, the Government are ignoring the needs of those in our society who most need help. We should oppose it.
6.39 pm
Mr. John Fraser: One of the fundamental duties of Parliament is to sustain and support the fair and efficient administration of justice and the exercise of individual civil rights. When a Legal Aid Bill comes before the House, it should be an occasion on which we can celebrate the strengthening of our system of justice and equality before the law—a phrase to which many right hon. and hon. Members have attached importance. It
924
should be an occasion when we push forward the frontiers of representation, for example, before coroners, before tribunals and in serious defamation cases.
The numbers of tribunals and their importance have multiplied immensely since the modern legal aid system was introduced. The judgment of an immigration appeals tribunal can often be a matter of life and death. Tribunal awards in unfair dismissal cases often exceed amounts within the county court jurisdiction. Class actions are becoming increasingly important, not just for the consumers of drugs but for the residential occupants of estates, whether privately or publicly owned. The Bill should be an occasion to reverse the tendency towards a first and second-class standard of legal representation, which has worried hon. Members. The Bill should reinforce the proposition that legal rights are valueless unless the means to be aware of them exist.
Unfortunately, the Bill does not rise to those occasions. Instead, it is a vehicle mainly to enable the Treasury to hack £10 million off legal aid expenditure and to cash-limit the money that is available for legal aid purposes. As has been the case with other social legislation—health, housing, pensions and social security—it is a device to get people to pay more but receive less. The Bill will not reverse the trend towards a smaller proportion of people of moderate means having access to the courts for the redress of legitimate grievances.
The definition of legal aid by the Rushcliffe committee —repeated by the Solicitor-General—was that the real test of "small and moderate means" should be a test of those means in relation to the probable cost of the proceedings, without unreasonable deprivation of the litigant. In many European jurisdictions the test for moderate means is based on the amount to be expended. An example of how the system operates in this country is that if any person has a disposable income exceeding £110 per week, which is not a great deal of money, or capital exceeding £5,000, no legal aid is available for representation no matter the size or cost of the case, although some advice may be given.
I offer as an example the case of an elderly couple with more than £5,000 in the bank. They find that their retirement home is falling apart because of alleged negligence by a well-known firm of builders or an architect. That couple must gamble their life savings on the result of a court case. In those circumstances, no one could argue that their means are not small and moderate in relation to the issue involved. The Bill does nothing to meet the case where an elderly couple are expected to exhaust their saved capital before receiving any assistance from the state. In a case where the defendant is affluent or is protected by an insurance company and the couple have spent all their savings on the fees of expert witnesses and counsel, they should then qualify for legal aid because their disposable income is less than £110 a week. The new law will make it less likely that they will pursue their case or succeed, because their period of contribution will go beyond one year. That will make it more difficult for them to obtain justice. The existing system falls short of equal or adequate access.
The National Consumer Council provided me with several examples. Although about 2 million rented homes are in serious disrepair, last year only about 1,500 housing cases came before the courts. Only 8 per cent. of defendants who risk losing their homes because of possession proceedings are legally represented. About 85

925
per cent. of people who are injured at work and are off work for more than two weeks do not take the first step to obtain civil redress for the injury which they have suffered.
Despite what the Solicitor-General said about increased expenditure on legal aid, a smaller and smaller proportion of the population is now eligible for legal aid. Of course, the Government had to extend criminal legal aid and advice to prisoners at police stations as a price for obtaining the Police and Criminal Evidence Act 1984. Having paid that price, they are now trying to penalise the legal aid system by attempting to get back some of the money lost as a consequence of that Act.
I am grateful to Mr. Cyril Glasser, who wrote an article in the Law Society's Gazette on 9 March 1988. He describes in that article the extent to which the cover of legal aid in general has decreased. He said in that article:
"During the period of 1979–86, an estimated 13 million people, representing over 25 per cent. of the population, went out of scope for eligibility on income grounds alone. These figures may well have substantially increased over the last two years, so that only just over half the population now qualifies, compared with well over 80 per cent. in 1979."
Because of lack of time, I shall not give the other statistics that he has usefully stated there. However, it is clear that, whatever the pattern of expenditure on legal aid might be, the number of people—the number of two-parent households in particular—who qualify for legal aid has reduced substantially since 1979.
In the words of my right hon. and learned Friend the Member for Aberavon (Mr. Morris), the Bill is a missed opportunity. The script for the Bill may have been written by the Lord Chancellor, but the real plot has been devised by the Treasury. The real face behind the mask is found in the penultimate paragraph of the explanatory memorandum to the Bill, which talks about a consolidated saving in public expenditure. In the words of the National Consumer Council, we do not believe that the Bill will improve access to justice
In the time available, I cannot deal with the many and detailed points which have been raised. However, I endorse the views of many hon. Members about the preservation of the legal aid advisory committee. At the beginning of a new scheme, there should be no time limit on how long that advisory committee runs. In many of our national industries and in other areas, for example, in health administration, it is not unknown to have one system of administration for executing a scheme and to have a consumer representative body, rather like the legal aid advisory committee and the social security advisory committee, to comment on what is happening. I endorse the comments of many of my hon. Friends and many Conservative Members on the preservation of the independence of the new legal aid board.
I hope that the Government will not remove from criminal courts the ability to award criminal legal aid on the spot, particularly when the defendant is in custody. The criminal court deals with the urgent question of whether a person should be at liberty and the level of assistance which he should have when before the court. No one is in a better position to judge the eligibility for legal aid on merit. I am not now talking about legal aid on the basis of income.
We agree with many commentators that contracting-out means obtaining advice on the cheap. In the words of
926
the National Association of Citizens Advice Bureaux, they will not accept advice on the cheap or arrangements which will damage their relationship with other agencies or with the legal profession. There is a great danger, particularly in the less populous parts of the country, of creating a monopoly of advice which is given by people who may not be subject to professional codes of ethics. That may put them into conflict with those to whom they will subsequently have to refer cases.
The professions will have to negotiate remuneration with the Treasury. That has always been the case, but I can see no justification for taking out of the wording of the existing legislation the provision for remuneration for
"work actually and reasonably done."
Of course, the professions will always be accused of special pleading, but the Attorney-General is aware of the problems in the magistrates courts in London, the difficulties of obtaining clerks and running our systems of justice properly because the rate for the job is not being paid to magistrates' clerks. He is also aware of the problems with the Crown Prosecution Service because the right rate for the job is not being paid. He knows that the system of justice continues to break down because there is not fair remuneration for
"work actually and reasonably done."
There are plenty of examples outside the legal aid scheme of the difficulties that will be encountered if the Lord Chancellor intends to impose upon the profession a system of remuneration that does not bear fair comparison with salaries elsewhere.
When the Lord Chancellor introduced the Bill in the other place, he described it as
"the framework for the legal aid scheme through into the next century."—[Official Report, House of Lords, 15 December 1987; Vol. 491, c. 605.]
The trouble is that it is not so much a framework as a frame without a picture. The picture will have to be painted in by 53 regulation-making powers that the Lord Chancellor assumes in the Bill. It will have to be painted in through the guidance that he is entitled to give to the legal aid board. It will have to be painted in by the partly hidden hand of the Treasury. The Bill, by its history, letter or spirit, does not seek to reinforce or extend the legal aid service.
One of the Government's principles is give and take. Yesterday, they gave in the debate on one of the clauses of the Finance Bill; today, they take. The Bill represents not the open hand of justice, but the tight fist of the Treasury. For those reasons, and because of the hidden agenda behind the Bill, we shall vote against it.
6.52 pm
The Solicitor-General: This has been an interesting debate with three themes. First, there is a wide welcome for the new framework set by the Bill, but there were some major misapprehensions in the speeches of hon. Members, particularly of Labour Members, and some reassurances were sought.
The first major misapprehension concerns funding. I want to state as firmly as possible that it is nonsense to talk of cuts or a second-class service. The legal aid system is demand led today and it will continue to be demand led under the new system.
The right hon. and learned Member for Aberavon (Mr. Morris), with the Welsh hwyl steaming in particularly fine form, sought to depict my noble and learned Friend the

927
Lord Chancellor as someone who might easily be seen as dancing to the Treasury's tune, clutching a poisoned chalice. Those hon. Members who know my noble and learned Friend will find that difficult to believe.
We spent rather a long time on the question of fair remuneration for the legal profession. I wish to draw the House's attention to the criteria set out in clause 34(7). The Law Society, for example, has said that its overheads will not be covered. It has been suggested that there will not be sufficient barristers and solicitors to provide the service required. However, one finds in that clause those specfic matters that the Lord Chancellor must take into account. That is a much firmer and better safeguard than the inevitably imprecise concept of fairness. The Lord Chancellor made it clear that we shall be fair and the Bill enshrines the sensible criteria to achieve that.
Mr. Michael Jack rose—
Mr. Vaz rose—
The Solicitor-General: No, I shall not give way. I have already given way to the hon. Gentleman several times and I want to try to answer the points raised in the debate. However, I shall give way to my hon. Friend as he has been here throughout the debate.
Mr. Jack: Will my hon. and learned Friend take the opportunity to review the speed of payments to solicitors undertaking such work? That point has been drawn to my attention by solicitors in my constituency who believe that the present system is slow. Will he also, either now or later by letter, answer the point about the Bill's treatment of conveyancing and wills, particularly in respect of testamentary guardianship?
The Solicitor-General: I promise my hon. Friend that we shall consider those points carefully. Other aspects regarding speed of payment have already been carefully considered in recent months and I well understand my hon. Friend's point. Although my hon. Friend the Under-Secretary of State for the Home Department has been heavily engaged elsewhere, he will know that we are considering that aspect.
I was asked directly by the right hon. and learned Member for Aberavon whether I accepted the figures in the Law Society's briefing. We shall listen carefully to the Law Society's comments, but that briefing does not come up to the standard that we might have expected from the Law Society. It argues that 27 per cent. of solicitors are ceasing to do matrimonial work, but I have studied that briefing and I see that the hard facts show that, over the past five years, almost double the number of solicitors have come into matrimonial work as have left it. That does not appear to be a sound basis for that statistic.
We also regard as ill-founded the Law Society's claim that 25 per cent. of people have ceased to be eligible for legal aid over the past few years. It is a difficult matter to work out and Mr. Glasser, whose article I have read, makes that clear. However, one can obtain legal aid in many circumstances with an income well above the national average. As the country becomes richer, that may lead to some change in the proportions, but the figure is not to be accepted.
In the time left to me I shall seek to give reassurance on a few important points. The right hon. and learned Member for Aberavon, the hon. and learned Member for Montgomery (Mr. Carlile) and my hon. and learned
928
Friend the Member for Burton (Mr. Lawrence), among others, asked about tribunal representations. The Lord Chancellor is carrying out research on that matter and, when it has been completed, we shall consider it, particularly in relation to one of our priorities, social security commissioners. That is a particularly complex issue, but we shall take no lectures from Opposition Members because, in all the years that they were in government, they did nothing about Strasbourg, defamation, industrial tribunals, social security tribunals and coroners. It is rich for them to suggest that we should have put all those matters right at a time when legal aid expenditure has been increasing at an exponential rate, precisely because the service is demand led. It is nonsense to suggest that we are proposing to dismantle the green form scheme. Many advice agencies do a pretty good job in giving advice on specialised matters, such as welfare benefits. Nothing will be forced upon them, but they will have the opportunity to enter into freely agreed contracts to provide that advice in limited areas and only then will the green form scheme be withdrawn.
High standards of service are part of our priority. The opportunity for appeals on criminal legal aid will remain. I give that assurance to my hon. and learned Friend the Member for Burton. The board will be able to fund legal services committees if it thinks right. That is my response to the remarks of the hon. Member for Pontypridd (Mr. John). The legal aid advisory committee can continue if that be thought right and if the Lord Chancellor and the board think that helpful. Decisions on criminal legal aid will remain with the courts unless and until it seems wise and sensible to do anything different.
The aim of the Bill is to provide the litigant, who would otherwise be unable on account of his means to obtain advice, assistance or representation, with a legal aid system that is efficient and effective and gives value for money both for him and for the taxpayer. We wish to create a system that is capable of evolving to meet the challenges of the decades ahead.
Question put, That the Bill be now read a Second time:-
The House divided: Ayes 242, Noes 147.

Division No. 285]

[7pm

AYES

Adley, Robert

Brandon-Bravo, Martin

Aitken, Jonathan

Brazier, Julian

Alexander, Richard

Bright, Graham

Alison, Rt Hon Michael

Brittan, Rt Hon Leon

Allason, Rupert

Brooke, Rt Hon Peter

Amess, David

Browne, John (Winchester)

Amos, Alan

Bruce, Ian (Dorset South)

Arnold, Jacques (Gravesham)

Buchanan-Smith, Rt Hon Alick

Arnold, Tom (Hazel Grove)

Buck, Sir Antony

Aspinwall, Jack

Budgen, Nicholas

Atkins, Robert

Burns, Simon

Baker, Nicholas (Dorset N)

Butler, Chris

Batiste, Spencer

Butterfill, John

Beggs, Roy

Carrington, Matthew

Bennett, Nicholas (Pembroke)

Carttiss, Michael

Bevan, David Gilroy

Cash, William

Biffen, Rt Hon John

Chapman, Sydney

Biggs-Davison, Sir John

Chope, Christopher

Blackburn, Dr John G.

Clark, Sir W. (Croydon S)

Blaker, Rt Hon Sir Peter

Clarke, Rt Hon K. (Rushcliffe)

Bonsor, Sir Nicholas

Coombs, Anthony (Wyre F'rest)

Boscawen, Hon Robert

Coombs, Simon (Swindon)

Boswell, Tim

Critchley, Julian

Bottomley, Peter

Davis, David (Boothferry)

Bottomley, Mrs Virginia

Day, Stephen

Bowden, Gerald (Dulwich)

Dorrell, Stephen

Bowis, John

Douglas-Hamilton, Lord James

929

Durant, Tony

Marshall, John (Hendon S)

Dykes, Hugh

Marshall, Michael (Arundel)

Emery, Sir Peter

Martin, David (Portsmouth S)

Fookes, Miss Janet

Mates, Michael

Forman, Nigel

Maude, Hon Francis

Garel-Jones, Tristan

Maxwell-Hyslop, Robin

Gill, Christopher

Mayhew, Rt Hon Sir Patrick

Gilmour, Rt Hon Sir Ian

Meyer, Sir Anthony

Goodhart, Sir Philip

Miller, Hal

Gorman, Mrs Teresa

Mills, Iain

Gorst, John

Miscampbell, Norman

Gow, Ian

Mitchell, Andrew (Gedling)

Gower, Sir Raymond

Mitchell, David (Hants NW)

Greenway, Harry (Ealing N)

Moate, Roger

Greenway, John (Ryedale)

Molyneaux, Rt Hon James

Gregory, Conal

Monro, Sir Hector

Griffiths, Sir Eldon (Bury St E')

Montgomery, Sir Fergus

Griffiths, Peter (Portsmouth N)

Moore, Rt Hon John

Ground, Patrick

Moss, Malcolm

Grylls, Michael

Moynihan, Hon Colin

Hamilton, Hon Archie (Epsom)

Neale, Gerrard

Hamilton, Neil (Tatton)

Needham, Richard

Hanley, Jeremy

Nelson, Anthony

Hannam, John

Neubert, Michael

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

Newton, Rt Hon Tony

Hargreaves, Ken (Hyndburn)

Nicholls, Patrick

Harris, David

Nicholson, David (Taunton)

Haselhurst, Alan

Onslow, Rt Hon Cranley

Hawkins, Christopher

Page, Richard

Hayes, Jerry

Paice, James

Hayhoe, Rt Hon Sir Barney

Patnick, Irvine

Hayward, Robert

Pawsey, James

Heathcoat-Amory, David

Peacock, Mrs Elizabeth

Heseltine, Rt Hon Michael

Porter, David (Waveney)

Hicks, Mrs Maureen (Wolv' NE)

Powell, William (Corby)

Hicks, Robert (Cornwall SE)

Price, Sir David

Hind, Kenneth

Raffan, Keith

Hogg, Hon Douglas (Gr'th'm)

Raison, Rt Hon Timothy

Holt, Richard

Redwood, John

Hordern, Sir Peter

Renton, Tim

Howard, Michael

Rhodes James, Robert

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

Ridsdale, Sir Julian

Howarth, G. (Cannock & B'wd)

Rifkind, Rt Hon Malcolm

Howell, Ralph (North Norfolk)

Roe, Mrs Marion

Hughes, Robert G. (Harrow W)

Ross, William (Londonderry E)

Hunt, David (Wirral W)

Rossi, Sir Hugh

Hunter, Andrew

Rowe, Andrew

Irvine, Michael

Rumbold, Mrs Angela

Jack, Michael

Ryder, Richard

Janman, Tim

Sackville, Hon Tom

Johnson Smith, Sir Geoffrey

Sainsbury, Hon Tim

Jones, Gwilym (Cardiff N)

Shaw, David (Dover)

Jones, Robert B (Herts W)

Shaw, Sir Giles (Pudsey)

Jopling, Rt Hon Michael

Shaw, Sir Michael (Scarb')

Kellett-Bowman, Dame Elaine

Shephard, Mrs G. (Norfolk SW)

Kilfedder, James

Shepherd, Colin (Hereford)

King, Roger (B'ham N'thfield)

Shepherd, Richard (Aldridge)

Kirkhope, Timothy

Shersby, Michael

Knight, Greg (Derby North)

Sims, Roger

Knight, Dame Jill (Edgbaston)

Skeet, Sir Trevor

Knowles, Michael

Smith, Tim (Beaconsfield)

Knox, David

Soames, Hon Nicholas

Lamont, Rt Hon Norman

Speller, Tony

Lang, Ian

Spicer, Sir Jim (Dorset W)

Lawrence, Ivan

Squire, Robin

Lennox-Boyd, Hon Mark

Stanbrook, Ivor

Lester, Jim (Broxtowe)

Steen, Anthony

Lilley, Peter

Stern, Michael

Lloyd, Sir Ian (Havant)

Stevens, Lewis

Lloyd, Peter (Fareham)

Stewart, Andy (Sherwood)

Lyell, Sir Nicholas

Stradling Thomas, Sir John

McCrindle, Robert

Sumberg, David

MacGregor, Rt Hon John

Summerson, Hugo

Maclean, David

Tapsell, Sir Peter

McLoughlin, Patrick

Taylor, Ian (Esher)

McNair-Wilson, M. (Newbury)

Taylor, John M (Solihull)

McNair-Wilson, P. (New Forest)

Taylor, Teddy (S'end E)

Malins, Humfrey

Tebbit, Rt Hon Norman

Mans, Keith

Thompson, D. (Calder Valley)

Maples, John

Thompson, Patrick (Norwich N)

930

Thorne, Neil

Wells, Bowen

Thurnham, Peter

Wheeler, John

Tracey, Richard

Whitney, Ray

Tredinnick, David

Widdecombe, Ann

Trippier, David

Wiggin, Jerry

Trotter, Neville

Wilshire, David

Twinn, Dr Ian

Winterton, Mrs Ann

Vaughan, Sir Gerard

Winterton, Nicholas

Waddington, Rt Hon David

Wood, Timothy

Wakeham, Rt Hon John

Woodcock, Mike

Waldegrave, Hon William

Yeo, Tim

Walters, Dennis

Young, Sir George (Acton)

Ward, John

Wardle, Charles (Bexhill)

Tellers for the Ayes:

Warren, Kenneth

Mr. David Lightbown and

Watts, John

Mr. Kenneth Carlisle.

NOES

Abbott, Ms Diane

Griffiths, Win (Bridgend)

Allen, Graham

Hattersley, Rt Hon Roy

Alton, David

Heffer, Eric S.

Anderson, Donald

Hinchliffe, David

Archer, Rt Hon Peter

Holland, Stuart

Armstrong, Hilary

Howells, Geraint

Ashton, Joe

Hoyle, Doug

Banks, Tony (Newham NW)

Hughes, John (Coventry NE)

Barnes, Harry (Derbyshire NE)

Hughes, Robert (Aberdeen N)

Barron, Kevin

Hughes, Roy (Newport E)

Battle, John

Hughes, Sean (Knowsley S)

Beith, A. J.

Hughes, Simon (Southwark)

Benn, Rt Hon Tony

Illsley, Eric

Bermingham, Gerald

Janner, Greville

Bidwell, Sydney

John, Brynmor

Blair, Tony

Jones, Ieuan (Ynys Môn)

Boateng, Paul

Jones, Martyn (Clwyd S W)

Boyes, Roland

Kaufman, Rt Hon Gerald

Bray, Dr Jeremy

Kennedy, Charles

Buckley, George J.

Kirkwood, Archy

Caborn, Richard

Lamond, James

Callaghan, Jim

Leadbitter, Ted

Campbell, Menzies (Fife NE)

Leighton, Ron

Campbell, Ron (Blyth Valley)

Lloyd, Tony (Stretford)

Campbell-Savours, D. N.

McAllion, John

Carlile, Alex (Mont'g)

Macdonald, Calum A.

Clark, Dr David (S Shields)

McFall, John

Clay, Bob

McNamara, Kevin

Clelland, David

McWilliam, John

Clwyd, Mrs Ann

Madden, Max

Cohen, Harry

Mahon, Mrs Alice

Cook, Robin (Livingston)

Marek, Dr John

Corbett, Robin

Martlew, Eric

Corbyn, Jeremy

Michael, Alun

Cousins, Jim

Michie, Bill (Sheffield Heeley)

Crowther, Stan

Michie, Mrs Ray (Arg'l & Bute)

Cryer, Bob

Millan, Rt Hon Bruce

Cummings, John

Mitchell, Austin (G't Grimsby)

Dalyell, Tam

Morgan, Rhodri

Davies, Ron (Caerphilly)

Morris, Rt Hon A. (W'shawe)

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

Morris, Rt Hon J. (Aberavon)

Dixon, Don

Mowlam, Marjorie

Dobson, Frank

Mullin, Chris

Duffy, A. E. P.

Murphy, Paul

Dunwoody, Hon Mrs Gwyneth

Nellist, Dave

Eastham, Ken

Oakes, Rt Hon Gordon

Ewing, Mrs Margaret (Moray)

Orme, Rt Hon Stanley

Fatchett, Derek

Patchett, Terry

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

Pendry, Tom

Fisher, Mark

Pike, Peter L.

Flannery, Martin

Powell, Ray (Ogmore)

Flynn, Paul

Prescott, John

Foot, Rt Hon Michael

Primarolo, Dawn

Foster, Derek

Quin, Ms Joyce

Fraser, John

Radice, Giles

Fyfe, Maria

Randall. Stuart

Garrett, John (Norwich South)

Rees, Rt Hon Merlyn

George, Bruce

Reid, Dr John

Golding, Mrs Llin

Richardson, Jo

Gordon, Mildred

Robertson, George

Gould, Bryan

Rogers, Allan

Grant, Bernie (Tottenham)

Ross, Ernie (Dundee W)

931

Shore, Rt Hon Peter

Wardell, Gareth (Gower)

Short, Clare

Welsh, Michael (Doncaster N)

Skinner, Dennis

Wigley, Dafydd

Smith, Andrew (Oxford E)

Williams, Alan W. (Carm'then)

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

Winnick, David

Soley, Clive

Wise, Mrs Audrey

Spearing, Nigel

Worthington, Tony

Steel, Rt Hon David

Wray, Jimmy

Taylor, Mrs Ann (Dewsbury)

Young, David (Bolton SE)

Taylor, Matthew (Truro)

Vaz, Keith

Tellers for the Noes:

Wall, Pat

Mr. Frank Haynes and

Wallace, James

Mr. Frank Cook.

Walley, Joan

Question accordingly agreed to.
Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

LEGAL AID BILL [LORDS] [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purpose of any Act resulting from the Legal Aid Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of—

(a) any sums required for payments by the Lord Chancellor to the Legal Aid Board established by the Act;

(b) any other expenses of the Lord Chancellor under the Act; and

(c) any increase in the expenses of any other Minister of the Crown attributable to the discharge of functions under the Act.—[The Solicitor-General.]

Rover Group
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]
7.14 pm
The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke): The Government and the board of Rover Group have always looked forward to the day when the businesses of the Rover Group could be returned to full private ownership. That became a firm political commitment for the Government in the 1983 Conservative manifesto for the general election. We believe that a huge manufacturing business of this kind performs best under commercial management and subject to the normal demands of the market place. The interests of employees, suppliers and dealers are best served when the company is able to raise its capital, to invest and to make strategic decisions without the direct supervision and intervention of Ministers, Whitehall or Westminster.
Indeed as evidence of that claim I want to stress that privatisation has already brought benefits to the former parts of the group that have been liberated from state ownership. Jaguar has increased both production and employment since its flotation in 1984 and its excellent products are sought after across the world. Employees in Unipart have seen the value of their shares rise as that firm's profitability has grown since privatisation. The same applies to Istel, the information technology group. Leyland-DAF, in which Rover Group holds a 40 per cent. stake, has seen recent announcements of increased United Kingdom productivity and production. Jaguar Rover Australia is also trading profitably. Indeed all the privatised businesses where the Rover Group has maintained a minority stake are now contributing to the group's profitability.
Mr. Dave Nellist: While the Minister is recounting the list of former Rover Group businesses, especially those from Coventry, would he like to complete the list and add Alvis, the tank manufacturers in Coventry which is proposing to close its city centre site and which has shed hundreds of jobs since privatisation, Self-Changing Gears, the gearbox manufacturers, which, within six weeks of privatisation, sacked 20 per cent. of the work force, and, primarily, Coventry Climax—the factory which I live next door to and which is 10 yards from my back gate—which, after privatisation in 1981 when it had a work force of 3,000, shed 80 per cent. of that work force in five years? In Coventry we do not believe the Government when they argue for the supposed benefits of privatisation. Our experience in Coventry, Jaguar notwithstanding, is not what the Minister claims.
Mr. Clarke: Neither nationalisation nor privatisation can guarantee commercial success or sustained employment. I suppose that we have seen the biggest drops in employment in some of the great nationalised industries such as steel, ship building and others. Where the products can be sold successfully and the industry is not overmanned, the companies have a secure future.
The companies that I have mentioned have been enabled to take advantage of their position in the market place. The hon. Member for Coventry, South-East (Mr. Nellist) is perfectly aware of the background to the

933
companies to which he referred. He is also aware that the overmanning in some of those businesses was bound to be reduced, no matter who owned the company.
My examples show that the best parts of the Rover Group, when privatised, have thrived under privatisation, and employees and customers have benefited.
Mr. Bryan Gould: We are of course accustomed to the Minister's traditional introduction to this type of debate. Where is the evidence that privatisation and a change of ownership have made a difference? Surely all the evidence, even according to the Minister's statements, shows that ownership, in itself, makes very little difference.
Mr. Clarke: I always make this traditional opening to my speeches on privatisation because, having debated nationalisation and privatisation so often over the past six or seven years, I hope that the argument is now won. The general public must be aware that the climate has changed with regard to state ownership of manufacturing.
I concede that, in itself, the change of ownership does not produce the change. The management of the company is freed from the constraints of the Treasury, Ministers like myself, the officials who support me and the attempts of the House to interfere politically in what are essentially management and commercial decisions. That gives the best companies the prospect of thriving more than they otherwise would have thrived so long as they are not nationalised and are returned to the private sector. That is our belief and we are now at the stage where the Rover Group has made steady progress and has reached the point where privatisation on acceptable terms is not just a prospect but a reality.
I pay tribute to Graham Day's two years at the helm. It is a tribute to his performance that Rover should just have reported its best trading performance for nine years. At the operating level, performance was turned round from a loss of nearly £0·25 billion in 1986 to a positive result. That has been achieved on the back of record exports. At home, the group has improved the reputation of its products and is paying greater attention to the needs of its customers.
Mr. Gould rose—
Mr. Clarke: If the hon. Gentleman wishes to pay tribute to Red Robbo and to his contribution in the past, I shall happily give way.
Mr. Gould: It is simply that I must have misheard the Minister. He surely did not use the words "record exports", did he?
Mr. Clarke: I did, and I shall repeat them—based, as they are, on what I regard as excellent briefing. The hon. Gentleman will correct me if I have been misled. I believe that a record export performance has been achieved for the Rover Group's present companies.
As the House may have inferred from my opening remarks, I do not anticipate a great deal of controversy in the debate about the principle of privatisation. I take it almost for granted that for the world at large the argument is won. I shall find out in due course whether this is one of the days when the hon. Member for Dagenham (Mr. Gould) is in favour of renationalising the company—no
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doubt we shall come to that later. I believe that the House is mostly interested today in the way in which we have chosen to privatise the group and the terms of the proposed sale. I shall seek to satisfy the House that that method and those terms are fair, sensible and a good bargain for the taxpayer and for the company.
The Rover Group has the kind of business which cannot easily sustain uncertainty about its future. The House will recall that, when there were rumours that various bidders were in the field in 1986, they had a very adverse effect on the state of the company. During that period of speculation, the group lost £250 million worth of sales and 2 per cent. of its market share, which it has never since recovered.
It is for that reason that when British Aerospace, having talked to Rover Group in the first place, made its approach to the Government, we were determined to handle the situation in a way that would not risk damaging the group. There are those who argue that we should have thrown open the question of purchasing the Rover Group to a variety of bidders. I can only say that I believe that such a prospect would have been grossly irresponsible in respect of a business occupying such an important role in this major industry. The strong advice that we received, particularly from Graham Day and the board of Rover Group, was that we should accept British Aerospace's request that sale negotiations should be on an exclusive basis for a limited period. In my opinion, it would have been reckless to ignore that advice.
In considering the proposals from British Aerospace, we first satisfied ourselves that such a solution would give Rover Group the opportunity to develop its independent role in the vehicle industry. British Aerospace is strongly committed to the future development and growth of Rover Group and is looking to build on the strategy and progress made by the existing Rover Group management. We underlined that commitment in the negotiations which took place between the Government and British Aerospace through the conditions we introduced— particularly those intended to control on-sale.
The deal we concluded ensures that were British Aerospace to decide for some reason to relinquish control within five years the principal subsidiaries of Rover Group, their principal registered trade marks or any substantial part of the undertakings of those subsidiaries, British Aerospace could be required to repay any net economic benefit. That means that it could be not worth while financially for British Aerospace to contemplate any of those steps, which it is not contemplating in any event. That provision is in no way meant to inhibit the commercial freedom of management to run those businesses or to exploit opportunities as they see fit. What it will do, I believe, is contribute to a period of stability in which the Rover Group may operate.
Mr. Andrew Smith: Will the Minister tell the House his definition of a "substantial part" of the undertakings of the subsidiaries? Will he also make clear to the House whether British Aerospace will actually be required to forgo any of the advantages it has enjoyed? The Minister significantly used the phrase "could be required". Will he clarify that point?
Mr. Clarke: We have not defined that aspect in any substantial or quantified terms—it will be a matter for judgment at the time. Plainly, one can consider extremes.

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A small site or particular building might be shed without the terms I have mentioned being relevant. On the other hand, the sale of a substantial part of the business, if it were a significant part of the business, would certainly mean that the conditions would apply. As to the hon. Gentleman's second point, he is quite right, in that we have not made the conditions inflexible. It is not necessarily the case that they will be insisted upon by the Government. That provides for the possibility that there could be favourable circumstances in which the Government decide that it is in the public interest, as well as in the interests of the company, that such permission should be given. There might be some perfectly desirable commercial reason, raising no controversy on either side of the House, why that should be done.
Circumstances might arise in which British Aerospace wished to dispose of a subsidiary company. Therefore, we leave open the possibility that the Government might waive the condition. For the moment, British Aerospace has no intention of doing any of the things I have talked about, which I believe is why it accepted that condition. We do not foresee any circumstances in which we would want to see an on-sale of the kind I have described. However, we would expect the conditions to bite if British Aerospace suddenly decided to sell for reasons that were not readily accepted as being in the public interest.
Mr. Terry Davis: Does the Minister accept that when his Conservative predecessors were willing 20 years ago to give similar assurances in good faith about Chrysler, those pieces of paper were worth nothing in the end? My hon. Friends and I are entitled to press the Minister about what would happen if the events which the Minister does not envisage happening did happen. Suppose that there was a disagreement about what is a significant or substantial part of the business. How would that dispute be settled? Would the Government have the last word in defining what is significant or substantial, in their judgment? What if the management and directors of British Aerospace disagreed? Will there eventually be legal wrangles and court cases?
Mr. Clarke: Any contract can give rise to the possibility of litigation, but the parties to any sensible contract do not contemplate engaging in litigation. I cannot enter into discussion about what might happen if a dispute arose between the Government and British Aerospace about what comprised a "substantial part" of the business. I do not believe that anyone could put forward a tight, quantitative definition of what is meant by "substantial". It is one of those words that most people would find no difficulty in applying to a set situation.
I described those terms to the House because I believe they give a valuable assurance that the group will enjoy a period of stability. They reinforce the stated commitment of British Aerospace to acquire the businesses as going concerns and to develop them. I do not expect that the conditions will give rise to difficulties, and it is not fruitful to speculate what might happen if they did. Those conditions are not inflexible because circumstances might arise in which, for example, the hon. Member for Birmingham, Hodge Hill (Mr. Davis) might press on Ministers the case for permitting British Aerospace without penalty to sell a subsidiary to another purchaser,
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when that was thought to be desirable by everybody. It is right that we should not make the terms bite automatically when one of the interested parties wishes them to do so.
In negotiating terms with British Aerospace, the Government were aware mainly of the burden of debt borne by the Rover Group, which had been built up through years of accumulated losses. The banks had been willing to finance that debt only on the strength of the Government's involvement. We faced the situation—and we face it now—that whatever route was adopted for the company's return to full private ownership, and whatever sale was considered to any purchaser, it would be necessary to tackle the debt problem. Those losses were historic and irrecoverable. The bank indebtedness had to be taken off the back of the new owners—as it would have to be taken off the back of any new owners who might be interested in the group.
Therefore, the Government agreed that it was right to make a cash injection of £800 million to deal with that indebtedness. That was our calculation and reasonable judgment of the level of the indebtedness likely to exist at the time of the sale. With that slate wiped clean, we were able to conclude an agreement for the sale of the Government shareholding for £150 million. That purchase price reflects of course a balance between the prospects and the risks now in the business. However, in judging that deal—which is, I believe, the principal point of interest in the debate—it is necessary to appreciate all the elements of the agreement.
In addition to the £800 million historic debts that the Government are wiping clean and the £150 million being received for the Government shareholding, the taxpayer will benefit from the fact that some £1·1 billion of Rover Group's trading tax losses will effectively be eliminated. That reduces by about two thirds the amount that would otherwise be available to offset against future Rover Group profits. The hon. Member for Dagenham laughs, but that is worth about £400 million to the British taxpayer.
Moreover, BAe and the Government have agreed that the other currently available tax reliefs within the Rover Group will be applicable only within Rover's businesses. It is also an immense relief to most hon. Members—as it certainly should be to taxpayers—to see the prospective extinction of the contingent liability represented by the Varley-Marshall assurances on the group's obligations—a potential liability that now stands at about £1·6 billion.
Taking into account those features of the deal, I hope that hon. Members will see why, viewed as a whole, it is a good, sensible, realistic bargain for the Government and the company.
Mr. Gould: I am sorry to intervene again, but I am fearful that the right hon. and learned Gentleman is about to leave the subject of financial arrangements. Let me say in passing that it is a novel doctrine that wiping off a debt owed to the taxpayer is somehow to the taxpayer's advantage.
I want to ask about the £800 million that the Minister described, in a somewhat confusing way, in two different parts of his speech. As I understand it, it is—as he described it initially—a cash injection. Will he tell the House how much of that £800 million is needed to eliminate debts, and how much is properly to be regarded as simply a cash gift to the new proprietors of Rover if the deal goes through?
Mr. Clarke: The hon. Gentleman ought to have a look at the position of tax losses. Accumulated tax losses of the kind that I am talking about are a potential asset of a company such as this, because it is possible to offset future profits against them. By wiping off all but £500 million of the tax losses, the taxpayer frees himself from £400 million worth of potential cost in the future. This is genuine indebtedness. It is not a cash injection into the company.
Mr. Gould: All of it?
Mr. Clarke: Yes, all of it. It is a reasonable calculation of the level of indebtedness at the time of completion of sale. It is arrived at by a combination of the present indebtedness, the likely accumulation of further indebtedness by the time of conclusion of sale and some outstanding liabilities still to be incurred, which relate to the restructuring of Leyland-DAF last year. The figure was arrived at on that calculation and no other basis.
Mr. Gould: I am grateful for that information. For the sake of completeness and accuracy, will the Minister now quantify the various elements that he has described as making up the £800 million?
Mr. Clarke: Certainly—if you, Mr. Deputy Speaker, will forgive me for giving way so often in such a short debate. I had prepared a reasonably short speech. I shall have to stop giving way soon.
The debt position at the end of 1987 comprised short-term borrowings of £400·1 million, and amounts falling due after more than one year of £228·7 million. From those figures, cash and short-term investments of £42 million must be deducted. That leaves a total immediate debt at the end of 1987 of £585·8 million. To that figure must be added the part of the money provided in March 1987 for announced future restructuring in the commercial vehicle businesses, which has yet to be spent. The remainder of the £800 million takes account of changes that we estimate will take place in the group's indebtedness between the end of 1987 and completion of the sale in the summer. It is important that hon. Members and the European Commission understand how we arrived at that figure.
As I have said, the deal is a sensible and realistic bargain, satisfying the genuine interests of both parties. The Government were concerned that the merger of these two major manufacturing groups should move forward only on a firm financial footing, and I believe that the House should share that desire. BAe has expressed its confidence that the enlarged group will be able to support development programmes in the combined businesses.
As I explained to the House on 29 March, the proposed cash injection is subject to the completion of the normal European Community procedures. The Community applies rules which we accept and support. It must be ensured that the cash injections are legitimate and in accordance with the Community rules before they are allowed to proceed.
Following the meetings between my right hon. and noble Friend the Secretary of State and Commissioner Sutherland in March, we have continued to assist the Commission to reach a full understanding of the Government's objectives and proposals. Following its usual practice, the Commission has also invited comments from other member states and interested parties on the state aid proposal. I hope that the House will understand
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that it would be wrong of me to pre-empt the Commission by making any further comment on the progress of its studies. I am glad to say that the Commission is acting with expedition, and I am confident that it realises the need, in the interests of the business, to reach a conclusion and will—within the necessary confines of its procedures —seek to achieve a speedy resolution of its examination.
I expect some hon. Members to attack the terms on the basis that they are too favourable to BAe and Rover Group. That, indeed, was the implication of some of the murmurings a few moments ago. Some people attacked the terms on that basis when I made my original statement on the deal. I hope that the European Commission will not be influenced by such claims, because, when made in the House, they will probably be made on a political rather than a well-informed basis.
I also hope that hon. Members who are tempted to make such criticisms will ask themselves what is their aim and purpose in doing so. Do they want to threaten the deal with BAe, so that we return to uncertainty over privatisation and the Rover Group can be bid for again by all corners? Do they want BAe and the Rover Group to trade in a more cash-constrained way, and with a burden of debt? When I made the statement, I thought that some Opposition Members who attacked the terms had no idea of the point of the criticisms that they put forward, although I realise that some contemplate permanent nationalisation as the only future for the group.
Mr. Dennis Skinner: Perhaps I can help the Minister. Let me explain why I feel that the matter is a subject for inquiry. When BAe was privatised, having received a cash injection of £400 million, eyebrows were naturally raised outside the House, as well as on the Opposition Benches. The right hon. Member for Chingford (Mr. Tebbit) leaves the Cabinet and the chairmanship of the Tory party to become adviser to the chairman of BAe. Then, hey presto! Out of the blue along comes this whippersnapper Minister, acting on behalf of Lord Young—who has previously had a row with the right hon. Member for Chingford—and wanting to settle the argument. He gives in and acknowledges that there is a prospect of getting some deal through. To appease the right hon. Member for Chingford, he says, "Here is £800 million of taxpayers' money. If you give us £150 million back, that will be all right. It will cloud the issue. By the way, we are writing off another £1,100 million."
All in all, the right hon. Member for Chingford did not do badly for his friends at BAe. In my opinion, there ought to be a public inquiry into the affair.
Mr. Clarke: I came to the House at the same time as the hon. Member for Bolsover (Mr. Skinner), and I think that my age and political experience are about the same as his. Speaking as one whippersnapper to another, let me tell him that my right hon. Friend the Member for Chingford (Mr. Tebbit) is a considerable expert on the aerospace industry, which is no doubt why he gives unpaid advice to the chairman of BAe.
If the hon. Gentleman reflects on what I have said, I trust that he will be persuaded of the wisdom of the deal. His intervention did not reveal what he is aiming at by seeking to undermine it. If he is saying that it is too generous to British Aerospace, is he seeking to undermine the position of the business as it proceeds? If he is saying that it stinks, he will have to give a slightly less tortuous

939
explanation the next time that he goes through the deal, and try to explain where he thinks that any money that is changing hands is first not properly accounted for, and second is not passed for the purpose of sustaining the industry on a fair basis for the future. The fact is that the hon. Gentleman's advice on aeroplanes, paid or unpaid, is of even less use than his advice on the coal industry, although he has slightly more knowledge of that industry.
Mr. Skinner: I do not muddle up the taxpayers' money.
Mr. Clarke: The hon. Gentleman frequently muddles up the taxpayers' money in his own mind. I trust that he is not about to suggest that my right hon. Friend or anyone else has muddled up the taxpayers' money in this particular case. I have given the most detailed exposition of it to the hon. Member for Dagenham who understands these matters rather better than the hon. Member for Bolsover does, and does not resort to vague, unsubstantiated smears which the hon. Member does not understand when he repeats them.
If we can get back to the serious business in hand, I ask the more responsible hon. Members to consider exactly what, from the point of view of the British motor industry, British Aerospace or anyone else, they are driving at when they seek to criticise the deal and to suggest that we have arrived at our conclusion after anything other than a sensible appraisal of the need to get rid of past debts and to put the company on a sensible footing for the future.
Mr. Doug Hoyle: The Minister referred to experience in industry. Could he tell me of any experience that he has had in any industry?
Mr. Clarke: I have never worked in industry. I was talking about the experience of my right hon. Friend the Member for Chingford in the aerospace industry. However I have considerable experience of privatising industry, I am glad to say, and experience of facing criticism from Opposition Members. As this privatisation goes through they will find that their criticisms are ill-founded.
I have described the deal, I believe that it is sustainable and I trust that the Commission will approve it with expedition. Completion of the agreement between British Aerospace and the Government announced on 29 March is of course subject to the approval of British Aerospace shareholders and completion of the European Community procedures. The Government firmly believe that the best interests of the business will be served by speedy implementation of the deal that we have negotiated. The company needs to be removed at long last from the spotlight of political debate and the political battlefield, and should he allowed to get on with the business of making and selling passenger vehicles.
I believe that that view is shared by the vast majority of Rover Group employees who are delighted to see the company passing out of the political arena at last. I certainly believe that that view is shared by all the suppliers who make a vital contribution to the United Kingdom economy, particularly in the west midlands, and all those whose livelihoods are dependent on the distribution chain.
I am very conscious—as no doubt are many hon. Members from constituency correspondence—of the support of the 1,000-strong Austin Rover dealer network for the deal that the Government are proposing. My right hon. and noble Friend has also discussed the deal with Honda whose operational partnership with the Rover
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Group has already generated the flagship Rover 800 range and is being taken forward with a new mid-range model. The Government were particularly mindful of the importance that Honda placed on the continuity of the Rover Group management. Honda was reassured by British Aerospace's ownership of the company. The Government very much welcome the prospect that the relationship with Honda should continue to develop satisfactorily on the basis that we are proposing.
I gave a list of the people who have broadly welcomed the deal. I believe that the only basis on which any hon. Member can be opposed to the deal is on some continuing doctrinaire commitment to nationalisation of this car company. The Labour party has never extended its desire for nationalisation to the whole of the vehicle industry. Fortunately, the Labour party has never yet threatened to nationalise Ford or Nissan in this country—although it has devised other means of driving away investment in Dundee, but that is not relevant to this debate. The Labour party appears to retain a lasting yearning to intervene in the management of what was British Leyland.
Mr. Andrew Smith: Will the Minister give way?
Mr. Clarke: No, I cannot give way; I must conclude.
In this short debate I have described the terms again. There is nothing new to be said about them. I do not think that much can be said by either side. One thing that can be resolved today and would be of wider interest outside is whether the Labour party's attitude has in some way changed towards the public ownership of the Rover Group. I have the pleasure of being shadowed by the great revisionist in the Labour party. I hope that he will not avoid the only interesting topic of this debate: is the Labour party still committed to nationalisation of the commanding heights of the economy? I hope that the hon. Member for Dagenham will not avoid the question as he did last time by arguing the industrial logic of the proposal. If people are interested in logic I ask them to choose between the judgment of Professor Roland Smith, Sir Raymond Lygo, Graham Day and the management of both these great companies and that of Labour politicians.
Has the Labour party yet acquired the courage to abandon the idea of state-owned manufacturing? If it has, now is the time to declare it. If it has decided to abandon the principle of nationalised manufacturing I hope that Opposition Members will give backing to a deal which is extremely good for the taxpayer, the company, the company's employees, the company's dealers and for everyone who wishes a good future for those dependent on the Rover Group.
7.46 pm
Mr. Bryan Gould: Opposition Members recognise that what is at stake in the issues that we are debating this evening is the survival of an indigenous British volume car manufacturer—indeed, the last indigenous volume car manufacturer.
We believe that the car industry is of great importance to our economy in terms of employment, overseas earnings, wealth creation and the whole hinterland of economic activity that depends on it. That is true not only of our economy but of all major advanced economies which have at the heart of their industrial capacity a powerful and successful car industry. It is significant—and perhaps in microcosm an indication of our industrial

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decline—that we are at the bottom of the list of the G7 countries in terms of car manufacture. The Minister looks somewhat puzzled. I can assure him that we have now been overtaken by Spain, which is not a G7 country.
For all those reasons, we are concerned to preserve an expanding and prosperous car industry. We approach the matter with great seriousness and a sense of responsibility. We are not going to make cheap party points from the Dispatch Box or engage in debates about various forms of ownership, although I shall attempt to answer some of the Minister's questions. We do not want by any statement, doubt or point that we make this evening to jeopardise what we believe is the very fragile future of the industry.
Given that that is our basic purpose, we are entitled to express to the Government our grave disquiet. I shall try to explain in detail our grave disquiet—which is not unknown to Conservative Members—at what the deal will mean for the future of the indigenous British volume car industry five years down the road.
The Minister asked me about our view of the industry and what we think should happen to it. Our view is quite clear. We believe that the stability that the Minister emphasised, which I agree is extremely important, would best be achieved by the present ownership of that industry. I shall be quite categorical. We believe that the onus is on the Minister and the Government to explain how the deal will improve the industry's prospects. I propose to give him some reasons for thinking that the deal will worsen those prospects. I have yet to begin to develop that argument, but I gladly give way.
Mr. Kenneth Clarke: If the hon. Gentleman acts on the reasonable expectation that the deal will go ahead and that the company will be transferred to British Aerospace, would it be the intention of a future Labour Government to renationalise the Rover Group?
Mr. Gould: The Chancellor of the Duchy of Lancaster has pointed to two major obstacles over which the deal has yet to climb—the EEC and British Aerospace shareholders. Therefore, we have yet to see whether the deal takes place. My purpose is to show that, far from the argument that the Chancellor advanced—that there is no alternative —there is indeed an alternative. That alternative is to maintain the status quo. Indeed, I would go further.
If we are really concerned about the future of the Rover Group and volume car manufacturing in this country under British ownership and control—this is in support of the point made by the Chancellor of the Duchy of Lancaster—we need the commitment of an owner who is willing to make the long-term investment that is required. We need an appreciation by the owner of the long-term importance of the industry to the British economy. We need pride of ownership. Those things have been missing in the hands of the Government, who have made it clear that all they are concerned about is getting shot of the industry as quickly as possible and on whatever terms they can scrabble together. That is an indictment of what the Government have done. We believe that the alternative that I have mentioned should have been opted for. The commitment of the present owner would guarantee the future of the industry.
What is missing from the Government's recent record as the owner of Rover and from the deal they now propose
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in order to get rid of Rover is a sense of strategy, a sense of the importance of the industry and a sense of determination to maintain the industry in at least its present form or, preferably, in an expanded form. That is missing from the analysis offered by the Chancellor. In the absence of a strategy, we are offered the dogma of privatisation. That simply will not do. It is not good enough.
Mr. Roger King: We have heard all this before. Here we go again. The last strategy the company had under a Labour Government was called the Ryder plan. That ended in the most appalling mess, from which it took years for the company to recover. Is the hon. Gentleman suggesting that we want a Ryder plan mark II, because that is what strategies mean?
Mr. Gould: I am glad that the hon. Gentleman thinks that he has heard our arguments before, because, with luck, the message may be getting through. I am suggesting that we need a strategy based on a commitment to make the necessary investment. For reasons which I shall elaborate, I do not believe that the present deal offers that commitment or a prospect of investment.
As I have said, we have the dogma of privatisation, which means that a buyer has to be found. There has to be a buyer on any terms. The Government have nailed their colours to the mast and made their intentions clear. Therefore, somewhere, a buyer has to be found. The Government know already that for political reasons that buyer has to be British, and along comes British Aerospace. It is certainly British and it is welcome on that account. We certainly do not cavil at the prospect of a British owner if we believe that the other criteria are met. However, the questions and doubts that arise must be settled. Nothing that has been said this evening has settled those doubts or gone any way towards doing so.
The first doubt that will occur to anybody can be summed up in what a trade unionist working at the Longbridge plants said to me yesterday. He said, "What does British Aerospace know about making cars?" That is a simple question, but it is at the heart of the argument. Put in a different way—
Mr. Roger King: What do the Government know about making cars?
Mr. Gould: The Government have installed the present management and provided, at least until now, the investment required. If the hon. Member for Birmingham, Northfield (Mr. King) will contain himself for a moment, he will discover that it is on that question that I believe British Aerospace will prove deficient.
The question, "What does British Aerospace know about making cars?", is the same question as that on which the Chancellor poured scorn a moment ago. It is the same as asking, "Where is the industrial logic?" That is the way the leader writers tend to put it, but it is the same question. How can it make sense to put those two companies together? It certainly looks good on a balance sheet. The assets mount encouragingly, employment looks rather better, and so on. But not a whit of strength has been added to Rover as a car manufacturer or to British Aerospace as a plane maker. All that has happened is that the two balance sheets have been put together. The truth is that building cars on a production line is different from

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the work patterns, production runs and scheduling required for manufacturing specialised products such as aircraft.
We have heard much talk about synergy. It is a wonderful word. It is likely to dazzle some of those who do not bother to look behind it. Synergy has been rejected as an argument in favour of the deal by all those whom the Chancellor failed to mention. All the experts, commentators, academics and those who know about the industry are agreed that there is virtually nothing in the synergy argument. Of course, at the margins, if one puts two engineering companies together, however disparate, one might find some slight benefits here and there.
However, I suspect that those who talk so glibly about synergy have been dazzled by the glossy television adverts by Saab. Those advertisements are very much in the tradition of the current Department of Trade and Industry, so it is no wonder that people are susceptible to them. Those advertisements have made great play of the idea of synergy. However, if one asks Saab what has been the reality of its experience, it will say that it has proved to be of little value. What little value it has experienced has been produced over 40 years or more. It has had remarkably little impact on its overall operation. Indeed, its connection with Scania, the truck maker, has been of much greater importance than its role as an aircraft manufacturer. When one looks at all the other supposed synergistic liaisons between car makers and plane makers, one discovers that in almost every case the object of the acquisition—usually made by the car maker, not the aircraft manufacturer—has been diversification, not synergy. Let us set aside synergy, which is just a nice word that is sometimes used to impress Chancellors of the Duchy of Lancaster.
It is sometimes said—indeed Professor Roland Smith has said this—that British Aerospace has expertise in marketing around the world which will be of great value to Rover. I wonder whether the dealers whom the Chancellor prayed in aid will be impressed by the odd foray that British Aerospace makes to far flung corners of the world where it enters into long drawn out negotiations for the sale of two or three specialised products, dealing with Governments and, often, military regimes. I do not believe that those dealers will think that that sort of experience and expertise will help to develop mass markets for standardised products or help to maintain effective dealer networks in Britain and around the world. That is a very different experience. I do not believe that any serious person, looking at the two operations, can truly expect that marketing will be one of the great strengths that British Aerospace will bring to the Rover Group.
It gives me no pleasure to say what I have to say, but I believe that we have to point it out in view of the glowing picture developed by the Chancellor. If British Aerospace is deficient in experience and expertise, what about the crucial commitment that it is likely to make to the long-term investment, without which Rover cannot develop the new model ranges that are required if it is to stay in business? Where is that commitment to come from? It cannot come from Rover itself.
Let me pay a tribute to Rover, not so much to Mr. Graham Day—he simply produced his figures by going for margins rather than market share—but to the work force. The work force deserves a great deal of credit for the improvement in the Rover Group's performance. The problem is that, even with its present performance—its
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brief surge into profitability—Rover, with 15 per cent. of a market that some believe may be close to its peak, cannot generate for itself the investment that it needs. It is too small. Almost all commentators accept that, if Rover is to stay in business as a volume car manufacturer, it needs the support of a larger, preferably car manufacturing, firm.
Mr. Roger King: A few moments ago the hon. Gentleman mentioned that he had been to Longbridge, or spoken to someone there. Had he visited and examined the plant, he would have seen the enormous amount of investment going into it, with new factories being converted to the latest high technology equipment and new engine plants. coming on stream in preparation for a new car. There is no shortage of investment. The company is generating investment from its present business.
Mr. Gould: For once I am delighted to have given way to the hon. Gentleman, as he made the point that I was about to develop. Of course, he is right. Great investment has taken place in Rover, but under whose auspices? Where has the money come from? It has been generated not by Rover sales and profits, but by the willingness of the present owners to invest. In other words, the taxpayer has made the investment, and it has been valuable and important.
How is this investment to be sustained? Not from the resources of Rover cast adrift by the taxpayer. Rover will not make the investment. Some other source must be found, not from the taxpayer but from somewhere else. That means that we must turn to British Aerospace. Unless the investment is made and products such as the Metro—the most outdated small car model on sale anywhere in the world—are moved out of the way and replaced by new models—I concede that some are in the pipeline—Rover's future is bleak.
Of course, it is true, as the hon. Member for Northfield pointed out—and this is the case for public ownership—that the investment has largely been made in the K series engine and the R8 and R6 models. However, it is also true that the launch costs for those models have yet to be found. New investment will be required if the R8 is not to be—as I fear it may well be—the last car produced in Britain that can properly be regarded as a British car. If we are to avoid that outcome—it is an evident danger staring us in the face—capital must be produced and invested.
We look in vain for such a commitment from British Aerospace. British Aerospace is not in a shape to generate the sort of investment resources that will be required. It is on record as saying that at an exchange rate of more than $1·70 it cannot remain profitable. We know what the Prime Minister thinks of that sort of special pleading from industrialists. How dismissive and contemptuous she is of those who must operate in the real economy. But British Aerospace is in difficulties with the present exchange rate. It is making a huge loss on Airbus. It cannot easily sell civil aircraft at a profit with the exchange rate above $1·70. So British Aerospace is not now or in the foreseeable future likely to generate the cash that it needs to make this investment.
It is worth remembering that British Aerospace was itself the prospective victim of a takeover bid not so long ago. There may well be clever men in the City on the board of British Aerospace who reckon that, to ward off another

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takeover bid, it might not be a bad idea to surround themselves with the protection of Rover Group, which might deter possible predators.
Far from British Aerospace being a source of investment capital, we believe there are real reasons for fearing that its attitude to Rover will be the reverse—that it intends to take money out. That is what the company did when it acquired the royal ordnance factories last year —profitable factories that helped to keep British Aerospace in profit. That was a good move. Perhaps for the time being, or even for five years—there may be real significance in that period—the calculation is that British Aerospace can do with Rover what it has been doing with the royal ordnance factories.
Far from being anxious to invest its non-existent hundreds of millions of pounds in British industry, British Aerospace has been cutting back. It has been reducing its work force, closing down its sites and plants and making it clear that it is likely to move substantial production abroad. Some reports say that £1 billion of Airbus production may well be moved to the United States because of the exchange rate. The Chancellor lauded the prospects of the British components industry. If British Aerospace carries through its plants to move production of Airbus to the United States, I fear that there is a grim message in that for the British components industry. The Rover Group and its predecessors have been faithful customers of the British components industry, on which the livelihoods of so many people who are represented by Conservative Members depend. The message is grim, inspired by the new ruthlessness that British Aerospace is likely to bring to the car industry, as it did to the aircraft manufacturing industry.
The danger is that British Aerospace will look on Rover, for the reasons that the hon. Member for Northfield gave, as a company that has already made a valuable investment. That investment is likely to pay off, at least in cash terms, over the next few years. Little will be required for a period. British Aerospace has orders but no cash, because no one will pay for those aircraft for several years to come, and it desperately needs things to sell. That is why it wanted the royal ordnance factories and why it wants Rover. At least Rover has cars in showrooms which can be sold to bring in some cash.
The danger is not only that British Aerospace might want to regard Rover as a sort of cash cow for a period; it might also intend to treat some of the Rover assets—particularly its sites—in the same way as it did its own. It is significant that British Aerospace tended to close sites in the south and concentrate its operations in the north. It has sold the sites with the greatest development value—
Mr. Hal Miller: That is regional policy.
Mr. Gould: If that is regional policy, we now understand more clearly that it is about destroying jobs and capacity.
If British Aerospace seriously tackles the task of making volume cars; the one site that looks at risk is the Cowley south site, which happens to be of great potential development value. It is perhaps not an accident that British Aerospace, like so much of the rest of British industry, has found property development rather more to its liking than manufacturing the basic industrial products
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that brought it into existence. It is no accident that British Aerospace has had a profitable series of joint ventures with Trafalgar House, the property developer, which will have an eye on some of these sites.
The Chancellor fairly conceded that the relationship with Honda was of great importance to the future of Rover. The need for that relationship is unaffected by the link with British Aerospace. The Chancellor's agreement to that suggests the very point that I am making—that the link with British Aerospace does nothing to strengthen Rover as a car manufacturer. It still depends on the link with Honda. If, for any reason, Honda withdrew, British Aerospace would not have the expertise to make good that loss. Honda's attitude is of great importance.
The Chancellor has from time to time given slightly differing accounts of when Honda was first told about this deal, how closely it was consulted and what its current attitude is. He has revealed that the Secretary of State has been to Japan and talked to Honda. He brought back some general encouraging noises, but we have had little by way of assurance or detail. I hope that the Parliamentary Under-Secretary will remedy those omissions later this evening. We want to know more about what Honda has said, what intentions it has expressed, what assurances it has given and what its attitude to the change is. As the Chancellor rightly said, the one thing that Honda will want is stability of ownership and management. That is another powerful argument for maintaining the status quo of public ownership.
So much for what the deal offers to Rover. I wish that I could say that it offers a rosy future, but that cannot be said. What about British Aerospace? It is not in the healthiest of conditions. It has been made extremely unprofitable for the time being by the rise in the exchange rate. Its proposed link with Rover has already been criticised in today's newspapers by one of its potential European partners, Aerospatiale. The French have warned—I take no responsibility for the statement but simply report it to the House—that this sort of distraction may prove an obstacle to British Aerospace in developing the sort of European co-operation as aeroplane makers that is so essential if we are to withstand competition.
Of course, the deal offers British Aerospace total assets which will put it ahead of Lockheed, so it looks the part it— looks like a major industrial company. As I have argued already, as neither Rover nor British Aerospace is strengthened by the deal—indeed, they are conceivably weakened—looking the part will not be good enough. There is a great danger, as surely everyone must concede, that British Aerospace will get into the age old practice of cross-subsidisation. That has bedevilled the British car industry, especially British Motor Holdings and British Leyland, over a long period. The problems of British Motor Holdings dragged down Leyland Motors. We have seen it all before. There must be a fear that it will happen once again.
Rover, too, although briefly in profit, will be affected by rising exchange rates. It is not immune from the market. It will find difficulty in maintaining its sales and holding on to its market share, or at least holding on to its market share and to margins, with an exchange rate which is soaring against European currencies. The prospects of Rover staying in profit for more than three, four or five years without the investment that is required are grim. That is why we come to the detail of the deal and the financial arrangements that have been made.

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The Chancellor of the Duchy of Lancaster can argue for as long as he wishes about what this or that sum represents, but the truth is that, to persuade British Aerospace—and if all other bidders were discouraged—to take Rover off their hands, the Government were prepared to pay £650 million. The sum of £800 million of taxpayers' money—a cash injection, as the Minister so charmingly put it—was handed over to British Aerospace. The reason was that, unless Professor Roland Smith could be guaranteed by that sum that he would not lose in the next three or four years, he would not be able to sell the deal to his shareholders. Even as things stand, he may have great difficulty in convincing them that this is a wise move.
If Professor Roland Smith has insisted on this £800 million cash injection as the price of his doing a deal and if it is calculated—as I understand the Minister has done— that that will see the deal through the first five years, the logic of that approach is extremely worrying to those who believe that the deal guarantees any sort of future to Rover. Clearly, after five years, when the cash has run out, without the investment having been made, it is all too obvious what will happen to the bits of Rover that British Aerospace no longer wants. The Government know that and simply could not care less.
That is why it is important we should know what the EEC is likely to say. If the Minister's view is right and the EEC can he persuaded that this £800 million is entirely to do with writing off debts and so on, however calculated, Professor Roland Smith has an outside chance, according to his calculations, of selling the deal to his shareholders. But the EEC may unpick the deal and not accept all that the Minister has said. The EEC may say, "Just a moment. Rover's known borrowings amount to about £560 million. Even if you wanted to cover them—current borrowings as opposed to writing off accumulated losses—what is that extra £240 million for?" If the EEC decides that that is not a cash injection but a cash handout to sweeten the deal to make it possible, the deal starts to look not only in jeopardy from the Commission's view but a good deal less attractive to British Aerospace shareholders.
That is why, without any wish to jeopardise the deal, we need to know what the Chancellor of the Duchy of Lancaster thinks the chances are. We know the arguments that he will advance, but there is some evidence that the Commission in Brussels is unlikely to accept them. If the arguments are not accepted and £240 million, or perhaps some smaller sum, is removed from the £800 million, the question arises as to whether the deal looks sufficiently attractive to be able to sell it to British Aerospace shareholders, given that the Government have already committed the shareholders and themselves to a five-year guarantee—as I understand it, a legally binding guarantee in contract—that no disposal of any substantial part of Rover will be made over that period. We need to know what is likely to happen, because it is crucial.
We have not approached the debate in the sense of trying to destroy what the Government think they have achieved. We should like to see—indeed, we are desperate to see—a viable and prosperous future for the industry. We have felt contrained to argue that the deal does not guarantee that future. There are reasons for fearing that the future as a consequence of the deal is extremely truncated. We do not believe that the Government have had adequate assurances or guarantees. We do not believe that the Government have thought for a moment about what they will do if the EEC, some other agency or British
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Aerospace shareholders at some point say that the deal is not to go through. What then is the Government's position? They have ruled out other bidders. Indeed, they say that there are no other bidders. They have committed themselves, for political and ideological reasons, to private ownership as opposed to maintaining public ownership. It is the Government who have decided to play politics with this industry and those who work in it. We are fearful for the industry's future and we hold the Government responsible for whatever happens.
Several Hon. Members rose—
Mr. Deputy Speaker (Sir Paul Dean): Order. I remind the House that time is limited and that many hon. Members wish to speak.
8.17 pm
Mr. Roger King: I listened with great interest to the hon. Member for Dagenham (Mr. Gould). I congratulate him on his guarded comments, and we shall study with great interest what he said. One thing which has come across loud and clear is that he is a gentleman of very little faith. Conservative Members have great faith in what this merger will bring to the last remnant of the British motor industry.
The hon. Member for Dagenham said that he would like to see a plan and strategy for the development of the Rover Group. We have had many plants and strategies over the years, going back to the white hot heat of technology during the 1960s. We have brought together all the last outposts of the British motor industry in one great unit in an attempt to take on the world competition and breathe more life into the industry. We have seen progressively over the past 15 or 20 years that that has counted for little. New leaders of the industry have come and gone and strategies and plants have been cast to the wind as they have all been seen to have failed. I do not think that we need a plan concocted by Whitehall or by any political party. We need good, sound, solid management with the resources capable of continuing the progress on which this country has already embarked.
We have been asked, what do British Aerospace know about making cars? It is not necessary for everyone to know the detailed work of making cars, any more than it is necessary for many companies to say that they know exactly what they are involved with. Vickers, which is a very successful company, manufactures Rolls-Royce cars. One would think that Vickers would not know much about making photographic plates, yet it makes them very successfully. One would think that Vickers would not know very much about pharmaceutical equipment, yet it manufactures pharmaceutical equipment of a high quality and is very successful in the market. It is possible for companies such as Vickers to run other companies successfully because they know about delegating management on the spot, not management in Whitehall being dictated by a political party. Management is left to get on with the job.
Sir Michael Edwardes, who was chairman of BL Cars, and Graham Day, who is chairman of the Rover Group, exercised responsibility and told the management to control and develop on their own as far as they could, and they were successful in so doing.
In some ways, I am sad that we are debating the future of the Rover Group. Once again, its employees see that

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their future is being debated in Parliament. Over the years we have had more debates about the future of this part of the motor industry than about any other part of British industry.
The last thing that we should be doing tonight is debating the future of the Rover Group because talks between the Rover Group, British Aerospace and the EEC are at a delicate stage. It would be better for the House to say nothing, to allow the negotiations to continue and then to debate the issues once we knew what decisions had been made.
Mr. Nellist: Is the hon. Gentleman aware that a merger between GEC and Plessey could this week result in the loss of 4,000 jobs in Coventry, South-East? Arnold Weinstock, who is the managing director of GEC, has not come to the House with a Bill to sack those workers. There has been no debate in the House about that matter. Should not the future of hundreds of thousands of car workers in the west midlands, who rely on the publicly owned Rover Group for their jobs, be debated in the House? What is this place for if it is not to debate the jobs and future of workers in the car industry?
Mr. King: I am glad that the hon. Gentleman recognises that there are hundreds of thousands of workers in the industry. He describes the car industry as though nobody works in it and it is an industrial desert. I cannot comment on the talks between GEC and Plessey.
We have debated the future of the Rover Group on many occasions. Negotiations about the Rover Group are at a delicate stage, and we should allow them to be completed before debating the matter in detail. We are talking about a merger that will not result in a loss of jobs or a cutback in production but will bring much benefit to the Rover Group and British Aerospace. A formidable industrial combine will be created that will be able to take on the rest of the world.
The Labour party's message is that it loathes privatisation, particularly this deal. Some people in the EEC may be encouraged by Labour Members' words. They may say, "If the British Parliament is not speaking with one voice, perhaps we should consider the deal closely." Obviously there are parts of the deal that those people can latch on to and criticise us about. If the Commission gets tough and demands substantial changes that are unacceptable to British Aerospace, where will that leave the Rover Group? We know that the Labour party would like it to remain a nationalised company, but that is clearly a non-starter. We have seen in Socialist France and almost every developed western country that Government's role is to get out of manufacturing and to get its sticky fingers out of matters that are best done in the private sector.
Mr. Austin Mitchell: Tell that to Renault.
Mr. King: The French Government intend to privatise Renault, and they should be congratulated on that. Why is it good for the Socialist Government of France to privatise Renault but wrong for our Government to privatise the Rover Group?
The consequence of a breakdown in negotiations for Rover dealers could be quite substantial. Every time that
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we debate the future of the Rover Group in the House there is a registered downturn in its market the following month. Confidence in the company must be built up, and it has developed strongly not only in this country but in Europe and the rest of the world. The fact that every month or so we debate the Rover Group deters customers from buying its products.
My constituents have worked hard to achieve success for the Rover Group. Its model range is good and is well received in export markets. The Government have patiently nursed the Rover Group through an enormous setback in the market place and back to considerable health.
The merger with British Aerospace represents an exciting way forward. The realistic terms that have been negotiated—I admit that large sums of taxpayers' money have been written off—merely confirm the reality of the company's position. There is no question of us ever seeing that money return, at least in the short term, although as the company's profits increase the taxpayer will receive his fair share. The large sums that were written off had been invested to ensure that the Rover Group remained a major car manufacturing company. The Rover Group has been essential to the west midlands economy and the plethora of component manufacturing industries that follow in its trail.
The debate is timely because it gives us an opportunity to remind the country just how far the company has come. The Rover Group has a future only because the Government have remained steadfast and resolute and dragged its affairs successfully into a demanding and challenging world. It is ably led by managers of a high quality and calibre.
The Labour party has much to answer for, given its track record in the motor industry. I mentioned what happened in the 1960s when the Government of Lord Wilson helped to create the British Motor Holdings group. In those days the company had 48 factories and employed 190,000 people. Each employee produced only 5·6 cars per year; its productivity record was not good. Harold Wilson knew the reality of the matter and when BMC shop stewards descended on the 1966 Labour party conference to protest about redundancies he was asked whether a deputation of six of them could address him at his Brighton hotel. He agreed and 12 of them entered the hotel. Harold Wilson said, "That is what is wrong with the British motor industry—it always needs 12 men to do what six could do."
The industry was faced with the challenge of dragging itself into the latter part of the 20th century and to match Japanese and European competition. The conflict between management and employees was never ending. In 1969–70, 5 million man hours were lost through disputes. In 1971–72, the figure was 10 million; the year after that it was 7·4 million; and in 1973–74 it was 9·6 million. That continued until the Conservative Government took office and brought some law and order to industrial relations, which was the catalyst necessary to maintain the viability of much of our industry, particularly the British motor industry. It heralded the end of Red Robbo and his sort, who used to call out the work force at the drop of a hat, thus disrupting production and sales throughout the world.
No Labour Government could tackle overmanning and poor productivity, preside over closures, rationalisation and redundancies because their paymasters would never

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allow it. The survival of British Leyland depended on unpalatable decisions being taken. If we were to maintain a British car industry, those choices had to be made. The Conservative Government, using the support and skills of Sir Michael Edwardes, ensured that a large portion of the British motor industry survived. The choices were painful and tragic for those who were affected. Labour relations were tackled and the troublemakers finally cast to the wind.
Despite these great changes, the company still had a long way to go, and losses were still being incurred. Rumours abounded that the Government were anxious to ensure a sell-off, but, despite the discussions taking place, the business remained substantially intact until Graham Day took over in 1986. His policy of business disposal has been absolutely right. Jaguar had shown the way in 1984 —and what an outstanding success that company has been. It is employing more people than ever before, for higher wages, and turning out more products, bringing wealth to Coventry, to the country and to the people who are employed in that business—an outstanding achievement.
Mr. Nellist: Is the hon. Gentleman aware that, towards the end of last year, in a six-week period, 17 shop floor workers at Jaguar died from stress-related diseases, including strokes, and since then the company has demanded an extra 92 cars per week off the track? is that the benchmark of the hon. Gentleman's productivity?
Mr. King: The facts speak for themselves. If they are to survive, the productivity and performance of companies must be of a high standard. The output of Jaguar is still nowhere near the level of some of the European factories, which seem to manage perfectly well. I cannot comment on the physical standards of shop stewards and employees. However, the regular hours that they have been putting in and the good money that they have been earning has been reflected by a substantial upturn in the economy of the west midlands.
The Rover Group has been successful in privatising Unipart, Leyland Bus, Leyland Trucks and Freight Rover, Istel and smaller component businesses, and all are doing well. That is why I welcome the British Aerospace-Rover proposals. Along with my hon. Friend the Member for Bromsgrove (Mr. Miller), I expressed reservations initially about the early proposals, and asked whether there were any alternatives. Along with my hon. Friend, I went to see Graham Day. After our private talks with him, we were optimistic about the outcome and sure about the future of the business.
Rover and British Aerospace will be a formidable partnership. The merger is popular with the work force, just as the merger between Freight Rover and DAF was. When that announcement was made, Freight Rover workers were pleasantly surprised about their future, going into the Leyland-DAF combine, and the evidence shows that they were right. The factory is engaged in substantial expansion and there is talk of the work force being doubled in size. We look forward to that successful expansion.
The Rover-British Aerospace deal takes away the immediate worry of who will own what, and leaves everyone to get on with what they do best—building good quality vehicles. Labour Members would not prattle on about investment and the future so much if they could see
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the enormous investment taking place in the company with new engines, gearboxes and cars produced to the highest technology and by a skilled work force, determined to give themselves and their families a secure future. These investments are taking place under the financial regime of the business. It has not used Government money for the past four years. It is financing its own investment from its own earnings. It is cautious about its investment programme—as it is about all that it is achieving—which was set out by the Rover Group board and approved by the Government as part of the corporate plan. It is sustainable and it means that the Rover Group can maintain its viability as a separate car company, although it will be better off under the wing of British Aerospace.
Throughout the region car workers can take out mortgages and other such commitments because their income will be on a regular day-to-day basis. Productivity and quality are setting new standards and are nearly equal to those of the best of our competitors. Much of that has been learnt by the company in its dealings with Honda. Honda has taught the business to produce cars of a high quality, and that is reflected in many of its products. In a recent back-to-back test conducted for the April edition of Company Car, which is available in the Library, four popular fleet cars were tested—the Montego, the Sierra Sapphire, the Cavalier and the Peugeot 405, which is made in Coventry and is an outstanding vehicle. This was the conclusion:
"in overall assessment there is no escaping the conclusion that the Montego offers more than its rivals. It is not quite as fast as the Peugeot 405 manages to be, but it is more economical, offers much better accommodation … and is generally better equipped. As to the Cavalier and Sierra, they are both excellent fleet cars, but I find no grounds for changing the conclusion reached last year, that they are both beaten by he Montego. The Peugeot seems to drop neatly into second place".
The company is making outstanding products and will go on doing so as new products come forward.
My hon. Friend the Member for Solihull (Mr. Taylor),who by convention cannot speak in this debate, has been a staunch supporter of Land Rover and has played a leading part in ensuring the continuing viability of that company. What an outstanding future it will have under British Aerospace, as British Aerospace's military contacts throughout the world open new opportunities for the sale of Land Rover's military derived vehicles. That is an exciting prospect, and I know that my hon. Friend looks forward to the benefits of this merger for his constituents.
There is no doubt that all those connected with Rover, especially in the component industry, owe a huge debt of gratitude to the Government. With its new products, its dedicated work force and its new partner of British Aerospace, the future looks bright. Let us send out a clear signal to the European Commission tonight. It should not stand in the way of this deal, but should let it go through intact, as we have proposed., and it will play a substantial part in the continuing revitalisation of our industrial capacity and the resuscitation of our car industry.
8.36 pm
Mr. Terry Davis: I want the Rover Group to succeed, not least because thousands of my constituents depend on the Rover Group for their jobs and wages, but the Government's sale, or gift, of the Rover Group to British Aerospace is a bad deal for the taxpayer, for the people who work for the Rover Group and for the

