Sitting of 18 May 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
DEATH OF A MEMBER
Mr. Speaker: I regret to have to inform the House of the death of Sir Brandon Meredith Rhys Williams, Baronet, Member for Kensington, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.
MESSAGES FROM THE QUEEN

  SUMMER TIME
  THE VICE-CHAMBERLAIN OF THE HOUSEHOLD reported
  Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Summer Time Order 1988 be made in the form of the draft laid before your House.
  I will comply with your request.

  TAXATION
  THE VICE-CHAMBERLAIN OF THE HOUSEHOLD reported
  Her Majesty's Answer to the Address, as follows:
  I have received your address praying that the Double Taxation Relief (Taxes on Income) (Venezuela) Order 1988, and the Double Taxation Relief (Taxes on Income) (Turkey) Order 1988 be made in the form of drafts laid before your House.
  I will comply with your request.

Oral Answers to Questions
  ENVIRONMENT

    Vacant Council Houses
    Mr. Fallon: To ask the Secretary of State for the Environment how many council houses are vacant but available for letting in the northern region according to the latest figures.
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe): Housing investment programme returns indicated that 2,702 local authority dwellings in the northern region were empty and available for letting at 1 April 1987, the latest date for which figures are available.
    Mr. Fallon: Is not the real scandal not that more than 2,000 homes are empty but that no one seems to be doing anything about it? I have asked this question every year for the past five years. Will my hon. Friend consider legislating either to allow young homeless couples to homestead in these empty council properties or to improve letting procedures by providing for compulsory auction of any council homes that are not relet within, say, three months?
    Mrs. Roe: Following discussions in Committee on the Housing Bill we are considering measures to reduce the number of local authority empties. My hon. Friend the Minister for Housing and Panning is to make a statement on the subject at the Report stage of the Housing Bill. I am not convinced, however, that compulsory disposal along the lines suggested is necessarily the most effective means of making housing available to those in greatest need.
    I support the principle of encouraging homesteading. My Department encouraged it in circular 12/85. Homesteading depends on low sale prices and purchasers getting improvement grants. The ball is clearly in the local authorities' court. For our part, we are considering changes to the improvement grant regime, to be contained in new legislation.
    Mr. Cousins: Will the Minister bear in mind her own splendid example? When 15 houses run by the Property Services Agency in my constituency had been derelict for more than a year the Government gave Newcastle city council £300,000 to bring those derelict houses back into use. Is that an example for the Minister in this case?
    Mrs. Roe: One must remember Government empties that are held for operational reasons. My Department does not collect data on reletting times. However, the Audit Commission estimates that if the national average relet period could be reduced by two and a half weeks by better management and by streamlining the reletting procedures, an extra 20,000 dwellings could be occupied. The commission recommends a maximum three-week reletting period. The London borough of Greenwich manages that, but the average time for the borough of Southwark is 24 weeks. That puts 1,800 dwellings out of commission—enough for all its homeless households for a year.
    Mr. Soley: Are there operational reasons that lead to the Government's having 6·9 per cent. Of their properties

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    empty? In average terms, that is three times as many as the number held by a local authority. Why does the Minister have to rely on people such as myself and other Opposition Members going to Government Departments, in the way that I went recently to the Home Office, to get the Government to put back into use houses and flats that have been empty for as long as nine years? When will she do something about Government Departments that have hundreds of thousands of empty houses and flats all over Britain?
    Mrs. Roe: Government empties are regularly reviewed and Departments are strongly urged to sell surplus stock. Reduction targets agreed by the Treasury are also set. Where disposal is not practicable, Departments are encouraged to let empties temporarily to local authorities or to housing associations for use by homeless people. The Ministry of Defence has arranged 275 such lettings.

    Single People (Housing)
    Mrs. Dunwoody: To ask the Secretary of State for the Environment whether he has any new proposals to deal with housing need among single people.
    The Secretary of State for the Environment (Mr. Nicholas Ridley): The Government's housing policies—and in particular the proposals in our Housing Bill—will assist all categories of housing need.
    Mrs. Dunwoody: The Secretary of State's answer will come as a considerable surprise to most people. Would he like to live in cardboard box under Waterloo bridge? If not, what will he do to rehouse people who are living like that?
    Mr. Ridley: I imagine that the hon. Lady will strongly support the Housing Bill, which introduces assured tenancies, amended rules on shorthold, and fair rent tenancies to encourage more private landlords to come forward. It also encourages building societies by giving them extra powers to provide accommodation for rent, and encourages the housing association movement to build large numbers of social houses to rent, with Government subsidies to keep those rents low. In the light of that tremendous effort to help the housing shortage, I am surprised that the hon. Lady asked such a stupid question.
    Mr. Heddle: I acknowledge the enormous initiatives in the Housing Bill, but does my right hon. Friend agree that many of the single homeless could be adequately housed in pubic sector properties that are currently too large for their tenants? Does he also agree that perhaps many local authorities are not using the tenants' charter provisions of a previous Act to best effect for the single homeless?
    Mr. Ridley: Yes, Sir. There are well over 100,000 empty council houses and well over 500,000 empty private dwellings. The Government's policy is to bring the maximum number into use to ease the housing shortage.

    Pollution
    Mr. Ieuan Wyn Jones: To ask the Secretary of State for the Environment if he will outline those measures taken by Her Majesty's Government to reduce the incidence of pollution in United Kingdom offshore waters.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): A wide range of measures exist to control pollution in United Kingdom waters and recent quality status reports for the Irish and North seas show that they are generally in good condition. Substantial programmes are well under way to achieve improvements in water quality. In addition, a range of further initiatives were included in the ministerial declaration following the North sea international conference chaired by the United Kingdom last November.
    Mr. Jones: I am grateful to the Minister for that reply. I am sure that he is aware of public anxiety about pollution levels, particularly in the Irish sea, and of the effect of such pollution not only on the environment but on important industries such as fishing, tourism and agriculture. Is it not time for a major Government initiative aimed at drastically reducing what many people regard as unacceptably high pollution levels? Such an initiative would go a considerable way to allay that genuine public worry.
    Mr. Moynihan: It was for those very reasons that the Government supported the conference declaration to reduce the input of dangerous substances into rivers, because that is a major source of pollution in coastal waters. That declaration aimed to reduce such pollution by 50 per cent. by 1995 by stopping the dumping of harmful industrial wastes into the North sea by the end of 1989. It is also intended to ensure that there will be no increase from 1987 levels of inputs of contaminants and sewage sludge.
    Mr. Gale: Will my hon. Friend study carefully the report on the protection of the North sea against pollution, which was carried unanimously by the Council of Europe on 6 May? Will he consider the effect that the dumping of waste has on the north Kent coastal resorts such as Margate and Herne Bay in my constituency? Will he consider carefully the implementation of recommendation c.i. in the report? It recommends:
    "ensuring that ships' waste is stored and treated in port, and that any discharge of such waste at sea is severely punished".
    Mr. Moynihan: Full consideration is being given to the report and, as my hon. Friend will know, it is precisely because of the sort of worry that he has expressed that we are committed to substantial expenditure through the water authorities of up to £70 million per annum, to seek improvements in the quality of coastal waters and a reduction in bacteriological levels. As to my hon. Friend's point about shipping, he will know that we are committed to working through the International Maritime Organisation to improve controls on pollution from ships.
    Mr. Allan Roberts: The Minister referred to the ministerial declaration from the second international conference on the protection of the North sea, but how will the Government implement the recommendations to which they put their name? What dangerous substances going into our rivers will be reduced by 50 per cent.? The Government have not given us any idea of what those substances are. How will they reduce the contamination of sewage sludge by persistent toxic and accumulable materials when the amount of sewage sludge that needs to be dumped in the North sea is increasing? When will the

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    Government respond to the assurance given by the Secretary of State for the Environment in the House? He said:
    "I am certainly considering whether to create nitrate protection zones and I expect soon to come to a decision."—[Official Report, 2 December 1987; Vol. 123, c. 916].
    When are we to have the decision, or is the row with the Ministry of Agriculture, Fisheries and Food continuing indefinitely?
    Mr. Moynihan: The hon. Gentleman will know that we shall he publishing the red list of substances in connection with river quality objectives and the pollutants that are of specific concern to the Government once we have finalised the list. As to the range of other issues, I would encourage the hon. Gentleman to read in detail the 46 proposals on exactly how the Government intend to put into practice the recommendations agreed at the second international conference on the protection of the North sea.

    Regional Assistance
    Mrs. Maureen Hicks: To ask the Secretary of State for the Environment which areas have received Government assistance under the urban regeneration grant and urban development schemes in the last six months.
    The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier): Thirty two urban development and urban regeneration grants totalling £36·4 million have been approved since November 1987, including one urban development grant of £529,000 in my hon. Friend's constituency. I have made arrangements for a list of the areas receiving assistance to be placed in the Library.
    Mrs. Hicks: I am grateful to my hon. Friend for the substantial urban development grant that he has recently given to Wolverhampton. Is he convinced that the new city grant that has replaced it will be even more attractive to developers?
    Mr. Trippier: I am convinced that the new city grant will be more attractive. We have cut out a considerable amount of bureaucracy that was attached to the former grant regime. We have streamlined the process, giving the private sector direct access to the Department of the Environment. I have given an undertaking that a decision on the applications will be made within a shorter time scale than hitherto.
    Mr. Steen: Is not the most important problem to which urban regeneration grant should be directed getting rid of the 100,000 acres of public derelict, vacant but under utilised land on the register? Although my hon. Friend has made some steps towards getting rid of the land, more land is coming in because of the planning process. At the present rate it will be at least 1,000 years before we get rid of all the land on the register.
    Mr. Trippier: I agree with the thrust of my hon. Friend's question. I draw his attention to the fact that almost half the public land registered last year was directed by the Department of the Environment to be sold. The problem is not confined to local authorities, but occurs in Government Departments as well, and as a result of the
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    initiative in the "Action for Cities" presentation by my right hon. Friend the Prime Minister we are taking further steps in that direction.

    Cluttons (Contracts)
    Mr. Campbell-Savours: To ask the Secretary of State for the Environment what contracts have been awarded to Cluttons by his Department over the past seven years.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): Ten contracts have been awarded to Cluttons in the past seven years. Five were for the sale of surplus property, four for valuations and one for dealing with noise compensation claims.
    Mr. Campbell-Savours: Is it not true that Cluttons was paid £40,000 for valuing Richmond Terrace and that the same work could have been done in-house for £2,000? Is the Minister aware that that information comes from civil servants within the PSA? So that we may get at the truth, will the Minister publish the comparative costing documentation within the PSA and place it in the Library? This is a time bomb ticking away under his appointment as a junior Minister in the Department of the Environment, and we will get at the truth in the end.
    Mr. Chope: There was never any question of the valuation being carried out in-house. The decision was taken to employ experts. [HON. MEMBERS: "Why?"] Because they are experts in valuation. [Interruption.]
    Mr. Speaker: Order.
    Mr. Chope: It was the first time that there had been a new freehold in Whitehall for valuation. We considered it best to get the most expert advice and for that advice to be based on the best evidence available. It is important in valuations to have evidence of comparables. The firm that we chose to carry out the valuation employs experts in that work.
    Mr. Harry Barnes: Is this not a case where privatisation has clearly failed and has led to an increased bill for the taxpayers, only because of the Government's obsession with privatisation? The fee amounts to 70 or 80 people's poll tax payments for a year.
    Mr. Chope: I do not know that the Government are obsessed with privatisation. We are convinced that privatisation is a sensible policy and it is being pursued vigorously by the Government where it is most appropriate.

    British Olympic Association
    Mr. Menzies Campbell: To ask the Secretary of State for the Environment when he last met the chairman of the British Olympic Association; and what subjects were discussed.
    Mr. Moynihan: I had a private dinner with the chairman of the British Olympic Association on 19 April. I last met him formally on 13 January. We discussed my open letter of 19 November 1987 to John Smith, chairman of the Sports Council, about the future direction of our sports policies.
    Mr. Campbell: When the Minister next meets the chairman of the British Olympic Association, will he

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    impress on him the importance of the British Olympic Association assisting the elimination of the taking of drugs—particularly anabolic steroids—by sportsmen in the United Kingdom? Does the Minister share my worry about the possible effects—[Interruption.]
    Mr. Speaker: Order. I am sorry to interrupt the hon. Member. Private friendly conversations across the Chamber do not help at Question Time.
    Mr. Skinner: It is the Ladbroke's man.
    Mr. Speaker: Order. It would be helpful if the hon. Member for Bolsover (Mr. Skinner) and the hon. Member for Langbaurgh (Mr. Holt) kept quiet.
    Mr. Campbell: I shall not start again from the beginning. Does the Minister share my anxiety about the extent to which the use of such drugs appears to be prevalent? May the House take it that he is as keen as the 179 hon. Members who signed an early-day motion recently to see that the taking of such drugs is eliminated?
    Mr. Moynihan: I share the hon. Member's anxiety about the use of anabolic steroids to enhance performance in sport. For that reason, the subject of anabolic steroids has been referred to the advisory council to consider whether the Misuse of Drugs Act 1971 controls are appropriate. The BOA wholly supports the recommendations of the inquiry that I undertook with Sebastian Coe, and the Sports Council has now implemented them. The BOA is committed to testing being undertaken by independent sampling officers, to the random selection of competitors and, most important, to testing outside Olympic competition—[Interruption.]
    Mr. Speaker: Order. It would help us all if the hon. Member for Langbaurgh would keep quiet.
    Mr. John Carlisle: When my hon. Friend meets the chairman of the British Olympic Association, will he express to him the extreme anger of British sportsmen and sportswomen at the treatment afforded to Miss Zola Budd, who was hounded out of this country by Left-wing political extremists? Does he agree that those bigots and hypocrites have no place in sport or the Olympics? I hope he agrees that the time has come to return sport to the sportsman and not to the politician.
    Mr. Moynihan: My hon. Friend will be aware that that is a matter not for the BOA but for the International Amateur Athletic Federation and the British Amateur Athletic Board. Having said that, my hon. Friend will be aware that there are millions of people outside the Chamber who share the strength of his opinions.
    Mr. McCartney: Would the Minister care to express a view on the fact that amateur rugby league in this country is not being provided with the same resources as other amateur sports? Is he prepared to meet the parliamentary group to discuss the future investment in the sport at amateur level and at school and university level? Given the nature—
    Mr. Speaker: Order. The question is about the Olympics, not about football.
    Mr. McCartney: I understand that. To get to Olympic standard, the sport needs resources at amateur level and at school and university level. I would be pleased if the Minister would give some indication of his support.
    Mr. Moynihan: The hon. Gentleman will know that I am a great fan of rugby league. There have been some outstanding performances this year at amateur level and the sport is deserving of considerable support at both local and national level. The hon. Gentleman will need to direct his comments not just to International Olympic Committee delegates and the BOA, but to other countries, if he is to achieve his aim of seeing rugby league played as an Olympic sport.
    Mr. Hayward: Will my hon. Friend consider asking the chairman of the BOA to convey internationally the efforts of the Sports Council to put a stop to the use of drugs and convince other countries, for example, the United States, which is a major offender in sports in terms of taking drugs?
    Mr. Moynihan: My hon. Friend is absolutely right. This is not just a national but an international problem. It is for that reason that I have had meetings with the president of the IOC, Juan Samaranch, as well as the president of the IAAF. We had a major breakthrough during bilateral discussions with the German Democratic Republic, when we reached an agreement over the exchange of personnel and further developments in this area, which we hope will come to fruition in the not too distant future.
    Mr. Denis Howell: As the IOC and representatives of every one of the 26 Olympic sports long ago decided that no one connected with South African sport should be involved in the Olympic movement and that the spirit of that undertaking should be observed by international athletes, does the Minister not think that his remarks a few moments ago were wholly out of place and outwith the interests of British sport?
    As the Minister is meeting the chairman of the IOC about his letter to John Smith, why has he not yet met formally either the chairman or any other member of the executive of the Central Council of Physical Recreation—which comprises the governing bodies of British sport—which he did not see fit to invite to address his conference on Monday, although there were 18 speakers? Does he realise that he can make progress with British sport only if he respects the voluntary and democratically elected nature of British governing bodies of sport?
    Mr. Moynihan: If the CCPR was that keenly interested in the conference, one would have thought that the two invitations sent to it would have been accepted for the whole day. Only one person turned up, and he left at lunchtime.
    As for my comments to my hon. Friend the Member for Luton, North (Mr. Carlisle), I should say that the Government are totally committed to the Gleneagles agreement and remain so. The answer that I gave my hon. Friend, which can be read in tomorrow's Hansard, was that there can be no doubt that millions of people outside the House share the strength of the sentiments expressed by my hon. Friend.
    Mr. Harry Greenway: Does my hon. Friend agree that politics could be the death knell of the Olympics and all sports? Is it not high time that politics was taken out of sport in all lands, altogether?
    Mr. Moynihan: In an ideal world nobody would disagree with my hon. Friend. However, I regret to say that there are too many people who use the sporting

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    playing fields and arenas to focus their political attentions. That is to the detriment of sport and, therefore, the thrust of what my hon. Friend has said meets with complete agreement from me.