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thousands of people who work for dealers and components manufacturers in the west midlands and elsewhere, and who depend on the success of the Rover Group for their future livelihood.
The hon. Member for Birmingham, Northfield (Mr. King) missed the crucial point, which is not that British Aerospace knows nothing about making cars but that it knows nothing about selling cars. Indeed, the hon. Gentleman made hardly any reference to the sales and marketing problems of the Rover Group. He talked at length about the production of cars but he said nothing about selling cars. The biggest weakness of British Leyland, then Leyland Cars and now the Rover Group, has always been its sales and marketing department. Its biggest problem has always been its inability to design and sell cars.
That is the first criticism—that the deal will put the Rover Group under the control of a company that is in a different market. As my hon. Friend the Member for Dagenham (Mr. Gould) explained, people who sell planes are selling to a few customers with high-value orders with a great deal of Government involvement—the sales may even be made to Governments. People selling cars are selling them through dealers and retailers to individual customers and to the fleet market which is still a relatively large number of customers compared with the people buying planes. The markets are different, and that is why this is a bad arrangement.
The second problem is that of finance for investment in the future. A year ago, British Aerospace needed the Government to help it with money to finance its contribution to the Airbus project. To his shame, the Minister suggested that Labour critics of this deal were saying that the Government should not have helped British Aerospace with the Airbus project. He should know that that is not true. My hon. Friends and I were constantly pressing the Government to help British Aerospace by making available the money for our contribution to the Airbus project, as other Governments are doing for their companies. We did not criticise that. The Minister has deliberately missed the point, which is that if British Aerospace needed Government help for that contribution, how can it finance future model development at the Rover Group? Indeed, how can it finance the acquisition of the Rover Group? The answer is that it is not buying the Rover Group because the company is not being sold—it is being given to British Aerospace. That is the truth behind the arrangements that the Government have concluded with British Aerospace.
This is not a good deal for the taxpayer who has invested in the Rover Group over the years and is now beginning to see a return on that investment. The future profits of the Rover Group will go not to the taxpayer but to British Aerospace.
British Aerospace has an immediate cash flow problem over the next few years before the sales of planes generate the money that it needs. British Aerospace needs the Rover Group as it needed Royal Ordnance to provide the money for its day-to-day cash needs for the next few years. That is what the deal is about.
What will happen after those five years—after BAe has achieved that short-term cash flow—to the investment that needs to take place in new models at Longbridge and
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elsewhere? We fear that the answer is that British Aerospace will not be able to afford investment for future new models. The cash cow will dry up and then British Aerospace will want to close down plants and dispose of assets. In fact, British Aerospace may not even wait five years; it has a record of closing down factories—not only its own factory at Weybridge but the Royal Ordnance factory at Enfield. The policy of British Aerospace is to generate cash by capital receipts as a result of closing factories and selling prime sites.
Not only Cowley will be at risk. Cowley and Longbridge are not the only factories in the Rover Group. Many other smaller sites still operate in Birmingham and the west midlands. It is only a few years since the Solihull factory was closed down, and what happened once can happen again. Other smaller factories may well be closed and sold off to generate cash to tide British Aerospace over its short-term cash problems.
The Minister has not explained, and cannot explain, how the arrangement between British Aerospace and the Rover Group will strengthen Rover as a volume car producer. In the immediate future, Honda will be more important than British Aerospace to the Rover Group. The irony is that if the worst happens, we may find that not only have the Japanese acquired the Rover Group but they have acquired British Aerospace through the back door as well.
The real reason why the Government are so anxious to get rid of the Rover Group is that it is becoming profitable. The hon. Member for Northfield made our case for us when he told us about the investment that had taken place and how, thanks to the hard work of its employees, the Rover Group was beginning to make a profit. That is the point. The Government cannot stand profitable publicly owned industries. That is what it is all about. The Government want to get rid of profitable nationalised industries because they do not fit its dogmatic approach to industry.
The point is not that the companies that have already been privatised are doing well because they have been privatised. They are not doing well because they were sold; they were sold because they were going to do well. It is precisely because companies such as Jaguar and Istel and the others were becoming profitable that they were sold by the Government. Because the Government could not sell Rover Group, they are about to give it away.
The hon. Member for Northfield referred to the 1960s. It is important to emphasise that the Rover Group was not taken into public ownership as a result of a Labour Government's hankering to tinker with manufacturing industry but because the company had failed under private ownership and had become virtually bankrupt after four years of Conservative Government—a point carefully glossed over by Conservative Members. At the end of four years of Conservative Government, the privately owned British Leyland had to be rescued by the Labour Government because the country could not afford to allow it to be closed. Thousands of people depended on what was then British Leyland for their livelihood. Thousands more depended on it for their employment at component manufacturers and hundreds of privately owned dealerships depended on it for employment and profits. That is why we had to take British Leyland into public ownership.
We need a continuing long-term commitment. The Minister was right to say that uncertainty and instability damage our prospects of selling cars. But who created the

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uncertainty and the instability? The Government created them by their own 1983 manifesto commitment to sell or get rid of Rover Group. We need a continuing long-term commitment from the present owners—the Government, on behalf of the taxpayers—to the group and an equal commitment from the people who work there.
I thought it very significant that, while the Minister was lavish in his praise for Graham Day and made passing laudatory references to the present management, he could not find it in him to say a word of congratulation or appreciation to those who have worked for the Rover Group not for two years but for 22 years or longer. Virtually the only people left, as most of the newcomers have been sacked, are the hundreds of people who have worked at the Rover Group all their working lives. I should have thought that they deserved some congratulations on their hard work through the bad years as well as the good years to keep the Rover Group going.
The Minister said that the employees were delighted by his arrangement. He said that the majority of those who worked at the Rover Group were delighted by the takeover by British Aerospace. How can he say that? I do not know how he can have reached that conclusion. To the best of my knowledge, there has been no ballot on the proposals and no attempt to take soundings of employees. There was no discussion with the trade unions that represent the work force. The Government did not even adopt the latest Land Rover management technique of using an outside polling organisation to phone employees' ex-directory numbers, intrude on their privacy and seek their opinion. How can the Minister have reached that conclusion? He is making it up, just as he made up most of his comments about the Rover Group.
We need a commitment from the Government to keep the Rover Group in public ownership and an equal commitment, which has been forthcoming over 20 years or more, from the people who work at the Rover Group. If we have that, we shall continue to have success and the taxpayer will then enjoy the profits from the investment that has been made in the past.
8.46 pm
Mr. Hal Miller: My old and valued opponent, the hon. Member for Birmingham, Hodge Hill (Mr. Davis), has been going through the routine again. He gave exactly the same song and dance act on television the night that the Leyland-DAF deal was announced. There were the workers in his constituency being interviewed about what they thought of the deal. They were welcoming it while the hon. Gentleman forecast doom and gloom. He conveniently forgot to mention that while they were on strike the Land Rover workers welcomed the British Aerospace deal. Opposition Members never consult the workers. They blather on about them but they never bother to find out what they think. Instead, they pursue their own ends.
I am not surprised that the Opposition have recoiled from their initial reaction to the announcement of the deal. They had to ask for a debate because they knew they had made a botch of it. Now they have had time to reflect and are beginning to jabber for the first time about the need for stability in the company. Having made a ritual obeisance, they then go all out to destroy its fragility.
My hon. Friend the Member for Birmingham, Northfield (Mr. King) was right to say that every time we
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have a debate on the matter a new question mark appears. That is one very good reason for getting into privatisation —to get away from public discussion of the company's affairs, which can be so damaging.
Opposition Members put up a number of Aunt Sally s, which they then proceeded to destroy. They bore no relation to my right hon. and learned Friend's speech. They were imaginings designed to prove the Opposition's case that all would be well if the world could stand still and remained in public ownership. Of course, we have not had the form of that public ownership defined. We do not know whether it is social ownership or a new form of ownership. The revisionist hon. Member for Dagenham (Mr. Gould) was remarkably coy on the subject. No doubt the hon. Member for Great Grimsby (Mr. Mitchell) will give us the revealed truth—the tablets of the Old Testament. Perhaps a new testament is being hatched by Opposition Members.
Mr. Austin Mitchell: It will be the Book of Revelations when I speak, brother.
Mr. Miller: The hon. Gentleman's only connection with the car industry lies in his christian name.
Let me return to the background. It is important to bear in mind that, thanks to the Government's policies and the philosophy that underlies them, our motor industry is beginning to recover. It is important to recall that production in the United Kingdom is likely to rise this year to 1·25 million vehicles, of which approximately 350,000 will be exports.
Some Opposition Members questioned the increase in our car exports. That increase has been solid, and it has particularly contributed to the recovery of the Rover Group. Of the 1·25 million vehicles produced, the Rover Group accounts for 600,000. Of those 600,000, approximately a third are accounted for by the Metro— the only car produced by the Rover Group that is in the top-selling six or seven vehicles. Therefore, that car is crucial to the 1,000 dealers and many hundreds of suppliers. In that context it is important to mention that there are about 2,000 components suppliers in the United Kingdom motor industry, but only 60 of them have a turnover that exceeds more than £10 million a year. The motor industry is fragmented, but it is important to many hon. Gentlemen and their constituents.
I wish to explore the flexibility that my right hon. and learned Friend announced—I believe for the first time—in the operation of the condition on the disposal of a substantial part of the car-making asset. That flexibility is important, and I welcome what I detect as a forward move on the part of my right hon. and learned Friend. I have always argued, right back to the balmy days recalled so fondly by the hon. Member for Hodge Hill—the clays of the Ryder plan and nationalization—that the Rover Group needed to collaborate with other manufacturers. Indeed, that collaboration already takes place with Honda, Peugeot and Volkswagen. I believe that such co-operation should be extended if we are to manufacture a full model range. I hope that the condition of disposal will not prevent collaboration with another manufacturer, including a possible share particiption.
Once again, the Opposition talk about investment as if mere quantum investment is sufficient to produce the results that we are seeking. I believe that it is easy to place too much reliance on technology and consider it a

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short-cut to quality, productivity, output and, in some cases, a means of bypassing responsibility for labour problems.
I well recall sitting in front of Mr. Toyoda in Toyota city. He said, "Welcome. We are happy to show you around our factory. Let me give you a word of warning, however. You will not find any plants here as advanced as that in Longbridge." My goodness, that was true. Nevertheless, productivity and profitability were much higher in that company. Exactly the same was said to me, in slightly different terms, by the managing director of a Japanese shipyard that I visited. He said, "I believe that your yards have too many computers. You have become too inflexible. You have gone too far down that road when you should have been developing communications with the work force, proper preparation of the work and proper presentation of it to the workers so that they can accomplish their target." We should not be misled by the parrot cries of the Opposition who claim that it is just a question of more and more investment and that only the state can guarantee that investment. All Opposition Members say the same thing.
The Opposition believe that it would be lovely if the world stood still and we could all stay as we were. They are the original Conservatives. They are unable to contemplate change and unwilling to give effect to it.
Let us examine the record of public ownership. I believe that the hon. Member for Hodge Hill was rather selective because he overlooked the role that was played by his right hon. Friend the Member for Chesterfield (Mr. Benn) who, in 1968, put the plan together with Harold Wilson. Public ownership has been no protection against low wages. After nationalisation, the wages of car workers, in comparison with other occupations, dropped from the top of the league to near the bottom. The Opposition do not often think about the customer and nationalisation. It did not protect the customer from poor quality or rising prices. We sat up all night discussing the prices and incomes policy introduced by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). The car makers put up their prices every quarter, and a fat lot of good that was. Nationalisation offered no guarantee to suppliers, designers or dealers of a market of parentage or of supply. Nationalisation was no basis for exports or strategy. As my hon. Friend the Member for Northfield has said, there was no guarantee that the Ryder plan would be fulfilled.
It is for good reason that it has been the policy of the Rover hoard, as well as of the Government, to return the firm to private ownership. The Labour party always wants to keep its fingers on; it always wants some sort of control. It does not tell us what sort of ownership or what sort of management it has in mind. Would we see a return to the co-operative form of management? Would we go back to the Triumph Motor Cycle company, which was a co-operative venture? Would we see the resurrection of Kirby Engineering—another venture of the right hon. Member for Chesterfield? The Labour party is reluctant to yield control. In some ways it resembles civil servants. As I was a civil servant, I am reluctant to make that comparison. Certainly, the Labour party and civil servants share the same inability to distinguish, on occasion, between capital and revenue.
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What I object to most of all is the false distinction that the Opposition continually try to make between capital and labour—between workers and managers—as if everyone was not involved in the success of an enterprise or as if managers do not work. They are myths from Labour's past; they are bogy men paraded in front of us. They are an attempt to frighten the workers into the belief that their futures will be at stake if they are allowed, for once, to acquire a shareholding in their companies. That is what is at issue. The Labour party does not like the idea that workers should have real power of ownership which is not exercised by the Opposition.
The Opposition talk about worker representation on the board. Do we seriously imagine—as my hon. Friend the Member for Northfield has said—that we would have Red Robbo on the board? Would that be in the best interests of the workers, customers or suppliers?
We must conclude that, thanks to the policy followed by the Government, the timing of this deal is right. Our policies have made it possible; our underlying philosophy has made it inevitable. Commercial decisions must be made commercially because that is the only way in which we can match competition.
The Opposition have nothing to offer—neither the old nostrums nor the new panaceas that they carefully left unelaborated. With them, it is jam tomorrow. With the Conservative party, it is power and shares to the workers today.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. This is a very short debate and if every Member who wishes to take part is to have the chance of speaking speeches must be short.
8.59 pm
Mr. Matthew Taylor: I have listened with some disillusionment to the debate. I thought that sterile toing and froing between nationalisation and privatisation had been written into the history books.
The Minister had to start with a sterile description of the benefits of privatisation. I suppose that that would be what the hon. Member for Bromsgrove (Mr. Miller) would describe as one of the new panaceas. The examples that the Minister gave showed the turnround which has happened while the company has been publicly owned. That does not mean that privatisations are wrong. It means that the company need not be privatised for there to be a turnround.
Equally, we have heard the Labour party say that the company should remain nationalised. It does not follow that there is a benefit from that. Many of the workers and consumers who obtain their products from the nationalised sector would hardly see that as being the case. Equally, there is nothing intrinsically wrong with it. When it is appropriate, the state can help to turn round an industry. Indeed, the Government have been reaping the benefit of their ability to do that. They cannot deny that.
Let me nail my colours firmly to the mast. I believe that it is important to consider the long-term viability of the Rover Group, its engineering integrity, its ability in research and development and, in particular, its ability not just as an assembler—such as Peugeot and Nissan—but as an integrated designer and builder of motor cars from the bottom up throughout the range of cars. It is important,

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not only because of the nationalism associated with the motor industry, but because of the jobs and the engineering ability which could be lost. The records show that when we lose that ability and that integrity, they do not come back. We are not looking suddenly to plough back into mainstream motor cycle building. As has been said, we lose it for ever, if we lose it at all.
Any deal that involves the strengthening of the position of the Rover Group, and guarantees that it will remain at its current position or, preferably, move forward, would of course be welcomed by hon. Members on both sides of the House, although some hon. Members may be more up front than others. In our hearts, we know that we are debating how to ensure the integrity of the group. The essential question is addressed somewhat inadequately, judging by the way the debate has gone: will the British Aerospace link-up achieve what the Government say it will achieve and Opposition Members say it will not?
The question mark that is hanging over that matter was well stated by the Financial Times. That is hardly a Socialist rag, but nor is it just crawling to the Government. It is an independent voice in the business sector, writing largely for business men. It said:
"The basis on which the Government has chosen to negotiate appears more designed to save political face than to protect the taxpayer's interest."
That is what the Financial Times describes as the real objection. That is the basis on which the debate is taking place.
The more one learns about the deal, the more remarkable it appears. Consider Lord Bruce-Gardyne, who is hardly a critic of the Government's comments. When the announcement was originally made, Lord Bruce-Gardyne, in another place, called it "Golden giveaway terms." That is not echoed by Government Back-Bench Members on this occasion. That is a comment of a strong supporter of the Government, especially as regards his business and monetarist views of the economy. That rather contrasts with the view of the Secretary of State for Trade and Industry that it is the deal of the decade for the Government. It is difficult to see that that is the case.
When one looks at Rover's accounts and adds together the net asset value and the giveaway of £800 million—the write-off of large sums of taxpayers' money—it is clear that British Aerospace is getting a bargain. It is being paid to take the company off the Government's hands. That is the truth of the spectacular deal that it has made with the Government. It means that the Government have valued Rover's shares at only 2·7p a shot, whereas the market values the shares at 75p a shot. That is the truth of the Government's best deal of the century.
It may be a good, sensible, realistic bargain, as the Minister described it, to British Aerospace, but it does not look like a bargain to the taxpayers in my constituency. Nor does it appear that it will be much of a bargain to those who already own shares in the Rover Group. If the Government have already put that value on the shares, what value will they put on them when they offer them for sale to potential shareholders?
In The Times of 3 March, Professor Smith said:
"We shall strike a very hard bargain on the purchase."
He was clearly signalling that the Government were going to lie back and let him have it without any serious negotiations. There was no possibility of turning down the deal or of considering other offers.
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Nevertheless, we are told that the golden giveaway will be of benefit to the country and the Rover Group. There are no hard, economic grounds for the deal, but perhaps the Government took the view that an overall strategic viewpoint would be more beneficial. They do not appear to have put much thought into the matter or to have thought seriously about negotiation or turning down the deal. British Aerospace must have been aware of that and realised that the Government had put themselves into a corner on the very day of the announcement. They could not turn it down after that.
Mr. Hoyle: It was decided at a cocktail party.
Mr. Taylor: As the hon. Gentleman says, it was decided at a cocktail party. Clearly, Lord Young had no thoughts on the matter until it was presented to him. At the press conference where Rover announced its 1987 results, he said:
"I have literally an open mind on it…I will wait for Mr. Day to tell me even whether privatisation is feasible. I have no thoughts of my own on the subject at the moment."
That hardly suggests that the Government were considering in detail the advantages and disadvantages of the company moving into the private sector, or the deal that they wanted.
If that is how much the Government were putting into consideration of the strategic overview, it is just as well that they are giving the company away on golden giveaway terms. At least a group of people in the private sector might be prepared to consider the strategic implications for the company and to look ahead and to sell the company, rather than, as the Government have tended to do, undermine it on every possible occasion.
The Government have shown an ideological commitment to the private sector as poor as any that has been heard from the Labour party in favour of the nationalised sector. They have paid no attention to the fact that companies in both the private and state sectors go up and down. The basis of the Government's privatisation successes has been laid down in the public sector when those companies have been properly managed.
The Government must respond to a number of important questions. What do they believe will happen with the EC? What indications have they of the EC"s view on the matter? The EC is taking an increasingly tough line on such Government giveaways. Indeed, it forced a reduction in the terms of the Leyland-DAF deal. The EC has accepted an agreement between Renault and the French Government, but that involved no new money, only enough to restore the company to net worth zero. I cannot believe that the EC will take as lightly as Government Back Benchers the idea that £800 million is not a giveaway.
More important, what guarantees have the Government extracted in those detailed and difficult negotiations about British Aerospace's future investment plants for the Rover Group? We are told that BAe sells the deal to its shareholders on the basis that everything will be generated within Rover and that nothing will come out of BAe. That does not suggest that there will be any guarantees for the company if it is hit by hard times. What guarantees have the Government won for the future of an integrated business? Will the engineering status of the company be maintained in terms of engines and model

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range? Have the Government won guarantees on research and development ability and for the various major industrial sites and factories that the company runs?
Are there any plants for the future of the Rover Group? We have heard much about difficulties that can be caused by political debate, but what are the plants for the group if the EC should reject the current proposals? The Government seem to have written off any hopes for the company in the absence of BAe. Have the Government considered what will happen if the shareholders object? What guarantees have the Government extracted from the five-year rule? We have not heard much about that.
What would happen if BAe were taken over? There have been possible bidders in the past. There is a list of companies that might be interested in taking it over. For example, GEC has expressed an interest. Other possibilities are thought to be Hanson Trust plc, BTR plc and Thorn EMI plc. Given the recent profit failings of BAe, a takeover is hardly an impossibility. If that were to happen, what guarantees would remain with the Rover Group and what would be the strength of the Rover Group?
The Minister said that if there were a sale of any major part of the company it would lose any economic gain as a result. How do the Government define economic gain? Does that encompass a distress sale or unloading the Rover Group into another area for economic gain in the strategic interest of the company rather than for immediate cash gain? How will the Government judge the economic gain to the company? Will the Government put the matter before the House if a major disposal is planned? When the Government say that they will consider these matters, do they mean that they will do so at a Cabinet meeting or within a Department, with the result that we shall never have the chance to debate the issue on the Floor of the House?
The Government must acknowledge that, while the deal may be good for BAe at a time of losses on several aircraft orders and uncertainty over the Airbus, BAe has no expertise in the manufacture and selling of motor cars and no expertise in the overseas markets of the sort engaged in by the Rover Group. Its expertise lies in specialised international defence markets. I note that it has been suggested that BAe had no interest in the Rover Group as a whole. It was interested only in Land Rover as that division comes under the military wing and, to some extent, within the interest of the Government.
The future of the group will depend on the willingness of the owners of Rover, nationalised or privatised, to invest in its future and to see it through dark days as well as good. That is the history of the company. That is the history of car manufacturing throughout Europe and throughout the world. There is rise and fall followed by rise and fall. The winners are those who can invest during the falls and who are prepared to do so. The evidence is that BAe, willing or not, is in no position to give such guarantees.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I shall try again. This is a short debate and short speeches will be in order.
9.14 pm
Mr. Iain Mills: I guarantee briefness, Mr. Deputy Speaker. However, having heard what sounded like Gilbert and Sullivan without the songs and the humour from Opposition Members, I was at one stage tempted to speak at length.
I wish to pay tribute to my constituents' work in the Rover Group factories, in the component manufacturing industry and in the many dealerships throughout the midlands. I pay tribute to their improvements in productivity, their better designs, their better appreciation of their markets, their more professional management skill and their more dedicated work force. Surely these are guarantees of an excellent company that has put its house right and is now seeking a partner.
Opposition Members who use phrases such as "the deal of the century" and "to get rid of" denigrate a great British company that employs many of my constituents and constituents of many colleagues on both sides of the House. They do themselves and their parties great harm in not recognising that. It is sad to see such unbelievably negative attitudes and almost synthetic passions about the arrangement between a great British car company, which is now high-tech and enjoying high productivity, and a great British Aerospace company, again high-tech and enjoying high productivity. It would seem to be an excellent marriage and one in the national interest. It will benefit the future of the people working in the company —both managers and employees—and the future of the component manufacturers and dealers.
I condemn the synthetic disagreement expressed by Opposition Members with a Conservative Government giving money to someone and writing off debt. Opposition Members were not singing that tune last week. However, if that action enables the company to approach its new partner and match the strengths of the two companies, it must be beneficial. So many Opposition Members are interested only in looking for notional weaknesses in the partnership rather than the strengths.
The Rover Group includes Austin Rover. Land Rover is particularly important to my constituency. I know that my hon. Friend the Member for Solihull (Mr. Taylor), who has listened so assiduously to the debate, takes a passionate interest in this matter. He and I represent Land Rover employees in the borough of Solihull. We are aware that this merger is very important for the people working in Land Rover. Their plants for the future will be aided by the strength that British Aerospace can bring to the Rover Group. Indeed, the employees at the Rover Group will bring strength to British Aerospace.
I do not have many questions to ask my hon. Friend the Minister. Indeed, perhaps I should address my questions to Opposition Members. Perhaps the Opposition will tell us what they would do with the group. Will they renationalise it if they have the chance? They will not have that chance, but let us enter their thinking and learn what they intend to do. The hon. Member for Dagenham (Mr. Gould) was not clear about that.
Would public ownership be to the advantage of my constituents? It is inconceivable in a highly competitive world market that public ownership could continue to allow a company like the Rover Group to develop, to design, have access to the markets and to be successful. The Opposition are living so far in the past that their comments tonight will go unreported, largely unnoticed

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and unsupported by the majority of people in the midlands to whom I have talked about this natural partnership involving two great British companies. The company needs the resources to compete with European competitors in 1992 and also with international competitors. It must also compete with emergent nations like Korea and China. I hope that China will thank us when it gets its car manufacturing going.
I have many Jaguar workers in my constituency. I worked in the components industry for 18 years and I know the car industry and its dealers. I welcome this period of stability. I encourage the Government in their efforts to ensure that the European Commission approves the proposal as quickly as possible and I wish all the employees in the Rover Group success in future.
9.18 pm
Mr. Doug Hoyle: I will be as brief as I possibly can to allow other hon. Members to speak. However, I must declare an interest as I am the joint president of the Manufacturing, Science and Finance Union.
At the end of the day the workers must work in the industry under any management. The Government have a lot of cheek in pretending that this is a grand strategy which has been proposed as part of a long-term plan. That is absolutely wrong. The Government simply did not want a privatised company. Why could not the Government have written off the debt and let the company remain where it was? The profits would then have come in. However, that did not suit the Government's commitment.
There are 71,000 people employed in British Aerospace and 60,000 are employed directly in the Rover Group. That 60,000 does not include workers in the components industry. Rover Group and British Aerospace are two of the major exporters in this country.
In the short time available to me, I wish to pay tribute to the people responsible for that success—the workers in those industries. Some of them are members of my trade union, while others belong to different unions. None of them has been consulted by the company. Indeed, the company has kept them at arm's length and has failed to consult them about the future of the industries in which they work, despite the 22 per cent. sales increase at Austin Rover and a similar increase at Land Rover. There has also been a tremendous increase in export sales, and a 16 per cent. overall rise in production at both Rover and Land Rover. It is on the basis of that success story that the company has been sold to British Aerospace.
We heard from the Minister, when he opened the debate, the usual glib and shallow speech, but he has given no answers about the future. What guarantees about the future have been sought by the Government? When the Minister replies, I hope he will answer some of the questions that have been put. We know that the K-series engine is going ahead, and that it is a highly successful and versatile engine. We know also that the R8 is due to come on stream in 1989, and I am sure that it will be a very successful model. However, what about the replacement for the Metro? Was any guarantee sought by the Government in that connection?
It is true that neither of the companies has funds available for the new model programme. What guarantees have been given in that respect? We have heard that Honda are prepared to collaborate, but what terms have
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been agreed? What kind of collaboration will there be with Honda in the future? I am concerned about Longbridge and Cowley. Will one of them be sold off for property development—because we have heard about the situation in which British Aerospace has found itself?
The workers involved want answers to all those questions. Whatever may be the future, they are concerned about the success of the industry. They have made a success of British Aerospace and they want to continue in their jobs and build on that success. Have the Government sought any guarantees, and what replies has the Minister been given? Only when we know those facts—whether or not we shall be given them tonight, I am not sure—will we be able to judge whether the merger will be a success.
9.22 pm
Mr. David Gilroy Bevan: I am surprised at the paucity of the arguments that have been advanced from the Opposition Benches tonight. During the whole time that British Leyland was the plaything of the dead hand of Socialism, or was in the manipulative hands of the trade unionists who operated it in Birmingham, where my constituents were dependent upon it for their jobs, there was a shambles all round. There were losses and there was the failure of the industry. Well does my hon. Friend—yes, I say "Friend"—the Member for Birmingham, Hodge Hill (Mr. Davis) know that to be true, and well does he know the satisfaction of his own workers in that area of the city about the fresh Rover situation.
In the past we have seen the failure of the group being directly attributable to the manipulative scheming of the right hon. Member for Chesterfield (Mr. Benn), who put together the British Motor Corporation and made British Leyland a massive, overwhelming and complicated body of over-employment that was bound to make a loss. Now that that has been put to rights, no argument can be raised against it. Even Professor Bhattacharyya of Warwick university, who has worked on these matters and analysed them with the Austin-Rover Group, says that he expects that within three years or so the group under British Aerospace will be earning £250 million a year in profit.
It is probable that many of the new models will be produced—strangely enough—by an economic process engendered from profits, unknown in earlier times and unappreciated by Opposition Members: the installation of good management, the cultivation of excellent labour relations which did not exist before, and the development of factories able to produce goods that are wanted throughout the world. Exports have risen throughout Europe and in the far east, and the group is responsible for producing three quarters of the cars that we export.
Now, rightly, the business is being retained in British hands. That was demanded overwhelmingly by the Opposition in previous years, when they joined us in claiming that it was wrong for British Leyland or the Austin-Rover Group to be sold abroad. Now the situation has been saved: it is in British hands. However, the Opposition are still complaining about the position, as indeed are the French. The French say that the deal will prevent the organisation of a. pan-European international aeroplane business. I find that those arguments are strangely not shared by the Germans, who are attempting —unsuccessfully—to do precisely what the Government have been able to do with this formula.

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If the French are complaining, I am very happy that this is an excellent formula. A full part is being played by the British car manufacturing industry, in a new way and a new form which will succeed, and which the Opposition do not like.
9.26 pm
Mr. Andrew Smith: I do not think that the long-term interests of a successful Rover Group—or of the country's car industry—are helped by the ideological ranting about the dead hand of Socialism such as we have just heard, any more than they are helped by the unbelievable protestations from Conservative Members that we have debated the Rover Group a number of times recently. Whose responsibility is that? It is, of course, the Government's responsibility, as they brought forward the proposals to sell off the group, just as previously they were anxious to get rid of it at any price to Ford. That is why the company is continually in front of the public as a matter of general debate. It is a matter of the Government's own choosing, through their ideological commitment—there is no other industrial rationale—to remove the company from the public sector.
As has been said, a remarkably generous deal is being offered to British Aerospace. I emphasise that my concern is to ensure that the revenue and capital resources that are available are applied within Rover Group, and are applied to investment in the model range. No one with the interests of the industry at heart wants Rover Group to be saddled with a millstone of debt for the future. We are right to ask, however, what tangible benefit the Government have secured for the future of the company and the industry in the negotiations through which those generous terms were reached.
My particular concern is for the future of the Cowley plants in my constituency. As production of the Maestro comes to an end, and in the knowledge that production of the Montego will not continue for ever, it is abundantly clear that however successful is the excellent Rover 800 and its derivatives—in that respect, much turns on the value of the pound—we are fast approaching a point at which the prospects for employment at Cowley require the announcement of a new model, and confirmation that the Rover 800 reskinning will go ahead by 1992.
I have every confidence that, given the opportunity, Cowley will deliver the goods. Cowley has an extremely committed and skilled work force at all levels which has been responsible for dramatic improvements in productivity and quality. I join my hon. Friend the Member for Warrington, North (Mr. Hoyle) in saying how unbelievably disrespectful to the work force it was for the Minister to praise Graham Day and not to utter a word of praise for the commitment of the workers which has actually turned the company round. I trust that the Minister will rectify that omission.
Internal company studies show that the workers at Cowley are being expected to put in 20 per cent. more effort than workers in West German car plants. The commitment of the work force is not in doubt. Cowley is eminently suited to producing competitive and successful models for the future, which the country and our community want. At the same time, however, it is clear that expressions of confidence in the future must be based
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on more than that excellent potential and the Minister's vague aspirations. We need a clear indication of the model programme, and we need to know that resources will be available to build on Rover's undoubted strengths to put that programme into effect.
As my hon. Friend the Member for Dagenham (Mr. Gould) said, the Government have no industrial strategy whatsoever to ensure that that happens. The workers at Cowley, and those in Oxford and in other areas most immediately affected, want to know what the Government have done to represent their interests in the takeover. What have the Government done to secure a viable future for the plants? As the public custodian of the company, what have they done to make sure that there will be new models for the future? What have they done to make certain that the deal does not become an asset-stripping exercise in the long term?
The Minister's response to my earlier interventions about the conditions under which British Aerospace might divest itself of substantial holdings or parts of sites will have done nothing to reassure my constituents or others in the west midlands who are dependent upon the Rover Group for their livelihood. I shall listen very carefully to the reply from the Parliamentary Under-Secretary of State for Industry. If he says, as the Chancellor of the Duchy has said, that the Government in these negotiations sought to impose no such constraints and that it is up to the management and the market, I shall have to say that that answer simply is not good enough. It is further evidence that the Government set a higher stake on washing their hands of the Rover Group than securing a prosperous future for my constituents and for the country.
If the deal goes ahead, we must all hope that the amalgamated company is successful, and we must do what we can to ensure that it is successful. If the deal goes ahead, the Government should be left in no doubt whatsoever of their responsibility for the consequences. A responsible Government would not be embarking upon this course, as my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) and others have pointed out. The Government are pursuing their ideological commitment in such a cavalier and uncertain way, and without the assurances for the future that could and should have been obtained, that no one can be in any doubt where the responsibility will lie if things go wrong. That responsibility rests squarely on the Government. For ideological reasons, the Government may seek to wash their hands of the Rover Group, but they must and will not be allowed to escape the consequences of the decision that they have taken.
9.33 pm
Mr. Austin Mitchell: There have been two themes from the two sides of the House. From the Conservative Members we have heard forced praise for the arrangements, and from Opposition Members we have heard doubt, hesitation and pain. From nowhere has there been a "glad, confident morning", from nowhere has there been a real welcome.
We have heard forced praise from Conservative Back Benchers who have to say something nice and do not have the understanding to say the truth or the guts to ask for guarantees and therefore have clutched at straws—from which Central Office makes the bricks for them to drop —by claiming that there is some kind of synergy involved. There is as much synergy in this merger as there would be

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if Rover were to merge with the manufacturer of the fluffy dice that hang in the back of cars. The best test of synergy is the reviews in the quality newspapers. The Financial Times said:
"The industrial logic behind the proposal scarcely adds up to much."
The Guardian said:
"In terms of industrial logic the merger is madness."
The Economist said that so much industrial logic is
"PR fiannel. Aircraft and cars are utterly different to make, utterly different to sell. Rover needs car company skills, full stop."
That is true.
Hon. Members on both sides of the House are trying to make the best of a bad job. It is time that we looked at the basic truth, which is that the Government have betrayed, are now betraying and will continue to betray the British car industry. The car industry in this and any other country is central to a powerful manufacturing economy. We need a strong manufacturing industry and a strong car industry. Our industry has been allowed to shrink so that we are now well behind any other major industrial country in the share of home market that our car industry has and in the size and capacity of our domestic producer. Our car trade deficit with the EEC is nearly one third of our visible trade deficit.
The Government have betrayed the car industry because they have used a high exchange rate as a discipline on industry. They are dedicated to making the land fit for investors to live in. For investors to invest overseas they need a high pound. The Government have refused to let the market operate on the pound by propping it up with high interest rates, thus imposing a double burden on industry. That has caused the ruination of the car industry in the years during which they have been in office.
Imports make up a large share of our market. It is a far higher share than in any other industrial country. That has occurred simply because of the economic policies carried through by the Government. That is the first betrayal.
The second betrayal is the Government's failure to compensate the industry for the consequences of their folly. Let us look at the walking wounded that came out of their industrial folly. The problem is that Rover is not big enough for a volume car producer. It is not big enough to obtain the economies of scale that it needs and there is not enough investment to enable it to become the specialist up-market producer that it needs to be.
Between those two stools Rover is sinking. It needs help to overcome its problems. Every major car manufacturer in the world has had problems at some stage and in every other country the car industry has been helped and sustained by its Government. Volkswagen, Fiat, Peugeot, Renault and Chrysler in the United States have all received help. That help has built up and sustained the car industries, not whittled them down, which is what has happened in Britain. It would cost us to provide that help, but we must carry those costs if we are to maintain the car industry, which is vital to manufacturing. We cannot just close the industry down. We have to build it up and that is why the Government have to sustain their responsibility.
In every other country Governments work with industry. In this country the highest wisdom of the Government is to wash their hands of industry. They have a Lady Macbeth approach to industry. They want to wash their hands and divest themselves of it. We understand that the Minister is under a binding mandate from the
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Prime Minister to get rid of Rover. That is what this is all about. Let us look at how the Minister could approach that.
The only test of whether the industry could be privatised is whether it could be floated on the market. It fails that test because nobody will buy it. If it were floated, it would sink. Even if it were advertised as a slightly used car industry with one lady owner, it would not sell. The Government cannot float it; they will not build it up; they would rather give the money to tax cuts. They cannot close it—even Sir Keith Joseph was not crazy enough to do that. It would pull the heart out of the industrial midlands.
The Government cannot even adopt the Victor Kyam approach. He is the man who liked the Remington razor and bought the company. That is the approach the Government are taking with. British Shipbuilders—"You like the ships? Have the shipyard." They cannot take that approach with Rover because no one will have it given to them. So they must do what they have done. First, they put in Mr. Graham Day to give Rover the anorexia nervosa treatment—to sell it all off. What is the logic in selling off all those related businesses? The list of them is enormous and I shall not go through it all. He has sold off all those car businesses and divested the company of responsibility in the car industry for radiators and engineering design, and then merged with another company in a wholly unrelated business.
If Rover is to compete in the world it must be a specialist, strong car producer, not a limping part of another organisation in another activity. There is no logic in what Mr. Day has done. apart from prettying up the profits to get the company sold as quickly as possible. He has gone for profit, not market share. Market share has fallen consistently under his running of the company. That is the major test, and he has not solved the problems.
Now the Government are getting rid of the company. It would be better for the taxpayer to sell it to a foreign manufacturer who would pay more for it, but the Government's Back Benchers would not allow them to do that, and rightly so. They would get more money for the company in that way, but they must sell it to a British firm—but which one? That is the Government's problem. Who will take it off their hands?
Enter the well-known industrial Toby jug Professor Smith. He is not daft. He will not take Rover from the Government or have it given to him. He must be paid to take it. He will drive a hard bargain. However much he gets—one estimate is £650 million, another is £250 million—he will have been paid to take the company off the Government's hands. And that is a good deal for the Government. It uses the window of opportunity that arises as the company becomes profitable again and as the exchange rate fall of 1986 makes it profitable again. The deal allows the Government to get rid of the company, which is their highest ambition and wisdom.
The problem is that it is no ringing declaration of confidence in Rover, if the Government are so anxious to get rid of it that they will pay someone to take it. Conservative Members may criticise us for being critical of it, but this is a good deal for the Government because it gets rid of their obligation. It is our responsibility not to be taken in by ministerial speeches that are more sighs of relief than arguments.
What is to happen next? Now comes the Wendy hamburger question: where is the logic of this deal? Aerospace is an industry which needs heavy long

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investment runs. If British Aerospace wants a merger with other firms it would do best to take over an insurance company, a money cow that will provide the assistance to keep it going through early investment runs.
The merger with Rover will certainly put up BAe's earnings per share. Phillips and Drew say that they will be approximately doubled. The merger will give British Aerospace a stronger share price which will help it to avoid takeovers and give it better survivability.
For the rest, the merger only adds to the problems of British Aerospace. Both organisations have problems now that the dollar is falling and the pound rising. The pound has risen in real terms by 18 per cent. since the last quarter of 1986. That poses major problems for British exports and manufacturing. Tying these two firms together when there is an overvalued exchange rate is as logical as tying two one-legged men together and expecting them to compete in a three-legged race.
The merger will demand management time from British Aerospace which can scarcely be spared, given the company's severe problems with commercial aircraft. The merged Rover will need money of its own. It needs the new investment for new models that my hon. Friend the Member for Oxford, East (Mr. Smith) mentioned. It must have investment to keep going. If it is to be worth anything to Honda, it must have something to offer. That requires investment.
Once the survivability crisis has passed in two or three years, the company will need massive sums, which British Aerospace will not be able to provide and which Rover will not be big enough to generate from its own sales. According to the evidence of its previous managing director, it needs sales of more than 600,000 vehicles to generate the profit needed for new investment. The company is not making anything like that amount.
There is nothing much in it for British Aerospace, apart from in the immediate short-term period. There is nothing in it for Rover. It is not even a resting place for Rover. The basic dilemma remains: the company is not big enough to produce the volume and there is not enough investment for specialist production. There is no escape from that dilemma. That is why Rover must stay with the state. It is a matter not of the case for and against nationalisation but of who has the power, the muscle and the money to provide the investment to build up Rover. That is essential to our industrial base and economy. No one else is qualified to do it, and that is why the company should remain with the state. That is why the Minister is being irresponsible in getting rid of it in this fashion.
Labour would keep the company in the state and build it up as the kernel of the manufacturing expansion which will dominate the 1990s, with a Labour Government rebuilding our economy and using Rover as the powerhouse for that expansion. The job of the next Labour Government will be to rebuild from the wreckage generated by this Government.
Rover finds a reasonable home. New parents move into it, but they do not like Rover. They want to get rid of Rover so they do not feed or sustain it. In that case, Rover is probably better off with the People's Dispensary for Sick Animals. That is what is happening to the Rover Group, but it is not the best fate for it. Rover should be expanded and sustained through the difficulties. The Government
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have that responsibility. The responsibility for Rover, the future of the car industry, the workers in it and the dependent industries all over the west midlands is the Minister's. He is not getting rid of that responsibility by this manoeuvre. We will hold him to it.
9.47 pm
The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins): I have the good fortune to be a Member of Parliament for a constituency in which the Rover Group and British Aerospace have substantial interests, so I am well placed to speak with some knowledge about the activities of both companies. The Rover Group originally started as Leyland Motors in the town of Leyland, in my constituency, so I can speak with some personal knowledge and the knowledge of my constituents about what Leyland, now the Rover Group, has achieved, the problems which it has faced and the potential success offered by this deal.
British Aerospace operates near my constituency, with the military aircraft division centred in the Preston area. The aircraft activities of British Aerospace have been especially pertinent to the good fortune which has been achieved by many of my constituents who work for that company or for Royal Ordnance, which is partly based in my constituency.
The privatisations which have come to British Aerospace, to Royal Ordnance, to Leyland Trucks, now Leyland-DAF, and to Leyland Bus, now part of the Volvo group, have been a great success.
Mr. Nellist: Are job losses a success?
Mr. Atkins: The hon. Gentleman, who, as always, is concerned about matters relating to the motor industry and to Coventry, should not gainsay the fact that the difficulties faced by these companies have been overcome by privatisation. Many of the constituents of my hon. Friends who have been here and participated in the debate will confirm that. I visited Leyland-DAF the other day and drove the 50,000th truck off the line. Productivity has doubled since privatisation, and that is not the only example that I could give. I am sure that the same will be the case with regard to the deal between the Rover Group and British Aerospace. My constituents and those of my hon. Friends have achieved some remarkable results. They have had to do so because the pressure of world competition on the passenger car and commercial market has been substantial. It forced them to realise that productivity had to be improved.
We have heard that not only the constituents of my hon. Friends but dealers, component manufacturers and almost anyone who knows anything about the motor industry welcome this deal—except of course the Labour party. The speeches of Labour Members were well summed up by my hon. Friend the Member for Bromsgrove (Mr. Miller), who made a typically robust speech. He said that the Labour party is out of date and does not recognise the new interests that are being pursued by those who work in the motor industry. It does not recognise that this deal is important for the future of the two companies. It is ever ready to snipe, predict doom and gloom and disaster and devalue possible and actual success. It is now following the dictum that the Opposition's duty is to oppose. It goes to such lengths to score what it classes as a few points, but that flies in the

971
face of the industry's success story, which has been achieved as a result of its hard work at management and shop floor level in overcoming its difficulties.
My right hon. and learned Friend the Chancellor of the Duchy of Lancaster dealt with the substance of the debate, but a number of matters have been raised that I should try to deal with in the short time available to me. The hon. Member for Dagenham (Mr. Gould), in his usual, reasonable and amenable way, refused to answer the question that was asked by my right hon. and hon. Friends about whether the Labour party would renationalise the Rover Group if, as we confidently expect and hope, the deal goes through. We have noted that the hon. Gentleman avoided answering that question. I know that there are difficulties in the Labour party about its exact policy on social ownership, public ownership and nationalisation.
Mr. Austin Mitchell: The question is whether the deal will help tile Rover Group to survive. The question that should be put to the Government is, if the deal does not work and the Rover Group suffers as a consequence, will the Government take it hack and support it as they should?
Mr. Atkins: The hon. Gentleman must not wag his finger at me. I have asked the hon. Gentleman and his hon. Friend the Member for Dagenham a question, but I have received no answer. My hon. Friends and I want to hear an answer. Would the Labour party renationalise the Rover Group?
The hon. Member for Dagenham asked about Honda. My right hon. and learned Friend the Chancellor of the Duchy of Lancaster and my right hon. and noble Friend the Secretary of State have said on many occasions that Honda welcomed continuity of British—British Aerospace—management—[Interruption.] I shall say again, so that the hon. Member for Dagenham can hear, that Honda welcomed the continuity of British management, as represented by British Aerospace, which, in case the hon. Gentleman was not aware, is British management.
Mr. Andrew Smith: Did Honda welcome the deal?
Mr. Atkins: I have just said so. The hon. Gentleman should listen. Honda welcomed the continuity of British management and the deal that we are debating. It positively welcomed it—what more does the hon. Gentleman want?
Mr. Gould: I assume that the Minister chose his phrase with care and placed emphasis on the continuity of British management. He took care to correct what I take to be a slip of the tongue when he talked of British Aerospace management. The impression given is that Honda expressed strong support for the existing management. Is that what the Minister is saying?
Mr. Atkins: The hon. Gentleman has a capacity to split a phrase into different words and to make of them what he wants. Honda welcomed the deal. It welcomed continuity of British management and the future as represented by British Aerospace. Does the hon. Gentleman want it spelt out any more clearly than that? Honda welcomed the deal. There it is, and there it lies.
The hon. Gentleman asked what British Aerospace knows about making cars. What does Ford know about
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making aircraft? There is a company called Ford Aerospace within the group which knows a great deal about making aircraft.
My hon. Friend the Member for Birmingham, Northfield (Mr. King) made an excellent speech, which showed how much he knows about the motor industry. He said that management is what counts, and consultation with the work force. It almost does not matter what is being made as long as the management and the work force are properly looked after and properly understand what is required—the end product—in a variety of areas.
The hon. Gentleman also asked about British Aerospace commitment. The company has made it clear that it is delighted with the continuity that it sees in the management of Graham Day, and the plants and ideas that he has set out, both publicly and privately, about the future of the Rover Group. It wishes to abide by those ideas and plants.
The hon. Member for Dagenham called in aid Aerospatiale. I find that astonishing, because the French never miss a chance to undermine the British aerospace industry, particularly—as I have cause to know in my constituency—when they have considerable problems in their own industry, caused largely by the success of British Aerospace and other related companies. To pray in aid Aerospatiale is taking it a long way down the line, and the hon. Gentleman should be careful.
Mr. Nellist: Will the hon. Gentleman give way?
Mr. Atkins: If the hon. Gentleman will forgive me, I will not, as I have only a few moments and several questions to answer.
My hon. Friend the Member for Bromsgrove asked me a particular question. I assure him that nothing in the detailed arrangements that we have been discussing would prevent further collaboration or joint ventures with other manufacturers, provided that control of the principal businesses remained unchanged. Nor would the arrangements inhibit any shareholding in the principal businesses by the potential collaborative party. I hope that that goes some way to answering his problem.
A number of hon. Members have asked about so-called guarantees. Without constraining British Aerospace's day-to-day management of the business, we have agreed important conditions on the acquisition. British Aerospace has undertaken not to relinquish control of Austin Rover or Land Rover within five years. This undertaking is supported by legal arrangements that ensure that, even if there were to be a sale within five years, the net financial benefits of British Aerospace's holding of the business and the net proceeds of the sale would be repaid to the Government subject to a ceiling of £650 million. British Aerospace has made clear its intention to hold and develop the businesses, but these arrangements ensure that it would not be to its financial advantage to break its undertaking. I cannot be more clear than that.
Mr. Nellist: I represent more than one or two aerospace and car workers, and I am probably the only hon. Member in the Chamber who has had a job with the predecessors of both Rover and British Aerospace. There is not much connection between a Rapier and a Rover—between a ground-to-air missile and a family saloon car. What confidence can car or aerospace workers have in Graham Day, who sold 18 businesses in two years and reduced the number of shipbuilders by 55,000 in the previous three

973
years, or in Mr. Smith, who talked about reducing the number of aerospace workers by about a third by 1992, or in Lord Young? He said on the Channel 4 business programme of 6 March:
"We will not impose conditions about manufacture at Cowley and Longbridge."
What confidence can car workers and aerospace workers have in anything that the Government spokesmen have said tonight?
Mr. Atkins: The hon. Gentleman has made his point, which I dealt with in some detail earlier. I hope that he will allow me to proceed to ensure that the debate is concluded in a proper way.
In his opening speech, my right hon. and learned Friend made it clear why, when one takes account of all the components of this agreement, and not the simple arguments relating merely to the cash injection and consideration, this deal represents a fair balance of various interests. I stress that the Government believe that privatisation is in the interest of the business. On that matter, I can do no better than to quote Graham Day, who said, when explaining why putting the business back in the private sector had been one of his objectives:
"For me, it is not simply a matter of ideology, it is a matter of very good common business sense."
The Government for their part were determined that privatisation should take place in a way that recognised the contribution made to the economy by the Rover Group and gave the company the best available chance of developing its independent role in the vehicle industry.
This is an excellent deal for the Rover Group and an excellent deal for British Aerospace. It is an excellent deal for the taxpayer and also for many of our constituents whose interests have been so ably represented in the speeches made by my hon. Friends. We are exceedingly proud of the deal and more than content for it to be subjected to scrutiny when it is completed, as we hope it will be. I know that my hon. Friends will recognise that we believe that this deal could be very exciting for the future of this country.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Lords Amendments to the Immigration Bill and the Lords Amendments to the Public Utility Transfers and Water Charges Bill may be proceeded with, though opposed, until any hour.—[Mr. Ryder]

Immigration Bill
Lords amendments considered
New Clause

  MEMBERS OF DIPLOMATIC MISSIONS
  Lords amendment: No. 1, after clause 3, insert new clause:
  ". At the beginning of subsection (3) of section 8 of the principal Act (exemption from immigration control for members of diplomatic missions etc) there shall be inserted the words "Subject to subsection (3A) below," and after that subsection there shall be inserted—
  "(3A) In the case of a member of a mission other than a diplomatic agent (within the meaning of the said Act of 1964) subsection (3) above shall apply only if he enters or has entered the United Kingdom—

  (a) as a member of that mission; or

  (b) in order to take up a post as such a member which was offered to him before his arrival;

  and references in that subsection to a member of a mission shall be construed accordingly."
  Read a Second time
  10 pm
  The Minister of State, Home Office (Mr. Tim Renton): I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Speaker: With this it will be convenient to take Lords amendment No. 3, in clause 11, page 5, line 31, after "3" insert "(Members of diplomatic missions)"
  Mr. Renton: The third amendment depends on the first, and both are proposed by the Government.
  The proposed amendment of section 8(3) of the 1971 Act seeks to improve the effectiveness of immigration control in relation to those who at present are granted exemption from the control by virtue of employment as a member of a mission. It has entered the lists at this late stage because the extent and nature of the problem have been identified only quite recently and the proposed solution has required careful consideration in consultation with the Foreign and Commonwealth Office.
  Section 8(3) of the Immigration Act 1971 confers exemption from immigration control on all members of a mission within the meaning of the Diplomatic Privileges Act 1964—together with members of the family forming part of the household. No distinction is drawn between the various categories of staff employed in foreign missions. Exemption is accorded to caretakers and drivers as well as to full diplomatic agents. More particularly, the exemption extends to all locally engaged staff—that is, someone who has come to this country for another purpose and then been taken into employment by a mission.
  That leads to the rather curious state of affairs whereby locally engaged staff with no entitlement to any form of diplomatic immunity or privilege are, none the less, automatically accorded exemption from immigration control by virtue of section 8(3) of the 1971 Act.
  The exemption places anyone employed as a member of a mission beyond the framework of control set out in the Immigration Act and the rules. This position is not satisfactory as it can be exploited by a number of people who would not otherwise qualify to remain in this country. That happens in a number of ways. At one end of the spectrum there are those who are here lawfully but whose conditions do not allow them to take employment—for

  975
  example, people admitted initially as visitors or students, who then switch to employment with a mission when they no longer have any basis for remaining.
  Then there are those who might be termed "prospective overstayers", who use missions as a safe haven. I have in mind those who are awaiting the outcome of an appeal against a refusal to extend their leave to remain. They may then seek to secure their position by taking employment with a mission in the knowledge that they cannot then be removed, even if the appeal is unsuccessful.
  Finally, there are those who clearly have no basis under the rules for remaining in the United Kingdom. They include illegal entrants, those on temporary admission or overstayers themselves.
  The numbers are not at all large. In 1986, 119 overstayers or illegal entrants took up employment that entitled them to exemption from immigration control, and a further 286 people, whose conditions of stay prohibited employment, had these conditions removed on the grounds of their exempt employment. The great majority of them were employed as members of missions. While the scale of the abuse is not great, so long as this method of evading removal remains, it is sadly inevitable that it will be exploited from time to time.
  We are not concerned with those who are appointed as full diplomatic agents. We do not wish to intervene in that area, and that is not where the problems arise. The evidence of abuse is restricted to those in what are known as categories C and D employment with a mission—administrative and technical staff and those employed in the domestic service of the mission, such as drivers and caretakers.
  The effect of the new clause will be that locally engaged staff in non-diplomatic posts and their families will no longer be exempt from immigration control. Missions will be able to continue to employ locally engaged staff in those categories if their immigration status enables them to take that employment. It may also be possible for others to be employed in those categories, but only if the mission notifies the Foreign and Commonwealth Office of their appointment in accordance with the Vienna convention on diplomatic relations.
  The Foreign and Commonwealth Office needs to be satisfied that the individual is in bona fide employment and thus entitled to immunities and privileges. Where those requirements are met, the mission may be allowed to take on locally engaged staff in those categories. However, if it does, those members of the mission will be subject to immigration control. Furthermore, in accordance with the Vienna convention, the mission will be required to notify the appointment of the individual and the termination of his appointment. Those changes will improve the effectiveness of our control procedures.
  Nothing in the proposed amendment resiles from the United Kingdom's commitment as a signatory to the Vienna convention. Our approach is not inconsistent with that adopted by other countries to the employment of locally engaged staff in our missions abroad. On the contrary, the proposed amendment simply puts into practice the advice already given to missions by the Vice Marshall of the Diplomatic Corps that they should not employ persons who would not otherwise be permitted to work in the United Kingdom. Equally, the proposed amendment will not apply retrospectively. Those already employed by a mission will retain their exemption from immigration control while they remain in that capacity.
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  The new arrangements will be fully explained to missions before the amendments come into effect. The proposed consequential amendment to clause 11 would simply provide the amendment to section 8(3) to be brought into effect by means of a commencement order.
  I commend the amendments to the House.
  Mr. Stuart Randall: It is interesting to note that, at this stage in the passage of the legislation through both Houses, we are now raking up this type of amendment. I find it interesting that the Minister says that the Government have only now identified this problem. I get the impression that this is a sledgehammer to crack a nut. Certainly the Minister has not impressed on me the need for the amendments. He has not explained the extent of the problem to which he has referred and which has resulted in the amendments being tabled in another place and accepted by the Government.
  If there is abuse we would have no truck with it. I notice that the Minister giggles. When we were in Committee the Minister used to become insulting, rude and—[HON. MEMBERS: "Shame."] Conservative Members know that every time the Minister was on the ropes in Committee he behaved in that way. It is interesting that, after all these weeks, we get such giggles from the Minister when we again debate immigration.
  The Minister should explain in more detail the scale of the problem. In which embassies and missions has this abuse been perceived to have taken place? Exactly how did he come across this problem? How was it perceived? What agencies were used to find out about this? Were the police involved or was it just the immigration service? The House must be clear that there is a need for this information. I have made it clear that I would not in any way support any abuse of diplomatic immunities or the breaking of the law. There is no dispute about that. We are trying to obtain from the Minister what was miserably lacking in his speech. We have no insight into the matter.
  I would welcome any Conservative Member standing up and explaining in detail the nature of the problem. I am willing to give way, but no hon. Member stands up because nobody understands the detail of the problem. The Minister must give us more information about which countries are involved and how the problems were identified. We need to know the nature of the abuse and who was doing the abusing. Was it the drivers, the cleaners or people who had failed on an appeal process or who had an appeal outstanding? We need to know more if we are not to divide the House on the amendments.
  Mr. Jeremy Hanley: Will the hon. Gentleman give way?
  Mr. Randall: I think that it would be valuable to the House if the Minister explained in more detail what is happening in other countries.
  Mr. Hanley: In the unreal world, when the hon. Gentleman might be responsible for immigration law in this country, what would he do, if he discovered that 119 people would have deliberately defrauded international law, if it were not for this clause? If he discovered that a further 280 people had abused or were about to abuse the privileges of international diplomatic immunity, would he have acted in the way that the Minister acted or would he ignore it, because 400 people are too few?
  Mr. Randall: The hon. Member has come up with some statistics—[HON. MEMBERS: "You asked for them".] Hon. Members are baying for an answer and I shall give them an answer, as I always do. The hon. Member has come up with those statistics, and I do not know whether they are just made up. The hon. Member knows much about these matters, because he is a member of the Sub-Committee on Race Relations and Immigration. [HON. MEMBERS: "He was".] He was. I do not know why he left. He was a member of the Select Committee and he has studied these matters. He has come up with figures which are revealing. Are they authentic or are they made up? If they are authentic, the hon. Gentleman seems to have given the House much more information about the matter than the Minister has. That is the sort of detail that we all want.
  Mr. Keith Vaz: My hon. Friend mentioned the figures given by the hon. Member for Richmond and Barnes (Mr. Hanley). Does he recall that, in Committee, when reference was made by the Government in clause 4 to the seven-year limit, the hon. Gentleman volunteered the information that that was the limit that had been adhered to in the Limitation Act 1963? That is another example to show that figures and statistics are being made up by the hon. Member for Richmond and Barnes, and are being misused in this way.
  Mr. Randall: I do not know whether the figures are authentic, but I will give way to the hon. Member for Richmond and Barnes.
  Mr. Hanley:The hon. Member may have done the same research as I have to find the figures, but that is irrelevant. I am certain that that would not have happened, as the hon. Gentleman's research is painfully shallow. I asked the hon. Gentleman questions. I asked how, if those figures were the truth, he would have acted when confronted with that information. Will the hon. Gentleman have the courage and decency to answer my questions and not prevaricate?
  10.15 pm
  Mr. Randall: The hon. Gentleman is obviously suggesting that his figures are untrue. When we all read Hansard avidly tomorrow, we shall realise that the hon. Gentleman is playing with words and that he does not believe that those figures are true.
  I shall answer the question. I have already said twice that, if there were abuse on a large scale, Labour Members would have no truck with the breaking of the law and the abuse of diplomatic missions. Perhaps the Minister will confirm the figures of 119 and 280. I am not walking into a trap. The hon. Member for Richmond and Barnes is grinning away. I know his tricks, but if there is large-scale abuse, we must take measures to prevent it. The Minister has failed to convince me that there is abuse on a large scale. He told the House clearly that he tumbled upon the fact. It is a new phenomenon for him. He said that the problem has only recently been identified.
  Mr. Renton: We have become accustomed to the hon. Gentleman assuming the dormouse position in Committee, but he appears to have been singularly sleepy a few moments ago when my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) quoted the figures that I gave in my opening remarks. I said that the hon. Gentleman was asleep and I repeat that, in 1986, 119
  978
  overstayers or illegal entrants took up employment which entitled them to exemption from immigration control and a further 286 people whose conditions of stay prohibited employment had those conditions been removed on the ground of their exempt employment. My hon. Friend, with his mastery of mathematics, added up those figures and came to the figure of 400. That is precisely the figure that I quoted, but, once again, the hon. Gentleman was thinking so hard about what he could say to oppose this sensible amendment that he just was not listening.
  Mr. Randall: The Minister and his hon. Friend have got the matter completely back to front. The Minister knows that to be so, because, on the one hand, he talks about figures for 1986 and, on the other hand, he talks about the new phenomenon. He cannot have it both ways. He either perceived the problem in 1986 or he has just perceived it. If I were in his position, I would explain when the problem was first perceived and mention the number of cases identified each year so that we could be clear about whether the problem was growing, diminishing or remaining stable. What kind of people were involved? The Minister has given us nothing tonight and, as usual, the hon. Member for Richmond and Barnes has put the cart before the horse and muddled both the House and himself.
  I shall not spend much time on this, but we want clarification. The Minister has not justified the need for legislation to deal with the problem. Certainly, the figures that he has given have not shown us the extent of the problem. Will he tell us what forms of abuse he found? If it is a new phenomenon, what other nasties did he find under the stone?
  Mr. Vaz: I take up my hon. Friend's comment about nasty things being hidden beneath the stones. It is refreshing to see the Minister of State in his place, and perhaps he will tell us something about the unopened letters at Lunar house. We hear his dulcet tones on "The World at One", but it would be more helpful if he made a statement on the current position at Lunar house.
  Mr. Randall rose—
  Mr. Deputy Speaker (Sir Paul Dean): Order. Before the hon. Member for Kingston upon Hull, West (Mr. Randall) is tempted to follow that road, I wish to make it clear that I find it difficult to associate Lunar house with the amendment.
  Mr. Randall: Though tempted, Mr. Deputy Speaker, I accept your ruling and shall not follow the path that has been put before me by my hon. Friend the Member for Leicester, East (Mr. Vaz). I merely say in passing that the new clause makes clear reference to the documentation that is necessary for those seeking admission who have the right of abode. I think that my hon. Friend is suggesting that some of the documents that might be needed for admission might be caught in the administrative mess that the Minister has created both at Lunar house and Petty France. I shall take the point no further than that.
  The Opposition are unhappy with the Minister's performance. He has failed to convince us of the need for change. He has failed to tell us about scale and he has failed to get the numbers right. I wish that he would give us a thorough and clear explanation that would give us the sense of conviction to vote for the amendment.
  Mr. Renton: If I permitted myself a smile during the opening remarks of the hon. Member for Kingston upon Hull, West (Mr. Randall) it was because I am normally a cheerful fellow, and because of the hon. Gentleman's remark that if there was abuse in the immigration procedures the Opposition would wish to put a stop to it.
  Anyone who served on the Committee which considered the Bill would know well that when we were discussing clause 5 and seeking to make overstaying a continuous criminal offence, as it was originally intended to be in the 1962 legislation, the Opposition were against us closing the door on this evident abuse of immigration control. Those who overstay their permission to be in this country are consciously or knowingly breaking the conditions under which they were permitted to enter. It is therefore only logical that overstaying should be a continuous offence, yet constantly the Opposition argued against that in Committee. Against that background the hon. Member for Kingston upon Hull, West had the gall to say that if there was abuse of immigration procedures the Opposition would be against it. That is a statement of such hypocrisy that it is not surprising that I broke into a slight smile.
  Ms. Diane Abbott: Does the Minister agree that it is rather unfair to accuse my right hon. and hon. Friends and me of being against any sanction for abuse of immigration legislation? Surely he is aware that there are good administrative sanctions against overstayers that operate every day of the week and every week of the year, as I have reason to know. We know that adminstrative sanctions exist and we have never argued against them. We have argued against double jeopardy.
  Mr. Renton: This issue arose many times in Committee. It was explained many times to the hon. Lady that there is a need for criminal procedures as well as administrative procedures and that the original intention was that overstaying should be a continuous offence. We explained also that it was our intention to bring it into that position again.
  The hon. Member for Kingston upon Hull, West has the beguiling characteristic of being able to turn a silk purse into a sow's ear. I presented an amendment to the House, which was approved in another place without a Division, to the effect that we should plug this minor gap in relation to those in non-diplomatic positions employed by embassies who find themselves outwith immigration controls as a result of taking up that employment. I should have thought that that was a fairly simple proposition on which hon. Members on both sides of the House could agree.
  However, the hon. Member for Kingston upon Hull, West got himself into a great tangle over the figures. Are they too big or two small? I made it abundantly clear that the figure that we were talking about from the 1986 statistics was about 400. We did not learn from the hon,. Member for Kingston upon Hull, West whether he would support a figure of 600 or whether he would not support a figure of 200. He owes the House an explanation about that.
  I quoted the figure and evidently the hon. Member for Kingston upon Hull, West did not listen. What is wrong with the figure? Is it not large enough? Would he like a bigger figure or would he like a smaller one? Will the hon.
  980
  Gentleman tell us? [Interruption.] Obviously, he will not. He is also permitting himself a little giggle, and perhaps that is not a bad thing.
  Mr. Paul Boateng rose—
  Ms. Abbott rose—
  Mr. Renton: I will give way to the hon. Member for Brent, South (Mr. Boateng) because I have already given way to the hon. Member for Hackney, North and Stoke Newington (Ms. Abbott).
  Mr. Boateng: Over the months of discussion about this Bill, has it not sunk in that the Opposition's objection to this clause and to many others that the Government have presented is directed not simply to the clause but to the fact that the clause is an unpleasant little accretion on an already monstrous edifice of injustice? That is what we object to. That should surely have sunk in amidst all the suavity and charm.
  Ms. Abbott: Charm?
  Mr. Boateng: Yes, charm of a somewhat jaded and lethargic kind, but charm none the less. Has not our true objection to this nasty, sordid little measure sunk in?
  Mr. Renton: I am sorry that the hon. Member for Brent, South was not a member of the Committee. I am sure that his hon. Friends could have made use of his expertise and wisdom because those qualities were at times sadly lacking on the Opposition Benches in Committee. He might have added something to their deliberations.
  If the hon. Member for Brent, South is seriously suggesting that, having become conscious of the ability of those who came to this country as visitors subsequently to obtain employment when they were not permitted to do so —for example, as a driver or gardener in a diplomatic mission—and therefore be outwith immigration control, and, having perceived that gap in the rules, we should do nothing about it, he is making a very odd case. I should have thought that there was a general acceptance that we should do something about that omission once it had come to our attention. After detailed consultation with the Foreign and Commonwealth Office, that is precisely what we are doing tonight.
  The hon. Member for Kingston upon Hull, West asked which mission had been involved. The problem has arisen in several cases. It would not be helpful to identify any particular mission as a major offender, but if he wants to continue to pursue that point with my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, he might like to do that in detailed and private conversations.
  I have already explained that exempt employment had been exploited by overstayers, illegal immigrants, and prospective overstayers, including students and visitors, whose immigration conditions preclude employment. Having detected that, it is only right to put an end to that practice, as we are doing tonight.
  As it stands, section 8(3) of the Immigration Act 1971 provides for all members of a mission to be exempt from immigration control in a way that is not demanded by the terms of the Vienna convention on diplomatic relations. There is evidence that that form of employment has been exploited by those who would otherwise have no basis for remaining in this country. So long as this potential abuse remains, it is likely to be exploited in future. For that

  981
  reason, we are taking this opportunity to improve the effectiveness of our immigration control arrangements in that regard.
  I commend the amendments to the House, and I find it hard to believe that the Opposition will vote against them.
  Question put and agreed to

Clause 5

  KNOWINGLY OVERSTAYING LIMITED LEAVE
  Lords amendment: No. 2, in page 3, line 37, at end insert
  "but a person shall not be prosecuted under that provision more than once in respect of the same limited leave."
  10.30 pm
  Mr. Renton: I beg to move, That this House doth agree with the Lords in the said amendment.
  I am happy to accept this amendment. As shown during the Committee stage, it is not, and never has been, the Government's intention that multiple prosecution should be brought for overstaying the same period of limited leave. This amendment, which has been agreed in another place, makes it entirely clear that only one prosecution may be brought in respect of overstaying the same period of limited leave. It removes any doubts there could be about the effect of clause 5, and I am happy to commend the amendment to the House.
  Mr. Randall: We welcome the idea of inserting into the legislation the notion that there should not be multiple prosecutions for overstaying. One can justify the argument for that provision from the legal viewpoint. Although I am not a lawyer, I am sure that there are lawyers in the House who understand such matters and who would be able clearly to explain that it is a provision that one would want to make.
  Overstaying is done by people intentionally, which is wrong, and sometimes—as we discussed to some considerable extent in Committee—for technical reasons and unintentionally. When one examines clauses 4 and 5 of the Bill, it is clear that the Government's line on overstaying has been harsh and wrong. The appeal procedures, which were perfectly adequate under the existing administrative arrangements, now mean that prosecutions will be brought far more often, because of the new option in the legislation—assuming that it receives Royal Assent.
  Overstaying need not necessarily be evil or very bad —although, as with many other things, it can be abused and intentional. For that reason, overstaying is to be condemned, but removing the possibility of multiple prosecutions is to be welcomed.
  Mr. Max Madden: This minor amendment does little to remove or lessen the objections to this squalid and nasty Bill. It is typical that the Minister should seek to steer this squalid and nasty Bill through the House at 10.30 pm at night, aided by nine officials from the Home Office and after a trawl of the Tea Room, from where the semi-intellectual wing of the Conservative party has been dragged into the Chamber to give the Bill some support.
  This Bill is friendless. Apart from the extreme Right wing of the Conservative party, the Bill has no friend at all. There is no one in favour of the Bill's provisions, no one
  982
  who has clamoured for the Bill to be put on to the statute book, and no one—apart from the Government—who relishes the prospect of the Bill becoming law. Just how friendless it was could clearly be seen on Second Reading, when the Government secured the lowest majority so far achieved for any Bill—beaten only by the poll tax vote of recent weeks, which was even lower.
  The amendment will do nothing to mitigate the fears and anxiety created by the Bill, especially clause 5. The Bill does nothing to help black and Asian communities, and the amendment will not remove the anger and resentment that it is creating throughout the country. It does nothing to help a constituent of mine who was widowed at the end of last year with five young children—the youngest two years old—and a small business to keep going. My constituent married recently, and he and his children are looking forward eagerly to his wife—their mother—joining them soon in Bradford.
  I am sorry that the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs, who was with us until a few minutes ago, has now left the Chamber. He wrote to me recently, in answer to my request that that woman be given a priority interview. He told me that she would have to wait until the end of this year, or early next year. He said that it would be wrong to grant her a priority interview, as it would mean that many others suffering from similar "compassionate" circumstances would not be given their interviews in time. If that is the case, instead of wasting time discussing the amendment and the Bill, the House should be discussing how the family of my constituent—and the families of others who the Minister tells me are in similar "compassionate" difficulties—can be united and their fear and anxiety alleviated.
  Mr. Deputy Speaker: Order. The hon. Gentleman has just admitted that he is not really discussing the amendment. I am sure that, with his usual ingenuity, he can bring his remarks within the confines of the amendment.
  Mr. Madden: Yes, indeed, Mr. Deputy Speaker. But the difficulty is that we are dealing with a Minister who proceeds by means of media hype. The Select Committee on Home Affairs was widely known recently to be producing a severe criticism of the administration of the Home Office. Days before that report was published, the media—obviously acting on leaks from the Home Office—was warning the nation that thousands were seeking to enter the country illegally, thereby trying to pre-empt the Select Committee's criticism of the Minister.
  Ms. Abbott: Does my hon. Friend agree that—as with the previous amendment and the clause on polygamous wives—numbers are the essence here? The politics of the Bill has been to conjure up some huge threat to civilisation as we know it, and then call in aid the need of law. Just as there is no evidence of a steep rise in the number of overstayers, a whole clause has been devoted to the apparently world-menacing threat of polygamous wives trying to enter the country. When we inquired in Committee, we were told that an entire clause was devoted to a total of 26 polygamous wives a year. In this and the previous amendment the figures are not an irrelevance; they are central to the politics of the Bill.
  Mr. Madden: My hon. Friend is exactly right. We should be clear that there is absolutely no need for the Government to acquire, through the Bill, any additional powers to deal with overstayers.
  The Minister may not like it, but the blunt fact is that the administrative powers available to him to deal with overstayers are more than sufficient to deal with a very limited problem. Instead of discussing the Bill, we should be discussing the fact that last summer the Minister failed to heed the warnings of his senior staff and deal with the chaos that now grips Lunar house in dealing with registration applications for British citizens.
  Mr. Deputy Speaker: Order. I am getting the distinct impression that we have returned to the Committee stage. We are now dealing with a fairly narrow Lords amendment. The hon. Gentleman is an experienced parliamentarian and I am sure that he will not abuse the procedures of the House by trying to widen the debate.
  Mr. Madden: The difficulty is that, as each week has unfolded since the Committee stage, we have seen more evidence that the Bill is wholly irrelevant to the needs of black and Asian communities throughout the country that require positive action. For instance, we should be concerned with the appointment of more immigration officers so that interviews can be conducted—
  Mr. Deputy Speaker: Order. The hon. Gentleman must realise that he is trying to broaden this into a debate on immigration procedures. That would have been relevant at earlier stages of the Bill, but we are now dealing with a comparatively narrow Lords amendment and I must ask him to address himself to that.
  Mr. Madden: Indeed, Mr. Deputy Speaker. However, the amendment relates directly to the competence of the Home Office. Therefore, the sufficiency of immigration staff and the competence of the immigration and nationality department are related directly to the substance of the amendment. I would argue that it is germane to the debate for us to discuss the incompetence of the immigration and nationality department, the insufficiency of immigration officers and the general incompetence of the administration over which the Minister, in theory, presides.
  Ms. Abbott: Does my hon. Friend agree that the Minister has smiled throughout the discussion on the amendment about overstayers? Does my hon. Friend agree also that if the Minister had any personal experience of the misery that is caused, particularly by the prosecution of possible overstayers, the miserable lives that some of them lead and the tragedy around some of the casework, he would not sit there smirking?
  Mr. Madden: Indeed. Unfortunately, the Minister has not seen fit to resign, considering the chaos over which he now reigns. In years gone by, when Ministers recognised their responsibilities, the Minister of State would have resigned long ago.
  The amendment is wholly irrelevant to the anxieties of many black and Asian people who view the Bill with great anger and resentment. If the Bill, particularly clause 5, is implemented robustly by the police, it will create very great difficulties in black and Asian communities throughout the country.
  I am pleased that the chief constable in west Yorkshire clearly has not made any representations to the Home Office for the clause or the Bill to be introduced. Therefore, I am sure that it will not be implemented in west Yorkshire with the vigour that some of the extremists in the Conservative party would like. I hope that the police in the rest of the country, particularly in areas with black and Asian communities, will not use the legislation in the way that some Conservative Members would like them to implement it. I very much hope that powers in the Bill will not be taken up by the police. It should be quietly ignored. I fear that, if it is not, there will be a hot summer in many parts of the country. If that occurs, the responsibility will lie squarely with the Minister of State and the Home Office.
  10.45 pm
  Mr. Hugo Summerson: Looking at the amendment, which we are supposed to be discussing and which is narrowly drawn, does the hon. Gentleman agree that to some extent it limits the Government's powers for prosecuting overstayers?
  Mr. Madden: The unfortunate fact is not only that the amendment exists but that we also have the clause and the Bill.
  I regret the Government's political will and determination to push through this dangerous legislation. They have shown no willingness to listen to those from the Churches, the voluntary agencies or the community organisations who have told them time and again that the legislation does not address itself to the real problems of black and Asian people throughout the country. It is a recipe for disharmony. It is a recipe for division, anger and resentment at a time when we need to bring communities together and build confidence between those communities and the police. My view of this legislation is shared by the vast majority of my colleagues on the Opposition Benches.
  Question put and agreed.
  Lords amendment No. 3 agreed to.

  Public Utility Transfers and Water Charges Bill
  Lords amendments considered

  ROVISIONS REGULATING THE CHARGES OF ALL WATER UNDERTAKERS
  Lords amendment: No. 1, in 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."
  10.47 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): I beg to move, That this House doth agree with the Lords in the said amendment.
  The amendment is designed 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 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.
  During 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. That provision was inserted in the 1973 Act at the WCA'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 stock holders. Section 12(6) was in turn derived from the proviso to section 40(1) of the Water Act 1945. It also pointed out that, because investors have got used to seeing references to section 12(6) in the prospectuses of water companies, they will be looking for similar protection, and to have similar wording in this case.
  I commend this technical but important amendment to the House.
  Mr. Roland Boyes: We agree with the amendment. It is a technical matter, but, as the Minister said, it is eminently sensible that the water companies should have the protection they are seeking. The Lords amendment clarified the position exactly.
  I should like to ask the Minister one question so that his answer is on the record. It is the only thing about which we are concerned. Will he define for us what is meant by a "reasonable" return on capital? I understand that discussions on that matter have been taking place between the Government and the Water Companies Association. I have a copy of a letter from the association, signed by the director, Michael Swallow, saying that the association
  986
  requested this amendment. We are happy that discussions have taken place, but would like to know what a reasonable return on capital means.
  Mr. Moynihan: There have been lengthy debates on the Floor of the House and in Committee about the precise definition of "reasonable". There is a statutory restriction on the dividends of water companies. So anything below a statutory restriction—if it is imposed—would be deemed reasonable. That point was debated extensively in Committee and in the context of the 1973 Act, which gave no definition of "reasonable" It was left to common sense. The advantage here is the statutory restriction on the dividends of water companies, and a reasonable return on capital would be anything beneath that ceiling.
  Question put and agreed to.

Clause 4

  METERING TRIALS SCHEMES
  Lords amendment: No. 2 in page 5, line 34, at end insert "and with any bodies representing the interests of those persons".
  Mr. Moynihan: I beg to move, That this House doth agree with the Lords in the said amendment.
  The Government gave an undertaking on Report that they would table a suitable amendment in another place in response to an amendment seeking to ensure that consumer bodies representing the interests of those affected by the trials were consulted. As a result of that undertaking, clause 4 was amended in the other place 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, which was the then position, should he 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 organisations such 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 have regard to whether that consultation appears appropriate. This provides for a common-sense 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. That 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. An obvious example would be a local authority representing the interests of its tenants, or a social services client, resident in a trials area. Clearly, local authorities are not consumer bodies, but they represent—at least I hope they do—the interests of their tenants and social services clients.
  The amendment is not complex, nor will it change the Bill in a radical way. However, it serves to emphasise the importance that the Government attach to full and proper consultation on the trials. I hope that it answers the

  987
  concerns that were expressed by Members of both Opposition parties represented in the House tonight and that we shall not disagree with the thrust of the amendment, which I recommend to the House.
  Mr. Matthew Taylor: I am sure that hon. Members on both sides will welcome the amendment, which was pressed on many occasions in Committee. It represents a substantial part of the case that we put forward. As such, we welcome it, and I am sure that the Labour party will do the same.
  We still have serious concerns about the impact that metering may have on individuals and about differentials. I am a little sad that there has not been a further amendment to cover the point made about protection for individuals who may be worse off under the metering trials than if they had not been imposed on them. The Minister said that he would consider that point. This measure is a second-best, but it is welcome. I hope that the Minister will take advantage of the opportunity presented by any schemes that are proposed.
  I represent one of the few boards that will not have metering trial schemes. People in my area are not entirely disinterested since, if the Government press ahead with the schemes, many will be directly affected. I hope that amendments along these lines will be viewed in similar terms when other proposals come before the House. The guarantees written into the Bill will apply to only a minority of the population—those involved in the schemes—but, if the schemes are extended, many more people will be worried about the possible effects of compulsory metering. I give a cautious welcome to the amendment. I am sure that there will not be opposition to it.
  Mrs. Virginia Bottomley: There is no caution or hesitancy about my welcome for the fact that my hon. Friend the Minister has agreed to the amendment. He has shown a willingness to listen and an awareness of consumer interests.
  As with Lords amendment No. 1, this amendment shows a willingness openly to review plans. I urge my hon. Friend to continue along this line and to listen to the advice of the statutory water companies, of one of which I am a director. Such companies offer a valuable service to the consumer and a valuable model. I ask my hon. Friend, before moving towards public limited companies, encircled by regulations in a monopoly supply situation, to consider the tried and tested model of the statutory water companies. Their dividend is limited by statute and all surpluses must be redirected towards the benefit of the consumer.
  Mr. Boyes: We agree with the amendment, but in one way the Minister, in defining it, seemed to be giving with one hand and taking with the other. He paraphrased what the Earl of Caithness said, which was:
  "It will he up to each undertaker to consider which bodies it would he appropriate to consult in each case, and for the Secretary of State to decide whether that consultation appeared appropriate."—[Official Report, House of Lords, 16 March 1988; Vol. 494, c. 1343.]
  Surely, if various bodies decide that there should be consultation, I cannot understand why the Secretary of State wants to be involved. I do not know what some of the nationally recognised consumer organisations would think of the Minister describing the definitions as "woolly" when they have a good record on a number of issues.
  988
  On Third Reading, I described the Bill as "shoddy" and "undesirable". Although I welcomed the amendments, neither changes my opinion about the Bill. Throughout its passage, Labour Members continually bombarded the Minister and his colleagues with calls for more representation of consumer interests.
  On 2 Febuary the Minister promised that he would table an amendment, but it is clear from reading the Committee proceedings that it was never in his mind to do so. We almost had to break off his arm and beat him with it to get him to move the amendment to give consumer associations a say in what is happening.
  11 pm
  To a casual observer, the amendment would appear to be a minor one, but its inclusion is a major concession by the Government to the arguments that we made on behalf of the nation's consumers. Consumer representation is not an insignificant issue to be tacked on to the Bill: it is the crux of the Bill.
  I read the Committee proceedings in Hansard this morning and found at least a dozen references that I had made to consumers and their interests. My hon. Friends made similar contributions over the many hours that we spent considering the Bill. I shall give an example of what I said:
  "We are anxious about the shabby way in which consumer councils have been treated … We cannot understand the Government's reluctance to accept our amendments".—[Official Report, Standing Committee B, 12 November 1987; c. 90.]
  It has taken time and further deliberation for the Government to accept our point, but we are grateful that, even at this late stage, the amendment has been accepted.
  Although the mechanism for consultation is welcome, there are vast injustices inherent in the terms of the Bill and its longer-term implications for the imminent privatisation of the whole water industry. For example, there is no balloting of consumers in trial areas, the trials are compulsory and the powers of right of entry have caused anxiety to many people.
  I have visited different areas and talked to people about the water privatisation proposals. The one thing that is sticking in their gullets is that power is being given for water authorities to be able to kick somebody's front door down and fix a meter. [Interruption.] The hon. Member for St. Ives (Mr. Harris) might laugh, but he has not read the schedules to the Bill. Powers of entry are part and parcel of the Bill. People are aware of the nature of the Bill and of the Government who have introduced it.
  We have consistently championed the cause of consumers during the passage of the Bill, and we made consumer interests the subject of our main new clause on Report. I am glad that the Government have taken to heart the need to consult consumers, but I fear that that is not because of a genuine concern for the well-being of those in the trial areas but a cynical desire to minimise the unpopularity of the trials and of water privatisation generally.
  I remind the Minister of my final remarks in Committee. I said:
  "I hope that we have persuaded some Conservative Members to reflect on our arguments. All constituents, whatever party they vote for, are consumers, and I hope that Conservative Members will consider supporting some of our amendments in the interests of the many consumers whom they represent."—[Official Report, Standing Committee B, 21 January 1988; c. 714.]

  989
  I am disappointed that only two amendments have come back from the other place. We moved a host of amendments that could have been considered by the other place that would have given the consumer and the people affected by the trials more rights than they have under the Bill.
  990
  If the Government cared what consumers thought they would have consulted them about whether a trial was wanted. That was the main issue throughout the Bill. Nevertheless, we accept the amendment because it will help to some degree. We regret that the other place was unable to help more, but we shall not divide the House on the amendment.
  Question put and agreed to.

  Statutory Instruments, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).
  Statutory Instruments, &c.

    WEIGHTS AND MEASURES
    That the draft Weights and Measures (Knitting Yarns) Order 1988, which was laid before this House on 12th April, be approved.—[Mr. Lennox-Boyd.]
    Question agreed to

  PUBLIC PETITIONS
  Motion made, and Question proposed,
  That Standing Order No. 133 (No debate on presentation of petition) be left out and the following be inserted:

  PUBLIC PETITIONS

    Time and manner of presenting petitions
    133 (1)—Every petition presented under Standing Order No. 132 (Presentation of petitions) not containing matter in breach of the privileges of this House, and which according to the rules or usual practice of this House can be received, shall be brought to the Table—

    (a) on Mondays, Tuesdays, Wednesdays and Thursdays, after a Minister of the Crown shall have signified his intention either to move 'That this House do now adjourn', for the purpose of bringing the sitting to a conclusion, or to move, pursuant to Standing Order No. 10 (Sittings of the House (suspended sittings)) 'That the proceedings of this day's sitting be suspended', and

    (b) on Fridays, at the commencement of public business; Provided that petitions remaining to be presented at ten o'clock on a Friday on which private Members' bills have precedence under paragraph (4) of Standing Order No. 13 (Arrangement of public business) shall stand over and may be brought to the Table after a Minister of the Crown shall have signified his intention to move 'That this House do now adjourn', for the purpose of bringing the sitting to a conclusion.

    (2) Proceedings under paragraph (1)(a) and (1)(b) of this order shall not be interrupted at ten o'clock or at half-past two o'clock, respectively.
    (3) Mr. Speaker shall not allow any debate, or any Member to speak upon, or in relation to, such petition; but it may be read by the Clerk if required.
    That this Order be a Standing Order of the House—[Mr. Lennox-Boyd.]
    Hon. Members: Object.

    Gaelic Language Broadcasting
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
    11.6 pm
    Mrs. Ray Michie: I very much welcome the opportunity to discuss in the House the need for a Gaelic broadcasting service, and I am delighted that it is the hon. Member for Mid-Sussex (Mr. Renton) who is to reply. It is rather late, and I am sure that he would prefer to be on the beautiful island of Tiree, in my constituency, where he must surely by now have been adopted as a true Tirisdeach.
    In the next few months, the Government promise to publish a major White Paper on broadcasting policy. It is suggested that it will contain many changes in terms of franchises, subscriptions, new cable services and satellite broadcasting. At the same time, as we move towards 1992, discussions are taking place on European Commission directives on broadcasting.
    The purpose of this debate is to raise one vital issue, which must not be overlooked as we move towards what is likely to be a more deregulated and market-orientated broadcasting system. It is an issue which raises questions of consumer choice and the responsibilities of public service broadcasting. I am talking about broadcasting in the Gaelic language—an issue of great importance to more than 80,000 Gaels living in Scotland; an issue in which the Government must have an interest and one which I very much hope will not be ignored in the Government's White Paper.
    The main issues I wish to highlight relate to television, but it is worth recording that there has been some expansion of Gaelic on both radio and, to a lesser extent, television in recent years. We have seen the creation by the BBC of a structure for Gaelic radio service, Radio Nan Gaidheal, which broadcasts five to 27 hours a week, but only a quarter of that is heard in central and southern Scotland, so 26,000 Gaels in Strathclyde do not get a full service.
    However, the situation in television is different, and although there has been a slight increase in programming in the past few years on both BBC and the independent companies, to put it mildly, Gaels are less than happy about television, for it is crucial to the prospects of the language. We all know that television is the most significant means of communication for both information and entertainment. I do not pretend that access to television can alone guarantee the future of the Gaelic language, but exclusion from television would slow down its recovery. The advance of new technology means that more and more people are able to receive four colour channels, although some of the more remote parts of my constituency still have considerable problems.
    There is tremendous potential, but potential which is not yet being exploited fully by the production companies. The average weekly Gaelic television output from all channels is less than one and a half hours. That is almost entirely current affairs programmes—Crann Tara and Prosbaig—and children's programmes. There is no arts, no sport, no religion, no light entertainment, and precious few documentaries. Gaelic programming is ad hoc and unco-ordinated. It is that situation which has led to Gaels calling for a Gaelic broadcasting service. We live in an

    993
    English-centred culture with endless hours of broadcasting in English. Particularly for those Gaels whose mother tongue is Gaelic, there is no choice.
    What a difference it would make, for example, to have many more programmes on the Gaelic part of our literary heritage—to become familiar with the works of such great Gaelic poets as Alexander MacDonald and Duncan Ban Maclntyre, to say nothing of the contemporary poet, Sorley MacLean, known in Gaeldom for his scholarly essays and poetry that has won him wide recognition as a great poet meriting international fame. His poems have been translated into Chinese, as well as most of the European languages. They have also been translated into English but I do not think they know much about him down here. People like him give the lie to any suggestion that we in Scotland are parochial and inward looking.
    Previous Government reviews, in particular the Annan committee and the Peacock committee on the future financing of the BBC, have paid careful attention to the question of a Gaelic broadcasting service. The Peacock committee suggested:
    "because of the anomaly by which the Scottish TV companies contribute more to maintaining the Welsh Fourth Channel than they spend on Gaelic television programmes in Scotland, a partial adjustment of their contribution to Wales should be considered".
    In its recent evidence to the Home Affairs Select Committee, the Home Office recognised that the public service obligations of broadcasters included the notion that
    "a suitable proportion of material should be calculated to appeal specially to the tastes and outlook of the persons served by the station including in languages other than English".
    At a conference in 1985, the right hon. Member for Ayr (Mr. Younger), when Secretary of State for Scotland, said:
    "I quite accept that we want to keep on pressing for as much more of the air for those in the Gaelic speaking areas as we can".
    In this House, there has been all-party support for the promotion of broadcasting in Gaelic. Three Bills were introduced in 1981, which called for the creation of a Gaelic broadcasting committee, consisting of representatives of the BBC and IBA, to co-ordinate and develop Gaelic television and radio; to oversee the scheduling of programmes in Gaelic; to comment and give guidance on the amount and balance of Gaelic broadcasting; to monitor the audience for Gaelic programmes; and to report to and advise the Secretary of State for Scotland.
    I think that it is important to be clear what we are asking for. It is principally a framework for the development of Gaelic broadcasting, to allow better co-ordination of programme production and output, a commitment to a wider range of programmes, and more finance directed to the service provided. Currently Gaelic programmes appears to be ad hoc and seems to be seen in some quarters as an add-on extra.
    An adequate service should extend to a wide range of programmes with regular time slots for specific programmes; they should not be shown in the middle of the night after all sane people have gone to bed. That happens all too often at the moment. There must be some commitment to real investment in the programmes.
    Gaels look with some envy at the £3 million that annually leaves Scotland to fund the Welsh language channel S4C. I hasten to add that we do not object to that
    994
    channel and we congratulate them on it. I hope that an extension of the levy principle to fund Gaelic programmes is something that the Government will consider when reflecting upon the funding of Channel 4.
    Realistically, Gaels may not necessarily be looking for a separate channel like the Welsh. The proportion of Welsh speakers in Wales to Gaels in Scotland is significantly higher. The situations are different. But Gaels expect the Government to persuade the broadcasting companies of their public service obligations to Gaelic speakers. Tonight I hope that the Minister will be able to give me an assurance that this issue will be considered in the White Paper. I understand that that document is to be a broad-brush document, but the rights of minorities, the principle of consumer choice, and the concept of public service broadcasting are broad-brush issues that relate directly to the provision of a Gaelic broadcasting service.
    What we are asking for is a commitment to the creation of a structure that allows Gaels an input to the provision of a co-ordination service. Co-ordination between the broadcasting companies, the Home Office and the Scottish Office is the starting point. Up to now the Home Office position has been that, if Gaels are not pressing for a separate channel, they can be accommodated within existing broadcasting arrangements—the only issue being how successful they are in persuading the broadcasting companies of that point of view. Experience has shown that that has not been good enough.
    The broadcasters, on the whole, have been sympathetic in principle, but I suspect that, unless the Government act to create a structure which will make the broadcasters co-operate, there is little prospect of change in the immediate future.
    There are therefore two specific areas to which the Government should give some consideration in their White Paper: the concept of an overall framework, and the levy by Scottish TV companies to S4C and Channel 4.
    There is some concern that moves towards deregulation, and, in particular, auctioning independent franchises to the highest bidder, might mean that minority interests are squeezed out, because they are not generating sufficient advertising interest, and that there will be a subsequent decline in the quality of programmes. Will the Minister give an assurance that the White Paper will entail a commitment, on the grounds of public service obligations and consumer choice, that all parts of the community are served?
    The survival of the Gaelic language remains on a knife-edge. To lose it would be a tragedy not just for Scotland, but I believe for the United Kingdom and Europe. It has had a chequered career, surviving the infamous clearances, being downgraded and sneered at as the language of the ghillie. Children are forbidden to speak it in the school or the playground.
    However, the long-drawn-out struggle to preserve and strengthen the language, culture and heritage goes on. Gaels are now responding with enterprise. For example, Bocsa-Beo—Living Box—which is Scotland's first independent Gaelic television company, was recently launched. There is a Gaelic video workshop called "New Vision". That shows that the Gaels are prepared to be enterprising.
    Much work has been done by Comunn na Gaidhlig. It is at present drawing up a major policy document on a

    995
    Gaelic broadcasting service. I hope that the Minister will be able to meet Comunn na Gaidhlig later this summer when the document is published.
    I am glad to have had this opportunity to state again the need for keeping alive our language in Scotland and, in particular, the need for a Gaelic broadcasting service.
    11.18 pm
    Mr. Calum Macdonald: I thank the hon. Member for Argyll and Bute (Mrs. Michie) for allowing me a couple of minutes to support the sentiments that she has expressed.
    I have three interests in the debate: first, as a native Gaelic speaker; secondly, a constituency interest; and, thirdly, the fact that the private Member's Bill to which the hon. Lady referred was introduced by my predecessor as Member of Parliament for Western Isles, Donald Stewart. That Bill contained a reference to the need to establish a Gaelic broadcasting committee to create a coherent policy framework for Gaelic broadcasting. The need for such a policy is even greater now than it was in 1981 when that Bill was introduced.
    The hon. Lady said that Gaelic is on a knife-edge. But Gaelic is stronger than it was in 1981. Indeed, it is stronger than it has been for the past 100 years. Instead of a decline in interest, there seems to be an upsurge in interest and enthusiasm for the language, not just in my constituency but throughout Scotland. It is a fair reflection of that interest that the subject of Gaelic is no longer the sole preserve of the hon. Member for Western Isles, because Members representing other parts of Scotland are introducing such debates. That is a welcome and significant development.
    The hon. Lady said that the main problem with Gaelic broadcasting is that, despite great advances, it remains ad hoc and fragmented. Sometimes programmes duplicate each other. That tends to hinder the development of Gaelic broadcasting. We must acknowledge the excellent work of those who pioneered Gaelic broadcasting, but, as the hon. Lady said, the time is right, with all the changes that are taking place in the broadcasting world in general, for a new look at the provision for Gaelic.
    I urge the Minister to make a commitment and to say that the Government are considering a coherent policy framework for Gaelic. I hope that he will also give a commitment to meet representatives of the Gaelic language to discuss the need for a Gaelic broadcasting service.
    11.21 pm
    The Minister of State, Home Office (Mr. Tim Renton): I thank the hon. Member for Argyll and Bute (Mrs. Michie) for introducing this interesting and important debate on the provision for broadcasting in the Gaelic language, and I also noted with great interest the remarks of the hon. Member for Western Isles (Mr. Macdonald).
    I do not pretend to be an expert on Gaelic matters, and I would hesitate to say "Tirisdeach" with the flair and speed of the hon. Lady, but with a wife who comes from Ayrshire and having spent many holidays in Tiree in the hon. Lady's constituency, I have some small knowledge of the problems to which she referred. On Tiree, the older generations seem to prefer to speak Gaelic rather than English—at least among themselves—but there is not the same incentive or wish to speak Gaelic among the younger
    996
    generation. That is why I was especially pleased the other day to hear my hon. Friend the Minister responsible for education in Scotland announce that the specific grant for Gaelic education will be increased from "£300,000 this year to £500,000 in 1988–89.
    The hon. Lady was right to say that Gaelic is an important part of Scottish heritage and culture and that, in turn, broadcasting has an important role to play in the preservation of Gaelic as a living language and in sustaining the distinctive culture upon which it is based. But I must remind the hon. Lady that Parliament has placed statutory obligations on the broadcasters in relation to minority interests. Our role is to ensure that the broadcasters meet the needs of all parts of the community, but it is the responsibility of the BBC and the IBA to consider the emphasis that should be given to Gaelic broadcasting, or to any other programme service. Decisions on the allocation of resources to services are matters in which the Government do not intervene.
    The hon. Lady was more pessimistic about the Gaelic language than I am, and I was interested to hear that the hon. Member for Western Isles also thought that.
    Certainly, Gaelic broadcasting on BBC Scotland television and radio aims to sustain and encourage the use of the Gaelic language as a means of transacting everyday life, of understanding and debating the widest range of public affairs—nationally and internationally —and of promoting contemporary Gaelic culture in the various communities of Scotland.
    To achieve that, over 50 hours of television were broadcast in Gaelic last year by the BBC. Grampian Television plans to broadcast just over 40 hours of Gaelic programmes over the next 12 months and Scottish Television transmits about 26 hours of Gaelic programmes. Radio broadcasters already make real efforts to meet demand for Gaelic programmes. The BBC has been running Radio Nan Gaidheal for over three years as a distinctive radio service for the Gaelic-speaking population and, as the hon. Lady will know, it has steadily increased its hours of broadcasting and range of service.
    I am sure that the BBC will take note particularly of the comments by the hon. Lady that there are 26,000 Gaels in the south of Scotland who cannot hear some of the radio programmes broadcast in Gaelic by the BBC, as well as her comments about the ad hoc and unco-ordinated nature of programmes.
    I do not think that Gaelic as a language and culture is generally ignored by the broadcasting world, hut. if it is felt that not enough attention is paid to it. those concerned, led perhaps by the hon. Lady and the hon. Member for the Western Isles, should seek to persuade the broadcasting authorities that greater coverage is needed.
    The broadcasting authorities provide the service and, in fulfilling that function, they have to be sensitive to the various strands of public opinion. It must be recognised that, for any service to be provided, there must he a demand for that service. I am not persuaded, at this stage at least, that there is a demand for a Gaelic television service in the way that justified the creation of the Welsh fourth channel.
    I understand the hon. Lady's concern about the subscription of about £3 million each year provided by the Scottish independent television companies towards the cost of the Welsh fourth channel, but I pointed out that all the ITV companies throughout the United Kingdom contribute in that way as part of the total package for

    997
    establishing a Welsh language broadcast service and, indeed, of the fourth channel as a whole. Those contributions are taken into account in determining the ITV levy rates, and it is difficult to seek to change just one piece of the jigsaw in isolation.
    When the Welsh fourth channel was reviewed in 1985, the ITV Association told the Government that the ITV companies supported in principle the continuation of the existing arrangements, and we concluded that the arrangements should continue. I do not think that it would be right at this stage to contemplate unpicking the package
    I wish to turn to future arrangements and the question of future opportunities for broadcasting through the introduction of new technology. Some of those might be in the form of new television services. Studies have been carried out into the feasibility of providing new services in the UHF and VHF bands. We have also been examining a technology new to this country—the microwave video distribution systems. That technology uses microwave frequencies to transmit television and sound channels from terrestrial transmitters to aerials on individual buildings. We have to make our own decisions about the new services and what form they might take, but new local specialist services are clearly a possibility.
    We also envisage considerable scope for more Gaelic on radio in the future, if that is what listeners want. My right hon. Friend the Home Secretary, in his announcement of 19 January, confirmed that we propose to legislate on the basis of proposals put forward last year in our Green Paper. We shall invite Parliament to agree to establish a new radio authority which will be responsible for licensing a wide range of local services with the general aim of enhancing the range of choice for listeners. It will therefore
    998
    be open to those interested in providing a Gaelic service, or at least one with a strong Gaelic flavour, to apply to the authority.
    The stations that are then set up will not, as now, have to operate within all the constraints of the Broadcasting Act 1981. There will be no arbitrary limit on the number or range of stations that seek to address a Gaelic audience. The Radio Authority will take its licensing decisions on the basis of a number of considerations, and these will include the availability of frequencies, local demand for services and the extent to which they widen consumer choice.
    I must suggest to the hon. Lady and the hon. Member for Western Isles that advocates of Gaelic broadcasting may want now to make a start on getting their proposals worked out, thinking about business plans and establishing support within the community.
    I hope that my reply is not too disappointing to the hon. Lady. She said that she is a realist and that she is not seeking a new television channel devoted exclusively to Gaelic. I agree with her realism. Despite the importance of preserving the language as part of the cultural heritage of Scotland, we do not feel that the level of demand for Gaelic broadcasting would justify the creation of a new television station in Scotland at this stage. However, there are major new opportunities for broadcasting both in television and on radio immediately ahead. I strongly urge the various interested parties in Scotland to consider those opportunities and to take advantage of the exciting developments.
    At great risk, I say tapadh leibh to the hon. Lady. I thank her for raising this important subject and for the thoughtful and moderate way in which she has addressed the House this evening.
    Question put and agreed to.
    Adjourned accordingly at twenty-nine minutes to Twelve o'clock.

WALES

  Lambs (Mutation)
  Dr. David Clark
  To ask the Secretary of State for Wales what research is being undertaken into the mutation of lambs born in the restricted area in north Wales since the Chernobyl accident; and if he will make a statement.

  Mr. Peter Walker
  Scientific and veterinary advice indicates that the level of Chernobyl contamination presents no health hazard to sheep and will have no effect on their fertility and breeding potential.

  Congenital defects in lambs may be caused by a variety of factors including viral infections and nutritional deficiencies. There is no evidence that lambs born in the north Wales restricted area have a higher incidence of congenital defects than lambs born elsewhere.

  I understand that a research project by Liverpool university into the effects of low levels of radiation on sheep is utilising sheep supplied by farmers in north Wales.

TRADE AND INDUSTRY

  Javelin Missiles
  Mr. Foulkes
  To ask the Chancellor of the Duchy of Lancaster whether Short Brothers has made any applications or inquiries regarding an export licence from the sale of Javelin anti-aircraft missiles to the Government of Chile.

  Mr. Alan Clark
  It is not the practice to comment on individual defence equipment export matters.

  Central Heating Oil
  Mr. Dalyell
  To ask the Chancellor of the Duchy of Lancaster if he will refer the price differential for bulk storage kerosene based central heating oil charged by different classes of supplies to the Office of Fair Trading; and if he will make a statement.

  Mr. Maude
  No. The price of standard grade kerosene for use in central heating systems is set by the costs of supply and the level of competition in the market. If the hon. Gentleman has any concern about lack of competition in this market, he should put it to the Director General of Fair Trading.

  Gross Domestic Product
  Mr. Ieuan Wyn Jones
  To ask the Chancellor of the Duchy of Lancaster what measures his Department is taking to seek to increase the gross domestic product per head in the regions of the United Kingdom; and if he will make a statement.

  Mr. Atkins
  My Department offers a range of incentives under its recently launched enterprise initiative, which are designed to encourage self-generating growth in all regions of the country.

  Director General of Telecommunications (Report)
  Mr. William Powell
  To ask the Chancellor of the Duchy of Lancaster whether the Secretary of State for Trade and Industry has yet received a report by the Director General of Telecommunications for the year 1987, as required under section 55 of the Telecommunications Act 1984.

  Mr. Butcher
  Yes. The fourth report by the Director General of Telecommunications is being published today. It covers the period 1 January to 31 December 1987. Copies of the report have been laid before each House of Parliament.

PRIME MINISTER

  Defence Equipment Manufacturers (Retired Officers)
  Mr. Latham
  To ask the Prime Minister if she will make a statement on the rules which affect the employment by defence equipment manufacturers of Royal Naval officers of flag rank, and their equivalents in the Royal Marines. the British Army and the Royal Air Force, following their retirement from Her Majesty's forces; and what specific rules affect senior officers who been engaged in procurement policy.

  The Prime Minister
  All service officers are required to seek approval prior to accepting an appointment with a defence related business. Particularly senior officers are required to do so before accepting any appointment. The requirement extends for a period of two years after each retirement or resignation. Each application is examined in the light of the circumstances of the proposed appointments including the extent of his involvement in procurement policy. Approval may be withheld for a period of up to two years or some other restriction imposed, including limitations on the areas of work where the individual may be employed.

  European Community (Beef)
  Mr. Teddy Taylor
  To ask the Prime Minister if she will raise at the next meeting of the European Council the current practice of offering beef for sale abroad by subsidy at prices low enough to enable it to be sent back to the United Kingdom at prices lower than are available to home producers; and if she will make a statement.

  The Prime Minister
  The Community agreed a reform to the beef support policy in December 1986 which cut the common support level by some 15 per cent. The Commission's proposals for agricultural prices for 1988–89 envisage a further cut and the beef regime is to be further revised this year in the light of the recent decisions of the European Council. As these steps and the measures which have been applied in the milk sector come into full effect the need to make costly disposals of surplus beef on world markets will decline. Meanwhile, the EC Commission has recognised the need to ensure that additional supplies of beef are available to the Community meat processing industry on terms that enable the Community production to be competitive with processed products from other sources.

ENERGY

  Electricity Board Chairmen
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Energy when he next expects to meet the electricity board area chairmen; and what subjects he hopes to discuss.

  Mr. Parkinson
  I meet the area board chairmen from time to time to discuss a number of issues of common interest.

  British Coal
  Dr. Thomas
  To ask the Secretary of State for Energy when he next expects to meet the chairman of British Coal; and what matters he hopes to discuss.

  Mr. Parkinson
  I meet the chairman of British Coal regularly to discuss all aspects of the coal industry.

  Sizewell B
  Mr. Andy Stewart
  To ask the Secretary of State for Energy if he will make a statement on the Advisory Council on Science and Technology's report on the industrial impact of Sizewell B.

  Mr. Parkinson
  I have placed in the Library of the House today a copy of a letter I have written to Sir Francis Tombs, the chairman of the advisory council, responding to points raised in the council's report.

ATTORNEY-GENERAL

  Postal Centres International Ltd.
  Mr. Wheeler
  To ask the Attorney-General if the Crown Prosecution Service has yet reached a decision on whether to prosecute the directors and others in connection with the alleged fraud by Postal Centres International Ltd. of Manchester; and if he will make a statement.

  The Attorney-General
  No papers in relation to this matter have been referred to the Crown Prosecution Service. The liquidators appointed to handle the affairs of the company in liquidation have not reported finding evidence of any criminal offences.

  Legal Aid Board
  Mr. Jack
  To ask the Attorney-General whether the Lord Chancellor is able to announce when he will be appointing to the proposed Legal Aid Board; and if he will make a statement.

  The Attorney-General
  The Lord Chancellor has today appointed John Pitts, who retired last year as chairman and chief executive of the Tioxide Group, to be chairman of the proposed Legal Aid Board, and the following to be members:

  Martin Acland

  Diana Beale

  Allan Blake

  Hilary Bradley

  Lyn Devonald

  Kenneth Farrow

  Suzette Harold

  Geoffrey Hibbert

  David Sinker

  John Smith

  Peter Soar

  444
  The Lord Chancellor regards it as important that the board should have adequate time in which to prepare for taking over responsibility for those functions currently exercised by the legal aid administration of the Law Society. The Lord Chancellor intends that this transfer should take place early in 1989. The appointments are, of course, contingent on the Legal Aid Bill's receiving the approval of Parliament.

EDUCATION AND SCIENCE

  Teachers and Ancillary Staff (Vetting)
  Mr. Cohen
  To ask the Secretary of State for Education and Science what information he has in relation to the number of teachers and ancillary staff who have been vetted by police before they are employed in jobs where they work with children; and whether his Department keeps information as to the number of people refused employment and the reasons therefor.

  Mrs. Rumbold
  I refer the hon. Member to the answer given to him by my hon. Friend the Parliamentary Under-Secretary of State for the Home Department on 29 April, at column 283.

  University Grants
  Mr. Hood
  To ask the Secretary of State for Education and Science if he will give the percentage increase in grants to the universities for each year since 1974.

  Mr. Jackson
  Changes in grants made available to universities in Great Britain on the advice of the University Grants Committee and the Computer Board have been:

  Financial year

  Per cent. increase over previous year

  1974–75

  10·0

  1975–76

  25·0

  1976–77

  13·4

  1977–78

  10·2

  1978–79

  11·2

  1979–80

  21·8

  1980–81

  26·7

  1981–82

  3·0

  1982–83

  19·4

  1983–84

  3·5

  1984–85

  2·5

  1985–86

  3·1

  1986–87

  3·6

  1987–88

  19·6

  1988–89

  17·8

  1 Estimates.

  Universities also receive public funds from other sources, notably through the home undergraduate tuition fee, where changes in practice create difficulties for year-on-year comparisons.

  Research Expenditure
  Mr. Wray
  To ask the Secretary of State for Education and Science what is in 1988 moneys the annual expenditure in civil research of the United Kingdom universities since 1974.

  Mr. Jackson
  The Department funds civil research in the universities through grants-in-aid to the research
  445
  councils and the University Grants Committee's block grant. Where the latter is concerned, only a notional attribution of resources committed to research can be made, since universities' research activities and other expenditure (including teaching) cannot be clearly distinguished. The figures in the following table are therefore necessarily approximate.

  No figures are available for the notional attribution to research of UGC funding prior to 1977–78. Since 1977–78, approximate total expenditure, at constant 1988–89 prices as measured by the GDP deflator, on civil research at United Kingdom universities through the research councils and the UGC is as follows:

  £ million

  1977–78

  741

  1978–79

  763

  1979–80

  800

  1980–81

  840

  1981–82

  838

  1982–83

  860

  1983–84

  859

  1984–85

  845

  1985–86

  848

  1986–87

  863

  1987–88

  856

  1988–89

  867

  Sources: Annual Reviews of Government Funded R and D 1983–87.

  For 1986–87—Appropriation Accounts.

  For 1987–88 and 1988–89—Supply Estimates.

  Statistics on funding of research in universities by other Government Departments can be found in the annual reviews of Government funded R and D.

  Teachers (Pay)
  Mr. Wray
  To ask the Secretary of State for Education and Science what has been the percentage increase in teachers' pay for each year since 1974.

  Mrs. Rumbold
  I refer the hon. Member to the answer I gave to the hon. Member for Clydesdale (Mr. Hood) on 27 April, at columns 168–69

  Teacher Governors (Misconduct)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Education and Science on how many occasions of which he is aware a school governing body or sub-committee of a school governing body has brought and heard charges of gross misconduct against a teacher employed at the school in respect of that teacher's actions as a governor of the school and not related to the teacher-governor's employment at the school; and if he will make a statement.

  Mr. Dunn
  We are not aware of any such occasions. The meetings and proceedings of school governing bodies are governed by regulations made by my right hon. Friend. Under the current regulations a teacher or other governor is disqualified from continuing to hold that office in certain specified circumstances. However, the regulations make no provision for a governing body to hold a disciplinary hearing in relation to the actions of one of its members in that person's capacity as a governor.

  Higher Education (Course Approval)
  Dr. Hampson
  To ask the Secretary of State for Education and Science how many of Her Majesty's inspectors will be rendered redundant by the ending of the course approval system for higher education.

  Mr. Jackson
  None.

  Ethnic Monitoring
  Mr. Blunkett
  To ask the Secretary of State for Education and Science (1) how many(a) colleges of further education, (b) colleges of higher education, (c) polytechnics and (d) universities in England and Wales are actively engaged in ethnic monitoring with respect to (i) academic staff, (ii) support staff and (iii) the student body;

  (2) how many (a) colleges of further education, (b) colleges of higher education, (c) polytechnics and (d) universities in England and Wales are actively engaged in ethnic monitoring in accord with guidelines currently laid down by the Commission for Racial Equality with respect to (i) academic staff, (ii) support staff and (iii) the student body.

  Mr. Jackson
  This information is not collected by my Department. However, a consultative document was issued by the Department on 8 March addressing the issues and options for consideration in the collection of ethnically-based statistics for students in further and higher education. The document sought views on the use of the Commission for Racial Equality guidelines for classification of ethnic origin.

  Mr. Blunkett
  To ask the Secretary of State for Education and Science what information he has on overall percentages of black lecturers in(a) colleges of further education, (b) colleges of higher education, (c) polytechnics and (d) universities.

  Mr. Jackson
  This information is not collected by my Department.

  Mr. Blunkett
  To ask the Secretary of State for Education and Science if UCCA and PCAS plan to include an ethnic monitoring question on their application forms for student entry to universities and polytechnics.

  Mr. Jackson
  I refer the hon. Member to my reply to the hon. Member for Newham, North-West (Mr. Banks) on 13 April 1988, at column 135, in which it was reported that UCCA is considering the question of ethnic monitoring of university applicants. In addition, a response to the Department's consultative document on ethnic monitoring of students in further and higher education has now been received from PCAS indicating its willingness to discuss the proposal with the Department.

CIVIL SERVICE

  Equal Opportunities
  Mr. Baldry
  To ask the Minister for the Civil Service when his Department will publish the progress report on the implementation of equal opportunities policies for women in the Civil Service.

  Mr. Luce
  The report is being published today. Copies have been placed in the Libraries of Parliament.

  Selection and Promotion
  Mr. Robert G. Hughes
  To ask the Minister for the Civil Service if there have been any changes in the principles underlying selection for and promotion in the Civil Service.

  Mr. Luce
  No. Entry to and promotion in the Civil Service continue to be based on selection on merit.

HOME DEPARTMENT

  Drug Trafficking
  Dr. Michael Clark
  To ask the Secretary of State for the Home Department what representations he has received about progress the Government are making both bilaterally and multilaterally in controlling the international trade in drugs.

  Mr. Douglas Hogg
  We receive occasional representations about the need for international co-operation in the fight against drug trafficking. The Government have helped in achieving progress on a number of fronts: in the United Nations, by our support for its drugs agencies and for current work on a draft convention against trafficking; at regional level through our chairmanship of the Council of Europe's co-operation group on drugs (the Pompidou group); and by various forms of bilateral co-operation, including the provision of financial assistance for drug producing and transit countries and negotiations to conclude agreements with other countries for the enforcement of court orders to confiscate traffickers' assets.

  Remand Prisoners
  Mr. Redmond
  To ask the Secretary of State for the Home Department what is the average length of stay of prioners held on remand who are transferred from London courts to police stations in(a) the Doncaster area and (b) nationally; and if he will make a statement.

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

  Passports
  Mr. Evennett
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 April,Official Report, column 592, whether he has any plans to allow persons applying for passports to have the option of either an old-style British passport or a new-style European Community format passport; and if he will make a statement.

  Mr. Renton
  No. Retention of the old form of passport after computerisation of the United Kingdom passport offices would lead to confusion, inefficiency and additional expense. The public would lose the advantages of a fully computerised passport-issuing service and of having a pssport which is machine-readable.

  Police (Greater Manchester)
  Mr. Tom Arnold
  To ask the Secretary of State for the Home Department what plans he has to review the level of his Department's funding of the Greater Manchester police in real terms during the current financial year; and if he will make a statement.
  448
  Mr. Douglas Hogg
  The Home Office meets, through police specific grant, 51% of police authorities' expenditure for police purposes. An additional contribution is made from central funds through block grant. We have no plans to review this level of funding.

  Safer Cities Programme
  Mr. Blunkett
  To ask the Secretary of State for the Home Department if he has yet decided in which areas the initial safer cities programme will operate; what the total cost of this initial phase will be; how much of this represents new expenditure by his Department; and what vote the remaining expenditure will come from.

  Mr. Hurd
  We aim to establish 20 safer cities projects over the next three years: eight in 1988–89; eight in 1989–90; and four in 1990–91. Each will be located in an urban programme area where there are serious crime problems, and where other central Government programmes have been targeted. My hon. Friend the Minister of State announced on 7 April, when visiting the west midlands, that Wolverhampton is to be the first safer cities project area. Other areas will be invited to join the safer cities programme soon. Decisions about the location of projects will be made only after consultation with the appropriate local authority, the police and probation services and other local interests. Provision for the initial phase of the programme (1988–89) is £2·9 million. This will be met from the Home Office Vote (class XI, vote 3) and all of it represents new expenditure.

  Prisons (Drugs)
  Mr. Butler
  To ask the Secretary of State for the Home Department if he will construct a table showing the average number of doses of drugs administered per inmate in each of Her Majesty's penal establishments in the last available year.

  Mr. Douglas Hogg
  [pursuant to his reply, 20 January 1988, c. 706]: I am grateful to the hon. Member for drawing attention to an inaccuracy in that part of the information in my earlier reply which related to Her Majesty's prison, Wakefield.

  The pharmacist at Wakefield is responsible for dispensing not only at that establishment but at six other establishments and his returns, on which my reply was based, represent the doses of medicine administered at the seven establishments. The information relating solely to Her Majesty's prison Wakefield is as follows:

  Number of doses of medicine administered to inmates in prison service establishments in England and Wales 1 April 1986–31 March 1987

  HMP Wakefield

  1. Medicines available without prescription in the community

  157,084

  Prescription only medicines

  2. Psychotropic drugs (ie antidepressants, sedatives and tranquillisers)

  49,925

  3. Hypnotic Drugs

  16,837

  4. Drugs acting on the central nervous system other than those shown in (2) and (3)

  13,825

  5. Other drugs and medicines

  347,713

TRANSPORT

  Road Accident Statistics
  Mr. Tony Lloyd
  To ask the Secretary of State for Transport if he will list the number of child pedestrian road fatalities, in total and expressed in relative terms, in each member state of the European Community within the age ranges five to nine, 10 to 14 and 15 to 17, for each of the last 10 years.

  Mr. Peter Bottomley
  The number of deaths in each member state of the European Community is as follows for 1979 to 1986 inclusive. Data for other years could he made available only at disproportionate cost. Most countries use the standard international definition of "road accident death", which is dying within 30 days as result of the road accident. The exceptions are France (death within six days of the accident), Greece (death within three days), Italy (death within seven days) and Spain (death within 24 hours).

  Pedestrian deaths in EC countries: 1979

  Age of fatality

  Percentage of all pedestrian deaths

  6 to 9

  10 to 14

  15 to 17

  United Kingdom

  145

  94

  65

  14·4

  Belgium

  25

  18

  17

  12·1

  Denmark

  11

  10

  5

  18·2

  Eire

  20

  9

  9

  16·7

  France

  n/a

  n/a

  n/a

  n/a

  Germany

  182

  93

  86

  11·4

  Greece

  28

  28

  15

  18·2

  Italy

  80

  56

  51

  10·5

  Luxembourg

  1

  1

  1

  15·8

  Netherlands

  25

  10

  10

  17·1

  Spain

  66

  41

  28

  11·3

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1980

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  United Kingdom

  105

  109

  86

  14·7

  Belgium

  26

  12

  13

  10·1

  Denmark

  6

  4

  5

  10·9

  Eire

  15

  5

  4

  11·5

  France

  113

  80

  57

  11·5

  Germany

  173

  100

  81

  11·4

  Greece

  12

  10

  3

  6·5

  Italy

  91

  47

  40

  9·8

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  34

  12

  4

  16·9

  Spain

  74

  41

  30

  12·5

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1981

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 lo 14

  15 to 17

  United Kingdom

  123

  101

  81

  15·6

  Belgium

  26

  15

  12

  12·5

  Denmark

  8

  3

  9

  13·5

  Eire

  15

  10

  9

  15·8

  France

  n/a

  n/a

  n/a

  n/a

  Germany

  141

  77

  65

  10·8

  Greece

  13

  12

  7

  8·2

  Italy

  64

  45

  24

  8·5

  450

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  28

  11

  10

  16·7

  Spain

  58

  46

  31

  12·1

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1982

  Age of fatality

  Percentage of all pedestrian deaths

  6 to 9

  10 to 14

  15 to 17

  United Kingdom

  99

  127

  75

  15·5

  Belgium

  17

  22

  11

  13·0

  Denmark

  9

  8

  3

  12·3

  Eire

  5

  15

  9

  18·0

  France

  n/a

  n/a

  n/a

  n/a

  Germany

  124

  48

  45

  8·4

  Greece

  13

  10

  7

  7·0

  Italy

  59

  39

  35

  8·5

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  20

  16

  9

  17·4

  Portugal

  n/a

  n/a

  n/a

  n/a

  Spain

  48

  35

  19

  10·0

  Pedestrian deaths in EC countries: 1983

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  United Kingdom

  132

  132

  86

  17·6

  Belgium

  19

  17

  11

  12·6

  Denmark

  9

  6

  9

  15·9

  Eire

  13

  9

  12

  19·3

  France

  96

  72

  46

  11·4

  Germany

  90

  59

  55

  8·2

  Greece

  14

  15

  8

  8·5

  Italy

  66

  42

  25

  9·3

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  19

  20

  6

  15·7

  Spain

  51

  34

  18

  9·5

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1984

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  United Kingdom

  115

  141

  69

  16·8

  Belgium

  19

  18

  7

  13·2

  Denmark

  4

  10

  8

  17·2

  Eire

  16

  8

  6

  19·2

  France

  89

  81

  34

  11·6

  Germany

  79

  37

  43

  7·0

  Greece

  16

  3

  4

  5·3

  Italy

  41

  29

  22

  7·2

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  12

  7

  6

  11·8

  Spain

  41

  30

  31

  10·0

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1985

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  United Kingdom

  109

  129

  69

  16·6

  Belgium

  23

  10

  9

  12·9

  451

  Age of fatality

  Percentage of all pedestrian deaths

  6 to9

  10 to 14

  15 to 17

  Denmark

  9

  7

  2

  14·3

  Eire

  12

  7

  3

  15·9

  France

  83

  78

  35

  12·6

  Germany

  69

  36

  31

  7·6

  Greece

  15

  11

  4

  7·3

  Italy

  51

  39

  22

  9·0

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  9

  10

  6

  13·4

  Spain

  50

  47

  30

  12·4

  Portugal

  n/a

  n/a

  n/a

  n/a

  Pedestrian deaths in EC countries: 1986

  Age of fatality

  Percentage of all pedestrian deaths

  6 to 9

  10 to 14

  15 to 17

  United Kingdom

  80

  108

  79

  13·8

  Belgium

  16

  11

  8

  10·9

  Denmark

  3

  6

  3

  9·0

  Eire

  n/a

  n/a

  n/a

  n/a

  France

  74

  52

  43

  n/a

  Germany

  87

  38

  27

  7·4

  Greece

  11

  6

  7

  5·9

  Italy

  n/a

  n/a

  n/a

  n/a

  Luxembourg

  n/a

  n/a

  n/a

  n/a

  Netherlands

  12

  10

  7

  13·4

  Spain

  60

  39

  28

  10·9

  Portugal

  n/a

  n/a

  n/a

  n/a

  Mr. Beith
  To ask the Secretary of State for Transport how many fatal accidents involving heavy lorries have occurred on the A1 in Northumberland in the last five years.

  Mr. Peter Bottomely
  There have been 10 such accidents in the period from 1 January 1983 to date.

  The figures are as follows:

  Number

  1983

  1

  1984

  2

  1985

  2

  1986

  2

  1987

  3

  1988

  1—

  1 None to date.

  Dial-a-Ride (London)
  Mr. Cartwright
  To ask the Secretary of State for Transport what representations he has received seeking an increase of funding for London Dial-a-Ride to enable it to provide one trip a week to each of its registered users; and what response he has made.

  Mr. David Mitchell
  I have received a number of letters from Members of Parliament, voluntary organisations and private individuals concerning the "one trip a week" campaign by the London Dial-a-Ride User's Association. In replying I have pointed out that funding has already been increased from £4·2 million in 1985–86 to £6·27 million in 1988–89 and this has provided for a substantial expansion of Dial-a-Ride services. London Regional Transport believes that there is still considerable scope for increasing service provision within existing resources by 452
  more cost-effective operation. We would expect that to be fully exploited before substantial increases in resources are sought.

  Israel (Flights)
  Mr. Cummings
  To ask the Secretary of State for Transport if he will make it his policy to ensure that security staff handling passengers on flights from United Kingdom airports to Israel do not question the political beliefs of passengers.

  Mr. Peter Bottomley
  The Department does not require passengers flying to Israel or anywhere else to be questioned about their political beliefs.

  It is open to airlines to add further security measures if they consider them necessary to protect their operations.

  Miracle Bus Company
  Mr. Teddy Taylor
  To ask the Secretary of State for Transport when he was first advised of the problems facing the Southend council and the Miracle Bus Company in securing permission from the West German Government to provide a bus from Ostend to West Germany to connect with a plane from Southend airport; and if he will set out the actions taken by his Department since that time.

  Mr. David Mitchell
  The Department first became aware of these problems in December 1985. Since then we have been engaged in correspondence and discussions with the authorities in Belgium, the Federal Republic of Germany and the European Commission to secure authorisation for the operation of the service. I understand that it is now due to come into operation towards the end of this month.

OVERSEAS DEVELOPMENT

  Swaziland
  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment is available to him of the level of economic growth in Swaziland in each year since 1983.

  Mr. Chris Patten
  The rate of economic growth in Swaziland, as measured by the estimated growth in the gross domestic product, is as follows for each year since 1983.

  Percentage Growth Rate of GDP in Current Prices

  Year

  Per cent.

  1984

  4·2

  1985

  2·4

  1986

  7·4

  1987

  0·0

  Source: IMF Staff Papers and Swaziland Budget Speech 1988–89.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his assessment of the extent to which Swaziland has benefited from joining the Lomé convention and giving improved access to European Community markets.

  Mr. Chris Patten
  Over the five years to 1990 Swaziland will get 26 million ecu (about £18 million) in planned aid from the European development fund, in addition to
  453
  benefiting from SADCC and other regional projects. Swaziland also receives lending from the European Investment Bank, finance under the STABEX scheme, and emergency aid.

  Under the Lomé convention, Swaziland's industrial products and the great majority of her agricultural products can enter the Community free of tariff or other restrictions. Swaziland also benefits from the special provisions of the Lomé convention relating to sugar and beef. Under the sugar protocol, Swaziland may export annually up to 117,844·5 tonnes to the Community at a guaranteed price, which is currently about three times the world market price; and under an exchange of letters annexed to the convention Swaziland can export annually up to 3,363 tonnes of beef and veal to the Community.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list current development projects in Swaziland for which United Kingdom national, Commonwealth or European Community assistance is given, and the value of that assistance.

  Mr. Chris Patten
  Under the bilateral aid programme to Swaziland, Britain is currently financing the following projects:

  Product

  £ million

  Water scheme for rural areas

  0·55

  Land purchase and development

  2·00

  In addition, we expect to spend about £2 million in 1988–89 on technical co-operation activities.

  The Commonwealth fund for technical co-operation is currently financing, with grants estimated at £269,000, a number of technical co-operation projects in Swaziland.

  Projects in Swaziland currently being financed by the European Community under the second and third Lomé conventions are as follows:

  £ million

  Grant funding

  Rural water supplies

  1·69

  Teacher Training College (Ngwane and Piggs Peak)

  1·24

  Smallholders support project (credit and marketing)

  2·45

  Integrated development of trade and tourism in handicrafts

  1·86

  Micro projects

  0·56

  Technical assistance (Rural Development Areas Programme; Swazi Development and Savings Bank; Co-operatives and Credit Union; Department of Economic Planning; Customs and Excise)

  1·69

  Development of Matsapha airport

  1·45

  Agricultural training (SADCC)

  0·74

  Training of customs officers

  0·35

  Regional training (SADCC)

  0·28

  Waterford Kambala School

  0·22

  Regional railways training

  0·16

  Maths and Science teacher training

  1·59

  Swazi Industrial Development Corporation

  0·84

  Special loan funding

  Vocational training centre (Matsapha Manzini)

  2·21

  Swazi Investment and Development Corporation (SINDECO)

  2·07

  Total

  19·40

  The United Kingdom share of European Community aid listed above is £3·2 million.
  454
  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list United Kingdom contributions to Swaziland through national, Commonwealth and European Community action in each year since 1983.

  Mr. Chris Patten
  The information is as follows:

  £000s

  1983

  1984

  1985

  1986

  Gross United Kingdom bilateral aid1

  5,665

  5,626

  3,376

  7,722

  Estimated United Kingdom share of Commonwealth2 aid

  69

  72

  94

  80

  Estimated United Kingdom share of European Community aid

  700

  1,070

  360

  380

  Note: Figures for 1987 are not yet available.

  1 Includes expenditure by the Commonwealth Development Corporation of: (1983) 2,683, (1984) 2,876, (1985) 1,267 and (1986) 3,881.

  2 Commonwealth fund for technical co-operation; figures cover the period July-June.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what measures he has taken, or proposes to take, to assist the Swaziland Government to strengthen their national economy and decrease their dependence on the economy of the Republic of South Africa;

  (2) if he will make a statement on her Majesty's Government's policy on the role of the Southern African Development Co-ordination conference as an agency for diminishing Swaziland's economic dependence on the Republic of South Africa.

  Mr. Chris Patten
  One of the principal aims of our bilateral aid programme to Swaziland is to strengthen the national economy. In addition we support the Southern African Development Co-ordination Conference, of which Swaziland is a member.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment is available to him of Swaziland's repayment of foreign debt; and to which countries payments are in arrears.

  Mr. Chris Patten
  The figures show the debt service payment which were due and estimates of the actual payments made on public and publicly guaranteed debt from 1984 to 1987. I am not aware of any countries which have failed to receive repayments due from Swaziland.

  Debt service payments $US million

  Year

  Due

  Paid

  1985

  23

  23

  1986

  23

  25

  1987

  27

  28

  Source: World hank debt tables and IMF staff papers.

  Middle East
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will indicate the level and nature of medical aid from Her Majesty's Government to the Palestinians; and if he will make a statement.

  Mr. Chris Patten
  Last year we provided £650,000 to the United Nations Relief and Works Agency and the
  455
  International Committee of the Red Cross for their programmes in Lebanon, which included medical assistance. In addition, we have recently committed some £104,000 through the Order of St. John and Oxfam for medical support in the occupied territories, including nursing, training, research, surgery and support for the mentally handicapped.

  The European Community has allocated £270,000 in emergency aid, including medical supplies, to Palestinians since December 1987. Some 20 per cent. of the Community's programme is met from the British aid budget.

  Ethiopia (Aid)
  Mr. Faulds
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, in view of the intransigence of the Ethiopian Government over famine relief operations in Tigré, Her Majesty's Government will consider increasing donations to the Relief Society of Tigré through the channel of British aid agencies.

  Mr. Chris Patten
  We are extremely concerned about the disruption of relief operations in Eritrea and Tigré as a result of the recent intensification of civil conflict and the Ethiopian Government's decision that most expatriate relief personnel must leave these regions. Our objective remains to provide humanitarian relief to the hungry, regardless of where they are.

NORTHERN IRELAND

  South Down (Education)
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what representations he has received concerning the reorganisation and rationalisation of secondary school education in the controlled sector in the northern area of South Down; and if he will make a statement.

  Dr. Mawhinney
  None. However, the South-Eastern education and library board is currently considering the matter.

SCOTLAND

  Kidney Transplants
  Mr. Galloway
  To ask the Secretary of State for Scotland what information he has as to the reasons why kidney transplants have had to be discontinued at the Western infirmary; and if he will make a statement.

  Mr. Michael Forsyth
  I understand that the kidney transplantation programme at the Western infirmary is being carried out at broadly the same level as in previous years. The only constraint is the availability of donated organs.

  National Health Service Property
  Mr. Ernie Ross
  To ask the Secretary of State for Scotland (1) if he will list in the Official Report the National Health Service properties in Tayside which require work to be done as identified by the National Audit Office report of 28 March, HC 405; and if he will make a statement;
  456
  (2) which National Health Service properties in (a) Scotland and (b) Tayside do not comply with statutory and non-statutory building standards as outlined in the National Audit Office report of 28 March, HC 405;

  (3) what is the estimated cost of work required to be carried out in Tayside health board properties as identified by the National Audit Office report of 28 March, HC 405.

  Mr. Michael Forsyth
  The National Audit Office report on "Estate Management in the National Health Service" does not identify particular properties used by Tayside health board which require substantial maintenance work. The report stresses the importance of developing strategies to maintain the Health Service estate in an adequate condition. The comprehensive survey into the condition of all hospitals, carried out by health boards in Scotland during 1986–87, is in line with this recommendation.

  In the survey. Tayside health board estimated that work costing £21·8 million was necessary, over the next 10 years, to maintain its buildings in an adequate condition. This estimate is now being scrutinised by the Scottish Home and Health Department.

  Where health service premises are subject to statutory requirements, the various enforcement agencies ensure compliance. Beyond these statutory requirements, the Department has issued instructions to boards on a wide range of non-statutory standards.

  Pupil-Teacher Ratios
  Mr. Beggs
  To ask the Secretary of State for Scotland what is the present pupil-teacher ratio for(a) primary and (b) secondary schools in Scotland.

  Mr. Michael Forsyth
  The provisional pupil-teacher ratios for 1987–88 are 20·2 in primary and 12·9 in secondary schools.

  Further and Higher Education
  Mr. Galloway
  To ask the Secretary of State for Scotland how many students in Scottish further and higher education are between the ages of 16 and 18.

  Mr. Michael Forsyth
  In session 1986–87 the number of students in vocational higher and further education in Scotland aged 16 to 18 inclusive was estimated to be 92,000. Of these, 34,100 were full-time or sandwich course students and 57,900 were part-time students.

  Meat Firms (Redundancies)
  Mr. Teddy Taylor
  To ask the Secretary of State for Scotland what representations he has had about redundancies in Scottish meat firms caused by Messrs Marks and Spencer transferring its purchases to Brazilian firms; and if the recent agreements at the European Council will result in Scottish meat firms receiving supplies at prices comparable to Brazil.

  Mr. Michael Forsyth
  The Marks and Spencer's decision should not affect Scottish meat firms generally, but will have an adverse impact on employment at one particular company, with whom officials are in close touch. The Government have discussed this problem with the European Commission, which recently stated at a meeting of the Agriculture Council that it recognised the need to ensure that additional supplies of beef are
  457
  available to the Community's meat processing industry on terms that enable Community production to be competitive with products from other sources.

  Infertility
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will institute an official survey into infertility provision within the National Health Service in Scotland.

  Mr. Michael Forsyth
  The Government have for some time recognised the importance of developments in the alleviation of infertility. However, we take the view that we cannot contemplate a review of infertility services in Scotland until such time as consideration has been completed of the recommendations of the Warnock report on "Human Fertilisation and Embryology".

  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland (1) what current research is being undertaken into the needs of the infertile in Scotland;

  (2) what Government funded research is being undertaken into infertility services in Scotland.

  Mr. Michael Forsyth
  The Scottish Home and Health Department is not currently funding any research specifically on infertility services and the needs of the infertile. Some aspects of a current research project on well women clinics may, however, have a bearing on this, and previously funded research on male infertility has been incorporated within the service provided by one health board. So far as Government funded research into more fundamental aspects of infertility is concerned, the main focus of the Medical Research Council's work in this field is the reproductive biology unit based in Edinburgh.

  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what funds have been allocated in the past five years to health boards for the provision of National Health Services for the infertile in Scotland.

  Mr. Michael Forsyth
  No separate allocation of resources is made to health boards for the provision of infertility services. It is for each health board to decide within the available resources what priority should be given to the provision of such services.

  Local Authority Employees (Audit Information)
  Mr. Allan Stewart
  To ask the Secretary of State for Scotland what action he intends to take in the light of responses to his consultation paper in which he proposed to amend section 101(1) of the Local Government (Scotland) Act 1973 to restrict the rights of the public to inspect at the time of audit information which an authority holds about its employees; and if he will make a statement.

  Mr. Lang
  My right hon. and learned Friend has decided in the light of the responses received to his consultation paper to seek at the next convenient opportunity an amendment to section 101(1) of the Local Government (Scotland) Act 1973 so that all information relating to employees of local authorities, audited under part VIII of the 1973 Act, should be excluded from public inspection, except information about gross pay, allowances, bonuses and overtime payments, which would continue to be open to inspect at time of audit. My right hon. and learned Friend considers that such an amendment would strike an acceptable balance between safeguarding personal privacy and providing adequate 458
  public inspection to ensure proper accountability. It also corresponds with similar action being taken by my right hon. Friends the Secretaries of State for the Environment and for Wales.

  Competitive Tendering
  Sir Hector Monro
  To ask the Secretary of State for Scotland if he will provide a timetable for the implementation of competitive tendering procedures for individual local government services in the phasing programme.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend has now considered the responses to the consultation paper on implementation of competition for Scottish local authority services issued in November. He has decided to confirm the proposal of a phased introduction of competition by local authorities with authorities split into groups and each group taking the activities covered by the Act in a different order. The groups of authorities will be the same as set out in the consultation paper. The date by which authorities will have had to have exposed their first activities to competition will be set at 1 August 1989, to allow adequate time for all stages of the competitive process to be completed.

  Two other changes to the implementation proposals have been made which will help ensure efficient implementation of the competition process. These take account of the fact that a decision on the possibility of adding sport and leisure management to the list of defined activities has not yet been taken, and therefore, if this activity is added by order, some delay in implementing competition for it is inevitable.

  My right hon. and learned Friend has decided to confirm the £100,000 de minimis level below which authorities' services would be exempt from competition. He has considered very carefully the position of the islands councils, but has concluded that no form of exemption is to be given to them at this stage. Their position will, however, be carefully monitored through a research project which will evaluate the effect of competition.

  These decisions are described fully in letters which are today being sent to all affected authorities and other bodies covered by part I of the Act and copies of which have been placed in the Library.

  Community Care
  Mr. Kirkwood
  To ask the Secretary of State for Scotland whether he will issue guidelines to social fund officers to accept applications for community care grants for domestic alarm installation, including telephone socket costs, to enable residents on benefit to continue to stay at home and out of long-stay residential institutions.

  Mr. Portillo
  I have been asked to reply.

  No. When considering such applications social fund officers will exercise their discretion in the light of general guidance and the Secretary of State's directions in the "Social Fund Manual". Local authorities have powers to supply and meet the costs of alarms for elderly, sick or disabled people. Housing benefit (or, for owner-occupiers, income support) may be available in certain circumstances to help with the running costs.

HOUSE OF COMMONS

  Televising of Proceedings
  Mr. Sayeed
  To ask the Lord President of the Council if he will arrange for a copy of the video recording shown to the Select Committee on Televising of Proceedings of the House produced by the Central Office of Information and showing a compendium of televised proceedings of overseas Parliaments to be(a) made available to right hon. and hon. Members and (b) shown in the Jubilee Room for Members of both Houses and the media.

  Mr. Wakeham
  I am placing a copy of the video recording in the Library, where it will be accessible to Members by arrangement with the staff of the Library.

  Press Bar
  Mr. Cryer
  To ask the Lord President of the Council what is the annual turnover of the Press Bar of the House of Commons; who is permitted to use the bar; whether a loss or profit was made in the last five years; and if he will make a statement.

  Mr. Wakeham
  The Press Bar's turnover for the 12 months ended 31 March 1988, excluding VAT, was £38,790; the gross profit for the same period was £14,935. A profit was made during each of the last five years. Those permitted to use the Press Bar are: Parliamentary Lobby journalists and their guests, overseas press officers, Hansard staff, and staff posted to the Press Gallery.

  Mr. Cryer
  To ask the Lord President of the Council what is the number of accredited journalists entitled to use the Press Bar of the House of Commons.

  Mr. Wakeham
  The latest Pass Office figures show that 393 accredited journalists are entitled to use the bar in the Parliamentary Press Gallery premises.

FOREIGN AND COMMONWEALTH AFFAIRS

  EC (Foreign Policies)
  Mr. Knox
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next proposes to have discussions with his European Community partners concerning the development of common European foreign policies.

  Sir Geoffrey Howe
  I met my colleagues from the Twelve to discuss European political co-operation matters at an informal weekend meeting in Konstanz on 5–6 March, and again at a ministerial meeting on 22 March in Brussels. I next expect to discuss these matters on 13 June in Luxembourg.

  World Debt
  Mr. Skinner
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet other Foreign Ministers to discuss world debt; and if he will make a statement.

  Mrs. Chalker
  As I told the hon. Member on 3 February, my right hon. and learned Friend and I regularly meet our counterparts from other countries. Debt is frequently discussed, particularly with the Foreign Ministers of debtor nations and of major creditor nations.

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

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

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

  Central America
  Mr. Tony Banks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what policies are currently being pursued by Her Majesty's Government to establish peace in central America.

  Mr. Eggar
  We and our European partners have repeatedly expressed our support for the Guatemala peace agreement and urged the Central American Governments to fulfil their commitments under that agreement. We have appealed to countries with links and interests in the region to lend constructive support for the peace efforts of the Central American countries. We have also condemned all acts of violence which might jeopardise the peace process. We have warmly welcomed the 60-day truce signed at Sapoa on 23 March as a positive step towards the achievement of peace and reconciliation and hope that it will facilitate the establishment of a pluralistic democracy in Nicaragua.

  Mr. Michael Martin
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications for Her Majesty's Government's policy towards a settlement in Central America of the conduct of the recent elections in E1 Salvador.

  Mr. Eggar
  The holding of elections in E1 Salvador was in keeping with the objectives of the Central American peace agreement, which we support, of establishing peace and democracy in the region.

  Mr. Home Robertson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of the Central American peace plan; and what initiatives the Government are taking to encourage further developments.

  Dr. Reid
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of the Central American peace plan; and what initiatives the Government are taking to encourage further developments.

  Mr. Eggar
  We and our European partners have repeatedly expressed our support for the Guatemala peace agreement and urged the Central American Governments to fulfil their commitments under that agreement. We have appealed to countries with links and interests in the region to lend constructive support for the Central American peace process. We have also condemned all acts of violence which might jeopardise the peace process. We welcomed
  461
  the 60-day truce signed at Sapoa on 23 March as a positive step towards peace and reconciliation within a pluralistic democracy in Nicaragua.

  Mr. Flannery
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to visit Central America.

  Mr. Eggar
  My right hon. learned Friend has no plans at present to visit Central America.

  Chemical Weapons
  Mr. Stern
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress in the limitation of chemical weapons.

  Mr. Mellor
  We are committed to the negotiation of an effectively verifiable and global ban on chemical weapons. Encouraging progress has been made at the negotiations in Geneva to this end. However, many complex details remain to be resolved, particularly on verification and arrangements for an international inspectorate, if we are to achieve an effective convention.

  Middle East
  Mr. Ernie Ross
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will meet a representative of the Palestine Liberation Organisation to discuss recent events in the middle east; and if he will make a statement.

  Mr. Mellor
  No. The Palestine Liberation Organisation is well aware why contact at this level remains difficult.

  Ms. Short
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on his policy towards the response of the Israeli Government to the Palestinian uprising in the occupied territories.

  Mrs. Fyfe
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he will make representations to the Israeli Government about the deaths and injuries inflicted by Israeli troops on Palestinians in the occupied territories; and if he will make a statement.

  Mr. Dunnachie
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has made any recent representations to the Government of Israel about the security situation in the occupied territories; and if he will make a statement.

  Mr. Wray
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Israeli Government about the situation in the occupied territories; and if he will make a statement.

  Mr. Mellor
  We regularly urge Israel to administer the occupied territories in accordance with international law and human rights standards. We particularly deplore the use of live ammunition, deportations and collective punishments, and other excessive measures of repression.

  South Africa
  Mr. Canavan
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent communications he has had with the Government of South Africa; and if he will make a statement.

  Mrs. Chalker
  We maintain regular contact with the South African authorities, both here and via Her Majesty's ambassador, on a wide range of issues.

  Mr. Evennett
  To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria influence his decision to talk to, and acknowledge, some black South African leaders and not others.

  Mr. Burns
  To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria influence his decision to talk to and acknowledge some leaders in South Africa and not others.

  Mrs. Chalker
  Our policy is to maintain contact with a wide cross-section of black South African opinion.

  Mr. Nigel Griffiths
  To ask the Secretary of State for Foreign and Commonwealth Affairs what further response he has received from the South African Government to his representations on behalf of the Sharpeville Six; and if he will make a statement.

  Mrs. Chalker
  A defence application for a retrial is currently under consideration. We continue to follow the progress of the case closely and with concern.

  Poland (Human Rights)
  Mr. Anthony Coombs
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received regarding human rights in Poland.

  Mr. Mellor
  My colleagues and I have received many representations on this subject. The concern expressed in all parts of the House about human rights in Poland is fully reflected in representations we made to the Polish authorities, sometimes with our Community partners. During the visit of the Polish Foreign Minister last December, for instance, my right hon. and learned Friend made it clear that we hoped all forms of harassment of Solidarity supporters would cease.

  Palestinians (Assassinations)
  Mr. McKelvey
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he has made representations to the Government of Israel about the recent assassinations of Palestinians in Tunis; and if he will make a statement.

  Mr. Mellor
  No.

  Mr. Adley
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Israeli Government about their recent act of state terrorism in Tunis.

  Mr. Meale
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of Israel about the killing of Palestinians in Tunisia; and if he will make a statement.

  Mr. Mellor
  None.

  Gulf War (Chemical Weapons)
  Mr. Wallace
  To ask the Secretary of State for Foreign and Commonwealth Affairs what actions his Department intends to take in response to the recent use of chemical weapons in the Gulf war.

  Mr. Mellor
  We abhor the use of chemical weapons by any country in contravention of the 1925 Geneva protocol. As far as the Iran/Iraq conflict is concerned, we have made our views abundantly clear to those concerned when chemical weapons have been used. We and our European Community colleagues issued a condemnatory statement on 24 March. More recently, on 29 March the Iraqi ambassador in London was told of the British Government's own condemnation of Iraqi use in Kurdistan in mid-March.

  The Secretary General's investigative team has confirmed that chemical weapons were used then. We shall be studying the report very closely but are deeply concerned that the investigation has shown that these weapons continue to be used in the conflict.

  We have been willing to allow CW victims to receive specialist private hospital treatment in this country for humanitarian reasons. This in no way prejudices our impartiality in the conflict itself. Eleven victims, six from Iran and five from Iraq, are receiving treatment following use of chemical weapons in Kurdistan.

  Terrorism
  Mr. Mans
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made towards achieving an international convention on terrorism.

  Mr. Mellor
  There already exist a number of international conventions dealing with various aspects of terrorist crime, including the Tokyo convention on offences and certain other acts committed on board aircraft, the Hague convention for the suppression of unlawful seizure of aircraft, the Montreal convention for the suppression of unlawful acts against the safety of civil aviation and the New York international convention against the taking of hostages. Opportunities to supplement these conventions are taken in the light of developments in the continuing fight against terrorism. For example, a protocol to the Montreal convention, which extends the provisions of the convention to cover acts of violence at international airports as well as on board aircraft, was open for signature on 24 February 1988. I regret to say that by no means all countries have signed the conventions. We continue to press those which have not to do so.

  Anglo-Turkish Relations
  Mr. Roger King
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Turkish relations.

  Mrs. Chalker
  Britain's relations with Turkey are excellent. My right hon. Friend the Prime Minister paid a very successful visit to Turkey last month and President Evren will be making a state visit to Britain this summer. Trade is increasing and record numbers of Britons will visit Turkey this year.

  Guatemala
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current human rights situation in Guatemala.

  Mr. Eggar
  A number of murders and kidnappings have occurred, although it is not clear to what extent they are criminally rather than politically motivated. We accept the view of the United Nations special expert on Guatemala that it is the Government's firm political will to ensure respect for human rights and that violations are not a result of Government policy.

  Mr. Rogers
  To ask the Secretary of State for Foreign and Commonwealth Affairs what instructions were sent to the British embassy in Guatemala in connection with the return of the Guatemala exiles on Monday 18 April.

  Mr. Eggar
  Her Majesty's ambassador was requested to monitor the situation carefully and to keep the Foreign and Commonwealth Office informed of developments.

  Namibia
  Miss Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current position in relation to South Africa's unlawful occupation of Namibia.

  Mrs. Chalker
  We believe that the South Africans should end their unlawful occupation of Namibia. We remain committed to Namibian independence on the basis of United Nations Security Council resolution 435 and without preconditions. We support efforts by the United Nations Secretary General and the United States Administration to secure the implementation of resolution 435.

  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he intends to take to speed the implementation of United Nations resolution 435, calling for a South African withdrawal from Namibia.

  Mrs. Chalker
  We shall continue to press South Africa to agree to the implementation of United Nations Security Council resolution 435.

  Bophuthatswana
  Mr. Andy Stewart
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his assessment of efforts by the Bophuthatswana Government to establish a multi-racial, democratic society which guarantees human rights.

  Mrs. Chalker
  The policy of apartheid applied in other parts of South Africa is not applied within Bophuthatswana. However, Bophuthatswana was created out of the republic of South Africa as a key element in the policy of separate development and we regard the territory as part of South Africa.

  Moreover, there are persistent reports that non-Tswanas resident in Bophuthatswana are subject to discrimination. We also note that recent legislation restricts the exercise of certain individual rights.

  Mr. Colin Shepherd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment
  465
  he has made of the extent to which he is receiving accurate and detailed information about the situation in Bophuthatswana from the British embassy in Pretoria.

  Mr. John Townend
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to ensure that the British embassy in South Africa obtains more accurate information about the situation in Bophuthatswana.

  Mr. Hunter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to ensure that the British embassy in Pretoria obtains more accurate information about the situation in Bophuthatswana.

  Mrs. Chalker
  Her Majesty's embassy in South Africa already provides full and accurate information on all relevant aspects of the South African scene, including developments in Bophuthatswana.

  Mr. Gardiner
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy on efforts to establish within Bophuthatswana a multi-racial, democratic society which guarantees human rights.

  Mrs. Chalker
  Any assessment has to take into account that Bophuthatswana is an expression of the South African Government's policy of grand apartheid and that we do not recognise it or the other "independent" homelands.

  The policy of apartheid applied in other parts of South Africa is not applied within Bophuthatswana but there are persistent reports that non-Tswanas resident in Bophuthatswana are subject to discrimination. We note that recent legislation restricts the exercise of certain individual rights.

  Falkland Islands
  Mr. Campbell-Savours
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet members of the Falkland Islands Council.

  Mr. Eggar
  My right hon. and learned Friend has no plans at present to meet members of the Falkland Islands Council.

  Foreign Affairs Council
  Mr. Stevens
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the outcome of the most recent meetings of the EC Foreign Affairs Council.

  Mrs. Chalker
  I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) on 27 April, at column 156.

  Campaign for Nuclear Disarmament
  Mr. Jacques Arnold
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received from the Campaign for Nuclear Disarmament following the North Atlantic Treaty Organisation Brussels summit.

  Mr. Mellor
  Four representations have been received from the Campaign for Nuclear Disarmament since the NATO summit. These have covered the following subjects:466

  The NATO Nuclear Planning Group meeting, 27–28 April;

  The use of chemical weapons in the Gulf conflict (two representations);

  The third United Nations special session on disarmament.

  Israel
  Mr. Galloway
  To ask the Secretary of State for Foreign and Commonwealth Affairs, in the light of the current situation on the West Bank and Gaza Strip, if he will give consideration to applying selective economic sanctions against Israel; and If he will make a statement.

  Mr. Mellor
  Economic sanctions would not help bring about a solution of the problems of the region.

  Mr. Marlow
  To ask the Secretary of State for Foreign and Commonwealth Affairs to what extent the recent Israeli terrorist activity in Tunisia has affected Her Majesty's Government's policy towards a settlement in the middle east; and if he will make a statement.

  Mr. Mellor
  We remain determined to work for a peaceful settlement of the Arab/Israeli conflict. Violence and terrorism offer no solution to the problems of the middle east.

  Mr. Janner
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations between the United Kingdom and Israel.

  Sir Geoffrey Howe
  We have always wanted to see Israel safe and secure. But Israel's own recent actions have made it more difficult for her friends to help her to achieve those objectives. We shall go on trying, not least by promoting the peace process. We hope that Israel will reciprocate those efforts. In particular, we urge Israel to make clear that she accepts that the only way for her to achieve lasting security is to endorse the principle of territory for peace.

  Southern Africa Front-line States
  Mr. Hanley
  To ask the Secretary of State for Foreign and Commonwealth Affairs when last he met the ambassadors of the Southern Africa front-line states.

  Mrs. Chalker
  My right hon. and learned Friend has not met the high commissioners/ambassadors of the frontline states collectively. However, I met the high commissioners of Zambia, Tanzania, Botswana and the Angolan charge and Nigerian counsellor on 16 March at their request to discuss the front-line states position on sanctions against South Africa.

  Dalai Lama
  Sir Russell Johnston
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Dalai Lama; and what subjects were discussed.

  Mr. Eggar
  My right hon. and learned Friend has never met the Dalai Lama.

  Inter-Parliamentary Union (Guatemala)
  Mr. Morgan
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will meet the leader of the recent Inter-Parliamentary Union delegation to Guatemala to discuss the outcome of the meeting between the British and Argentinian delegations at this conference.
  467
  Mr. Eggar
  The delegation called on me yesterday, 3 May, to discuss various aspects of the Inter-Parliamentary Union conference, including the meeting with the Argentine delegation.

  Anglo-Algerian Relations
  Mr. Carrington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Algerian relations.

  Mr. Mellor
  Relations between Britain and Algeria are becoming closer. I visited Algeria last September and the first meeting of the United Kingdom/Algerian joint commission took place in February. Both sides are agreed on the need to maintain this trend. The Algerian Foreign Minister has accepted an invitation to visit the United Kingdom, on dates yet to be fixed.

  Conference on Security and Co-operation in Europe
  Mr. Duffy
  To ask the Sectetary of State for Foreign and Commonwealth Affairs when he next expects to attend the conference in Vienna on security and cooperation in Europe.

  Mr. Mellor
  I visited the Vienna CSCE meeting on 15 April. A copy of my speech has been placed in the Library. We will consider further ministerial visits to the meeting, including for the purpose of signing a concluding document, in the light of circumstances at the time.

  Anglo-Soviet Relations
  Mr. Sumberg
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's recent initiative to improve relations with the Union of Soviet Socialist Republics.

  Mr. Mellor
  Anglo-Soviet relations are better than for many years, with an active high level dialogue. Fundamental differences between us remain but we are able to discuss these frankly and look for solutions wherever possible. We aim to secure progress in arms control and the settlement of regional conflicts; much greater respect for human rights; an increase in trade; and more contacts between peoples at all levels. We shall continue to work for further improvement in bilateral relations.

  Mr. Soames
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received about Her Majesty's Government's current relations with the Union of Soviet Socialist Republics.

  Mr. Mellor
  We regularly receive letters from right hon. and hon. Members and members of the public about Anglo-Soviet relations. The views we receive are reflected, where appropriate, in our dealings with the Soviet authorities, where we are seeking to improve relations further, including progress in Soviet respect for human rights, arms control measures and the settlement of regional conflicts.

  Chief Minister of Gibraltar
  Sir Fergus Montgomery
  To ask the Secretary of State for Foreign and Commonwealth Affairs what was the outcome of his recent talks with the Chief Minister of Gibraltar.
  468
  Mrs. Chalker
  My right hon. and learned Friend and I had a useful initial exchange of views with the new Chief Minister of Gibraltar on 12 April. We discussed a wide range of subjects of mutual interest.