    Homelessness
    Mr. Simon Hughes: To ask the Secretary of State for the Environment if he will give figures for the number of households accepted as homeless in Greater London in 1979 and in 1987; and what is Her Majesty's Government's policy for reducing homelessness in London.
    Mr. Ridley: Acceptances in 1979 and 1987 were 16,650 and 30,000 respectively, I should emphasise that these figures represent households qualifying as homeless under the terms of the Act. It is likely that most had some form of accommodation before applying.
    Mr. Hughes: Do the Secretary of State and the Government not stand condemned by those figures, which show that under the Tory Government homelessness in London has doubled to 30,000 families a year, while the number of rented properties has diminished by 13 per cent., or 200,000? Is not the only solution for the Government to realise that affordable rented accommodation is required to meet the needs of the homeless? Is not the only immediate prospect of that an amendment to the Housing Bill on Report next month to ensure that in London, as in the rest of Britain, we have affordable rented housing for those who would otherwise have inadequate housing or no housing at all?
    Mr. Ridley: No, Sir. The failure lies very much with the local housing authorities, which are responsible for housing. I am glad to say that the category that really counts—those in bed-and-breakfast accommodation—has grown smaller. The figures fell from 8,000 at the end of the first quarter of last year to 7,000 at the end of the year. That 7,000 is almost one fifth of the number of council-owned void and squatted properties, which stands at 33,000, so there are almost five times as many houses as people in bed-and-breakfast accommodation. The hon. Gentleman mentioned money. I point out that this year more than £800 million is available for housing capital works in the London boroughs, so it can hardly be said that the boroughs do not have the resources, given that most of the repairs necessary cost less than £15,000 per unit.
    Mr. Bowis: I do not underestimate the need to look for solutions to the genuine problems of homelessness, but does my right hon. Friend agree that the definition of homelessness needs to be kept under constant review? In the light of his answer to the hon. Member for Southwark and Bermondsey (Mr. Hughes), does he recognise the need to introduce measures to cajole, if not force, Labour authorities sitting on empty or squatted properties to put them to good use to help homeless people?
    Mr. Ridley: Yes. We should always keep all these matters under close review. I agree with my hon. Friend that we must prevail upon local authorities to bring more of their properties back into occupation. I would add that the Housing Bill will definitely greatly increase availability
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    in London because of the large number of empty private properties that may by released by removing the Rent Act restrictions.
    Mr. Tony Banks: How dare the Minister blame local authorities in London for the homelessness crisis? Is he aware that there are between 30,000 and 40,000 people in 600 bed-and-breakfast hotels in Greater London? It is absolutely insufferable for the Minister to stand there in his complacent fashion and blame someone else. Why do the Government not accept responsibility for the scandal and crisis of homelessness in London? Why does the Secretary of State not do something positive for once? Why does he not call together the leaders of all the local authorities in London, Tory and Labour alike, for a conference to try to find some way of working the problem out together?
    Mr. Ridley: The hon. Gentleman's last suggestion that I should call the leaders of the London boroughs together makes my point, that it is the responsibility of the London boroughs to deal with homelessness. Parliament has placed that responsibility on local authorities. Half the time I am told not to interfere with local authorities—except when Opposition Members try to make a political point.
    I would add that the money available to local authorities—as I said to my hon. Friend the Member for Battersea (Mr. Bowis)—for repair and restoration of houses is £800 million a year. There is plenty of opportunity for authorities to put the problem right. Furthermore, the figure that the hon. Gentleman gave is not the figure that I have for those in bed-and-breakfast hotels, which was 7,000 households—not 30,000—at the end of last year.
    Mr. Nicholas Bennett: Does my right hon. Friend recall the parliamentary answers that he gave at the beginning of the year concerning empty properties nationally and in London, and rent arrears, showing that the constituency borough of the hon. Member for Newham, North-West (Mr. Banks) had the highest number of empty properties anywhere in London and that the borough council of the hon. Member for Southwark and Bermondsey (Mr. Hughes) had 1,800 empty properties and took six months to relet them?
    Mr. Ridley: The figures for Newham show that at the end of 1987 there were 2,764 void dwellings and 575 households in bed-and-breakfast accommodation. The answer to the problem is perfectly clear—those homeless people could have been housed in the empty properties in Newham.—[Interruption.]
    Mr. Speaker: Order. It would be helpful to the whole House if Members' questions could be confined to the Minister and not asked of each other across the Chamber.
    Dr. Cunningham: How can the Secretary of State deny responsibility for London's housing problems or those of the country as a whole when the Government have deliberately and systematically cut local authority housing investment programmes by more than 70 per cent. in real terms during their period in office? Does the Minister agree with his right hon. Friend the Member for Henley (Mr. Heseltine), who, in addressing himself to this problem, said

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    that he was far from persuaded that building more and more houses which fewer and fewer of our children could afford to buy would solve the problem of homelessness?
    Mr. Ridley: The hon. Gentleman has always failed to realise that, on top of capital allocations, 20 per cent. of receipts is available to local authorities to spend. That amounts to a record figure of £6,000 million for capital investment.
    The hon. Gentleman quoted my right hon. Friend the Member for Henley (Mr. Heseltine), who I wish was with us. I shall quote exactly what he said.
    Dr. Cunningham: I have his words here.
    Mr. Ridley: I have them too. My right hon. Friend said:
    "If there is an assumed right of the newly created family, the newly separated single family or the pensioner living longer to have a home in the south-east, then we are effectively abandoning the south to an inevitable and irreversible erosion of the very qualities that are today so prized by those who live there."
    That is the view of my right hon. Friend. What he means is that surplus people should be transported.

    Housing Stock
    Mr. Patchett: To ask the Secretary of State for the Environment whether he has any proposals to prevent the deterioration of the housing stock in England and Wales.
    Mr. Ridley: Proposals for the improvement of the housing stock in both the private and public sectors were included in last September's White Paper "Housing: The Government's Proposals".
    Mr. Patchett: Given the present housing crisis, will the Minister allow local authorities to spend at least some of the moneys accrued from the sale of council houses on making improvements, to meet the basic needs of existing council tenants?
    Mr. Ridley: I said earlier that local authorities may spend 20 per cent. of their housing receipts per year, which means that they can spend money, but over a period of time. That sum, together with the allocations, results in the high total of about £6 billion a year for local authority capital investment. I do not believe that the hon. Gentleman has noticed that both figures should be added to give the real total.
    Mr. McLoughlin: Will my right hon. Friend consider forcing local authorities that have empty houses to ensure that those properties that have been empty for longer than six months go on to the housing market for homesteading purposes? One of the problems of public sector housing is that many properties on housing estates become dilapidated. Young people would like the opportunity to buy those properties at prices they could afford, for the purpose of doing them up themselves.
    Mr. Ridley: I agree with my hon. Friend. There is every possibility of homesteading taking place. I have listened to the pressure from my hon. Friends that we must do something more with empty council houses, and I certainly take their comments seriously.
    Mr. Rooker: Does the Minister agree that the rate of renovation and new building when taken together should at least equal the rate of deterioration, otherwise, whatever figures the Minister may quote at the Dispatch Box today,
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    matters will only get worse? Will he dismiss and completely repudiate the comments of his hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) talked of people—and he must have meant the elderly—under-occupying their homes, saying that they ought to be chucked out to make room for others?
    Mr. Ridley: It is for my hon. Friend to look after himself, as I am sure he can do very ably. I can tell the hon. Gentleman, however, that if he adds together allocations and the amount spent from receipts he will find that the total is running at a very high level. Furthermore, it has been increased because of the success of the right-to-buy policy, which has produced more receipts.
    Mr. David Nicholson: Is my right hon. Friend aware that we await firm decisions on the future of improvement grants with some concern? First, such proposals would, we hope, minimise the invasion of the statutory and non-statutory green belt. Secondly, I hope that they would help the owners of Woolaway homes in my constituency, about which I have corresponded with the Minister of State and which face severe deterioration as a result of non-traditional building methods.
    Mr. Ridley: I can tell my hon. Friend, first that proposals to reform the system of improvement grants will be the subject of legislation at the earliest possible opportunity, so that money can be concentrated on the cases of greatest need.
    Secondly, considerable extra allocations have been made for defective housing, and a further £20 million has recently been released for the very purpose of trying to gain ground against the large number of defective houses that need to be put right. Most councils with such houses will find that they have recently received a large new allocation.

    Housing Corporation
    Mr. Geraint Howells: To ask the Secretary of State for the Environment what is the number of people employed by the Housing Corporation; and by what percentage he expects the number to rise over the next three years.
    Mrs. Roe: As at 1 April 1988 the number of staff employed by the Housing Corporation in England whose costs are met from my Department's programme was 573. Future staffing requirements are currently being assessed in the light of the functions to be conferred on the Housing Corporation under the Housing Bill now before Parliament and the proposed establishment of separate bodies which will carry out the corporation's functions in Wales and Scotland.
    Mr. Howells: I thank the Minister for that very thoughtful reply. It is well known in the House that she is a staunch devolutionist, and I am delighted with the news that Wales will have its own Housing Corporation. In view of the large guango that is building around the Housing Corporation in England, will she bring forward proposals to devolve power to the various regions of England?
    Mrs. Roe: As I have already said, we announced that amendments to the Housing Bill would be brought forward to transfer the Housing Corporation's functions in Wales to a new body, Housing for Wales. The Housing

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    (Scotland) Bill currently before Parliament also provides for the Housing Corporation's functions in Scotland to be transferred to a new body, Scottish Homes, the constitution and staffing of which are matters for my right hon. and learned Friend the Secretary of State for Scotland.

    Council Housing and Home Ownership
    Mr. Pike: To ask the Secretary of State for the Environment what was the total subsidy to council housing for the year 1980–81 and for the year 1987–88; and what was the total level of support for home ownership for each of the same two years.
    Mr. Ridley: Housing subsidy up to 1980–81 was paid under a different system, so I am using 1981–82 as the base year for this reply. Council houses in receipt of Exchequer subsidy and contributions from general rate funds received an average of £265 in 1981–82; those similarly supported in 1987–88 received an average of £271. In addition, housing benefit was available to those who qualified. Owner-occupiers receiving mortgage interest tax relief in 1981–82 obtained an average of £514 and in 1987–88, £576.
    Mr. Pike: Is it not a fact that over the past nine years there has been a reduction of 1 million in the number of properties available for rent, and that more than half are in the private rented sector? Is it not true to say that the number of properties to rent will continue to decline until the Government give those who want to rent a fair deal comparable to that available for those who wish to purchase their homes?
    Mr. Ridley: First, the figures that I have given to the hon. Gentleman are not really comparable, because subsidies to council house tenants are not comparable with mortgage tax relief as the subsidy to council housing is calculated on the historic cost of building the house, whereas mortgage relief goes to people who have paid market values for their homes. If it were calculated on a comparable basis, the subsidy to the council tenant would be very much higher. Secondly, I hope that the hon. Gentleman will support the Housing Bill, which aims to bring forward more social housing to rent on a large scale.
    Mr. Ashton: On a point of order, Mr. Speaker. The Minister is misleading the House. He has been asked for total subsidies, not individual house subsidies.
    Mr. Speaker: Order. Ministers do not deliberately mislead the House and I am not responsible for their answers.
    Mr. Dykes: Does my right hon. Friend agree that the increase in home ownership under this Government is one of the Government's greatest success stories? Does he further agree that, in the outer London boroughs, a paradoxical effect is beginning to develop whereby very tight planning controls are needed to have a dampening effect on developers with strong financial power because they are impinging too much on a particular area and preventing first-time buyers making their first purchase?
    Mr. Ridley: I entirely agree with my hon. Friend that the policy of encouraging people to buy their own homes has been one of immense success and satisfaction to the over 1 million tenants who have exercised their rights.
    944
    With regard to my hon. Friend's other point, as he knows, we consider all planning applications and policies with the greatest of care and I am fully aware that in some parts of the London suburbs there is a feeling that they are being asked to take too great a density to relieve pressure elsewhere.
    Ms. Armstrong: May I invite the Minister to answer the question that was tabled? If he cannot deal with the total subsidy to council housing nationally, perhaps he will tell the House what is the differences in housing allocation for the north of England, in terms of Government subsidy to council housing, between 1980 and today?
    Mr. Ridley: I would be happy to give the hon. Lady the global figures, but they mean little unless one directs them to the number of houses to which they are applicable. The total figures for Exchequer contributions to council housing in 1981–2 was £1·3 billion and in 1987–88, £0·8 billion. [Interruption.] There were many fewer houses. Mortgage tax relief cost £2·7 billion in 1981–82 and £4·3 billion in 1987–88, when there were many more houses. Housing benefit amounted to £1·7 billion in 1981–82 and £3.5 billion in 1987–88.
    Mr. David Shaw: Is it not true that the amount of private housing now being built is back to the 1973 level, which was the highest for some years? Is it not also true that people want to buy and live in private, rather than public, sector housing? Is it not further true that much public sector housing has deteriorated badly in recent years, with massive maintenance being required after about eight years, and often complete rebuilding within 30 years? Is it not therefore true that the best value for money over the past 30 years has been private sector housing?
    Mr. Ridley: I cannot be absolutely sure, without notice, of the figure that my hon. Friend quoted, but it is certainly true that last year was the best year for house construction for many years. With regard to the relative merits of owner-occupation and renting, there is a need for supply in both markets, for people to buy and rent houses. That is why we are taking action through the Housing Corporation and the Housing Bill to provide more social housing to rent.
    Mr. Soley: Why is the Minister so ashamed to admit to the figures that were eventually wrenched out of him by the Opposition? Why will he not accept that there are 1 million fewer homes available for rent in this country since 1980, over half of them from his much loved private rented sector? Why do Conservative local authorities use council rents to subsidise ratepayers when, at the same time, we are prepared to use taxpayers' money to subsidise the private sector? Why can he not get his act together and make sure that there is a proper subsidy for people who seek to rent in both the public and private sectors.
    Mr. Ridley: The question asked for figures which would have been misleading because, obviously, subsidy must be related to the number of houses to which it is applied, not to the total figure irrespective of the number of houses. My later point, which the hon. Gentleman did not deny, was that because council house subsidies and rents are based on historic costs the true cost of the subsidy of those houses is represented by the cost of disrepair, because enough money has not been put by to repair them and eventually replace them when that is necessary. These

    945
    figures are not similar, and I made my best efforts to give the hon. Member for Burnley (Mr. Pike) the figures for which he asked.

    Crown Suppliers
    Mr. Dalyell: To ask the Secretary of State for the Environment, pursuant to the answer of 20 April, Official Report, columns 817-18, what criteria he intends to use in assessing the public interest in the proposed privatisation of the Crown Suppliers.
    Mr. Chope: I shall ensure that the public interest is taken into account by having regard to wider Government policies, including those for privatisation, procurement, value for money and the maintenance of adequate security.
    Mr. Dalyell: Does the House of Commons have the clearest, unambiguous assurance that before any moves to privatise the Crown Suppliers there will be legislation? Or is Parliament to be bypassed?
    Mr. Chope: It is not my practice to comment on press speculation about advice requested from or given by officials. I am considering the details of the package for the Crown Suppliers' activities which will be offered for sale to the private sector and the arrangements for the staff of the Crown Suppliers. It is certainly not my intention to bypass this House as yesterday's articles in The Guardian and The Independent suggested.
    Mr. Holt: In his consultations and deliberations on privatising the Crown Suppliers, did my hon. Friend recognise the recent experience of Langbaurgh council when it put lighting maintenance out to contract and its in-house tender of £450,000 was beaten by a private sector tender by £150,000? As a consequence, the ratepayers are that much better off and, more important, workers who had their jobs transferred to the private sector are now earning £40 a week extra.
    Mr. Chope: My hon. Friend's latest evidence from his local authority area of the massive savings that can be made from privatisation are being replicated in other areas as the Local Government Act 1988 is implemented. There is no doubt that billions of pounds can be saved for local authorities by going out to competitive tender.
    Mr. Boyes: Is the Minister aware that his treatment of the loyal and skilled work force of the Crown Suppliers is seen as high-handed and downright insulting? Does he recall that a petition given to him on his visit to Hastings and signed by 99 per cent. of the work force condemned privatisation and his handling of the situation, and called for staff transfer on a voluntary basis? Why does he not give the Hastings' work force, and, indeed, the entire Crown Suppliers' work force some straight answers, instead of treating them as objects to be flogged off at an auction?
    Mr. Chope: The hon. Gentleman does a disservice to himself and to the loyal employees of the Crown Suppliers. It is certainly the intention of management to use its best endeavours to meet staff preferences, but I cannot give assurances that all staff who do not wish to work for the privatised Crown Suppliers can be found jobs within the Civil Service.