  Foreign Minister (China)
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Foreign Minister of China; and what was discussed.

  Mr. Eggar
  My right hon. and learned Friend had talks with the then Foreign Minister Wu Xueqian on 10 and 11 March during his visit to the United Kingdom. Their agenda covered a wide range of bilateral and international subjects, including East-West relations, disarmament, the middle east and Hong Kong. He has yet to meet the new Foreign Minister, Qian Qichen.

  Anglo-Mexican Relations
  Mr. Favell
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about current Anglo-Mexican relations.

  Mr. Eggar
  We enjoy excellent bilateral relations with Mexico. This is reflected in recent ministerial exchanges, which will continue with my visit to Mexico City from 1 to 3 June.

  El Salvador
  Mr. Jim Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications for Her Majesty's Government's policy towards a settlement in Central America of the conduct of recent elections in El Salvador.

  Mr. Eggar
  The holding of elections in El Salvador was in keeping with the objectives of the Central American peace agreement, which we support, of establishing peace and democracy in the region.

  Republic of Ireland (Counter-terrorist Policy)
  Rev. Martin Smyth
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Government of the Republic of Ireland about the implications for counter-terrorist policy of that country's trading links with Libya; and if he will make a statement.

  Sir Geoffrey Howe
  The Irish Government are fully alive to the threat posed to both our countries by Libya's active support for terrorism. We have discussed this with them on a number of occasions recently, particularly in the context of increased security co-operation following the seizure of MV Eksund last October which revealed extensive Libyan support for the Provisional IRA.

  EC Structural Funds
  Mr. Heathcoat-Amory
  To ask the Secretary of State for Foreign and Commonwealth Affairs what proportion of European Community structural funds is due to be spent in Britain for the current year.

  Mrs. Chalker
  The detailed arrangements for structural fund spending for the current year are still under discussion. We cannot therefore say what proportion is likely to be spent in the United Kingdom.

  Poland
  Mr. Wood
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of the Polish Government.

  Mr. Mellor
  My right hon. and learned Friend had several hours of useful discussion with the Polish Foreign Minister, Professor Orzechowski, during his visit to London from 6 to 10 December.

  Denmark
  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met the Danish ambassador, and what subjects were discussed.

  Mrs. Chalker
  My right hon. and learned Friend has frequent occasion to meet the Danish ambassador informally, but has not received a call from him on official business for some time.

  Guatemala and Belize
  Mr. Lofthouse
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on further progress in the territorial dispute between Guatemala and Belize; and what action the Government are taking to assist such progress.

  Mr. Eggar
  The territorial dispute is a matter for bilateral settlement between Belize and Guatemala. We wish to see the dispute resolved at an early date and are ready to assist the parties directly involved by being present at negotiations if both sides so wish.

  Kampuchea
  Mr. Matthew Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs if the Government will make it their policy to vote later in 1988 for the recognition by the United Nations of the Coalition Government of Kampuchea; and if he will make a statement.

  Mr. Eggar
  We have consistently voted in favour of United Nations resolutions which have reaffirmed the need to adhere to the principles of the United Nations; and which call for the withdrawal of all foreign forces from Cambodia and the right of the Cambodian people to self-determination, free from outside interference. There has been no vote on the question of Cambodian representation at the United Nations since 1982.

  Mrs. Clwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy towards recognition of the coalition Government of Democratic Kampuchea, with particular regard to the right to sit at the United Nations.

  Mr. Eggar
  Our policy is to recognise states, not governments. We have no dealings with either of the two rival Cambodian regimes as Governments. We support the retention by the Coalition Government of Democratic Kampuchea of the Cambodian seat at the United Nations in line with the recommendations of the Credentials Committee.

  Single European Market
  Mr. Patrick Thompson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what 470
  representations he has received about the opportunities provided for business and trades unions by the single European market.

  Mrs. Chalker
  My right hon. and learned Friend and I are in regular contact with a number of business organisations and representative bodies about the completion of the single European market and the opportunities it affords for British businesses and for job opportunities.

  Mr. Batiste
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last met Lord Cockfield to discuss the completion of the internal European market.

  Mrs. Chalker
  My right hon. and learned Friend last met Lord Cockfield to talk about the single market on 18 November last year. He will he meeting him again shortly to discuss a number of issues including completion of the single market.

  EC Foreign Ministers
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next expects to discuss political co-operation with EEC Foreign Ministers.

  Mrs. Chalker
  My right hon. and learned Friend met colleagues from the twelve to discuss European political co-operation matters at an informal weekend meeting in Konstanz on 5–6 March, and again at a ministerial meeting on 22 March in Brussels. He expects to discuss these matters with them next on 13 June in Luxembourg.

  Atlantic Alliance
  Mr. Curry
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress is being made within the Western European Union to strengthen the European pillar of the Atlantic Alliance.

  Mr. Mellor
  Work is continuing on developing the Western European Union platform, on examining European security issues and on concerting policy on issues outside the NATO area affecting common security interests.

  Persian Gulf
  Mr. Hind
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current position in the Persian Gulf.

  Sir John Farr
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current situation in the Gulf.

  Mr. Mellor
  The situation in the Gulf is relatively quiet at the moment. Since 18 April there has been only one attack on merchant shipping. Events on 18 April reminded Iran that she cannot expect to endanger the lives and interests of non-belligerents with impunity. The Armilla patrol, British minesweepers and other friendly navies in the area continue to contribute to maintaining freedom of navigation with a high level of vigilance.

  Cyprus
  Mr. Ian Bruce
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Cypriot relations.

  Mrs. Chalker
  Anglo-Cypriot relations are good. My right Friend the Prime Minister held friendly and useful talks with President Vassiliou on 31 March.

  Mr. Squire
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the prospects for settlement of the Cyprus dispute.

  Mrs. Chalker
  We continue to hope that the United Nations Secretary-General will be able to find a basis for the resumption of inter-communal talks. Good will gestures by both sides would facilitate his task.

  Ethiopia
  Mr. Andrew MacKay
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Ethiopian Government about human rights issues in that country.

  Mrs. Chalker
  Over the years we have made numerous representations. Most recently my hon. Friend the Minister for Overseas Development took the matter up with the Ethiopian Deputy Prime Minister during a visit to Ethiopia in January. We shall continue to raise the subject at every suitable opportunity.

  Afghanistan
  Mr. Goodlad
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to pay an official visit to Afghanistan.

  Mr. Eggar
  My right hon. and learned Friend has no such plans.

  Panama
  Mr. Haynes
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether there have been any discussions with the United States Government concerning the current situation in Panama.

  Mr. Callaghan
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether there have been any discussions with the United States Government concerning the current situation in Panama.

  Mr. Eggar
  The situation has been discussed in the course of our normal contacts with the United States Government.

  Mr. Morley
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether there have been any discussions with the United States Government concerning the current situation in Panama.

  Mr. Eggar
  The situation in Panama has been discussed in the course of our normal contacts with the United States Government.

  Commonwealth Countries (Nuclear Policy)
  Mr. Boswell
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many 472
  Commonwealth states have policies of refusing access to nuclear-armed or nuclear-powered aircraft or naval vessels.

  Mr. Mellor
  New Zealand is the only Commonwealth country whose current policy in relation to declarations on the presence of nuclear weapons prevents visits by Royal Navy ships.

  Hong Kong
  Mr. Yeo
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received about progress with the transition to Chinese sovereignty in Hong Kong; and if he will make a statement.

  Mr. Eggar
  My right hon. and learned Friend has received no representations on the general question of the transition in Hong Kong. Good progress is being made in the implementation of the Sino-British joint declaration. The Sino-British joint liaison group and the Land Commission have held successful meetings, and have concluded agreements on a number of important issues which will facilitate a smooth transfer of Government in 1997.

  USSR
  Mr. Sackville
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he expects to meet his Soviet counterpart to discuss nuclear matters.

  Mr. Mellor
  My right hon. Friend has had a series of meetings with Mr. Shevardnadze, most recently at Brize Norton in December and during his visit to Moscow in February, when they covered the full range of nuclear and arms control issues. No date has yet been fixed for their next meeting.

  Nicaragua
  Mr. Wilson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government's policy towards a settlement of the conflict in Nicaragua.

  Mr. Eggar
  We have consistently advocated a peaceful negotiated solution to the region's problems. Together with our European partners we warmly welcomed both the Guatemala peace agreement and the 60-day cease-fire agreement signed by the Government of Nicaragua and the Contras at Sapoa on 23 March. We hope negotiations for a definitive cease-fire now under way will lead to peace and reconciliation within a pluralistic democracy in Nicaragua.

  Federal Republic of Germany
  Mr. Rooker
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the ambassador of the Federal Republic of Germany.

  Mrs. Chalker
  My right hon. and learned Friend has frequent occasion to meet the ambassador informally, but no immediate plans to meet him on official business.

  Chile
  Mr. Darling
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received regarding the imprisonment of the former Chilean Foreign Secretary, Clodomiro Almeyda.

  Mr. Eggar
  On 19 April, Sr. Clodomiro Almeyda's brother met officials of the Foreign and Commonwealth Office. He asked that Her Majesty's Government should intervene on his brother's behalf. He was informed that the Chilean Government are already well aware of our concern about Sr. Almeyda.

  West Indies
  Mr. Gerald Bowden
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he intends to pay an official visit to the West Indies.

  Mrs. Chalker
  My right hon. and learned Friend has no plans at present to pay an official visit to the West Indies.

  Human Rights
  Mr. Lawrence
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the Vienna Conference on Security and Co-operation in Europe conference has so far yielded any advances in the area of human rights; and if he will make a statement.

  Mr. Mellor
  Advances have been distinctly modest so far. When I addressed the Vienna CSCE meeting on 15 April, I made it clear that we could not conclude business without much more progress on human rights issues.

  Nigeria
  Mr. Speller
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on United Kingdom-Nigeria relations.

  Mrs. Chalker
  As I told my hon. Friend on 3 February, the United Kingdom enjoys close and cordial relations with Nigeria. These were again demonstrated at the bilateral talks which my right hon. and learned Friend and I had with the Nigerian Foreign Minister at Chevening on 15 and 16 March.

  Singapore
  Mr. Coachman
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of Anglo-Singaporean relations.

  Mr. Eggar
  Our relations with Singapore are excellent. My right hon. and learned Friend visited Singapore from 7 to 9 April as part of a wider tour of south-east Asia, which also included visits to Malaysia and Brunei. He had valuable discussions with Prime Minister Lee Kuan Yew, Deputy Prime Ministers Goh Chok Tong and Ong Teng Cheong, and with Foreign Minister Dhanabalan on bilateral links and a range of regional and international issues.

  Gibraltar (Checkpoints)
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he has taken to 474
  assess whether the border checkpoints on Gibraltar are working effectively and that staff are able and have powers to detain persons where this is considered necessary.

  Mrs. Chalker
  My right hon. and learned Friend is satisfied with the effectiveness of the frontier controls. We are currently looking for ways of streamlining them.

  Gibraltar (Police)
  Mr. Cryer
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken to assess the adequacy of the police establishment on Gibraltar; and what is the current approved establishment and actual staff in post.

  Mrs. Chalker
  My right hon. and learned Friend is satisfied with the police establishment in Gibraltar, which is kept under continuous review. The approved establishment is 232 and there are currently 230 staff in post.

  Miracle Bus Company
  Mr. Teddy Taylor
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he was first notified of the problems facing the Southend council and the Miracle Bus Company in securing permission from the West German Government to provide a bus from Ostend to Germany to connect with a plane from Southend airport; and if he will set out the action taken by his Department since that time.

  Mrs. Chalker
  My Department was first informed of the problems involved in setting up this service to Frankfurt in June 1986. Since then we have held many discussions with the German and Belgium authorities and with the European commission. Agreement was subsequently reached that the service should be authorised and I understand the British operator hopes to start the service at the end of this month.

  Irish Trust (Residual Funds)
  Sir John Biggs-Davison
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the transfer of residual funds from the Irish Sailors' and Soldiers' Land Trust has been completed; to what extent this has benefited, or will benefit, the Royal National Lifeboat Institution in the island of Ireland; and if he will convey to Mr. Charles Haughey the appreciation of Her Majesty's Government of his interest in the matter.

  Mrs. Chalker
  The first (and major) tranche of surplus funds from the Irish Sailors' and Soldiers' Land Trust, £4·5 million, has been distributed in accordance with the 1987 Act. The distribution of the Irish Government's share is a matter for that Government, but I understand that they plan to pass a portion of the money to the Royal National Lifeboat Institution (Ireland). I am happy to record the appreciation of Her Majesty's Government at this development.

DEFENCE

  Ex-departmental Staff (Appointments)
  Mr. Redmond
  To ask the Secretary of State for Defence how many staff have left his Department and
  475
  taken up employment in the private defence industry, for each year from 1979 to date; and what were the grades involved.

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  11988

  Below HEO

  5

  13

  4

  24

  34

  101

  159

  124

  50

  11

  HEO

  23

  20

  31

  71

  104

  115

  97

  110

  92

  12

  SEO

  33

  22

  41

  65

  121

  112

  173

  82

  72

  22

  Grade 7

  16

  24

  44

  31

  69

  66

  136

  60

  72

  14

  Grade 6

  1

  6

  3

  7

  19

  14

  31

  29

  12

  7

  Grade 5

  7

  10

  13

  14

  30

  15

  35

  16

  20

  6

  Grades 1–4

  6

  10

  23

  21

  34

  21

  46

  18

  16

  2

  Total

  91

  105

  159

  233

  411

  444

  677

  439

  334

  74

  1 To date.

  Notes:

  1. The table represents the number of individuals making applications rather than the number of applications received.

  2. The table includes all MOD civil servants and service officers at equivalent grades/ranks.

  3. The figures record the number of approvals given to prospective appointments; records do not exist of those appointments actually accepted.

  Prisoners of War, Wormhoudt
  Mr. Shersby
  To ask the Secretary of State for Defence what progress has been made in assessing the papers relating to the killing of 80 British prisoners of war captured in 1940 near the French village of Wormhoudt, near Dunkirk; what discussions he has had with others on this matter; and if he will make a statement.

  Mr. Freeman
  As my right hon. Friend the Secretary of State for the Home Department announced on 21 April, we are examining the records relevant to the killing of the British prisoners of war in 1940 near Wormhoudt as a matter of urgency. We are in close touch with other interested Departments.

  Chipmunk
  Mr. Rogers
  To ask the Secretary of State for Defence how many hours of Royal Air Force initial training are currently carried out on the de Havilland Chipmunk aircraft.

  Mr. Freeman
  Four thousand two hundred and fifty hours were flown on the de Havilland Chipmunk aircraft during elementary flying training in the year ending 31 March 1988.

  Mr. Rogers
  To ask the Secretary of State for Defence how many de Havilland Chipmunk aircraft are currently in Royal Air Force service.

  Mr. Freeman
  There are 77 Chipmunk aircraft currently in service with the RAF.

  Mr. Rogers
  To ask the Secretary of State for Defence when the de Havilland Chipmunk entered Royal Air Force service.

  Mr. Freeman
  The Chipmunk entered service with the RAF in February 1950.

  Targeting Pods
  Mr. Rogers
  To ask the Secretary of State for Defence when he intends to order night vision targeting pods for Royal Air Force Tornado and Harrier GR5 aircraft.
  476
  Mr. Sainsbury
  The total number of approvals by grade to take up employment in defence industries since 1979 is as follows:

  Mr. Sainsbury
  Following a competition, a contract for development and production of a night vision forward-looking infra-red system for Tornado GR1 and Harrier GR5 aircraft was awarded to GEC Sensors of Basildon in December 1985.

  The competiton to select an advanced laser designator pod, a targeting aid for installation on Tornado GR1 aircraft, is in its final stages. There is no requirement for this system to be fitted on Harrier GR5 aircraft.

  Nimrod
  Mr. Rogers
  To ask the Secretary of State for Defence whether his Department is considering the conversion of Nimrod AEW aircraft for use as tankers.

  Mr. Sainsbury
  This is one of a number of possibilities we are considering for utilising the Nimrod AEW airframes, but no decision has yet been taken.

  Trident
  Mrs. Margaret Ewing
  To ask the Secretary of State for Defence what has been the total expenditure to date on the building of a road network for the establishment of a Trident base on the Clyde.

  Mr. Freeman
  [holding answer 3 May 1988]: I refer the hon. Member to the answer I gave the hon. Member for Leyton (Mr. Cohen) on 4 March 1988 at column 687.

AGRICULTURE, FISHERIES AND FOOD

  European Agriculture Ministers
  Mr. Ieuan Wyn Jones
  To ask the Minister of Agriculture, Fisheries and Food when he last met his counterparts from the other European Community countries; and what matters were discussed.

  Mr. MacGregor
  I refer the hon. Member to the reply I gave on 20 April to my hon. Friend the Member for Pembroke (Mr. Bennett), at columns 505–6.

  Sheep (Radioactivity)
  Mr. Wigley
  To ask the Minister of Agriculture, Fisheries and Food what recent representations he has
  477
  received concerning the restrictions placed on the movement of sheep following the Chernobyl disaster and concerning compensation to those farmers affected by the restrictions.

  Mr. Donald Thompson
  I have received representations from the Cumbria branch of the National Farmers Union, which sent to the Ministry's Carlisle office the results of a survey it conducted concerning the operation of the sheep compensation scheme. The branch has listed 66 producers who feel that they have been inadequately compensated. Of the 66 producers, 57 have already received compensation under the arrangements totalling £78,447 up to April 1988. We have said all along that we would be prepared to look at the scheme and its operation, which has been discussed in detail with the farmers' unions before and following the introduction of the various elements. As a result, changes have been made to some aspects of the scheme.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food whether his Department has evidence of an increase in mutations of lambs born in the restricted area of Cumbria since the Chernobyl accident; and if he will make a statement.

  Mr. Donald Thompson
  Congenital defects in lambs may be caused by a variety of factors, including environmental agents, nutritional deficiencies and viral infections. We are advised that the annual dose of radiation to sheep in Cumbria is within the normal range of background radiation in the United Kingdom. There is no reason to believe that the levels of contamination from Chernobyl present a health hazard to sheep or that it will effect their fertility or breeding potential. There is no evidence that lambs born in the restricted area of Cumbria have a higher incidence of congenital defects than lambs born elsewhere.

  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food what research is being undertaken into the mutation of lambs born in the restricted area of Cumbria since the Chernobyl accident; and if he will make a statement.

  Mr. Donald Thompson
  I understand that a research project by Liverpool university into the effects of low-level radiation on sheep is being undertaken. I believe that the project is utilising sheep supplied by farmers in North Wales, but I am not aware that sheep have been supplied by farmers in the restricted area of Cumbria.

  Surplus Food and Drink
  Mr. Canavan
  To ask the Minister of Agriculture, Fisheries and Food what is the total volume and value in pound sterling of surplus food and drink in the EEC.

  Mr. MacGregor
  A note setting out the volume of EC intervention stocks of agricultural commodities, which is not necessarily the same as surplus food and drink, is deposited in the Library of the House and updated monthly. The estimated book value of the EC stocks, excluding depreciation, set out in the most recently deposited note is £4·8 billion.

  Sheep
  Dr. Thomas
  To ask the Minister of Agriculture, Fisheries and Food when he next expects to meet the farming unions to discuss the sheep sector.

  Mr. Donald Thompson
  I continue to maintain regular contacts with the farming unions and their representatives on matters relating to the sheep sector.

  Inshore Fishermen
  Mr. Barry Field
  To ask the Minister of Agriculture, Fisheries and Food what is the total number of licences that can be issued to an inshore fisherman; and if he will list them.

  Mr. Gummer
  The restrictive licensing scheme does not differentiate between inshore and offshore fishermen. The number of licences issued to a fisherman depends on his eligibility and the fish stocks he wishes to catch.

  Farm Incomes
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food if he will publish in the Official Report figures showing at the latest available date (a) what proportion of fauns derived all their income from agriculture; (b) what proportion of those farmers' earnings were from non-agricultural employment, investment and pensions in (i) England, (ii) the south-western region and (iii) each of the counties in that region.

  Mr. Donald Thompson
  The latest information available is from the Inland Revenue's "Survey of Personal Incomes, 1984/85", and is given in table 4.5 of "Farm Incomes in the United Kingdom" 1988 edition. This shows that for those with a self-employment income from agriculture and horticulture in the United Kingdom:

  (a) 15 per cent. had no other income than that arising from self-employment (virtually all from agriculture and horticulture) and,

  (b) 30 per cent. had income from employment (in or out of agriculture) in addition to income from self-employment.

  The further information requested is not available.

  Milk
  Mr. Butler
  To ask the Minister of Agriculture, Fisheries and Food what information he has on producer prices for milk at the latest available date in(a) Japan, (b) the European Community, (c) the United States of America and (d) New Zealand.

  Mr. Donald Thompson
  The information requested is set out in the table.

  Producer price1 per kilogramme of milk: 1987

  Country

  Price per kilo

  Japan2

  Yen

  782·75

  Yen

  890·50

  United States3

  US$

  0·272

  New Zealand4

  NZ$

  60·159

  European Community Member States5

  United Kingdom

  £

  0·155

  Germany

  DM

  0·612

  France

  FF

  6l·757

  Italy

  Lire

  519·9

  Netherlands

  F1

  0·718

  479

  Country

  Price per kilo

  Belgium

  BF

  611·10

  Luxembourg

  LF

  12·21

  Ireland

  £IR

  60·174

  Denmark

  DKr

  2·45

  Greece

  Dra

  637·19

  Notes

  1 Relates to milk of varying fat content.

  2 Guaranteed price for manufacturing milk delivered to factory: average selling price for fluid milk.

  3 Average price for milk sold to plants.

  4 Farmgate price of milk fat converted to milk equivalent; actual fat content.

  5 Ex farm, actual fat content: net of co-responsibility levy. No data are readily available for Spain and Portugal.

  6 Provisional.

  7 Manufacturing.

  8 Fluid.

  Beef
  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food what was the total amount of beef exported in the most recent annual period for which figures are available; which countries the exports were sent to; and what was the price of buying the meat into intervention and of subsidising its export, respectively.

  Mr. Donald Thompson
  176,140 tonnes of beef were exported from the United Kingdom in 1987. The table gives details of destinations. In 1987, 20,406 tonnes of intervention beef were sold under sales which required the beef to be exported to third countries. This beef had been purchased during a period the prices paid for intervention ranged from £1,920/tonne to £2,140/tonne for steer carcases of R3 quality on the carcase classification scale. The total expenditure on refunds for all beef exports to third countries in 1987 (including sales from intervention and other exports as well) was £27,401,295.

  Tonnes

  EC member states

  France

  79,716

  West Germany

  15,766

  Irish Republic

  9,975

  Netherlands

  9,270

  Belgium/Luxembourg

  7,056

  Italy

  3,127

  Greece

  641

  Spain

  592

  Denmark

  318

  Portugal

  166

  Third countries:

  Brazil

  14,611

  Iraq

  9,619

  Egypt

  3,918

  Tunisia

  3,444

  South Africa

  3,064

  Iran

  2,145

  Turkey

  1,814

  Saudi Arabia

  1,534

  Barbados

  1,267

  Venezula

  1,219

  Cyprus

  887

  Zimbabwe

  829

  Mauritius

  725

  Israel

  662

  French Polynesia

  346

  Ivory Coast

  232

  Yugoslavia

  214

  Hong Kong

  196

  480

  Tonnes

  Sweden

  194

  Zaire

  157

  Dubai

  150

  Taiwan

  143

  Togo

  125

  Canary Island

  113

  Comoros

  109

  Malta

  102

  Angola

  98

  Romania

  89

  Antigua; Barbuda

  87

  Kuwait

  87

  Bahrain

  79

  India

  75

  Oman

  75

  Trinidad and Tobago

  73

  Gibralta

  69

  Jordan

  62

  Sharjah

  59

  Qatar

  57

  Bangladesh

  50

  Hungary

  47

  Niger

  43

  Bahamas

  42

  Sudan

  41

  Congo

  38

  Abu Dhabi

  37

  Senegal

  36

  Belize

  34

  Nigeria

  30

  Grenada

  27

  St. Lucia

  27

  Ghana

  23

  Gambia

  22

  Gabon

  20

  British Indian Occupied Territory

  18

  Czechoslovakia

  18

  Surinam

  18

  South Korea

  17

  Nauru

  16

  St. Vincent

  15

  Bolivia

  14

  Chad

  13

  Algeria

  12

  Andorra

  12

  Dominica

  11

  St. Helena

  10

  Djibouti

  9

  Japan

  8

  Libya

  8

  Tanzania

  8

  Bulgaria

  7

  Benin

  6

  Guatemala

  6

  North Yemen

  6

  Mayotte

  5

  Switzerland

  5

  Syria

  5

  Falkland Islands

  4

  Norway

  4

  Pakistan

  4

  Greenland

  3

  St. Kitts, Nevis Federation

  2

  Soviet Union

  2

  Zambia

  2

  Bermuda

  1

  Canada

  1

  Kenya

  1

  United States of America

  1

  Total trade with EC:

  126,627

  Total trade with 3rd countries:

  49,513

  Total trade:

  176,140

  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food how much was spent by the EEC in purchasing meat into public and private intervention over
  481
  the most recent annual period for which figures are available; and how much was spent on storing and exporting such beef, respectively, during the same period.

  Mr. Donald Thompson
  Intervention purchases are paid for initially by the member state, but part of the storage and financing costs, as well as the eventual loss on sale, are borne by the European Community. Private storage aid is paid in full by the EC. No separate figures are kept for the cost of export refunds on beef which has been the subject of public intervention storage and aided private storage. 1986 figures are as follows:

  million ecus

  £ million

  Total intervention

  2,030·5

  1,315·5

  Private storage

  102·3

  66·3

  Public intervention

  1,928·2

  1,249·2

  Figures are available only for 10 months of 1987, as follows:

  million ecus

  £ million

  Total intervention

  1,050·3

  756

  Private storage

  66·3

  48

  Public intervention

  984·0

  708

  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food what is the current range of prices offered for the purchase of beef into intervention; and what are the comparable figures offered to traders for such beef to be exported, including any specific export subsidy.

  Mr. Donald Thompson
  Prices for beef being bought into intervention in Great Britain range from £1,646·7/tonne to £1,717·8/tonne for straight cut forequarters depending on the quality.

  Prices for sales for export from intervention stocks are currently:

  Tonne

  Cuts

  £710·55–£3,908

  Forequarters

  £426·33–£994·76

  Hindquarters

  £1,456·22–£1,598·73

  In certain cases prices within these ranges are minimum prices for tender sales and actual prices paid may be higher.

  Export refunds are payable only in respect of some sales from intervention stocks, these being generally the sales for which higher prices are sought. The rate varies according to the eventual destination of the beef but the range of rates for frozen beef (adjusted by MCAs) in the week ending 29 April are:

  tonne

  Cuts

  £185·50–£727·80

  Forequarters

  £185·50–£483·60

  Hindquarters

  £315·60–£794·00

  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food what is his latest estimate of the amount of beef produced and consumed internally by the EEC; and if comparable figures are available for lamb and pork respectively.

  Mr. Donald Thompson
  The latest figures provided by the European Commission estimate the amount of beef produced and consumed in the EC in 1987 at 8,005,000 tonnes and 7,550,000 tonnes respectively. The equivalent estimates for mutton and lamb are 1,005,000 tonnes 482
  produced and 1,239,000 tonnes consumed, and for pigmeat 12,273,000 tonnes and 12,057,000 tonnes respectively.

  EC Meat Exports
  Mr. Teddy Taylor
  To ask the Minister of Agriculture. Fisheries and Food if any record is kept of the meat which is exported from the EEC with subsidy and then returns to the United Kingdom for domestic consumption. and if he will make a statement.

  Mr. Donald Thompson
  Export refunds are available for beef, pigmeat and poultry and are paid only when proof is provided that the meat has been cleared through Customs for consumption in the country of destination.

  Refunds are not generally payable for destinations which are significant exporters of beef to the Community. In 1986 when Brazil was suffering a meat shortage the Commission arranged tender sales of intervention beef to Brazil. A condition of these sales was that the beef should be imported by a Government agency, Interbras, and the Brazilian authorities gave an undertaking that the beef would be consumed there.

  To ensure that exports of poultrymeat are not returned to the Community export refunds are related to the basic levies charged on all third country imports. The Community is not a significant importer of pigmeat.

  Meat Prices
  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food whether the recent European Council agreement on agricultural spending will have the effect a making meat available to home manufacturers and canners at prices comparable to the prices offered to foreign canners.

  Mr. Donald Thompson
  When the Council of Agriculture Ministers agreed on the level of imports of beef under the manufacturing balance sheet at its meeting on 8 February the Commission gave an undertaking that it recognised the need to ensure that additional supplies of beef are available to the Community meat processing industry on terms that enable Community production to be competitive with products from other sources. The recent decisions taken on agricultural spending should not affect the ability of the Commission to discharge this undertaking.

  Badgers
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food how many badgers were removed in each of the parishes listed under his badger control strategy in 1986 and 1987.

  Mr. Donald Thompson
  [holding answer 25 April 1988]: The numbers of badgers taken in parishes where, under the present control strategy, badgers may be removed automatically in the event of an unexplained herd breakdown due to bovine tuberculosis, are shown in the following table. The table excludes badgers taken in removal operations prior to adoption in April 1986 of the revised control strategy recommended in the Dunnet Report.
  483

  County

  Parish

  Number of badgers taken

  1986

  1987

  Avon

  Batheaston

  13

  —

  Cold Ashton

  37

  6

  English Combe

  4

  —

  Hawkesbury

  3

  28

  St. Catherine

  1

  —

  Cornwall

  Camborne

  —

  9

  Helland

  4

  —

  Kirkhampton

  —

  18

  Linkinhorne

  —

  5

  Ludgvan

  —

  13

  Michaelstow

  4

  —

  Merwenstowe

  —

  1

  Sancreed

  13

  —

  South Hill

  2

  4

  Stithians

  19

  —

  Stoke Climsland

  —

  6

  St. Gulvias

  43

  —

  St. Just

  46

  —

  St. Neot

  23

  —

  St. Veep

  —

  11

  Wendron

  27

  35

  Devon

  Hartland

  —

  2

  Manaton

  —

  33

  Dorset

  Cheselbourne

  3

  10

  Stoke Abbott

  —

  11

  Gloucestershire

  Alderley

  —

  2

  Bisley with Lypiatt

  26

  35

  Boxwell with Leighterton

  —

  30

  Coates

  —

  5

  Edgeworth

  1

  3

  North Nibley

  1

  —

  Nympsfield

  1

  —

  Painswick

  —

  9

  Prestbury

  11

  5

  Standish

  40

  —

  Stinchcombe

  8

  —

  Stroud

  —

  17

  Uley

  6

  3

  Whittington

  17

  —

  Wotton Under Edge

  —

  45

  Somerset

  Cheddar

  —

  10

  484

  County

  Parish

  Number of badgers taken

  1986

  1987

  Wiltshire

  Box

  10

  4

  Compton Bassett

  20

  —

  North Wraxall

  10

  —

  Dyfed

  Bettws Evan

  —

  6

  Llangeler

  1

  7

  Mr. Ron Davies
  To ask the Minister for Agriculture, Fisheries and Food how many badgers were removed in 1986 and 1987, by parish, for which prior approval of the consultative panel on badgers and tuberculosis was required.

  Mr. Donald Thompson
  [holding answer 25 April 1988]: The number of badgers taken in parishes where prior approval of the consultative panel on badgers and tuberculosis was required are as follows:

  County

  Parish

  Number of badgers taken

  1986

  1987

  Avon

  Pucklechurch

  15

  —

  Cornwall

  Davidstowe

  —

  6

  Menheniot

  —

  —

  St. Martin

  —

  7

  Devon

  Holsworthy

  —

  31

  Milton Damerel

  —

  7

  Sutcombe

  —

  5

  Thornbury

  —

  15

  Gloucester

  Brookthorpe

  —

  17

  Duntisbourne Rouse

  —

  45

  Moreton Valence

  8

  —

  Somerset

  Rodney Stoke

  —

  12

  Westbury sub Mendip

  —

  52

  Wiltshire

  Brokenborough

  —

  46

  Malmesbury St. Paul without

  —

  1

  Sherston

  —

  12

  Dyfed

  Llanddarog

  —

  3

  Llanwinio

  —

  2

NATIONAL FINANCE

  Personal Taxation
  Sir Brandon Rhys Williams
  To ask the Chancellor of the Exchequer if he will publish tables comparable to those published to indicate the effect of the Budget income tax tables, continuing up to income of £2,000 per week, illustrating the tax and national insurance position of couples in 1989–90 both having income from employment and also where the wife's income is derived from

  Comparisons between the proposed 1988–89 regime and independent taxation

  £ per week

  NIC

  Income tax

  Net income

  Total income

  Husband's income

  Wife's income

  Husband's

  Wife's

  Existing joint tax charge

  Independent taxation

  Existing regime

  After independent taxation

  Husband's tax

  Wife's tax

  1. Total income split 50-50 per cent. between husband and wife. Income all earned

  100

  50

  50

  2·50

  2·50

  ·00

  ·00

  ·00

  95·00

  95·00

  200

  100

  100

  7·00

  7·00

  17·79

  5·31

  12·48

  168·21

  168·21

  400

  200

  200

  18·00

  18·00

  67·79

  30·31

  37·48

  296·21

  296·21

  800

  400

  400

  27·45

  27·45

  174·95

  80·31

  87·48

  570·15

  577·31

  1,000

  500

  500

  27·45

  27·45

  248·58

  112·83

  124·29

  696·52

  707·98

  1,500

  750

  750

  27·45

  27·45

  448·58

  212·83

  224·29

  996·52

  1,007·98

  2,000

  1,000

  1,000

  27·45

  27·45

  648·58

  312·83

  324·29

  1,296·52

  1,307·98

  2. Total income split 75–25 per cent. between husband and wife. Income all earned

  100

  75

  25

  5·25

  ·00

  ·00

  ·00

  ·00

  94·75

  94·75

  200

  150

  50

  13·50

  2·50

  17·81

  17·81

  ·00

  166·19

  166·19

  400

  300

  100

  27·00

  7·00

  67·79

  55·31

  12·48

  298·21

  298·21

  800

  600

  200

  27·45

  18·00

  201·76

  152·83

  37·48

  552·79

  564·25

  1,000

  750

  250

  27·45

  22·50

  274·26

  212·83

  49·98

  675·79

  687·25

  1,500

  1,125

  375

  27·45

  27·45

  455·51

  362·83

  81·23

  989·59

  1,001,05

  2,000

  1,500

  500

  27·45

  27·45

  648·58

  512·83

  124·29

  1,296·52

  1,307·98

  3. Total income split 50–50 per cent. between husband and wife. Husband's income all earned and wife's income all investment income1

  100

  50

  50

  2·50

  ·00

  5·31

  ·00

  ·00

  92·19

  97·50

  200

  100

  100

  7·00

  ·00

  30·31

  5·31

  12·48

  162·69

  175·21

  400

  200

  200

  18·00

  ·00

  80·31

  30·31

  37·48

  301·69

  314·21

  800

  400

  400

  27·45

  ·00

  232·83

  80·31

  87·48

  539·72

  604·76

  1,000

  500

  500

  27·45

  ·00

  312·83

  112·83

  124·29

  659·72

  735·43

  1,500

  750

  750

  27·45

  ·00

  512·83

  212·83

  224·29

  959·72

  1,035·43

  2,000

  1,000

  1,000

  27·45

  ·00

  712·83

  312·83

  324·29

  1,259·72

  1,335·43

  4. Total income split 75–25 per cent. between husband and wife. Husband's income all earned and wife's income all investment income1

  100

  75

  25

  5·25

  ·00

  5·31

  ·00

  ·00

  89·44

  94·75

  200

  150

  50

  13·50

  ·00

  30·31

  17·81

  ·00

  156·19

  168·69

  400

  300

  100

  27·00

  ·00

  80·31

  55·31

  12·48

  292·69

  305·21

  800

  600

  200

  27·45

  ·00

  232·83

  152·83

  37·48

  539·72

  582·25

  1,000

  750

  250

  27·45

  ·00

  312·83

  212·83

  49·98

  659·72

  709·75

  1,500

  1,125

  375

  27·45

  ·00

  512·83

  362·83

  81·23

  959·72

  1,028·50

  2,000

  1,500

  500

  27·45

  ·00

  712·83

  512·83

  124·29

  1,259·72

  1,335·43

  1 Assumed paid gross.

  Government Departments and Agencies (Re-location)
  Mr. Robert Banks
  To ask the Chancellor of the Exchequer which Government Departments and agencies have been transferred from London and the south-east of England to the regions since 1979.

  Mr. Brooke
  The Government's dispersal programme since 1979 has included significant transfers of Civil Service posts from London to regions outside the south-east, by the following Departments and agencies:

  Export Credits Guarantee Department (to Cardiff)

  Health and Safety Executive (to Bootle)

  Her Majesty's Stationery Office (to Norwich)

  Home Office (to Bootle)

  486
  investments and showing the tax and national insurance position and the resultant net income for couples over the same range of incomes after the introduction of independent taxation in 1990.

  Mr. Norman Lamont
  Illustrative examples of the effects of independent taxation for non-aged taxpayers at various levels of income up to £2,000 per week are given in the tables. They are based on income tax and national insurance contribution rates for 1988–89. The tables include two illustrations of the possible distribution of the amount of income between husband and wife.

  Manpower Services Commission (to Sheffield)

  Ministry of Defence (to Glasgow)

  Overseas Development Administration (to East Kilbride)

  Property Services Agency (to Bootle)

  Details of dispersals undertaken on Departments' own initiatives are not held centrally. However, Her Majesty's Land Registry opened a new office in Hull in 1987; the Department of Trade and Industry recently announced plans to relocate the Patent Office to Newport; and the Department of Health and Social Security has created a large number of new jobs at its Newcastle central office and at its family credit centre at North Fylde.

  Interest Rates
  Mr. Ieuan Wyn Jones
  To ask the Chancellor of the Exchequer what recent representations he has received concerning the level of interest rates in the United Kingdom; and if he will make a statement.

  Mr. Lilley
  My right hon. Friend has received a number of representations on this subject.

THE ARTS

  Merseyside Arts Association
  Mr. Bermingham
  To ask the Minister for the Arts if he will provide money additional to the 2·2 per cent. increase in development funds for the Merseyside regional arts associations; and if he will make a statement.

  Mr. Luce
  [holding answer 3 May 1988]: No. It is for the Arts Council to determine the distribution of its grant.

  Distance Learning Scheme
  Mr. Fisher
  To ask the Minister for the Arts how much money he has allocated to his Department's distance learning scheme.

  Mr. Luce
  [holding answer 29 April 1988]: Negotiations are continuing between the Arts Council and the Institute of Marketing, which are to provide the distance learning package. No figure has yet been agreed, but it is likely to be in the region of £100,000.

EMPLOYMENT

  Availability for Work Test
  Ms. Short
  To ask the Secretary of State for Employment whether individuals who are on the community programme who choose to leave when the adult training scheme is introduced in September will be liable to benefit loss under the availability for work test.

  Mr. Nicholls
  Participants who join the community programme (CP) from the end of February are entitled to six months on that programme. We have already made it clear that the new employment training programme is to be a voluntary one. Those CP participants who choose not to take advantage of the new programme at the end of their time on CP will not be liable to benefit loss under the availability for work test.

  Inter-union Disputes
  Mr. Stern
  To ask the Secretary of State for Employment if he has any plans for further legislation to limit the effects of inter-union disputes; and if he will make a statement.

  Mr. Nicholls
  My right hon. Friend has no such plans.

  Disabled Persons
  Mr. Hannam
  To ask the Secretary of State for Employment how many of the United Kingdom's largest 100 employers hold permits exempting them from the Disabled Persons (Employment) Act 1944; how many of these(a) hold permits covering multiple outlets—
  488
  operational sites and (b) do not hold exemption permits and who are failing to meet their quota obligations; and how such companies are being encouraged to meet their obligations under the Disabled Persons (Employment) Act 1944.

  Mr. Lee
  The information requested about the 100 largest employers is not available centrally and could be provided only at disproportionate cost. In Great Britain the Department of Employment's employment service established a major organisations development unit in October 1987. This maintains contact with major employers at senior, head office, level and influences and assists large companies in the adoption of good practices in the employment of people with disabilities. At a local level, the employment service's disablement advisory service also promotes vigorously the employment of people with disabilities. In Northern Ireland these functions are undertaken by the Department of Economic Development's disablement resettlement officers.

  South Korea
  Mr. Leighton
  To ask the Secretary of State for Employment what information he has as to how many hours there are in the average working week in South Korea, and on the average wage there.

  Mr. Lee
  The latest available information relates to 1986 and is published by the International Labour Office in its "Yearbook of Labour Statistics 1987." In nonagricultural activities, average hours worked per week by employees are shown as 52·5 and average earnings per month as 350,966 Won, approximately £63 per week.

  Retail Workers
  Mr. Leighton
  To ask the Secretary of State for Employment what percentage of workers in retail are(a) full-time and (b) part-time; and what were the comparable figures five years previously.

  Mr. Lee
  In December 1987, the latest date for which figures are available, the proportions of full-time and part-time employees in employment in the retail distribution industry in Great Britain were 54 per cent. and 46 per cent. respectively. There are no comparable estimates for December 1982 but comparable figures from the 1981 census of employment show that in September 1981 the proportions were 60 per cent. and 40 per cent. The figures have not been adjusted for the effects of seasonal variations.

  Training Schemes
  Mr. McAllion
  To ask the Secretary of State for Employment if people who(a) complete a course on the adult training strategy and (b) come off training courses prior to completion will be entitled to claim unemployment or supplementary benefit.

  Mr. Nicholls
  People who have completed their time in employment training or have left the programme early and who have not secured a job will be entitled to claim unemployment benefit or income support provided that they meet the statutory conditions for entitlements to these benefits.

  Enterprise Agencies
  Mr. Robert G. Hughes
  To ask the Secretary of State for Employment if he will make a further statement on the progress of the enterprise agencies.

  Mr. Cope
  There are now over 400 local enterprise agencies in the United Kingdom. This Department, through the local enterprise agency grant scheme, is encouraging the development of a network of viable agencies in England; 200 agencies were supported under the scheme in the 1987–88 financial year.

  Enterprise Allowance Scheme
  Mr. Wigley
  To ask the Secretary of State for Employment how many people took up offers under the enterprise allowance scheme during the past 12 months; and what plans he has for extending this scheme.

  Mr. Cope
  During the year April 1987 to March 1988, 106,305 people joined the scheme; 110,000 places will be available during the current year.

  There are no plans at present to alter the main eligibility rules of the scheme.

  Labour Statistics
  Ms. Ruddock
  To ask the Secretary of State for Employment how many young people aged 16 to 18 years were unemployed in the London borough of Lewisham at the latest available date.

  Mr. Lee
  On 14 January 1988, the number of unemployed claimants in the London borough of Lewisham aged 16 to 18 years was 1,004.

  Mr. Fatchett
  To ask the Secretary of State for Employment what was the total number of persons under the age of 23 years, by sex, who have been registered as unemployed for(a) less than six months, (b) between six and 12 months and (c) more than 12 months.

  Mr. Lee
  The following information is available in the Library. Unemployment figures are not available for the age range requested. However, the table shows the numbers of unemployed claimants under 25 years, by sex and duration, in the United Kingdom on the latest date available, 14 January 1988.

  Administrative and clerical staff

  Whole time equivalents

  Cost £000

  Cost relative to population £

  Northern Region

  Total

  6,263

  49,646

  16

  Hartlepool

  177

  1,395

  15

  North Tees

  342

  2,453

  14

  South Tees

  575

  4,387

  15

  East Cumbria

  301

  2,325

  13

  South Cumbria

  274

  2,047

  12

  West Cumbria

  229

  1,687

  12

  Darlington

  270

  2,017

  16

  Durham

  274

  2,771

  12

  North West Durham

  156

  1,225

  14

  South West Durham

  252

  2,034

  13

  Northumberland

  441

  3,464

  12

  Gateshead

  278

  2,236

  11

  Newcastle

  1,163

  8,328

  30

  North Tyneside

  239

  1,812

  9

  South Tyneside

  216

  1,729

  11

  490

  Unemployed

  Male

  Female

  Total

  Less than 6 months

  315,330

  205,569

  520,899

  6 to 12 months

  97,328

  60,279

  157,607

  Over 12 months

  144,392

  70,419

  214,811

  TOTAL

  557,050

  336,267

  893,317

  Family Expenditure Survey
  Mr. Ian Taylor
  To ask the Secretary of State for Employment if he intends to issue further data from the 1986 family expenditure survey.

  Mr. Cope
  Yes. Since the report on the 1986 survey was published on 30 December 1987, it has been discovered that, because of a fault in a computer programme, average weekly household expenditure in 1986 was overstated by £6·92; the published figure is £185·02 whereas the revised estimate is £178·10.

  An announcement of what has happened will appear in this month's Employment Gazette, together with revised data for broad groups of expenditure. The June Gazette will contain an article providing more detailed revised data.

  Corrected results from the 1986 survey will be made available in early July, free of charge to those customers who have purchased a copy of the original report.

SOCIAL SERVICES

  NHS Staff
  Mr. David Shaw
  To ask the Secretary of State for Social Services what is the number and cost of administrative and clerical staff employed in the National Health Service by each district health authority; and what is this cost expressed relative to the population in each district.

  Mr. Newton
  Information for district health authorities in England and which relates to 1986–87 (the latest years available) is shown in the table.
  491

  Whole time equivalents

  Cost £000

  Cost relative to population £

  Sunderland

  626

  4,627

  16

  Yorkshire Region

  Total

  7,024

  56,508

  16

  Hull

  601

  4,389

  14

  East Yorkshire

  311

  2,561

  14

  Grimsby

  285

  2,153

  14

  Scunthorpe

  276

  1,993

  10

  Northallerton

  125

  1,014

  9

  York

  469

  3,871

  15

  Scarborough

  197

  1,624

  11

  Harrogate

  265

  1,988

  15

  Bradford

  584

  4,808

  14

  Airedale

  274

  2,218

  13

  Calderdale

  291

  2,241

  12

  Huddersfield

  409

  3,161

  15

  Dewsbury

  251

  1,897

  12

  Leeds Western

  764

  6,099

  17

  Leeds Eastern

  773

  5,945

  17

  Wakefield

  386

  3,227

  23

  Pontefract

  255

  2,095

  13

  Trent Region

  Total

  8,900

  71,906

  16

  North Derbyshire

  402

  3,067

  8

  Southern Derbyshire

  830

  6,659

  13

  Leicestershire

  1,440

  11,146

  13

  North Lincolnshire

  499

  3,837

  14

  South Lincolnshire

  422

  3,363

  11

  Bassetlaw

  134

  1,136

  11

  Central Nottinghamshire

  449

  3,568

  13

  Nottingham

  1,247

  10,941

  18

  Barnsley

  330

  3,613

  12

  Doncaster

  427

  3,321

  11

  Rotherham

  332

  2,668

  11

  Sheffield

  1,448

  10,691

  20

  East Anglian Region

  Total

  4,030

  32,221

  16

  Cambridge

  739

  5,651

  21

  Peterborough

  423

  3,045

  15

  West Suffolk

  346

  2,760

  12

  East Suffolk

  557

  4,247

  13

  Norwich

  769

  6,072

  13

  Great Yarmouth and Waveney

  343

  2,702

  14

  West Norfolk and Wisbech

  300

  2,334

  13

  Huntingdon

  224

  1,713

  13

  North West Thames Region

  Total

  7,736

  69,017

  20

  North Bedfordshire

  411

  3,056

  12

  South Bedfordshire

  450

  3,271

  12

  North Hertfordshire

  219

  1,673

  9

  East Hertfordshire

  272

  2,323

  8

  North West Hertfordshire

  588

  4,849

  19

  South West Hertfordshire

  331

  2,373

  10

  Barnet

  677

  6,342

  21

  Harrow

  416

  3,123

  15

  Hillingdon

  575

  5,008

  22

  Hounslow and Spelthorne

  582

  4,857

  17

  Ealing

  404

  4,020

  14

  Brent

  568

  4,592

  18

  Paddington and North Kensington

  629

  6,937

  58

  Riverside

  1,246

  12,889

  45

  North East Thames Region

  Total

  9,794

  89,209

  24

  Basildon and Thurrock

  498

  3,744

  13

  Mid Essex

  468

  3,838

  13

  North East Essex

  621

  4,587

  15

  West Essex

  391

  2,982

  12

  Southend

  580

  3,735

  12

  Barking Havering and Brentwood

  705

  5,623

  12

  Hampstead

  627

  5,868

  54

  492 493

  Whole time equivalents

  Cost £000

  Cosl relative to population £

  Bloomsbury

  1,159

  12,692

  97

  Islington

  486

  4,863

  29

  City and Hackney

  852

  7,914

  41

  Newham

  331

  3,385

  17

  Tower Hamlets

  803

  7,473

  49

  Enfield

  363

  3,189

  12

  Haringey

  461

  3,753

  19

  Redbridge

  353

  3,448

  15

  Waltham Forest

  553

  5,244

  24

  Soulh East Thames Region

  Total

  8,946

  79,171

  22

  Brighton

  710

  5,564

  19

  Eastbourne

  370

  3,035

  13

  Hastings

  326

  2,630

  16

  South East Kent

  396

  3,180

  12

  Canterbury and Thanet

  569

  4,399

  15

  Dartford and Gravesham

  434

  3,519

  16

  Maidstone

  370

  2,740

  14

  Medway

  482

  3,654

  11

  Tunbridge Wells

  426

  3,460

  18

  Bexley

  431

  3,472

  16

  Greenwich

  575

  4,950

  23

  Bromley

  497

  4,242

  14

  West Lambeth

  770

  8,135

  50

  Camberwell

  742

  7,302

  34

  Lewisham and North Southwark

  1,262

  12,402

  39

  South West Thatnes Region

  Total

  5,909

  64,371

  22

  North West Surrey

  368

  3,516

  17

  West Surrey and North East Hants

  361

  2,784

  10

  South West Surrey

  364

  2,996

  16

  Mid Surrey

  296

  2,808

  17

  East Surrey

  344

  3,016

  16

  Chichester

  325

  2,532

  14

  Mid Downs

  380

  3,006

  11

  Worthing

  335

  2,612

  11

  Croydon

  490

  4,779

  15

  Kingston and Esher

  356

  3,357

  19

  Richmond Twickenham and Roehampton

  331

  3,318

  14

  Wandsworth

  809

  7,714

  41

  Merton and Sutton

  596

  5,316

  16

  Wessex Region

  Total

  5,442

  46,009

  16

  East Dorset

  696

  5,999

  14

  West Dorset

  332

  2,770

  14

  Portsmouth and South East Hampshire

  826

  6,295

  12

  Southampton and South West Hampshire

  1,026

  7,934

  19

  Winchester

  324

  3,659

  18

  Basingstoke and North Hampshire

  376

  3,104

  14

  Salisbury

  298

  2,279

  19

  Swindon

  388

  3,491

  15

  Bath

  657

  5,437

  14

  Isle of Wight

  205

  1,975

  16

  Oxford Region

  Totat

  4,662

  36,815

  15

  East Berkshire

  505

  3,975

  11

  West Berkshire

  683

  5,257

  12

  Aylesbury Vale

  367

  2,930

  21

  Wycombe

  315

  2,431

  9

  Milton Keynes

  236

  1,826

  11

  Kettering

  331

  2,320

  9

  Northampton

  567

  4,262

  14

  Oxfordshire

  1,127

  8,226

  15

  South Western Region

  Total

  6,732

  53,519

  17

  Bristol and Weston

  1,130

  8,004

  22

  494 495

  Whole time equivalents

  Cost £000

  Cost relative to population £

  Frenchay

  548

  4,417

  20

  Southmead

  474

  4,076

  18

  Cornwall and Isles of Scilly

  580

  4,678

  10

  Exeter

  713

  5,556

  18

  North Devon

  247

  1,781

  14

  Plymouth

  700

  5,393

  16

  Torbay

  406

  3,220

  14

  Cheltenham and District

  311

  2,653

  13

  Gloucester

  581

  4,126

  13

  Somerset

  611

  4,739

  12

  West Midlands Region

  Total

  11,283

  89,718

  17

  Bromsgrove and Redditch

  288

  2,324

  14

  Herefordshire

  257

  2,057

  13

  Kidderminster and District

  238

  1,779

  18

  Worcester and District

  475

  3,457

  15

  Shropshire

  604

  4,348

  11

  Mid Staffordshire

  416

  3,149

  10

  North Staffordshire

  805

  5,881

  13

  South East Staffordshire

  428

  3,122

  12

  Rugby

  116

  966

  11

  North Warwickshire

  299

  2,387

  14

  South Warwickshire

  420

  3,499

  16

  Central Birmingham

  891

  6,435

  36

  East Birmingham

  471

  3,222

  16

  North Birmingham

  358

  2,615

  16

  South Birmingham

  678

  4,816

  19

  West Birmingham

  600

  4,744

  22

  Coventry

  616

  4,593

  15

  Dudley

  587

  4,132

  14

  Sandwell

  410

  3,111

  10

  Solihull

  308

  2,300

  11

  Walsall

  405

  3,197

  12

  Wolverhampton

  550

  3,800

  15

  Mersey Region

  Total

  5,306

  41,784

  17

  Chester

  409

  3,128

  18

  Crewe

  372

  2,860

  12

  Halton

  173

  1,503

  11

  Macclesfield

  303

  2,361

  13

  Warrington

  379

  3,061

  17

  Liverpool

  1,308

  9,876

  20

  St. Helens and Knowsley

  529

  4,008

  11

  Southport and Formby

  232

  1,884

  16

  South Sefton

  488

  3,681

  20

  Wirral

  623

  4,542

  13

  Norlh Western Region

  Total

  9,563

  74,833

  19

  Lancaster

  381

  2,904

  22

  Blackpool, Wyre and Fylde

  497

  3,749

  12

  Preston

  626

  4,587

  37

  Blackburn Hyndburn and Ribble Valley

  550

  4,304

  16

  Burnley Pendle and Rossendale

  433

  3,032

  13

  West Lancashire

  234

  1,735

  16

  Chorley and South Ribble

  149

  1,153

  6

  Bolton

  418

  3,022

  12

  Bury

  247

  1,577

  9

  North Manchester

  589

  4,248

  29

  Central Manchester

  685

  5,123

  41

  South Manchester

  923

  6,362

  35

  Oldham

  393

  2,875

  13

  Rochdale

  284

  2,132

  10

  Salford

  722

  5,385

  23

  Stockport

  464

  3,451

  12

  Tameside and Glossop

  324

  2,335

  10

  TrafJford

  360

  2,645

  12

  Wigan

  498

  3,672

  12

  Sources:

  1. DHSS (SR7) annual census of NHS non medical manpower (staff in post at 30 September 1986).

  2. Annual accounts of regional and district health authorities—1986–87.
  496 497
  3. Mid year estimates of populations—1986 (Office of Population Censuses and Surveys).

  Notes to the Table:

  1. All RHA tables include

  (a) General Managers.

  (b) Regional totals include Regional Headquarters and Units Staff.

  (c) Figures are rounded to the nearest whole time equivalent.

  2. The staff numbers and costs (essentially expenditure on pay including employers' national insurance and superannuation contributions) shown in the table include all directly employed staff in the diversity of grades whose pay negotiations are dealt with by the Administrative and Clerical Staff Whitley Council together with general managers and non National Health Service (agency, etc.) administrative and clerical staff.

  3. Each region's totals include figures for regional headquarters and unit staff in addition to the totals for the districts.

  Housing Benefit
  Mrs. Dunwoody
  To ask the Secretary of State for Social Services how many individuals in the Crewe and Nantwich constituency have lost housing benefit since the change in the Social Security Act on 1 April; and what is the total amount of housing benefit lost.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Services how many recipients have had their housing benefit(a) withdrawn or(b) reduced in the Wakefield metropolitan district.

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

  Mrs. Beckett
  To ask the Secretary of State for Social Services (1) whether payments of transitional protection to claimants of housing benefit will be made as regular weekly payments or some other basis; and what period he expects a transitional protection certificate to cover;

  (2) what further subsidy he is offering to local authorities to compensate them for the administration needed to implement the certification process associated with the scheme of transitional protection for housing benefit; when he expects the scheme to be in operation; and what guidance he has issued in the meantime to local authorities on collection of the new higher rent and rate payments due.

  Mr. Portillo
  I refer the hon. Member to my reply to the hon. Member for Walsall, North (Mr. Winnick) on 3 May 1988.

  Mr. Winnick
  To ask the Secretary of State for Social Services how many people have had their housing benefit(a) withdrawn or (b) reduced in the Walsall metropolitan borough.

  Mr. Portillo
  [holding answer 28 April 1988]: I regret that the information is not available.

  Mr. Winnick
  To ask the Secretary of State for Social Services (1) if he will state the number in each region of the United Kingdom who have had their housing benefit withdrawn because their savings exceed £6,000; and if he will also give the number who have had their housing benefit reduced because their savings exceed £3,000;

  (2) if he will state the number of those who have lost housing benefit arising from the recent legislative changes in each region of the United Kingdom.

  Mr. Portillo
  [holding answer 28 April 1988]: I regret that the information is not available in the form requested.

  Rates (Payments)
  Mr. Galbraith
  To ask the Secretary of State for Social Services if he will consider for the elderly and disabled direct payments of rates from pensions to the appropriate authority.
  498
  Mr. Portillo
  We have no plans to do so.

  Methadone (Hydrochloride)
  Sir Peter Hordern
  To ask the Secretary of State for Social Services if he will publish a table showing the amount of Methadone (Hydrochloride) prescribed in the National Health Service each year since 1975 to the latest convenient date.

  Mr. Newton
  The number of prescriptions and the volumes of Methadone dispensed by community pharmacists in England in each of the years 1975 to 1986 inclusive is as follows:

  Methadone (thousands)

  England

  Quantities prescribed

  Year

  Number of Prescriptions

  Tablets

  Mixture1 (ml)

  Linctus2 (ml)

  Injection (ampules)

  1975

  135·4

  1,634·7

  9,542·3

  7,529·0

  2,004·4

  1976

  85·7

  1,570·3

  2,200·5

  6,313·9

  612·2

  1977

  114·6

  1,380·8

  6,978·0

  5,991·1

  1,472·5

  1978

  95·4

  1,478·6

  5,072·5

  6,227·2

  620·3

  1979

  90·3

  833·4

  7,511·5

  4,012·1

  862·9

  1980

  93·6

  1,249·2

  5,896·4

  5,945·1

  793·1

  1981

  78·6

  1,321·6

  11,826·5

  4,459·9

  1,124·9

  1982

  95·1

  1,016·4

  7,689·9

  9,037·4

  650·0

  1983

  105·9

  1,443·0

  10,064·9

  6,713·0

  502·6

  1984

  101·9

  1,217·9

  11,716·3

  6,775·2

  588·7

  1985

  128·6

  1,048·6

  17,329·8

  5,538·4

  399·1

  1986

  184·9

  1,740·0

  26,738·9

  4,863·4

  1,175·3

  Note:

  These estimates are based on a sample of approximately 1 in 200 prescriptions dispensed in England by chemists and appliance contractors. Information on drugs dispensed in hospitals and by Dispensing doctors is not available.

  1 The mixture is 1mg/ml.

  1 The linctus is 2mg/5ml.

  Independent Living Fund
  Mrs. Beckett
  To ask the Secretary of State for Social Services (1) what he anticipates will be the number of claimants receiving help from the Independent Living Fund(a) in 1988–89 and (b) in a full year; and how these figures have been derived;

  (2) whether payments from the Independent Living Fund will be treated as income for the purposes of calculating housing benefit entitlement.

  Mr. Scott
  I refer the hon. Member to my reply to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on 3 May.

  Mrs. Beckett
  To ask the Secretary of State for Social Services how much of the £5 million budget for the Independent Living Fund he anticipates will be spent on administration.

  Mr. Scott
  I refer the hon. Member to my reply to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) on 29 April at column 337.
  499
  Mrs. Beckett
  To ask the Secretary of State for Social Services whether payments from the Independent Living Fund are available to claimants who were not receiving disability benefits prior to or on 11 April.

  Mr. Scott
  Yes.

  Mrs. Beckett
  To ask the Secretary of State for Social Services (1) whether community care grants from the social fund will be taken into account when assessing entitlement to a payment from the Independent Living Fund;

  (2) whether he expects there to be (a) a maximum and (b) a minimum sum for a claim from the Independent Living Fund;

  (3) how entitlement to payments from the Independent Living Fund will be calculated for (a) someone in receipt of income support and (b) someone not on income support.

  Mr. Scott
  These will be matters for the trustees to determine.

  Mrs. Beckett
  To ask the Secretary of State for Social Services whether applicants to the Independent Living Fund will routinely be referred to the social fund.

  Mr. Scott
  I expect the trustees will wish to inform applicants of their possible entitlement to other forms of help where appropriate. However the social fund cannot make payments for domestic assistance and respite care.

  Mrs. Beckett
  To ask the Secretary of State for Social Services whether applications to the Independent Living Fund will be accepted from people who have applied to the social fund and been refused a payment.

  Mr. Scott
  The eligibility criteria do not preclude payments to such people. It will be for the trustees to determine what weight is to be given to such factors.

  Mrs. Beckett
  To ask the Secretary of State for Social Services whether he expects payments from the Independent Living Fund to be made from his Department's local offices; and whether payment will be by order book or giro.

  Mr. Scott
  Payments from the Independent Living Fund will not be made from the Department's local offices. It will be for the trustees to determine the method and frequency of payments.

  Mrs. Beckett
  To ask the Secretary of State for Social Services whether the Independent Living Fund will be able to make(a) one-off payments and (b) regular weekly payments; and for what period of time he envisages regular payments being made.

  Mr. Scott
  The Independent Living Fund is primarily intended to help severely disabled people pay for domestic or personal care. The fund's eligibility criteria do not place restrictions on the type of payments that may be made. It will be for the trustees to determine what form of payment is appropriate in each case.

  Mrs. Beckett
  To ask the Secretary of State for Social Services whether claimants will still be able to receive payments from the Independent Living Fund if they are(a) being cared for by someone receiving independent living assistance and (b) receiving any assistance from a local authority home help.

  Mr. Scott
  This will be a matter for the trustees to decide. However the Independent Living Fund's eligibility 500
  criteria provide that that part of personal care and domestic assistance provided by a local authority is not normally eligible for help from the fund.

  Mrs. Beckett
  To ask the Secretary of State for Social Services (1) what costs of disability will be covered by payments from the Independent Living Fund; and whether the fund will make payments to cover housing costs, debts or essential household equipment if these are judged necessary to prevent the claimant from entering an institution;

  (2) what is the definition of living alone for the purposes of entitlement to payment from the Independent Living Fund.

  Mr. Scott
  These will be matters for the trustees to determine in the light of the eligibility criteria which were published in my reply to my hon. Friend the Member for Newark (Mr. Alexander) on 31 March at columns 659–60.

  Mrs. Beckett
  To ask the Secretary of State for Social Services what evidence claimants to the Independent Living Fund will be required to provide to support their claim; and whether they will be visited to assess that evidence.

  Mr. Scott
  The precise details will be for the trustees to determine. However it is envisaged that applicants will be visited by a social worker experienced in matters relating to disability to make an assessment of their care needs and offer other advice as appropriate.

  Mrs. Beckett
  To ask the Secretary of State for Social Services for how long he anticipates the Independent Living Fund will be in existence.

  Mr. Scott
  I anticipate that the duration of the fund will be in the region of three to five years.

  Mrs. Beckett
  To ask the Secretary of State for Social Services from where he anticipates the Independent Living Fund will be administered; and where, once it is in operation, claimants will make application.

  Mr. Scott
  It is proposed that the Independent Living Fund will be administered from offices in Nottingham and that applications will be made by post to a PO box address. These arrangements are subject to ratification by the trustees.

  Mrs. Beckett
  To ask the Secretary of State for Social Services when he expects guidelines to be available for trustees of the Independent Living Fund; and whether they will be published.

  Mr. Scott
  The rules governing the operation of the Independent Living Fund will be set out in the fund's eligibility criteria and trust deed. The eligibility criteria were published in my reply to my hon. Friend the Member for Newark (Mr. Alexander) on 31 March at columns 659–60. The trust deed will be subject to approval by the Charity Commissioners and will be available for public inspection in the usual way.

  Mrs. Beckett
  To ask the Secretary of State for Social Services when he expects the Independent Living Fund to be constituted; when he anticipates regulations covering its operation will be laid; and whether they will be available in draft for consultation or comment.

  Mr. Scott
  The Independent Living Fund will be constituted shortly. The provisions establishing the fund
  501
  and the rules governing its operation will be contained in the trust deed, which will be subject to approval by the Charity Commissioners and available for public inspection in the usual way. Regulations will however be laid to ensure that payments from the fund are disregarded in calculating entitlement to income support, family credit, and housing benefit.

  Mrs. Beckett
  To ask the Secretary of State for Social Services what briefing has been issued to local offices to enable them to advise claimants who should apply to the Independent Living Fund for assistance; what publicity his Department intends to give the fund; and what expenditure on that publicity will be.

  Mr. Scott
  A letter has been written to regional controllers drawing their attention to the purpose of the fund and advising that people enquiring in local offices about the fund should be instructed to write to its temporary address: c/o room 520 New court, Carey street, London, WC2A 2LS.

  For details of other action undertaken or proposed to publicise the fund I refer the hon. Member to my reply to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) on 29 April, at column 338. The publicity budget has not yet been settled.

  Income Support
  Mrs. Beckett
  To ask the Secretary of State for Social Services whether the tear-off slip attached to form SB1(1988) will be accepted as a claim for income support.

  Mr. Portillo
  Yes.

  Mr. Jack
  To ask the Secretary of State for Social Services how many people are receiving full income support to cover(a) rest home fees and (b) nursing home fees.

  Mr. Portillo
  There were 84,500 people claiming supplementary benefit in residential care homes in May 1987, and 32,300 in nursing homes. Information is not available about the number of these receiving only supplementary benefit; many supplementary benefit or income support claimants have other income to help meet the fees of their home, including contributory or other benefits. For those who qualify, the income-related benefit is paid in addition to this up to prescribed limits.

  Social Workers (Education and Training)
  Mr. John Greenway
  To ask the Secretary of State for Social Services when he expects to be able to respond to the proposals from the Central Council for Education and Training in Social Work for reforms to the education and training for social workers and other care staff.

  Mr. Newton
  I wrote yesterday to Professor Saul setting out the Government's position in response to the proposals of "Care for Tomorrow". The letter indicates that, while the Government do not feel able to commit resources to the extension of qualifying training for social workers to three years, as proposed by CCETSW, we wish to work closely with the council in developing a balanced package of improvement not only to improve qualifying training, but also to improve the skills of staff already working in the field.

  The training support programme announced by the Government last November is an important step already
  502
  taken in relation to those working in the care of elderly people. The Health and Medicines Bill includes powers which would enable us to make similar provision in the field of child care. We are making up to £1 million available to CCETSW to improve planning and cooperation between the colleges and employers and review the standards of teaching of various aspects of social work. We are also providing support for a variety of other initiatives aimed at extending the availability of training for social services staff in a number of specialist areas such as mental health and mental handicap and child abuse.

  In developing qualifying training, our view is that the most important immediate objectives are to improve the quality and availability of "practice placements" and to move to a uniform two-year training period for postgraduates. We attach high priority to both of these. We are seeking the help of the council to develop detailed proposals for phased development over a five-year period starting in 1989–90.

  These further measures, building on improvements already taking place, should help to ensure a better prepared and therefore more competent staff for the personal social services. The full text of my letter is as follows:

  "CARE FOR TOMORROW: THE CCETSW TRAINING REFORM PROPOSALS
  I am grateful to you, Tony Hall and Rachel Pierce for coming to see me on 20 April. We agreed that it would be helpful if I were to let you have a statement of the Government's position before your Council session on 4 May.
  I was able to assure you that the Government agrees that there is a need for improvement in training for the social services. The employers of social services staff have an important role to play in this, as does CCETSW. For social work staff this is necessary both at the qualifying and post-qualifying stages, and more training opportunities are vital for the other staff employed in the social services. We have already introduced a training support programme for staff working with elderly people with that in mind.
  We welcome the considerable effort the Council has already put into specifying what needs to be attained by student social workers at the point of qualification; improving planning and co-operation between the colleges and the employers and reviewing the standards of teaching of the various aspects of social work. These are all essential elements in getting the most from the existing public investment in the preparation of social workers. We very much want to encourage and support this work, and the developments that flow from it. We also welcome the contribution being made by CCETSW to the development of the National Vocational Qualification framework. I told you that the Government's financial allocation to CCETSW for this financial year is being increased by up to £1 million to enable the programme of improvements to increase in scale. I asked you to let officials have an action plan for this programme of improvements for their agreement.
  We had, in our earlier correspondence, asked CCETSW to provide a set of costed options to enable Ministers to form a view of their relative benefits. In the event the Council provided a single package of measures in its Care for Tomorrow proposals. We discussed those, and I made it clear that the Government did not feel able to make financial provision for the proposals it contains for the extension to three years of qualifying training for social workers. I explained that this conclusion was based principally on our assessment of the relative priority of this development for future generations of social workers among the many other competing calls on public resources in the short to medium term, both in the social services and in other fields, including not least those needed to improve the skills of existing social care staff in such fields as residential care of the elderly and child care.

  503
  You made it clear that three years training was essential in the view of the Council in order adequately to prepare social workers for the tasks they face, and that its achievement would remain your long-term goal.
  Against this background, I am concerned to respond to your request for a firm steer on where and how to concentrate planning effort in getting a practical programme of improvement in social work training under way. Our view, which I think you share, is that the two most important objectives in the short-term are to improve the quality and availability of "practice placements" and to move to a uniform two-year training period for postgraduates, both of which have the advantage of building on developments already taking place.
  I acknowledge that both require a measure of direct government encouragement or sponsorship, especially in advance of employment-led NVQ arrangements becoming a reality. You understand that I cannot commit myself to specific sums in advance of public expenditure discussions, which will not be completed until the autumn; but I can tell you that I attach very high priority indeed to finding the resources to make significant progress in these two respects, with a start being made from 1989–90. I hope therefore that the Council will bring forward proposals quickly for a phased programme to secure these improvements over a five-year period.
  I recognise that you and your Council would have wished us simply to accept the programme set out in "Care for Tomorrow". But I hope that you and they will recognise in turn that the important steps we are suggesting are consistent with the Council's long-term goal, and indeed can be seen as substantial progress towards it. I hope too that the arrangements that we have set in train for an annual programme and performance review will provide a good framework for us to work together in building further on this progress in due course.

  Accident and Emergency Service (Sheffield)
  Mr. Blunkett
  To ask the Secretary of State for Social Services if he will take steps to ensure that the Sheffield district health authority retains a full accident and emergency service; and if he will make a statement.

  Mrs. Currie
  [holding answer 3 May 1988]: Management of local health services is the responsibility of the district health authority concerned. The hon. Member may therefore wish to contact the chairman of Sheffield health authority for the information he seeks. However I understand that there has been a rota for

  Year

  Urgent needs payments £ million

  Maternity grants £ million

  Death grants £ million

  Single payments £ million

  1974–75

  n/a

  16

  n/a

  n/a

  1975–76

  n/a

  16

  16

  n/a

  1976–77

  n/a

  15

  n/a

  n/a

  1977–78

  n/a

  15

  n/a

  n/a

  1978–79

  n/a

  16

  16

  n/a

  1979–80

  n/a

  16

  16

  40

  1980–81

  n/a

  16

  16

  48

  1981–82

  n/a

  16

  17

  57

  1982–83

  n/a

  16

  17

  98

  1983–84

  n/a

  17

  17

  166

  1984–85

  0·5

  18

  17

  241

  1985–86

  0·4

  17

  18

  335

  1986–87

  1·0

  14

  18

  330

  504
  accident and emergency services in Sheffield since 1976 and the current rota has been in operation since 1981. Although it has been reviewed from time to time, it is still regarded locally as the most efficient way of serving the city's needs.

  Kidney Donor Cards
  Mr. Michael McNair-Wilson
  To ask the Secretary of State for Social Services how many persons who were kidney donors in the past year were carrying, or in possession of, kidney donor cards.

  Mrs. Currie
  [holding answer 3 May 1988]: This information is not available centrally. The total number of organ transplant operations carried out in 1987 (as notified to the United Kingdom transplant service) was 1,972, which was again a record. The total number of cards issued in 1987 was approx 5·5 million. The value of the organ donor card cannot be assessed solely by the extent to which it is found on donors. It has proved a useful publicity tool in making the general public aware of the need for organ donation. It also encourages those who would be willing to be donors to discuss their wishes with their relatives so that, even if a card is not found, they will be receptive to, or perhaps initiate, a suggestion that organs should be donated. We are currently emphasising this aspect of the card in our publicity.

  Some 3 million cards have been issued in the first four months of 1988 and transplants appear to be approximately 57 per cent. higher than in the same period last year.

  Benefits and Grants
  Mr. Hood
  To ask the Secretary of State for Social Services what have been the figures for expenditure on supplementary benefits, urgent needs provision, maternity grants, death grants and all other benefits which now come under the social fund, for each year since 1974.

  Mr. Portillo
  [pursuant to his reply, 25 April 1988, c. 33–34]: I regret that some of the information relating to maternity grants and death grants was wrong. The table sets out the correct data.

ENVIRONMENT

  London Docklands Development Corporation
  Mr. Leighton
  To ask the Secretary of State for the Environment how much the London Docklands development corporation spent last year on consultants; what percentage that sum was of total expenditure; how many consultancies were awarded; and how many of those involved competition.

  Mr. Trippier
  In 1987–88 LDDC made 225 consultancy appointments to 145 consultants at a value of £6·2 million plus associated costs. Total payments amounting to £12·1 million were made to 199 consultants in respect of appointments let in 1987–88 and previous years, which was about 10 per cent. of LDDC's expenditure. The LDDC is satisfied that the requirements for competition were met. The external audit for 1987–88 will provide an idependent scrutiny.

  Mr. Leighton
  To ask the Secretary of State for the Environment what the London Docklands development corporation is doing to finance the building of new schools in docklands.

  Mr. Trippier
  The statutory responsibility for providing new schools rests with the local education authorities. The LDDC is continuing to consider with those authorities and other interested bodies what assistance it can provide to raise educational standards in docklands.

  Ms. Gordon
  To ask the Secretary of State for the Environment what is the policy of the London Docklands development corporation for the disposal of its assets and responsibilities when it is wound up; and what directions he has given on these matters.

  Mr. Trippier
  The corporation will be guided by the Secretary of State in these matters. No directions have been given.

  Ms. Gordon
  To ask the Secretary of State for the Environment what arrangements have been adopted by the London Docklands development corporation to ensure that there is no conflict of interest between the corporation and developers where members of the corporation's staff leave, or are intending to leave, to take up a post in the private sector with development companies.

  Mr. Trippier
  The corporation's code of conduct for its staff sets out requirements for the declaration of interests.

  Ms. Gordon
  To ask the Secretary of State for the Environment what arrangements have been made by the London Docklands development corporation to safeguard the use of(a) the Millwall outer dock and (b) the Royal Victoria dock for water sports; what arrangements exist to assess possible conflict between developments and water sport uses; what is the development corporation's policy on current development proposals at these docks which adversely affect water sports users; how much the development corporation has invested in water sports facilities at these two locations; and what has been invested by (i) other public bodies and (ii) private companies.

  Mr. Trippier
  I will write to the hon. Member.

  Ms Gordon
  To ask the Secretary of State for the Environment what arrangements have been made for the 506
  disposal of land on the south side of the King George V docks by the London Docklands development corporation; at what price it has been sold or leased; and what restrictions have been placed on its future use.

  Mr. Trippier
  Some 22 acres of LDDC land in the area have been leased to London City airport. Part has been disposed of for mixed development and part for airport related uses, subject to planning permission and LDDC's detailed approval as landlord. The price paid for individual sites is commercially confidential information.

  Ms. Gordon
  To ask the Secretary of State for the Environment what area of water currently in the enclosed docks will be required for the Canary wharf scheme: what arrangements have been made for its disposal or leasing to the developers of Canary wharf by the London Docklands development corporation; and what price has been fixed.

  Mr. Trippier
  A small part of the West India dock water has been sold to the developers. The price is contained within the agreement outlined in my answer of 23 July 1987, at column 377.