    European Football
    Mr. Pendry: To ask the Secretary of State for the Environment when he will next meet the chairman of the Football Association to discuss the future of English participation in European football.
    Mr. Moynihan: I met the chairman of the Football Association on Saturday 14 May, together with the president of UEFA and the president of the Football League. It was agreed that the decision on the re-admittance of English clubs was for UEFA and that it would take it in the light of my report of the domestic season and events during the European championships finals.
    Mr. Pendry: When the Minister next meets the chairman of UEFA, will he give him, and all of us, some good news? Will the Minister tell him that he intends in future to speak up for our national game and highlight the successes of English football over the past three seasons? In particular, will the Minister praise those who attended last night's match when Manchester United, which would be returned to Europe should the ban be lifted, played the Italian champions AC Milan in front of a crowd of 37,392 and there were no arrests inside or outside the grounds? As this is not an isolated occasion, why is the Minister not being positive and saying that we should be back in Europe? Or will he continue to chicken out?
    Mr. Moynihan: I will always speak up for success and I will always speak out against hooliganism. For that reason I have been determined throughout the whole season to put in place a package of measures to deter hooliganism. As for the European championships in West Germany in June, I hope that the comprehensive approach to tackling the problem, particularly through police intelligence and co-ordination, will be successful. Of course I praise games where there have been no arrests, but I hope that the day will come when I need not comment on there being no arrests, because there never should be arrests at sporting venues.
    Mr. Ashton: Is the Minister aware that his record in supporting the application of British teams has been despicable this season? Why should innocent people who have committed no offence see their teams barred because of the antics of a few National Front supporters, who will be judged on their behaviour in Germany this summer? When will the Minister start backing British teams and praising British crowds for their good behaviour over the last three years?
    Mr. Moynihan: I recognise that the vast majority of football fans go along to enjoy the game and do not want to have anything to do with hooliganism. It is fair to say that the hooligan element is not a football fan element but a criminal element. Regrettably that criminal element has done enormous damage to our national game and to our reputation, not least at Heysel. I am determined to take every possible measure to ensure that the innocent are protected and that at every opportunity we bring to book the criminals—[Interruption.]—who have caused so much trouble for our national game.
    Several Hon. Members rose—
    Mr. Speaker: Order. I do not know what it is about Environment questions that always lead to an excited atmosphere.
    Mr. John Carlisle rose—
    Mr. Speaker: Order. I endeavour to call hon. Members on a fair basis. The hon. Gentleman has had one supplementary question. I decide the order in which Members are called.
    Mr. Carlisle: I am very grateful to you, Mr. Speaker. Does my hon. Friend accept from me, as vice-chairman of the all-party football committee, that he has the full support of the Tory Benches in his determination to make the Football Association, the Football League and the European football authorities responsible for their own behaviour and that of their clubs? Does he agree that if more clubs had followed the example of Luton Town football club, worthy winners of the Littlewoods cup, in banning away supporters, with the result that there were no problems of hooliganism this season, all British clubs would be readmitted to Europe?
    Mr. Moynihan: I appreciate. recognise and support what Luton has done. It is deserving of support from both sides of the House. As my hon. Friend will know, the package of measures required to tackle hooliganism varies from ground to ground and circumstance to circumstance. It was for that reason that we took police advice on the level of membership schemes appropriate to deter hooligans at each and every ground in the Football League.
    Mrs. Margaret Ewing: Has the Minister monitored the increasingly good behaviour of Scottish football fans, which has meant that no Scottish football teams have been banned from European competition, unlike their English counterparts? Therefore, we should not be talking about British teams in this context. Will he join the chief constable of Strathclyde in congratulating the football crowd at the Scottish cup final on Saturday on their good behaviour, in spite of the provocation of some unusual spectators?
    Mr. Moynihan: In regard to the UEFA decision, I have always referred specifically to the readmission of English clubs, because that is what we are talking about. However, because of the record of previous years it has been necessary to put in place exceptional measures in preparation for the game on Saturday. I hope that those measures and the recognition by Scottish as well as English fans of the importance of having a trouble-free game on Saturday will he borne in mind, especially as we are on trial when it comes to UEFA's decision later this season.
    Mr. Favell: Will my hon. Friend take it from me that, contrary to the impression given by Opposition Members, the vast majority of people support him entirely in his view
    948
    that, until he is satisfied that British football fans can behave, under no circumstances should they be allowed to go abroad and bring shame and disgrace to this country?
    Mr. Moynihan: I am grateful to my hon. Friend for his support. There will never be a time when the Government can guarantee the behaviour of fans in Europe. However, I hope that the comprehensive package of measures to deter hooliganism will result in UEFA recognising that there has been a satisfactory improvement in our national game. [Interruption.]
    Mr. Speaker: Order. We are not on the football terraces here—[Interruption.] Order. The hon. Member for Langbaurgh (Mr. Holt) does not help with his continual shouting across the Chamber.
    Mr. Denis Howell: We shall be playing added time, I take it Mr. Speaker.
    The Minister is correct to describe the evil people attached to football grounds here and abroad as criminals. However, if that is the case, why are the Government expecting football clubs to police those criminals and to pay the bill? Why are football clubs paying for the policing of their grounds if, as the Minister says, the problem has nothing to do with football clubs? Why does he expect the Football Association to have any control over evildoers abroad? That is something that it should not be expected to do. If this is the Government of law and order, when will their law and order policies bring peace to football?
    Mr. Moynihan: I have never said that the problem has nothing to do with football clubs. On the contrary, the package of measures requires decisive action by football clubs to deter the hooligans. The importance of the clubs providing the police inside their grounds is reasonable, as they are going into private property. Outside the football grounds the Government, through the police authorities, pay for extensive policing from the public purse. There is no doubt that the determination shown by the Government in association with the football authorities is absolutely essential if we are to solve these problems. We have to continue with such determination in the future.

    BILL PRESENTED
      ENGLISH CHURCH
      Mr. Tony Benn, supported by Mr. Eric S. Heller, Mr. Jeremy Corbyn, Mr. Bill Michie, Mr. Bernie Grant, Mr. Tony Banks, Mr. Bob Cryer, Mrs. Alice Mahon, Mr. Dennis Skinner, Ms. Mildred Gordon, Mr. Chris Smith and Mr. Bob Clay, presented a Bill to disestablish the Church of England: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 156.]

"The House Magazine"
3.31 pm
Mr. David Winnick: On a point of order, Mr. Speaker. Has The House Magazine any official status in the House? I ask this question because the article by the right hon. Member for Shropshire, North (Mr. Biffen) in the current edition does not apparently include all that he wrote. What has been deleted?
Mr. Speaker: That is not a matter for me. I am not responsible for The House Magazine. I cannot answer the question that the hon. Gentleman is about to put to me. He should raise it with the editor.
Mr. Winnick: On this point—
Mr. Speaker: No, I cannot answer a question like that. The hon. Gentleman now knows perfectly well the content of that article. He would not expect me to make any comment upon it. Nor do I think it is appropriate for him to raise it in the Chamber.
Mr. Tam Dalyell: You will recollect, Mr. Speaker, that on a previous occasion an article was written in a review of a book by a professor of journalism, a former business editor of The Times, about a correspondence and contact between a Grand Companion of the Bath, Sir Robert Armstrong, and a Companion of the Bath, Sir Brian Hayes. As a result of that article, the whole issue of The House Magazine was pulped.
There is cause for reflection by the Chair, because outside the House, whether we like it or not, The House Magazine is seen to have the imprimatur of Parliament. If the magazine has nothing to do with the House, why does it have the portcullis all over it? It must be one thing or the other. This review by a respected journalist caused embarrassment to 10 Downing street. Now embarrassment has occurred again for the same reason.
Mr. Speaker: The House Magazine is nothing to do with me. It is nothing to do with a point of order. It is a private publication, and a number of hon. Members sit on the editorial board. I cannot answer questions about it in the Chamber. It has nothing to do with me.
Mr. David Harris: Further to that point of order, Mr. Speaker. I heartily endorse everything that you have said. As somebody who has an article in the current issue of The House Magazine, which was cut and overwritten, may I say that the points of order that have been raised by Opposition Members are completely bogus?
Several Hon. Members rose—
Mr. Speaker: Order. I am not prepared to answer any questions about The House Magazine. It is absolutely nothing to do with me— [HoN. MEMBERS: "What about the portcullis?"] That matter should be drawn to the attention of the appropriate authorities. I am not responsible for that either.
Mr. Dennis Skinner rose—
Mr. Dalyell rose—
Mr. D. N. Campbell-Savours rose—
Mr. Richard Holt rose—
Mr. Speaker: Order. I call Mr. Holt.
Mr. Holt: During questions today, Mr. Speaker, you had occasion to reprimand me. I have no reason to cause you any aggravation and I respect this House very much. You know and I know, because we have had a private conversation on this matter—[HON. MEMBERS: "Oh."]—that I will continue to shout, "Shut up, Skinner," as long as—[Interruption.]
Mr. Speaker: Order. It would be unwise if private conversations were exposed in the Chamber because then they would hardly be private. I must advise the hon. Gentleman—[Interruption.] Order. I say to the House that it is a great disservice while the Chair is seeking to concentrate—a high level of concentration is required at Question Time—if hon. Members continually seek to cause distractions. [Interruption.] I must advise the hon. Member that every time that he comes in and does that it causes a disturbance. I ask him to refrain from doing it in future.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: Order. No further point of order arises.

WELSH AFFAIRS
Ordered,
That the matter of Education and Training for Employment in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Peter Lloyd.]

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That European Community Documents Nos. 7658/ 86 + COR 1 and 9928/87 on the protection of workers from the risks related to exposure to chemical, physical and biological agents, 10662/87 on the protection of workers from the risks related to exposure to carcinogens at work, and 4544/88 on the marketing and use of certain substances and preparations be referred to a Standing Committee on European Community Documents.—[Mr. Peter Lloyd.]
Mr. Speaker: We now come to the ten-minute Bill.
Mr. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I am not taking further points of order on that matter.
Mr. Campbell-Savours rose—
Mr. Speaker: Does it concern The House Magazine?
Mr. Dalyell rose—
Mr. Speaker: Order. I called Mr. Campbell-Savours.
Mr. Campbell-Savours: Could you advise me, Mr. Speaker, about whom one should approach regarding the misuse of the portcullis?
Mr. Speaker: The Serjeant at Arms.
We now come to the ten-minute Bill. I call Mr. John Battle.
Mr. Dalyell: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I am not prepared to take his point of order and the hon. Gentleman knows the reason. I ask him to obey the Chair.

Statutory Minimum Wage
3.37 pm
Mr. John Battle: I beg to move,
That leave be given to bring in a Bill to introduce a statutory minimum wage to be paid in all industries and services as a requirement on employers.
I have been asked why I have chosen this opportunity to bring before the House a Bill about a statutory minimum wage. My answer is that it is my first opportunity to do so. First, I represent an area of west Yorkshire in which low pay is the primary cause of family poverty. Secondly, this could not be a more apt time to introduce the Bill because, when our Budget debates have to the national average male wage of £244 per week in Britain, it does not seem to me that there is widespread awareness of how little many people have to live on week by week.
The primary aim of my Bill, therefore, is to eradicate poverty by tackling a primary cause—the persistence, even in what is heralded by the Government as a booming economy, of low pay. My Bill will bring forward a framework for the introduction of a statutory minimum wage in Britain, built on the establishment of a basic level of two thirds of the average wage, with a procedure for regular revision of that figure, and monitoring and enforcement provisions by a new minimum wages inspectorate.
First, I shall address the question whether there is a need for the Bill. West Yorkshire has been traditionally renowned as an area of Britain which pays lower wages than elsewhere. In the heart of my constituency of Leeds, West, which is a traditional textile and engineering manufacturing area, is the Bramley jobcentre.The jobs that are on offer at that jobcentre are predominantly in the service sector and are part-time, temporary and low-paid. One of the best jobs on offer is a general catering assistant post at the princely rate of £2·10 an hour. There are five cleaning jobs featured in the jobcentre window with hourly rates that range from £1·70 an hour. For those who cannot do the arithmetic, that works out at £68 for a 40-hour week. There is a job for a play scheme leader, who needs to have experience and references, at a wage of £55 a week. One can apply for a job as a security guard at a rate of £1·50 an hour for a basic 60-hour week.
This means that there are many working for much less than £2·50 an hour, or £100 a week, which is well less than half the national average of £244 that has been cited in the Budget debates. That is well below the Council of Europe's decency threshold of £3·50 an hour, or £135 a week, which has been fixed for the whole of Europe. In reality, about 9.4 million adult workers in Britain earn less than the Council of Europe's decency threshold of £135 for a week's work. That is one in three of male manual workers in Britain.
The new earnings survey, to which I shall refer briefly without citing figures, spells out the fact that many workers in west Yorkshire are on less than £100 a week.
952
Many workers in Yorkshire, both manual and non-manual—these are predominantly women—earn significantly less than the decency threshold, or half the accepted national average.
Some may say that the remnants of the wages councils remain to deal with the issue. In 1987, 23 per cent. of the establishments checked by the councils were found to be paying less than the set levels. The clothing industry is one of the lowest of the low-paid industries, yet the Minister has been petitioned to abolish the wages council that sets wages in that industry and its hourly rate is £1·98 an hour.
A new minimum wages inspectorate is needed to replace the voluntary approach which has been tried and has failed. If the view is presented that most low-paid workers are women who do not need the money they earn—the so-called pin-money argument—and that home workers, who number about 250,000 in Britain, and piece-rate workers should not be counted, I shall press the argument for economic justice in our society by using the following quotation:
"Just remuneration for the work of an adult who is responsible for a family means remuneration which will suffice for establishing and properly maintaining a family and for providing security for its future."
I suggest that that should be our baseline approach. To generate a low-wage economy for a large minority in our society alongside the current economic boom for the rest of us is grossly unjust. It is pricing people into work at the expense of their families.
I shall use what little time remains to me to argue that a statutory minimum wage will not jeopardise the economy but will increase its efficiency. I could press the case that a national minimum wage operates effectively in many other countries. I could further ask, with the move to an integrated European labour market in 1992, what more opportune moment could there be to prepare for it by adopting the Council of Europe's decency threshold as the statutory minimum wage`' Without a commitment to a national minimum wage, we perpetuate the conditions that manufacture poverty in our society alongside the wealth of others.
The Bill offers an opportunity to change those conditions and to introduce a basic cornerstone that will enable us to tackle poverty in our society. The way to prevent poverty is to pay decent wages and not force families into the benefit system. I hope that the Bill will gain the support of the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Battlle, Mr. Frank Cook, Mr. Derek Fatchett, Ms. Clare Short, Mr. Chris Smith, Mr. Tony Blair, Mrs. Alice Mahon, Ms. Harriet Harman, Mr. Torn Clarke, Mr. Kevin Barron, Mr. Ian McCartney and Mr. Doug Henderson.

Statutory Minimum Wage
  STATUTORY MINIMUM WAGE
  Mr. John Battle accordingly presented a Bill to introduce a statutory minimum wage to be paid in all industries and services as a requirement on employers: 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 168.]
Orders of the Day
  British Steel Bill
  As amended (in the Standing Committee), further considered.
  British Steel Bill
    Clause 1

      VESTING OF PROPERTY ETC. OF BRITISH STEEL CORPORATION IN A SUCCESSOR COMPANY
      3.45 pm
      Mr. John Maxton: I beg to move amendment No. 10, in page 2, line 13, at end insert
      (7) The Secretary of State shall, after consultation with the appropriate trade unions, nominate to the board of the successor company two directors in the employee interest.'.
      In Committee, my hon. Friend the Member for Great Grimsby (Mr. Mitchell) moved two new clauses to ensure the appointment to the board of the new company of directors selected by the trade unions who represent workers in the steel industry. The new clauses tried to obtain a large representation for such directors on the board. I believe that one of the new clauses tried to establish that one fifth of the board should be worker directors or appointed by the trade unions. The new clauses were rejected by the Government, with their Tory majority, one because the Government claimed it was otiose, and the other on a matter of principle.
      This amendment is more modest. It does not suggest that the appointment should be made by the trade union movement. It proposes that the Government should appoint two directors to the board of the successor company after consultation with the appropriate trade unions. So in theory, if not necessarily in practice, the directors may not be members of the trade union. They may not work in the steel industry or even be the people suggested by the trade unions. We know that all Governments, and particularly this one, do not necessarily accept the advice of those they consult. To be honest, there is no reason why they should. Consulting does not necessarily mean taking the advice given.
      The only clear criterion that we are seeking to lay down for these two directors is that they should be appointed to represent the interests of the employees. Obviously, our amendment had to be different for procedural reasons. If it had been the same as the new clauses I doubt whether it would have been selected for debate. We hope that our more limited proposal will attract the support of the Government. It meets at least some of the objections that the Under-Secretary made during his rebuttal of our new clauses in Committee. He referred, as did my hon. Friend the Member for Motherwell, South (Dr. Bray) to the problems that arose when worker nominees were appointed to the steel board after nationalisation in the 1960s. In this case, however, the Government have the right to veto trade union nominees and to suggest their own names.
      During the debate in Committee the Under-Secretary of State, the hon. Member for Preston—
      The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins): South Ribble.
      Mr. Maxton: I apologise.
      The hon. Member for South Ribble (Mr. Atkins)—I thought that was a bus company—said:
      "I hope seriously that the Committee will not consider my next remark as patronising, but I am aware from experience in my own large and industrial constituency"—
      the Minister kept claiming that he was a powerful trade unionist—
      "that workers do not want to be directors involved on a daily basis with the management of the company. I have spoken to employees in Leyland Vehicles, British Aerospace and BTR. Employees want to make certain that their views can be heard. The complaint has always been about the channels of communication rather than about active participation in the direction of the company."
      That is exactly what our amendment seeks to do. It does not seek, as the new clauses sought, to put on the board worker directors appointed by trade unions. It says that we need two directors who will listen to the problems of the workers and will put those problems to the board. It meets exactly the point made by the Minister in Committee and creates a channel of communication between the employees and the board of directors. I hope that the Minister will note that.
      I accept that the amendment does not overcome the Minister's more basic objection, that the Government do not wish to put statutory restraints on a new company. That brings us to the basic philosophical divide between the Government and the Opposition. In Committee, the Minister said:
      "a director's responsibility is, first and foremost, to the company collectively … rather than to a specific electorate".—[Official Report, Standing Committee D, 28 April 1988; c. 815-17.]
      He was trying to suggest that all directors would maintain an interest in the employees of the company and that there was no need to appoint special directors for that purpose. I think that it was my hon. Friend the Member for Motherwell, South who told the Minister that a company is defined in law as the shareholders. Thus the sole responsibility of directors is to the shareholders and not in any way to the employees or to the community in which the company is based.
      The Government and their supporters believe that a company must be run to ensure the maximum profit for those who invest in it. They have little or no concern for the work force or for the rest of the community in which a company is based. If profits can be increased by so-called rationalisation, which as we all know is the polite word for closure, or if losses can be minimised by such a move, it is the interests of the shareholders which will be taken into account by the board of directors. They will not take account of the interests of the work force, those who have invested their labour, time and effort in the company. If profits can be increased by keeping down wages or by altering the conditions of employment, the directors have a responsibility and a duty to ensure that that happens. That is because their first responsibility is the profit of the shareholders.
      Employees who have perhaps given their whole working life to a company have a much greater investement in it than do some shareholders who have moved money in for profit and will move it out without a thought if that is the best way to get an increased return. They will sell the shares to whomever will give them the biggest price, whatever the nationality of the purchaser or his motives for buying.

      955
      The work force has more right to a say than the shareholders, because the very livelihood of workers depends on the success of the company. Directors from the work force may have a great deal more expertise about the running of the company than some non-executive directors. Such directors may he appointed by an insurance company or other institutional shareholders whose only interest is in ensuring profits for the company and who may have no knowledge whatever of the steel industry.
      In Committee, the Minister suggested that the right to purchase shares that the Government would give employees would give them the stake in the company that we are seeking, and that would lead to the appointment of worker directors. However, the Government's proposal for shareholdings for employees is so limited that it is highly unlikely that, even if all employee shareholders were to vote en masse, from top management down to labourer, they would have a voting share large enough to ensure a director on the board. I shall have further questions for the Minister about that.
      The Labour party does not believe that this modest amendment will give the work force any real power. In Committee, we repeatedly made it clear that we are opposed to privatisation, and that we believe that the steel industry would be best left in public hands, perhaps with changes that would give the work force a greater share and a greater say in how the company is run. Privatisation is bad for the British economy and for those who work in the steel industry. However, given that the Government majority will push it through, as well as opposing the Bill, we have a responsibility to ensure that if it becomes law, the employees in the industry are protected as best we can in difficult circumstances.
      Our two directors might be outvoted when the board suggests closure, but at least there would be someone to give the views of the workers and obtain some concessions from the board. Perhaps I am being over-optimistic in thinking that the Government might accept the principle of this proposal, but I live in hope.
      Mr. Michael Fallon: It would be churlish of the Conservative party not to recognise that the amendment is at least much more moderate than that tabled in Committee, and that the Labour party has come a long way from the days of Bullock and worker directors—the direction in which we were heading in the late 1970s. Although it is modest, the amendment is as flawed as the previous one because it assumes that the employees' interest is necessarily distinct and separate from the interest of the shareholders or the interest of the company as a whole.
      The hon. Member for Glasgow, Cathcart (Mr. Maxton) gave the game away when he said that the other directors would be interested only in profits. That is a misleading view of the duties, responsibilities and interests of the directors of a public company. A director of a public company is interested not simply in profits but in the success of that company and that enterprise, and that embraces the well-being of those who work for it.
      As well as being fundamentally flawed in principle by its reference to "employee interest", the amendment, if it were carried, would be defective in practice. Far from strengthening the channel of communication, as has been suggested, it would cut clean across it. For example, what would be the relationship between the two directors and
      956
      the local steel union convenors, or the national trade union committee, when it came to putting forward the employee interest? Who would be speaking for the employees—the trade unions or the two worker directors?
      Secondly, the amendment is defective in practice because it assumes, through its reference to "employee interest", that different directors have different interests and that there can be a specialist director—not simply one who is in a full-time or part-time capacity or is an executive or non-executive member, but specialist in the view that he takes of the duties of a director. It seems to me that those in the new category of worker director would be placed in the impossible and invidious position of weighing their general duties to the company and their general obligations to the shareholders against the particular interest that they should have in regard to their employees. I believe that that would place them in an impossible position and would be no recipe for the smooth running of an important public company. For those reasons, the amendment should be resisted.
      4 pm
      Mr. Barry Jones: Notwithstanding the cogency of the argument of the hon. Member for Darlington (Mr. Fallon), he will not be surprised when I say that I support my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), who made a very reasonable case.
      I consider that the British Steel Corporation work force, which is highly successful and co-operative, deserves extended rights to information, consultation and representation. I do not consider that any work force should be kept in the dark, especially because individual workers in the steel industry often devote their whole working lives to the industry. My hon. Friend, in proposing the amendment, made a strong case for a channel of communication.
      Ordinary working people should be involved at every level—on the shop floor through their trade unions. Certainly, the leadership of the trade unions at BSC Shotton would acknowledge that. The work force has earned the ability to get to the heart of the company now proposed. The steel industry has suffered closures, cuts and almost perpetual demanning. Throughout the 1980s, the work force of BSC has broken records and has given the company exemplary co-operation and immense loyalty. It deserves the facility proposed in the amendment.
      The amendment does not ask for a great deal. At a major turning point in the history of the industry in Britain, it will help to dispel suspicion and to promote co-operation. I recollect the worker-director scheme as it operated in the 1970s. At divisional level, the worker director of BSC Shotton, Mr. Jack Leonard, played a heroic role, and was the means of expressing the shop floor's views to the managing director. At main board level, the status of the director in the employee interest was very considerable. He could relate directly to the TUC's iron and steel committee and each union then disseminated information to its menbership in each steel works throughout the country.
      I urge the Government to accept this modest amendment, given that their proposals represent a turning point in the history of the industry.
      Mr. Elliot Morley: If the Government are serious about involving employees in any industry, they should accept the amendment, which relates to worker directors. We have heard about the valuable role of such a position in steel companies and how it has been a link between the work force, giving their trade unions a direct say on the board.
      If we are to make progress with industrial democracy, we should include such measures which have been pioneered by BSC and not go backwards, which is what the Government are doing, by throwing out of the window all the work in industrial democracy that has been done within BSC. The amendment would allow the reformed company to become a modern, progressive company, striving to compete in the steel market, and trying to set a model for industrial democracy and the involvement of its work force.
      If the work force is meaningfully involved in decision making, as well as the end product, the company will work better and more efficiently and the work force will have a greater commitment to it if the employees feel part of the company and their views are heard and taken into account.
      I have worked in industries where much of the manufacturing plant was designed as a result of suggestions from the work force, the people at the sharp end of production who often see ways of making production more efficient, cheaper and more cost-effective. Such progress is best brought about by direct involvement which does not give people a few pounds as a reward for their suggestions, but gives those who work in the industry a real say in decision-making and genuine involvement.
      Mrs. Margaret Ewing: In supporting the amendment, I reflect the views of my party, which firmly believes in employee participation as being a vital factor in improving industrial relations. The amendment concerns the steel industry, a vast, complex and significant industry for economic and social life. The vastness and complexity of the industry produces even stronger arguments for ensuring that employee directors are appointed to the new board. That would ensure that no part of the industry was seen in isolation from the rest of the industry and that there were clear channels of communication from the work force to the management, ensuring that full information about decisions is disseminated and fully comprehended by everyone. That would be a sounder basis for progress.
      The hon. Member for Darlington (Mr. Fallon) put forward rather a strange argument when he suggested that employee directors would in some way be at odds with other directors. It seems to me that they would have interests very similar to those of other directors. After all, employee directors would be concerned about the success of the steel industry, as they would be only too well aware that on that success hinged the future security and work prospects of a vast number of people. Therefore, they would participate fully, and would make sure that their views were heard and that any decisions would be to the advantage of everyone in the industry.
      This modest amendment gives the Government an opportunity to show the work force in British Steel, and those who will be employed in the steel industry after privatisation, that there is genuine concern to ensure that all aspects of the industry are explained and discussed by all those who consider that the industry will have a vital
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      impact on their future. That future surely includes the employees, and the Government have an ideal opportunity to express their commitment to the work force.
      Mr. Stuart Bell: The hon. Member for Darlington (Mr. Fallon) said that this was a modest amendment compared with what the Labour party and the Labour movement had in mind in the 1970s with the Bullock report. I well remember the report of Mr. Bullock, which was a great venture to bridge the terrible gap that had existed for a century between capitalism and labour. The ideas in the Bullock report originally came from General de Gaulle, who, from his lofty vision, wanted to find some way of achieving worker participation. He believed that workers ought to participate in the affairs of their companies, other than simply by selling their labour.
      In the 1970s, my right hon. Friend the Member for Chesterfield (Mr. Benn) pointed out that a working man invests most of his time, apart from his sleeping time, in the factory or the firm in which he works, and that that investment should have some return, other than simply a wage. De Gaulle had the idea of worker participation, which was taken up by Mr. Bullock in the 1970s and for which we had great hopes at that time.
      I remember a conversation with Lord Callaghan who was the Prime Minister of the time. We were discussing ways of getting the Bullock report on to the statute book. He pointed out that with no majority in the House it was impossible. Following the election in 1979, events turned away from the concept of involving workers in their factory other than through the sale of their labour.
      When General de Gaulle introduced worker participation, he also introduced a system in France with two sets of books. One set was for the workers on the board and one was for the other directors. When the Italians introduced worker participation, they had three sets of books—one for the directors who were not workers, one for the workers and a third for the tax man. That shows how things were done differently in Italy and France from the way we envisaged worker participation in Britain.
      I remember an incident in the 1970s when there was a worker participation experiment in Birtley. A trade unionist on the board of a company in Birtley went to a meeting with the management and came back at 5 o'clock with the management proposals. He told the workers that those proposals ought to be accepted by the workers. The workers tied him to a chair an kept him there all night. They said, "That is what we do with those who come here as worker directors with proposals from the management." Therefore, that experiment came to a sorry end and again we failed to convince the work force that there was an interest for them in having proper participation.
      As the hon. Member for Darlington said, this is a modest amendment and one which reflects the fact that the Opposition are unable to make progress other than by way of persuasion. We cannot take on the massed battalions of Tory Members in the Division Lobby. Therefore, we are seeking to persuade the Government that it is an appropriate amendment, worthy of consideration and acceptance.
      We must bear in mind the long tradition in the steel industry of worker directors. In the 1960s the steel industry pioneered the idea of worker directors. A series of worker directors over many years were successful in linking the work force of BSC with the management in the best interests of the company and the country. Therefore, we

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      have seen successful worker participation in the steel industry and that is why we have tabled the amendment, however modest it may be. We wish to see continued involvement of the work force at board level with BSC or its successor company and prior to privatisation.
      I make those comments in the interests of my constituents on Teesside who work within the British Steel Corporation. In 1979 there were some 25,000 workers in the steel industry on Teesside and that has been reduced to about 7,000. Many thousands receive a British Steel Corporation pension and they were rudely surprised to learn that under the new social security measures introduced by the Government they were net losers. Taking into account their BSC pension, they were to lose some of the state benefits to which they had become accustomed prior to the change in legislation. As my right hon. Friend the Member for Chesterfield said, those men and some women—although not many—invested their working lives in the steel industry and now see their pensions cut by the Government. That is a great disappointment to those people, as it was to others, who had seen the steel industry as a bastion of the economy on Teesside.
      We do not wish to see a privatised steel industry without the worker participation that we desire. We do not wish to see the links between workers and management cut so that they are adrift and we return to a society of "them and us".
      The 7,000 or so who continue to work in the steel industry on Teesside look forward to the future of British Steel on Teesside in their interests as workers and as part of the local economy. They wish to see their representatives on the board of the company. We do not know whether the massive takeover of BSC will be followed by the setting up of regional boards with regional input, but if that happens there may be directors on those boards. Certainly, the workers want an opportunity to have their voices heard through worker directors. We ask the Government to take the amendment seriously and to consider it in the best interests of co-operation between labour and capital in the future.
      4.15 pm
      Mr. Atkins: The substance of the debate is reminiscent of the "them and us" mentality that has characterised the Labour party's industrial relations policy for many years. In many respects, it harps back to the days when that sort of tokenism caused some difficulties. Labour Members, particularly as the party is presently constituted, always assume that the Government and the Conservative party are somehow anti-union and opposed—[Interruption.] As the House will recall, at the previous election and the election before that a substantial number—in the 1983 election, a majority—of trade union members voted Conservative rather than for the parties represented by Opposition Members. In those circumstances, Opposition Members have to be cautious in making the assumption that the Government are anti-union.
      Far be it from me to remind the hon. Member for Glasgow, Cathcart (Mr. Maxton) that, like him, I am a member of what was the Association of Scientific, Technical and Managerial Staffs and is now Manufacturing, Science, Finance. I suspect that I have done as much work in my union activities as he has. I also suspect that that work has been more effective, as I am in
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      government and he is not. To that extent, I am not unfamiliar with or unsupportive of trade union activities. The hon. Gentleman will know that, as we discussed the matter in Committee.
      The experience of the past, as represented by the difficulties experienced by Sir Charles Villiers and others, with worker directors was that the divisions caused within the trade union movement and with the worker directors was such that they did not want to continue to do the job with which they were faced. I can do no better than repeat what I said in Committee:
      "directors have Companies Act responsibilities, as well as moral and industrial responsibilities for their employees' quality of life—for example, concerning pension funds, industrial relations and so on".— [Official Report, Standing Committee D, 28 April 1988; c. 819-20.]
      The hon. Gentleman will know that Jack Eccles, who is on the board now, does a remarkable job. He does so because of his experience, knowledge and understanding and not simply because he is a trade unionist, albeit a distinguished one.
      It is worth recording that the Government and, more especially in this context, the company recognise the important contribution that has been made by the trade unions in the British steel industry over the years, particularly through the trying and difficult times that it has experienced in recent years. They respect trade unions and understand their requirement to represent their members' interests. They wish that to continue after privatisation. I have no reason to suppose that the excellent relationships between the chairman and the various trade unions representatives as well as other members within the company will not continue to be as good as they were in the past.
      The directors of the successor company will be appointed by the company in conformity with the provisions of the Companies Act. The Secretary of State will have a role in that process to the extent that he is a shareholder. As I have said, such matters are governed by the Companies Act and it is not our intention that the Secretary of State should have any additional powers of the sort proposed by the amendment. The successor company should not be subject to any more statutory intervention than other Companies Act companies. It will appoint directors on their merits and it would be inappropriate to provide for statutory intervention by the Secretary of State.
      Mr. Maxton: As the Minister said, the Secretary of State will be the only shareholder in the company when it is first set up. Does he intend to appoint two trade union representatives to the board at that stage? If the Minister was prepared to say that, it might make some difference to our vote.
      Mr. Atkins: The Secretary of State may or may not appoint various people, but he will appoint individuals on their merits, and not because they are trade unionists or anything else.
      Mr. Bryan Gould: It is relevant.
      Mr. Atkins: Of course it is relevant; the hon. Gentleman makes the point that he made in Committee. Of course trade unions have a part to play. I speak as a trade unionist myself, and I understand the contribution that trade unions have to make. However, as my hon. Friend the

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      Member for Darlington (Mr. Fallon) put it so eloquently, we do not believe in tokenism, because we believe that the time for that has passed.
      The issue of worker directors was discussed at considerable length in Committee, and we had a particularly interesting debate on it. We concluded that there was a philosophical divide. I emphasise that, at least on my part—and I suspect on that of my hon. Friends who served on the Committee—there was no anti-trade union bias. There was simply a difference of attitude. Conservative Members believe that management should manage and trade unions should represent the interests of the employees.
      Mr. Gould: As the Minister said, we had an interesting debate in Committee. On that occasion, he appeared to take the view that the fact that a person represented the work force disqualified him from having the objectivity that might be required of a director. Is that still his view?
      Mr. Atkins: As I recall, I said that all directors had a Companies Act responsibility for everything that went on in the company, which includes matters related to employees. If a group of people were elected or selected—whatever phrase we use—directors to represent a particular interest, that would, by definition, conflict with their Companies Act responsibility, which is to represent interests wider than those of a specific group. That is why it is vital that directors should be selected on their merits rather than specifically to represent a particular group of people.
      Mr. Maxton: I find that slightly surprising. Is the Minister saying that, if one of the banks finishes up with a major shareholding in one of the companies, that bank will not insist on having a nominee on the board to represent its own interests rather than those of the whole company?
      Mr. Atkins: Not necessarily. I do not see how the hon. Gentleman's question conflicts with my last point. I emphasised that we select on merit. I have already said that someone like Jack Eccles—[Interruption.] That does not destroy the point. Hon. Members must not make sedentary interventions that disprove their own point. I have emphasised that Jack Eccles, with his experience and expertise, has contributed greatly to the affairs of the board and the company. He was selected on merit and I hope that that policy will continue, rather than the tokenism that Opposition Members persist in advocating merely because they believe that they are the only people who represent the trade union movement, which is clearly not the case.
      Mr. Morley: Part of the problem in the past was that on occasions worker directors were used to apologise for hostile company action threatening the work force. However, the amendment could be used to take a new and imaginative direction in industrial relations. For example, in the share offer the total equity given to the work force could be 25 per cent. The Government could hold a 50 per cent. golden share and 25 per cent. could be sold on the open market. The work force would then have a direct involvement and we could have radical and progressive attitudes to industrial democracy rather than what is in the Bill.
      Mr. Atkins: I do not agree that the approach is new and imaginative. As I said, I think that it is a very old-fashioned approach, which has been tried in part and did not work. Our belief in employee participation is based largely on the fact that we believe that employees should be owners of their companies in the sense of being shareholders. Many trade unions have already suggested that they believe that they can exert pressure on the direction of the company—guiding the board of directors—by virtue of having a portion of the shares to give them the right to influence events and as shareholders. That is what we would prefer.
      I emphasise yet again that it is a mistake for Opposition Members to think that the amendment would protect the interests of trade union representatives and employees. We believe that argument to be fundamentally flawed.
      Mr. Morley: The Minister may have missed what I said. Although the share issue has already been announced, the percentage has not been announced. I suggested that the amendment could be linked to giving 25 per cent. of the total share issue to the work force, which force would then have not only a direct involvement through the share issue but a more meaningful involvement through the worker director arrangements.
      Mr. Atkins: Employees will have the chance to buy shares under what will be one of the more generous schemes in the privatisation process with which the Government have been associated. I can speak only from personal experience. I have a semi-industrial constituency and I know people in companies such as Leyland, British Aerospace and others who are actively involved in the day-to-day running of large concerns. The view of my constituents—except those whose politics are extreme in either direction—is, broadly speaking, that management is there to manage and trade unions are there to represent employees' interests. That view is also held by many trade unionists.
      Communication is the most important aspect of the day-to-day running of a company. Much of the criticism arises not because employees want someone on the board to represent their interests but because they would prefer to know what is going on on a more regular basis so that they can participate through their negotiating procedures and through the structure of the trade union as it is involved in pay bargaining, conditions of employment and so on. Employees would prefer not to be involved as directors in the day-to-day management of the company.
      There was a philosophical divide on that between Conservative and Labour Members in Committee. I urge the hon. Member for Glanford and Scunthorpe (Mr. Morley) to read the relevant debate. While he is clearly more likely to agree with his hon. Friends, I think that he will find the debate interesting. I return to the point that I have been making all along. The directors are there to look after the interests of all those involved in the company. The Government are not hostile to trade unions, because we believe strongly that they have the right to exist, to negotiate and carry out their day-to-day activities on behalf of their members. However, we believe that tokenism as represented by the amendment is an old-fashioned process rather than a modern one.
      Mr. Gould: The Minister is being characteristically generous in giving way. It is important that we should get on record the essential divide between us. As I understand