  Pensions (Underpayment)
  Mrs. Dunwoody
  To ask the Secretary of State for the Environment when he intends to introduce legislation to ensure that local authority retired employees will receive compensation for the underpayment of their pensions from April 1987.

  Mr. Chope
  Pursuant to the statement made on 18 December 1987 by the Paymaster General (Official Report, columns 845–46), my right hon. Friend has no plans to introduce such legislation. But in the light of the statement he has invited the local government employers to consider what action might be taken in respect of the local government superannuation scheme.

  Water Privatisation
  Mr. Andrew F. Bennett
  To ask the Secretary of State for the Environment what consultations took place between his Department and the Water Authorities Association prior to their commissioning of a survey from Hill and Knowlton on the interests of environmental bodies in water privatisation.

  Mr. Moynihan
  None.

  Rating Reform
  Mr. Frank Field
  To ask the Secretary of State for the Environment when he will answer the letter from the Prison Reform Trust dated 10 March regarding the eligibility of remand prisoners for the community charge.

  Mr. Howard
  A reply was sent to the Prison Reform Trust on 29 April. In accordance with the undertaking I gave at the Report stage of the Local Government Finance Bill. We are considering the possibility of exempting remand prisoners from the community charge.

  Inner Cities
  Mr. John M. Taylor
  To ask the Secretary of State for the Environment what response was received to the consultation document on the Government's proposal to introduce the new city grant for inner city projects.
  507
  Mr. Trippier
  The responses to the consultation document which was issued by the Department on city grant on 7 March to local authorities, businesses and other interested persons and organisations was extremely encouraging. The proposal to simplify the grants system and speed up the handling of cases were warmly welcomed by the great majority of respondents.

  A short summary of the written responses received has been placed today in the Libraries of the Houses of Parliament and, where respondents have explicitly authorised the Department to do so, copies of their responses have also been placed in the Libraries of both Houses.

  City grant will now operate in broadly the way proposed in the consultation document with a threshold of £200,000 project value. Copies of the guidance notes have also been placed in the Libraries of both Houses.

  Palace of Westminster (Toilets)
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment, pursuant to the answer to the hon. Member for Wakefield of 20 April, if he will take steps to ensure that those toilets in the Palace of Westminster which are marked as reserved for the exclusive use of hon. Members of Parliament also designate the gender for which they are reserved.

  Mr. Chope
  [holding answer 29 April 1988]: I will draw this to the attention of the Accommodation and Administration Sub-Committee.

  London Boroughs (Properties)
  Mr. Summerson
  To ask the Secretary of State for the Environment what information his Department has on(a) how many commercial and industrial buildings and sites are owned by each London borough, (b) how many of them are let, (c) how much rent they produce, (d) how many of them are empty and (e) whether the borough owns them freehold or leasehold.

  Local Rates and Precepts 1987–88—1988–89

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1.4.88

  Avon

  228·50

  246·50

  7·9

  422

  456

  None

  Bedfordshire

  232·20

  246·40

  6·1

  544

  577

  None

  Berkshire

  178·50

  193·60

  8·5

  466

  505

  Conservative

  Buckinghamshire

  208·50

  227·70

  9·2

  579

  632

  Conservative

  Cambridgeshire

  206·00

  216·00

  4·9

  429

  450

  None

  Cheshire

  211·00

  232·00

  10·0

  430

  473

  None

  Cleveland

  252·00

  282·00

  11·9

  413

  462

  Labour

  Cornwall

  184·00

  207·70

  12·9

  288

  325

  None

  Cumbria

  246·50

  260·00

  5·5

  329

  347

  None

  Derbyshire

  262·00

  297·50

  13·5

  426

  484

  Labour

  Devon

  188·50

  209·75

  11·3

  335

  373

  None

  Dorset

  189·00

  203·00

  7·4

  409

  439

  Conservative

  Durham

  214·00

  246·00

  15·0

  281

  323

  Labour

  East Sussex

  190·30

  217·10

  14·1

  432

  493

  Conservative

  Essex

  199·50

  235·00

  17·8

  493

  580

  None

  Gloucestershire

  194·26

  217·30

  11·9

  372

  417

  None

  Hampshire

  184·10

  200·30

  8·8

  400

  436

  None

  Hereford and Worcester

  168·50

  185·00

  9·8

  365

  401

  Conservative

  Hertfordshire

  205·60

  240·40

  16·9

  541

  633

  None

  Humberside

  217·00

  261·00

  20·3

  326

  392

  None

  Isle of Wight

  207·14

  227·23

  9·7

  366

  402

  Liberal

  508
  Mr. Waldegrave
  This information is not available to my Department.

  Gipsy Sites
  Mr. Gareth Wardell
  To ask the Secretary of State for the Environment, further to his reply to the hon. Member for Gower on 26 April regarding local authority gipsy sites in areas of outstanding natural beauty, if he will indicate for which of these sites he had considered what action to take under section 8 of the Caravan Sites Act.

  Mrs. Roe
  The sites at Redland depot, Robertsbridge and Chiseldon camp, Swindon were subject to directions under section 8 of the Caravan Sites Act 1968.

  Rates
  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will list for each English authority(a) their rate or precept for 1987–88 and 1988–89 expressed as pence in the pound, (b) the percentage change between the two above years, (c) the average rate or precept for 1987–88 and 1988–89 expressed as an average charge per domestic hereditament, (d) the average of (a) and (c) above and the percentage change between the two by class of authority and (e) the average of (a) and (c) above and the percentage change between the two by political control of authority.

  Mr. Chope
  The local rate for a district or borough is made up from the rate charged by the district itself together with the average of parish precepts and special district expenses and precepts charged by certain other specialised bodies such as waste disposal authorities. It does not include the precepts charged by higher tier authorities, for example, county councils in the shires, police, fire and civil defence and transport authorities in metropolitan areas and London, and the Inner London education authority.

  The table sets out the available information:
  509

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (P)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1.4.88

  Kent

  170·60

  192·00

  12·5

  322

  362

  Conservative

  Lancashire

  197·50

  234·00

  18·5

  297

  352

  None

  Leicestershire

  199·30

  221·20

  11·0

  381

  423

  None

  Lincolnshire

  179·00

  204·00

  14·0

  291

  332

  Conservative

  Norfolk

  173·60

  190·90

  10·0

  308

  339

  Conservative

  Northamptonshire

  199·00

  229·00

  15·1

  389

  448

  Conservative

  1Northumberland

  200·70

  230·10

  14·6

  310

  355

  None

  North Yorkshire

  194·00

  217·00

  11·9

  306

  342

  Conservative

  Nottinghamshire

  236·00

  253·00

  7·2

  384

  412

  Labour

  Oxfordshire

  218·30

  238·60

  9·3

  503

  550

  None

  Shropshire

  184·00

  200·00

  8·7

  331

  359

  None

  Somerset

  200·50

  224·00

  11·7

  364

  406

  None

  Staffordshire

  198·50

  215·00

  8·3

  373

  404

  Labour

  Suffolk

  189·00

  204·00

  7·9

  361

  390

  Conservative

  Surrey

  183·50

  202·70

  10·5

  517

  571

  Conservative

  Warwickshire

  196·00

  227·10

  15·9

  453

  525

  None

  West Sussex

  176·00

  192·00

  9·1

  387

  422

  Conservative

  Wiltshire

  203·40

  219·30

  7·8

  357

  385

  None

  Isles of Scilly

  192·71

  198·67

  3·1

  347

  357

  Independent

  Greater Manchester

  Bolton

  205·75

  218·79

  6·3

  342

  364

  Labour

  Bury

  227·84

  244·69

  7·4

  421

  452

  Labour

  Manchester

  316·14

  285·63

  -9·7

  523

  473

  Labour

  Oldham

  217·00

  239·01

  10·1

  316

  348

  Labour

  Rochdale

  262·14

  281·59

  7·4

  371

  399

  Labour

  Salford

  237·14

  257·59

  8·6

  404

  439

  Labour

  Stockport

  190·54

  207·39

  8·8

  416

  452

  None

  Tameside

  248·83

  268·50

  7·9

  364

  392

  Labour

  Trafford

  182·66

  201·15

  10·1

  409

  451

  None

  Wigan

  246·71

  270·17

  9·5

  384

  421

  Labour

  Merseyside

  Knowsley

  256·35

  265·88

  3·7

  467

  484

  Labour

  Liverpool

  264·93

  268·17

  1·2

  437

  442

  Labour

  St. Helens

  239·62

  253·22

  5·7

  410

  433

  Labour

  Sefton

  202·70

  217·76

  7·4

  419

  450

  None

  Wirral

  226·44

  242·68

  7·2

  466

  499

  None

  South Yorkshire

  Barnsley

  239·76

  261·18

  8·9

  286

  312

  Labour

  Doncaster

  244·29

  264·53

  8·3

  339

  367

  Labour

  Rotherham

  244·97

  263·66

  7·6

  329

  354

  Labour

  Sheffield

  259·06

  290·35

  12·1

  356

  399

  Labour

  Tyne and Wear/Gateshead

  231·45

  254·61

  10·0

  312

  344

  Labour

  Newcastle-upon-Tyne

  290·82

  270·01

  -7·2

  457

  424

  Labour

  North Tyneside

  265·77

  289·78

  9·0

  421

  459

  Labour

  South Tyneside

  234·71

  254·55

  8·5

  333

  361

  Labour

  Sunderland

  255·00

  264·58

  3·8

  348

  361

  Labour

  West Midlands

  Birmingham

  213·39

  220·25

  3·2

  439

  453

  Labour

  Coventry

  232·01

  250·55

  8·0

  456

  492

  Labour

  Dudley

  206·97

  210·99

  1·9

  451

  459

  Labour

  Sandwell

  209·15

  219·60

  5·0

  399

  419

  Labour

  Solihull

  169·94

  170·69

  0·4

  465

  467

  Conservative

  Walsall

  228·85

  239·50

  4·7

  480

  502

  None

  Wolverhampton

  211·00

  218·30

  3·5

  464

  480

  None

  West Yorkshire

  Bradford

  250·00

  277·60

  11·0

  317

  352

  Labour

  Calderdale

  240·33

  283·91

  18·1

  275

  325

  None

  Kirklees

  233·23

  265·35

  13·8

  273

  311

  None

  Leeds

  196·49

  212·12

  8·0

  288

  310

  Labour

  Wakefield

  233·83

  262·26

  12·2

  313

  351

  Labour

  I.L.E.A.

  79·73

  81·80

  2·6

  243

  249

  Labour

  City of London

  64·43

  67·06

  4·1

  339

  353

  Independent

  Camden

  120·07

  117·00

  -2·6

  425

  414

  Labour

  Greenwich

  120·89

  136·00

  12·5

  262

  295

  Labour

  Hackney

  123·30

  134·72

  9·3

  309

  338

  Labour

  Hammersmith and Fulham

  126·70

  133·32

  5·2

  315

  331

  Labour

  Islington

  78·90

  89·65

  13·6

  237

  270

  Labour

  510 511

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1.4.88

  Kensington and Chelsea

  5·73

  4·22

  -26·4

  30

  22

  Conservative

  Lambeth

  112·42

  92·32

  -17·9

  278

  229

  Labour

  Lewisham

  127·12

  131·76

  3·7

  297

  307

  Labour

  Southwark

  111·32

  101·00

  -9·3

  258

  234

  Labour

  Tower Hamlets

  110·38

  123·21

  11·6

  283

  316

  Liberal

  Wandsworth

  27·43

  36·12

  31·7

  69

  90

  Conservative

  Westminster

  51·23

  51·02

  -0·4

  279

  278

  Conservative

  Barking and Dagenham

  170·76

  181·36

  6·2

  371

  394

  Labour

  Barnet

  153·66

  177·56

  15·6

  560

  647

  Conservative

  Bexley

  148·36

  168·26

  13·4

  345

  392

  Conservative

  Brent

  224·84

  248·96

  10·7

  634

  702

  Labour

  Bromley

  131·26

  140·86

  7·3

  380

  408

  Conservative

  Croydon

  126·76

  136·86

  8·0

  384

  414

  Conservative

  Ealing

  221·26

  167·00

  -24·5

  598

  451

  Labour

  Enfield

  154·26

  185·86

  20·5

  419

  505

  Conservative

  Haringey

  238·37

  214·69

  -9·9

  596

  537

  Labour

  Harrow

  159·76

  173·36

  8·5

  487

  529

  Conservative

  Havering

  145·76

  157·36

  8·0

  394

  426

  None

  Hillingdon

  177·51

  190·66

  7·4

  477

  512

  None

  Hounslow

  205·97

  221·05

  7·3

  535

  574

  Labour

  Kingston-upon-Thames

  153·26

  169·36

  10·5

  439

  485

  Conservative

  Merton

  136·26

  151·02

  10·8

  377

  417

  Conservative

  Newham

  232·67

  259·66

  11·6

  493

  550

  Labour

  Redbridge

  130·16

  130·76

  0·5

  366

  368

  Conservative

  Richmond-upon-Thames

  162·63

  179·99

  10·7

  471

  522

  Liberal

  Sutton

  163·26

  178·86

  9·6

  448

  491

  Liberal

  Waltham Forest

  289·76

  199·14

  -31·3

  673

  463

  Labour

  1 Excluding Northumbria Police Authority precept.

  Local rates and precepts 1987–88 to 1988–89

  Local rate or precept 1987–88 (P)

  Local rate or precept 1988–89 (P)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Avon

  Bath

  7·00

  9·00

  28·6

  12

  16

  None

  Bristol

  41·25

  47·44

  15·0

  71

  81

  Labour

  Kingswood

  16·39

  16·51

  0·7

  30

  30

  Conservative

  Northavon

  22·58

  24·72

  9·5

  44

  48

  Conservative

  Wansdyke

  11·50

  12·43

  8·1

  23

  24

  Conservative

  Woodspring

  23·51

  26·92

  14·5

  49

  56

  Conservative

  Bedfordshire

  North Bedfordshire

  22·20

  22·40

  0·9

  48

  48

  Conservative

  Luton

  27·60

  26·60

  -3·6

  67

  64

  Conservative

  Mid Bedfordshire

  22·61

  23·84

  5·4

  52

  54

  Conservative

  South Bedfordshire

  24·58

  27·65

  12·5

  62

  70

  Conservative

  Berkshire

  Bracknell

  14·41

  14·84

  3·0

  37

  38

  Conservative

  Newbury

  13·56

  15·11

  11·4

  34

  38

  Conservative

  Reading

  23·00

  28·00

  21·7

  51

  63

  Labour

  Slough

  10·31

  10·33

  0·2

  24

  24

  Labour

  Windsor and Maidenhead

  16·10

  16·14

  0·2

  47

  47

  Conservative

  Wokingham

  17·55

  22·71

  29·4

  52

  68

  Conservative

  Buckinghamshire

  Aylesbury Vale

  12·49

  12·69

  1·6

  29

  30

  Conservative

  South Buckinghamshire

  13·48

  16·36

  21·4

  50

  60

  Conservative

  Chiltern

  18·72

  20·08

  7·3

  67

  72

  Conservative

  Milton Keynes

  28·44

  29·55

  3·9

  61

  63

  None

  Wycombe

  15·18

  15·64

  3·0

  45

  47

  Conservative

  Cambridgeshire

  Cambridge

  18·50

  23·50

  27·0

  46

  59

  None

  East Cambridgeshire

  13·61

  13·48

  -1·0

  24

  24

  Independent

  Fenland

  19·03

  21·14

  11·1

  31

  34

  Conservative

  Huntingdonshire

  15·36

  16·06

  4·6

  31

  32

  Conservative

  Peterborough

  34·00

  37·00

  8·8

  63

  68

  None

  South Cambridgeshire

  13·91

  14·14

  1·7

  36

  37

  Independent

  512 513

  Local rate or precept 1987–88 (P)

  Local rate or precept 1988–89 (P)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Cheshire

  Chester

  27·98

  29·63

  5·9

  59

  63

  None

  Congleton

  26·39

  27·75

  5·2

  55

  58

  None

  Crewe and Nantwich

  30·71

  33·86

  10·3

  58

  64

  None

  Ellesmere and Neston

  30·00

  31·50

  5·0

  63

  66

  Labour

  Halton

  31·93

  33·53

  5·0

  56

  59

  Labour

  Macclesfield

  20·84

  21·82

  4·7

  53

  55

  Conservative

  Vale Royal

  28·65

  31·45

  9·8

  55

  61

  None

  Warrington

  31·67

  35·08

  10·8

  58

  65

  Labour

  Cleveland

  Hartlepool

  36·02

  40·02

  11·1

  51

  57

  Labour

  Langbaurgh-on-Tees

  43·33

  48·41

  11·7

  72

  80

  None

  Middlesbrough

  44·56

  32·16

  -27·8

  73

  53

  Labour

  Stockton on Tees

  30·18

  37·17

  23·2

  52

  65

  Labour

  Cornwall

  Caradon

  19·55

  23·82

  21·8

  31

  38

  Independent

  Carrick

  23·91

  27·29

  14·1

  39

  44

  None

  Kerrier

  25·29

  29·61

  17·1

  37

  43

  None

  North Cornwall

  22·82

  25·68

  12·5

  37

  41

  Independent

  Penwith

  23·78

  26·84

  12·9

  35

  39

  None

  Restormel

  21·58

  22·67

  5·1

  35

  37

  None

  Cumbria

  Allerdale

  26·12

  26·12

  0·0

  33

  33

  None

  Barrow in Furness

  30·22

  35·22

  16·5

  34

  40

  Labour

  Carlisle

  30·70

  30·79

  0·3

  43

  43

  Labour

  Copeland

  25·85

  26·01

  0·6

  31

  31

  Labour

  Eden

  21·44

  22·72

  6·0

  28

  29

  Independent

  South Lakeland

  19·34

  19·48

  0·7

  31

  31

  None

  Derbyshire

  Amber Valley

  27·08

  24·76

  -8·6

  42

  38

  None

  Bolsover

  45·73

  50·23

  9·8

  60

  66

  Labour

  Chesterfield

  34·53

  34·72

  0·6

  52

  52

  Labour

  Derby

  26·50

  25·00

  -5·7

  48

  45

  Labour

  Erewash

  18·26

  21·26

  16·4

  30

  34

  Conservative

  High Peak

  33·71

  35·81

  6·2

  50

  53

  None

  North East Derbyshire

  39·19

  46·15

  17·8

  63

  75

  Labour

  South Derbyshire

  24·34

  26·29

  8·0

  42

  46

  Labour

  Derbyshire Dales

  25·56

  29·12

  13·9

  45

  52

  Conservative

  Devon

  East Devon

  18·83

  19·11

  1·5

  36

  36

  Conservative

  Exeter

  14·80

  15·96

  7·8

  26

  29

  None

  North Devon

  24·21

  26·91

  11·2

  35

  39

  None

  Plymouth

  18·50

  21·50

  16·2

  35

  41

  Conservative

  South Hams

  23·72

  25·57

  7·8

  42

  46

  Conservative

  Teignbridge

  23·45

  26·67

  13·7

  42

  48

  None

  Mid Devon

  22·07

  25·08

  13·6

  34

  39

  Independent

  Torbay

  32·30

  34·50

  6·8

  64

  69

  Conservative

  Torridge

  27·00

  27·28

  1·0

  34

  35

  Independent

  West Devon

  20·58

  25·26

  22·7

  33

  41

  Independent

  Dorset

  Bournemouth

  25·00

  25·00

  0·0

  55

  55

  Conservative

  Christchurch

  20·09

  21·62

  7·6

  47

  50

  Conservative

  North Dorset

  13·67

  17·05

  24·7

  25

  32

  Independent

  Poole

  18·00

  19·00

  5·6

  43

  45

  Conservative

  Purbeck

  13·42

  14·33

  6·8

  28

  30

  None

  West Dorset

  13·70

  15·85

  15·7

  24

  28

  Independent

  Weymouth and Portland

  23·00

  23·00

  0·0

  42

  42

  None

  East Dorset

  22·53

  26·72

  18·6

  58

  68

  Conservative

  Durham

  Chester le Street

  40·84

  43·82

  7·3

  61

  65

  Labour

  Darlington

  56·70

  62·20

  9·7

  85

  93

  None

  Derwentside

  53·27

  64·27

  20·6

  66

  79

  Labour

  Durham

  44·49

  48·99

  10·1

  67

  93

  Labour

  Easington

  36·08

  55·49

  53·8

  42

  64

  Labour

  Sedgefield

  60·80

  66·60

  9·5

  77

  85

  Labour

  514 515

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Teesdale

  19·08

  20·93

  9·7

  22

  24

  Independent

  Wear Valley

  59·69

  66·72

  11·8

  67

  75

  Labour

  East Sussex

  Brighton

  22·50

  30·00

  33·3

  47

  63

  Labour

  Eastbourne

  26·60

  26·60

  0·0

  65

  65

  Liberal

  Hastings

  24·80

  26·00

  4·8

  48

  51

  None

  Hove

  0·00

  4·90

  —

  0

  12

  Conservative

  Lewes

  21·38

  22·81

  6·7

  52

  55

  Conservative

  Rother

  22·90

  23·54

  2·8

  56

  57

  Conservative

  Wealden

  25·71

  27·33

  6·3

  57

  61

  Conservative

  Essex

  Basildon

  52·84

  49·68

  -6·0

  133

  125

  None

  Braintree

  19·55

  22·96

  17·4

  41

  48

  None

  Brentwood

  19·87

  18·87

  -5·0

  62

  59

  Conservative

  Castle Point

  18·00

  19·00

  5·6

  45

  48

  Conservative

  Chelmsford

  14·36

  19·55

  36·1

  38

  51

  Liberal

  Colchester

  14·65

  16·84

  14·9

  32

  37

  None

  Epping Forest

  21·41

  22·47

  5·0

  61

  64

  Conservative

  Harlow

  87·40

  92·90

  6·3

  201

  213

  Labour

  Maldon

  20·12

  18·91

  ·60

  48

  45

  None

  Rochford

  23·09

  26·53

  14·9

  62

  71

  Conservative

  Southend-on-Sea

  21·00

  21·00

  0·0

  52

  52

  None

  Tendring

  24·92

  25·04

  0·5

  53

  53

  Conservative

  Thurrock

  39·90

  46·90

  17·5

  95

  112

  Labour

  Uttlesford

  21·07

  21·60

  2·5

  56

  57

  Conservative

  Gloucestershire

  Cheltenham

  18·77

  19·71

  5·0

  39

  41

  None

  Cotswold

  17·82

  18·91

  6·1

  39

  41

  Independent

  Forest of Dean

  24·46

  24·97

  2·1

  38

  38

  None

  Gloucester

  20·83

  22·00

  5·6

  36

  38

  Conservative

  Stroud

  25·20

  30·41

  20·7

  47

  56

  None

  Tewkesbury

  16·39

  16·67

  1·7

  35

  36

  None

  Hampshire

  Basingstoke & Deane

  8·19

  9·73

  18·8

  18

  22

  Conservative

  East Hampshire

  23·07

  26·91

  16·6

  57

  67

  Conservative

  Eastleigh

  22·19

  23·47

  5·8

  49

  52

  None

  Fareham

  26·00

  28·00

  7·7

  63

  67

  None

  Gosport

  21·50

  23·50

  9·3

  43

  47

  Conservative

  Hart

  32·38

  36·34

  12·2

  89

  100

  None

  Havant

  19·80

  24·10

  21·7

  45

  55

  Conservative

  New Forest

  24·30

  29·25

  20·4

  51

  61

  Conservative

  Portsmouth

  29·00

  30·00

  3·4

  53

  55

  Conservative

  Rushmoor

  26·00

  25·00

  -3·8

  61

  59

  Conservative

  Southampton

  25·00

  26·00

  4·0

  45

  47

  None

  Test Valley

  19·68

  21·58

  9·7

  46

  50

  Conservative

  Winchester

  24·85

  26·22

  5·5

  60

  63

  None

  Hereford and Worcester

  Bromsgrove

  17·51

  20·16

  15·1

  44

  51

  Conservative

  Hereford

  23·80

  15·80

  -33·6

  40

  27

  Liberal

  Leominster

  23·10

  25·27

  9·4

  38

  42

  Independent

  Malvern Hills

  28·83

  30·35

  5·3

  65

  69

  None

  Redditch

  34·01

  36·51

  7·4

  73

  79

  Labour

  South Herefordshire

  16·02

  16·40

  2·4

  29

  30

  Independent

  Worcester

  29·01

  30·20

  4·1

  64

  67

  Labour

  Wychavon

  28·46

  30·33

  6·6

  70

  74

  Conservative

  Wyre Forest

  32·90

  37·38

  13·6

  68

  77

  None

  Hertfordshire

  Broxbourne

  22·25

  22·25

  0·0

  54

  54

  Conservative

  Dacorum

  19·94

  20·96

  5·1

  52

  55

  Conservative

  East Hertfordshire

  22·89

  25·88

  13·1

  56

  64

  Conservative

  Hertsmere

  30·88

  31·06

  0·6

  87

  88

  Conservative

  North Hertfordshire

  23·69

  28·73

  21·3

  60

  73

  Conservative

  St. Albans

  19·00

  26·52

  39·6

  54

  75

  None

  Stevenage

  41·30

  41·30

  0·0

  101

  101

  Labour

  Three Rivers

  28·70

  28·93

  0·8

  88

  88

  Liberal

  Watford

  30·86

  30·86

  0·0

  74

  74

  Labour

  Welwyn Hatfield

  35·90

  38·45

  7·1

  95

  102

  Labour

  516 517

  Local rate or precept 1987–88 (P)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Humberside

  Beverley

  26·68

  29·68

  11·2

  55

  61

  Conservative

  Boothferry

  29·70

  33·83

  13·9

  40

  45

  None

  Cleethorpes

  32·81

  35·77

  9·0

  52

  57

  None

  Glanford

  24·84

  25·00

  0·6

  40

  40

  Conservative

  Great Grimsby

  26·00

  29·00

  11·5

  39

  44

  Labour

  Holderness

  20·96

  26·21

  25·0

  34

  42

  Independent

  Kingston-upon-Hull

  56·61

  47·00

  -17·0

  71

  59

  Labour

  East Yorkshire

  37·00

  46·01

  24·4

  52

  64

  Conservative

  Scunthorpe

  42·50

  45·00

  5·9

  68

  72

  Labour

  Isle of Wight

  Medina

  26·24

  27·26

  3·9

  45

  47

  Conservative

  South Wight

  33·50

  34·93

  4·3

  62

  64

  Conservative

  Kent

  Ashford

  23·53

  24·74

  5·1

  47

  49

  Conservative

  Canterbury

  26·37

  28·69

  8·8

  49

  53

  Conservative

  Dartford

  25·21

  25·48

  1·1

  46

  46

  Conservative

  Dover

  19·98

  25·18

  26·0

  34

  42

  Conservative

  Gillingham

  4·89

  6·96

  42·3

  10

  14

  Conservative

  Gravesham

  24·83

  26·26

  5·8

  49

  51

  Conservative

  Maidstone

  21·21

  21·51

  1·4

  42

  42

  None

  Rochester on Medway

  10·21

  10·24

  0·3

  19

  19

  Conservative

  Sevenoaks

  25·71

  29·05

  13·0

  54

  62

  Conservative

  Shepway

  28·03

  37·28

  33·0

  57

  75

  None

  Swale

  27·72

  29·15

  5·2

  42

  44

  None

  Thanet

  29·85

  32·79

  9·8

  56

  61

  None

  Tonbridge and Malling

  28·75

  31·86

  10·8

  55

  61

  Conservative

  Tonbridge Wells

  22·24

  26·75

  20·3

  44

  52

  Conservative

  Lancashire

  Blackburn

  49·04

  47·04

  -4·1

  59

  57

  Labour

  Blackpool

  36·00

  38·50

  6·9

  62

  66

  None

  Burnley

  63·04

  63·04

  0·0

  64

  64

  Labour

  Chorley

  28·61

  30·05

  5·0

  47

  49

  None

  Fylde

  28·40

  29·68

  4·5

  57

  60

  Conservative

  Hyndburn

  43·15

  43·90

  1·7

  48

  49

  Labour

  Lancaster

  25·00

  27·00

  8·0

  39

  42

  None

  Pendle

  47·00

  51·50

  9·6

  48

  53

  Liberal

  Preston

  38·06

  45·07

  18·4

  57

  67

  Labour

  Ribble Valley

  30·55

  32·74

  7·2

  52

  55

  Conservative

  Rossendale

  49·64

  54·23

  9·2

  60

  65

  Labour

  South Ribble

  26·17

  29·15

  11·4

  42

  47

  Conservative

  West Lancashire

  28·53

  28·59

  0·2

  57

  58

  Conservative

  Wyre

  24·23

  25·02

  3·3

  43

  45

  Conservative

  Leicestershire

  Blaby

  20·13

  19·27

  -4·3

  43

  41

  Conservative

  Charnwood

  18·72

  18·23

  -2·6

  40

  39

  Conservative

  Harborough

  26·70

  28·16

  5·5

  59

  62

  None

  Hinckley and Bosworth

  16·33

  18·89

  15·7

  32

  37

  Conservative

  Leicester

  47·75

  52·30

  9·5

  74

  81

  Labour

  Melton

  4·13

  5·83

  41·2

  9

  12

  Conservative

  North West Leicester

  33·60

  35·72

  6·3

  61

  65

  None

  Oadby and Wigston

  20·50

  21·50

  4·9

  46

  48

  Conservative

  Rutland

  19·68

  19·94

  1·3

  44

  44

  None

  Lincolnshire

  Boston

  19·50

  22·00

  12·8

  32

  36

  None

  East Lindsey

  23·78

  28·14

  18·3

  37

  44

  Independent

  Lincoln

  27·00

  31·00

  14·8

  40

  46

  Labour

  North Kesteven

  25·12

  26·75

  6·5

  43

  46

  None

  South Holland

  25·66

  27·39

  6·7

  42

  45

  Independent

  South Kesteven

  18·38

  18·73

  1·9

  33

  33

  Conservative

  West Lindsey

  29·63

  31·74

  7·1

  47

  51

  Liberal

  Norfolk

  Breckland

  17·68

  20·59

  16·5

  31

  36

  Conservative

  Broadland

  18·20

  21·02

  15·5

  37

  43

  Conservative

  Great Yarmouth

  29·31

  30·46

  3·9

  47

  49

  None

  North Norfolk

  16·86

  18·49

  9·7

  29

  32

  Independent

  518

  519

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (P)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Norwich

  43·70

  45·50

  4·1

  75

  78

  Labour

  South Norfolk

  18·52

  22·23

  20·0

  37

  45

  Conservative

  Kings Lynn/West Norfolk

  20·37

  22·20

  9·0

  33

  36

  Conservative

  Northamptonshire

  Corby

  25·50

  25·50

  0·0

  47

  47

  Labour

  Daventry

  25·61

  25·61

  0·0

  57

  57

  Conservative

  East Northampton

  9·82

  12·19

  24·1

  17

  21

  Conservative

  Kettering

  22·75

  24·60

  8·1

  40

  43

  None

  Northampton

  29·89

  34·62

  15·8

  60

  69

  Conservative

  South Northampton

  11·13

  12·95

  16·4

  25

  29

  Conservative

  Wellingborough

  18·80

  19·00

  1·1

  34

  34

  Conservative

  Northumberland

  Alnwick

  19·44

  23·78

  22·3

  29

  36

  None

  Berwick-upon-Tweed

  20·72

  24·23

  16·9

  28

  33

  None

  Blyth Valley

  49·25

  54·00

  9·6

  75

  83

  Liberal

  Castle Morpeth

  29·17

  33·54

  15·0

  59

  67

  None

  Tynedale

  25·35

  27·39

  8·0

  39

  43

  None

  Wansbeck

  54·00

  58·00

  7·4

  71

  76

  Labour

  North Yorkshire

  Craven

  22·66

  25·05

  10·5

  32

  35

  None

  Hambleton

  21·07

  25·43

  20·7

  38

  45

  None

  Harrogate

  37·57

  40·14

  6·8

  68

  73

  Conservative

  Richmondshire

  24·46

  27·71

  13·3

  43

  48

  Independent

  Ryedale

  20·92

  22·51

  7·6

  32

  35

  Independent

  Scarborough

  29·57

  31·82

  7·6

  42

  46

  None

  Selby

  30·08

  31·22

  3·8

  46

  48

  Conservative

  York

  13·50

  14·80

  9·6

  18

  20

  Labour

  Nottinghamshire

  Ashfield

  30·48

  33·17

  8·8

  42

  45

  Labour

  Bassetlaw

  39·72

  43·24

  8·9

  59

  64

  Labour

  Broxtowe

  23·69

  25·03

  5·7

  41

  44

  Conservative

  Gedling

  24·10

  27·23

  13·0

  44

  50

  Conservative

  Mansfield

  31·00

  36·00

  16·1

  46

  53

  Labour

  Newark and Sherwood

  25·33

  31·27

  23·5

  40

  49

  None

  Nottingham

  29·00

  29·00

  0·0

  46

  46

  Conservative

  Rushcliffe

  27·42

  27·79

  1·3

  56

  57

  Conservative

  Oxfordshire

  Cherwell

  11·38

  11·88

  4·4

  25

  26

  Conservative

  Oxford

  22·10

  41·60

  88·2

  52

  98

  Labour

  South Oxfordshire

  16·11

  16·91

  5·0

  39

  41

  Conservative

  Vale of White Horse

  8·99

  9·21

  2·4

  21

  22

  Conservative

  West Oxfordshire

  16·14

  16·66

  3·2

  35

  36

  Conservative

  Shropshire

  Bridgnorth

  17·58

  18·56

  5·6

  36

  38

  Independent

  North Shropshire

  19·39

  24·52

  26·5

  34

  43

  Independent

  Oswestry

  24·47

  30·49

  24·6

  37

  46

  None

  Shrewsbury and Atcham

  24·02

  26·25

  9·3

  45

  50

  None

  South Shropshire

  17·22

  19·37

  12·5

  27

  30

  Independent

  The Wrekin

  34·92

  40·23

  15·2

  63

  73

  Labour

  Somerset

  Mendip

  17·81

  19·94

  12·0

  33

  36

  None

  Sedgemoor

  22·85

  22·90

  0·2

  43

  43

  Conservative

  Taunton Deane

  18·20

  18·96

  4·2

  33

  34

  Conservative

  West Somerset

  18·11

  21·62

  19·4

  32

  38

  Independent

  South Somerset

  18·49

  24·23

  31·0

  33

  43

  Liberal

  Staffordshire

  Cannock Chase

  29·20

  29·89

  2·4

  53

  55

  Labour

  East Staffordshire

  22·48

  23·16

  3·0

  40

  41

  None

  Lichfield

  21·00

  22·59

  7·6

  51

  54

  Conservative

  Newcastle Under Lyme

  28·69

  30·28

  5·5

  51

  53

  Labour

  South Staffordshire

  19·41

  20·75

  6·9

  47

  50

  Conservative

  Stafford

  16·57

  20·17

  21·7

  34

  42

  None

  Staffs. Moorlands

  24·45

  29·97

  22·6

  44

  54

  Conservative

  Stoke-on-Trent

  28·00

  29·00

  3·6

  43

  44

  Labour

  Tamworth

  19·00

  19·00

  0·0

  38

  38

  Conservative

  520 521

  Local rate or precept 1987–88 (P)

  Local rate or precept 1988–89 (P)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Political control at 1 April 1988

  Suffolk

  Babergh

  21·75

  23·01

  5·8

  43

  46

  None

  Forest Heath

  16·60

  19·50

  17·5

  30

  35

  Conservative

  Ipswich

  36·90

  40·50

  9·8

  69

  76

  Labour

  Mid Suffolk

  23·49

  26·16

  11·4

  44

  49

  Conservative

  St. Edmundsbury

  16·13

  18·71

  16·0

  31

  36

  Conservative

  Suffolk Coastal

  26·31

  36·60

  39·1

  56

  78

  Conservative

  Waveney

  23·45

  25·27

  7·8

  41

  44

  None

  Surrey

  Elmbridge

  24·82

  25·44

  2·5

  83

  85

  None

  Epsom and Ewell

  30·60

  33·90

  10·8

  96

  107

  Independent

  Guildford

  20·61

  20·61

  0·0

  56

  56

  Conservative

  Mole Valley

  21·51

  22·85

  6·2

  57

  61

  None

  Reigate and Banstead

  27·11

  29·07

  7·2

  75

  80

  Conservative

  Runnymede

  19·90

  17·00

  -14·6

  51

  43

  Conservative

  Spelthorne

  15·50

  4·20

  -72·9

  39

  11

  Conservative

  Surrey Heath

  18·73

  20·71

  10·6

  58

  64

  Conservative

  Tandridge

  16·82

  17·57

  4·5

  44

  46

  Conservative

  Waverley

  24·32

  26·61

  9·4

  70

  76

  Conservative

  Woking

  26·00

  29·00

  11·5

  68

  76

  None

  Warwickshire

  North Warwickshire

  44·28

  46·32

  4·6

  89

  93

  Labour

  Nuneaton & Bedworth

  40·70

  44·10

  8·4

  82

  88

  Labour

  Rugby

  25·89

  26·29

  1·5

  56

  57

  Conservative

  Stratford-on-Avon

  21·45

  21·08

  -1·7

  57

  56

  Conservative

  Warwick

  23·42

  25·16

  7·4

  60

  64

  Conservative

  West Sussex

  Adur

  43·87

  47·29

  7·8

  89

  96

  Liberal

  Arun

  24·40

  26·46

  8·4

  53

  58

  Conservative

  Chichester

  18·83

  20·14

  7·0

  42

  45

  Conservative

  Crawley

  42·75

  48·00

  12·3

  83

  93

  Labour

  Horsham

  20·97

  22·86

  9·0

  47

  51

  Conservative

  Mid Sussex

  28·15

  33·11

  17·6

  69

  81

  Conservative

  Worthing

  22·50

  22·50

  0·0

  49

  49

  Conservative

  Wiltshire

  Kennet

  19·21

  20·63

  7·4

  36

  39

  Independent

  North Wiltshire

  26·23

  33·03

  25·9

  44

  56

  Conservative

  Salisbury

  11·37

  12·99

  14·2

  23

  27

  Conservative

  Thamesdown

  55·17

  51·10

  -7·4

  88

  82

  Labour

  West Wiltshire

  18·23

  25·78

  41·4

  31

  44

  Conservative

  Local Rates and Precepts 1987–88—1988–89

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Metropolitan Police PA

  15·75

  16·87

  7·1

  n/a

  n/a

  Greater Manchester PA

  15·65

  15·38

  -1·7

  27

  26

  Merseyside PA

  22·64

  19·30

  -14·8

  42

  36

  South Yorkshire PA

  16·00

  15·59

  -2·6

  21

  21

  Northumbria PA

  14·20

  14·40

  1·4

  21

  21

  West Midlands PA

  12·32

  14·11

  14·5

  26

  30

  West Yorkshire PA

  18·20

  15·72

  -13·6

  24

  21

  London Fire Authority

  8·07

  8·07

  0·0

  23

  23

  Greater Manchester Fire Authority

  9·75

  10·45

  7·2

  17

  18

  Merseyside Fire Authority

  6·80

  8·39

  23·4

  13

  16

  South Yorkshire Fire Authority

  10·26

  11·21

  9·3

  14

  15

  Tyne and Wear Fire Authority

  10·54

  11·04

  4·7

  15

  16

  West Midlands Fire Authority

  6·62

  7·48

  13·0

  14

  16

  West Yorkshire Fire Authority

  11·59

  13·41

  15·7

  15

  18

  Greater Manchester PTA

  12·96

  15·58

  20·2

  22

  27

  522 523

  Local rate or precept 1987–88 (p)

  Local rate or precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Merseyside PTA

  28·48

  26·50

  -7·0

  53

  49

  South Yorkshire PTA

  34·28

  30·35

  -11·5

  46

  41

  Tyne and Wear PTA

  14·51

  9·58

  -34·0

  21

  14

  West Midlands PTA

  7·81

  10·31

  32·0

  16

  22

  West Yorkshire PTA

  23·78

  24·82

  4·4

  31

  33

  Local rates and precepts 1987–88 to 1988–89

  Local rate or precept 1987–88 (p)

  Local rate of precept 1988–89 (p)

  Percentage change

  Local rate or precept 1987–88 £ per hereditament

  Local rate or precept 1988–89 £ per hereditament

  Shire Counties

  All

  200·0

  223·0

  11·5

  396

  411

  Conservative

  183·4

  203·0

  10·7

  391

  433

  Labour

  231·8

  256·5

  10·6

  381

  421

  Other

  203·7

  228·5

  12·2

  401

  450

  Inner London (excluding City)

  All

  78·9

  79·5

  0·8

  240

  242

  Conservative

  41·3

  41·8

  1·1

  176

  178

  Labour (excluding rate limited)

  98·4

  107·5

  9·2

  271

  296

  Rate limited

  117·3

  116·1

  -1·0

  298

  295

  Outer London

  All

  174·9

  180·7

  3·3

  481

  497

  Conservative

  142·6

  158·5

  11·1

  418

  465

  Labour (excluding rate limited)

  211·8

  231·5

  9·3

  521

  570

  Rate limited

  243·6

  189·0

  -22·4

  615

  477

  Other

  164·2

  178·3

  8·6

  452

  491

  Shire Districts

  All

  26·0

  28·2

  8·1

  52

  56

  Conservative

  21·2

  22·9

  8·0

  46

  50

  Labour (excluding rate limited)

  35·6

  39·5

  10·9

  61

  67

  Rate limited

  53·0

  46·1

  -13·0

  89

  77

  Other

  24·6

  27·0

  9·7

  47

  51

  Metropolitan Districts

  All

  232·7

  245·0

  5·3

  391

  412

  Conservative

  169·9

  170·7

  0·4

  465

  467

  Labour (excluding rate limited)

  229·3

  246·1

  7·3

  368

  395

  Rate limited

  292·1

  275·9

  -5·5

  477

  450

  Other

  212·3

  230·2

  8·4

  399

  432

  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will list in descending order for each English authority on the basis of the percentage change in their rate or precept from 1987–88 and 1988–89, showing in each case the political control of the authority at the time of setting the later rate or precept.

  Mr. Chope
  The local rate for a district or borough is made up from the rate charged by the district itself together with the average of parish precepts and special district expenses and precepts charged by certain other specialised bodies such as waste disposal authorities. It does not include the precepts charged by higher tier authorities, for example county councils in the shires, police, fire and civil defence and transport authorities in metropolitan areas and London, and the Inner London Education Authority.

  The table sets out the available information for each English authority:
  524

  Change in local rate or precept 1987–88 to 1988–89

  Percentage change

  Political control at 1 April 1988

  Oxford

  88·2

  Labour

  Easington

  53·8

  Labour

  Gillingham

  42·3

  Conservative

  West Wiltshire

  41·4

  Conservative

  Melton

  41·2

  Conservative

  St. Albans

  39·4

  No overall control

  Suffolk Coastal

  39·1

  Conservative

  Chelmsford

  36·1

  Liberal

  Brighton

  33·3

  Labour

  Shepway

  33·0

  No overall control

  West Midlands PTA

  32·0

  —

  Wandsworth

  31·7

  Conservative

  South Somerset

  31·0

  Liberal

  Wokingham

  29·4

  Conservative

  Bath

  28·6

  No overall control

  Cambridge

  27·0

  No overall control

  North Shropshire

  26·5

  Independent

  Dover

  26·0

  Conservative

  North Wiltshire

  25·9

  Conservative

  Holderness

  25·0

  Independent

  525

  Percentage change

  Political control at 1 April 1988

  North Dorset

  24·7

  Independent

  Oswestry

  24·6

  No overall control

  East Yorkshire

  24·4

  Conservative

  East Northampton

  24·1

  Conservative

  Newark and Sherwood

  23·5

  No overall control

  Merseyside Fire

  23·4

  —

  Stockton on Tees

  23·2

  Labour

  West Devon

  22·7

  Independent

  Staffordshire Moorlands

  22·6

  Conservative

  Alnwick

  22·3

  No overall control

  Caradon

  21·8

  Independent

  Reading

  21·7

  Labour

  Havant

  21·7

  Conservative

  Stafford

  21·7

  No overall control

  South Buckinghamshire

  21·4

  Conservative

  North Hertfordshire

  21·3

  Conservative

  Stroud

  20·7

  No overall control

  Hambleton

  20·7

  No overall control

  Derwentside

  20·6

  Labour

  Enfield

  20·5

  Conservative

  New Forest

  20·4

  Conservative

  Humberside

  20·3

  No overall control

  Tunbridge Wells

  20·3

  Conservative

  South Manchester PTA

  20·2

  —

  South Norfolk

  20·0

  Conservative

  West Somerset

  19·4

  Independent

  Basingstoke and Deane

  18·8

  Conservative

  East Dorset

  18·6

  Conservative

  Lancashire

  18·5

  No overall control

  Preston

  18·4

  Labour

  East Lindsey

  18·3

  Independent

  Calderdale

  18·1

  No overall control

  Essex

  17·8

  No overall control

  North East Derbyshire

  17·8

  Labour

  Mid Sussex

  17·6

  Conservative

  Thurrock

  17·5

  Labour

  Forest Heath

  17·5

  Conservative

  Braintree

  17·4

  No overall control

  Kerrier

  17·1

  No overall control

  Hertfordshire

  16·9

  No overall control

  Berwick-upon-Tweed

  16·9

  No overall control

  East Hampshire

  16·6

  Conservative

  Barrow in Furness

  16·5

  Labour

  Breckland

  16·5

  Conservative

  Erewash

  16·4

  Conservative

  South Norhampton

  16·4

  Conservative

  Plymouth

  16·2

  Conservative

  Mansfield

  16·1

  Labour

  St. Edmundsbury

  16·0

  Conservative

  Warwickshire

  15·9

  No overall control

  Northampton

  15·8

  Conservative

  West Dorset

  15·7

  Independent

  Hinkley and Bosworth

  15·7

  Conservative

  West Yorkshire Fire

  15·7

  —

  Barnet

  15·6

  Conservative

  Broadland

  15·5

  Conservative

  The Wrekin

  15·2

  Labour

  Northamptonshire

  15·1

  Conservative

  Bromsgrove

  15·1

  Conservative

  Durham

  15·0

  Labour

  Bristol

  15·0

  Labour

  Castle Morpeth

  15·0

  No overall control

  Colchester

  14·9

  No overall control

  Rochford

  14·9

  Conservative

  Lincoln

  14·8

  Labour

  Northumberland1

  14·6

  No overall control

  Woodspring

  14·5

  Conservative

  West Midlands P.A.

  14·5

  —

  East Sussex

  14·1

  Conservative

  Carrick

  14·1

  No overall control

  Lincolnshire

  14·0

  Conservative

  Derbyshire Dales

  13·9

  Conservative

  Boothferry

  13·9

  No overall control

  Salisbury

  13·9

  Conservative

  Kirklees

  13·8

  No overall control

  Teignbridge

  13·7

  No overall control

  526

  Percentage change

  Political control at 1 April 1988

  Islington

  13·6

  Labour

  Mid Devon

  13·6

  Independent

  Wyre Forest

  13·6

  No overall control

  Derbyshire

  13·5

  Labour

  Bexley

  13·4

  Conservative

  Richmondshire

  13·3

  Independent

  East Hertfordshire

  13·1

  Conservative

  Sevenoaks

  13·0

  Conservative

  Gedling

  13·0

  Conservative

  West Midlands Fire

  13·0

  —

  Cornwall

  12·9

  No overall control

  Penwith

  12·9

  No overall control

  Boston

  12·8

  No overall control

  Kent

  12·5

  Conservative

  Greenwich

  12·5

  Labour

  South Bedfordshire

  12·5

  Conservative

  North Cornwall

  12·5

  Independent

  South Shropshire

  12·5

  Independent

  Crawley

  12·3

  Labour

  Wakefield

  12·2

  Labour

  Hart

  12·2

  No overall control

  Sheffield

  12·1

  Labour

  Mendip

  12·0

  No overall control

  Cleveland

  11·9

  Labour

  Gloucestershire

  11·9

  No overall control

  North Yorkshire

  11·9

  Conservative

  Wear Valley

  11·8

  Labour

  Somerset

  11·7

  No overall control

  Langbaurgh-on-Tees

  11·7

  No overall control

  Tower Hamlets

  11·6

  Liberal

  Newham

  11·6

  Labour

  Great Grimsby

  11·5

  Labour

  Woking

  11·5

  No overall control

  Newbury

  11·4

  Conservative

  South Ribble

  11·4

  Conservative

  Mid Suffolk

  11·4

  Conservative

  Devon

  11·3

  No overall control

  North Devon

  11·2

  No overall control

  Beverley

  11·2

  Conservative

  Fenland

  11·1

  Conservative

  Hartlepool

  11·1

  Labour

  Leicestershire

  11·0

  No overall control

  Bradford

  110

  Labour

  Merton

  10·8

  Conservative

  Warrington

  10·8

  Labour

  Tunbridge and Malling

  10·8

  Conservative

  Epsom and Ewell

  10·8

  Independent

  Brent

  10·7

  Labour

  Richmond-upon-Thames

  10·7

  Liberal

  Surrey

  10·5

  Conservative

  Kingston-upon-Thames

  10·5

  Conservative

  Craven

  10·5

  No overall control

  Surrey Heath

  10·5

  Conservative

  Crewe and Nantwich

  10·3

  No overall control

  Oldham

  10·1

  Labour

  Trafford

  10·1

  No overall control

  Durham

  10·1

  Labour

  Cheshire

  10·0

  No overall control

  Norfolk

  10·0

  Conservative

  Gateshead

  10·0

  Labour

  Hereford and Worcester

  9·8

  Conservative

  Vale Royal

  9·8

  No overall control

  Thanet

  9·8

  No overall control

  Ipswich

  9·8

  Labour

  Isle of Wight

  9·7

  Liberal

  Bulsover

  9·7

  Labour

  Darlington

  9·7

  No overall control

  Teesdale

  9·7

  Independent

  Test Valley

  9·7

  Conservative

  North Norfolk

  9·7

  Independent

  Sutton

  9·6

  Liberal

  Pendle

  9·6

  Liberal

  Blyth Valley

  96

  Liberal

  York

  9·6

  Labour

  Wigan

  9·5

  Labour

  Northavon

  9·5

  Conservative

  527

  Percentage change

  Political control at 1 April 1988

  Sedgefield

  9·5

  Labour

  Leicester

  9·5

  Labour

  Leominster

  9·4

  Independent

  Waverley

  9·4

  Conservative

  Oxfordshire

  9·3

  No overall control

  Hackney

  9·3

  Labour

  Gosport

  9·3

  Conservative

  Shrewsbury and Atcham

  9·3

  No overall control

  South Yorkshire Fire

  9·3

  —

  Buckinghamshire

  9·2

  Conservative

  Rossendale

  9·2

  Labour

  West Sussex

  9·1

  Conservative

  North Tyneside

  9·0

  Labour

  Cleethorpes

  9·0

  No overall control

  Kings Lynn/West Norfolk

  9·0

  Conservative

  Horsham

  9·0

  Conservative

  Barnsley

  8·9

  Labour

  Bassetlaw

  8·9

  Labour

  Hampshire

  8·8

  No overall control

  Peterborough

  8·8

  No overall control

  Stockport

  8·8

  No overall control

  Canterbury

  8·8

  Conservative

  Ashfield

  8·8

  Labour

  Shropshire

  8·7

  No overall control

  Salford

  8·6

  Labour

  Berkshire

  8·5

  Conservative

  South Tyneside

  8·5

  Labour

  Harrow

  8·5

  Conservative

  Nuneaton and Bedworth

  8·4

  Labour

  Arun

  8·4

  Conservative

  Staffordshire

  8·3

  Labour

  Doncaster

  8·3

  Labour

  Wansdyke

  81

  Conservative

  Kettering

  8·1

  No overall control

  Coventry

  8·0

  Labour

  Leeds

  8·0

  Labour

  Croydon

  8·0

  Conservative

  Havering

  8·0

  No overall control

  South Derbyshire

  8·0

  Labour

  Lancaster

  8·0

  No overall control

  Tynedale

  8·0

  No overall control

  Avon

  7·9

  No overall control

  Suffolk

  7·9

  Conservative

  Tameside

  7·9

  Labour

  Wiltshire

  7·8

  No overall control

  Exeter

  7·8

  No overall control

  South Hams

  7·8

  Conservative

  Waveney

  7·8

  No overall control

  Adur

  7·8

  Liberal

  Fareham

  7·7

  No overall control

  Rotherham

  7·6

  Labour

  Christchurch

  7·6

  Conservative

  Ryedale

  7·6

  Independent

  Scarborough

  7·6

  No overall control

  Lichfield

  7·6

  Conservative

  Dorset

  7·4

  Conservative

  Bury

  7·4

  Labour

  Rochdale

  7·4

  Labour

  Sefton

  7·4

  No overall control

  Hillingdon

  7·4

  No overall control

  Redditch

  7·4

  Labour

  Wansbeck

  7·4

  Labour

  Reigate and Banstead

  7·4

  Conservative

  Warwick

  7·4

  Conservative

  Kennet

  7·4

  Independent

  Bromley

  7·3

  Conservative

  Hounslow

  7·3

  Labour

  Chiltern

  7·3

  Conservative

  Chester le Street

  7·3

  Labour

  Nottinghamshire

  7·2

  Labour

  Wirral

  7·2

  No overall control

  Ribble Valley

  7·2

  Conservative

  Greater Manchester Fire

  7·2

  —

  Welwyn Hatfield

  7·1

  Labour

  West Lindsey

  7·1

  Liberal

  Metropolitan Police P.A.

  7·1

  —

  528

  Percentage change

  Political control at 1 April 1988

  Chichester

  7·0

  Conservative

  Blackpool

  6·9

  No overall control

  South Staffordshire

  6·9

  Conservative

  Torbay

  6·8

  Conservative

  Purbeck

  6·0

  No overall control

  Harrogate

  6·8

  Conservative

  Lewes

  6·7

  Conservative

  South Holland

  6·7

  Independent

  Wychavon

  6·6

  Conservative

  North Kesteven

  6·5

  No overall control

  Bolton

  6·3

  Labour

  Wealden

  6·3

  Conservative

  Harlow

  6·3

  Labour

  North West Leicester

  6·3

  No overall control

  Barking and Dagenham

  6·2

  Labour

  High Peak

  6·2

  No overall control

  Mole Valley

  6·2

  No overall control

  Bedfordshire

  6·1

  No overall control

  Cotswold

  6·1

  Independent

  Eden

  6·0

  Independent

  Chester

  5·9

  No overall control

  Scunthorpe

  5·9

  Labour

  Eastleigh

  5·8

  No overall control

  Gravesham

  5·8

  Conservative

  Babergh

  5·8

  No overall control

  St. Helens

  5·7

  Labour

  Broxtowe

  5·7

  Conservative

  Poole

  5·6

  Conservative

  Castle Point

  5·6

  Conservative

  Gloucester

  5·6

  Conservative

  Bridgnorth

  5·6

  Independent

  Cumbria

  5·5

  No overall control

  Winchester

  5·5

  No overall control

  Harborough

  5·5

  No overall control

  Newcastle under Lyme

  5·5

  Labour

  Mid Bedfordshire

  5·4

  Conservative

  Malvern Hills

  5·3

  No overall control

  Hammersmith and Fulham

  5·2

  Labour

  Congleton

  5·2

  No overall control

  Swale

  5·2

  No overall control

  Restormel

  5·1

  No overall control

  Dacorum

  5·1

  Conservative

  Ashford

  5·1

  Conservative

  Sandwell

  5·0

  Labour

  Ellesmere Port and Neston

  5·0

  Labour

  Halton

  5·0

  Labour

  Epping Forest

  5·0

  Conservative

  Cheltenham

  5·0

  No overall control

  Chorley

  5·0

  No overall control

  South Oxfordshire

  5·0

  Conservative

  Cambridgeshire

  4·9

  No overall control

  Oadby and Wigston

  4·9

  Conservative

  Hastings

  4·8

  No overall control

  Walsall

  4·7

  No overall control

  Macclesfield

  4·7

  Conservative

  Tyne and Wear Fire

  4·7

  —

  Huntingdonshire

  4·6

  Conservative

  North Warwickshire

  4·6

  Labour

  Fylde

  4·5

  Conservative

  Tandridge

  4·5

  Conservative

  Cherwell

  4·4

  Conservative

  West Yorkshire PTA

  4·4

  —

  South Wight

  4·3

  Conservative

  Taunton Deane

  4·2

  Conservative

  City of London

  4·1

  Independent

  Worcester

  4·1

  Labour

  Norwich

  4·1

  Labour

  Southampton

  4·0

  No overall control

  Milton Keynes

  3·9

  No overall control

  Medina

  3·9

  Conservative

  Great Yarmouth

  3·9

  No overall control

  Sunderland

  3·8

  Labour

  Selby

  3·8

  Conservative

  Knowsley

  3·7

  Labour

  Lewisham

  3·7

  Labour

  Stoke-on-Trent

  3·6

  Labour

  529

  Percentage change

  Political control at 1 April 1988

  Wolverhampton

  3·5

  No overall control

  Portsmouth

  3·4

  Conservative

  Wyre

  3·3

  Conservative

  Birmingham

  3·2

  Labour

  West Oxfordshire

  3·2

  Conservative

  Isles of Scilly

  3·1

  Independent

  Bracknell

  3·0

  Conservative

  Wycombe

  5·0

  Conservativc

  East Staffordshire

  3·0

  No overall control

  Rother

  2·8

  Conservative

  I.L.E.A.

  2·6

  Labour

  Uttlesford

  2·5

  Conservative

  Elmbridge

  2·5

  No overall control

  South Herefordshire

  2·4

  Indepcndent

  Vale of White Horse

  2·4

  Conservative

  Cannock Chase

  2·4

  Labour

  Forest of Dean

  2·1

  No overall control

  Dudley

  1·9

  Labour

  South Kesteven

  1·9

  Conservative

  South Cambridgeshire

  1·7

  Independent

  Tewkesbury

  1·7

  No overall control

  Hyndburn

  1·7

  Labour

  Aylesbury Vale

  1·6

  Conservative

  East Devon

  1·5

  Conservative

  Rugby

  1·5

  Conservative

  Maidstone

  1·4

  No overall control

  Northumbria P.A.

  1·4

  —

  Rutland

  1·3

  No overall control

  Rushcliffe

  1·3

  Conservative

  Liverpool

  1·2

  Labour

  Dartford

  1·1

  Conservative

  Wellingborough

  1·1

  Conservative

  Torridge

  1·0

  Independent

  North Bedfordshire

  0·9

  Conservative

  Three Rivers

  0·8

  Liberal

  Kingswood

  0·7

  Conservative

  South Lakeland

  0·7

  No overall control

  Copeland

  0·6

  Labour

  Chesterfield

  0·6

  Labour

  Hertsmere

  0·6

  Conservative

  Glanford

  0·6

  Conscrvative

  Redbridge

  0·5

  Conservative

  Tendring

  0·5

  Conservative

  Solihull

  0·4

  Conservative

  Carlisle

  0·3

  Labour

  Rochester on Medway

  0·3

  Conservativc

  Slough

  0·2

  Labour

  Windsor and Maidenhead

  0·2

  Conservative

  West Lancashire

  0·2

  Conservative

  Sedgemoor

  0·2

  Conservative

  Allcrdale

  0·0

  No overall control

  Bournemouth

  0·0

  Conservative

  530

  Percentage change

  Political control at 1 April 1988

  Weymouth and Portland

  0·0

  No overall control

  Eastbourne

  0·0

  Liberal

  Southend on Sea

  0·0

  No overall control

  Broxbourne

  0·0

  Conservative

  Stevenage

  0·0

  Labour

  Watford

  0·0

  Labour

  Burnley

  0·0

  Labour

  Corby

  0·0

  Labour

  Daventry

  0·0

  Conservative

  Nottingham

  0·0

  Conservative

  Tamworth

  0·0

  Conservative

  Guildford

  0·0

  Conservative

  Worthing

  0·0

  Conservative

  London Fire Authority

  0·0

  —

  Westminster

  -0·4

  Conservative

  East Cambridgeshire

  -0·9

  Independent

  Stratford-on-Avon

  -1·7

  Conservative

  Greater Manchester P.A.

  -1·7

  —

  Camden

  -2·6

  Labour

  Charnwood

  -2·6

  Conservative

  South Yorkshire P.A.

  -2·6

  —

  Luton

  -3·6

  Conservative

  Rushmoor

  -3·8

  Conservative

  Blackburn

  -4·1

  Labour

  Blary

  -4·3

  Conservative

  Brentwood

  -5·0

  Conservative

  Derby

  -5·7

  Labour

  Basildon

  -6·0

  No overall control

  Maldon

  -6·0

  No overall control

  Merseyside PTA

  -7·0

  —

  Newcastle-upon-Tyne

  -7·2

  Labour

  Thamesdown

  -7·4

  Labour

  Amber Valley

  -8·6

  No overall control

  Southwark

  -9·3

  Labour

  Manchester

  -9·7

  Labour

  Haringey

  -9·9

  Labour

  South Yorkshire PTA

  -11·5

  —

  West Yorkshire P.A.

  -13·6

  —

  Runnymede

  -14·6

  Conservative

  Merseyside P.A.

  -14·8

  —

  Kingston-upon-Hull

  -17·0

  Labour

  Lambeth

  -17·9

  Labour

  Ealing

  -24·5

  Labour

  Kensington and Chelsea

  -26·4

  Conservative

  Middlebrough

  -27·0

  Labour

  Waltham Forest

  -31·3

  Labour

  Hereford

  -33·6

  Liberal

  Tyne and Wear PTA

  -34·0

  —

  Spelthorne

  -72·9

  Conservative

  1 Excluding Northumbria Police Authority precept.

  Note: Hove (Conservative) increased its local from op to 4·9p, but this can not be expressed as a percentage.

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

Mental Health Act: Section 133
Lord Mottistone Lord Mottistone asked Her Majesty's Government:
Whether Section 133 of the Mental Health Act 1983 (information for the nearest relative about the patient's discharge) is being adequately implemented.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, information is not available centrally on the application of Section 133 of the Mental Health Act 1983 in respect of NHS mental illness or mental handicap hospitals, but in spite of repeated offers since the election to follow up cases only one has been forthcoming.
Lord Mottistone: My Lords, I thank my noble friend for that Answer, but it is very disappointing. Is it not a fact that in the second biennial report of the Mental Health Act Commission attention was drawn to the fact that this section had not been fulfilled as happily as one might have expected?
Lord Skelmersdale: My Lords, yes indeed, I am aware of the reference in the commission's second biennial report on this matter. All health authorities received a copy of the report, of course, and I would expect them to take note of the commission's comments.
Lord Ennals: My Lords, is the Minister aware that MIND has a great deal of evidence of failure to inform the families of discharged patients under the terms of Section 133 and that that is causing great hardship to both patients and families alike? Can the Minister say what action he can take to improve the situation and to facilitate the kind of multi-disciplinary advocacy provided for in the Disabled Persons (Services, Consultation and Representation) Act 1986?
Lord Skelmersdale: My Lords, as regards that Act the Government are pursuing its implementation. It was always made clear (was it not?) that that would depend on resource allocations and agreement between local authorities and central government? This is being pursued as vigorously as possible.
As regards the after-care of people chronically disabled by mental illness, we hope that in due course there will be guidance to health authorities. I attended a working conference in February this year organised jointly by the department and the National Unit for Psychiatric Research and Development at which a number of people from the field discussed the detailed requirements of such guidance and indeed of
562
such a service. I understand that a report of that conference will be published shortly by the national unit and we shall take it from there.
Lord Ennals: My Lords, while thanking the Minister, would he accept that unless the information is available it is simply not possible for the multi-disciplinary advocacy to which I referred in the Disabled Persons (Services, Consultation and Representation) Act to take place? Without the information concerning when a patient is going to be discharged, how can that advocacy operation as conceived in the Act be carried out?
Lord Skelmersdale: My Lords, obviously I accept that. I regard it as very disturbing that the Mental Health Act Commission in its second biennial report felt the need to make the remarks that it did. That is why it is absolutely essential that all health authorities should get this information.
Lord Elwyn-Jones: My Lords, are the financial resources available for this important work so that it can be carried out competently?
Lord Skelmersdale: My Lords, there is no targeted fund for health authorities as regards mental illness. It is up to health authorities to judge their priorities in the light of local circumstances. Where this is being carried out properly, there is no need for them to reorder their priorities. Where it is not being carried out properly, clearly there is a need for that reordering.
Lord Mottistone: My Lords, does not my noble friend agree that the instruction within Section 133 is extremely clear? I paraphrase that section. It states that the managers of hospitals shall take such steps as are practicable to inform the person—that is, the nearest relative. Costs are not involved in this instance. It is a matter of people doing things. Does not my noble friend agree that somebody has to make sure that this is done? If the local district health or regional health authorities are not doing it, cannot the Government bring pressure to bear through them?
Lord Skelmersdale: My Lords, yes indeed they can. I should however point out that subsection (2) of Section 133 states:
"Subsection (1) above shall not apply if the patient or his nearest relative has requested that information about the patient's discharge should not be given under this section."
There may well be a problem in this area.

Road Traffic Law Review
2.40 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they will give urgent consideration to the recommendations of the road traffic law review.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, as I said in a Written Answer to my noble friend Lord Brougham and Vaux on 12th April, the Government will press ahead with consideration of the review's report and will report to Parliament on our progress before the Summer Recess.
Lord Campbell of Croy: My Lords, I am grateful for that very satisfactory reply. I was certainly not expecting immediate comments as early as today. Does my noble friend agree, however, that this report is timely and relevant in suggesting better use of police time and a realistic campaign against dangerous and inconsiderate driving, examples of which some of us see almost every week?
Lord Brabazon of Tara: My Lords, I agree that this is indeed a timely and relevant report. It is a long and complex report which contains 137 recommendations. We agree that there is a need to consider these quickly, but also, of course, thoroughly. The views of others, such as the police, have to be taken into account.
Lord Underhill: My Lords, does the Minister appreciate that we are in full agreement with him that this very important report needs to be given the most thorough and careful consideration? Hasty decisions must not be made even though we want early decisions. When the Minister says that the Government will report to Parliament, will that be in the form of a document listing the Government's responses which, if necessary, through the usual channels could be debated before legislation is introduced?
Lord Brabazon of Tara: My Lords, I am not sure what form the published response will take. However, a request for a debate would have to be arranged through the usual channels.
Lord Campbell of Croy: My Lords, will my noble friend agree that many accidents are caused through lack of imagination—cars being driven much too fast down narrow streets, or weaving in and out of traffic lanes—and that such drivers cannot all be doctors on emergency calls or even parliamentarians responding to the call of urgent whipping?
Lord Brabazon of Tara: My Lords, my noble friend is quite right. Obviously there is a need for education and research into the problem of road safety. The Government are contributing in respect of both those matters.
Lord Elwyn-Jones: My Lords, can the House assume from the question put by the noble Lord below the gangway that he has been subjected to demands in urgent whipping?
Lord Brabazon of Tara: My Lords, perhaps the noble and learned Lord will address his question to my noble friend.

Harland and Wolff: Super-liner Project
2.45 p.m.
Lord Bruce-Gardyne Lord Bruce-Gardyne asked Her Majesty's Government:
What approaches they have received for taxpayer subsidisation of Harland and Wolff to enable that company to proceed with the construction of a 'super-liner' for Mr. Ravi Tikkoo, and what are the EC rules governing such subsidies in cases where there is no external competition.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, the Government have received no formal approach for subsidy for this project. European Commission rules do not require evidence of competition before subsidy can be granted. However they limit subsidy to 28 per cent. of contract costs.
Lord Bruce-Gardyne: My Lords, I am grateful to my noble friend for that information. Has he noted that Mr. Ravi Tikkoo appears to have been touting the project around the globe, just as a previous distinguished entrepreneur, into whose clutches the Northern Ireland Office once fell, did in similar circumstances? Can my noble friend assure the House that before a 28 per cent. subsidy or any other subsidy is given to that project he will take particular care to make sure that it does not have gull wings?
Lord Lyell: My Lords, the device to which my noble friend refers was the subject of a debate during which he made sundry comments about Ministers putting their own portfolios at risk in such ventures. In this venture there is no risk of that. It is far too early to make any commitment to Government support for the project since we have not received any proposals. However, I assure my noble friend that when proposals are received they will be fully assessed.
Lord Blease: My Lords, does the Minister agree that the tenor of his reasoned reply will be more readily accepted by United Kingdom taxpayers in Northern Ireland than the plaintive tone of the Question? If the order for the liner is placed in accordance with EC intervention rules and other cost factors, will the Minister agree that it could give a much-needed boost to the overall competence of the United Kingdom shipbuilding industry as well as to Harland and Wolff?
Lord Lyell: My Lords, those questions will be more easily answered when we receive formal proposals from Mr. Tikkoo, together with the figures which the Government and the company will require.
Lord Prys-Davies: My Lords, perhaps I may ask the Minister two short questions. First, can he confirm that both his department and Harland and Wolff have the organisation and the accounting systems which will be necessary to properly monitor and handle the contractual relationships which Harland and Wolff may enter into in respect of the venture, given its magnitude and complexity?

565
Secondly, if the venture is to attract public money, will the subsidy be at the expense of other Northern Ireland heads of expenditure?
Lord Lyell: My Lords, so far as payments are concerned, in previous cases the payment and monitoring systems were divided into three parts. First, Harland and Wolff would provide weekly cash forecasts to the Department of Economic Development. Secondly, consultants for the department would check the work in progress and provide monthly reports. Thirdly, the company's auditors would provide reports and certificates on a quarterly basis.
In response to the second question asked by the noble Lord, perhaps I may say that any funding for the project, once concrete and firm proposals are received, will have to come from within the Northern Ireland block.
Lord Graham of Edmonton: My Lords, can the Minister tell the House in general terms how the Government view the interests of individuals like Mr. Tikkoo with reference to the affairs of Northern Ireland? Is the idea of relief for the taxpayer tempered in the minds of the Government with a proper sense of the national interest and concern for the protection of jobs in Northern Ireland?
Lord Lyell: My Lords, the interests of Mr. Tikkoo and the taxpayer, as well as the protection of jobs in Northern Ireland, will become clearer when Mr. Tikkoo or anyone else brings firm proposals and figures to my right honourable friend.
Viscount St. Davids: My Lords, does my noble friend know whether there are any dry docks in this country which are able to take a vessel of that size? Is he aware that if there are no such dry docks, any repairs done to this vessel would have to be done abroad?
Lord Lyell: My Lords, I understand that the Harland and Wolff shipyard is capable of building the vessel. I am not aware whether or not the same facilities would be available to provide for repairs or whether existing facilities would need to be enlarged. If I am able to adduce any further information concerning suitable dry docks for a vessel of that size elsewhere, I shall write to the noble Lord.
Lord Harmar-Nicholls: My Lords, is my noble friend aware, as my noble friend who tabled the question made clear, that the taxpayer has been bitten in the past and as a consequence there is a need for the utmost vigilance to ensure that things that are offered in the future are the right ones? Ought we not to be careful not to sour the atmosphere so completely that we frighten off people who may have genuine products which could bring good to this country in terms of employment and general profitability?
Lord Lyell: My Lords, I hope that nothing that I have said today could sour any atmosphere. My right honourable friend's door is open to Mr. Tikkoo and to all entrepreneurs who might wish to come to
566
Northern Ireland with projects. They are all most welcome.
Lord Bruce of Donington: My Lords, on the assumption that the noble Lord's department comes to the conclusion that the proposal is a perfectly sound one and one that should quite properly go ahead, in the event of the European Commission seeking to invoke Directive No. 6 will he make quite sure that researches are made into the previous application of that particular directive to other European countries before agreeing to the intervention of the European Commission in this matter?
Lord Lyell: My Lords, certainly we should need to be in touch with the Commission. In a recent case to which the noble Lord is no doubt referring, the sixth directive was invoked when Govan shipyards alleged that a French yard had exceeded the sixth directive in a bid to build a ferry for Brittany Ferries. As the noble Lord and your Lordships will be aware, the sixth directive provides that where there is competition for a contract the Commission can at the request of any member state examine the bid. In that particular case the United Kingdom lodged a formal complaint, and after examining the bid the Commission ordered the French yard to pay back to the French Government that amount of support which had breached the sixth directive.
Lord Moran: My Lords, is it not the case that the subsidy that is being talked about for this project is simply that which is available to any shipyard in the United Kingdom? Is it not also the case that it has been made available in many cases in the past and is not in any respect a special subsidy for this project? That said, does the Minister not agree that if this turns out to be a viable project it will be very valuable for employment in Belfast and for the economy of Northern Ireland?
Lord Lyell: My Lords, the noble Lord is quite correct. Subsidies of this type are available for shipbuilding. Contract support is the correct label for any government expenditure on a project of this type. I would not commit the Government to subsidies for any other project in any other yard although we would look at what subsidy might be available were Mr. Tikkoo to produce realistic figures for my right honourable friend's consideration in respect of this particular project. The noble Lord is quite correct in saying that if the project were found to be realistic and were to come to Belfast, we should all be very pleased.
Lord Crickhowell: My Lords, as an old friend of Mr. Tikkoo—and incidentally can we spell his name correctly?—I should like to ask my noble friend whether he agrees that there can be no criticism of Mr. Tikkoo in asking Harland and Wolff to build this ship, although possibly he may be brave. Does he also agree that the Government will have to look at the ability of Harland and Wolff to carry out the task and at the readiness of French and other European shipyards to undertake the task, with or without subsidies?
Lord Lyell: My Lords, I am not too sure whose name is being spelt incorrectly. Mine is frequently spelt wrongly but I do not think that it is pronounced as my noble friend pronounced the name of the entrepreneur—at least, not so far as I know. I do not think that we could be responsible for checking on subsidies from any other nation. That would be for Mr. Tikkoo and for Harland and Wolff. However, as I stressed to the noble Lord, Lord Bruce, the sixth directive would bite.
Lord Underhill: My Lords, will the Minister encourage the Government to reconsider his reply to my noble friend, that any grant or subsidy made would come out of the Northern Ireland budget? Will he do so, first, because of its effect on the general position in Northern Ireland and, secondly, because one would hope that subcontracting would benefit the whole of the United Kingdom?
Lord Lyell: My Lords, I am afraid that the position will remain as I stated it. If the project is found to be realistic and the contract is eventually signed, that will be the time to look at any spin-off or alternative contracts elsewhere in the United Kingdom. The first step must be for Mr. Tikkoo to produce realistic figures to my right honourable friend.
Lord Underhill: My Lords, perhaps I may again intervene. The Minister definitely replied to my noble friend to the effect that any subsidy or grant would come out of the Northern Ireland budget. Is he now saying that that may be reconsidered?
Lord Lyell: My Lords, I reiterate for the second time, no. Any subsidy would come from the Northern Ireland block.
Lord Bruce-Gardyne: My Lords, in view of our past experiences in these matters, could my noble friend assure us that this House, and indeed another place, would have an opportunity to look at any specific proposition for taxpayer subvention which might arise in these circumstances? Could he also at the same time confirm that over a great many years this shipyard has been invited by Ministers to observe the obligation to become commercial and has so far shown a total inability to do so?
Lord Lyell: My Lords, concerning my noble friend's second question, he will know the figures. What we have done for Harland and Wolff and government support for sundry contracts in that yard are a matter of public record. So far as concerns my noble friend's first question—and he is expert at asking questions—we would give no guarantee that your Lordships would be able to have such a debate. That is entirely a matter for the usual channels and, I have no doubt, for my noble friend.
Lord Harmar-Nicholls: My Lords—
Noble Lords: Next question! Order!
Lord Harmar-Nicholls: My Lords, whilst I apologise for asking a second question, may I ask my noble friend whether he is aware that if every time a business prospect is brought to this country it has to
568
be debated by the politicians in both Houses, not many prospects will be brought to this country?
Lord Lyell: My Lords, I think that the answer I can give to my noble friend is the same that I gave to Lord Bruce-Gardyne, that if either of my noble friends wishes to ask the Government any particular question there are many channels available for them so to do—now, later at night, or indeed early in the morning.