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      it, the Minister is saying that whoever the shareholders are and however temporary and short-lived their interests, they are entitled to have those interests represented and protected on the board and therefore to have control over the direction of the enterprise. The work force, whose members are so much more closely involved, as their lives and livelihoods depend on the enterprise, are apparently disqualified by that fact alone from representation and from having their interests protected. Is that what the Minister is saying?
      Mr. Atkins: We share the desire to ensure that employees are represented in the day-to-day running of the company. However, it is a legal requirement of the Companies Act that a director should have at the centre of his decisions and concern the interests of all those in the company, whatever their involvement. We do not believe that worker directors are necessary, and such arrangements have failed in the past. In those circumstances—as I have tried to indicate on a personal basis if no other—my understanding and experience suggest that most people involved in a company's day-to-day activities prefer to get on with the job in hand. They want to know what the company is about and to understand through communication and a variety of other ways where the company is heading and to know of its successes and problems.
      They also want to know what the future holds and how they may best improve their work processes, and so on. However, they do not want to be involved at board level. If the hon. Gentleman asked many people working in industry, he would find that such a view is generally held. Perhaps it is not held by trade union activists, who may wish to become members of the board and are probably prejudiced.
      4.30 pm
      Mr. William Powell: It has been suggested to my hon. Friend that shareholders may have only a short-term interest in the company whereas an employee is likely to have a long-term interest. Will he confirm that a shareholder is just as likely to have a long-term interest as an employee, and that an employee is just as likely to have a short-term interest in the company as a shareholder?
      Mr. Atkins: My hon. Friend, who is an authority on these matters, speaks with considerable truthfulness. He represents a steel constituency, and he understands the work force at Corby, albeit residual, better than most. He is in a position to speak knowledgeably. Many trade union pension funds are involved, on a day-to-day basis, in share ownership. Opposition Members may themselves be shareholders in that way.
      We have explored this issue at great length. Opposition Members have tried to suggest that the Government are opposed to trade unions and are not prepared to accept the amendment because we want to do trade unions down yet again. I have demonstrated, at least to the satisfaction of my hon. Friends, that such is not the case.
      Mr. Gould: What there are of them.
      Mr. Atkins: It is an indication that they are unconcerned by the threat which the hon. Gentleman purports to present, as would seem to be the case among Opposition Members, given the paucity of numbers on the hon. Gentleman's own Benches during the passage of what is, by the Opposition's own standards, a highly
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      controversial Bill. This matter was explored at length in Committee, in a debate which was worth hearing arid reading. I reject the essence of what is being proposed in the amendment and urge my hon. Friends to do so.
      Mr. Maxton: I am not surprised at the Minister's reply. I commented at the end of my opening remarks that I live ever in hope and that I am one of nature's born optimists—or so my wife is always telling me. However, obviously, I was wrong. It was inevitable that the Government would make their argument about token trade unionists. If we are to speak of tokenism, the Minister is clearly the Government's own token trade unionist on the Front Bench—there are not many others. As to his membership of ASTMS, now the MSF, to which we both belong, it actively campaigned to have me elected to the House, but I am not sure that it did the same for the Minister. I am rather convinced that it did the opposite.
      Mr. Atkins: The hon. Gentleman should be careful in suggesting that I am a token trade unionist. If he examines any of the records of Members' interests, he will discover that many Government Members are trade unionists. More important, an even greater number of Government Members were elected by the majority of trade unionists in their constituencies voting Conservative.
      Mr. Bob Cryer: Most of them are directors who are lining their pockets as fast as they can.
      Mr. Maxton: I shall not respond to my hon. Friend's sedentary intervention, but I shall sit down if he wishes to speak.
      Perhaps those on the Government Front Bench would like to declare their trade union membership—except for
      the hon. Member for South Ribble (Mr. Atkins). They might be rather pushed to do so—I do not imagine that Lloyd's is a trade union.
      The Minister made a smooth reply—I believe that one of my hon. Friends called it a smarmy reply—and made great play of his trade union membership and of the Government's belief in trade unionism and he spoke of the Government's wish to see active unions getting on with the job, yet they accuse us all the time of tokenism. We cannot win this argument. In Committee, we tabled a strong new clause suggesting that one fifth of the board should comprise trade union members appointed by the unions. We were then accused of extremism and of going over the top. When we make a more modest proposal, we are accused by the hon. Member for Darlington (Mr. Fallon) of backing off from our commitment to worker participation.
      We accept that the Tory party is the Government and that we have to work within their bounds, however much we may dislike them. That is why we made a reasonably modest proposal for trade union participation. Our commitment to involving the work force in company decisions is not token. It is not tokenism to have as members of a board people representing the trade union movement. Far from that being a backward step, it is a step forward. The backward step is that being taken by the Government in suggesting privatisation in the first place. It is the Government who are attempting to return industrial relations and the ownership of companies to the conventions operated in the 19th century, let alone the 1960s or 1970s.

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      It is astonishing that any Conservative Member should say that he supports unions and that the Government have not spent the past seven years attempting to destroy the trade union movement, when that is the Government's aim. The trade union movement is, quite rightly, linked to my own party. The Prime Minister has said that it is one of her prime objectives to destroy Socialism. In my view, that can only be achieved by destroying trade unions as well.
      In replying to the amendment, the Minister raised a number of interesting points. It is clear now that, once the Bill is enacted and the new Companies is established under the Companies Acts, there will be only one shareholder, the Secretary of State. Speaking in terms of the present Government, it will be the Chancellor of the Duchy of Lancaster who will be that single shareholder. It will be he who appoints the board of directors. Our view is that at least two of the directors, the Chancellor of the Duchy of Lancaster having discussed this matter with the steel unions, ought to represent the industry's workers and all the employees—not just those who work on the shop floor.
      The Minister has stated that he will appoint to the board people with appropriate qualifications. We have a right to know—and have not been told this at any stage—what qualifications will be required, who the Minister has in mind, and from what source those directors will be drawn. I presume that British Steel's present chairman, Sir Robert Scholey, and Jake Stewart may be among them, but who else?
      Mr. Atkins: Wait and see.
      Mr. Maxton: That is the trouble. That was the Minister's answer to almost every question put to him throughout the whole of the Committee stage. This is an enabling Bill designed to give the Government carte blanche to do whatever they damn well like with the steel industry once it has been privatised. That is what is wrong with the Bill. We do not know who will be on the board of directors that is to run the country's steel industry.
      What will happen when the flotation takes place? Will the new shareholders necessarily accept the board of directors appointed by the Secretary of State? Perhaps, although I consider it very unlikely. The employee shareholding will be such that the employee shareholders will say, "Hey, we are not accepting this board of directors. You can get rid of him, or her, for a start. We want our director in his place." What would be the Secretary of State's answer to that? Will a new board of directors be appointed immediately after flotation?
      I am afraid that the Minister is wrong. It seems highly likely that one of the big institutional investors will gain a large shareholding, as I do not believe that the average punter will buy many shares. If the company is to be sold at all, it will be sold to the big investment companies and share institutions, because that is the nature of the industry. If Barclays bank, the Bank of Scotland, the Royal Bank of Scotland or an insurance company obtains a large bulk of shares, it will probably insist that one of the directors represents it on the board, which is normal, standard practice in business. That person is there not to represent the whole company and look after its interests, but to represent that particular institution and ensure that its shareholding is looked after. He is interested in one of
      966
      two things: either a high return in profits, or boosting the share price so that he can sell at a good price and get out of the company altogether.
      Mr. Atkins: Why do the hon. Gentleman and many of his hon. Friends think that profit is a dirty word? Profit, after all, is the lubricant that makes the company expand, which is to the benefit of all those working in it—particularly the employees.
      Mr. Maxton: We do not believe that profit is a dirty word. We do, however, believe that profit generated by an industry should be used properly for the benefit of both the industry and the employees within it. That is not the track record of free-market capitalism, either in the past or in the present. We cannot guarantee that the unbridled profit motive will allow proper attention to be paid to the interests of employees, or the community in which industries are based. The company is interested primarily in making a profit for the shareholders. That is the law as it stands, and the Government have reinforced it continually. The shareholder is the company, and the interests of the shareholder—the profit of the shareholder—are inevitably the major concern of a company once it moves into private hands.
      Dr. John Reid: I have always understood, with my lack of economic knowledge, that in general terms profit is a return to an investor on a capital investment. Given that the thousands of millions of pounds invested over the past 10 years have been invested by the taxpayer, will my hon. Friend ask the Minister when the profit will be returned to them over the next five years, now that British Steel is in a healthy condition?
      Mr. Maxton: We asked that question time and again in Committee, and the Minister never gave us an answer. He may yet have an opportunity during the evening, or perhaps the Chancellor of the Duchy of Lancaster, as he was not on the Committee, may take the opportunity to answer it on Third Reading.
      However modest this proposal, I consider that it is realistic and would serve the interests of the work force. It is not tokenism, but a genuine attempt to ensure proper communications between work force and management, in which we believe. It is not we who believe in the "them and us" view of our industries; it is the Government, who have reinforced that attitude and made it worse over the past eight years. We believe in genuine co-operation, and good management in this country knows that such co-operation is the best way of achieving higher productivity. It is a great pity that the Government do not believe in it as well.
      I ask my hon. Friends to support the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 192, Noes 244.

      Division No. 310]

      [4.44 pm

      AYES

      Abbott, Ms Diane

      Bell, Stuart

      Allen, Graham

      Benn, Rt Hon Tony

      Anderson, Donald

      Blair, Tony

      Archer, Rt Hon Peter

      Boateng, Paul

      Armstrong, Hilary

      Boyes, Roland

      Ashley, Rt Hon Jack

      Bradley, Keith

      Banks, Tony (Newham NW)

      Bray, Dr Jeremy

      Barnes, Harry (Derbyshire NE)

      Brown, Gordon (D'mline E)

      Barron, Kevin

      Brown, Nicholas (Newcastle E)

      Battle, John

      Bruce, Malcolm (Gordon)

      Beckett, Margaret

      Buchan, Norman

      Beith, A. J.

      Buckley, George J.

      967

      Caborn, Richard

      Janner, Greville

      Campbell, Menzies (Fife NE)

      John, Brynmor

      Campbell, Ron (Blyth Valley)

      Jones, Barry (Alyn & Deeside)

      Campbell-Savours, D. N.

      Kaufman, Rt Hon Gerald

      Canavan, Dennis

      Kennedy, Charles

      Carlile, Alex (Mont'g)

      Kinnock, Rt Hon Neil

      Cartwright, John

      Kirkwood, Archy

      Clark, Dr David (S Shields)

      Lambie, David

      Clarke, Tom (Monklands W)

      Leighton, Ron

      Clay, Bob

      Lestor, Joan (Eccles)

      Clwyd, Mrs Ann

      Lewis, Terry

      Coleman, Donald

      Livsey, Richard

      Cook, Frank (Stockton N)

      Lloyd, Tony (Stretford)

      Cook, Robin (Livingston)

      Loyden, Eddie

      Corbett, Robin

      McAllion, John

      Corbyn, Jeremy

      McAvoy, Thomas

      Cousins, Jim

      McCartney, Ian

      Cox, Tom

      McFall, John

      Crowther, Stan

      McKay, Allen (Barnsley West)

      Cryer, Bob

      McKelvey, William

      Cummings, John

      McLeish, Henry

      Cunliffe, Lawrence

      McTaggart, Bob

      Cunningham, Dr John

      Madden, Max

      Dalyell, Tarn

      Mahon, Mrs Alice

      Darling, Alistair

      Marshall, Jim (Leicester S)

      Davies, Rt Hon Denzil (Llanelli)

      Martin, Michael J. (Springburn)

      Davies, Ron (Caerphilly)

      Martlew, Eric

      Dewar, Donald

      Maxton, John

      Dixon, Don

      Meale, Alan

      Dobson, Frank

      Michael, Alun

      Doran, Frank

      Michie, Bill (Sheffield Heeley)

      Douglas, Dick

      Michie, Mrs Ray (Arg'l & Bute)

      Dunnachie, Jimmy

      Millan, Rt Hon Bruce

      Dunwoody, Hon Mrs Gwyneth

      Moonie, Dr Lewis

      Eadie, Alexander

      Morgan, Rhodri

      Eastham, Ken

      Morley, Elliott

      Ewing, Harry (Falkirk E)

      Morris, Rt Hon A. (W'shawe)

      Ewing, Mrs Margaret (Moray)

      Mowlam, Marjorie

      Fatchett, Derek

      Mullin, Chris

      Faulds, Andrew

      Murphy, Paul

      Fearn, Ronald

      Nellist, Dave

      Field, Frank (Birkenhead)

      O'Neill, Martin

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

      Orme, Rt Hon Stanley

      Fisher, Mark

      Parry, Robert

      Flannery, Martin

      Patchett, Terry

      Flynn, Paul

      Pike, Peter L.

      Foot, Rt Hon Michael

      Powell, Ray (Ogmore)

      Foster, Derek

      Primarolo, Dawn

      Foulkes, George

      Radice, Giles

      Fyfe, Maria

      Randall, Stuart

      Galbraith, Sam

      Redmond, Martin

      Galloway, George

      Rees, Rt Hon Merlyn

      Garrett, John (Norwich South)

      Reid, Dr John

      Garrett, Ted (Wallsend)

      Richardson, Jo

      Gilbert, Rt Hon Dr John

      Roberts, Allan (Bootle)

      Godman, Dr Norman A.

      Rooker, Jeff

      Golding, Mrs Llin

      Ruddock, Joan

      Gould, Bryan

      Sheerman, Barry

      Graham, Thomas

      Sheldon, Rt Hon Robert

      Grant, Bernie (Tottenham)

      Short, Clare

      Grocott, Bruce

      Skinner, Dennis

      Hardy, Peter

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

      Harman, Ms Harriet

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

      Hattersley, Rt Hon Roy

      Soley, Clive

      Haynes, Frank

      Spearing, Nigel

      Healey, Rt Hon Denis

      Steel, Rt Hon David

      Heffer, Eric S.

      Steinberg, Gerry

      Henderson, Doug

      Strang, Gavin

      Hogg, N. (C'nauld & Kilsyth)

      Straw, Jack

      Holland, Stuart

      Taylor, Mrs Ann (Dewsbury)

      Home Robertson, John

      Thomas, Dr Dafydd Elis

      Hood, Jimmy

      Thompson, Jack (Wansbeck)

      Howarth, George (Knowsley N)

      Vaz, Keith

      Howell, Rt Hon D. (S'heath)

      Wall, Pat

      Howells, Geraint

      Wallace, James

      Hoyle, Doug

      Walley, Joan

      Hughes, John (Coventry NE)

      Wareing, Robert N.

      Hughes, Robert (Aberdeen N)

      Welsh, Andrew (Angus E)

      Hughes, Roy (Newport E)

      Welsh, Michael (Doncaster N)

      Illsley, Eric

      Wigley, Dafydd

      968

      Williams, Rt Hon Alan

      Wray, Jimmy

      Williams, Alan W. (Carm'then)

      Young, David (Bolton SE)

      Wilson, Brian

      Winnick, David

      Tellers for the Ayes:

      Wise, Mrs Audrey

      Mr. Allen Adams and

      Worthington, Tony

      Mr. Adam Ingram.

      NOES

      Adley, Robert

      Fox, Sir Marcus

      Alexander, Richard

      Franks, Cecil

      Alison, Rt Hon Michael

      French, Douglas

      Allason, Rupert

      Gale, Roger

      Amos, Alan

      Gardiner, George

      Arbuthnot, James

      Garel-Jones, Tristan

      Arnold, Jacques (Gravesham)

      Gill, Christopher

      Ashby, David

      Goodhart, Sir Philip

      Atkins, Robert

      Goodlad, Alastair

      Atkinson, David

      Goodson-Wickes, Dr Charles

      Baker, Nicholas (Dorset N)

      Gorman, Mrs Teresa

      Batiste, Spencer

      Gorst, John

      Beaumont-Dark, Anthony

      Gow, Ian

      Bellingham, Henry

      Gower, Sir Raymond

      Bendall, Vivian

      Greenway, Harry (Baling N)

      Bennett, Nicholas (Pembroke)

      Greenway, John (Ryedale)

      Benyon, W.

      Griffiths, Sir Eldon (Bury St E')

      Biffen, Rt Hon John

      Griffiths, Peter (Portsmouth N)

      Biggs-Davison, Sir John

      Grist, Ian

      Blackburn, Dr John G.

      Ground, Patrick

      Blaker, Rt Hon Sir Peter

      Grylls, Michael

      Bonsor, Sir Nicholas

      Gummer, Rt Hon John Selwyn

      Boscawen, Hon Robert

      Hamilton, Neil (Tatton)

      Boswell, Tim

      Hannam, John

      Bottomley, Mrs Virginia

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

      Bowden, A (Brighton K'pto'n)

      Hargreaves, Ken (Hyndburn)

      Bowden, Gerald (Dulwich)

      Harris, David

      Bowis, John

      Haselhurst, Alan

      Boyson, Rt Hon Dr Sir Rhodes

      Hawkins, Christopher

      Braine, Rt Hon Sir Bernard

      Hayes, Jerry

      Brandon-Bravo, Martin

      Hayhoe, Rt Hon Sir Barney

      Brazier, Julian

      Hayward, Robert

      Brittan, Rt Hon Leon

      Heathcoat-Amory, David

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

      Heddle, John

      Bruce, Ian (Dorset South)

      Hicks, Mrs Maureen (Wolv' NE)

      Buchanan-Smith, Rt Hon Alick

      Hicks, Robert (Cornwall SE)

      Burns, Simon

      Higgins, Rt Hon Terence L.

      Butcher, John

      Hill, James

      Butler, Chris

      Hogg, Hon Douglas (Gr'th'm)

      Butterfill, John

      Holt, Richard

      Carlisle, John, (Luton N)

      Hordern, Sir Peter

      Carrington, Matthew

      Howard, Michael

      Carttiss, Michael

      Howarth, G. (Cannock & B'wd)

      Channon, Rt Hon Paul

      Howell, Ralph (North Norfolk)

      Chapman, Sydney

      Hughes, Robert G. (Harrow V/)

      Chope, Christopher

      Hunt, David (Wirral W)

      Churchill, Mr

      Hunt, John (Ravensbourne)

      Clark, Sir W. (Croydon S)

      Hunter, Andrew

      Clarke, Rt Hon K. (Rushcliffe)

      Irvine, Michael

      Conway, Derek

      Irving, Charles

      Coombs, Anthony (Wyre F'rest)

      Jack, Michael

      Coombs, Simon (Swindon)

      Janman, Tim

      Couchman, James

      Jessel, Toby

      Cran, James

      Johnson Smith, Sir Geoffrey

      Currie, Mrs Edwina

      Jones, Gwilym (Cardiff N)

      Davis, David (Boothferry)

      Jones, Robert B (Herts W)

      Day, Stephen

      Jopling, Rt Hon Michael

      Devlin, Tim

      Kellett-Bowman, Dame Elaine

      Dickens, Geoffrey

      Key, Robert

      Dorrell, Stephen

      Kilfedder, James

      Douglas-Hamilton, Lord James

      Kirkhope, Timothy

      Durant, Tony

      Knapman, Roger

      Dykes, Hugh

      Knight, Greg (Derby North)

      Evennett, David

      Knight, Dame Jill (Edgbaston)

      Fallon, Michael

      Knowles, Michael

      Farr, Sir John

      Knox, David

      Favell, Tony

      Lamont, Rt Hon Norman

      Fenner, Dame Peggy

      Lang, Ian

      Field, Barry (Isle of Wight)

      Lawrence, Ivan

      Finsberg, Sir Geoffrey

      Lennox-Boyd, Hon Mark

      Fookes, Miss Janet

      Lilley, Peter

      Forth, Eric

      Lloyd, Peter (Fareham)

      969

      Lord, Michael

      Renton, Tim

      McCrindle, Robert

      Rhodes James, Robert

      Macfarlane, Sir Neil

      Ridley, Rt Hon Nicholas

      Mac Kay, Andrew (E Berkshire)

      Ridsdale, Sir Julian

      Maclean, David

      Roe, Mrs Marion

      McLoughlin, Patrick

      Rossi, Sir Hugh

      McNair-Wilson, M. (Newbury)

      Rost, Peter

      McNair-Wilson, P. (New Forest)

      Rowe, Andrew

      Madel, David

      Rumbold, Mrs Angela

      Major, Rt Hon John

      Sackville, Hon Tom

      Malins, Humfrey

      Sainsbury, Hon Tim

      Mans, Keith

      Shaw, David (Dover)

      Maples, John

      Shaw, Sir Michael (Scarb')

      Marland, Paul

      Shelton, William (Streatham)

      Marlow, Tony

      Shephard, Mrs G. (Norfolk SW)

      Marshall, Michael (Arundel)

      Shepherd, Richard (Aldridge)

      Martin, David (Portsmouth S)

      Sims, Roger

      Mates, Michael

      Skeet, Sir Trevor

      Mawhinney, Dr Brian

      Smith, Tim (Beaconsfield)

      Maxwell-Hyslop, Robin

      Soames, Hon Nicholas

      Meyer, Sir Anthony

      Speller, Tony

      Mills, lain

      Spicer, Michael (S Worcs)

      Mitchell, Andrew (Gedling)

      Squire, Robin

      Moate, Roger

      Stanbrook, Ivor

      Monro, Sir Hector

      Stern, Michael

      Moore, Rt Hon John

      Stevens, Lewis

      Moss, Malcolm

      Stewart, Andy (Sherwood)

      Moynihan, Hon Colin

      Summerson, Hugo

      Mudd, David

      Taylor, John M (Solihull)

      Nelson, Anthony

      Taylor, Teddy (S'end E)

      Neubert, Michael

      Temple-Morris, Peter

      Newton, Rt Hon Tony

      Thompson, D. (Calder Valley)

      Nicholson, David (Taunton)

      Thorne, Neil

      Nicholson, Emma (Devon West)

      Thornton, Malcolm

      Onslow, Rt Hon Cranley

      Townend, John (Bridlington)

      Oppenheim, Phillip

      Townsend, Cyril D. (B'heath)

      Page, Richard

      Trippier, David

      Paice, James

      Waddington, Rt Hon David

      Patnick, Irvine

      Wakeham, Rt Hon John

      Patten, Chris (Bath)

      Walker, Bill (T'side North)

      Patten, John (Oxford W)

      Walters, Dennis

      Pattie, Rt Hon Sir Geoffrey

      Warren, Kenneth

      Pawsey, James

      Watts, John

      Peacock, Mrs Elizabeth

      Wheeler, John

      Porter, David (Waveney)

      Widdecombe, Ann

      Portillo, Michael

      Wilkinson, John

      Powell, William (Corby)

      Wilshire, David

      Price, Sir David

      Wood, Timothy

      Raffan, Keith

      Raison, Rt Hon Timothy

      Tellers for the Noes:

      Rathbone, Tim

      Mr. Richard Ryder and

      Redwood, John

      Mr. Kenneth Carlisle.

      Question accordingly negatived.

    Clause 2

      REDUCTION AND SUBSEQUENT EXTINGUISHMENT OF CORPORATION'S PUBLIC DIVIDEND CAPITAL
      Mr. Gould: I beg to move amendment No. 24, in page 2, line 16, leave out from 'by' to end of line 19 and insert
      'an amount equal to the accumulated historical cost losses on vesting day, thereby extinguishing those losses.'.
      Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take the following amendments: No. 3, in page 2, line 16, after 'amount', insert
      'not exceeding 10 per cent. of the total'.
      No. 25, in page 2, line 38, at end add—
      `(5) The Secretary of State shall direct that a public investment reserve be created of an amount equal to the reduction of public dividend capital under subsection (1) above which—

      (a) so long as it exists, ranks for dividends on the same basis as an equivalent nominal amount of share capital in the successor company which is held by the Secretary of State; and

      970

      (b) may be extinguished at any time by payment by the successor company to the Secretary of State of the then current market value of the equivalent nominal value of the share capital so extinguished'.

      No. 6, in page 5, line 6, leave out '("the statutory reserve")' and insert
      'which shall be known as the British Steel Investment Reserve and used exclusively for the purposes of investment in new plant and training.'.
      No. 7, in page 5, line 7, leave out subsections (2) to (4).
      No. 26, in page 5, line 7, leave out from 'reserve' to end of line 23 and insert
      'shall rank for dividends on the same basis as an equivalent nominal amount of share capital in the successor company which is held by the Secretary of State.
      (2a) The statutory reserve may be extinguished at any time by payment by the successor company to the Secretary of State of the then current market value of the equivalent nominal value of the share capital so extinguished'.
      No. 28, in page 5, line 14, leave out from 'applied' to end of line 16 and insert
      'to investment in plant or capacity or to sustain plants threatened with closure.'.
      Mr. Gould: The amendments bear upon clauses 2, 3 and 7 which are, in many respects, at the heart of the Bill. The Bill is, of course, principally concerned with the capital restructuring of the British Steel Corporation so that it can be prepared for privatisation and its assets and liabilities vested in the successor company in such a way as to comply with companies legislation.
      A way must be found of taking over a corporation that has accumulated considerable losses and has, accordingly, drawn substantially on taxpayers' financial support. That is essentially the problem faced by the Government, and it causes us great concern. We must find a way of taking account of that and of writing off a good deal of the indebtedness and losses so that the assets and liabilities can be put in a proper form to comply with company legislation.
      However, the Government appear to be trying to draw a line at the point where the corporation ceased to make losses and moved into profit and to provide that, until that point, those losses were the taxpayers' responsibility, but that after that point, any profits should be available to the new private owners. We are concerned about that aspect and wish to quiz Ministers about it.
      We are assured that none of this involves any subsidy of any sort. One understands exactly why that firm protestation should be made. Apart from any anxiety that might arise on this side, it would undoubtedly create slight difficulties with the EEC Commission if there were thought to be any element of subsidy. We are also told that there is no gift to the new private owners and no loss to the taxpayers. Ministers have made this clear on several occasions. Whenever these issues were debated in Committee, they have given us exactly those assurances.
      5 pm
      The Government have gone further than that in the valuable and welcome notes on clauses. In respect of clause 2, for example, the notes say that this is "solely an accounting transaction". Another passage states that there is
      "no forgiveness of debt or other liabilities."
      The guidance notes on clause 7 say:
      "The provision does not have the effect of giving money to the successor company."
      In picking out these remarks in the guidance notes, I do not mean to be churlish. They are extremely welcome and

      971
      valuable, and we are grateful to the Government for providing them. I hope that nothing I say will deter their production in future. But are these statements to be taken exactly at face value?
      It is not surprising that some sensitivity on this issue is displayed by the fact that these notes specifically took up these points and tried to give assurances. It is worth trying to unravel exactly what has happened to the financial structure of the British Steel Corporation and what the Bill proposes to do to change it. For reasons that are well understood, BSC traded at a loss over a long period. I would argue that this was for reasons that were at least primarily the responsibility of mistaken economic policies, not least to do with the exchange rate introduced by the Government in the early 1980s. Taxpayers were required, for good reason, to stump up a good deal of money to keep this vital British industry afloat.
      It was decided by the Government that the provision of that financial support should not take the form of an ordinary loan or some other form of repayable capital sum on which dividends or interest should be paid, but should be public dividend capital. In principle, even that public dividend capital, as its title suggests, should have produced a dividend for taxpayers. But as we established in Committee, except for an early period, in practical terms no dividend or other payment has ever been made to taxpayers.
      Perhaps the Minister would confirm that the public dividend capital totals more than £4 billion. It is worth adverting to a point that I raised on a couple of occasions in Committee, but which the Minister failed to answer. It is that no payment of any sort and no interest or dividend has been paid on that public dividend capital. That has strongly influenced the corporation's profitability over that period and today. When considering the future profitability of the corporation we must take into account the fact that the cost-free public dividend capital will not be available to the private owners.
      Does the Minister agree that the benefit to the corporation and the disadvantage to the future operation of the successor company could be quantified? It should be possible to make a calculation according to the then prevailing commercial interest rates—let us set aside the question of dividends and assume that the money was made available on ordinary commercial terms—of how much that dividend capital was worth year by year to the corporation, and its impact on the much touted level of profitability, on the basis of which the industry is now being offered for sale.
      We well understand that the level of profitability is the key to the price that the Government think they can achieve on the market. Clearly, they are basing their calculations on a projected level of profitability of about £400 million per annum. If that figure is to be written down to take account of the cost of the capital—the borrowing— which has not been taken into account, that will substantially affect what the Government could expect to receive in the market place. I hope that today the Minister can enlighten us on what that figure might represent, because it tells us a great deal about the price which might be expected.
      It is the taxpayers' misfortune that the Government decided that taxpayers should make that £4 billion contribution not in the guise of the ordinary creditor who could expect to be repaid—not only the capital sum but some return on the loan—but as public dividend capital.
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      Because of that, the taxpayer finds himself in a similar position to that of the equity holder. That is the closest analogy that I can draw. It is on that basis that the Government have treated public dividend capital when they have tried to subsume the corporation within the ordinary private sector company.
      Under clause 2, about hall the sum that taxpayers have paid—we are simply assuming a sum of £4 billion and I hope that the Minister can confirm its general accuracy—is simply to be written off to cover the accumulated losses that have been chalked up. As the guidance notes make clear, that is essential, if the corporation is to be privatised, to meet the Companies Acts requirement that a company cannot be floated if the assets do not match or exceed its capital and undistributable reserve. That may be a good argument from the Government's viewpoint. It would be impossible to privatise the corporation if the write-off did not take place. But that is not of much comfort to taxpayers, half of whose money is written off, and it begs the question whether privatisation is a necessary and desirable step.
      The Minister will then say, "Don't get too agitated about this because this is a perfectly normal transaction. It is purely an accounting procedure which a private company can do and it is specifically provided for in section 135 of the Companies Acts." But there are various safeguards for a private sector company operating under section 135. This must be provided for in the articles of association, and there must be a special resolution, and authorisation by the courts. The reason for all those safeguards is that the write-off, at least potentially, prejudices the interests of several people, not least the potential creditors of the company.
      Other than introducing this legislation and refusing to go into any detail of by way of explanation, have the Government taken any steps which would be equivalent to the formal and substantial steps which a private sector company would have to take to satisfy a court that this was a proper procedure? What consultations have been held, for example, with potential creditors? Because taxpayers are not technically in the position of creditors, they have the misfortune of not being regarded as creditors. They could well have been so regarded. They find that £2 billion of investment loan has simply disappeared. We want the Minister to answer those questions.
      The next step in the proceedings outlined in the Bill is that the remaining public dividend capital, having been reduced by about half, is extinguished. Any liability to the Secretary of State is extinguished. Under clause 3, part of it is converted into securities, which are then offered for sale. Under clause 7, the balance passes to a statutory reserve. The guidance notes are again helpful on the meaning of the procedure. They point out that the statutory reserve provided for by clause 7 is meant to act as a substitute for what, in the case of a private sector company, would be a share premium account. As there is unlikely to be any share premium, the statutory reserve is provided to fulfil that role.
      The difficulty for the Government is that the Companies Acts treat the share premium account in a special way—as being available only for certain purposes. That is right, and one understands why that should be so. The money in the share premium account is limited to particular purposes, such as the writing off of unrealised losses. Will the Minister estimate to what extent the money

      973
      which will pass to the statutory reserve will be devoted to that purpose? Will he also estimate what proportion of the extinguished public dividend capital will end up in the statutory reserve? It is difficult to debate the issues without indications from Ministers as to what figures should be put to the various categories into which the public dividend capital will fall.
      Let us go back to the equivalent of the share premium account. If the ordinary company rules were to apply to the share premium account, and if in essence it were regarded as undistributable, this would not meet the Government's book. As we know, the Government are anxious to present the books and the balance sheet of the corporation, and therefore of the successor company, in the most favourable light so as to emphasise the potential profitability of the successor company.
      If the money were to be tied up in a statutory reserve and were not distributable, it would dampen the ardour, one assumes, of those who might want to get their hands on it. Therefore, it is provided by clause 7(2)(b)—this is the provision which the Minister has to defend—that the Secretary of State may direct that some part of the statutory reserves
      "may be applied as if it were profits available for distribution".
      I am by no means an expert but, as far as I am aware, the Secretary of State is thereby taking a power which is not available in similar circumstances in a private sector company. Therefore, the argument that this is merely a technical adjustment or an accounting procedure which is exactly equivalent to that of a private sector company falls down at this point.
      I do not believe the Government claim that this is normal procedure. They claim that it represents the past profitability of the corporation and argue that if it had been a private company, it could have passed those profits to a reserve which would have been distributable. This merely makes our case that the Government are intent on drawing a line at the point at which the corporation became profitable and that their real purpose is to ensure that the losses are the responsibility of the public sector owner but the profits, as soon as they arise, will be money on which future private owners can get their hands. That is the essence of what the Government propose.
      Under clause 7(3), the power of the Secretary of State to make the direction is limited to the period in which the ownership of the successor company remains in the hands of the Crown. It is clear that the provision would not be in the Bill if the Secretary of State did not intend to make such a direction. I want the Minister to confirm that any direction that is thereby made will have consequences for the successor company. The disposition of capital into securities on the one hand and into the statutory reserve on the other, and the direction as to what part of the statutory reserve will be distributed, will be decided before the successor company is floated. Will the Minister confirm that that position will be inherited by the new private owners of the successor company, and that any sums which are declared to be distributable by a direction of the Secretary of State will remain distributable in the hands of the private owners?
      If that is so, notwithstanding all the technical arguments, we have a magical process by which a substantial sum of taxpayers' money, totalling over £4
      974
      billion, which stands as a debt owed by the corporation to the taxpayer, is converted, at least in part. into profits available to private owners. That is a remarkable procedure whereby debt owed to one group of people is transformed by the stroke of a pen into profits available to another group. It must be a wonderful feeling for people to have the law operating so benevolently and for them to be able to say that there is nothing unusual about it and that it just happens to enable them to get their hands on hundreds of millions of profit. Will the Minister confirm that that is the general effect of what is proposed in the Bill?
      5.15 pm
      There is a further objection to what is proposed. Not only does it do the taxpayer down and provide, in a sense, false profitability as a bait to private owners, but it is a reversion to the bad old days of private ownership in the steel industry when dividends were paid not out of trading profits but out of capital, and time after time the private owners bled the industry dry, ate the seed corn and paid dividends out of money which was desperately needed for reinvestment.
      The Government are laying down the guidelines whereby that process is to be renewed even before private ownership takes effect. Once again we see private ownership in the steel industry being encouraged to take its profits and dividends out of money that has been accumulated as capital and ought to be used for investment. We understand why the Government have been compelled to do this. The unseemly haste with which they tabled the legislation, for reasons which have yet to be properly explained, means that the Government have had to bring the industry to the market without a proper track record of profits. That is why they have had to make the peculiar arrangement whereby there is a built-in substitute for profitability. That substitute is the ability to lay hands on capital which was provided in the past by the taxpayer.
      That is unsatisfactory and an unfortunate indicator of the future of the industry under private ownership. Ministers can confirm that the industry requires substantial investment for the foreseeable future if it is to maintain its competitiveness. The best estimate of the required investment is about £300 million per annum. That investment will be required year in, year out, in good times and in bad, in an industry which is essentially cyclical, for all the reasons which we debated at length in Committee.
      If the Government are already not only permitting but encouraging private owners to pay themselves dividends out of capital, we can have little confidence that there is any long-term intention on the part of Government or of the new private owners to make the essential investment. Not only is the financial and capital restructuring a fraud on the taxpayer and a hidden gift to the new private owners, but we fear that it points the way to an uncertain future for the industry. That is why we have tabled amendments to clauses 2 and 7, which are designed at least in part to try to curb the excesses that the Government intend to permit.
      Our amendments will introduce a greater rigour in the degree to which capital can be written down. As provided by clause 2(1), there is less discretion for the amount by which the public dividend capital can be reduced. We have provided by our amendments Nos. 24 and 3 limits which will at least impose some discipline on the extent to which that writing down will take place. In the case of