Nato's Nuclear Capability
3 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What is their present policy towards the 1983 decision to replace and extend NATO's nuclear capability.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, at their meeting in Brussels on 27th and 28th April, Nuclear Planning Group Ministers reviewed and revalidated the framework established at Montebello and reaffirmed their support for national efforts to meet requirements stemming from the Montebello decision. The process of keeping the alliance's forces up to date and properly structured is a continuous one and the United Kingdom will continue to play its full part in this.
Lord Hatch of Lusby: My Lords, perhaps I may ask the Minister two questions. First, is he aware that there is considerable concern that despite the INF treaty, which we all hope will be the prelude to further arms negotiations, control and reductions, this policy may very well increase the nuclear warheads and nuclear capacity in Europe? Secondly, is it the case, as appears to have been elicited in another place on the basis of research done by Mr. Dan Plesch, that the British Government have already—in fact some time ago—started to renovate their present nuclear weapons?
Lord Trefgarne: My Lords, so far as concerns the INF treaty, I can assure the noble Lord that there is no question of trying to circumvent it. Indeed, the alliance warmly supports the agreement and we hope for early ratification. We have certainly not taken any decisions about the modernisation of our own systems.
Lord Irving of Dartford: My Lords, does the Minister agree that the proposals that are envisaged to remove United States ground-launched missiles from this country and to replace them with air-launched missiles in other parts of Europe would indeed be widely construed as contrary to the spirit of the whole INF treaty?
Lord Trefgarne: My Lords, I can only repeat that there is no question of our seeking to circumvent the INF treaty. It is perhaps worth noting that since 1979 the number of allied warheads in Europe has decreased from a figure of around 7,000 in that year to around 4,600 now.
Lord Mellish: My Lords, is the Minister aware that some noble Lords on this side of the House happen to think that the nuclear capability of NATO was a good reason why Mr. Gorbachev came to the negotiating table and produced the agreement of which we have been speaking? Is he further aware that some of us would take a very dim view of Britain taking unilateral action on reducing armaments without absolute agreement with every single one of our allies?
Lord Trefgarne: My Lords, I am sure that the noble Lord is quite right to say that alliance decisions on nuclear disarmament must be multilateral decisions within the alliance. We must move step by step in a balanced and verifiable way.
Lord Mayhew: My Lords, does the Minister agree that although it may not be the Government's intention to circumvent the INF treaty, that is the practical effect of the decisions about weapons that they are taking? There is, for example, the effect of taking cruise missiles from the ground at Greenham and putting them on planes. The effect is the same. Moreover, not only the West but also the Soviet Union are taking this action. One has a treaty such as the INF treaty, but would it not be better to have treaties which provide against the substitution of other weapons? Why was that not done more effectively, and is it too late to try to get agreement on something on those lines?
Lord Trefgarne: My Lords, no decisions have been taken to substitute anything for anything else, so the question of circumvention, as the noble Lord suggests, does not arise. However, let me underline again that there is no question of this Government or indeed any other government within the Western alliance who are party to this agreement seeking to undermine it. We wholly support it and look forward to early ratification.
Lord Molloy: My Lords, following the question put by the noble Lord, Lord Mellish, regarding the fact that all our allies should be informed, is the Minister aware that one of our allies happens to be the United States of America and that its President and Mr. Gorbachev have raised a hope that perhaps all the world will depend on? is full cognisance taken of that hope of Reagan and Gorbachev in full discussions, bearing in mind that the utmost detailed examination must be undertaken and great caution exercised at all times? Nevertheless, does he agree that this hope of Gorbachev and Reagan should not be ignored?
Lord Trefgarne: My Lords, of course it is the case that the United Kingdom was not strictly a party to the INF agreement. However, we are concerned with it because some of the facilities were based in this country. I can assure the noble Lord that the British Government were certainly kept fully informed during the United States negotiations in connection with that agreement and indeed we are still being kept fully informed by the United States in connection
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with its current discussions with the Soviet Union over a wider START agreement, as it is called.
Lord Rea: My Lords, can the Minister say whether the decision of NATO to improve its nuclear capacity was in answer to Soviet modernisation of its nuclear arms, and, if so, what is the evidence for that suggestion? Alternatively, was that decision, as another noble Lord has suggested, intended from a position of strength to encourage the Warsaw Pact to come up with a new proposal for a balanced reduction of conventional weapons or short and medium-range nuclear weapons? If so, would it not be cheaper and considerably safer for our side to make new proposals at Geneva for such balanced reductions without going to the expense of modernising our weapons, as is proposed?
Lord Trefgarne: My Lords, the original twin-track decision, as it was called, taken in 1979, was made under what was then the new threat of the deployment of the SS.20 systems. The allies took a decision at that time to respond to that threat by the deployment of the intermediate range systems, as the noble Lord will be aware, and at the same time they addressed vigorously the question of a control agreement for those systems. That policy has proved to be overwhelmingly successful in that for the first time we have an agreement between the superpowers to eliminate a whole class of nuclear weapons and to make a significant reduction in the number of warheads, to which I referred earlier. I believe that the way forward is by such measures of arms control and I hope that your Lordships agree with me.
Lord Hatch of Lusby: My Lords, I agree with the noble Lord, Lord Mayhew, that the Government may very well not be attempting deliberately to circumvent the INF treaty, but can the Minister say whether he has read (or if not whether he will read) the work of Dr. Paul Rogers of Bradford University; namely, his guide to nuclear weapons? I know that he cannot confirm directly any figures this afternoon but will he write to me about the figures which are given; that is to say, that if the INF deal is ratified, 464 United States ground-launched cruise missiles will be removed from Europe but at the same time the United States Navy will acquire 758 similar sea-launched missiles and the United States Air Force has already deployed about 1,700 air-launched missiles?
Lord Trefgarne: My Lords, I can only tell the noble Lord again that there is no question of the allies seeking to undermine or circumvent the intermediate range weapons agreement that was made recently. It now only remains for that agreement to be ratified by the United States Senate. It was an agreement on land-based intermediate range systems and it will be scrupulously observed by this side.
Lord Hatch of Lusby: My Lords, will the noble Lord write to me as I asked!
Noble Lords: No, no!

European Communities Committee: Select Committee
3.7 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the Lord Renwick be appointed a member of the Select Committee in place of the Earl De La Warr, deceased.—(The Chairman of Committees.)
On Question, Motion agreed to.

Statutory Instruments: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, that the Baroness Blatch be appointed a member of the Select Committee in place of the Lord Beloff, resigned.—(The Chairman of Committees.)
On Question, Motion agreed to.

Manufacturing Productivity and Jobs
3.8 p.m.
Lord Joseph Lord Joseph rose to call attention to the gap between British and North-West European manufacturing productivity, its implications for British earnings and for public and social services, and the case for more entrepreneurs to provide more jobs; and to move for Papers.
The noble Lord said: My Lords, I hope that your Lordships will agree that normally I am ready when necessary to make party points, which is an indispensable part of democracy. Today, I seek an equally valid aim, which is to reach towards a common diagnosis of two problems: why have we become the least prosperous of developed countries; and why do we still have so much unemployment?
Even if we were to reach a common diagnosis there would still be ample scope for party arguments on how to shape policy. Today, I do not propose to blame any group—management, trade union leaders, trade union members or even governments. During 1974 to 1979, the years of a Labour Government, unemployment doubled; it doubled again during the years of Tory administration from 1979 to 1986, and it is now falling.
Since 1979 our average manufacturing productivity has improved compared with our past and with competitor countries. However, their average manufacturing productivity is still far higher than our own. Since 1979 entrepreneurship and self-employment have grown, but to provide more jobs in the North and in the inner cities we need many more entrepreneurs and jobs. Noble Lords will realise that the more productivity rises the more jobs and entrepreneurs will be needed to return us to full employment.
I accept that greater prosperity does not necessarily guarantee more individual fulfilment, but
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certainly it is better than greater poverty. I want all countries, especially poor countries, to grow more prosperous, as I am sure noble Lords do. I do not seek that we should be the most prosperous of all but that we should be among the top group; and we are not, now.
Noble Lords will be relieved to learn that I shall use no statistics. We have reduced the average manufacturing productivity gap but there is a still a long way to go. We have reduced unemployment but there is still a long way to go. Perhaps we should all avoid magic wands. I undertake not to argue that if we were to have earnings and housing flexibility we should have much less unemployment. I ask that others of your Lordships will try to avoid arguing that our problems stem from low investment. Our problem is, and has been, low output from investment, whether new or old. If anyone doubts that, I refer them to the 1975 Central Policy Review Staff Report on the British car industry.
Noble Lords may ask why the Motion refers to manufacturing productivity. The answer is simply because the statistics are available. I am not an economist but I am aware that the precise criterion that I am using is productivity per unit of resource per hour in the economy as a whole; but I shall call it productivity for short. Finally by way of prelude, I acknowledge that I am neither a manager nor an entrepreneur though I understand and value the important function of each.
Noble Lords will realise that there are two interconnected limbs to my Motion. The first is the need, if we are to compete and prosper as we would wish, to improve average productivity; and the second limb is the need, as we improve productivity, to have additional jobs via more entrepreneurs so as to continue to reduce unemployment. Of course I am not arguing that productivity is all that matters. Research and development, marketing, design, value for money, quality and servicing are all crucial. I simply wish to emphasise that productivity is crucial too.
The future for our prosperity and our employment depends on our performance in productive activity. Either we can continue to improve our productivity and to increase our entrepreneurship, in which case our standard of living, our help to those who cannot help themselves, our public services and our employment are all improved; or, if we do not, recent progress will be reversed and unemployment will rise instead of falling. Incidentally, I express surprise that those concerned with low pay do not give more attention to the low productivity that is often involved.
The propositions on which my Motion rests are, first, that average prosperity reflects average productivity, and that the greater our average productivity the greater will be our prosperity and the greater the buying power of average earnings. Secondly, jobs depend on customers. It is the entrepreneurs—alas, we do not even have such a word in English—whose function it is to identify and to serve groups of customers in the hope of profit but, because of competition, at the risk of loss. The entrepreneur does this self-interested service, if successful, by mobilising resources to provide the

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goods and services that people at home and abroad want at prices they can afford.
It is customers who provide jobs. I should love to be able to create an aphorism that would ring round the country so that this was widely recognised. I tried to put the proposition briefly and crisply: fuss over jobs and jobs vanish; fuss over customers and jobs multiply. I wish that this truth could be more widely recognised.
Public sector jobs depend indirectly upon customers too, since public services are largely financed out of taxes and most taxes are paid by businesses or people who work in business. We have, relative to all developed countries, low average buying power because our average productivity is low. In competitor countries real earnings are higher, yet, because of higher productivity, unit labour costs are lower. This is a platitude: we should aim to become a high earning, high productivity, low labour unit cost economy instead of being, as now, a low earning, low productivity, high unit labour cost economy.
Even if North-West European average manufacturing productivity growth rates remain, as they have recently been, favourable to the United Kingdom, it will take us years to catch up with the standard of living and the public and social services of North-West European countries. However, there is a cheerful aspect even if they accelerate: they will then be even better markets for us and cheaper suppliers. Some people, even in your Lordships' House, may fear that new technology—even robots—will lose jobs. If our productivity rises we can win new markets and be ourselves a larger market for others with, it will be thought, less labour use. But I wish to argue that as productivity rises we shall be able to afford more of the good things of life, including a shorter working year and longer paid holidays.
I draw the attention of colleagues to the problems ahead in raising productivity and in reaching the flexibility, the erosion of job demarcation, that firms in competitor countries take for granted. I shall read four brief paragraphs from a recent issue of Income Data Services Study No. 360, which is in the Library:
"With very few exceptions, the process of achieving full-scale flexibility has hardly begun. There are exceptions, and we look at some of these … But in general, progress has been limited. The gap between the few advanced companies and the large majority is considerable.
"Many agreements which look impressive on paper are enabling agreements. They establish the possibility of change, often over a long period. Normally they begin the process—often by cutting numbers employed—but the real tests are in the future.
"Extensive change requires change from higher management as well. Management restrictive practices and demarcations, for example between production and engineering, need to be eliminated as the pre-condition for any major change.
"However, demarcations and 'restrictive practices' are not just the result of trade union defensiveness—they have also arisen because of managers 'guarding their own patch', even in factories where unions have never been recognised".
How far there is to go appears also, I gather, from an article in tomorrow's issue of the Industrial Relations Services Review by Dr. Michael Cross, which, I understand, will also be available in the Library.
Your Lordships may ask: what can the Government do about all this? Much has already
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been done. I do not wish in any way to withhold credit for what has been done over the last nine years. However, making even further progress in removing disincentives to work is a continuing task, and that remains to be completed. Improving education and training are two others. Countries at every stage of development are busily improving the capability of their work forces. However, the prime responsibility is upon management. The least that they must do, surely, in their own interest, is to inform staff directly, not indirectly, and with great regularity, of the competitive position, and of the scope for and threat to jobs. Unions have in most cases tended to emphasise production rather than productivity and producers rather than consumers. Yet consumption is the sole purpose of production. How can government help managers to do their jobs effectively? Above all, I would argue, by competition, including free trade. But what about those quotations that I read from IDS 360?
Do people realise, I wonder, how rapidly jobs can go, can vanish, if key factors go wrong? There have been all too many examples. Could not government—here I speak to my noble friend the Secretary of State—secure the examination by academics or consultants and the publication of case studies to put in the hands of managements and their staffs examples of job suicide, of firms' suicide, of subsector suicide and of sector suicide, and more case studies of success in holding and gaining markets and jobs?
I turn to the second limb of my Motion—the need for more entrepreneurs. The great function of entrepreneurs is the perception and pursuit of customers and thus more jobs. I used to think that entrepreneurs were needed only to start new firms. I have come to realise that nearly every department of every division of every existing business needs entrepreneurs if current customers are to be held and new ones attracted. In the past we have used some very effective ways, alas, to discourage entrepreneurs—snobbery about business; over-taxation; over-regulation, and overmanning.
We are now trying to improve matters. My noble friend has set himself the task of reducing over-regulation. I now ask the crucial question: shall we generate enough entrepreneurs ourselves within this country to continue the decline of unemployment, especially in the North and in the inner cities? I accept that there is need for changes in taxation and further changes in taxation and welfare law if we are to reduce—I hesitate at the word, but I must use it—the incentive to be unemployed in combination with other forms of income receipt.
I am talking about the number of entrepreneurs. The framework created since 1979 has led to a sharp rise in the birth rate of new businesses. Clearly, self-employment has risen also; but there plainly are not yet enough entrepreneurs to absorb the existing unemployed and there seems to be a particular shortage in the North. Moreover, the inner cities, whether they know it or not, are crying out for more entrepreneurs. If the Government can discover more ways to encourage more entrepreneurs internally, so much the better. But supposing Ministers think that there is no more that they can effectively do. Why not

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then consider encouraging more entrepreneurs from abroad? What a transformation more entrepreneurs from abroad might bring to inner cities and the North in the provision of new jobs. Would the Government perhaps be willing to consider focusing the business initiatives of such immigrants on a limited number of inner cities?
I do not presume to suggest how it might be done. We already admit businessmen from abroad with money to invest. Perhaps passports might be made conditionally available on evidence of performance. I understand that Canada is trawling for entrepreneurs and so are some other countries, including the United States. Evidence of entrepreneurial capacity is most vividly shown by financial success, associated with job creation. If a financial qualification were to be considered repugnant by Her Majesty's Government, let them consider whether their understandable fastidiousness might be eased by the condition that five years' success in job creation here would be necessary. Moreover, should they balance the interests of the unemployed against their repugnance?
Underlying these two themes of higher productivity and more entrepreneurs is an even deeper issue. Why is it that in this country, full of intelligent, well-meaning people and where the Industrial Revolution began, we have been so overtaken in prosperity by countries which, even a few decades ago, were far poorer than we? Why is the need to be profitably competitive, if we are to prosper and to be fully employed, not more widely perceived? Why do some managements lose markets by their own failings, by lack of drive, lack of attention to the marketing skills, and why do some workforces often help managements to lose markets by obstructing the efficiency on which profitable competitiveness depends? With John Bolton I set up the Foundation for Management Education in 1959 which does not begin to meet the need. I accept that management education needs much expansion and I welcome the vigorous expansion now contemplated.
Tentatively to answer my own question, I suggest that the opinion formers, the intellectuals, the academics, the teachers and the journalists all too often tend to have ignored the foundations on which a prosperous, fully employed society of free individuals must be based. What we need is, in the magic phrase of de Toqueville, "self-interest rightly understood".
Perhaps it would help if more nationally accepted figures among the opinion formers and in the trade unions were willing to point out that bad management and restrictive labour practices inflict widespread damage on those concerned and on far wider sections of the public. I quote from Graham Hutton, writing in 1980:
"The truth is still … that we can easily raise our economic performance, our standard of living and our leisure by a steady marginal reduction in unit costs, and by increases in regularity, quality, productivity, added value per occupied worker, however you care to measure economic efficiency. It requires the will, and the legal, social, political setting. We have the ability. We can do it with scarcely any extra effort, at most with some extra attention".
Much has been done in the past nine years, but the scope is still immense.
My Lords, I beg to move for Papers.
3.26 p.m.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, the House is indebted to my noble friend for raising in his Motion issues of such fundamental importance to the future prosperity of this country.
There is a logic in the Motion of the noble Lord, Lord Joseph, which I find irresistible. That logic is that growth in efficiency is the essential foundation of a rising standard of living, both in private wealth and in public services; that our nation must therefore raise its productivity in industry and commerce; and that the source of our future productivity and wealth lies in the enterprise of individuals.
The Motion calls attention to the gap between British and North-West European manufacturing productivity. The available evidence suggests indeed that our level of productivity in manufacturing remains below that of our major competitors, including France and Germany. But in recent years we have made significant progress in closing the productivity gap.
In the 1960s and 1970s the United Kingdom was at the bottom of the productivity growth league; now in this decade it is at the top. Productivity then in our competitors was on average around 3.5 per cent. per annum throughout both the 1970s and 1980s—well above the UK of the 1970s, with productivity growth averaging about 1.5 per cent. a year but below the growth of this decade, with productivity growth averaging nearly 5.5 per cent. a year.
What has happened? Since 1980 firms have overcome some of the barriers to change. They have invested in new technology. They have brought in greater flexibility in working arrangements. They are reaping the advantage of a better climate in industrial relations. But a gap in productivity still remains. There are arguments about the size of the gap, but I suspect we may still be as much as 30 per cent. behind some of our major competitors. Better productivity is not exclusively about the cheapest and most effective production system. Our notion of productivity has to be updated from the mechanistic production of more to the imaginative production of new and better—better design, better quality, better reliability. To achieve that we cannot do without the spur of continuous improvement and innovation. That spur is the enterprise of individuals.
Our task in government is simple. It is to spread best practice even further across British industry and commerce. I identify three areas as critical in achieving higher levels of productivity. The first is innovation and particularly the effective application of the best techniques to many of our firms. Technology transfer forms a major element in our innovation policy. It will probably have the greatest impact on productivity as new technology is introduced. It need not necessarily be new technology but more and more small and medium-sized companies adopting existing technologies. For that reason the enterprise initiative plays an important part in the policies of my department.
The second—and I believe that this covers common ground across the whole of your Lordships' House—is the need for industry to invest in training both at a technical and managerial level. That has

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been continually emphasised by the Government. I believe that recent developments in creating the National Council for Vocational Qualifications, through the charter group now emerging through the CBI and the British Institute of Management, will help to give the essential infrastructure towards encouraging individuals to develop a career pattern and to encourage companies to recognise the simple value of training. The responsibility is clear: it is on employers to invest in their own people.
The third—and it follows from that—is the involvement of employees. We have played some part through tax incentives for employee share schemes and profit-related pay. I believe that benefits to companies of closely involving their employees in the direction and success of the company account for major differences in productivity levels between businesses. When the Japanese came to these shores they brought with them not only investment, money and technology but methods of involving their employees. They have shown us what can he achieved by paying close attention to detail. Akio Morita, the head of Sony, put that well when he said:
"The fate of your business is actually in the hands of the youngest recruit on the staff"
Such changes do not require major financial investment but good management and a business strategy centred on the people who make up that business.
All those elements—innovation, training and employee involvement—add up to greater flexibility, better use of resources and therefore higher productivity. Many companies have achieved such changes but, alas, many have not. Even those who have remember that our international competitors have not stood still and have continued to improve. Therefore I fear that I must agree with my noble friend. The scope for our industry to raise its level of productivity remains considerable and is ever present. If we can achieve higher productivity we shall provide the basis for improved competitiveness, stronger growth, higher earnings and in the end lower unemployment.
However, those goals are not achieved automatically because competitiveness is relative. Even if our productivity growth if 5 per cent. faster than that of our competitors, I fear that if we give ourselves pay rises of 5 per cent. more than our competitors we shall not improve our competitiveness. If higher productivity is simply reflected in higher earnings there is less scope for increased profitability. Without that profitability there is not the scope for investment, innovation, increased training or any of the other changes needed to provide the foundation for long-term prosperity and security of employment.
All noble Lords should welcome the fact that profitability in manufacturing is now at its highest level for nearly 20 years. However, even today it remains below the levels consistently achieved in the 1960s. Worse than that, it remains well below the rates achieved by our competitors. We need higher levels of profit to increase the incentive to invest. Too often in the past people invested either overseas or in low-risk financial assets within the United Kingdom. We shall change that only with higher profits—a better return for investors—in UK industry.
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One of the few points which I find difficult about the Motion is its emphasis on manufacturing productivity. I understand the explanation given by my noble friend for choosing that particular index. However, our standards of living and the ability of our economy to generate the wealth which can provide the public services we all want depend on the productivity and efficiency of the whole economy and not just the manufacturing sector. We know that both our industries and services must be efficient.
Indeed, if we put all efforts into higher productivity in manufacturing, and the growth of earnings in that industry matches the growth of manufacturing productivity, the much larger service sector may find itself burdened with significantly higher labour costs as higher pay claims spread across from manufacturing industry. Such a burden would not assist the growth of profitability in services, which is just as vital to our future wealth as that in manufacturing.
If one were to examine the issue surely one would find that the key difference is not that between manufacturing and services but between wealth consumption and wealth creation. At the beginning of the decade our nationalised industries were enormous consumers of taxes. Today those same companies are as a whole creators of wealth. They contribute towards our increase in living standards and many are now operating profitably in the private sector. That is where they belong and where, I suspect, they should not have left.
We all recognise that the resources which we can put into our public services depend on an efficient economy. We should all recognise too that the level of public services is not just a result of the resources put into them; it is also a question of how efficiently those resources are used. Indeed, we should concentrate not on inputs, which seems to have been an obsession of the media and of many people in public life, but on outputs and what we receive for government investment. That is the relevant factor. The Government have put considerable effort into improving the efficiency with which public-sector resources are used. We have tried by contracting out services and by setting clear priorities, objectives and performance standards within the public sector.
Our concern in this debate is essentially the best way to encourage a successful economy which will provide our people with the goods and services which they need. I have long held the belief that widening the scope given to the enterprise of individuals, their skills, ability and initiative will provide the way.
In 1979 we set ourselves the objective of encouraging enterprise. No doubt my noble friend will have long forgotten that yesterday was the ninth anniversary of the day on which he saw me as his first appointment on becoming Secretary of State for Trade and Industry. On that occasion he was reckless enough to appoint me as his industrial adviser. We have come a long way since then. I recall that one of my first actions on joining the department was to ask for a survey on the birth of new businesses. It disclosed that we had one of the lowest birthrates in Europe. Since that time—since the beginning of the decade—the number of businesses has been growing week in and week out by over 500 a week. Today we

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have over 180,000 more businesses than on the day when I first saw my noble friend.
The number of self-employed people has increased by almost 1 million, an increase of almost 50 per cent., since that day in 1979. The enterprise allowance scheme has seen 330,000 unemployed people setting up their own businesses. I listened with great interest to my noble friend's suggestion about finding more entrepreneurs, and I shall certainly pay attention to what he says.
The whole climate for wealth creation and enterprise has changed. The changes in the tax system have put more emphasis on incentives, rewards and the risks both for individuals through lower personal taxation and for businesses through initiatives such as the business expansion scheme. In some ways, equally as important, the links between education and the needs of industry have been changed by TVEI, the National Council for Vocational Qualifications and the Open College, which have brought back into the forefront of our lives the need for individuals to improve their skills. Those schemes that I have already mentioned to your Lordships' House to help people to start their own businesses through the encouragement of the network of local enterprise agencies have had their effect.
We are endeavouring in some small part to lift the burden on people in business through lifting the burden of regulations, although I suspect that were it possible to do an objective test we should see that all we are actually doing is lifting those imposed by ourselves. I should not like to say whether they improve the position. Finally, we are encouraging businesses to flourish through opening up professions, encouraging competition and removing companies and their markets from state control.
We have come a long way and we are seeing the return of enterprise to our economy. However, we have much more to do, and much more to do to ensure that the enterprise culture is given a chance, a chance to become part of our way of life, a chance to work with industry and increase our efficiency and competitiveness.
I am sure that my noble friend will not disagree with me that it is not the task of entrepreneurs to create more jobs. Indeed, John Harvey-Jones made the point that:
"In this country, uniquely, industry is looked upon as a means of providing jobs, and that actually isn't the job of industry. The job of industry is to create wealth".
That is quite so. The job of enterprise is to create successful businesses. Those successful, profitable businesses will create more jobs. They have created over 1½ million more jobs since 1983 and we have seen the results in the recent unemployment figures. The job of government is to provide a climate in which our people can use their enterprise and skills to develop the businesses which can compete on ability.
Therefore, today we have a Government committed passionately to encouraging enterprise. We have people with the talent and initiative to develop new ideas, new products and new ways of working. That is a winning combination which has succeeded, is succeeding and will succeed.
3.43 p.m.
Lord Williams of Elvel: My Lords, the noble Lord, Lord Joseph, in moving his Motion, said that he was not anxious to raise party political points. Indeed, we are grateful to him for putting a rather philosophical speech before your Lordships—if I may express it in that way. The Secretary of State added his own government gloss to what the noble Lord, Lord Joseph, had said. Other noble Lords will no doubt wish to pursue the various themes raised by the noble Lord and, indeed, by the Secretary of State.
In the spirit of cross-party co-operation, I should like to state—it may be a platitude but it is a sensible platitude—that I agree wholeheartedly when both noble Lords say that it is the ability of the United Kingdom or, indeed, any country to generate wealth by its own efforts that determines, in the end, the quality of the social services we can afford. If we do not deliver the goods, then we cannot look after our people. That is a very simple platitude, but I believe it to be true.
The argument revolves around how we are to deliver the goods; whether we are delivering enough goods relative to our competitors, for example, in North-West Europe, to which the noble Lord has referred; whether we are delivering the right goods; and whether we shall continue to deliver the right goods. All those matters are raised by the noble Lord's Motion. We must be grateful to him for putting the Motion in a wide form that enables us to discuss them because they are the proper stuff of political debate.
I start with the gap in manufacturing productivity that exists between Britain and North-West Europe. The Secretary of State said that the figures were somewhat difficult to come by; indeed, they are. I have tried to dig out some figures to show—as they do show—that in terms of output per man hour or output per employed person there has been a shift in our favour in the present decade. That is wholly welcome provided we are manufacturing products which will continue to sell. However, that is not the whole story. When we look at total factor productivity—that is, the productivity of capital and labour—the picture is somewhat different. In the period from 1979 to 1985, according to OECD, Belgium was the leader in this category, followed by Sweden—I am picking North-West European countries for this example—with the UK, Germany and Norway bunched in behind.
The implication of the differential growth of labour productivity and total factor productivity gives rise to results we would not altogether wish for and, indeed, to results to which the Secretary of State referred. Let us take Belgium, Sweden and the UK. Wages per head in the period 1980–86 rose by 36 per cent. in Belgium, by 63 per cent. in Sweden and by 75 per cent. in the UK. In other words, it was the welcome increase in labour productivity—and here I join with the Secretary of State—that financed rises in earnings while a much poorer return on capital was ignored.
Of course, there are the knock-on effects in the non-manufacturing sectors. Everyone involved in economic management over the last few decades has been faced with the problem of the relationship

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between incomes in sectors where the market cannot operate, such as education, law and order and defence, and earnings where the market can operate. In my view, no one has succeeded in achieving a balanced relationship that survives the test of time. The result is what we have witnessed over the last few weeks: rises in earnings in the trading sector provoking pay protests from teachers, nurses and so on, ending in decisions, I am afraid, of a purely political nature designed to head off Government Back Bench revolts.
The fundamental difficulty which has been with us for a long time, and which remains, is how to allow earnings in manufacturing to rise in some relation to manufacturing labour productivity without provoking the political problem of depriving people of the services which they themselves politically demand by the expression of their political views through the ballot box. It seems to me that we are as far from a rational answer to that problem as we have ever been.
I said a moment ago that the increase in labour productivity was most welcome in manufacturing provided we were producing goods that would sell and continue to sell. It is clearly no good producing last year's model, however efficiently we do so. Here again, there is cause for concern. It cannot be said too often that industry is simply not spending enough on civil research and development. In 1985 our industry funded civil research and development to the extent of 1 per cent. of the gross domestic product compared with America's 1·3 per cent., Germany's 1·6 per cent. and Japan's 1·8 per cent. If that continues, the new products will not come through and our present products will grow obsolete.
Our training programmes are still lamentable. Even with the present wholly unacceptable level of unemployment, the number of British manufacturers expecting shortages of skilled labour to affect their output has almost doubled in the past year. There are particularly acute shortages of professional engineers, computing information technology specialists and craftsmen. The people required to develop and market the new products are simply not there. It is perfectly possible to argue that this would not matter if the whole world were playing the same game and all markets were wholly free. But they are not—not even in the USA which in its own way is as protectionist as it appears to be liberal.
We can say that the only criterion for judging the public interest in a takeover is the competition criterion. But nobody else does. So Nestlé or Suchard can take over Rowntree but GEC cannot take over Brown Boveri because the Swiss simply do not play the same game and nor do France and Germany. Anyone who thinks that 1992 is going to change that is living in some kind of dreamland.
Therefore, to be successful as a nation, since it is competition between nations that we are talking about, we must study the example of other nations. Many commentators have focused attention upon Japan. I should like to take up the noble Lord's Motion; it is to North-West Europe that I believe we have to look to see what lessons we may be able to learn.
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What are the characteristics of North-West European countries that we might look at? First, I would argue that it is the commitment to social cohesion which is based upon several principles: the interest of productive industry, encouraged and stimulated in partnership with government; a high level and quality of collective provision in health, education and income maintenance and, as the Secretary of State, said, a commitment to investment in people through exceptional education, training and retraining.
Perhaps I may give an example. Sweden was the second largest producer of ships in the 1950s. Today its shipbuilding industry is virtually dead. But the rundown was achieved without resorting to mass unemployment in the shipbuilding areas because of planned investment location, active involvement of the labour force in seeking new opportunities, and major retraining policies. What a difference in the way we have collapsed our own shipbuilding industry.
Next, there is equal commitment to participation and democracy, not only through local democracy and local and regional government, but also the involvement of the workforce in major investment decisions and in legislation relating to the working environment. None of those commitments seems to be present in this country. We have abandoned the goal of full employment. The financial markets dominate productive industry and the non-financial service sectors. Our institutions are adversarial in nature and in many cases inefficient in practice. Local democracy is being killed off by the death of a thousand cuts.
But the noble Lord and the Secretary of State may argue entrepreneurs are flourishing; should not there be more of them? Before answering that question, I am not entirely clear what the Motion, or indeed what the noble Lord, Lord Joseph, means by the expression "entrepreneur". I am not sure that the noble Lord himself was entirely clear. I believe he said that he had changed his mind over the years as to the meaning of that expression. That was a very interesting remark. If the word is used in the way in which the French use it, it is probably best expressed by the third definition given in the Oxford English Dictionary:
"A contractor acting as intermediary between capital and labour".
Of course, I disregard the first two definitions which are:
"The director or manager of a public musical institution"
and,
"One who gets up entertainments".
If the meaning I have quoted is the right one it is by no means clear that the entrepreneur creates jobs. Indeed, the record of job creation in some of our larger companies run by major entrepreneurs, some of whom are Members of your Lordships' House, is far from heroic. Companies that grow by acquisition—which is the favourite method of our entrepreneur—normally engage in destroying jobs by what is politely known as rationalisation of the labour force.
Nevertheless, entrepreneurs come in all shapes and sizes. The start-up venture to which the noble Lord, Lord Joseph, referred, is one which, in our view,

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grows organically. It is a job creator and must therefore be welcomed. My response to the question of whether there should be more entrepreneurs is, yes. Many entrepreneurs are flourishing; in some cases, the wrong ones. Yes, we should have more of the right kind of entrepreneur. But even if that is achieved, as I hope, we must recognise the problems. Small businesses do little to help our trade balance. In the competition between nations in which we are engaged, that will be the crucial indicator of success or failure.
If the only result of the years of North Sea oil is to lead us back to where we started, with regular payments deficits and sterling crises, then the whole exercise of the past few years, which has only been possible thanks to the oil, will turn out to have been a dreadful failure. Conversely, if payments deficits do not recur after the oil has run out, then the Government can legitimately claim a success. Until then the jury is out.
A second problem associated with entrepreneurship is more of a social nature. The active encouragement of what the noble Lord, Lord Joseph, called self-interest properly understood, which I would prefer to call possessive individualism and others would call the promotion of the rat race, has some unpleasant side effects. I quote part of an article in Monday's Guardian by a distinguished novelist:
"A new tyranny of fear has been born from today's unequal society. Britain, we are repeatedly told by the press and the politicians, is richer under Thatcherite monetarism, with the newly released competitive energies of the market place, than it has been for decades. How odd, then, if this is so, that we should be so nervous, so alarmist, so frightened of walking the streets at night or taking public transport of an evening. Should we not feel safer, more protected in the citadel of our own money? We are not, we know, and we know although we do not admit it, that we live in a society so unjust and unequal that groups within it declare unofficial war on other groups. Equality of opportunity, the career open to the talents, these are as black a joke to the black youths of Brixton or Broadwater Farm as the same concepts seemed to George Bernard Shaw in the Edwardian heyday of the belle époque. Choice is still restricted to those with educated talents and long purses".
We believe that in these matters too we can learn from North-West Europe. We need a sense of national cohesion and of purpose. We need to work together, not adversarially against one another. We need a government who lead and persuade, not centralise, harass and bully. Above all, we need to ensure that the youths of Brixton and Broadwater Farm have the opportunity to exercise the same freedom of choice that is now only open to what is still a minority. That is the proper task of government in the 1990s; and that is the task we expect the Government to undertake for the good of the whole country and the survival of us all.
3.58 p.m.
Lord Ezra: My Lords, we are particularly indebted to the noble Lord, Lord Joseph, for introducing a Motion which enables us to do something which I believe this House is fairly skilled at doing: namely, pondering over a major issue of policy. We have had important contributions from the noble Lords, Lord Young and Lord Williams, on this subject and we shall have many other important contributions to follow.
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I believe that it is quite right—this is not the first time—that we should be looking at the problems of productivity in manufacturing industry. It is perfectly true that in spite of improvements in recent years we are still lagging behind most of our competitors in Western Europe. The noble Lord, Lord Young, pointed out that the figure could be of the order of 30 per cent. In fact the CBI has mentioned in regard to West Germany a figure of nearer 50 per cent. Whatever the figure may be, there is a large gap. This, regrettably, is reflected in levels of pay. Although there have been substantial increases in pay in recent years, the absolute levels compared with other countries showing this higher productivity are much lower. Therefore within Western Europe we still demonstrate the features of a low pay, low productivity economy.
Another serious feature—and it is important to tabulate these features at the beginning—is that while the manufacturing capacity of our competitors has increased quite noticeably during the past decade, ours has still not caught up with where it stood a decade ago. So we have a reduced manufacturing capacity, relatively lower productivity and relatively lower levels of pay. These features are beginning to work their way through to our balance of payments. In this respect we have had some nasty shocks in the first two months of the year. In the most recent month the position was a little better, but the Treasury is now forecasting a deficit of the order of £4 billion for the year as a whole, and some fear that it could be larger.
All these issues were raised in the report of the overseas trade committee chaired by the noble Lord, Lord Aldington, who I am glad to note will be speaking in the debate. There have also been more recent references to this problem. In fact in another place on 11th March there was an important debate on the need to develop engineering performance up to and above the standards of leading industries overseas. Members of another place skilled in engineering identified this as one of a number of sectors where we still have some catching up to do.
Noble Lords who have already spoken have indicated how they feel this problem should be dealt with. But I should like to draw attention to one difficulty which we face and on which the noble Lord, Lord Williams, touched. In trying to find a solution to this problem, which is essentially of a long-term nature, we are limited by a tendency towards short-term thinking which is still rife.
I can demonstrate this by personal experience. I happen to be connected with a large enterprise involved in the manufacture of building materials. After a great deal of thought we decided to invest a large sum in a new enterprise, building on a green field site. It was going to take two to three years to mature and obviously there would be a cash outflow problem in the meantime. As soon as the analysts heard about it they wrote down the value of the shares. Had we instead acquired a company in order to do what we set out to do, which would not in any way have added to the total resources in the sector, I am quite convinced that our shares would have gone up overnight. It is most regrettable that this view should be taken. Short-term acquisitions are in; long-term investment seems to be regarded with a degree

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of suspicion by those who judge these matters and influence the level of share prices. This in turn has an influence on the success or failure of companies.
In my opinion, we have to take a long-term view in this matter.The three areas of particular importance are investment, training and research. The prime responsibility in these three areas lies with industry, but industry has to act within a framework laid down by government. That is what we have governments for. It is in connection with the framework that some degree of confusion has recently arisen. At the moment the Government's policy on the exchange rate is by no means clear. This is of considerable importance to manufacturing industry if it wants to export. There is also uncertainty on the related question of the level of interest rates. That in turn has its impact on the balance of payments.
Here, I am afraid there is also uncertainty about the validity of the figures published on the balance of payments. We have been told that there were changes in the EC methods of identifying the various sectors that are collated, but more recently I have heard—no doubt this can be corrected later on if it is wrong—that, as a result of cutbacks in the statistical staff in the government department concerned, there has been a much less thorough collation of these figures than in the past. This perhaps explains why at some time much after the end of the year very substantial corrections are brought to bear on the balance of payments figures. The balance of payments figures are of vital importance.
Lord Young of Graffham: My Lords, if the noble Lord will allow me, I believe that these corrections at the end of the year have been taking place since time immemorial. The process has to do with the way the figures are collated and does not arise because of reductions in government staff.
Lord Ezra: My Lords, I am glad to be reassured on that point. I can only point out to the noble Lord that this point was recently mentioned. If it is incorrect that there has been a cutback in statistical staff, that should be made known officially.
The CBI made a good comment on the problem when it said in a recent publication that,
"relying on exchange rates and interest rates to squeeze out inflation puts at risk investment in the manufacturing sector and exports."
There is the feeling that there are some in government at any rate who want to use the mechanism of exchange rates and interest rates solely for the purpose of squeezing out inflation or what they consider to be the risk of inflation—we all agree that inflation must be kept down—but that this could be carried to the point where serious risk could ensue for manufacturing industry. That view is expressed by the CBI.
Another worrying factor in the macro-economic scene is the continuing high level of consumption financed by credit and accompanied by a very low savings ratio. I am sure your Lordships are aware that the savings ratio in this country is now at the lowest level since 1959. It has fallen progressively from more than 15 per cent. in 1980 to as low as 4·25 per cent. in the fourth quarter of 1987. This puts us lower even than the United States, which traditionally has had a low savings ratio.
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These are all matters of serious concern and fall within the domain of government to some degree and of individuals and companies responding to government policy. It is against this background of some uncertainty and one or two disturbing factors that the questions of investment, training and research have to be addressed. There are gaps in each of those. Those gaps have to be closed if we want to get our manufacturing industry and performance up to the level of that of our major competitors.
On investment, I tend to agree with the noble Lord, Lord Joseph, when he said that what is important is not so much the amount of investment but the use made of it. The two go together. A good deal of investment has been under-utilised or badly used. The country must obviously improve in that respect. The total level of investment certainly lags behind other countries, as statistics compiled by the CBI freely reveal. On training, reference has already been made by the noble Lord, Lord Williams, to skills shortages. It is a sad reflection on the performance of our country since the end of the last war that every time we have had a period of growth we have run into the bottleneck of skill shortages. I hope that progressively we shall be able to overcome that. Other countries manage to overcome it: otherwise how do they have the goods that we do not appear to have to send to us in addition to meeting their own requirements? So this is an area which still requires a lot of attention.
Finally, on civil research we have had many debates in this House on that subject. It is very clear that we have a long way to go to close that gap. These are clearly the problems which we face and these are clearly the matters which have to be attended to in order to resolve these problems. I concur wholeheartedly with all three noble Lords who have just spoken: we in this country have all the ingredients that are necessary in order to solve these problems, whether human or material. What we have to do is to find the right framework within which, and as a result of which, the right responses can be achieved.
4.11 p.m.
Lord Boyd-Carpenter: My Lords, I am sure all your Lordships are deeply indebted to my noble friend Lord Joseph, both for introducing this debate and, if he will allow me to say so, for the deeply thoughtful and penetrating speech with which he opened it. I think I can make no better comment on that speech than saying that it was what one would expect from a Fellow of All Souls. It is a debate which deals with the fundamentals—not so much the fundamentals of economic and financial policy, but the fundamentals that lie behind those policies and determine them or ought to determine them. So far, this debate has been concerned basically with those matters.
Again, it has been the sort of debate which it is difficult to visualise taking place in any assembly other than your Lordships' House, not least because of the immense wealth of experience and practical knowledge which your Lordships collectively possess. My noble friend Lord Joseph made the point very early in his speech—a point which I should very strongly like to support—that employment, development and wealth creation depend not merely

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on producing efficiently but on finding customers. I could not help recalling, as he was saying that, an experience which I had when I was chairman of Rugby Portland Cement and visited one of the factories in the United States in a subsidiary company which that company had acquired. In the works there were great placards saying: "Customers make pay-day possible." Even with the vigorous phraseology with which one is accustomed in the American language, you could hardly put the matter more vividly from the point of view of comprehension of ordinary people. I am sure it had a real effect, and I judge that from the conversations I had with the people who worked there. It had a real effect on them; they wanted to see customers and they wanted to see those customers pleased and satisfied with their product. As a result, I am glad to say that not only that subsidiary company but the great company which owns it are doing extremely well to this day.
I would also join with my noble friend Lord Young in saying that perhaps the only qualification one might add in respect of the speech of my noble friend Lord Joseph, was that he concentrated perhaps too much on manufacturing industry. Very often, if I may say so with respect, it is the failing of noble Lords on the Front Bench opposite that their questions and their approach are very much concentrated on manufacturing industry. But it is the experience of all advanced countries that as they develop and advance a larger proportion of their populations are engaged in the service industries and therefore a smaller proportion in manufacturing industry. I was very glad that my noble friend Lord Young made that point. We in this country are at least as dependent on our service industries as we are on manufacturing industries. We want them both to succeed and to be prosperous. It would certainly be a mistake if in this debate we allowed the discussion to relate solely to manufacturing industry.
However, so far the only very mildly and courteously discordant note has been struck by the noble Lord, Lord Williams of Elvel, who seems at the moment to have absented himself from the Chamber. As he has spoken so recently, I do not think I shall err if I nonetheless in his absence seek to comment on what he said. The noble Lord seemed to me to be suggesting that there was some deep flaw in the policies being pursued by the present Government because of the real threat of disorder and violence which exists in certain parts of our cities, particularly at night. He seemed to suggest that it was because a certain section of the population felt that they were denied any opportunities that they resorted to violence.
I think, with respect, that is a quite superficial argument. Violence is to be found not only in this country. In the United States, where wealth and opportunity are perhaps greater than here, there is a great deal of violence. That is also true in the countries of our friends in North-West Europe, covered by the Motion. Undoubtedly it has been complicated by the problems created as a result of large-scale immigration over recent years, but it is really not true to say that there is some sort of justification for resort to violence by young people
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because they feel they are denied opportunities. There is the Youth Training Scheme, with which my noble friend Lord Young of Graffham will always be associated, gratefully, by his fellow countrymen. And there is the enormous expenditure on education, but I will not start to discuss education as your Lordships will certainly have had enough of that subject, certainly in a few weeks' time. But with the youth training opportunities and the opportunites for education, it is difficult to see that there is any excuse for any young man or young woman who wants to develop himself or herself, or to train himself or herself and wants to work, not taking advantage of the opportunites and feeling that they are entitled to resort to violence because of frustration. Of course they need leadership, and of course there are parts of our country where they do not get that leadership; there are parts where they are not helped as they should be by their seniors. But really to suggest, as the noble Lord, Lord Williams, seemed to, that there was a major defect in our economic policies because this thing happens, as it happens in most of the other leading industrial countries in the world, is, it seems to me, a wholly unfair and unsustainable argument.
In fact, in making all thse provisions, we come down to the question of wealth creation. Some people in this country are apt to feel that because of our nice blue eyes we are entitled to one of the highest standards of living in the world and that all sorts of good things should be provided, including improving standards, year by year. But the reality—and it is this reality upon which our debate hinges—is that all this depends upon wealth creation.
What are the best methods of creating the wealth from which all these other advantages can be drawn? That is really the question, and there are basically two philosophies. There is the philosophy of state control, carried to its most extreme in the communist world; and there is the principle of expansion of entrepreneurial enterprise to which this Motion relates. One has only to look round the world to see which produces the better results.
Let us take, for example, the simple comparison between two great countries: the enormously higher standards of life and wellbeing in the United States, which is the country of entrepreneurial activity, as compared with Soviet Russia, which is the country where state control rules. It is indeed not without significance that that highly intelligent man, Mr. Gorbachev, seems to have appreciated that point and to be moving, as fast as his somewhat reactionary colleagues will permit, towards loosening the ties of state control and thereby providing more opportunity to individual enterprise. Many of us will follow that situation with interest and wish Mr. Gorbachev success—no doubt he will need every bit of luck in the process!
However, I return to the question of which is the best method of securing the creation of wealth. If one looks around the world all the evidence is in favour of the entrepreneurial principle.
That leads me to a further point. One of the differences between the two sides of this House and, still more acutely, between the two sides in another place, is on the issue of taxation. In my view—and I think in the view of many of my noble friends—the present Government have acted with great good

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sense in making drastic reductions in taxation. The reaction of noble Lords opposite has been not only to reject that policy but, through the mouths of their leaders, to pledge themselves to restoring the cuts in taxation now being offered.
It is most difficult to reconcile those two points of view. Noble Lords opposite always seem to me to take the line that virtually all earnings—all income—are at the disposal of the state which graciously allows a certain number of people to retain a certain proportion of their earnings and income. Hence all the remarks about "giving money to the rich" with which we have become extremely familiar over the past few weeks.
Our approach is a different one: that it is necessary to levy taxation, and to levy it as fairly and intelligently as one can, to finance the necessary public services, but that taxation of itself is not a good thing; it is a bad thing and should be kept within limits so far as is possible. That policy is not founded on any theoretical basis; but it is common experience that the higher the rates of taxation the more discouragement one gives to enterprise.
If one is to risk one's small capital in setting up a small business, one does so because in one's judgment it will pay off. However, that judgment—as to whether the risk is worth taking—must be very much affected by the knowledge of what it does pay and what amount one will be allowed to retain. If one knows that one's efforts—the risk one has taken and the investment one has made—will, however successful, result in one only being able to retain a comparatively small proportion of what one makes, that will discourage one from taking the risk, facing the anxieties and exposing oneself to the strain and the problems of building up that business. Equally, it may encourage one to go abroad where levels of taxation are lower; or, having gone abroad, it may encourage one to stay in countries where one is allowed to retain a large part of one's earnings. Noble Lords may care to be reminded—
Lord Peston: My Lords, may I interrupt the noble Lord for just a moment so that I may ask him to clarify what in fact he is saying? Am I right in thinking that he is not actually discussing taxation; he is discussing income taxation? Can he tell us about indirect taxation, national insurance contributions and such matters, so as to give us a broader view of the taxation changes over the past decade?
Lord Boyd-Carpenter: My Lords, I am always anxious to oblige the noble Lord opposite and if, within the reasonable time that I allot myself, I can pass on to such forms of taxation then I shall gladly do so. However, I must return to the point regarding the stimulation of entrepreneurial activity. It is direct taxation on incomes which is directly relevant. The other forms of taxation, especially in the case of national insurance contributions, have a certain relevance, but the crucial point, from which I do not wish to be led, is the effect of income tax on enterprise.
I was about to remind your Lordships that as recently as 1979 on really high incomes, if you include the investment income surcharge, the rate of taxation rose to 98 per cent.; and the lowest rate of taxation
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was at 35 per cent. Therefore it is not surprising, in those circumstances, that enterprise was discouraged. It is one of the reasons for the success of this Government that they have been able to secure expansion to the enormous number of businesses to which my noble friend Lord Young of Graffham referred in his speech. The figure—which was certainly new to me—was 180,000. In this freer atmosphere people are encouraged to earn, to take risks and to build up enterprises. They are not encouraged to go abroad, whether it is to the United States or to the Channel Islands.
Therefore I say to the noble Lord that that form of taxation is relevant to the debate, although, if it gratifies him, I must say that I too regret taxation and believe—having some experience of this, following two terms in the Treasury—that it is right to keep it as low as possible, provided that one can adequately finance the public services from it.
I do not want to be distracted from my main point. It is wealth creation which is the key to the solution of our problems. It is also the key to implementing all the improvements which your Lordships wish to see in the social services. For some years I was Minister of Pensions and National Insurance. From that experience I know that the amount of money one can usefully put into social welfare is absolutely unlimited. There are hardships which one can relieve and there are good deeds one can do, but one has to restrain that expenditure within the limits of what can be earned by the national economy, and earned by it without discouraging such earning by excessive rates of taxation. I beg the noble Lord, who is, I believe, an economist, to reflect upon that fact.
I have only one further point to make. The policy of the Government is plainly paying off. The improvements which we heard about today are real. However, there is—if I may paraphrase the words of my noble friend Lord Young of Graffham—still a long way to go. In important respects we are still behind our North-West European competitors, and that factor becomes even more serious with 1992 looming up upon us. I hope therefore that we shall hear from the Government that they will continue along the lines which plainly have been shown to be right.
Further, I hope they will not be deterred by the observations of a certain right reverend Prelate to the effect that their policy was "wicked". That was indeed a strange word to use, coming, as it did, from a right reverend Prelate who presumably can be said to be using it with technical expertise. As I understand it, wickedness is not just error of judgment, it is not even pursuing a policy with which one happens to disagree; it is the deliberate doing of something which one knows to be wrong and which one then persists in doing. As a comment on the policy of a government, who may be right or who may be wrong but who at least have been successful in that policy, it is so grossly unfair—I would dare to say so grossly improper—that I thought fit to mention it this afternoon, having given due warning to the right reverend Prelate that I would do so. If we are to talk of wickedness, there is perhaps an adjective more appropriate for someone who would take high office in the Church, with a duty to strengthen the faith of believers while openly questioning two fundamental aspects of that faith.
4.30 p.m.
Lord Harris of High Cross: My Lords, as the only Cross-Bencher taking part in the debate I feel that I offer a rather thin sandwich between two such practised parliamentary hands as the noble Lords, Lord Boyd-Carpenter and Lord Aldington. I was delighted to hear an old Treasury hand say—I believe I have written this down correctly—that all taxation is a bad thing. I treat that as a good first approximation. I was trying to think of some obscure respects in which taxes might help to strengthen our economic performance, but that requires all kinds of assumptions about the difference between the impact and the incidence of those impositions.
Such is my admiration for the noble Lord, Lord Joseph, that when he invited me to take part in the debate I am afraid that I accepted on the spot and then found that I had a binding commitment which may prevent me from staying until the final speeches. I apologise to noble Lords, and as a penance I shall keep my remarks well within my customary 10 minutes.
I have long had the highest admiration for the noble Lord, Lord Joseph, as the chief intellectual architect of the transformation of our economic prospects since 1979. But instead of resting on his laurels and basking at least in the prospect of growing approval for his past efforts, he brings this uncomfortable Motion before us. Instead of complacency at what the Sunday Times recently called the "British productivity miracle", the noble Lord is anxious that we should further close the gap between the performance of British industry and that of our leading European competitors.
I wish there were time to explore with the noble Lord, Lord Peston, some definition of entrepreneurship which would be acceptable to both of us. I think that it would have less to do with what the noble Lord, Lord Williams, called "contractor" and must include an important element of risk-taking, of a readiness to do new things, to get out new products and to try new methods. That potentially fruitful activity will blossom under one kind of political and economic framework more than under another. My view coincides approximately with that of the noble Lord, Lord Boyd-Carpenter.
All I want to do this afternoon is to try to draw some lessons from Germany's post-war history which I think might serve both as encouragement to the noble Lord, Lord Joseph, and as a warning to many other noble Lords, not only on the Labour and Liberal Benches. It seems to me wholly uncontroversial to say that the emergence of Germany to European economic leadership was based on the reforms of a professor of economics named Ludwig Erhard after 1948. It is perhaps a shade less uncontroversial to say that his secret was nothing more than the dissolution of state socialism in the potent brew of a free market economy. Guided largely by the incentives of competitive prices and incomes, German effort and enterprise rose like a phoenix from the ashes of defeat in war.
For three decades growth in output, exports and incomes justified the title of a German miracle. Alas, as we have recently seen in Britain, economic success is too easily taken for granted. Politicians are everywhere better at dissipating the fruits of
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economic success than at maintaining the conditions for its continuance. Thus even in Germany the vigour of its earlier resurgence is being enfeebled by government intervention.
I have two prime witnesses for that observation, both outstanding economists whom I have known well for many years. They were both members of the German Council of Economic Experts in the heyday of the Erhard miracle. The first is Professor Herbert Giersch of the Kiel Institute of World Economy. In a Wincott lecture 18 months ago he offered a gloomy picture of a slowing down in German progress. He diagnosed what he called Eurosclerosis, which appears to be a mild European version of the "British disease" that we suffered before 1979. Its principal symptoms are a slackening rate of growth and rising unemployment. Its causes, Professor Giersch believes, include subsidies for declining industry and agriculture, job protection, national wage setting and even the beginnings of rent control. Above all, he argues that the German labour market is increasingly impeded by non-wage labour costs—social security taxes and other impositions—and high social benefits, which have led, as in Britain, to unemployment and a growing black economy.
My second witness is Professor Armin Gutowski of Hamburg, who sadly died last year in his prime. In an eloquent paper to a Cambridge conference in 1984 he compared Germany's record under Herr Kohl unfavourably with Britain's sustained progress under Mrs. Thatcher. His explanation was the power of sectional interest groups in gouging favours from weak politicians such as we remember in the 1960s and the 1970s. Most revealing was his attribution of a major cause of weakness to the appealing catch-phrase of the "social market economy" which like "compassion" in Britain has become the main pretext for undermining the work ethic, even in Germany, and substituting a pervasive, perverted form of welfare ethic.
That brief account of trends in Germany is meant to encourage the noble Lord, Lord Joseph. We may have more time to put our house in order and further to close the gap between our economic performance and theirs. But it is also intended as a warning to others against the ever-present nostalgic efforts to depreciate economic striving and wealth creation in favour of indiscriminate welfare and the dissipation of wealth. I was encouraged by the noble Lord, Lord Williams, who said that wealth came before welfare, although he went on to spoil that effect by denouncing the rat-race and sundry other Guardian obsessions.
We see the danger in the continued trade union opposition to change, yesterday in Dundee, today in Dover and every day in the sheltered public sector. We see it more widely in the superficial debates we have had recently over social benefit and the National Health Service. The common confusion is to set at nought the intellectual discipline essential for the efficient production of tomorrow's wealth and to indulge the emotional spasm of concentrating on the feckless joys of redistributing today's wealth.
It cannot be said too often that in a world of changing markets and methods the primary discipline is to shun the soft option and to adapt, however painfully, to the challenge and opportunities of the future. To succeed against all-corners, from

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Europe and less developed countries, we need less of the backward-looking conservatism beloved by the Liberal and Labour Benches. We also need more of the market discipline that the noble Lord, Lord Joseph, has injected into the modern Tory Party to great advantage. The lesson of debates such as this is that we stilt have a long way to go.
4.40 p.m.
Lord Aldington: My Lords, I always enjoy listening to the noble Lord, Lord Harris of High Cross, even when, speaking after me, he is as unkind to me as he has just been to the noble Lords, Lord Ezra and Lord Williams of Elvel. However, I have learnt much from him, and I take some of his words with a pinch of salt, even today.
I wish to join all noble Lords in expressing admiration and thanks to my noble friend Lord Joseph for introducing the Motion and for the very thoughtful way in which he led us on. Many of your Lordships have had the advantage over the years, although perhaps not quite as much as I have, of listening to the noble Lord both privately and publicly and of being challenged by the thoughtful way in which he approaches the problem and his refusal to think that he or anyone else has done perfectly in the past. That is very good for us.
My noble friend Lord Young of Graffham applauded the logic of the Motion, and so do I. I cannot understand why my noble friend never misses an opportunity of decrying the special importance of British manufacturing industry, and he simply could not do it today in his comments upon the wording of the Motion. I happen to agree with the wording of the Motion as it stands and with the importance of productivity in manufacturing industry to the whole area of wealth in Britain, to our standard of living and what we can afford to spend on public services; and to the chance of success of entrepreneurs and eventually the creation by them of jobs. Incidentally, I agree with my noble friend that the purpose of an entrepreneur is to provide wealth, and the result of providing wealth is to provide jobs.
The vital question—for vital it is—of the relationship of the productivity of our manufacturing industry to the productivity of manufacturing industry in the principal North-West European countries which compete with us is all the better discussed against the background of a healthy growth in our economy, a generally sound financial situation and world confidence in our policies and our money. We have to thank the Government for that. It is a good background against which to explore what needs to be done to close the gap that undoubtedly exists between our productivity and that of our competitors.
Some noble Lords have pointed out that it is very difficult to find figures to quantify the gap. Some mentioned the figure of 20 per cent., others referred to 30 per cent. and some put it higher. I have a range of figures from the OECD affecting 1985 based on constant 1980 pounds that put it rather lower. I think that that is because the figures were taken when the pound was high. That the gap exists I think none of us doubts. The only question that we may ask ourselves is how urgent it is to close the gap as quickly as possible. In 1985 there were those of us who got
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into trouble with some of your Lordships for, in their view, overstating the urgency. I still regard it as urgent to get a faster improvement in our productivity, even with the splendid record of the last 18 months or so, than we have so far achieved and as a result a faster increase in the total output of British manufacturing.
Whatever view may have been taken of that in earlier days, your Lordships must surely be affected, as I am, by the proximity of the single market in Europe by the end of 1992; and we must surely be affected by the steadily declining position in the balance of trade in manufactured goods. When the Select Committee on Overseas Trade was set up, the balance of deficit was around £2 billion. When the committee reported, it was £4 billion. This year, 1988, it was £2·8 billion in one quarter—I think that that may be for special reasons. It was £6·5 billion last year and £5·3 billion the year before. That troubles me. If the trend goes on, it will trouble even my noble friend Lord Young of Graffham.
I mentioned the splendid improvement in productivity in recent years, and splendid it is. However, as a result, some people have come to believe that the gap about which we have talked has been almost closed. The great value of the debate is to bring about a consensus in the House that the gap has not been closed, that we have a big job to close it and, to use a phrase of my noble friend, that there is great scope for improvement.
Your Lordships will have in mind that we are talking about averages, not about particular manufacturing companies and enterprises. Some of those we well know are as competitive as anywhere in the world, whether in North-West Europe or in Japan. There is a great difference in the efficiency and productivity of factories in this country inside great firms. The noble Lord, Lord Ezra, will remember being told by the then chairman of Ford, Europe, that of his four factories in the United Kingdom two—they happened to be the two smaller ones—were at least as efficient as any of his factories in Europe. We know of other very efficient companies in this country. Some of your Lordships had the chance recently to go round the machine tool trades exhibition in Birmingham. Some very fine new products were displayed that according to what one was told are selling well and invading markets in North-West Europe. We know therefore that it can be done.
The question that we have to solve is how more of our businessmen can become more efficient. The increase in productivity that we have seen has owed a good deal to the elimination of overmanning. For the future I guess that we shall not be able to rely so much upon the elimination of overmanning in improving our productivity. We shall have to look to other factors, all of which have been mentioned by noble Lords in one way or another. They are better management, which is always vital; investment in new plant and tools; investment in R&D; and the more perfect use of the products of those investments. I agree that the one is no use without the other. Last but not least more skills among the workforce and better training in those skills are required. We have to do better there.

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Your Lordships may remember that the Select Committee's report referred to a study which had been carried out in 1985 by the National Institute of Economic and Social Research entitled Productivity, Machinery and Skills in a Sample of British and German Manufacturing Plants. It stated that labour productivity was 63 per cent. higher on average in the German case and it was concluded that lack of technical expertise and training was the major stumbling block to better performance by the British plants.
The national institute has produced further studies. In the most recent one that I have available, which is the February study, it has studied the training of foremen in Britain and Germany. Among the conclusions of that study, all of which are worth reading, is this:
"About seven times as many foremen in Germany acquire technical and organisational qualifications of a high standard; the steps taken in recent years in Britain towards bridging that gap have still a long way to go".
There is some very good and interesting material in that study. All these points apply to British industry and not directly or even indirectly to the Government. But they need support. As we said in the Select Committee's report two-and-a-half years ago, the main support that they need is in a change of the national attitude towards manufacturing and towards enterprise generally. I agree with the noble Lord on that point. There is no doubt that change has begun in a welcome way.
Snobbery was mentioned. The snobbery element is going but it has not altogether gone. Efficiency is now admired. I think that the Government have to continue to take a lead. I much admire the lead given by my noble friend the Secretary of State in the enterprise initiatives that he is taking all of which are of enormous importance, and the effort that he is putting in to help management to help itself.
I much admired too the leadership that my noble friend gave in training and the leadership that my noble friend Lord Joseph gave when he was Secretary of State for Education in getting attitudes altered in that regard. All that is progressing well, and the Bill that we have been discussing on other occasions and which we discussed until a very late hour this morning is relevant to all of this and to the improvement of standards.
But I have to ask myself some questions. Frankly I do not know the answer to them. Why is it that we are constantly told—and the figure sheets show this—that our manufacturers do not invest as much in new plant and tools or in research and development as most of our competitors? That is what we are told and I do not think that I am being misled, by the figures. Why is that? Are the figures wrong or are our competitors wrong? There is something to examine there.
I ask myself too whether the instability of the exchange rate of the pound over recent years discourages and interferes with enterprise and plans for the future. It is very odd, particularly for me, to appear to criticise the pound when it goes up. But the increase from 72 to 78, which is roughly the increase of the past nine months or so in the "basket rate" as I call it, eliminates a great deal of the advantage of an
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increase in productivity and competitiveness elsewhere. That must affect peoples attitudes to investment.
Is the still rather high rate of interest—it is high compared with the rest of North-West Europe—coupled with the constant warnings from economic pundits that it will rise again unsettling investment plans? I acquit the noble Lord, Lord Harris of High Cross, on that score. I must ask again whether we suffer from "short-termitis" in investment. All these points have been made. I put them to your Lordships again. There must be something in all of them. How much there is in them I cannot say. There is something in their effect upon productivity and through that in their possible effect on the key point which my noble friend made, which is the need for more and more entrepreneurs. I think that he would couple with that the need for existing proven entrepreneurs to do more and more in terms of expansion and extension. Obviously the absence of skills will affect that and all the other factors which affect investment.
An entrepreneur by himself does not make an economic summer. They need a team, they need tools and they need confidence so that they can compete with other countries particularly in North-Western Europe. In order to do that they will need to have economic conditions at home equally favourable to those which other governments give to their competitors. I think that they should feel comforted with what they have. Certainly the drain of entrepreneurs for tax reasons should now have ceased altogether. The Government are to be congratulated on that. Certainly too the newly expressed attitudes to innovation support, export credit support, management education support and other such matters put out by the noble Lord should give them comfort. I have constantly to say in this regard that I hope that the Secretary of State will always be prepared to match support given by other governments to important competitors, because that is what our people have to deal with.
At the present time we have policies which should comfort and give confidence to entrepreneurs who are and entrepreneurs who will be. I congratulate the Government on that. I am sure that it will take time to close this gap and that we can make faster progress than we have already. If I am asked to place my priorities in order of what needs doing and what we need to pay constant attention to, it would be these three factors: first the continued attention of the nation to the importance of manufacturing productivity and enterprise; secondly, the need for more skilled people and more training of them; and thirdly—and this is what is so important about this Motion—a constant attention to the attitudes and methods of our competitors.
4.59 p.m.
Lord Pennock: My Lords, I regret to say that I begin with an apology. It is an apology for the fact that owing to a long-standing engagement which was fixed many months ago and my unsuccessful efforts to have it changed I shall not be able to stay until the end of the debate. I hope that the House will accept my apologies.
I am grateful to my noble friend Lord Joseph, as are many noble Lords, for the prescience which he

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has shown in introducing the debate, especially at a time when he has the pressure of many other preoccupations. In my ICI days I remember being involved in a job evaluation scheme to decide what was and was not important in jobs. The art of disparate attention received the most marks in the evaluation. My noble friend Lord Joseph would undoubtedly have earned high marks, not only because of his disparate attention but even more significantly because of his disparate projection.
Having said that, if I am honest I must say that I was somewhat disappointed in that the erudite and penetrating analysis which he gave of our situation today seemed to me to give a message of yesteryear. If it had been delivered in 1980, it would have been received with rapt attention. I recognise that it is part of our psyche as a nation to be somewhat lugubrious and full of self-denigration, which in times of difficulty gives us balance. However, in times when we are beginning to succeed one wonders whether we have the necessary perspective.
For the last four years I have been involved, first as president and more recently as past president, in UNICE, which in a nutshell is a confederation of CBIs in the countries of the Community and EFTA; numbering 17 nations in all. The presidents of those associations and the businessmen that I meet have one constant question: How is it that the British disease has been replaced by the British miracle? How have we achieved the tremendous change in attitude to which the noble Lord, Lord Aldington, has referred?
I find that the Scandinavians continually ask me questions concerning our self-employed schemes and small business development. I find that the French look at us quizzically and say, "C'est formidable!", and not much more. The Germans watch with respect because perhaps their progress has been slowing of late. American newspapers are full of analyses of the reasons for what they call the great transformation. Even in Australia, which has a government of a different persuasion from our own, tribute is constantly paid to the turn-around that has taken place. Therefore, I am mystified that it has not been recognised with sufficient force in this country.
What are the facts? As many noble Lords have mentioned, they are difficult to come by. From those which I have been able to gather from the CBI and elsewhere, my recollection is that last year—I choose my words carefully—in rate of progress for that year we were top of the league. We were top of the league in GDP. We were significantly top of the league in productivity. Our profitability returned to a position of approximately 12 per cent., compared with 3 per cent. when I first became involved with the CBI in 1978. Our export trend, which has gone down over several decades, has been reversed.
I believe that that could and should be a fundamental change. My recollection over a business life of almost 40 years is that in the 1950s we had a pretty comfortable time. The rest of the world was recovering and picking up the pieces. We had very little difficulty in competing. In the 1960s the rest of the world began to catch up and life became fairly difficult. However, there was considerable world growth at that time. I note from the figures that I have that at that time we were bottom of the productivity league. Nevertheless, there was world growth,
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inflation was kept under control and business developed quite reasonably.
In the 1970s, with the oil price rise and the inflation that followed, we plummeted to an all-time low. I remember that Rab Butler said in the middle 1950s that it should be the aim of a progressive democracy to achieve a doubling of the standard of living within 30 years.
Noble Lords: Twenty-five.
Lord Pennock: I beg your Lordships' pardon: 25 years. When I first became involved in the CBI 25 years later, I took the opportunity to check the figures. The standard of living in real terms of the man on the shopfloor had doubled. At that moment the profitability of manufacturing industry in this country was 3 per cent.
What has happened since? First, as I said, the GDP, productivity, profitability and export trends were reversed. If we look further at the figures of unit cost per tonne for manufacturing industry generally in this country today, we will find that we are competitive with the rest of the world. We have not reached the level of productivity of our European neighbours. However, I take issue with the noble Lord, Lord Ezra. We are not lagging behind but rather catching up. The level at the present time is perhaps 25 per cent. below that of the Germans and 10 to 12 per cent. below that of the French and the Italians. That is much better than it was eight years ago.
In terms of unit costs we are now competitive. That is true for two very important reasons which have to do with our labour costs. I have an analysis from a Swedish confederation which I shall give to noble Lords who may be interested. I find it quite fascinating. It says, quite correctly, that our wages are lower than those of our colleagues in Europe. They are not significantly lower compared with our productivity. However, they are lower, although in the last decade they have been catching up because we have on the whole had higher wage rate increases than our competitors.
The significant factor of which many of my employer colleagues in industry are not aware is that the social charges which are paid by British industry are approximately half those which are paid in the other countries in Europe. The figures are roughly that the social charges paid by employers on the last figures which were available were 43 per cent. of wages. In Germany, France, Holland and Belgium the figure was between 70 and 80 per cent. Perhaps I may say in brackets, looking a bit further into Europe, that in the United States the figure was 38 per cent. and in Japan it was 18 per cent. Armed with that tremendous help, we have become competitive in unit costs. That is a major factor in the improvement in exports, GDP and productivity.
There are lessons to be learnt from that. However, perhaps I may speak briefly about jobs. We cannot depend on the major companies to relieve our unemployment situation or to create more jobs. If we look at the annual reports of companies such as Shell, BP, ICI, Unilever and the other top 100 companies, we will find that year after year they have been reducing the overall figures. Most of them employ

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something like 30 per cent. or even 50 per cent. fewer people than they did at the beginning of the decade.
Jobs rely vitally not only on new industries but also on small companies. Figures which are up to date are difficult to come by, but in the period 1982 to 1984 a million new jobs were created in companies employing fewer than 20 people. Between 1979 and 1987 the percentage of self-employed in our country increased from 7½ per cent. to 12 per cent. That again represents approximately 1 million jobs.
In our lugubrious moods we often hear stories of vicious circles. Let me tell the story of the virtuous circle which I think has now begun to come into play. I hope that if we can keep the momentum going it will help to solve the problems and create the situation which all of us are looking and hoping for.
As the noble Lord, Lord Joseph, has said quite rightly, it begins with productivity. As a result of improved productivity we become more competitive. When we become more competitive we increase our volumes, we increase our margins and we earn better profits. As a result of earning better profits we pay better wages and we have a motivated workforce. We also invest more in new technology to become more competitive, to earn more profits and to continue the virtuous circle.
That circle began in 1980 and is growing in momentum. Although figures could be produced to show that it may take another decade for us to catch up with the levels of productivity of our European competitors, I believe that if the momentum is growing we shall catch up more quickly.
It is as well to analyse why these things have happened and perhaps to emphasise them more for the future. Here I begin by paying tribute to the employees in most of manufacturing industry. There has been a greater, more intelligent and more understanding appreciation of what we roughly call economic reality. Many of our trade union leaders have recognised that economic reality and I believe that many of them deserve more credit than they appear to receive in an age which seems to me naturally inimical to them.
As a result restrictive practices have been reduced and new arrangements whereby jobs do not become the right of individuals have taken their place. I think that that has been the biggest single factor in improving our productivity. There have been fewer industrial problems, the cynics will say because of the unemployment rate but others like myself will say because of a keener recognition of economic reality. However, believe me, there is still room, particularly in large organisations, for a considerable further improvement in the abolition of restrictive practices.
Sir John Egan reported succinctly in a Sunday paper two or three weeks ago that in 1980 in his organisation one car was produced every one man year. Today four cars are produced per man year. In the case of Mercedes and BMW the figure is six cars. That is not a set of figures which suggests that we are lagging; it is a set of figures which suggests that we are catching up.
Finally, I would say something to my fellow employers. I believe that in the years—and the years were long—when we were up against the collar and profitability was low we tended to become
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shortsighted. We tended to cut back on training. We certainly cut back on research, and the figures have been mentioned. We tended to be hesitant about investment. I would say to employers that with the profitability we are achieving today that is no longer justifiable. It is not enough to say that it depends on government and ask what the Government are doing about training.
Sir Richard O'Brien produced some interesting figures in the Financial Times today or yesterday comparing the Swedish situation with our own. I think the reason he gave for their unemployment being so low was somewhat facile. Whether that is so or not, there is no doubt that their continuing, continuous and assiduous application of training, training, training has had a desirable effect on their productivity and also on their unemployment figures.
I close by saying that we have come a considerable way. I echo the message of others that we still have a long way to go. However, I feel that we are beginning to get there and I am somewhat disappointed at the lugubrious air which some of my colleagues have adopted.
5.16 p.m.
Lord Basnett: My Lords, perhaps I may first of all welcome the manner in which the noble Lord, Lord Joseph, introduced the debate. It is a manner which I hope I can reflect in what I have to say.
I welcome the Motion because it allows us to say a wide range of things about our economic situation, as of course we have heard. I particularly welcome it because it allows us to draw a contrast between the situation pre-1979 and post-1979, a situation in which the role of trade unions has changed tremendously. Therefore, I want to consider first whether the usually simplified and politicised reasons given for our failure to improve productivity substantially are acceptable. I do so not because they have been raised in the debate but because I think that by answering them we begin to see the route by which we can make improvements in the future.
I then want to consider whether the current policies offer escape from the possibility of low productivity and low remuneration remaining self-reinforcing in the United Kingdom. Having listened to the noble Lord, Lord Pennock, I still believe that that possibility exists. Lastly, I want to end with some thoughts on the route not yet tried in this country but practised by those in Western Europe whose productivity has risen substantially in the post-war period.
The noble Lord, Lord Joseph, mentioned Graham Hutton and quoted from We Too Can Prosper. Perhaps I may give another quotation from that book. Graham Hutton said, near the beginning, that the British are a traditional, tradition ridden, conservative people. They dislike change. That is one of the roots of our problems and why other nations have reacted to change better than we have, both in our management and in our workforce from time to time.
The cause of our failure is complex. It is certainly not due to many of the much publicised reasons given during the post-war period. It is not due, for instance, to excessively high earnings. Hourly earnings in the United Kingdom had fallen by 1970 into the bottom