      975
      amendment No. 24, they are limits which will, at least in part, enable the Government, even within the context of privatization—which we oppose—to meet the requirements of the Companies Acts.
      We have a second group of amendments which will retain for the taxpayer some interest in the future profits of the steel industry, if any profits are made, and some possibility of being repaid for the very substantial investment that the taxpayer has made. That is the purpose of amendments Nos. 25 and 26.
      The next group of amendments ensures that the capital which passes to the statutory reserve is retained, not to pay dividends from day one to private owners who have not done anything to earn them, but for investment in essential plant and equipment, which are important to the industry's future. That is the purpose of amendments Nos. 6, 7 and 28.
      I hope that the Minister will take these amendments seriously and will answer my questions in detail. Further, I hope that he will satisfy us that our fears about the irresponsibility of the Government in these matters are misplaced. I doubt that he can do that, but we shall listen with interest to what he has to say.
      In conclusion, our objections are to that essential "short-termism" which characterises all that the Government do for our industrial future. First, it is the Government who take a short-term view. They are so concerned to get shot of an industry at the best possible price that they are prepared to jeopardise its future by the way in which they restructure its capital. By giving this open invitation to the new private owners to rip off what remains of the taxpayer-provided capital, the Government are selling the industry in circumstances which are the least favourable to its proper and secure future.
      Secondly, there is the "short-termism" that we have seen before from the private owners in the steel industry and elsewhere. That is the "short-termism" which is now made possible, and indeed encouraged, by the Bill, and will encourage private owners to pay themselves dividends before they consider the investment that is needed to secure employment and output in the interests of the national economy. That is why we regard these amendments as important and the provisions of this bad Bill as unsatisfactory.
      Mr. Cryer: I want to speak especially to amendments Nos. 28 and 6. Amendment No. 6 provides for the statutory reserve to be used exclusively for the purposes of investment in new plant and training. Amendment No. 28 says that money may be applied.
      "to investment in plant or capacity or to sustain plants threatened with closure."
      Those two items are essential, beccause we are talking about privatising an industry which since 1979 has lost 134,000 jobs. Privatisation will be carried out by this Government on the backs of 134.000 people who are walking the streets, having mainly been sacrificed on the altar of the Government's economic policy of selling off our assets at knockdown prices. Those assets have been provided by the taxpayer for unlimited distribution in the way that my hon. Friend the Member for Dagenham (Mr. Gould) described.
      I want to draw attention to the problems of the steel industry and the way in which these two amendments will provide for training and the sustenance of plants threatened with closure. They are important because of the
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      steel industry's failure to provide training payments. As the Minister may know, I am also a member of the Common Market assembly. Some people call it a parliament, but I never give it much credit. I prefer to use the more accurate description of consultative assembly. In that capacity, I have come across a number of cases where former members of the steel industry are being retrained through a less than adequate scheme. These two amendments will ensure that, however the steel industry develops, it will make provisions for retraining within its own revenue sources rather than relying on external ones. There is a retraining scheme that is designed to train redundant steel workers for new jobs elsewhere.
      The Department of Trade and Industry likes to pretend that it is the sole arbiter of the iron and steel employee redundancy benefit scheme, which is called ISERBS for short. However, the truth is that it is not. The decision whether money shall be applied from the Common Market for retraining is not a decision of the Ministers, of the House, or of civil servants. It is a decision for a Commissioner. The Commissioner in this instance is Commissioner Marin.
      Nine ex-employees of Eaton and Booth in Sheffield have been waiting for a decision from the commissioner for 12 months. I wrote to the commissioner and begged him to give a decision which was confidently anticipated by the Department of Trade and Industry. I received a reply from the commissioner on 28 March stating:
      "The demand for readaptation aid under Art. 56 as a result
      of accelerated restructuring in both the coal and steel industries of the European Community had by the end of 1987 outstripped the available budget. Since the Council refused to make more funds available and bearing in mind the prospect of even lower budgetary resources in the future the Commission has been obliged to carry out a realignment of its strategy with respect to its readaptation commitments.
      The complex process of realignment is being carried out as rapidly as possible and I will shortly be informing the UK government of the allocations to be made in respect of their outstanding readaptation requests."
      The people who were the subject of those readaptation requests have been on retraining courses on the promise of readaptation payments being made. At the time of that letter they had been waiting for 10 months. They have now been on the course for over 12 months with the promise of finance. However, that finance is being held up by the commission.
      The Minister, who is a Member for one of the Ribble Valley constituencies—he has moved about a bit since he was elected for Preston. so I cannot pinpoint him precisely.
      Mr. Atkins: South Ribble.
      Mr. Cryer: The Minister said to me in a letter of 11 May:
      "I regret that the position has not changed since my letter of 30 April. My officials are still continuing to press the Commission for early decisions on the application for aid being held, but to date no progress has been made. As soon as the Commission do approve the applications for aid ISERB Scheme payments will be authorised."
      He concludes with the assurance that the people mentioned in his letter will be paid first. So they should be.
      Those amendments would help to deal with the position where civil servants and elected representatives have been entreating the Commission to make the payments, and where Ministers also, as I understand it, have been making representations to the Commission to make those payments, yet no payments have been made. That has gone on month after month. It enrages me because these

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      people have been made redundant from the steel industry, and in good faith have attended courses, yet month after month their home economies are devastated. They have to borrow money to sustain their existence. Meanwhile, some overpaid bureaucrat in Brussels is withholding his decision and keeping these ordinary people in suspense and penury. That is not good enough.
      I hope that the Minister can accept the amendments in the belief that it is necessary for the future that the Government have some insulation against the machinations of the Commission. I believe that that Commissioner is using those workers as pawns in the negotiations over the budget. That is a rotten and foul thing to do, but that is the conclusion that one reaches because of the implications of the Commissioner's letter to me.
      5.30 pm
      If the Minister cannot accept the amendments, I hope that he will say that, if the Commission will not pay, or continues to procrastinate as it has done for over 12 months, his Department will make the funds available to take those workers and their families—the innocent victims—out of the financial doldrums that they are in due to the machinations of that wastrel in the Common Market—Commissioner Marin. If the Minister has any sense, he will consider the amendments carefully because the industry needs better protection than it has obtained so far—both when in the private sector before nationalisation and under the protection that the Common Market is alleged to give it.
      Time after time, Commissioners and, indeed, Ministers in this House, cosily claim that the Commission's ISERBS payments protect steel workers when there is readaptation and rationalisation. Those words hide the grim reality of managers making decisions which put people on the dole. It is not adequate simply to rely on the Commission to provide support, because its words mean nothing. The cases that I have mentioned apply not only to Sheffield, but to Rotherham and south Wales. Alpha Steels is a case in point.
      The Minister should consider the amendments seriously so that in the future the Government have some right of independent action. The Minister is sitting at the Dispatch Box absolutely powerless. He is a pawn in the hands of the Commission. I regret that, because I would far rather be able to press the Minister for a decision, but at the moment he is powerless to give one. The amendments go some way towards redressing that terrible imbalance that the steel workers face.
      Mr. Barry Jones: Like my hon. Friend the Member for Bradford, South (Mr. Cryer), I rise to speak in support of amendment No. 6. I have recently had the honour of giving fifth-year high school leavers their record of achievement. That is an enlarged report on the last years of their school life. In meeting those excellent and hopeful young men and women, I have been struck by the large number who have opted to join the armed services. In conversation, it has become clear that they are enlisting because they will then have the most thorough apprenticeship grounding. There is no doubt that there is a shortage of apprenticeships locally on Deeside, throughout Wales and, I suspect throughout the United
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      Kingdom. That is partly the reason why those young men and women are seeking to join the armed forces on leaving school.
      As the House knows, since 1979 the industrial training boards have, by and large, been swept away and apprenticeships have declined as unemployment has risen. That cannot be good for Britain's prospects for the 21st century. We should invest more and more in training and apprenticeships. The investment reserve that we propose in our amendments could help Britain's economic future.
      Clause 7 is the financial heart of the Bill. It is the mechanism whereby the public dividend capital is done away with. In arguing for a British Steel investment reserve, we are urging the Government to recognise that steel is a strategic industry, which is vital for Britain's economic and military future. It is Britain's foundation industry. Without it, we have no reliable manufacturing base and an impaired defence capability.
      I want to speak briefly to amendment No. 6 regarding the need to spend more money from our proposed investment reserve on improved and enlarged training. The background is that in the 1980s Britain has lost nearly 2 million manufacturing jobs. As my hon. Friend the Member for Bradford, South has said, steel has suffered greatly. We lost as an industry in the great jobs shake-out of the 1980s. At BSC Shotton in my constituency, we lost 8,000 jobs in just three months. We lost our steel-making capability.
      The attention given to training and to providing apprenticeships declined, not unnaturally, during what was an industrial emergency. Before the major cuts in steel jobs and the large closure programme, virtually every British steelworks ran large, successful apprentice schools. That was certainly the case in my constituency. The standards of those apprentice schools were high and the places were much sought after. Any young man or young woman in receipt of such an apprenticeship knew that the world was his or her oyster if the course was completed. 1 want us to attempt to return to that position in at least some degree.
      When parents visit my surgeries to seek help in placing their teenage children in work, they always mention apprenticeships. The apprentices' schools in our steelworks at Shotton had a high reputation and there was heavy demand for its many places. Today there is huge competition for apprenticeship places at a steelworks such as Shotton or the nearby Aerospace factory. Hundreds apply for the dozens or for fewer than dozens of places and many young people are disappointed. That is a blow to the morale of young school leavers and to their families.
      I fear that, when a sustained upsurge in demand occurs in manufacturing generally, and in steel in particular—I hope that that upsurge is ahead—we shall be short of the required skills. Amendment No. 6 will help Britain's future. I do not want the steel industry to be caught short. I should like the British Steel investment reserve to be set up and its funds directed to training in particular.
      In today's world economic climate—in a climate of collapse and speculation and black Mondays—an enlarged and skilled work force in steel will be a priceless asset. The BSC's management and labour have recently been spectacularly successful in productivity and manning. They should now have the reassurance of knowing that they can carry enlarged apprenticeship schools at individual plants. Each steel plant and its surrounding

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      travel-to-work area could then have at its disposal a reservoir of recently trained potential labour. That is what I should like to see in my own area of Deeside.
      Quick profits and enlarged dividends can be the enemy of thorough high-class training. That is one of the dangers inherent in these privatisation proposals. Training is not only for school leavers. It can be for the existing work force also.
      I should like the Secretary of State for Wales to set up an economic planning council in Wales, which would enable trade unions, employers and Government agencies to work together to establish a strategy for economic recovery. At the top of the agenda for such a council, I should like education and training to be writ large. Perhaps the British Steel investment reserve could play an important part in such a steel industry and in that industry's training opportunities. That is why I support this batch of amendments.
      Dr. Reid: I take as my starting point the comment made by the Under-Secretary of State during the debate on the previous group of amendments. It seems that he is suffering from the misapprehension that Opposition Members always regard profit as a dirty word, even when it is applied to the steel industry. Profit, profitability and productivity are not dirty words to us. It is as well to make that clear at the outset.
      Opposition Members are pleased that Britain has a healthy, profitable and productive steel industry. We draw strength from and take pride in the fact that in the first two months of 1988 Scotland produced 46,700 tonnes of usable steel, compared with only 32,700 tonnes in the first two months of 1987. We are pleased that the weekly national output in February was in excess of 388,000 tonnes, the highest that has been achieved by the industry in many years. We are pleased that that is not far short, when projected, of the 21·5 million tonnes for which we have argued for Britain. The average weekly output for February would amount to 19·75 million tonnes for the year.
      Mr. Rhodri Morgan: In a leap year?
      Dr. Reid: It would be slightly more in a leap year.
      We are pleased that profits and productivity have risen in the British Steel Corporation, and we take this opportunity to express that pleasure and pay tribute to the management and workers who have made the achievement possible.
      That leads me to the amendments. All the signs confirm that the taxpayers' sacrifice over many years has been worth while. The signs confirm that the faith of the taxpayers in the industry has been well and truly vindicated. As that faith has been shown and as those sacrifices have been made over so many years, and now that we have a profitable industry, surely this should be the time to repay the taxpayers and to reward their sacrifices.
      What do we find instead of repayment and reward for the British people? We find contained in the Bill what my hon. Friend the Member for Dagenham (Mr. Gould) has described as a magic formula. My hon. Friend is a man of extensive vocabulary but moderate language. This afternoon he has pushed to the fullest extent both his vocabulary and his moderation in referring to the financial clauses as a magic formula.
      In Motherwell we have a simpler word that is picked from a less extensive vocabulary. That word is swindle.
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      The reality is that the sell-off of the corporation is the greatest con trick ever played on the British taxpayer. To paraphrase a cliche, never, even under this Government, have so many been swindled out of so much by so few with such little talent.
      Ministers, who have crowed constantly of value for money for taxpayers, have been prepared to write off millions of pounds of taxpayers' money to float the corporation. The Government, who boast constantly cif creating a share-owning democracy, have resolved to write down the taxpayers' public dividend capital to less than half its value to sell off the corporation to City institutions. Having written off the losses, the Government, who proclaim their aim to be a policy of fair taxation, will allow the already written-off losses to be offset against future profits in a tax bonanza for the new City shareholders of our steel industry.
      5.45 pm
      The privatisation of British Steel in its present form is a political scandal and a financial swindle. That is why the Opposition have tabled the amendments. The primary purpose of the amendments is the protection of those whom all of us in this House are supposed primarily to represent—the taxpayers. Secondly, they are aimed at the long-term protection of the steel industry, albeit in private hands.
      The amendments tackle the financial heart of the Bill, which contains a mechanism whereby the public dividend capital, as outlined by my hon. Friend the Member for Dagenham and others—it has financed the corporation since the mid-1970s—is to be extinguished and replaced by a share issue which, together with the new statutory reserve, will have the equivalent value. The mechanism will allow the new company to pay out of the reserve. To be technically correct, the statutory reserve will act as the platform and the justification for the payment of dividends to shareholders in future.
      The amendments seek in various ways to preserve the new company's capital and to divert the reserves for use as investment and to finance training and the refurbishment of old plants that will become necessary if recapitalisation and reinvestment is to be commensurate with the demands of a continuing and thriving steel industry.
      The amendments seek to protect taxpayers by transferring to the new company some consideration of the financial support that they have provided for many years to the corporation. It is amazing how little interest exists in the Bill for taxpayers, especially when we think of the huge debt that British Steel owes them. We have become familiar since Second Reading and our debates in Committee with the Government's tendency to deny access to the flow of financial information to Committee members and to the public generally. This has been justified under the cloak of commercial confidentiality. For whatever reason, the flow of information on financial matters has, to say the least, been stemmed by the Government. The same can be said of the financial implications for the taxpayer and the write-off of debt.
      We have been forced to look slightly further than the Government for academic support for our arguments. One of the best studies—it was referred to in Committee and it appears to have been ignored by the Government—is that which was undertaken by Bell, Findley and Oughton of the department of political economy of Glasgow university. The report states that British Steel's existing debt takes

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      two forms. The first form is public dividend capital, which has been defined as the aggregate of sums paid, or treated as paid, to the corporation under section 18 of the Iron and Steel Act 1982. This debt amounts to £3,980 million. The second form is the corporation's accumulated losses, which amounted by 1987—the last financial year—to £1,023 million.
      The Government maintain that the capital restructuring under this Bill involves no writing off of debt. Once again, the old magic formula plucked from the extensive vocabulary of my hon. Friend the Member for Dagenham could be applied to the Government's position. The Government insist that there is no writing-off of debt, which may be true according to the letter of the law but which is certainly not true according to the spirit of any possible definition of the writing-off of debt.
      We understand why the Government must be economic with the financial truth in these circumstances. We understand why they cannot admit to the House or to institutions outside it—perhaps on the other side of the Channel—that no debt has been written off. However, in economic terms and in the spirit of any reasonable definition of what constitutes the writing off of debt, large resources have been invested in British Steel throughout the 1970s and during the lifetime of the Government, and those resources are not to be returned to those who invested them in the first place.
      This leads me to the point that the Minister made about profits. I said during discussion of the previous group of amendments that, unskilled as I am in economic theory, my simple understanding of profit was always that profits were the return to investors on the capital they had invested. We are now left with a generation of profits that will clearly not be returned to the people who made the investment in the first place—the great British public.
      To disguise this sleight of hand, the Government argue that no debt will be written off under the Bill. But we contend, as we did on Second Reading and in Committee, that the massive subsidy given to the British Steel Corporation by taxpayers in recent years will not be repaid. Furthermore, we maintain that that subsidy may be written off by the Government's sleight of hand. They may pretend that it has disappeared through a hole in the floor of the stock exchange or of the House, but any ordinary non-skilled non-economist taxpayer will ask why, when profits have been generated after millions were invested, he is receiving no return from the now profitable corporation.
      It would help those of my hon. Friends who are as unskilled as I and who cannot countenance discussing these matters with the Minister's advisers if we considered the economic base of the British Steel Corporation as consisting of four shares, each valued at £1 billion. The Bill gives the Government the right to transfer those shares into ordinary equities which can then be traded in the same way as those of any publicly quoted company. The difficulty would arise when the equities were sold and the Government were forced under the Companies Act to set the nominal value of the shares at the sale issue price of the time of flotation.
      Let us suppose that the shares were valued by the market, as we have been led to believe they will be, at about £2 billion, which represents a price-earnings ratio of
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      eight, which we believe would be necessary to attract investment from prospective shareholders who were unfamiliar with the industry. There would be a clear discrepancy between the value of the public dividend capital and the sale value of the company.
      That would mean that the market value of the taxpayers' investment was expressed at half its worth. That is how the subsidy to the British Steel Corporation will come about—not through the technical writing-off of debt but through the halving of the capital asset paid back to the taxpayers.
      This is not a bagatelle or mere financial trifle. We are dealing, if future projections are correct, with about £2 billion of taxpayers' money, which will be written off by this mechanism. It will not be a publicly declared writing-off; it will be a halving of the share capital invested in the company.
      One further complication adds salt to the taxpayers' financial wounds. As has been said, the difference between the value of the public dividend capital and the sale value, which we expect to be about half of the public dividend capital, is to be put into what is called a statutory reserve. Subsequently, that statutory reserve could be used either to write off unrealised losses or to be distributed as profits, with the permission of the Treasury, to pay up unissued shares of the company. Not only is the public dividend of the company halved, therefore, but once halved, the half that mysteriously disappears is then used as the justification to pay out profits in future, not to the taxpayer who has invested and already lost, but to the new shareholders who have already purchased and reaped the benefits of the write-down in the dividend capital.
      If someone with even the most extensive vocabulary could find a phrase other than "financial scandal" to describe this, I should be grateful to hear it. The company will be compensated; the taxpayer will not. That is the first reason why we tabled the amendments. The accumulated losses of the company have been met by the taxpayer but they still exist on the corporation's balance sheet. They are to be treated as a one-off reduction in the capital base of the company or as an equivalent reduction in the public dividend capital.
      It is argued that the amount of capital shown on the balance sheet will more truly reflect the net assets of the company. Let us suppose that the value of that company is £2 billion and that the public dividend capital is reduced to £3 billion after the accumulated losses are deducted. That would leave £1 billion to be entered into the statutory reserve, which could be used subsequently to generate liquidity for the company or to justify the pay-out of profits.
      This outline shows the need for the amendments. Such a scheme, in any other circumstances, would be regarded as nothing less than a rip-off of the taxpayer. Is it fair? Would it be fair under any circumstances? Would it be fair in this context? Would it be fair in the context of a political world that increasingly demands attention for the small investor? Why should we raise a hue and cry when some City slicker gets involved in a massive fraud, but refuse to raise one because the slicker happens to sit around the Cabinet table?
      We have spent some time considering how this rip-off—let us give Cabinet Ministers the benefit of the doubt and say it is an unconscious rip-off—of the taxpayer will take place. Now it is worth reminding ourselves of the extent of the burden that the taxpayer has borne under this