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half of the league table, where they have since remained. In relation to total labour costs, by 1986 the United Kingdom had gained the dubious distinction of having the lowest total labour costs of any advanced industrial economy.
Of course it can be argued that the more that governments and employers have sought pay restraint as a solution to industry's problems, the weaker has been the incentive to invest, innovate and modernise. That is not to argue for unrestrained settlements but rather for an organisational and economic environment conducive to rising high productivity and remuneration compared with what we have had for most of the post-war period; namely, an environment characterised by a vicious, self-perpetuating spiral of low wages and low productivity.
Three arguments, of which there are still echoes, have been used in the past to explain that spiral. It has been argued that trade union obstructionism prevented producers from responding adequately to trading opportunities; that employers and managers lacked the skills and entrepreneurial flair to cope with the challenges; and that by interfering with market forces successive governments promoted inefficiency. All three arguments share the same weaknesses. There is a tendency to concentrate on one element of the system of industrial relations, whether it be the trade unions, employers or the state, though the system of industrial relations—I shall return to this point later—is of vital importance. There is also a tendency to ignore the varying structures and constraints under which we all operate, and by implication there is a tendency to offer simple reasons for a complex series of problems. That is something which I feel we still do.
I shall not examine the case against the trade unions, which has not been raised and which has never been the subject of systematic empirical inquiry, but I should like to say that we have never created the structure or removed the constraints which could have allowed us in the United Kingdom to take advantage of three facts in relation to the trade unions. First, unions are not opposed in principle to productivity enhancing innovations. Indeed, if anything, the official position of most unions is to welcome and indeed to encourage new investment. Secondly, there is some evidence pointing to a positive relationship between productivity and unionism. Thirdly, in so far as unions are able to close off certain options available to management, such as low wages and unreasonable conditions, they can and do act as a positive force for modernisation and change.
Those observations suggest that a more complex view is warranted. Most striking is the fact that separately and together all three—employers, unions and the state—have failed to generate sufficient pressure to bring about the high productivity, high remuneration economy that we all claim to seek. Separately and together they have helped to perpetuate structures and constraints that inhibit change and innovation.
The question is: has all that changed since 1979? The evidence that has so far been presented can scarcely be said to confirm that that has happened. There has been a marked improvement in
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productivity, particularly over the past five years, as has been mentioned by a number of noble Lords. However, that improvement has to be seen against the sequence of changes involving a massive slump in output, an even larger collapse in employment and, only around 1982, a recovery in output.
Another feature of the post-1979 period has been the acceleration of closures and plant rationalisation. In general, plants and firms with below average performance were eliminated first, and, as marginally efficient firms disappeared, overall performance improved irrespective of whether or not the surviving plants and firms improved. A more serious aspect of this period was the sharp decline in the rate of new capital formation and investment in education and training. As a percentage of the gross domestic product in manufacturing, investment is still lower now than it was in 1979 and 1980, with an alarming similarity in education and training.
As a consequence, the United Kingdom's long-standing problem of having an underskilled and poorly qualified workforce by comparison with international competitors has been exacerbated. The fact that investment in new capital stock and new human skills has proceeded at such a slow rate since 1979 is a serious matter the significance of which remains undiminished by any claims of a cure or a miracle in Britain. Without that investment there is no cure. In practical terms, it implies that recent advances are unlikely to be sustained, for while there is scope for improved productivity in the current situation there are limits to the gains which can be secured from labour intensification.
I agree with the noble Lord, Lord Ezra, that potentially the state can assume a pivotal role guiding and, if necessary, underwriting new investment and modernisation. Broadly speaking, that role defines the German and Japanese approach; or, in terms of Western Europe in total, most of the Western democracies and most of the Scandinavian democracies. In each of those countries there is a close consensus on industrial policy and to a greater or lesser extent a microeconomic policy. There is no such consensus in this country; nor have we ever had a substantial consensus in industry. We have no co-determination such as in Germany, France and Sweden, and little employer-motivated involvement. Maybe, after all, one of the important problems is an industrial relations problem.
In the past, intervention has been at the macroeconomic level or at the level of the industrial sector—from the top downwards. We have never built up, as have Germany, France, most of the Continent and all Scandinavia, close consensus involvement through the introduction of co-determination. In this country we have never seen among employers the substantial promotion of involvement that has been introduced by the Americans and the Scandinavians—intervention from the bottom upwards. Co-determination and consensus in industry will not solve our problems but could provide the pressure that we need to begin to create the climate to encourage the investment and build the long-term rise in productivity and remuneration that we all want.
5.30 p.m.
Lord Harmar-Nicholls: My Lords, if a sub-editor wanted to sum up in a headline the call made by my noble friend Lord Joseph it would be right for him to say, "The noble Lord, Lord Joseph, calls for more entrepreneurs". That sums up the message that my noble friend tried to give. He spoilt it a little by saying he was sad that there was no English word with the same meaning. The noble Lord, Lord Williams, said that he did not know what the word "entrepreneur" meant, either. I do not have much difficulty. By "entrepreneur" I mean two easily understood English words: the risk takers. They are the ones who are prepared to take the risk. At a time when we are moving into a new world, with new technological approaches, and new areas to be covered, people who have the courage and ability to take the risks and to get away with it are pretty important. I support my noble friend. We want more of those risk takers.
I did not quite understand the noble Lord, Lord Ezra—if I heard him aright. He was talking about one of the businesses with which he had been connected that he felt was inhibited, or had some problem, because the share price had varied. I do not know that the share price has anything to do with an ongoing business.
Lord Ezra: My Lords, I did not say that it was inhibited by the share price having gone down. I said that, it having made a completely green field new investment, the analyst took a dim view because it was long term. That is the point I was making.
Lord Harmar-Nicholls: My Lords, I do not see what the share price has to do with it. It is the end result that decides whether the business is a success or failure in terms of employment and profitability.
I took on the chairmanship of a company when the profits were £300,000 a year. When I gave it up—because I had reached the magic age of 70–16 years later the profits were more than £40 million a year. If we had paid any attention to share prices in the period in between in which they varied, we should all have been in the madhouse. However, we were satisfied that our knowledge of the business was such that the rise and fall of share prices was not as important as the end result. However, I take the point.
The noble Lord, Lord Basnett, was a little grudging in that he did not accept wholeheartedly that there had been improvement in productivity. I do not think that there is any doubt about it. The productivity figures are very clear. They have been repeated many times. However, for what they are worth, taking a base of 100 in 1980, the productivity figure in France by 1987 was down to 99. The productivity figure for the Netherlands remained at 100. The productivity figures for Germany and Belgium had increased to 106. The productivity figure for Britain had increased from 100 to 109. One can argue that it could have been better, and that we might have been happier if it had been. But I do not think that one ought to be grudging about the fact that we are catching up and taking up some of the slack of previous years.
I do not wish to make any party political points. In opening the debate my noble friend made it clear that his intention was nothing to do with party thinking or
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party divisions. That is the spirit in which we have to continue. If those productivity figures are factual, the Government's prudent control of the nation's finances since 1979 means that industry and business generally have been given an opportunity that was not there before. However, those of us who know anything about business have to reiterate the important point: we are not there yet. We may not be even half-way towards the pre-eminence that we used to have and that I believe we have the ability to regain in the future. If we have had success in the past eight years is is absolutely vital that we continue in the same direction for at least the next seven or eight years. We are then likely to have returned to the point that is attainable, whichever personality happens to be in the driver's seat, and whoever is in the Cabinet.
I enjoyed the very practical speech of my noble friend Lord Pennock. He was absolutely on the ball when he stated that, whatever views some of us in this country may have about how good or how bad the general government leadership has been, it is the view throughout most of the rest of the world that what was supposed to be the British disease has turned into the British miracle. I never felt that more vividly than during the five years I spent as a Member of the European Parliament. When I was there in 1979, one felt the almost patronising way in which the representatives of all the other nations were expressing sorrow at the way Britain had gone down, with such remarks as, "You may get on better in the future, but bad luck, old chap". I compare that with the back-slapping and the plaudits that I received—as though I was responsible—from members of the EC six years later when the improvement that I am claiming was known to the world. We ought to bear that in mind.
My message is that there is no doubt that unearned pay increases raise costs and cost jobs. Unless we keep the costs of production at a commonsense level, we cannot attain and continue the success that we seek.
Such issues are often made a part of party ping-pong. The noble Lord, Lord Boyd-Carpenter, spoke about the tax reductions that have taken place over recent years. Their effects on people's incomes are equivalent to a 2 per cent. increase in average wages. When pay negotiations take place this ought to be taken into account, and not ignored as it now often is.
I agree with my noble friend Lord Pennock that for those of us who live in the industrial Midlands and who know a little about business there, it is gratifying to see the great improvement that has taken place in the responsibility by the workforce, and the improved leadership that we see in so many of the trade unions. That is an advantage that I hope will continue. However, we would be very foolish if we felt that that battle had been won.
When we came up against the problem in Dundee, we saw that the old-fashioned intransigence was still there and could produce dangers. I am very conscious of that. For 25 years I was Member of Parliament for Peterborough, which housed the great Perkins Diesel Company. It won the award for exports year after year. When I first went to Peterborough as a candidate, that company employed 30 people in a

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little shop in the centre of Peterborough. When I left, it was employing thousands of people with the great advantages, to which I have referred, of its export success.
I hope that the Government will keep their fingers out of much of this. My noble friend who moved this Motion so admirably said that he had no management or entrepreneurial experience on which to build. He was talking as one who has examined the position. He spoke with some authority. However, we have to leave it to people who are on the job every day and know something about it. This is what my noble friend Lord Pennock, with his vast experience in a great industry, was trying to say. It was for that reason—it was not pleasant; I like to be loved, like everybody else—that I incurred the displeasure of the House at Question Time by wanting to speak a second time in order to make the point.
The point is, as my noble friend said, that we want to attract entrepreneurs from other countries to come here so that we can have the advantage of their risk-taking. If we do that then we must not sour the atmosphere by giving the impression that every time a firm wants to come here we look at it full of suspicion. I was sad when I heard a colleague on these Benches say that before a company comes there ought to be a debate in both Houses. That would mean politicians trying to tell those who have to make the decisions what those decisions should be. That is the kind of lesson that the Government must keep in mind.
The reason I put my name down to say a few words today was that I wanted to represent what I believe is the feeling of the West Midlands. The West Midlands and the Birmingham area used to be the workshop of the world and the successful part of this country, which because of its diversification through good times and bad always managed to maintain its success. What changed that, even during this new period of technical improvement and change, was government interference.
Both sides were guilty—the Government I supported and the other side, with their industrial development certificates. They said: "For social reasons, although you believe that your works extension ought to be there where you think you can turn it to good account, it has to be moved somewhere else". I was involved in Peterborough when Perkins Diesel, which I spoke about a moment ago, wanted to build an extension but could not get an industrial development certificate. The extension had to be moved to Whitehaven, said the Government. If the company could have had its extension in Peterborough, it was only a matter of building an extension to an already existing plant, with the administrative offices and the power houses already there. But it was told that it had to move to Whitehaven, and in the end the company agreed to do so.
A great hoo-ha occurred when I, as the Member of Parliament for Peterborough who was gallantly giving up this extension in my constituency went to meet the Labour Member of Parliament in Whitehaven. We shook hands at the back of a great big hoarding which said that Perkins Diesel was moving to Whitehaven to help employment at the expense of Peterborough.
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Perkins Diesel had made that arrangement and wanted to honour it. It had arrived at its figures by examining the wage rates and the general conditions that then existed in Whitehaven. It was on that basis that it wanted to agree to the changes asked for by the Government, against the company's own wishes. But before the ground was dug for the foundations the unions let it be known that they wanted it to be clearly understood that the wage rates to be paid at Whitehaven had to go and the famous words used—I think the noble Lord, Lord Jay, was the person who used them—were, "We shall want parity with Peterborough".
Parity with Peterborough rates would have made all the difference to the calculations that were made about whether the company should move. It never did. The company knew that if parity was given with Peterborough, the Peterborough people would immediately say, "We want parity with the works in Coventry". The minute that was achieved, the Coventry people would have said, "We want parity with the works in London". That would have upset the whole bag of tricks, and I have no doubt that my noble friend Lord Pennock who has had to deal with many such matters understands how disruptive is that kind of thing.
For that reason I want to lobby my noble friend about putting in his oar where it is unnecessary. We want no more industrial development certificates of that kind, even to the disadvantage sometimes of the West Midlands. In the South, where there is much business, if it is better for the nation's interest that a development should be there, let it be there. We should stop trying to put forward social arguments which interfere with the general efficiency of the running of businesses, which is the only way of producing the profits and the jobs that follow.
I have a survey taken in the West Midlands from the people on the spot. I do not particularly want to put this to the House, but I want my noble friend the Minister to understand it. As it is mainly the Government I wish to inform in order for them to keep the whole matter in perspective, I shall not bore the House by reading the results now, although I had hoped that I might be able to do so. I shall send the details to my noble friend. When he receives this information I hope that he will pay heed to it.
5.45 p.m.
Lord Crickhowell: My Lords, I had hoped to be here until the end of the debate, but I have a longstanding engagement and if I slip away before the end I hope the House will accept my apology.
I very much welcome the debate. My noble friend Lord Joseph continues to hammer home a lesson that he had been teaching us since the early 1970s. He is absolutely right not to relax his efforts. My noble friends Lord Pennock and Lord Harmar-Nicholls were equally right to emphasise that it would be a mistake to ignore the revolution that has taken place and which has produced an enormous improvement in our industrial performance.
My noble friend Lord Joseph deserves great credit for the major part that he has played in achieving that improvement in performance. It is an improvement that is now acknowledged throughout the industrial world, where those who once regarded us with some

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degree of contempt now speak of the British industrial miracle. The process has been painful, but it was necessary both for our survival as an industrial nation and, not least, if we were to maintan and improve the social services and meet the rising costs of our increasingly elderly population.
My noble friend Lord Joseph will remember the anger and the bitterness which greeted us both as we toured South Wales when he was Secretary of State for Industry at a time when the British steel industry was having to face up to a drastic reduction in manpower. I wish my noble friend had been present with me at the works dinner at Llanwern, soon after the coal strike ended, to enjoy the warm welcome, the enthusiasm and the passionate dedication of a workforce which knew that it now worked for an organisation that was among the most competitive in the world and was determined to keep it that way.
As my noble friend the Secretary of State observed, we moved from a position when some of the nationalised industries have ceased to be consumers of wealth but have become creators of wealth. As a Minister I watched with pride the wide variety of industrial and commercial enterprises that began to match the transformation achieved by British Steel. Today, as president of AMDIA, the Association of Manufacturers of Domestic Electrical Appliances, and a director of a number of companies, I observe daily the progress that is being made.
In my own firms there are few things which I find more exciting than observing the entrepreneurial drive of managers, many of whom previously have found themselves stifled in nationalised industries. The process of privatisation has played a large part in the drive for productivity and entrepreneurship. There is still much to be done in that area. In the port industry it is absurd that we should still be shackled by the archaic distortions of the Dock Labour Scheme. In the energy industry the Government cannot hope to achieve the full potential for competition and performance in electricity generation without allowing the private sector a large and increasing role in the financing and production of our enormous stock of indigenous coal.
Although we have made so much progress, my noble friend is right to remind us that we cannot afford to be complacent. The Secretary of State confirmed that we still have ground to make up. In a multi-continental, fast changing, competitive world we have continually to move forward in order to maintain, let alone increase, our share of the market.
The noble Lord, Lord Williams of Elvel, and my noble friend Lord Aldington, reminded the House that we still live in a trading world distorted by restrictions and subsidies. Although it is probably right that we should seek to remove these international distortions, in the meantime we cannot allow our industries to be put at a disadvantage.
Earlier this afternoon my noble friend Lord Bruce-Gardyne raised the issue of subsidies in relation to Mr. Tikkoo's supership. Approximately 20 years ago Mr. Tikkoo was an example of the immigrant entrepreneur about whom my noble friend Lord Joseph spoke earlier in the debate. I suspect that the
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issue is not whether that particular ship will be built, but where it will be built. In the end Harland and Wolff may be able to satisfy Mr. Tikkoo and the Government of its ability to carry out the work efficiently, competitively and on time. I hope that it will be able to convince both parties.
However, the Government may decide that they do not wish to subsidise the British shipbuilding industry. They are entitled to look at those issues with an open mind as we look forward to having the Government's views in due course. However, they must recognise that the French, Italians and others may take a different view if we decide to move out of subsidies altogether. I believe that we are entitled to ask that that is one factor to be taken into account when the decisions are made. I hope that it will prove possible for Mr. Tikkoo to build his ship in Britain.
Industrial productivity is by no means just a matter of wage rates. It is the consequence of the effective use of investment, technology, management and good labour practices. If the combination is right the workforce is entitled to higher earnings, just as much as are the managers and shareholders. The taxpayer also obtains his or her reward. Over the week-end did I see—and can it be true—that the increase in tax revenue during the past year is a result of the increased output exceeding the entire yield of taxation that results from North Sea oil? That seems to me to be the implication of improving productivity for public and social services. The falling borrowing requirement and the increased resources available to fund social services arise because we have been improving our industrial efficiency. If there is still a gap between our performance and that of others the rising tax revenues are evidence that it must have closed considerably.
I do not believe that it matters enormously whether the wealth is created by the manufacturing or non-manufacturing sectors. I do not wish to become involved in the little quarrel between my noble friend Lord Aldington and the Secretary of State. I believe that both sectors are important. I find it hard to believe that in his long and distinguished career in the service sector my noble friend Lord Aldington did not believe that he was contributing to national wealth. Let us not quarrel about whether it is the manufacturing or non-manufacturing sector; I attach equal importance to both.
My noble friend Lord Joseph calls out for more entrepreneurs. They are springing up everywhere, even in previously depressed regions, and the Secretary of State gave us the figures. There are a number of essential conditions for success where progress has been made but where there is still enormous room for improvement. In Wales I observe a transformation in attitude and confidence. Only a few outdated politicians winge on thrusting out the begging bowls. Much has been done and is still being done to improve the infrastructure. There is even a sign of a strengthening of professional and financial services and of a closing of the gap between the City and the regions which a few years ago I identified in a speech to the Cardiff Business Club. The gap is less vast than it was, but it still exists. There is no substitute for local knowledge and local initiative. They played a large part in our earlier era of

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industrial greatness and there are lessons to be learned from that past experience. It is just as important that attitudes to the regions change among those in the prosperous South-East as it is that attitudes in the regions continue to change and develop.
The obstacles to entrepreneurial activity can still be too great. Too many people make a lifetime's practice of opposing almost every new initiative. Dare I say that I sometimes believe that there are even one or two people who may accept that that criticism lurks in this House? It is so much easier to be against something than to create something. Planning procedures are still far too cumbersome and take too long. The machinery of government, particularly as regards the Treasury, moves far too slowly. The avoidance of error rather than striving for achievement still seems to be the principal aim of too many people in the public services.
In the private sector the financial markets, confronted by uncertainty, reveal how easily confidence can be lost. There is a real risk that in the City a combination of legal activity and the new Financial Services Act will stifle business development. We must be most careful that in providing safeguards against abuse we do not make business almost impossible. I am now helping to bring a new company to the market and I had not begun to realise the immensely burdensome undertaking that would prove to be. This week a Canadian businessman involved observed to me that in Britain there seems to be a lack of business sense in everyone except business people. Several noble Lords have referred to the changing attitude to industry and the decline in snobbery about those engaged in it. However, I fear that that Canadian's comment still has a grain of truth about it.
I share some of my noble friend's anxieties and impatience. However, perhaps more than he I take encouragement from what has been achieved. I am delighted to have an opportunity to pay a tribute to him for the major contribution that he has made towards the achievement of the British miracle during the past two decades.
5.59 p.m.
Lord Houghton of Sowerby: My Lords, I am sure that the noble Lord, Lord Joseph, will always have a more sympathetic audience in your Lordships' House than he had in the other place. We are more used to noble Lords, with their finely-tuned intellects, grappling with the problems of the day and giving us the benefit of their reflections. They do so without necessarily being dogmatic about what we should do or where we should go.
I have watched the noble Lord, Lord Joseph, ever since he came into Parliament. I have admired the thought and zeal that he devotes to his contemplation of national affairs. I wish that he did not agonise so much with himself, but that is his temperament and that is one of his endearing qualities. He knows that I have always attended on his activities in Parliament with a great deal of sympathy. When he first came into the other place we established a great deal of mutual interest on the future of the social services.
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I do not know whether the noble Lord realised that this debate would be sandwiched between the first two days of the Committee stage of the Education Bill. It is probably coincidental and it might even have been opportune that it is so placed. It occurs to me that we might have regarded today's debate as an opportunity for expressing the concerns of industrialists, employers and those engaged in industrial and economic affairs with the product of our educational system. I felt very depressed after yesterday when we had a Government that wanted to put the economic, industrial and social requirements of the nation first in the review of the educational system, and yet we had religion dragged into the forefront to occupy the first day and had the repetition of the controversies of the four Education Acts of this century, and so much attention was given to that aspect of the matter.
I also feel that if we let slip today, as we have done, putting our spoke into the education debate on the real purposes of our review of the education system, they may become lost in the debate that follows. As soon as we are off the subject of the curriculum then we are into the field of administration and we are there for a very long time. Educationalists love administration, controls, democracy and bureaucracy. It is endemic to the educational system. However, I shall leave that. I do not want to continue yesterday's debate in my own interests.
However, we shall not come out of this education debate with the fulfilment of our purposes unless we let it be made clear that out of the educational system of the future we want something better in the equipment of our young people in the lives they have to lead and the living they have to earn. I believe that nothing else can replace that in the field of philosophy, mysticism, religion or anything else because that will be the condition for our survival.
We all agree that we have a long way to go. Goodness me, we are only rising out of the trough. I thought that the noble Lord, Lord Harmar-Nicholls, was becoming a little beside himself with the praise that he is receiving from colleagues overseas, but let him not become too "uppish" about that. I am sure that he has heard me say that I always remember the legend over the headquarters gymnasium at Aldershot which said:
"Be not wise in your own conceit. There is more hope of a fool".
I believe that we should bear that in mind when we are becoming strapped up on the backslapping on our recovery. When my friends in America ring me up late at night and say, "Are things in England as good as they say?" I say, "Do not believe all you read in the papers". I believe that we can examine the reality of what we are doing, satisfying as it is up to a point, with greater candour and realism than our friends overseas.
Perhaps I may offer a few reflections on the present situation. There are still a good many discontents around in the country. What is the mood of the people? What is the state of the nation? Are we getting the requisite sense of purpose, unity, endeavour and co-operation? It was an extremely discouraging experience to go through all the legislation on trade unions which put restraints on trade union leadership and on trade union activity without a word of goodwill or appreciation of the role of the trade unions in the industrial development of

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the future, as if the trade union movement was some kind of fifth column which unfortunately would not go away but which should be put in wraps or straitjackets to prevent it becoming too troublesome.
In my view, that was not the spirit in which the Government should have introduced that legislation. In this debate only my noble friend Lord Basnett and I have had Trade Union Congress connections. I regret that more of my noble friends on these Benches have not entered into this debate. It is not a matter entirely for the satisfaction and decision of noble Lords opposite; we are all in this. What is the morale of our workforce? Who is contented in Britain today? Will our institutions stand what we may yet have to go through?
I still believe very firmly in the future of this country in Europe. I believe that there is no alternative to it and that that is where the destiny lies of this country and of other countries in Europe. However, there will be serious problems to go through before we are comfortable and satisfied with our association with other European countries. We must face an element of difficulty in 1992, and I see no drawing back from that if we are to establish the kind of economic unity which is an essential condition of the EC.
What else is there? There are social benefits and taxation. If one reads the new spapers, there is a good deal of discontent with the Government. Is that real, or is it merely that they are the marginal wants or grievances of the people? That may express itself in some form or other in the election results tomorrow, but at present I believe that is very difficult to assess.
I believe that more attention should now be given to the future of industrial relations in this country. Practically nothing has been done to encourage a betterment of industrial relations in this country except to make it more difficult for unions to go on strike—if that is for the betterment of industrial relations. I believe that we have a great deal to work on there. The trade union movement is going through a period of considerable self-examination. I believe that should be encouraged. I think that a great deal about the organisation and so on of the trade union movement should be changed.
Will our other institutions stand the strain of the changes that lie ahead? Will Parliament itself do so? It is a strange situation, and in my view not a healthy one, when the Government of the day, without the clearest mandate from the electorate, can ignore completely what an Opposition want or suggest or hope for because of their superior position in the procedures of Parliament, and only give way to meet objections and difficulties when there is a revolt inside the governing party itself. That is not a healthy situation. After all, our electoral system does not give adequate representation in Parliament to the different elements of thought and conviction in the political sphere. Therefore, it is most important that governments which attain office on the quirks of our electoral system should use the power which they have in a less arrogant fashion. I believe that is an essential condition of the country feeling confident that the Government and Parliament will be representative enough of opinion generally to carry
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the nation with it into the future. There is no immediate prospect of that.
It seems to me that even your Lordships' House should not be left entirely as it is. I believe that our debate this afternoon would have been improved if more active industrialists had taken part. When I go around and do my little commercials in favour of the House of Lords one of the things I say—I am not sure whether I am right—is that there are more active industrialists in the House of Lords than there are in the House of Commons and that that is one of its virtues. We are almost all yesterday's men—
Noble Lords: Oh!
Lord Houghton of Sowerby: I said "almost", my Lords. People who are actively engaged in industry today, on both sides for that matter, would improve the quality and the authority of our debates. I presume we shall have to continue as best we can. I hope that those who are elevated to membership of our Lordships' House will feel increasingly under an obligation to come and give the benefit of their experience, especially if they are actively engaged in industry.
Where does this all take us? I believe that we need more sensitive Government administration, more regard to minority opinion, more understanding of the role of institutions—which the Government may dislike but which are essential to the life of the nation—and generally to adopt a softer approach to the issues of the day, so that we have a stronger feeling of unity in the country in the efforts that we still have to make. That is the message I give, and although it is not a very striking one I feel that there is an undercurrent of discontent with the Government at present which does not equip them to take us through what may well still be the problems and difficulties of the next three years.
6.12 p.m.
Lord Beloff: My Lords, I hope I shall be forgiven if I do not immediately follow the train of thought of the noble Lord, Lord Houghton of Sowerby, because after our marathon last night I have not the mental agility to cover so many themes in so short a time.
I must therefore go back to the origins of our debate this afternoon and the Motion which has been moved to our satisfaction by the noble Lord, Lord Joseph, and which has produced some important and interesting reflections on our economic situation. I was attracted to speak in this debate because of the noble Lord's use of, and the attention paid to the word and the concept of, "entrepreneur". Looking at economic history and development over the past three centuries or so, the most obvious feature is that there are great and continuous shifts of economic activity between regions, countries and sectors of the economy.
This has largely been the product of new men—call them entrepreneurs or risk takers—who have embarked upon the belief that they could do well for themselves by meeting, or in some cases even creating, new needs among consumers. The noble Lord and my noble friend the Minister have both made a point of the importance of encouraging

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entrepreneurship in our own society. The difficulty seems to be that we do not actually know how one encourages this human attribute.
It is perfectly easy to see how one discourages entrepreneurship in an economy. The difficulties which the East European countries now face in trying to rediscover entrepreneurship after one generation or, in the case of the Soviet Union, more than two generations in which this attribute has been highly disregarded, show that it is easy enough to destroy and difficult to create.
But that does not get us very far. If one looks at the history of entrepreneurs—and this was referred to obliquely by the noble Lord, Lord Joseph, and also by the noble Lord, Lord Pennock—it appears that one common feature is that they do not come from whatever are the most esteemed or privileged classes within that society. Diasporas are the great source of entrepreneurship. I take one simple example; namely a family of peasants in Gujerat. For generations they proceed with traditional methods of subsistence cultivation. Any little capital that they accumulate goes on golden ornaments for their women.
They follow the call for unskilled manual labour in East Africa. Within a couple of generations they play an important and vital role as entrepreneurs in the development of the East African economy. In the next generation they then suffer, under President Amin of Uganda and other local potentates, a further expulsion and they come to this country. So one has, as it were, a double diaspora and one is told that there are by now 100 Patel millionaires in this country.
Plenty of other parallels can be given; for example, the Lebanese in the Lebanon cut each others' throats whereas the Lebanese in West Africa perform an essential role in the economy. One could say that the United States, which is the country that one looks to for lessons in entrepreneurship, has been the constant beneficiary of a succession of diasporas. One is now told that the latest of these, the Vietnamese, are beginning to play an important role in those parts of the United States where they have settled.
One cannot wish for human misery to be the source of profit in that way, but it is also true if one looks at the native population of particular countries. For example, take our own. It is I believe a truism that the entrepreneurship of the industrial revolution of the late 18th and early 19th centuries and many of the great developments of British industry and commerce were the product of those who had been excluded, very often for reasons of religious dissent, from the established ranks of English society at that time. Some have felt that later on one of our weaknesses was that their descendants found the prospect of entering those ranks too tempting. I do not make a great point of it. However, if some people are to be believed, the fatal blow to British industry was given when religious tests were abolished in Oxford and Cambridge and the dissenting academics no longer played their original role.
One has to ask this question: Are there now in this country other elements—and I have given the example of recent immigrants—who might play an increasing role in providing the entrepreneurs that our economy obviously requires? It strikes me that one possibility may be in the largest group that
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regards itself as discriminated against. I refer to women. I have a feeling that there are a number of women entrepreneurs, although not as many as in the United States. However, it is a considerable number which may well increase. If it does, it will no doubt have the same useful effect and do a great deal more for the cause of women's equality than any number of quangos.
I come now to a question that I should like to put to the Minister. Is he—and it would be useful if he were—monitoring the response of people to the various enterprise initiatives and the other ways in which his department is trying to promote entrepreneurship? Is he doing so not merely in the sense of statistics but in the sense of getting the feel of where this works and where the appeal actually finds an echo? Who are the people willing to act in partnership with or under the encouragement of government in taking such risks? Given his past role in the Manpower Services Commission and his constant interest in training, can he say where are the successes and failures in attracting young people in particular to the various institutions for youth training that have evolved over the past few years? We need to know a good deal more about both those facets of the problem before we can fully assess whether the hopes expressed by the noble Lord, Lord Joseph, will be fulfilled.
The noble Lord, Lord Williams of Elvel, made some remarks with which I felt a degree of sympathy. However, I have a rather different explanation. I have sympathy with his view that entrepreneurship has its less pleasant side. That is inevitable. It can too easily become a mere search for material profit without much regard to the direction in which the economy and society as a whole are likely to benefit. When I see what is booming in the industrial and commercial world I sometimes wonder whether we will have something of a shock when any yuppie sitting in his bathroom can communicate at ease with another yuppie sitting in his bathroom in Tokyo. When all that has been fixed up, what do we do next?
Where my explanation would differ slightly from that of the noble Lord is that it may be that the entrepreneurs of today, and in particular the young entrepreneurs who are important on this scene, are less concerned about social development and contributing with their wealth, time or energy to the public good than were the great benefactors of the Midlands and the northern cities who made their wealth in the first stages of the Industrial Revolution and whose monuments are the town halls, the civic buildings and the universities which they donated to the towns and regions from which they drew their wealth. The reason I give is that they start with a feeling that what they are doing is not applauded as it was in Victorian times, but is regarded from the beginning as something disreputable.
There is some evidence that our education system—one really ought to keep education out of the debate today—tends at times to instil in young people the view that fairness of distribution is a noble thing and in some cases is the only thing that one should worry about in society, and that the production of wealth is either taken for granted or is considered to be a disreputable activity in which nice people should not be involved. This is another point I put to the

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Minister. How far do those who interview young people for training courses in the various schemes find that this kind of thinking has had a impact on them? This may make them more reluctant to receive the training that would make them either potential entrepreneurs themselves or members of that skilled workforce upon which the entrepreneurs will ultimately depend.
Those are important questions that relate to many aspects of our economic life. We should be most grateful to the noble Lord, Lord Joseph, for having brought them to our attention.
6.28 p.m.
Lord Dean of Beswick: My Lords, like previous speakers, I should like to express my appreciation to the noble Lord, Lord Joseph, for introducing this subject for debate.
In his speech the Secretary of State referred to the fact that our performance has improved. Unless it continues to improve we shall be at a disadvantage when the single market comes into being in 1992. I should like briefly to refer to a debate which took place in your Lordships' House just over 12 months ago. It was introduced by my noble friend Lord Cledwyn, and in reply the then Leader of the House, the noble Viscount, Lord Whitelaw, said:
"Productivity, perhaps the great weakness of British manufacturing in the past, has improved by no less than 40 per cent. in the last six years—a rate of improvement matched by none of our major competitors. And cost competitiveness has improved also—by 15 per cent. since the Overseas Trade Committee reported—making Britain a much more attractive country for manufacturing industry".—[Official Report, 11/3/87; col. 1061.]
When the Secretary of State comes to reply, will he say whether the general approach of the noble Viscount was correct? If that trend is continuing it is very welcome. We must continue with that improvement and try to accelerate it, because if we do not we shall be operating at a disadvantage in 1992.
The noble Lord, Lord Joseph, frequently mentioned the words "entrepreneur" and "entrepreneurial". It is all very well having a country full of entrepreneurs but they cannot do the job on their own. They only germinate ideas and start them moving. If you do not have the workforce to put the ideas into action the project will not take off. For instance, at the beginning of the last war in Manchester they developed a "Manchester bomber" and they thought that was going to be a resounding success; but it never had the power to be a success so they had to redesign the aircraft. They produced the Lancaster bomber, which was a success. The point I am making is that unless there are sufficient bodies to produce the goods the ideas will fall on stony ground and be wasted.
I was myself employed in the largest manufacturing section of our industry, which was the general engineering industry; and of course it still holds that position because in terms of manufacturing industry it employs more people than any other sector. During past debates in your Lordships' House I have tried to point out the significance of the tragic reduction in the numbers of young people coming into engineering in general for training, mostly in factories. It has already been said,
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and clearly underlined, that members of the CBI and related associations such as the Institute of Directors and so on are finding an increasing scarcity of skilled labour of the type that is needed to do the job.
I should like to say that when people are trained as engineers it does not follow that because their particular line of engineering becomes out of date they cannot quickly adapt to another particular line of industry that is about to take off. For my sins, I spent most of my life up to the age of 40 as a locomotive engineer working on the manufacture of locomotives. Coal was dated then because at that time there was available an abundance of cheap oil. I had to change my stance in order to maintain my family, and I had to go to the other side of Manchester and become a turbine engineer. It did not take me very long to do that because I was on piecework and if I did not produce very much I did not get a very good wage. Eventually I managed to produce the necessary goods in quantity and so obtained a good wage.
I feel that the necessity for basic training can sometimes be overplayed because people, once trained in a skill, are very adaptable at deploying their skills in a new way if they are given the chance. That, as I know, has always occurred in manufacturing industry. People move around within the industry; for instance, people involved in machine tool manufacture will move to other forms of industry without very much disturbance.
However, what worries me, when the entrepreneurs have got their ideas and they are in competition with our German and French colleagues in Europe, is the basic approach regarding our seed corn. It is well known, I think, that there are political differences between us. Some of us have said in the past that we think that Government have gone too far in wasting our seed corn when it should have been nurtured. I have said before, and still say, that the best way to train somebody to work in industry is to give them a good grounding within the industry itself. Although the present training schemes in themselves are excellent, in my opinion they should be used only to supplement the training of a person in the particular type of industry in which they will be absorbed.
I should like to give some indication of the competition that we face in this respect. Our rivals try to make sure that they have a reservoir of young people coming in who will be available at the right time and in the right place. I have figures here which show that at present the average British company spends on training only one-sixth of what would be spent in a company in a competitive country. That is a quite dramatic figure: for every one that we train, Germany or France will be training six.
It is easy to criticise, but I wish to be helpful and try to give some indication of the dimension of the problem facing us. The figures also show that every year in West Germany some 750,00 young people enter high-quality three-year employer-based traineeships. Wherever possible these traineeships should be employer-based, because the employer is the best barometer of what training the employee needs. He is the man who is looking ahead and he does not want to train youngsters for lines that are

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going out of existence in a few years' time. He wants to be training them for the future, for things that he knows will be successful.
The figures also show that in 1986–87 10,000 British youngsters started apprenticeships or their equivalent. That may sound good until you look more closely at the figures. I have given these figures before in your Lordships' House and they relate strictly to my own particular industry, engineering. The figures show that in the engineering industry the number of training board apprenticeships has fallen by 65 per cent. since 1979, from nearly 23,000 to about 8,000. Once again, those are quite dramatic figures. I am not saying for one moment that the whole of that decline was avoidable, because many of those youngsters in past years would have been employed in industries that are now outdated. However, we should be making a grave mistake if we did not take this fact on board.
The Government may have to offer employers in the so-called "sunrise industries—even if the sunrise seems rather distant—some encouragement so that youngsters may be taken into the factories in conjunction with a training scheme, to try to make sure that we are not operating at such a disadvantage in the future as would appear from the figures I have given.
If I may, at this stage I shall be a little critical of the Government. I am rather sorry that they broke the bipartisan agreement about the training boards, and diminished the numbers of trade union representatives, with an increase for the employers. I think that was rather unnecessary. I would not be one of those who suggest that trade unions should opt out because they have met with adversity of that kind. I think they should always be in, even if the Government make a mistake, as in this case, by diminishing their role. There has to be a great deal of goodwill from the trade unions for schemes, if they are really to succeed.
I know that some criticism arose from a recent event in Scotland, but your Lordships will make your own judgment as to whether the Ford Company was in the right in their view of what happened, or whether responsible trade unionists were right when they disputed that view, and we will not go through that today. In many industries now, the trade union movement has seen the light regarding the question of demarcation. I used to think it was nonsense when ships were on the stocks and nobody seemed in a hurry to finish them because of demarcation disputes. That type of thing is going and I believe that the trade union movement now recognises that there must be single-union agreements based on fair play and an agreement between the trade union involved and the employer they go to work for.
I would hope to see more of these agreements. There must be some attraction when we see the large investments made in areas of this country by countries like Japan, which are really an example to everybody of how to conduct this type of exercise. I think the fact that such people are prepared to invest huge sums of money in those areas says a lot for the history of the British workman.
I happen to come from one such area that had a good industrial record. Wages were never extremely high but, nevertheless, they produced the goods.
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However, at the time unfortunately it was done with machines that, by comparison with those of their competitors, were totally archaic. For example, the factory where I worked until well after the war had machines which were still started by pulling a rope and moving a belt off a loose pulley which would ultimately drive the machine. Some of those machines were still running when the factory closed down in 1960. Therefore, is it any wonder that that factory could not change its product and thereby compete in the wider market?
I noted the remarks of the noble Lord, Lord Boyd-Carpenter, in his comparison between the Russian system and that operated in the United States of America. I am not for one moment indicating that I favour the Russian system or that I should like to live under it. However, I think you have got to get the position regarding America right, because it is not, in some respects, the great entrepreneurial nation. America has a house full of problems, such as we have, and finds them insoluble.
Recently I happened to be in the company of some American people in your Lordships' House. Some of those people coined a phrase which I had not heard before. They came from an area called the Rust Belt. It was explained to me as being similar to what we started to term our smoke-stack industries; that is, the dying traditional industries that, whether we like it or not, have died for all time. Nevertheless, America with all its wealth and application of entrepreneurial skill and finance to invest still has substantial areas which are as bad industrially as the worst black spots in Great Britain. It is no good anyone trying to hide the fact that there are parts of America where deprivation, in its widest sense, is at its worst. I thought that the record on that issue should be put right.
However, there have been some tremendous successes in America, such as its refurbishment—one of the most outstanding examples of which is the city of Boston and the way it tackled its problems. We are hoping to learn from that type of example. But we cannot assume that America has the answer to everything, because it has not. In fact, American markets are increasingly being penetrated by people such as the Japanese and the South Koreans at a substantial rate. I am not an economist but I have enough sense to know that the American economy at present is only carrying on because the country is living on the biggest tick bill ever. It is running a record balance of deficit payments. Further, should it even dare to try to balance that situation the unemployment prospects in America would be absolutely horrendous.
Lord Boyd-Carpenter: My Lords, will the noble Lord allow me to intervene?
Lord Dean of Beswick: Yes, of course.
Lord Boyd-Carpenter: My Lords, I think the noble Lord misunderstood what I said. What I was saying—I apologise if it is obvious—was that the standard of life in the United States was infinitely higher than that in the Soviet Union; that is, of course, if one excepts the privileged ruling class there

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who are in a different position altogether. However, I was not seeking to make a general comparison or to suggest that all parts of the United States were prosperous.
Lord Dean of Beswick: My Lords, I accept the point that the noble Lord has made. However, I must say that whatever the system which governs a country may be, I have never found any shortage among what he termed the ruling class. The ruling class, in any system, do not walk about in sackcloth and ashes; they are usually at the top of the tree, whatever the system. I was trying to make the point that in some respects America is very good. However, in others its patchwork quilt is not a good example and does not provide the answers. In fact, the country would like to find them.
The debate has been an interesting and objective one which has given us some room for thought. It also indicates we have some mileage to make up before we can start to compete upon a pound-for-pound basis, in colloquial terms. I hope that the present trend continues and that we are successful. However, we have a long way to go and the worst thing we could do at present is to become overoptimistic and complacent about our position. The figures quoted last year by the noble Viscount, Lord Whitelaw, show a tremendously successful trend. As I have already said, I hope that trend continues.
I conclude by thanking the noble Lord, Lord Joseph, for giving us the opportunity to debate such an interesting and vital subject.
6.45 p.m.
The Viscount of Oxfuird: My Lords, I too should like to thank my noble friend Lord Joseph, first, for inviting me to speak and, secondly, for initiating the debate on this most important of subjects. I say that especially because it is he who has throughout his political life, and increasingly since 1979, done so much to stimulate the environment which has led to the entrepreneurial approach to job creation.
In taking part in the debate I must declare an interest, inasmuch as I have for the past 24 years been employed by Lansing Bagnall (a manufacturer of materials handling equipment), a firm whose history is acknowledged as one of the great industrial success stories of the post war years, and which has manufacturing plants in the United Kingdom, West Germany and France. It is a company which is in a prime position to experience the practical problems posed by the debate.
The materials handling industry in the United Kingdom is one of those industries that has been under attack, not only by the Japanese but also even more severely from Sweden and West Germany in the very centre of North-West Europe. Having been involved with the export of materials handling equipment to over 60 different countries during this time, I have found that the maintenance of continuously improving productivity standards requires a higher level of expertise and energy as every year goes by.
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I must confess to having felt a little daunted when I first read my noble friend's Motion, and I suspect that his years at the Department of Education and Science led him to word it rather in the style of a question in the new GCSE examination. I have tried hard to do my homework.
I should like to say a few words on the subject of job creation. As my noble friend said, the creation of an environment for the development of small businesses is one of the best ways of accelerating the creation of new jobs. Professor Birch of the Massachusetts Institute of Technology has, in a number of publications, underlined that it is within small business that the most dramatic job increases can be gained. He concludes that the job generating firm tends to be small, dynamic or unstable—depending on your viewpoint—and it tends to be young. His research has shown that small businesses are important to employment growth during both recovery and recessionary periods. The contributions of small businesses of less than 20 employees are particularly evident during recessionary periods, when employment at medium-and-large-size firms will be declining. His research, admittedly based largely on work in the United States, but I suspect equally relevant here and in North-West Europe, concludes that employment growth in small businesses is not confined to just a few industry sectors but occurs generally across all industries. In fact it was work carried out by Professor Birch which stimulated the Department of Trade and Industry's sponsored conference on job generation in 1984 which resulted in a paper being published on behalf of the Small Business Research Trust confirming many of his findings.
There is no doubt that the positive attitude taken towards small businesses by Her Majesty's Government today is having a continuing effect on reducing the unemployment levels in this country. However, we must have concern for the future. That future will be severely affected if we are unable to supply our industry with the right level of trained personnel.
Today there is a plethora of statistics providing international industry comparisons, and in the recent past we in the U.K. have been struggling to achieve improved productivity when compared to our rivals. Your Lordships have referred to direct vocational training or similar schemes. Our rivals in North-West Europe have a very much more positive attitude compared with our own. There has been much written on this subject, but a recent discussion paper published by the National Institute of Economic and Social Research, covering the vocational training in France and Britain of mechanical and electrical craftsmen, highlighted many of the existing problems today when it said:
"Both in mechanical and in electrical engineering work, France today trains between 2½ and 3 times as many qualified craftsmen and technicians per head of workforce as Britain, to standards which are as high, and often higher, than equivalent qualifications here".
I do not think there are many of us who is our own domestic lives have not suffered from the failure of service engineers, mechanics and other craft technicians when servicing the ordinary domestic equipment that is in daily use. However, when that failure is translated into the production areas of our

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industries, we come to face with a severe drawback which our manufacturing entrepreneurs face when competing with equivalent companies in north-west Europe. France has made very remarkable progress towards a vocationally qualified workforce; in engineering skills it is on the road to emulating the Germans and the Japanese. All three of these countries produce two to three times as many qualified craftsmen and technicians per head of the workforce as Britain. I am sure that there is no one in your Lordships' House who does not recognise the urgency of redressing this situation. On the question of productivity, there are both similarities and differences between ourselves and our north-west European competitors.
My noble friend Lord Aldington referred to a report in 1985 published in the National Institute Economic Review on productivity, entitled Machinery and skills in a sample of British and West German manufacturing plants. The further comment was made:
"The average age of British machinery was not very different from that found in German plants, but it was less technically advanced, was subject to more frequent breakdowns and breakdowns took longer to correct. Productivity is higher in Germany in each of the 45 matched product groups and the importance of skills at all levels was apparent".
The key to some of our productivity problems is the failure to invest in new technology. Everybody should be given the best available tools to do the job. My own employer is heavily engaged in upgrading our production processes. Our factories are redolent with the jargon of the new technologies. Words like CAD (Computer Aided Design), CAM (Computer Aided Manufacturing), CIM (Computer Integrated Manufacturing), JIT (Just in Time component supply) are forever in my ears. Investment in equipment and trained personnel to operate that equipment is essential to survival. But equally important is a change of attitude at all levels of the organisation.
My employer survived the recession of the '80s because we had taken care of industrial relations during the troubled '70s, but my point is much more than that. It refers to a fundamental change of attitude by every person in all parts of an industrial unit, a common will to break down the demarcation of us and them.
For the past nine months I have been engaged in the introduction of a programme called TQM (Total Quality Management) within our company in the UK. TQM is just another jargon word coined by PA Management Consultants, who have been helping us. Other companies have used other names for similar programmes. British Airways refers to it as putting people first. Sir John Egan of Jaguar did not call it anything—he just did it. In both cases, loss-making nationalised industries have been turned around to the point where they have become realistic investments for the institutions and private investors.
Dr. Edwards Deming, the creator of the quailty management philosophy, once made the statement:
"Defects are not free. Somebody makes them and gets paid for making them".
The philosophy of quality management is based on the principle of prevention, not detection. A policy
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that allows inspection to take a larger share of quality costs often creates an unquestioning acceptance of the inevitability of quality failure. A policy that is tolerant of quality failure is likely to be extremely expensive. The initiative must come from management. It must encourage others by example and guide the actions that follow, through successive levels of the company. Everyone is responsible for quality. You cannot inspect quality into a product. Making other people responsible for quality is less effective than creating a climate in which people are willing and able to take responsibility themselves.
The total costs of quality are usually not visible in company records. Most accounting systems fail to isolate them, and yet quality can be measured. There are three elements to the cost of quality—prevention, appraisal and failure. Prevention is the cost of getting it right first time. Appraisal is the cost of checking and inspecting whether we have done it right. Failure is the cost of not doing it right, and that is expensive. Right first time is the standard by which we must evaluate quality performance. The aim is for zero defects. To achieve that, people must be trained and it is in this area that further investment needs to be directed. Opportunities for quality improvement abound in every part of every company. Quality is needed in marketing, in personnel, in administration—indeed, in every department—not only in manufacturing.
My view, therefore, is that by concentrating on the quality of all aspects of everything that we do, we in industry can work towards improving our levels of productivity up to and beyond those already pertaining in north-west Europe. That, coupled with the encouragement of entrepreneurialism in the creation of new firms, often small firms, will lead to an environment in which new jobs can be born. The road will not be easy. Nothing worthwhile is easy, but I am convinced that it is possible, and with the help and good will of all parts of industry, management and the shopfloor alike, this country can succeed.
6.58 p.m.
Baroness Seear: My Lords, I too like to thank the noble Lord, Lord Joesph, for introducing this debate. For two days running we on these Benches have had reason to be grateful to the noble Lord, Lord Joseph. We are grateful to him, first and foremost, for his frank presentation of the position on productivity in this country. The Secretary of State tells us—he will forgive me for saying this—repeatedly about the great increases in productivity. What he tells us is of course true and much to be welcomed. However, the noble Lord, Lord Joseph, put that into perspective when he emphasised how far there still was to go.
As the Secretary of State knows perfectly well when he gives us the figures of percentage increases in comparison with other countries, it is much easier to achieve a percentage increase if one starts from a low base rather than a high base. If one's level of productivity is already high, it is far more difficult to get a 10 per cent. or even a 5 per cent. increase that if one starts at a low figure.
Lord Young of Graffham: My Lords, I said that we are still as much as 30 per cent. behind some of our major competitors. I did not seek to hide that.
Baroness Seear: My Lords, if I may say so, the Secretary of State was probably prompted into making that statement by the information that the noble Lord, Lord Joseph, had already given us in some previous presentation. We have not had the point made quite so clearly before. It is valuable that it has been done today.
The noble Lord, Lord Joseph, did the House a great service in underlining the deep cultural and attitudinal problems that lie behind our difficulties and that are probably more important than any other single factor about which we have talked. There is among those in all sections of society in this country a deep suspicion of people who make money. I have never made money myself. I should have no objection to doing so if I knew how. Indeed, I should greatly welcome it. Whether this stems from the old aristocratic tradition—about which I know very little—that to display wealth is the most vulgar thing that one can do, or from people who have been brought up on the principle that property is theft and that that is the end of it, there is a deep suspicion that anyone making money is, by definition, up to no good. If we could get over this it might help considerably.
There is also considerable hostility to wealth-creating jobs. This may come from the university lecturer who guides his better pupils away from anything that has to do with industry and the wealth creation process. Years ago when I was in industry I had a reference from a headmaster who said quite simply, "She is a perfect fool, but she will do for you". That kind of attitude has led the most able people in the country and those who have benefited from the best that our education system has been able to offer—and very good it has been—away from wealth creation and into other kinds of activity. Although worthy in itself, this has not helped to increase the country's prosperity.
The noble Lord, Lord Joseph, was surely right when he said that, in the past, we have been too much at the mercy of sectional interests powerfully organised to bring pressure to bear on governments. This could have been the professional interest of employers wanting protection and the ability to maintain monopolistic practices or the sectional interest of trade unions reluctant to break down divisions between jobs so that labour mobility has been made unnecessarily difficult. Such organised sectional interest is heavily in favour of the producer—the employer producer and the worker producer—and biased against the consumer. It has surely been a great handicap that we should overcome, and we are grateful to the noble Lord for bringing it to our attention.
Those are some of the important points that the noble Lord, Lord Joseph, has made. He rightly stressed the importance of increasing productivity and of wealth creation in the country if we are to maintain and, better still, improve, the standards of living of all people.
Like the Secretary of State, the noble Lord, Lord Joseph, is in favour of the entrepreneur and attaches great importance to the small entrepreneur. We must pay tribute to the Secretary of State for the amount he has done to encourage entrepreneurship. One
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finds that it is taking root and beginning to bear fruit. From time to time I earn a more or less honest penny doing some interviewing of young people for a company scholarship scheme: they will benefit from the company's help in going to university. I have been doing this recently. One young woman was excited and enthusiastic about the youth enterprise scheme in which she had been the production director. She was very proud of the fact that she had made a profit. That could not have happened 20 years ago. This young woman of 18 talked intelligently about how she had run a business producing personalised stationery. It had made £1,000, which it paid back to the shareholders. This is a revolution. I found that of 35 students—I always ask what they will do when they leave university—four wanted to run their own business. That would not have happened years ago. Perhaps I may add, to amplify what the noble Lord, Lord Joseph, said, that two of them were young Asians.
The further value of the noble Lord's speech was to underline the importance of a global economy—that is really what he was talking about—and the fact that we have to be entrepreneurial on a global scale. The old protectionist Little Englander approach gets into a frightful state if it is suggested that foreign capital should come into a company in this country—the Government are by no means Simon pure in this respect—and that people coming here with the potential to set up businesses should be allowed to compete. There is no room in a world with a global economy for such a Little Englander approach. The noble Lord underlined that to great advantage.
This progress in understanding the importance of enterprise can only be to the good. The Secretary of State talks a great deal about the entrepreneurial culture. This gives some people—it is probably unfair to the Secretary of State—the feeling that the only thing that matters is gaining money. I know that the Secretary of State believes that enterprise, wealth creation, is a means to an end and not and end in itself. However, constant talk about the entrepreneurial culture leaves the feeling that that is the end of the exercise and that is what it is all about. That is not what it is all about. The Secretary of State does not believe it, but some of the young who have been influenced by the good new attitudes talk like that.
For my sins, I took part in a Conservative club debate. A speech made by a brilliant young man who had been president of the Oxford Union gave everyone the impression that, provided one made money, that was the end of one's obligation to society. The Conservative Member for the constituency, who shall be nameless, finished up—I do not say that I appreciate this—by saying to me, "he sounded like an old-fashioned Manchester Liberal and you sounded like a Christian Democrat." Perhaps I may observe that the old-fashioned Manchester Liberals existed only in the realms of theory; they did not find their way into practical politics in the sense that the term was then used.
If people are to accept that being entrepreneurial and wealth creating is important, they must have an objective beyond that. The objective is the good society.

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The Government, in pressing wealth creation, must by their words and deeds press also the importance of the creation of a good society. I shall not expand on what I mean by that now, but at least it means that there must not be an under-class. We have such an under-class now—the Secretary of State knows this—and it will grow unless we take action to deal with it. The trickle-down policy will not in time reach the under-class. Those people feel, and will feel to a greater extent in future unless something is done, that they do not belong to society and that they owe it nothing, for it has done nothing for them. There is a middle way between simply leaving people to stand on their own two feet and nannying them with a nanny state in a way that all of us I think today reject. But if this could be brought out more plainly it would be very much in the interests of the development of true entrepreneurship.
There are a few rather more practical points that I wish to suggest to the noble Lord for future entrepreneurial development. We have already referred to developments in industrial relations. The Government boast that industrial relations have greatly improved, and in many ways they have over recent years. Certainly the strike record is very much reduced. But if one looks at the figures one can see that the number of days lost in strikes is always very low at a time of high unemployment for reasons which are crystal clear to anyone who thinks about it for five minutes.
What we now have to consider is how good industrial relations are to be generated and maintained when we no longer have the threat of unemployment, which is and has been an instrument in keeping industrial relations relatively tranquil. A great deal needs to be done. The Secretary of State referred to the involvement of people in the place of work. His Government have done a considerable amount in the development of employee share ownership. Those are both objectives which we from these Benches have advocated for at least 60 years. I shall not dwell on that for the moment as I have dwelt on it often enough in the past. But I think that the time has come to have a really systematic look at the kind of industrial relations systems which we wish to see developed in the more prosperous future that we hope lies ahead of us.
Then there is the question of where we can find the new entrepreneurs. From time to time I do not altogether agree with the noble Lord, Lord Beloff, and he does not always agree with me. But I found today that I was agreeing with a good deal of what he said, particularly when he mentioned that an important source of potential entrepreneurs is among women. Women in this country in comparison with American women have taken very little part in the new entrepreneurial growth. It is again time that we had a good look to see in what ways we can stimulate more women to take part as entrepreneurs.
I shall not say that this is a characteristic of women because I do not believe that such generalised characteristics exist, but many women are entrepreneurial pretty well every day of their lives although no one ever applied that term to them. Could we not rather more systematically see ways in
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which we could develop the entrepreneurial skills of women?
I want to make another suggestion which I know will seem somewhat way out to noble Lords. It is about bringing into entrepreneurship some of the least likely candidates in our society. The Secretary of State knows that the enterprise scheme, with the £40 a week, has been very attractive. I wonder whether we could reflect on that and see whether there is not something rather more permanent that we might with advantage offer. It may be possible for even a quite small basic citizen's income, which would not disappear with increased earnings, to be paid out. Therefore there would be no disincentive to enterprise and to earning. If it were possible to guarantee that I believe that one could pull into entrepreneurship a number of people who would then have nothing to lose by earning more and much less to risk because they would have a cushion behind them, however small.
Some of this has been shown to be valuable in connection with the community programme where there was some guarantee to people to come and make a contribution, or even more appropriately where there have been local community enterprise schemes in which there has been some safeguarding of the position of the person taking part in them. They have learnt to be entrepreneurial on the basis of a small guaranteed income.
Finally, needless to say I want to stress, as everybody has stressed this evening, the great importance of training. But I want to do that with a degree of urgency that perhaps has not been pressed on all sides. In the area in which I am involved with the MSC I am glad to say that the unemployment rate is now down to under 5 per cent. Our problem is not finding jobs for the unemployed; it is meeting ordinary labour market needs for skilled people which we cannot meet. I know that the Secretary of State says that training is industry's job, apart from what it is doing in the new job training schemes and in YTS. There is a lot in the argument that industry should be spending much more money on training. It should be anticipating what it needs and taking steps to deal with that but it is not doing that. The Government's own publications show plainly that industry is not doing that. Surely in this country what we have is a relatively small number of companies which train extremely well but a considerable number, which includes a lot of the smaller organisations, do not know what modern training is.
I ask the Secretary of State to think again as to whether it is not better to find some way of encouraging—it does require financial encouragement—those companies which can train to take on far more people than they need for their purposes and to do the training job. Why should they do that unless they have some financial assistance? Otherwise it will be too late. We cannot find the people for these jobs. That has already happened.
There is money available at the moment for training the unemployed. There are differences of opinion about the scheme but let us say about that, so far so good. But a ridiculous position is developing in my part of England where there are unfilled

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vacancies and money around for training schemes, yet we have to say to a young man of 18, "We cannot give you this training until you have been six months unemployed. You have to kick around for six months and then we can give you training".
The jobs are there if we could train that young man for them and the money is there. But we are not allowed to do that. There is something quite mad about that. If that money is not to be used for that purpose, can we not have some money for it and get on with the job? We could do it if only we had the money.
There is one other point I wish to make and I do not wish to finish on a disagreeable note, although I have talked for far too long. I just say to the noble Lord, Lord Boyd-Carpenter, that it is not my job to defend the Bishop of Durham. I do not think that I would have used the word "wicked" but there are sins of omission as well as sins of commission. Some people at least would see some acts of this Government as ranking as sins of omission. As regards the noble Lord's final comment, I wish just to say that there is a kind of courage which I greatly admire and appreciate in tackling the doubts, difficulties and problems of many people who wish to share the faith of the bishop but who find it difficult to do so because he opens up certain questions and he offends many of the orthodox belief. But he brings great comfort to many very sincere people.
7.18 p.m.
Lord Peston: My Lords, how pleasant it is to get away from the turbulence of the Education Reform Bill, albeit for only a day, and enter the tranquil waters of applied economics. We are indebted to the noble Lord, Lord Joseph, for allowing us to do that.
In preparing for the debate and interpreting its subject I felt that what we were really discussing was the wealth of nations or the wealth of our own nation. Therefore I thought again and went back to look at my Adam Smith, which one always reads with great pleasure.
It is odd that I had forgotten that 1990 is the bicentenary of the death of Adam Smith. The Secretary of State may well bear that in mind with respect to some commemorative activity. But the odd fact about Adam Smith for most people who do not read him and do not know what he actually said is that he had some quite relevant things to say about the present day.
I listened to the noble Lord, Lord HarmarNicholls, with great interest, as I always do, and I remembered Adam Smith's famous remark, that businessmen are always complaining about wages and their effect on prices and always omit to mention the effect of excess profits on prices. That is not to say that the noble Lord is wrong about wages and the need for them to be at an appropriate level. However, as Adam Smith was well aware, it is easier to blame the workers than to accept blame oneself. On the subject of trade unions, Adam Smith knew that people found it easy to blame combinations of workers and forgot all the "natural" (as he called them) combinations of merchants that he saw
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throughout the society in which he lived and which he deplored.
One of the two most interesting things about Adam Smith is his famous distinction between productive and unproductive labour. That is very much our distinction today, with the emphasis on manufacturing and the need to recognise the service sector. As an economist, one has always said that Adam Smith was wrong to distinguish productive from unproductive labour. Anything that fulfils a demand or a need is productive and simply to concentrate on manufacturing is wrong.
Nonetheless, one could interpret Adam Smith in another sense as saying that in terms of growth and productivity, the manufacturing sector is the easier sector to use as the engine for growth. That is a point well worth bearing in mind. However, my heart lies with the balanced view of the matter and not in saying that one kind of economic activity is superior to another, other than that it ought to meet the demands of consumers. I believe that the noble Lord, Lord Joseph, said that the sole purpose of production is consumption. Consumption is the original Adam Smith dictum.
The noble Lord also mentioned the unemployment problem. I should add that in the best of all worlds one would want to be a producer in order to consume. In other words, unless you are fortunate enough to inherit—which most of us are not—you have to earn an income. You would rather earn an income to consume and you would rather not be on benefit. That is another point which is well worth bearing in mind.
I could go on endlessly with Adam Smith quotations. However, I shall get down to the business of the debate. Perhaps I may say to the noble Lord that I accept what he called his common diagnosis, which is of several dimensions. There is no doubt that the rate of growth of output in manufacturing and GDP per capita in our country in the last few years has brought us back to the original trend of the 1960s. However, in the 1960s, we were doing less well than our colleagues in North-West Europe and the OECD. We are now well above average. Equally, when we look at levels we see that we are still a long way behind, as the noble Baroness, Lady Seear, pointed out.
The noble Lord, Lord Harris of High Cross, is not in the Chamber at present. However, he referred to Germany and it is true that the growth rate in Germany in the last few years is lower than ours. However, German output per capita, depending on how it is measured, is between 50 per cent. and 100 per cent. higher than ours. That is an important point. For noble Lords who are interested in other economic indicators, I believe that the German inflation rate is currently 1 per cent. per annum. That is slightly—perhaps even more than slightly—less than ours. I do not have the exact figures to hand. However, I believe that Germany has the second largest balance of payments surplus in the advanced world. Therefore, although Germany has some problems, I do not think that the average German would be looking to our country to find an economic miracle.

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I turn now to a question which again relates to Adam Smith and upon which I have been reflecting since I noticed that we were to have this debate. It is the question of entrepreneurs. I accept the view of the noble Lord, Lord Harmar-Nicholls, that we see in them the risk-taking function, the seeking out of new opportunities and market demands unmet and the ability to make profits. Certainly the Wealth of Nations contains countless examples of that and of its desirability within a centralised system.
However, there is also the management view of what is wrong with the economy: the correct decision, the precise decision, the highest standards—all the matters about which the noble Viscount, Lord Oxfuird, was talking. I put it to the noble Lord, Lord Joseph—I do not think that our state of knowledge is such that we can decide the matter—that it is not obvious that it is the lack of entrepreneurs which has been the cause of our relative economic failure. Alternatively, it may have been the rather low level of management and of management ambition. During the education debate the noble Lord referred to the low level of expectation that some children have or that we have for our children. My experience of management has been that managers also have low levels of expectation as regards what they can achieve. I emphasise that I do not know the answer. Is it entrepreneurs, is it management or is it both? But I respond to the noble Lord's approach to the matter by saying that it is worth debating. I hope that we shall return to the subject.
Turning to the question of entrepreneurs more generally, one must ask where we get them. I accept the view of the noble Lord, Lord Beloff. The extent to which the entrepreneur has been the outsider is amazing. The United States is as good an example of that as any. I agree with several noble Lords who have said that we should not reject outsiders in our society. The interesting question is whether we can produce entrepreneurs ourselves. Are they born or are they made? Judging by certain statements made by the Government in regard to education, I believe that their view is that they can be made. They say that if we adapt our schools or universities we can somehow make entrepreneurs.
I am not convinced. It does not make much sense to me. That relates to a point which the noble Baroness, Lady Seear, made, which also applies to me. I am not naturally entrepreneurish. Risk-taking is the thing that I hate most in the world. I always want a fallback position; I want to make sure that any room I enter has an exit door. When I meet people who are entrepreneurs, I find a spirit there. Economists have looked at the concept of the so-called natural spirit. Keynes talked in such terms. I am not suggesting that the Government are mistaken in asking those of us in education at least not to take a negative view of entrepreneurs. However, I am not at all convinced that we shall be able to manufacture many of them.
Since I am adopting a rather academic view of the matter, I recall that either the noble Lord, Lord Joseph, or the Secretary of State referred to the opinion formers and their influence. That is a subject which has been studied and there is quite a lot of research into it. The answer again is that we do not
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know. In almost all the advanced industrialised world the opinion formers—the high-class intellectuals and those sort of people—are against producers, capitalism and making money. They are against them not only in this country but in the United States, Germany, France and so on. That is a characteristic of intellectuals. Therefore, I doubt very much whether the explanation of Britain's relatively poor economic performance since the war can be our opinion formers. However, I do not push the point. It may be true that our opinion formers, including our professors, are more antipathetic to those things than they are in other countries. However, what research there is does not support that view.
Perhaps I may make two remarks in connection with the speech of the noble Lord, Lord Boyd-Carpenter. One is of disagreement and one is of total agreement. I disagree with the noble Lord's views on taxation. If there is one subject that economists have studied, it is the effects of taxation in those areas. The evidence simply does not support what one would like to believe. However, whether or not one accepts that, I find it hard to believe that the tax cuts of the present Government have achieved the productivity improvement which we have seen in the last few years. There must surely be a time lag in the effect. I shall be coming to a view on the future in a moment. If the Secretary of State believes the tax cutting view, he would be taking a very optimistic view about the next five years rather than trying to find an explanation of the past five years.
Lord Boyd-Carpenter: My Lords, will the noble Lord study not merely academic theorising on this matter but also the practical experience of the 1950s and 1960s when a succession of tax cuts resulted inter alia in increased yields for taxation, thereby increasing possibilities for improving the social services?
Lord Peston: My Lords, those were periods when our economy was growing pretty rapidly. It was a period during which both the government of whom the noble Lord was a member and a supporter and the Labour Government were in power. A great deal of that situation was not dissimilar to what we are observing now. In his day the buoyancy of the economy generated tax increases. I do not say that that is wrong; I am simply saying that it is an argument which has been investigated and which does not seem to stand up. What does stand up is that we must look at the fundamentals behind our economy. I agree very strongly with the noble Lord on that point and believe that Adam Smith would also have agreed with him.
To stop at the level of economics is almost certainly to make a mistake. We have to ask about our institutional arrangements and the kind of society in which we live. On that point I agree with the noble Lord entirely. Due to lack of time I cannot follow him in that direction, but it a fundamental matter.
Perhaps I may say a word or two about industry, productivity, and what we are seeking. These remarks relate also to the remarks made by noble Lords about education and training and in particular to those of my noble friend Lord Williams of Elvel

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and the noble Baroness, Lady Seear. In so far as we are operating in the manufacturing area it seems to me that there is a choice. We could opt for low wage costs—the creation of a small amount of value added in certain sectors, devaluing sterling and so on. We could generate competitiveness that way. The alternative is to go into the quality, high value added area where success becomes almost independent of price. It is a marvellous paradox that if one gets into the right area one can almost charge what one likes and one can have highly successful industry with a very high sterling rate.
If someone asks how one does that I cannot give an answer. I can only say that given the choice in my view the high value added approach is the correct approach. That approach is predicated on civilian research and development, and as the noble Lord, Lord Williams, has said, vocational training of the highest quality and so on. I emphasise that point.
I do not wish to detain noble Lords too long from hearing the Secretary of State's reply, but I am afraid that I have to make several negative remarks. I do not think that in looking at the state of our economy we can avoid the present state of the balance of payments. As someone who believes in high growth and does not want to see the present improvements peter out, I hope that we do not run into a balance of payments constraint. However, I am worried about the annual deficit on the current account. I refer to the current account and not to the trade account. The current account deficit is £4·3 billion. Over the past 12 months we have already achieved what the Treasury feared. That worries me. The trade account is £12 billion in deficit, but we should not look only at the trade account. I am interested in the short-term outlook for the inflation rate. I agree with noble Lords opposite that it is something that cannot be neglected.
Most of all I am extremely worried about unemployment. I worry that we have become complacent about it. I worry that we are prepared to live with the current figure. I am worried that we say that we dare not risk expanding the economy because in the area to which the noble Baroness, Lady Seear, referred we already have virtual full employment because of the constraint on skills. Therefore the rest of the economy is not allowed to move forward because we feel that we cannot go too fast. That worries me enormously.
We must all surely agree that the money spent on unemployment benefit is a total waste. I do not mean that we should not spend it as a matter of social policy, but it would be infinitely better for those people to be at work or for that money to be used for training and so on. What worries me about some of the changes in the social security arrangements is that we are not using the money for that purpose. In particular I understand—although I am slightly out of my depth here—that the so-called 21-hour rule under which young people could spend time learning while still receiving benefit was applied with a rather generous view about their availability. It seems absurd to tighten the availability doctrine so that they can no longer study for 21 hours and do nothing instead. They become the very people whom the
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noble Lord, Lord Williams, and others have mentioned who live in the inner cities, are alienated from our society and feel they have nothing to hope for in the future.
I conclude with two remarks. One concerns the trade unions. My noble friends Lord Dean, Lord Basnett and Lord Houghton have pointed out—and one forgets—how much of our economic success has been helped by trade unions rather than hindered. It seems to me that in the past few years we have been going through a critical phase. Rather as Dean Acheson said of Britain generally, the trade unions have lost a role and need to find something. It seems to me that trade unions need to think through what their role will be. I do not intend to go into detail on that point. I remain fully committed to trade unionism and I should like one day, I hope in the near future, to take part in a debate in your Lordships' House on trade unions. I think that we might find some interesting points to explore.
Lastly, I should like to go back to what my noble friends Lord Williams of Elvel and Lord Basnett have said. We have managed to get through this debate without a great deal of politics although there has been some. One or two noble Lords seem to have strayed slightly over the line, particularly in relation to some remarks about nationalised industries. On the whole we have behaved ourselves. I adopt that view about policy-making in general. I and my noble friends stick to the consensus approach to these matters. If I were asked to say what we can do in this country which would most help us move forward it would he that we must return to consensus decision-making in this and other areas.
7.37 p.m.
Lord Young of Graffham: My Lords, with the leave of the House, I believe that I speak on behalf of all in your Lordships' House when I say that the debate has lived up to the promise foreshadowed by my noble friend Lord Joseph in his original contribution. We have had a long but interesting and discursive debate in which, I would agree with the noble Lord, Lord Peston, politics has not appeared unnecessarily. Of course politics is always there because we are talking about essentially political matters.
The noble Lord, Lord Williams of Elvel, said at the beginning that he was convinced because the records showed, and I agree with him, that in 1985 industry itself was not spending enough money on research and development. That is true. Information since then indicates that as profitability has been restored to manufacturing industry in particular and industry in general expenditure on R&D has gone up. That is something that we shall have to see as the figures become available. Of course it is only in the past 18 months or so that we have seen profitability return. I live in hope that we shall see the sums spent on research and development equal those in other countries.
Where I fear I cannot join with the noble Lord is when he says that wrong entrepreneurs flourish but right ones do not. It seems to me that in making value judgments about entrepreneurs—
Lord Williams of Elvel: My Lords, may I correct the record? There are too many wrong entrepreneurs in the sense of people who live by acquisition. We are trying to encourage the right sort of entrepreneurs. That does not mean to say that small entrepreneurs and right entrepreneurs do not flourish at all. I wish merely to make that clear.
Lord Young of Graffbam: My Lords, the noble Lord has just confirmed my worst suspicions, because he is making value judgments about entrepreneurs. Indeed, it may be part of those attitudes to which the noble Baroness, Lady Seear, referred in her speech. I hope not.
The noble Lord referred to the balance of payments, about which he was worried, as did the noble Lord, Lord Ezra. I should like to assure both noble Lords that at a time when our net overseas investments stand at some 160 billion dollars and are going up steadily, we can afford to take a slightly more relaxed view about the balance of payments in that this position contrasts very much with the situation some 15 years ago when our net overseas investments were non-existent.
The noble Lord, Lord Ezra, was concerned about long-term investments. He referred in particular to his experience with one of the companies in which he was interested and to the market reaction. Yet surely last year we saw one of the best examples of successfully funded long-term investment in the Channel Tunnel. That is something which has a very long investment date. It is something which has not been attempted before. Yet the Channel Tunnel was funded, and successfully funded, by the City. The noble Lord tends to worry a little about manufacturing investment, but investment in manufacturing industry has been breaking United Kingdom records year after year over the past four years and there is every indication that it may well break another record this year.
My noble friend Lord Boyd-Carpenter referred to an American saying, "The customers make pay day possible". Since we live in a monarchy I prefer the expression, "The customer is king"; but both expressions have exactly the same connotation. I now try to persuade my department, parts of which have undertaken customer-care training in many cases, that we should look after the customer. I believe that that is something on which we must concentrate and spread the message throughout industry and commerce.
My noble friend looked at the relationship between the United States and the Soviet Union. I prefer to take the example of East Germany and West Germany, both of which started in exactly the same position in 1945. One of them had the advantage of a planned socialist economy and the other developed its entreprenuerial society. I believe that those countries demonstrated very clearly and quickly over a few years the advantages of one economy compared with the other. Attention has been drawn to the disincentive effect of high taxation. I shall come back in a moment to that point because I fear that I cannot agree with everything that the noble Lord, Lord Peston, had to say.
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I am afraid that my noble friend Lord Aldington has a weakness, which is that on occasion he misunderstands me. I did not decry industry; far from it. I gently pointed out that we have to impose an improvement in productivity across all sectors: the manufacturing sector, the service sector and not least in government. In all those areas we must look toward improved productivity.
I hope that the noble Lord will not be upset about what I have to say, but he was concerned about instability in exchange rates and drew attention to the way in which the basket had gone from 72 to 78. I have no wish to enter into any controversy about exchange rate policy but I should point out that only a few weeks ago I was in Japan. The Japanese are enjoying a manufacturing and export-led boom. Japan has seen the exchange rate of the yen change from 260 to 121 in two years. It now stands at about 125 or 126. Yet industry managed to live with that and did very well indeed. I believe that that is an example to us. If one looks back over the years, even Germany (which has figured largely in the contributions to the debate today) has seen the deutschmark go from about one-fifth to five times its normal value over a long period of years, and the Germans have managed to find ways of dealing with that situation.
The noble Lord, Lord Basnett, asked whether things had changed since 1979. He tried very hard and to my surprise succeeded in finding some figures to demonstrate that things are worse now than they were in 1979. If the noble Lord believes that attitudes to links between training and education and industry are worse today then they were in 1979, I fear that we live in slightly different worlds. The world in which I live is one of tremendous change. The noble Lord asks why consensus in industry does not exist today, but I point out to him that it takes two to reach a consensus. I believe that there are changes in attitudes taking place both in the north and in the south of our land and in many other areas where we should aim toward working together. I hope that the recent changes that have occurred will bring about that situation.
Lord Basnett: My Lords, perhaps the noble Lord will forgive me for interrupting, but I have been accused of being reserved about the Government's achievement. I acknowledge the growth in productivity. I made reservations about the failure in investment and in particular the reduction in the percentage of GDP spent on training. Nobody would dispute both those facts.
I agree that there is a joint responsibility in consensus but I said that we had failed to create the structure to make it happen in this country. We should do so, and that is the responsibility of government.
Lord Young of Graffham: My Lords, this is not the occasion to enter into a debate on training. However, I would argue with the noble Lord because I feel very strongly that today training is much more relevant to the world of the future than the training that existed in the late 1970s. At that time in the main the spend went down the apprenticeship route and into similar

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areas. However, that is another matter. If the noble Lord wishes to raise it on another occasion I shall be more than happy to discuss it then.
My noble friend Lord Harmar-Nicholls recounted the changes in attitude that occurred in Europe during his spell in the European Parliament. I can understand that, because I can recall some not very pleasant memories of what it was like to go to Europe 10 years ago and I know how pleasant it is to go there today.
My noble friend Lord Joseph asked me to keep out of business decisions. He admitted that he had not been an entrepreneur and said that he would not intervene. In my slightly chequered past I have been an entrepreneur, and I have promised my noble friend that I shall not intervene in any circumstances, if only because I suffered too much in the past from the intervention of my predecessors in office some decades ago.
The noble Lord, Lord Houghton of Sowerby, drew attention to the need for reform of education and said that we should look at its quality. I say to the noble Lord that we should look at the quality of output. That is one area in which we should begin to examine very strongly indeed the way in which young people who will be coming out of the school system can be more fitted for a realistic contribution to the world of the future. We should look at the combination; that is to say, not only at the changes in the education system but at the contributions made by TVEI and YTS and other initiatives. I believe that we are seeing a qualitative change in the way in which young people who leave school look toward the world of work.
My noble friend Lord Beloff asked how one encouraged entrepreneurs. Perhaps I may give him an answer to that question from the point of view of a presently non-practising entrepreneur. The answer is simple: stop discouraging them. I believe that entrepreneurship is part of human nature. All over the country, particularly perhaps in areas such as the North-East where old traditions have disappeared in the past few generations, there has been a return of entrepreneurship. We have seen people whose fathers, grandfathers and great-grandfathers worked in steel, coal or heavy industry suddenly come forward with entrepreneurial talent which no doubt has been brought out by the rigours of unemployment in the early years of this decade. They have come out and built up new businesses. Such entrepreneurship is part of human nature. I believe that it has always been there. It is latent and has to be brought out. I should favour some academic research, if we can find ways of doing it, to discover ways in which we could best encourage entrepreneurship.
I have much anecdotal evidence from travelling up and down the country and speaking to young people to show that more and more people are interested in becoming entrepreneurs and working for themselves. It is not necessarily entrepreneurship in the sense of money-making, but they are entrepreneurs in the way in which they look at their work in local government or in large firms, and in their attitude to life as well. One could put it shortly. I suspect it is the difference in an attitude of "can do" and one of "cannot do".
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The noble Lord, Lord Dean of Beswick, drew attention to the figures given by my noble friend Lord Whitelaw about a year ago. I can confirm that productivity has increased by some 50 per cent. since 1980. Indeed, cost competitiveness increased by some 30 per cent. between 1981 and 1987. I do not wish to disguise the fact that we are still behind some of our neighbours, but at least we are catching up. That is something, because for a considerable time we had been falling behind them.
The noble Lord drew attention to the United States and to the Rust Belt. I have been to parts of the Rust Belt and have seen enormous changes. But the United States is an entrepreneurial society. Its citizens have the ability to move to other parts of the country and to revive industry. Indeed, when I last spent some considerable time in the United States in the middle-to-late 1970s Massachusetts was an area of decline and decay. People were leaving to go to the South East and South West. Since that time it has become one of the most entrepreneurial areas of the country. People who had left have returned. We have seen unemployment fall from 11 per cent. to 3 per cent. That is part of the entrepreneurial society.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for the way in which he has dealt with the point I raised. I used the term "Boston". Boston is the heartbeat of Massachusetts and its recovery has been phenomenal. However, perhaps he will agree that there are parts of the United States—in Virginia and parts of the old mining belt—that are still as bad in almost every aspect as the worst places here. That is the point that I was trying to make.
Lord Young of Granam: My Lords, I accept that. However, we should look as a whole, rather than in part, at an economy that has created 22 million new jobs in 10 years.
My noble friend Lord Oxfuird referred to the importance of quality. I refer my noble friend to the enterprise initiative. He may have seen reference to this with some of the media. There is indeed a quality initiative. The words he read out are almost word for word what we have in this booklet. If my noble friend wishes to draw this fact to the attention of his company perhaps that will contribute in some way, although I suspect that that firm is indeed too large for such a contribution.
My noble friend also referred to a 1985 report, which was probably based on evidence from the early 1980s. I believe that there are now considerable improvements and that the figures that my noble friend quoted would not represent the changes that have taken place in the last few years.
I am grateful to the noble Baroness, Lady Seear, for her confirmation that enterprise is taking root. I accept what she says about an entrepreneurial culture. Although we talk about an entrepreneurial culture, it is in order to right the balance. Not many years ago young people were part of the "flower power" generation who thought that they could squat, or whatever and the world would take care of them. In talking of an entrepreneurial culture, we wish to right the balance. We are not a nation of Phillistines. We wish to see a balanced society. I

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believe that we shall see a balanced society. It is by balancing the concern of wealth creation with the demands of wealth consumption that we shall achieve a balanced society. It is not one or the other, but both.
I do not often disagree with the noble Baroness, but I doubt whether there is a correlation between industrial unrest and high unemployment. However, I have seen figures earlier in this decade when there was high unemployment and a very considerable amount of industrial unrest. I suspect that the issue has a great deal to do with the present position in which trade union members now have more control of their fate in their unions. I shall consider the suggestions made by the noble Baroness and pass them on to my right honourable friend the Secretary of State for Employment within whose province they come.
I thought that the noble Lord, Lord Peston, was today a little underhand! It is out of character for him to quote Adam Smith against us, or with us, all the time. However, I accept what he says. As in two years' time it will be the 200th anniversary, I promise faithfully to have read his book by then—and I shall find some quotations! However, I should like to explain to the noble Lord why I believe it is so important for our society to have a supply of entrepreneurs. We had had few new businesses as I found when I went to the Department of Industry in 1979–80. I wish to explain why that had made our economy stagnant.
I believe that businesses are organic. They have a growth period, a period in which they flourish, and then decay and die. We need a continual supply of new businesses. One business in 1,000 may employ 100, 500 or 1,000 people in 20 years, but we need that continuing one in 1,000. I believe that it is now more accepted that this is an important basis on which we should look to the future.
I fear there is one area on which I cannot agree with the noble Lord. If the researchers find that there is no correlation between tax cuts and enterprise, then I suggest that the research is wrong. I have known many people in the world that I left behind me. It was a world in which enterprise and entrepreneurship were carried out as acts of faith because tax rates were so high. I see the attitudes of many people today who realise that the Government are not taking all their hard earned money from them. I find a tremendous correlation. I look forward to continuing to see it. I accept that the noble Lord may well say that the results from the tax cuts of the last Budget will show in the next five years. I hope that the academic research will show the results of the tax cuts from 1979. If not, I shall have to find some more researchers or do the research myself.
Lord Peston: My Lords, I did not wish to press the point too strongly. It is worth making the point because it is interesting in economic terms. If tax rates are cut it is easier to make money. It is therefore not obvious that one puts in more effort to make money. One might put in less effort. That is a central proposition of economics. That is the difficulty that
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people in this field have had to face. I do not press the point but it is worth noting.
Lord Young of Graff ham:My Lords, I hope that the noble Lord will accept this comment in the spirit in which it is offered. I suspect that that is the observation of an academic and not of an entrepreneur. I do not find that attitude.
However, I wish to end my contribution to this debate on a good note. I agree totally with the noble Lord. I believe that in the future we shall go up-market, be of high value, and quality added. We live in a world where the industrial revolution started some 250 years ago, some 250 or so miles from where we are today. But it has yet to touch half the people in the world. For the first 150 years we made a very good living out of the industrial revolution because we were able to earn. In the 1850s we had half the world's steel and textiles. We were the greatest trading nation. However, gradually such trade has spread. If we are and the whole of Europe are to keep our position, we need to look towards our competitiveness. We need to look towards high added value. That is a matter on which I believe all sides of your Lordships' House would agree.
Lord Joseph: My Lords, I am very glad that the Motion has led us to so many thoughtful speeches. I am very glad that the Secretary of State has listened to every one of them. I thank all noble Lords who have taken part. Every speech from first to last has been significant. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Access to Medical Reports Bill
7.58 p.m.
Brought from the Commons; read a first time, and to be printed.

Community Health Councils (Access to Information) Bill
Brought from the Commons; read a first time, and to be printed.
Licensing (Retail Sales) Bill
Brought from the Commons; read a first time, and to be printed.

Social Security Changes
7.59 p.m.
Lord Banks Lord Banks rose to ask Her Majesty's Government what their response is to the comments on the social security changes contained in the sixth report of the Social Security Advisory Committee.
The noble Lord said: My Lords, I should like to begin by thanking all those noble Lords who have indicated that they intend to take part in this short

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debate. The Question asks the Government what their response is to the comments on the social security changes contained in the sixth report of the Social Security Advisory Committee. These changes have been much criticised in recent weeks as the scale of the losses suffered as a consequence of them has become more evident.
The criticism of Conservative Back-Benchers in another place has caused the Government much embarrassment and forced them to make some modifications. The Opposition parties and all the organisations concerned with the disadvantaged warned the Government what the situation would be. The noble Lord, Lord Skelmersdale, will recall that when I suggested on the Third Reading of the Social Security Bill that he had not taken the effect of the housing benefit changes fully into account, his reply was:
"I can advise the noble Lord, Lord Banks, that I fully understand the effects of the housing benefit changes".—[Official Report, 10/3/88; col. 880.]
In view of the Government's subsequent concessions it would appear that he and his colleagues did not fully take into account the effects of the housing benefit changes. At least, that is the most charitable construction to put on recent events.
Any concession which reduces the hardship caused by the changes is welcome, but a concession totalling £100 million does not go very far in a social security budget of £46,000 million. The raising of the capital maximum to £8,000 is welcome, although many considered that £10,000 would have been a more reasonable figure. Unfortunately there is no change to the tariff that is to apply between £3,000 and £8,000. Over the £3,000 exemption every £250 is assumed to earn £1 per week or £52 per annum, which is over 20 per cent. That seems an unrealistically high rate of return.
The transitional protection for certain categories of those losing £2·50 per week will presumably be phased out by inflation, so all it does is to postpone the evil day. I shall be grateful if the Minister will confirm that in his reply.
Since the last of our discussions in the House about these changes the sixth report of the Social Security Advisory Committee has been published. The Social Security Advisory Committee, I remind the House, is a statutory advisory body. It is not a pressure group seeking to promote particular interests, however worthy. The committee states clearly where it agrees with the Government. It says, for example, that it agrees with the alignment of income support, housing benefit and family credit and the use of net income. But in the introduction to its report it reiterates objections which it has previously expressed to aspects of the changes; objections to which it holds, having heard all that the Government have had to say.
Its objections can be summarised under six different headings. First, it regrets that the new arrangements for pensions make no provision for,
"a periodic uprating of the basic retirement pension in line with earnings".
With earnings increasing at 8½ per cent. and inflation at 3½ per cent. pensioners are being left further and
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further behind earners. It is no use telling us that pensioners' income from all sources is increasing on average. That is the usual reply which is given. It is good that more pensioners are drawing occupational pensions. It is good that more pensioners have a share in the earnings-related state pension, but there are those who depend entirely, and others who depend almost entirely, on basic pension. They are not sharing in the increased prosperity. Are they never to do so?
Secondly, the committee is concerned about the impact of the new scheme on young people. It says that lower rates of personal allowances will make it very difficult for 18 to 24 year-olds to live independently and virtually impossible for the small minority of 16 and 17 year-olds who cannot live with their parents.
Thirdly, with regard to income support, the committee regrets that:
"the rough justice which accompanies the simplification is not backed up by any system for making regularly weekly payments to the minority of claimants who have special needs which are not met by the premiums".
We know that in this respect we are talking about the very severely disabled. That criticism has been made many times in this House during our discussions on the changes. The Independent Living Fund is supposed to fill the gap. When we discussed that recently, I suggested that what the Government were doing was replacing statutory entitlement by cash limited charity. Is that a fair description of what is happening? If it is not, why not? I wonder whether the Minister will tell us more about how the fund will work. I understand that it is to be a temporary arrangement only and that it is to be replaced by a permanent system in due course. Is that correct, and, if so, how long is the temporary period to last?
Fourthly, the committee says that it does not believe that the basic rates have been increased sufficiently in comparison with supplementary benefit to allow for the fact that claimants needing to replace major items of furniture may now be offered help by way of a repayable social fund loan rather than a grant. So the committee is saying that the rates of benefit are too low. What do the Government say to that?
Fifthly, on housing benefit the committee welcomes the simplification and the equal treatment of people with similar incomes whether in or out of work, but its main concern is with the steeper tapers; the capital cut-off (about which it shares the general concern); the requirement that all claimants should meet 20 per cent. of their rates with compensation amounting to 20 per cent. of national average rates for those on income support; the expectation that 18 to 24 year-olds living with their parents or in someone else's household and claiming income support will contribute £3 towards the household rates without any addition to their benefit.
Sixthly, on the social fund the committee shares the objections to certain aspects which have been expressed in many parts of the House—the discretionary basis and the emphasis on loans rather than grants. The committee says that the majority of payments should be grants and it criticises the fact that the fund is cash limited and that there is no independent appeal system.
Those criticisms under the six headings of pensions, young people, severely disabled, level of benefits, housing benefits and the social fund are reiterated by the Social Security Advisory Committee after hearing all the Government's arguments. I hope that the noble Lord, Lord Skelmersdale, will tell us that the Government will take these sustained criticisms very seriously indeed.
The report considers certain aspects of the social security system in further detail. It considers again the position of young people and the committee points out that with regard to income support 16 and 17 year-olds who believe they fall within one of the exemption categories may pursue their claim through the independent appeals system. Those not exempted who take a YTS place and then leave because it is not suitable will have a bridging loan to cover until they take a new YTS place. If they do not like that place and leave again they may lose their bridging allowance altogether and could face destitution.
The decisions with regard to YTS and the bridging allowance are taken by officials of the Department of Employment and there is no appeal. The committee urges that there should be provision for appeals against decisions on YTS and bridging loan matters. That will make the procedure equally fair for exemptees (if I may so call them) and non-exemptees. I should be grateful if the Minister will tell the House of the Government's view regarding that suggestion.
The committee draws attention to the fact that while there is now a powerful disincentive to unemployment as an option for school leavers there remains much less of a incentive to opt for education. It states that for a significant minority financial factors will be important. Have the Government considered that point since it was made by the committee and, if so, what is their reaction?
The committee gives statistical evidence to show that a 17 year-old on the second year of YTS and living on his own will have only £20.12p to live on after meeting housing costs, compared with £30.23p under the pre-reform arrangements. It realises that the number of 16 and 17 year-olds living on their own is small but it urges the Government to find a solution to the problems of that small group of people. Do the Government recognise that problem?
In closing, I should like to return to housing benefit and what the committee says about it. It was originally planned that from April of this year there should be a saving in housing benefit of £640 million per annum. With the concessions that have been made under pressure, that will now be £540 million. There are two figures on which the Government base their case. In 1979–80, rent and rates rebates and supplementary benefit housing costs amounted to £1·24 million. In 1986–87, housing benefit was £5·4 million; in other words, an increase of approximately £4 million. I believe that that increase has led the Government to state that there is a case for a cut.
However, the report points out that the cost increase in housing benefit is due in part to increasing rents. In the public sector increasing rents are due in part to a reduction in the subsidy to local authorities as part of the Government's strategy to reduce public spending. In 1980–81, housing expenditure was £4·4 billion. It fell to £2·4 billion in 1987–88, a fall of £2
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billion. One must take into account the effect of inflation and in real terms the fall in the value of expenditure on housing amounts to over £5 billion at 1987–88 prices. There has been a shift from subsidising bricks and mortar to cash assistance. As one figure has fallen, the other has risen; in other words, government policy has contributed substantially to the increase in the cost of housing benefit.
On Third Reading of the Social Security Bill the noble Lord, Lord Skelmersdale, said that it was wrong that two-thirds of householders should be subsidising one-third. He did not say how many of the two-thirds were enjoying mortgage interest tax relief, which is also a subsidy. If one looks at the total amount spent on housing by the Department of Environment, the amount lost through mortgage interest tax relief and the cost of housing benefit, one finds that, in 1987–88, 43 per cent. of that total expenditure went on housing benefit. But 38 per cent. went on mortgage interest tax relief; that is nearly the same amount. In the light of all those considerations, it appears to me that the case for a saving of £540 million on housing benefit disappears.
In conclusion, I repeat that the Social Security Advisory Committee is an independent body. It was established to advise the Secretary of State for Social Services on security matters. In its sixth report it has reiterated some of its fundamental objections to much that is involved in the new social security system. It has pointed out further problems for urgent consideration. My question is designed to discover what response the Government propose to make.
8.15 p.m.
Lord Nugent of Guildford: My Lords, I should like to thank the noble Lord, Lord Banks, for raising this interesting topic and causing me to read the sixth report of the Social Security Advisory Committee. In that context I should like to congratulate my noble friend Lord Skelmersdale and his right honourable friend on setting up the advisory committee. It is a good body of public spirited people who have come together to carry out such important work. The report is a highly informative document and the noble Lord, Lord Banks, has shrewdly picked out the most penetrating criticisms. There are a few compliments here and there in the report, but I agree that there are also important criticisms. However, the committee gives credit to the Government for restructuring social security and it makes its criticisms, some of which I shall mention.
In recent weeks public debate, especially in the other place, has tended to concentrate on the hard cases, especially those in the housing benefit sector. The noble Lord mentioned the fact that the Government spend almost £48 billion per year on social security across the board, as mentioned in the report. That covers pensions and child allowances which, in one way or another, affect nearly everyone. That is approximately one-third of the annual budget and 11·8 per cent. of the total GDP of the nation. I regard that to be an enormous figure. I should not think that many other countries spend such a large amount of their total income in that way. I hope that as our income grows we shall be able to afford to

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increase that figure for the benefit of everyone. However, a government that can spend such a large figure for the benefit of the old, the young and the needy must be given credit for being a caring government. Of course they can always be asked to spend more.
The noble Lord referred to some of the main objectives of the restructure. They are to remove the anomalies and confusion of the administration which have been serious, to simplify, to strengthen incentives for employment, and—the major controversial issue—to bring housing benefit expenditure under control.
The noble Lord ingeniously tried to diminish the significance of the rise in expenditure on that account by fourfold since 1979–80. I believe that that is a very large rise, and I hope that the Government will examine that factor. The committee referred to the fact that as a result of the reorganisation more money will go to families with children, single parents and the sick and disabled. Inevitable criticism has been directed in relation to those who will lose out by the reduction in housing benefit. However, 7 million households—that is one in three—are receiving housing benefit. The Government regard that as too high a figure, and I am bound to say that I agree. The reform will reduce that expenditure to approximately £6 million.
Inevitably that is bad news for many people—for all who will lose something that they are receiving. However, bearing in mind the fact that those who are affected are all above income support level, it cannot be right to give taxpayers' money except in cases of proven need. Therefore, I support the Government's assertion and I am glad that they have been able to mitigate the severity of the cut, because it is severe, by extending the capital figure from £6,000 to £8,000, and particularly by giving transitional help because it is a grievous blow to people with small incomes when suddenly there is a cut. However, I believe that the mistake has been to allow the growth of this expenditure to go on for far too long and therefore the correction is all the more painful.
The advisory committee observes that the revised scheme will provide better support for those on the lowest incomes in regard to housing costs, which is to be welcomed; and it welcomes the removal of the anomaly whereby an unemployed person on supplementary benefit received a 100 per cent. grant but a person in work on the same income received only a 60 per cent. grant. Many of the side variations in different local authority administrations have also been removed.
In that context, the advisory committee welcomes the new management information system to monitor this administration. I am sure that is most desirable. It also refers to the appeals system to a review board of local councillors, which is to be continued. I am surprised that the noble Lord, Lord Banks, did not pitch into that because the committee doubts its adequacy, as I do. I hope that my noble friend will accept the recommendation of the advisory committee that the independent legally qualified Social Services Appeal Tribunal is a much more satisfactory body. Perhaps my noble friend will
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consider that point. I am on the same wavelength as the noble Lord, Lord Banks, in taking up the committee's point that the progressive narrowing of the scheme alongside the prospect of the rising trend of rents obviously may cause problems. My noble friend should keep an eye on that matter.
I agree with the imposition of payment of 20 per cent. of rates because I believe that the principles of the Local Government Finance Bill are right, and I would expect that the income support provision will provide for that payment in the lowest income levels. Evidently the new management information system will play an important part in the future administration there.
I agree with the noble Lord that the report was particularly interesting in its two chapters on young people and incentives. The Government's major achievement of the YTS on a national scale next September offers an attractive prospect with payment for all 16 and 17 year-olds who do not have a job. Income support cannot be claimed by school leavers which, the report says, makes unemployment a powerful disincentive for school leavers. This I believe was always very demoralising, but the exempt categories are to be provided for as they always were.
The committee welcomes the general provision of training with payment for all 16 and 17 year-olds but, as did the noble Lord, Lord Banks, I express anxiety about youngsters who opt for continuing education and whose families are not supportive. They will obviously need more help than is contemplated at present, and I hope that my noble friend will look at that point.
The report has a useful chapter on service to the public of which I am sure my noble friend has taken note. There are over 500 local offices and services are variable in the view of the committee. Delays and mistakes are too frequent—something like 10 per cent. on average, which is fairly high. Local offices vary from clean, bright and efficient with few delays, to run-down inner city premises with frequent staff changes and therefore the staff are unable to master the complexities of the system.
Having studied the matter for the last week or two, I am not surprised. The Government have embarked on a strategy of computerisation which is obviously right, but it will take some years to complete. The aim is to improve efficiency and reduce staff, which is a very big undertaking. However, the advisory committee advises that the staff should be redeployed in order to improve the service. I should have thought that that would be a good idea because there must be continuing anxiety about the percentage of non-take up, and if the service is better, so is the take-up.
The report concludes with a most interesting chapter headed:
"Meeting need—how much is enough?"
I daresay that we cannot agree on that matter across the House. Noble Lords on the other side will say that what we are now giving is nothing like enough, and we shall say that we have to be careful because we must balance the budget. The point is that there are no absolute standards and various criteria are used to try to make the safety net concept effective. The chapter concludes with the observation that existing

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sources of information from the DHSS, such as statistical monitoring together with a family expenditure survey cannot provide sufficient satisfactory information, and I quote:
"on the problems caused by life on low income, or the strategies which people adopt to make ends meet or … the ways in which people manage to avoid dependence on benefits or get themselves back into work".
The report makes out the case for a stronger research programme, and I ask my noble friend to consider allowing an increase in finance for the very small amount required, in the total context of the expenditure, for a research system in order to give better information. Bearing in mind that that huge national expenditure must rest on the backs of the working section of the whole nation, it is obviously of vital importance that my noble friend should be as fully informed as possible in order to justify that expenditure and, even more so, if there are increases expected in the future.
Therefore, I conclude that the report is a valuable, constructive document and I thank the noble Lord, Lord Banks, for calling the attention of the House to it and giving us the opportunity of this debate.
8.28 p.m.
Baroness Turner of Camden: My Lords, I also would like to express appreciation to the noble Lord, Lord Banks, for putting down this Unstarred Question and introducing a debate on social security. It is not very long ago that we discussed this subject at length in the context of the legislation which is now on the statute book. As the noble Lord, Lord Banks, said, Peers in Opposition sought to persuade your Lordships, mostly unsuccessfully, that there should be a whole series of amendments. Had some of them been adopted, some of the problems which have since emerged would not now be there.
Incidentally, when we fought for those amendments we received very little media coverage, but when the right reverend Prelate the Bishop of Durham made his intervention, whether or not one agreed with what he said, it had the effect of producing publicity and a public debate on the whole issue of social security. Whether or not one agrees with him, to that extent one can be grateful for that, because it is a very important subject and should be a matter of public scrutiny.
The report of the Social Security Advisory Committee—which is, as the noble Lord, Lord Banks, said, a committee of experts in that complicated field—raises a number of issues which give cause for much concern. However, the most striking feature of the report—and in that respect I agree with the noble Lord, Lord Nugent, that the report sets it out with great clarity—is that it shows how much we are paying for social security. In December 1986 32 per cent. of public expenditure was involved and over 5 million of our fellow citizens were dependent to some extent on state benefits. In February 1986, 2 million pensioners and over 2 million children under the age of 16 were living in families dependent on supplementary benefit. As the report also makes clear, that may well be an underestimate, since there is a substantial shortfall in take-up.
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As the report says, it is clear that a lot of this deprivation is due to unemployment. The regional figures for unemployment are quite striking. For Merseyside it is 18·8 per cent., for example, compared with 4·5 per cent. for Berkshire and 6·6 per cent. for the South-East as a whole. The report is realistic about the problems of securing work in some of the regions where unemployment is high. It says that the problem is not the lack of incentive to work—I believe that to be important—but the lack of jobs offering suitable incentives. Moreover, the report shows an understanding of the difficulties of moving workers to meet employment needs.
The point that I wish to make very strongly is that it is not only unemployment that forces people into dependency on what the Government choose to call the benefit culture; it is also low pay. In the debate on housing benefit in another place last week my honourable friends in opposition gave numerous examples of people existing and bringing up families on wages as low as £82 per week. It is true that under the new system they will have an increased sum from family credit. However, they will lose out on housing benefit, as has already been indicated, and their children will lose free school meals. Overall, therefore, families in this situation will be worse off and even though the Government are making some welcome changes in the cut-off for savings in regard to entitlement to housing benefit, it is a very modest and minor adjustment to meet the furore that has arisen over the whole issue of social security.
The point I make is that one of the reasons why we are spending much more on social security is that employers are getting away with paying people too little. We have heard a great deal about subsidies and people standing on their own feet without public support from the Government, but the extent to which the public actually subsidises low pay through the benefit system is very rarely referred to by Ministers. In reply to criticisms Ministers boast that we are spending more on social security than ever before. The noble Lord, Lord Nugent, made that point.
The Secretary of State in another place when talking about government changes in housing benefit regulations, which, as I have already indicated, have been made in response to heavy pressure, said that,
"the effect of the package of measures will add a further £100 million to the largest ever social security budget".
He apparently sees no inconsistency between that statement and the one he made seconds later, when he said (at col. 361 of Hansard:)
"Because of our extremely successful management of the economy we have been able to respond to the tune of £48 billion a year".
One is entitled to ask, if the economy is so successful, why is it necessary to spend so much on social security? No one could describe the benefits as exactly generous.
It is a myth, and that is emphasised in the report, that people opt for social security rather than work. I, and I suspect many of your Lordships, would find it very difficult to maintain a reasonable standard of living if one were simply confined to benefits. Of course benefits are now to be made more difficult to obtain in the sense that, as we said in the discussion of the Bill in this House, there is a move away from

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contributory benefits payable as of right and towards means-tested benefits as a result of the policy of the Government in targeting benefits.
If in such a successful economy over 5 million citizens—I have said already that that is probably an underestimate—require state support, clearly the benefits of that success are not trickling down in the shape of jobs paying reasonable wages. Indeed, one has only to look at the Government's employment policy to see what effect that has on social security. There has been a series of measures designed to remove wage protection from the poorly paid. We no longer have the Fair Wages Resolution. Schedule 11 of the Employment Protection Act, under which the Central Arbitration Committee was able to make awards in cases where wages were below the general level, has been removed. The Wages Act has eroded and undermined wages councils and the Wages Inspectorate has been substantially diminished. More recently, local councils have been prevented from using contract compliance to ensure that contractors do not use sweated labour on public contracts.
In the field of social security, regulations in regard to availability for work have been tightened up and disqualification from unemployment benefit in respect of anyone who loses a job through misconduct, who voluntarily leaves a job without good cause or who fails to apply for or to accept suitable training has been extended to 26 weeks.
The report states that disqualification from unemployment benefit for six months with reduced income entitlement is a harsh penalty; and so it is. It is part of the battery of measures designed by this Government to pressurise people into work which is low paid. At the same time continuous steps have been taken by the Government to weaken and undermine the capacity of the unions to organise and to obtain wage increases in these areas.
The net result of all this is that the public, through the benefit system, support employers who do not pay decent wages to their employees. I regret that we cannot expect very much in this direction from this Government. However, it is my firm belief that legislation establishing certain minimum standards is the only way of ensuring that employers must pay a reasonable wage to employees: at least there should be a minimum standard wage. Moreover, if this were to happen it would decrease substantially the public subsidy which has to be paid through the benefit system.
The report does not make that kind of recommendation. However, it sets out with great clarity some of the problems that we are now facing. We are constantly being told that we are experiencing an economic miracle. In the debate that we had earlier this afternoon several of your Lordships made precisely that point. If that is so, remarkably little seems to be done to ensure that the so-called benefits are felt in the areas of high unemployment or among those who are rapidly becoming an underclass dependent upon the benefit culture and as such are vulnerable to government re-vamping and economies which always seem to leave numbers of people who
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are already poor and vulnerable worse off than they were before.
Before I sit down I should like to make one point on the amendments that we discussed when the social security Bill was before your Lordships. It may be recalled that the noble Lord, Lord Banks, was successful with an amendment on child benefit. It required a review of child benefit every April. Clearly the intention was that it should be up-rated. When the Minister replies to the debate I should like him to state the Government's intentions in that regard because I understand that it is now part of the Act. Furthermore, I should like him to comment upon some of the press observations which seem to indicate that the Government may once again be considering whether child benefit should be a targeted rather than a non-means tested benefit. That is an area where there is almost a 100 per cent. take-up. There is a consensus on all sides of your Lordships' House that child benefit is valuable and must be protected.
Finally in my view the report is an excellent one. Noble Lords who have already spoken have referred in detail to the recommendations that it makes. I too will be interested to hear from the Minister what are the intentions of the Government as regards the recommendations of this highly competent and respected body.
8.38 p.m.
Lord Winstanley: My Lords, there are many things that I should like to say on this subject but I shall try to discipline myself if only because I am very anxious that the attention of the Minister should not be deflected from the very important points put to him by my noble friend Lord Banks and by the noble Baroness, Lady Turner. I hope that he will answer all of those points.
This is an excellent report. It is understandable that my noble friend Lord Banks, who knows as much as if not more than anybody in your Lordships' House about social security should focus attention on the areas of the new social security system which the advisory committee has found to be possibly flawed and perhaps in need of some change. It is also understandable that the noble Lord, Lord Nugent of Guildford, should point to those parts of the report which welcome the changes and suggest ways in which they have been helpful.
My involvement in this subject, which has continued professionally for some quarter of a century, has not been so much whether things are right or wrong but in helping the public to understand what the rules are. My principal complaint at the moment is not whether the changes are good or bad. It is that the people who depend on benefits frankly do not understand the new system. It is important that understanding should be improved.
I should now like to turn to the report. Paragraph 6.29 on page 40 states:
"The DHSS Communications Strategy launched in 1987 is intended to explain the restructured system to the public and raise awareness of social security generally".
It goes on to pay tribute to what the department has done in improving the quality of language used in leaflets. It says in regard to that matter:
"The DHSS has made great strides in this area".

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I acknowledge that the leaflets have improved in terms of the intelligibility of the language, but they have defects in other ways to which I shall come presently. At paragraph 6.34 of the report, on page 41, the committee refers to what was called Freefone DHSS, a means by which people can pick up the telephone and ring up entirely free to get information. It is now called Freeline Social Security. That is an immensely valuable service.
In my professional capacity I often have to answer questions about the social security system and I keep that telephone number at hand all the time. So that noble Lords themselves know it, I shall give the number. It is 0800 666555. If any noble Lord finds that his questions are not fully answered by the 'Minister he should go out of the House and dial 0800 666555. He will then receive a clear factual answer. I pay tribute to that service. I have had immense benefit from it. I use it frequently. Indeed, some of the operators recognise my voice straight away and say, "Is it you again? What is it this time?" I tell them and they always know the answer.
The noble Lord. Lord Nugent, referred to the end of the report. It is related to communications in the sense that it deals with the image of the social security department in the minds of those who depend upon it. I shall quote from the conclusion on page 42:
"there is no consistent level of service provided by local social security offices. In some inner cities the local office is characterised by rundown accommodation, a switchboard which is closed for part of the day, and staff who do not stay long enough to become experienced in administering a highly complex system".
I have had experience of offices just like that, particularly in Merseyside. It is regrettable that offices of that kind tend to be situated in the very areas in which there is the greatest need for help by people claiming benefits. The report goes on:
"In other areas the office is clean and bright, and callers have only a short wait before they are seen by long-serving and experienced staff".
That is entirely true and I confirm it myself.
The report goes on:
"Public perception of the social security system often seems to be dominated by the image of the problem offices, but many claimants and welfare rights agencies can testify to the helpful service which they receive from their local office".
That is true. As the report says:
"Performance indicators for the social security system produce averages which conceal both the best and the worst in the system. We believe that there is an important public relations and practical task for the Government to tackle".
Let me go on to show how the Government are tackling that. I referred earlier to greater clarity in leaflets and in claim forms. I have just been dealing with a new claim form for family credit. I have it before me. It is in beautiful language and it runs to 17 pages. As an exercise, in part to help a claimant but also in part to help myself to understand the system, I helped somebody to fill it in. We spent all day dealing with the 17 pages. The language is clear. The person concerned then had to go away and find out some information. We then spent much of another day on it. That is burdensome. Although the language is better, is it necessary that a claim form for family credit should go to 17 pages? I really feel that that is a little long.
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However, I shall move on because I have come across another form. It is an interesting one. I do not have the original with me but I have a photocopy. The original is coloured and is beautifully set out. It opens up lengthwise and is about three feet long. It is called Income Support Information Sheet. It is sent to beneficiaries and is headed with these words:
"Changes you must tell us about".
It goes on:
"The amount of money that you are entitled to is based on the information that you have given us. If anything changes and you do not tell us … you could be breaking the law".
That is true, but is it not a rather menacing statement?
I shall now move down to the section headed "Earning money". It says:
"Tell us if you, your partner, or children who have left school do any work at all, including work that is not paid".
What on earth does that mean? Is there anybody who does not do some work that is not paid? Does it include washing up and gardening? What on earth does it mean? Bearing in mind the menacing warning at the top:
"If anything changes and you do not tell us … you could be breaking the law",
I think that will worry people. Further down, under the heading "Changes to do with other money coming in", it says:
"Remember to include things like Social Security benefits".
It continues:
"Tell us if you start getting any benefits".
The DHSS is sending the benefits. We now have the admirable computer system. I should have thought that the DHSS would know if it is sending someone a benefit. However, I move on. The information sheet continues:
"Tell us if you … start to get a different amount of benefit".
What does that mean? We all know that benefits are periodically uprated. When invalidity benefit is uprated next April, will people be breaking the law if they do not write to the DHSS with that information? This is not entirely clear and I think it should be.
Under the heading of "Changes to do with where you live", the form says:
"Tell us if you … pay more money or less money for a mortgage or home loan or service charge".
Those things are constantly fluctuating because of changes in interest rates, and so on. Are claimants breaking the law if they do no send regular messages to the DHSS to say, "Have you noticed that my mortgage has gone down?", or whatever? This is part of a public relations exercise, it says here.
The leaflet goes on to say:
"Tell us also if someone comes to stay in your home".
If you do not tell them, you are breaking the law. If grandma stays the night, must claimants get on to the DHSS to say, "I am awfully sorry but the old lady missed her bus and she stayed the night"? I am sorry to turn this into what appears to be a laughing matter, but at the front the document says:
"The amount of money that you are entitled to is based on the information that you have given us. If anything changes and you do not tell us … you could be breaking the law".
I believe that it could be simplified in some way so as

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not to have such a menacing appearance to those who are fortunate enough actually to have been able to receive a benefit.
I have done a great deal of work in this field for some 25 years. During the past three weeks I have done more work than I ever did in studying this truly excellent report and learning about the way in which the DHSS system operates. I have to tell the Minister that as a result of that recent research into the way in which the DHSS now operates in certain areas, particularly perhaps in Merseyside, I have decided that the time I still have in active life—I do not know how long it will be—I shall use in order to make absolutely certain that I never have to depend on the Department of Health and Social Security.
In conclusion, perhaps I may say that I welcome many things. The DHSS is making an effort to make itself more approachable. The freefone is splendid. I hope that noble Lords will ring up and get some answers which they may not get otherwise. I welcome the efforts to change the image. However, the leaflet which I have just read out is unlikely to change the image favourably.
8.49 p.m.
Lord Henderson of Brompton: My Lords, that is a very hard act to follow. Instead I propose to make reference to the debate which preceded this one, because I believe that it is a happy coincidence that that debate on productivity should take place on the same day as the one on the excellent Sixth Report of the Social Security Advisory Committee. In this connection I refer to Chapter 8, which begins by saying,
"Social security has many objectives".
It goes on to say that there are some broader economic and social objectives such as fostering enterprise and initiative—which is just what the noble Lord, Lord Joseph's debate was all about. It also refers to:
"expressing society's recognition of those who for any reason are financially disadvantaged".
So I think that these two debates have a connection. Incidentally, the noble Lord, Lord Joseph, said that those concerned with low pay should also concern themselves with low productivity. I agree with him and I hope that he would agree with me that those concerned with low productivity should also concern themselves, as I admit he does, with low wages. They go together, as Chapter 8 of the report says, but in reverse.
The noble Lord, Lord Joseph, said—and I think I quote him correctly—that as productivity rises all sorts of good things will follow. Among those good things will be the alleviation and prevention of poverty. These are—again I quote from the report—
"two principal aims of the social services".
But that cannot happen without redistribution of resources between the rich and the poor. By the poor—again this is very interestingly analysed in the report—we mean, broadly speaking, those who for any reason are financially disadvantaged. That includes the young and the old and also the physically and mentally disadvantaged. So there is a connection
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between what has been said earlier and now later today.
I want to concentrate on only one category: the young who come from parents in the bottom fifth of income distribution. That category shows an increase in the number of families falling within it and there is a consequent reduction in the number of pensioners within the group. So this is a rising group with which I am concerned.
Those children mostly grow up in areas where there are the highest indicators of deprivation, areas with the highest number of those in receipt of benefit, high levels of unemployment and very few amenities or opportunities to become entrepreneurs in the legitimate sense used by the noble Lord, Lord Joseph. There is a strong link between poverty and unemployment on the one hand and criminal behaviour, mainly concerned with property offences, on the other.
As the report shows so well, poverty is not just a matter of material deprivation but must take account of the individual's place in society—that is to say, whether he is excluded from the normal pursuits of his peers and so on. Again I quote from the report, because wherever it may be in the report it is well expressed, as in this case:
"As society becomes more affluent it may become in some ways more difficult for the poor."
The young entrepreneur from the deprived background, for example, areas of high unemployment, with no capital or access to legitimate sources of capital is tempted—I may almost say is likely to use his enterprise illegitimately.
I commend that thought to the noble Lord, Lord Joseph.
I happen to be chairman of a comparatively new organisation called Action on Youth Crime which is especially concerned about offenders and levels of youth crime. We are particularly worried about some of the changes in the social security regulations which will have a damaging effect on young people under the age of 25. These changes affect the young particularly heavily in many ways. For example, young people under 25 will be subject to lower levels of income support than other sectors of the population. Why? Those under 18 years of age receive only £19·40 per week. When you get to the 18 to 25 band—and I quote from the report—
"these are the years in which young people start to break with their parents"—
the income support rate, net of housing costs, is £26·05. Those figures speak for themselves. Moreover, finding accommodation is going to be much more difficult, as the deposit for a month's rent in advance will be either not available or extremely hard to find. Setting up home will become more difficult as lump sum payments for the basic necessities will be less readily available and, if available, will be obtainable only in the form of repayable loans.
Implicit in many of these regulations, as is well stated in the report, is the assumption that young people could and should be living at home with their families. What this fails to take into account is that this is simply not an option for many young people, who for many reasons may not be able to live in their parental homes. In Chapter 1 and in the whole of

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Chapter 2 that is made abundantly plain, and there are also wider implications to these changes.
This age group is already heavily over-represented in the crime figures. Nearly a quarter of all known offenders are young adults between the ages of 17 and 20, and they constitute a growing proportion of those in custody. This serious situation may well become worse as a result of these social security changes. The crimes committed by this large group are predominantly property offences: that is what I am talking about. As life in general will become very much more difficult for them, the temptation to resort to petty theft as a way out of overwhelming financial problems may well increase.
It will also be increasingly difficult for young people to repay fines, for instance. The number of young people appearing before the courts as a result of fine default is likely to rise, probably resulting in more custodial sentences. As those coming out of custody are in the group with the highest re-offending rate, I am afraid that these new social security measures could eventually increase crime levels even further.
I should like also to refer briefly to Chapter 2 of this excellent report, which is specifically related to young people. It concludes that the benefit changes will leave:
"a small minority of young people in serious hardship".
Again I quote:
"the decision to introduce differential benefit rates for these young adults will make it difficult for young men and women to leave home, whether to seek work, to escape domestic tension or simply to establish their independence".
There is plenty of evidence of constructive thinking by Her Majesty's Government which is reflected in this document about the young, and I fully acknowledge it. There is a recognition in the report of co-operation and common thinking among the DHSS, the Department of Employment and the Department of Education and Science. I should like the DHSS to extend its interest in the effect of some of those measures on child crime and to interest the Home Office likewise in regard to the young offenders of 18 to 21 years of age. The report shows unmistakably, but unfortunately, that the benefit changes are adverse for the young from poor and deprived backgrounds and that this is likely to cause the crime figures to rise, thus swelling the prison population, which is exactly the opposite of what we all so earnestly desire to achieve.
9 p.m.
Lord Stallard: My Lords, I too should like to thank the noble Lord, Lord Banks, for giving us the opportunity to focus attention on what other noble Lords have quite rightly described as an excellent and extremely important report.
I begin, as did the noble Lord, on the first page of the introduction at paragraph 1.3 which mentions a subject which we have both been interested in and which has been discussed and debated many times in this House; namely, pensions. The paragraph talks about the link between pensions and earnings and the effect on pensions of the breaking of that link. I do not have the 1988 figures with me but I can say that up until April 1987, if pensions had still been linked
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to earnings, a single persons's pension would have been £46.65 instead of £39.50—that is, a difference of £7.15. A married couple would have been receiving £74.55 instead of £63.25—that is a difference of £11.30. The figures would be much more now of course because those statistics are 12 months old.
The sole link with the retail prices index excludes many items which are essential to pensioners. For example, it does not wholly include the standing charges for fuel and other costs. It does not include the increase in television licences, which are quite important to pensioners, or travel costs and a whole range of other expenses. The paragraph also refers to the dangers of,
"too large a gap between incomes in work and in retirement".
That is an issue which we have been arguing about for many years. Indeed, we argued many years ago that the figure should be 33 per cent. of average earnings. I think the demand has now increased to 50 per cent. An argument can be quite justifiably mounted to support the claim for 50 per cent.
It is interesting to note that in 1979 a single pension was 20·4 per cent. of average male earnings and in 1987 it was 17·7 per cent. That means the figure had been reduced by almost 4 per cent. since this Government came into office and it is certainly nowhere near the meagre demands of the pensioners' organisations, which still seek 33 per cent. as a minimum. Therefore there is no improvement on the position and I should like to underline the noble Lord's request to the Government that they should accept the recommendation in that paragraph for the need for:
"periodic uprating of the basic retirement pension in line with earnings".
That is the situation in other countries, so we would not be on our own if we were to implement it.
I should now like to draw your Lordships' attention to Chapter 4 of the report, which deals with another subject that I have been especially interested in over the years; that is, heating costs. Previous reports of the SSAC have also taken up the issue of heating costs and indeed there was a great deal of concern in that regard in its first two reports.
The committee tended to concentrate to some extent on the problems of Northern Ireland—quite rightly so—because the differences in the costs of fuel were quite stark and dramatic compared with the rest of the United Kingdom. In paragraph 4.6 the committee's concern is repeated:
"In 1984/5 Northern Ireland average fuel expenditure per household was 46% higher than in the UK as a whole and for the lowest quintile the difference was 60%. Looked at another way, Northern Ireland households on average spent 70% more of their disposable income on fuel than other UK households".
That is quite a chunk when we consider the type of people and the incomes that we are discussing in the lower quintile.
Of course the problems in the rest of the United Kingdom are equally as serious in some ways. We have debated those many times before and will continue to do so. However, I mentioned Northern Ireland because it was of particular concern to the committee and I happen to share its concern from my knowledge of the position in that part of the United Kingdom. Paragraph 4.12 maintains that:

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"the safety-net benefit should enable its claimants to achieve an adequate level of warmth",
but recognises that,
"the difficulty lies in deciding how this should be achieved".
It continues:
"The new scheme gives extra help to certain client groups … but it is not sensitive to variations in fuel expenditure within these groups. This means that a pensioner, for example, living in an old, poorly insulated property with an expensive heating system receives no more help than one living in a small, well-insulated home with an economical heating system. Claimants living in hard-to-heat accommodation who do not qualify for a premium receive no extra help at all".
I have also read another document from the National Right to Fuel Campaign which beavers away at the problem of fuel costs consistently, year in and year out. The campaign organisers recently published a closely reasoned and well-researched paper about those problems. They put the case roughly like this:
"By paying exactly the same levels of income to many thousands of households within each client group the Government have, by implication, assumed that each household in the various groups has the same quality of accommodation, the same heating system, the same degree of insulation and the same degree of draught-proofing"—
which of course they do not have. Therefore the present system is totally inadequate to meet the needs of thousands of people.
In paragraph 4.17 the report says:
"The prevalence of poorly insulated and badly heated homes in the United Kingdom may be an important factor in the 40,000 extra deaths which occur each year in the months of January to March, compared with July to September".
It is obvious from reading that report and other analyses that while some improvements have been made we still do not have the solution for those with serious heating problems. A great deal still has to be done. Will the Minister comment on the suggestion made in paragraph 4.22 that:
"We urge the Government to review the problem of low income households with high fuel bills, to ensure that all those on low incomes—whether or not on income support—are able to buy an adequate level of warmth".
I shall happily participate in any debate on that subject.
I should like to say a few words on housing benefit. The subject has already been well covered. I have spoken about this issue before, as have the noble Lord, Lord Banks, and my noble friends. The noble Lord, Lord Nugent, seemed to be interested in housing benefit. He said that the Opposition only pick the cases that suit us. He was worried about the added expenditure. I think that point was adequately replied to by my noble friend Lady Turner in her excellent explanation of why we are spending more on supplementary benefit and why it costs more than it should if the economy is as strong as we are told that it is.
The noble Lord, Lord Nugent, mentioned losers. I should like to put a thought into his mind. As soon as one becomes a claimant one is a loser. One must be a loser to be in that situation to begin with. When we talk about losers we are talking about people who cannot go much further down. To say that such people are losers means that they are in a drastic situation. We sometimes talk too glibly about that
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problem. It is not something to be sniffed at. I do not blame noble Lords opposite who have probably never been in that position.
Lord Nugent of Guildford: My Lords, the noble Lord said that something was not to be sniffed at. Is he implying that I was sniffing at it?
Lord Stallard: My Lords, I said that it is nothing to be sniffed at. I was not implying that the noble Lord was sniffing at it. I do not blame noble Lords opposite, who have probably never experienced a queue in a supplementary benefit office or filled in one of the forms that the noble Lord, Lord Winstanley, mentioned. He raised a few laughs and part of his speech was a bit lighthearted. The position is not lighthearted. I know that he will agree that there are thousands of people in this country who are absolutely terrified at the sight of a form. There are many more thousands—I have met many of them—who are heartily sick. They cannot claim benefit because they cannot fill in the form, and they are too ashamed to admit to anyone that they cannot do so. That situation does not only apply to a handful of people. The position is serious.
One cannot just say that there are losers. The position is much more serious. Last week, as has been said, the Secretary of State for Social Services announced an extra £100 million expenditure on housing benefit; £30 million of that was to relax the capital rule and £70 million for transitional protection. We of course welcome any extra expenditure which will help to ease the grim picture that had been put to us.
The new measures which were introduced recently cut the housing benefit budget by £650 million. On the Government's own figures, they are helping about 400,000 people. But nearly 5½ million people are what is termed "losers" under the new system. The Government are helping 400,000 people but there are 5½ I million in that serious situation.
Lord Nugent of Guildford: My Lords, will the noble Lord give way again?
Lord Stallard: My Lords, of course I will.
Lord Nugent of Guildford: My Lords, where are the 51 million people who are losing under the new arrangements?
Lord Stallard: My Lords, I do not have all the details.
Lord Nugent of Guildford: My Lords, they are not there.
Lord Stallard: My Lords, I am happy to justify what I said.
Lord Nugent of Guildford: My Lords, the noble Lord is using the figures very loosely. He knows that 5½ million represents the total number of beneficiaries. The broad effect of the changes has been specifically to benefit a number of beneficiaries, especially those on lower incomes.
Lord Stallard: My Lords, I am grateful to my noble friend Lord Carter who has supplied me with a piece

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of paper that I had misplaced. It is a quotation from Hansard from the other place dated 27th April 1988. Col. 355 states:
"As Ministers have accepted that part of our motion, I am all the more disappointed that they appear to be resisting the remainder of the motion because, although a change in the savings rule will be welcome to those people hit by that rule, they are relatively few. To put them in perspective, such a change would help 150,000 claimants. The Government admit that 5·5 million people"—
that is near enough 5½ million, is it not?—
"the vast majority of whom have no capital to their names, are losing as a result of the changes".
Lord Skelmersdale: My Lords, will the noble Lord allow me one intervention? I did not quite hear from whom he was quoting. If it was not from the Minister's speech in another place, I am afraid that the remark is out of order.
Lord Stallard: My Lords, I accept the noble Lord's stricture. The remark is out of order, but that is not the point. There were 5½ million. I stand by the figure, and I am happy to supply further particulars and quotations that will be in order.
The capital figure has been extended to £8,000, as the noble Lord, Lord Banks, said. The Government say that 1,000 people will be helped by the measure, but families will still lose. All capital over £3,000 will count towards tariff income and reduce entitlement. There will be a loss of £1 housing benefit for every £250 in savings over £3,000. One does not have to be a mathematician to work out that the extra tariff income will virtually wipe out the prospect of any improvement. Those affected must be added to the 5½ million.
Transitional protection was mentioned as the other part of the deal. That will not cover the losses for the 20 per cent. rate contribution that most of the very poor will have to pay. Another myth is being built up by many people in regard to 20 per cent. of a notional sum that has been allowed for rates. People in a borough like Camden will pay much more: they will pay 20 per cent. of the rates. It is not an allowance to the effect that eveyone will get 20 per cent. of the rates; 20 per cent. of a notional sum only is allowed for in the new system. There is also a limitation to losses greater than £2·50 per week. If people are not caught in one way, they are caught in another. This will not cover rent and rate increases since April, and many groups are totally excluded.
New claimants and claimants whose circumstances change—the noble Lord, Lord Winstanley, brought this to our notice—will not get any protection. New claimants will sustain massive losses. The figure amounts to quite a few pounds. At that level of income, the loss need not be much to have a dramatic effect. Rents are increasing and will increase considerably as a result of the Government's policy on deregulation. We shall hear more of that when we consider the housing Bill. Those who have read the proceedings of the Committee in another place will know what is on the way. No allowance is made for that and, as I say, new clients and others will lose dramatically as a result.
In spite of that, many problems resulting from the April changes remain untouched. The tapers have not been changed. Old claimants will lose 85p in
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every pound over the threshold—more than twice the highest rate of taxation. The noble Lord, Lord Banks, is right. All this means that the Government have done nothing for working families on low income or for pensioners with a small occupational pension. Nothing has been done to help new claimants on industrial injuries benefit. No rebate has been allowed on water charges or amenity charges. Local authorities are still being penalised for backdating schemes even in their own good causes, of which there are a number. The Government have not restored to local authorities the right to have discretionary schemes as was the case under the old system.
Paragraph 5.5 of the report confirms that the April restructuring will produce savings of £640 million. By adding up the figures in previous reports, I have calculated that since 1983 savings totalling more than £1,000 million have been made from housing benefit. As long as this saving, or cost cutting, is to be the basic approach, no real improvements will be made to the housing difficulties of millions of people, be they council tenants, private sector tenants or owner-occupiers. The casualty list gets ever longer.
Paragraph 5.5 of the report confirms also that the majority of households on housing benefit will receive less help with their rent and rates, and over 1 million claimants will lose entitlement altogether. I stress that they will lose not just some entitlement but all. Those are not my figures; it is what the report says.
In that context we have to judge the recent announcement of the Government. Any benefits to claimants from housing benefit are outweighed entirely by the Government's determination to cut the costs of the system to a drastic level. There is no movement upwards.
There are many other issues that I should like to raise, including the question of youngsters and board and lodging, which was referred to by the noble Lord, Lord Henderson of Brompton. However, I hope that the House will debate the Griffiths Report as soon as possible.
I agree with the noble Lord, Lord Nugent of Guildford, about the need for more research. I heartily support him in this respect. I look forward to the Minister's reply.
9.20 p.m.
The Countess of Mar: My Lords, I too am most grateful to the noble Lord, Lord Banks, for enabling us to ask the Government for their comments on this report. If there is a theme to the Sixth Report of the Social Security Advisory Committee it is the need for the distribution of social security benefits to be fair. While the committee rightly refrains from commenting upon the effects which the new income support and related schemes have had, judging it too early for the true results to be known, it highlights certain aspects of the social security system which continue to cause concern.
I do not hesitate to repeat and possibly underline some of the remarks made by the noble Lord, Lord Henderson of Brompton, about young people. Chapter 2 considers the plight of a small group of young people who are seemingly penalised for

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circumstances beyond their control. The Government seem to hold the view that every family should be a nice cosy unit within which parents are able and prepared to support or at least to subsidise the living costs of their children until they have completed their education and training and are able to earn their living or reach the age of 25.
In most cases this may be so but there is a substantial minority of families where for social or psychological reasons the children cannot continue to live in the family home. The Government recognise those who have been in local authority care and others who are at risk from abuse. In a small minority of cases children will simply have to leave home or be thrown out by their parents because they cannot get on emotionally. It is unrealistic of the Government not to recognise this factor. The result can be disastrous for the youngsters concerned, as the noble Lord, Lord Henderson of Brompton, said.
We all know what may happen to this group when they gravitate to the cities. It is wrong of the Government to assume that by reducing the level of benefits parents will be struck by conscience to assume responsiblity for their offspring. I too ask the Minister to ask his right honourable friends to reconsider their policy towards young people who fall into this category.
There is a particular problem for young people who leave local authority care at the age of 18. The only accommodation they can afford is that provided by landladies because the rates of social security benefits are so low. But their circumstances prior to leaving care will have given them little opportunity to learn normal living skills and even with the help of social services staff their development of these skills will be further retarded.
The difficulties surrounding the provision of incentives to work rather than to remain dependent upon benefits is thoroughly discussed in Chapter 3. The steepness of the taper for housing benefit is a positive disincentive for those people who are in low paid employment to look for a better paid job. For every extra £10 wages the housing benefit claimant will lose £6·50. Would not the Minister agree that for the system to be fair the argument which the Government apply to the disincentives of high income tax to the rich should also apply to the benefit reductions to the poor? There is also of course the possibility that the steep taper will increase the tendency of claimants not to report earnings increases despite the warnings on the forms that the noble Lord, Lord Winstanley, mentioned.
I turn now to the question of sanctions. I have spoken before about those people who may have a personality disorder which is not severe enough for them to be receiving medical attention and who will not have sought the help of a social worker. They do not recognise the fact that they suffer from a disorder but will be unable to explain their reasons for their inability to stay in work. They may have little skill but are willing to try. The employer may say that they left the job for good reasons or simply that they were dismissed.
Will the Minister please say what guidance is given to adjudication officers as to when the maximum
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sanction of 26 weeks disqualification should apply and when the period should be less than 26 weeks? Do the officers have the opportunity to refer a client to his general practitioner or a social worker?
We have heard a great deal about housing benefit during the past few weeks and again particularly this evening. I do not propose to dwell upon the subject except to say that the arrangements for transitional protection announced last week in another place seem to be what has been described to me as a dog's dinner.
Why on earth have the Government created a separate unit within the DHSS to assess and pay the allowance when it could have been done by the local authorities? May I also ask the Government what is the notional income assumed for those who have capital of up to £8,000? Is it really the 20 per cent. plus mentioned by the noble Lord, Lord Banks, and is this really reasonable? Will there be any flexibility to take fluctuating interest rates into account?
Chapter 6 rehearses many long-standing problems surrounding service to the public. The department is trying to improve the working conditions of its staff and this presumably will improve morale and the standard of service given to the public.
None of the DHSS offices in my locality provides access for the disabled, while all the Department of Employment offices and jobcentres are on the ground floor. The report stresses the importance of leaflets and display material in public waiting areas. In many instances the disabled client cannot see them because he has no access to the main waiting room.
The claim form for income support is clearly presented. Why did not the designers take into account the higher postal charges which would be incurred by its weight? Will the Minister ensure that the department reviews that matter when there is a reprint in the interests of economy? It must cost a huge amount of money in postal charges.
I also hope that the Government will not only note but act on the recommendations in Chapter 6, paragraph 6.32 of the report, which deals with ethnic minorities. Finally, is the Minister able to say when the statistics will be available to substantiate the Government's claim that the take-up of family credits will be greater than that for family income supplement?
I realise that I have asked the Minister a large number of questions. I do not expect him to answer them all instantly. If he is going to say that he will write to me, perhaps I may receive an answer in reasonable time and not have to wait several months for a reply, as I have previously.
9.25 p.m.
Baroness Jeger: My Lords, I should like to thank the noble Lord, Lord Banks, for bringing this matter before your Lordships. The Question which he has asked covers an enormous area and I do not think that we can go into all the details tonight. However, perhaps I may raise one or two points.
I am very interested in the social fund. I hope that the Minister will be able to give us some information about it. Obviously we shall have to wait to find out exactly how it is working out. However, I wrote to the noble Lord on 16th February 1988 and I have not

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received a reply. We have all heard that the National Audit Commission has reported the appalling behaviour of the DHSS in dealing with applications.
I wrote to the Minister about the case of a lady who was on social security and who had a daughter who was a gifted dancer. She could not receive payment for ballet shoes from the DHSS. The Times of 15th February 1988 reported that a charity had offered to buy the ballet shoes. However, she was told that if the charity sent her the money, that amount would be deducted from her benefit. However, if it sent her the shoes and paid the postage for them, that would be all right. I asked the Minister if the report was true. I have not received a reply. I think it likely that the woman and her daughter will not have received a reply either.
On 26th April there was a leader in the Guardian which pointed out that if someone was refused a gas cooker on a social fund application and then found a charity, as the social fund instructs, if the gas cooker was then sent by post that would be all right. However, if a cheque for the gas cooker was sent instead, the amount would be deducted from benefit.
I hope that I am wrong. I hope that the Guardian is wrong and The Times is wrong. However, I have not been unfair to the noble Lord because I sent him this inquiry from The Times on 15th February but I have not had a reply.
I think that this issue is very important. We have not had time tonight to go sufficiently into the problems of the social fund, but we must know about this nonsense. When voluntary organisations are paying money to help people—as they are supposed to under the new system—it is unacceptable that these problems are not dealt with.
The committee stated that there ought to be £350 million for the social fund but we have not had that. It also suggested in paragraph 1.6 that there should be an independent appeal system. Why do we not have an independent appeal system? There are many suggestions from the committee about changes but we have heard nothing from the Government.
The question of incentives is referred to in paragraph 3.2 of the committee's report. It discusses how unemployment incentives could he dealt with. The committee reported that in Berkshire the unemployment rate is 4·5 per cent. while in Strathclyde it is 17·1 per cent. How can we tell young people, or even older people, to go out and find a job when they live in areas with such a diversity of unemployment rates? Ministers like to talk about the dependency syndrome, which suggests a failure on the part of some people to go to work. I would suggest that it is the same government who condemn people to dependence because of low pay and inadequate benefits.
I am very glad that there have been contributions from noble Lords who share my concern about the impact of the scheme on young people, which is referred to in paragraph 1.4. I am also concerned about the steeper tapering of housing benefit and I should like particularly to refer to the question of rates. We are told that all but 20 per cent. of rates will be remitted for people receiving benefit. However, that is 20 per cent. of the national average rate charges which will be payable by people on income
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support. People on income support who live in areas with high rates will be overcharged. No account will be taken of the rates in individual areas. People in high rate areas will suffer because they will have to pay 20 per cent. of the national rate without any thought on the part of the Government about the level of local rates.
There are a great many points in this report which we could discuss at great length. However, I believe that it has given us a number of ideas and thoughts. I shall wait to hear what the Minister has to say.
9.35 p.m.
Lord Skelmersdale: My Lords, I too am grateful to the noble Lord, Lord Banks, for raising the matter of the Social Security Advisory Committee's sixth report. The Government welcome the committee's contribution to the debate about the benefit system, as indeed they welcome all such constructive and learned publications. I am sure that this House is extremely impressed by the thorough-going nature of the analysis in what is, as we all know, an extremely complex area.
The noble Lord, Lord Henderson, started with Chapter 8 of the report and it might therefore be appropriate for me to do the same. The chapter is headed:
"Meeting need—how much is enough?"
The Government welcome the committee's clarification of the important and complex issues raised in the discussion of the adequacy of the safety net benefit to meet claimants' needs. They further welcome the intention of widening the audience to this discussion, but it is the Government who are confronted with the real issues of helping the poorest in society. It was for that reason that in the Green Paper on the reform of social security consideration was given to what more could be done to review the changing needs of different groups with the aim of ensuring that the social security resources provided by Parliament were properly focused on those with the greatest need.
It may interest noble Lords to know that the quintile analysis approach was adopted for the Green Paper and enabled analysis of the characteristics of the poorest groups to proceed without getting too bogged down in the rather academic debates on the measurement of poverty. That led to some of the policy adjustments reflected in the new benefit structure, and notably the increased targeting on families with children.
The Government acted upon the findings of this analysis and those commissioned from outside bodies. They all contributed to the new structure of personal allowances and flat rate premiums for those groups identified as having the greatest need—families with children, sick and disabled people and pensioners. In setting the rates for those personal allowances and premiums we channelled some £220 million to those groups most in need.
Social security expenditure now accounts for a third of all public spending. A solution has yet to be found which reconciles the opinions of academics on what is adequate with what the taxpayer can pay. Therefore, no more can be expected of government than to create the conditions in which the incomes of

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most people at most levels, including the poorest, can rise. In that the Government are succeeding.
The noble Lord, Lord Banks, took me to task for saying—and I make no apology for repeating it—that between 1979 and 1985 pensioners' incomes, for example, rose by 18 per cent. more than inflation, which is a bigger rise than for any other group in society including those in work. We have met our pledge to maintain the value of the state retirement pension in real terms. It is being paid to 1 million more pensioners. Its total cost is £18½ billion and total public spending on benefits for the elderly has gone up by 29 per cent. in real terms since 1979. To raise pensions and linked benefits in line with earnings would cost about £1½ billion in 1988–89. Even those pensioners who comprise the lowest 20 per cent. have had increases in real incomes in excess of the national average. I shall say a little more later on about the pensions position.
Noble Lords are well aware that this is not a mean and penny-pinching government. It is a government who respond to the concerns of people, reflected as they have been in recent weeks and months in both Houses of Parliament. This House will recall that on 23rd June 1986 the noble Lord, Lord Henderson, successfully moved an amendment to the Social Security Bill which sought to give a "community care addition" to "chronically sick or disabled or elderly" people at a rate determined by their need for "care and attention". That provision was found to be too wide-ranging, potentially including the entire income support pensioner population and I am advised that it would have been unworkable.
The Government responded with an alternative amendment which, in keeping with the aims of income support, gives entitlement to extra benefit of £8 million in the form of the severe disability premium. This premium is payable at a set rate and based on clear-cut, easily identified criteria. I think that noble Lords will agree that that is a considerable achievement for this House.
On top of this there is the Independent Living Fund. I am not sure that I can be very helpful to the noble Lord, Lord Banks, at this moment. However, as soon as the fund is set up under its new trustees I shall be delighted to report to the House by means of a letter; or, if the noble Lord would like to put down a Question for Written Answer, that might be a way to attack the problem. Work on the way in which the fund will be administered is at an advanced stage but final arrangements must be ratified by the trustees. As noble Lords know, we shall be looking at the needs of all disabled people once we have considered the report of Sir Roy Griffiths. In the meantime the immediate requirement is to provide for the needs of severely disabled people.
I can agree with all noble Lords who have referred to a particular paragraph of the SSAC report. This is the need for better, constant and consistent information. I have advised the House before that we have asked the Office of Population Censuses and Surveys for a report on the disabled in this country. We expect to be able to receive this within the next 18 months or so. I should not like to be tied to an exact date, but I believe that this is important.
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The Independent Living Fund, and the Government's acceptance of a version of the amendment of the noble Lord, Lord Henderson of Brompton, are examples of the Government's preparedness to listen to those who have constructive points to make on the Government's reform of social security. A further example is my right honourable friend's recent announcement on changes to the social security benefits. These have caused some very strange comments on the Benches opposite this evening. Given the complexities of the old scheme it would be extraordinary if the new arrangements did not produce some problems. We are acting promptly and decisively to alleviate problems affecting particular individuals while leaving the underlying, improved structure intact.
The changes to the capital limit for housing benefit mean that people with capital up to £8,000 will become eligible for housing benefit. This is an increase from £6,000. An estimated 100,000 more people will then be entitled to support with rates and rents. The total cost is approximately £30 million. The extension will come into force as soon as possible.
The noble Lord, Lord Banks, questioned me on the fact that we were assuming £1 income for each £250 step of capital, and that this was far higher than anyone could reasonably expect to receive in interest. It is important to remember that the first £3,000, together with any income that it produces, is wholly ignored. That means that on the £6,000 limit—and I accept that it has increased to £8,000; my figures do not reflect the £8,000 figures, but nevertheless the point is valid—we are assuming £1 a week on £3,200 of capital, not £1 on each £250 itself. The sum of £3,200 invested at 6 per cent. interest would produce a higher income of £3.69 a week. But the noble Lord, Lord Stallard, picked up this point and commented that they lose £1 of housing benefit for each £250 above £3,000. The effect of the extra income assumed for capital above £3,000 is affected by the tapers. Where the total income, including the assumed income from capital, exceeds the applicable amount, the effect of each £1 excess is to reduce a rate rebate by 20p and a rent rebate allowance by 65p.
We had a little discussion, a rather noisy discussion, about whether there were or were not 5½ million losers. I think I have it right, although it was at moments rather difficult to follow the argument. For the record these exist. Some 5½ million people do lose housing benefit to a greater or less extent. These include some 700,000 who lost all benefit because of the introduction of the £6,000 capital cut-off, and a further 300,000 as a result of other structural changes.
As your Lordships are aware, in another place my right honourable friend announced an increase in the capital rule to £8,000, which will bring back some 100,000 people into housing benefit, but for the other housing benefit losers it is important to look at the overall benefit and other income. It will be seen when looking at the total picture that some 2 million are overall gainers. Transitional help will also be offered to housing benefit claimants whose benefit has been sharply reduced following changes such as the curtailment of discretionary schemes operated by local authorities. The help will be available to

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claimants with benefit reductions over £2.50 a week—mainly to disabled people, pensioners, families with children and lone parents. Transitional help provisions will include people with capital up to £8,000 who have been affected by the £6,000 limit. This help will also be backdated to 1st April.
To answer another question of the noble Lord, Lord Banks, as is usual with transitional arrangements increases in benefits will erode the provision necessary under transitional protection over time. Eventually the need for it will disappear, although the detailed arrangements for its withdrawal are still being worked out.
I said earlier that an estimated 300,000 people will be helped. The total cost will be £70 million. Help will be backdated to 1st April. The changes announced by my right honourable friend also affect income support rules for the disposal of property. Claimants will have six months, or longer in exceptional circumstances, to realise the value of property in which they are no longer living before it is taken as a capital asset for benefit purposes. A publicity campaign will be mounted to inform people who may gain by the changes and as to how they can apply. The Department of Health and Social Security will set up a special unit to administer the transitional housing benefit scheme.
One question from the noble Countess, Lady Mar, that I can answer is that there are two reasons why local authorities should not run this central unit. First, no legislation is in place which will permit that to happen. Secondly, we have recognised the considerable resources devoted by local authorities to implementing the new scheme. I am sure noble Lords all round the House would correctly have criticised us if we had imposed even more burdens on them once they had got used to running the scheme as it was originally planned.
We have never made any secret of the fact that one result of the reforms will be to take some people out of benefit altogether. When individual calculations were made, the Government saw that what was planned was having an unduly severe effect on some people and we decided that we had to adjust it. That is right. We have done so, and I make absolutely no apology for it whatsoever. At the risk of disappointing some noble Lords, I have to tell the House that this is not a U-turn by the Government. It is entirely consistent with the assurances that I gave during the passage of the recent Social Security Bill, that the Government will keep social security benefits under review. If that is not keeping them under review I should certainly like to know what is.
The noble Baroness, Lady Turner, referred to another review, also in connection with the recent Social Security Bill: that on child benefit. The future of child benefit will be reviewed each year as annual upratings are considered. I give that commitment.
I accept that while these adjustments will work to the advantage of many there will still be some who lose. That is inevitable to some degree. As my noble friend Lord Nugent has said, wherever we set the upper limit on capital there are bound to be some hard cases which fall just outside the scope of the scheme. However, I shall continue to defend the decision to have a capital rule in housing benefit. It is
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a vital part of targeting public resources where they are most needed.
I can tell the noble Baroness, Lady Turner, that I am not ashamed to say that people with no savings, or only a small amount, are in greater need of help than those who have demonstrated that by their own efforts they have the capacity to help themselves by saving more. The structure for housing benefit is now the same as for income support and that remedies the previous illogicality of taking savings into account for one benefit but not for the other. But by being prepared to change the rules in response to a fair demonstration that they were hurting some people too much, I firmly believe that we have shown that we are prepared to listen to reasonable and constructive expressions of concern and that we are flexible enough to respond in a meaningful and compassionate way.
I am conscious that I have strayed some way from the original terms of the Question but I am hardly alone in that this evening. These important but none the less small adjustments which I have detailed do not detract from this Government's major achievement in introducing social security reforms. It is therefore instructive to reflect upon what the SSAC report said on the reforms. My noble friend Lord Nugent, to whom I am grateful for speaking this evening, illustrated one or two of those. It backs the Government's aim of simplification, improved targeting of help and incentives.
As regards housing benefit I thought that the noble Lord, Lord Banks, quoted the report rather selectively. It also states that the new housing benefit scheme will provide a better system of support for those on the lowest incomes. It approves the simplification of income support by the introduction of personal allowances and standardised premiums. It believes that family credit will significantly improve incentives for people to take low paid jobs. It states that the new system ends the worst disincentive effects of the poverty trap whereby an increase in earnings could result in a reduction in net income. We have discussed that issue several times in recent weeks.
Of course, the report also raises some criticisms, criticisms which the Government take very seriously. In its sixth report, the committee has made clear its concern for minorities as well as majorities. With this in mind the committee considered in some detail the effects on young people and drew attention to two specific concerns. That has been reflected in the comments of several noble Lords this evening.
First, the committee suggests that the new income support scheme has not solved the incentive problem for the young person in a low income family who wants to stay on at school. I have to say that the Government do not share this view. Sixteen to 18 year-olds in full-time education will not be affected. Overall the effect of withdrawing benefit for 16 to 18 year-olds, unless on a YTS course, in full-time education or covered by exemption, is likely marginally to increase the tendency for this age group to study full-time and for there to be a reduction in the number of part-time students.
Secondly, the committee considers that young people who need to live independently will suffer a

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substantial drop in assistance with rent and rates even if they are in work. For the very small minority of 16 and 17 year-olds who need to live independently it will be difficult to make ends meet. However, noble Lords will know that the vast majority of under 25 year-olds live at home. Indeed the report itself acknowledges this. Our policy in the treatment of young people is geared to this fact and reflects our aims to simplify and target help on groups with priority needs.
In the long-term very few young people will have to look for income support for their maintenance. Most will be in training. Those exempt from training will usually qualify for a premium on top of the personal allowance. Clearly, if a YTS course really is unsuitable and another place has to be found, it will be found quickly. My right honourable friend the Secretary of State for Employment guaranteed that YTS places will be available for all, including those with disabilities and learning difficulties. I am sure that he will monitor the operation of the bridging allowance. There will be young single people who lose as a result of the reforms but the reforms generally give more help with rent to many poorer claimants and more to many paying unavoidably high rents.
The committee also draws attention to the fact that some low income families will still face combined marginal tax and benefit withdrawal rates—over 90p in the pound. That is true of a very few. Any income related benefit providing generous help paid to people in need has to be withdrawn as their income rises. There is no way round that. Under the old scheme a pay rise could mean that people lost more than they gained through a combination of higher taxes and the withdrawal of benefit. The report welcomes the fact that the reforms end that absurd situation.
The noble Lords, Lord Banks and Lord Stallard, criticised the requirement for all housing benefit recipients to pay at least 20 per cent. of their domestic rates. We have made it clear that we are committed to the principle of greater accountability of local authorities to their electorate. Under the old scheme about 3 million claimants were totally insulated from rises in domestic rates. Under the new structure if we were to start with 100 per cent. protection for those on income support or similar levels of income, even greater numbers would be insulated from the effects of their local authority's spending policies. For that reason we decided that the maximum level of help with rates would be 80 per cent. of the rates bill. I can tell the noble Lord, Lord Stallard, that that is not based on a notional figure but on the average bill across the country.
I have already referred to the fact that we need more information. The noble Lord, Lord Winstanley, and, indeed, other noble Lords, may have missed a recent Gallup poll on the subject of what people feel about what goes on in benefit offices. It was conducted on behalf of the National Audit Office and included the following results. Three out of four found the service to be fair to good; two out of three considered the staff to be polite; two out of three preferred to go to their DHSS local office with their problems, and it is instructive that one in 10
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preferred the Citizens' Advice Bureaux; four out of five found written replies easy to understand; 17 out of 20 said the visiting service was good or fair; two out of three rated the office interviewing service good or fair.
All those remarks were made before the introduction of these changes and inevitably there will be a time for them to be assimilated both in the advice given and in the receipt and understanding of that advice by the individual claimant. I believe that we shall need to repeat that exercise in due course to see what the result has been.
The noble Lord, Lord Winstanley, made a most amusing speech, but the points that he made were very well taken indeed. However, he surely appreciates that it is important that claimants tell us when their other benefits change. As the House is well aware, my department administers many benefits from both central and local offices. If a particular benefit drops, the claimant may well need more money from other sources. The sooner he tells us of that, the sooner he receives his correct benefit. It is also important for us to know about changes, both up and down, in mortgage interest. We need to know those facts in order to get the benefits right. However, although I have used two of the noble Lord's illustrations, I accept that his speech deserves study within the department and that study will certainly be made.
I do not know whether the noble Baroness, Lady Turner, heard my noble friend Lord Young at the end of his speech in the last debate say that he believed in a high wage, high value added economy.
Baroness Turner of Camden: So do I, my Lords.
Lord Skelmersdale: I am delighted that my noble friend and the noble Baroness clearly agree. Perhaps the noble Baroness will also accept that one can only have that by getting people into work in the first place. In part, that is what government policy seeks to achieve. However, one has to ask oneself which is better—to have people in work with low wages topped up by social security benefits or merely have them on social security and not in work. I have no difficulty in telling the House which I should prefer.
Again, I remind the noble Baroness that benefits for those out of work set a floor to the wage structure. I suspect that she knows far more about this subject than I do. I am advised that that is the effect, and the benefits such as family credit are specific to those with children and not to employees generally. Employers in their wage bargaining with employees cannot discriminate between those with and those without children and also those who do and those who do not receive housing benefit. There is no evidence that benefits for people in work drive down wages. If the noble Baroness has that evidence, I shall be interested to look at it. In recent weeks we have covered the extension of the voluntary unemployment reduction to 26 weeks. I do not intend to rehearse the arguments on that.
I very much regret that the noble Baroness, Lady Jeger, has not received an answer to her letter which she wrote to me in February. I shall investigate the matter, but I should point out that she was dealing with a specific case. I do not know whether this is the

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reason, but it may be that it has been necessary for officials at headquarters to get facts not only from the responsible local authority office but also from the local office of the department and very likely back files from Newcastle central office. Even so, I accept that there is no excuse for a reply taking this long and I shall certainly look into the matter.
Baroness Jeger: My Lords, perhaps I may say how much I appreciate the Minister's courtesy about this case. I should like to ask him a question on the principle. If someone is turned down by the social fund for a preliminary grant and then goes to a voluntary organisation, is the money that the voluntary organisation gives to the applicant for his gas cooker, new tools, or new clothes to go to a job deducted from benefit? If the assistance is in the form of, say, ballet shoes or a screwdriver it is not deducted. This does not just relate to the letter I wrote to the noble Lord. Can the Minister say whether it is a rule that the social fund can provide implements and artefacts, but if it gives money then somehow that gets into the circle of benefit?
Lord Skelmersdale: My Lords, the noble Baroness pre-empted me on what I was going to say on this precise fact. The original question asked by the noble Baroness was about charities and not about the social fund. The first £250 of any occasional payments made by a charity will be treated as capital and will not therefore affect the level of benefit in payments unless it takes existing capital above the £3,000 limit, in which case the normal income rules that I have described would apply.
Alternatively, a charity may send a claimant a cheque made payable to the supplier of, for example, a gas cooker and the payment will be disregarded. This will also be the case if the cheque is sent direct to the applicant; in other words, to the claimant. I am not sure that it profits us very much, after nearly half an hour of my answering your Lordships' very interesting debate, to go into details of the social fund. Perhaps it may be appropriate if I write to those noble Lords, who have raised specific questions.
It is the belief of this Government that the social security reforms take us closer to the vision of Beveridge of a benefit system designed to help with need but not to demolish the incentive to work. The new system is simpler and more humane. It gives extra help to those who are disabled without the need for intrusive questions. It recognises different needs at different ages. It gives more to the unemployed man in his fifties both for his daily needs and for his housing than to the 19 year-old who has never worked. It means that for virtually every family to be in work will be worth while, and to work harder will pay off. It is to fulfil this vision that we need a growing economy.
Only growth enables the most fortunate in our society to help those most in need. It is because of our economic record that our society has been able to respond generously to prevent the poverty that would otherwise exist. The poorest in the nation have shared in the improvement in national prosperity. At every level average standards have risen. We all want those standards to go on rising. For this reason we all want a strong economy to continue. These are substantial achievements of which the Government are proud.

Coroners Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at six minutes past ten o'clock.

  DIPLOMATS: SERIOUS OFFENCES
  DIPLOMATS: SERIOUS OFFENCES
  DIPLOMATS: UNPAID PARKING FINES
  DIPLOMATS: UNPAID PARKING FINES
  LEGAL AID BOARD
  LEGAL AID BOARD
  PROFIT-RELATED PAY SCHEMES
  PROFIT-RELATED PAY SCHEMES
  TRAVEL-TO-WORK AREAS: PRIORITY STATUS
  TRAVEL-TO-WORK AREAS: PRIORITY STATUS
  AGRICULTURE: LESS FAVOURED AREAS MAP
  AGRICULTURE: LESS FAVOURED AREAS MAP
  NHS: OFFICES REMOTE FROM HOSPITALS
  NHS: OFFICES REMOTE FROM HOSPITALS
  NHS: COMPUTERISED STATISTICAL RECORDS
  NHS: COMPUTERISED STATISTICAL RECORDS
  CORONARY ARTERY BY-PASS OPERATIONS: COST
  CORONARY ARTERY BY-PASS OPERATIONS: COST
  M.4: CLOSURE, 24th APRIL 1988
  M.4: CLOSURE, 24th APRIL 1988
  COMMUNITY CHARGE: EXEMPTIONS
  COMMUNITY CHARGE: EXEMPTIONS