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      Government since 1979. It is evident from all the figures available in the published material that until relatively recently the taxpayer has gone without dividends. The corporation has not paid one since 1975. The taxpayer has borne the heavy losses since the Conservatives came to office in 1979. Even allowing for the £400 million profit, about which we are all pleased and constantly told in the new advertisements that have appeared on television, which feature a shareholder working out in the morning and gloating over the prospect of increasing his BSC shares in the afternoon, there has been a loss to the taxpayer of almost £4·5 billion since 1979–80.
      The Prime Minister constantly speaks about taxpayers, and the Chancellor directs his attention to them—yet on this occasion they are to be cast aside, willingly and knowingly, because that suits the Government's purpose of channelling money from BSC into City investors. Those who bore the brunt of the subsidy to the BSC during the downturn in the market and the brunt of rationalisation in the steel industry are to receive nothing.
      We have always supported investment in the British steel industry on the precondition that, if taxpayers pay for investment, capitalisation and rationalisation, bear the brunt of redundancy payments and support losses during the lean years, when the fat years arrive they will receive some of the fat. That is the least that any reasonable Government should do. The Bill ensures that taxpayers will be cast aside just as the fat years are beginning to arrive.
      The Government cannot abandon their responsibility. They must maintain a degree of fairness. They used to argue that taxpayers wanted rid of the responsibility of the steel industry, but it is noticeable that that argument is no longer employed. The argument apparently applies only when the taxpayers suffer a loss. Ministers claim until they are blue in the face that when the British steel industry was making a loss taxpayers wanted to lose the British Steel Corporation and get rid of the need to subsidise it. Nowadays no one believes a Minister who says that the British taxpayer wants rid of a healthy, profitable steel industry and does not want in any circumstances to receive some repayment for his investment.
      6 pm
      Taxpayers deserve something better in return for their commitment and investment. The British Steel Corporation would have gone bankrupt twice, once in the mid-70s and once in 1979–80, if it had not been for taxpayers' support at a time when the demand for steel in a notoriously cyclical industry fell by about 50 per cent. For years, taxpayers have subsidised the industry and will receive no return on their investment. Common sense, public interest, decency and fairness demand that they do. The purpose of the amendments is to rectify the Bill and they should be supported by any hon. Member who shares that feeling of common sense, public interest and fairness to the taxpayer.
      Dr. Jeremy Bray: My hon. Friends have spoken about the massive giveaway in this privatisation. Such giveaways took place in previous privatisations and will take place in the biggest jumbo of them all—the privatisation of the electricity supply industry. It is a scandal of such outrageous proportions
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      that it will go down in history as financial swindling by the Government of the British people and will for eyer blight the name of the Conservative party.
      The country's assets are being sold at knockdown prices and that will obviously create problems for future Governments. People have been given wealth—assets for which they have not paid the proper price. They have acquired taxable capacity and the only possible course for future Governments is to tax those people and take that wealth away from them. The Government are ensuring higher future levels of taxation, not only under Labour Governments but under Conservative Governments. Income tax will be higher and there will certainly be a wealth tax, because to create a reasonable balance, future Governments—even a Conservative Government—will have to make good the swindling that has taken place under this Government.
      Another problem involves the viability of the financial structure that the Government are creating in the Bill for the British Steel Corporation. The treatment of past losses and the window dressing that has been carried out in recent years and which will continue to be carried out to prepare for privatisation have been well covered by my hon. Friends. How will the corporation survive with the financial structure that it is to be given?
      One would normally look at current cost accounts in order to assess prospects. Page 43 of the BSC accounts contains the notes to the current cost accounts and, contrary to normal accounting practice, the assets are valued at historic cost. That means that, if plant built a long time ago cost £1 million at that time, it would cost £2 million or £3 million to build today because we have to allow for inflation. Assets are valued at current cost to make sure that the value of the business is being preserved and that future depreciation is directly provided for.
      The figure of £1,928 million used for tangible fixed assets and recorded in the historic cost accounts is the same as that in the current accounts. Had the assets been revalued in accordance with proper accounting practice the figure would have been £3,294 million—higher by £1,366 million. Additional depreciation of £132 million a year should be charged on that in the current cost accounts. That means that, effectively, the current cost profits are being overstated by £132 million.
      That was picked up by the auditors and used to qualify the accounts. On page 23, the auditors say that in their opinion the historic cost accounts give a true and fair view of the state of affairs of the corporation, and that the accounts have been prepared to comply with the requirements of the Iron and Steel Act 1982 and the directions of the Secretary of State. On pages 42 and 43, the auditors, speaking about the current cost accounts that give the present picture, merely record that the accounts have been properly prepared in accordance with the policies and methods described in the notes thereto. The accounts do not purport to be true and fair or to have been prepared by any accounting standards other than those described in the notes.
      To justify that, the corporation says that its utilisation continues to be significantly below the installed capacity. That means that it has left out of the current cost valuation of its fixed assets items such as the big blast furnace a t Llanwern, the unused BOS vessel capacity at Port Talbot and so on. Effectively, the BSC has been stashing away plant for future use, and that plant has not been fully reported in the accounts. That may be a smart thing to do

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      and it may kid the investors when they read about the levels of recorded profits and apply the appropriate ratios. But the chickens will come home to roost in the long term when it becomes evident that the corporation has not been investing and will not in future invest adequately to maintain the value of its business.
      The consequence of that will not be immediately evident. For some years, the continuation of such policies will enable the corporation to report artificially high profits. That will only store up trouble for the future when the corporation begins to be seen to have failed to invest at the levels required to maintain the value of the business, the security of employment of the steel workers and an adequate supply of steel for British industry. It is not a very smart move by the corporation or Ministers in the Department of Trade and Industry and it will be added to the other squalid moves by which the Government have applied their industrial and economic policies.
      The Minister of State, Scottish Office (Mr. Ian Lang): We have had an interesting debate. The hon. Member for Dagenham (Mr. Gould), who is not in his place but no doubt may return, approached these issues in a more realistic, balanced and comprehending way than did some of his colleagues. I agree that clauses 2, 3 and 7 go to the heart of the Bill. I do not accept his suggestion that the Government are drawing a line from the time of profitability and that profits made thereafter will be made available to the new owners. That is not what we are about. We are preparing BSC for privatisation and are doing so against the background of a dramatic improvement in its results, leading to its move into profitability, without which privatisation would not have been easy to contemplate.
      I welcome the recognition from the hon. Member for Dagenham, if not from some of his hon. Friends, that what we are proposing does not include any writing off of debt or any measure of subsidy. I welcome the hon. Member back to his place. He will be glad to know that I have been agreeing with some of the things he has said.
      The debate has covered ground that will be familiar to members of the Standing Committee. The issues raised were discussed at great length in Committee on a number of occasions, but it might be helpful if I start by outlining briefly the operation of those parts of the Bill to which the amendments relate. I shall try to deal with most of the points that have been raised.
      Clause I provides that all the property rights and liabilities of the corporation will be vested in a successor company. The successor company will inherit all the corporation's undertakings, both assets and liabilities. After vesting has taken place, on a day appointed by order by the Secretary of State—that is, "appointed day"—British Steel will be a plc that is wholly owned by the Government. The successor company will require a capital structure compatible with the requirements of the Companies Act 1985, and clauses 2, 3 and 7 provide for that capital structure.
      The hon. Member for Dagenham identified as the starting point for our structural provisions the public dividend capital, and asked me to confirm the figure. As he will know, it is in BSC's accounts, and is shown as £3·98 billion at the end of the year 1986–87. He implied that the
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      development of public dividend capital was a recent phenomenon, but it has its antecedents in the 1978 White Paper of the Labour Government.
      The hon. Gentleman asked a question that he had already asked in Committee. I know that he had difficulties in Committee because he tended to ask a question and then leave the room because he was busy not so much in restructuring the steel industry as in restructuring his party's nationalisation policy—or rather, renaming it. At one time it was known as social ownership, which I characterised as being an upwardly mobile form of nationalisation or yuppie nationalisation, but I understand that that, too, has been dropped and the hon. Gentleman has had to go back to the drawing board.
      The hon. Gentleman asked me a hypothetical question about the extent to which BSC might have paid dividends or interest on its capital in the past. Althought it is possible to make theoretical calculations, it is not helpful to do so, and it does not enhance the discussion about the successor company structure. The BSC did not pay dividends because it had no retained earnings with which to do so. It did not pay interest on its capital because it was not interest-bearing.
      It is self-evident that, as the hon. Gentleman suggested, if interest or dividends had been paid, BSC's losses would have been correspondingly greater. One might speculate on what might have flowed from that; the return to profitability that we are seeing might have been that much more dramatic. The Labour Government recognised that had BSC been interest and dividend-bearing, its losses would have been correspondingly greater, and they did so in 1969, when they allowed BSC to convert £700 million into equity; and again in 1978, with the change from the national loans fund to the Exchequer capital funding and section 18 capital. We do not achieve very much by jobbing backwards in this way.
      Mr. Gould: If the Minister is unwilling to give the House such information, does he at least foresee that he may be required to meet an obligation to potential private investors? Presumably, he, or someone on his behalf, will have to make some statement on the subject in the prospectus when it is eventually published.
      6.15 pm
      Mr. Lang: Potential investors will be presented with a prospectus and with all the appropriate and necessary details, but I do not see it as part of the compilation of a prospectus to answer questions relating to events that did not occur and speculating what might have happened if they had occurred.
      Under clause 2(1), BSC's captial will be reduced, by an amount directed by the Secretary of State, to extinguish an amount of accumulated realised losses. The purpose of the capital reduction is to eliminate the deficit on its profit and loss account. The deficit is not a debt. I cannot stress that strongly enough. The corporation does not owe this money to anyone—it is simply a record of past trading losses. It reflects the erosion of the original capital base of the company through those trading losses. It is open to any Companies Act company to go to court and apply for a reduction of its capital to eliminate its accumulated losses. The BSC is unable to do this because of its status as a corporation. Therefore, we propose to proceed through

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      the Bill. It is not going to the court as a private company, but we are enabling it to happen through the High Court of Parliament.
      The amount of the capital shown in the balance sheet, will, following the capital reduction, better reflect the value of the net assets. It will not change the value—there is no subsidy involved. Under clause 2(3), the capital remaining after the reduction will be extinguished and replaced by shares or other securities issued to the Secretary of State or the Treasury under clause 3. No loss of taxpayers' money is involved in this process. The Secretary of State remains the sole owner of British Steel, which will be worth the same as a plc as it was a corporation.
      The hon. Member for Motherwell, North (Dr. Reid) raised an issue that he and I have already debated in Committee. He suggested that the reduction in capital would create benefits for the company, but not for the taxpayer. Even on the basis on which he puts that case, he seems to forget that the taxpayer owns the company. If he were right about the value accruing from the reduction in capital, it would accrue to the taxpayer at the time of the sale. As I have explained to him, the value of the company is unaffected by the restructuring exercise because the reduction is on both sides of the balance sheet. The reduction in public dividend capital is matched by an equal reduction in accumulated losses, so the net value is unchanged.
      Dr. Reid: I know that I have raised this point before, but does not the Minister recognise that it is not as easy as saying that this is just like a restructuring which can be carried out under the Companies Act? The difference is that, when a restructuring is carried out under the Companies Act, those who owned the company before the restructuring are almost always those who own it after the restructuring. Therefore, they gain any benefit. In this case, the people who own the company before the restructuring—the taxpayers—will not be those who own the company after the restructuring. It will be owned by the private investors. Therefore, the people who gain the benefits of the restructuring are different from the people who subsidised the losses before restructuring.
      Mr. Lang: No, the hon. Gentleman is wrong. The taxpayer owns the BSC and the taxpayer will own the public limited company that will be created by the restructuring. It is at the time of flotation that investors will place a value on the company and they will bid for it. The value that they place on it will take account of the condition of the company's balance sheet.
      The statutory reserve that is provided for under clause 7 will be the balancing item between the total nominal value of the shares and other securities issued to the Secretary of State or the Treasury, and the amount of the public capital extinguished. It is common practice in these circumstances for the sale price of shares to be greater than their nominal value, and the reserve partly reflects that difference, but it is essentially required to ensure that the balance sheet balances.
      Private sector companies generally have a mixture of share and loan capital and reserves. The process of restructuring the balance sheet of the corporation is complementary to the vesting provisions of the Bill. Instead of a nationalised corporation funded by public
      988
      dividend capital, the successor company will be a Companies Act company with capital and reserves, like other Companies Act companies.
      Amendments Nos. 3 and .24 seek to limit the capital reduction under clause 2 to a particular amount. That would not be acceptable to the Government, because, as I have explained, a limited company may, by a special resolution of its shareholders confirmed by the court, reduce its capital in any way, including a reduction to eliminate its trading losses. The provisions of clause 2(1) are equivalent to that procedure, which is not open to the BSC because it is not a limited company.
      The reduction will result in the writing off of an equal amount of accumulated realised losses from the balance sheet so that the capital more accurately represents the net assets. I must stress that there is no magic formula or mystery in that arrangement. It corresponds fully with the Companies Act 1985 and is purely a balance sheet transaction. It is required to ensure that the successor company can be registered as a plc and be able to pay dividends.
      We have not yet decided the capital structure of the successor company, and it would be premature to seek to take such decisions until the issues can be fully considered in the light of the BSC's audited accounts for the present year. The principle and purpose of the capital reduction are, however, clear and will be carried out entirely within the scope of existing company law.
      Amendments Nos. 6, 7 and 28 are concerned with the statutory reserve created under clause 7. I am sorry to say that amendments Nos. 6 and 28 are based on a fundamental misunderstanding of the nature of the statutory reserve that I explained. It was debated fully in Committee, and I hope that I have clarified it in this debate. A normal private sector company's balance sheet contains a mix of capital and reserves.
      Clause 7 provides for the creation of a reserve, called the statutory reserve. It will be equal to the difference between the nominal value of the securities issued to the Secretary of State under clause 3, and the amount of public dividend capital extinguished under clause 2. The nominal value of the securities issued under clause 3 will necessarily be less than the amount of capital extinguished—that is, the amount of capital after its reduction under clause 2(1). That is because a company cannot issue shares at a discount and, therefore, in order to have the ability to raise new capital at any future time, the market price of its shares needs to exceed their nominal value.
      The statutory reserve is similar to a share premium account, in that it may be applied in issuing fully paid bonus shares to its members. It may also be applied, however, to the extent that the Secretary of State directs, in writing off unrealised losses arising from a revaluation of the successor company's fixed assets, and as a distributable reserve. As I said in Committee, it has not yet been decided whether any revaluation will be undertaken, but if it is, it is not expected that there will be any material change to the basis on which British Steel's fixed assets are recorded.
      I was asked about the proportion and the amount of a revaluation. It is unlikely that the revaluation would have any material effect on BSC's total asset values. Any revaluation will have to be conducted by professional valuers and assess the value of all the company's fixed

      989
      assets to conform with section 275 of the Companies Act 1985 if it is to lead to an unrealised loss that subsequently can be written off against the statutory reserve.
      Dr. Bray: There is a note in the accounts to which I referred, saying
      "As their utilisation"
      of assets
      "continues to be significantly below installed capacity, the Corporation considers that it would be premature to anticipate that more than this value will be so recovered."
      In view of the very big increase in capacity utilisation during the past year, is the Minister saying that that will not be taken into account in the annual report this year?
      Mr. Lang: It has not yet been decided whether there will be a revaluation, but if there were to be a revaluation, it would not materially change the figures that are recorded in the balance sheet.
      Dr. Bray: In that case, is the Minister saying that he does not expect the huge increase in capacity utilisation that has taken place in the past year, which has brought extra capacity into use and has not been included in the accounts, to be taken into account? Is he saying that the accounts will not take account of that? If so, he is saying that the books have been rigged.
      Mr. Lang: I am not saying that; nor am I suggesting that the books have been rigged. I take this opportunity to correct the hon. Gentleman, who seemed to imply, if I understood him correctly—I shall read his words tomorrow—that the auditors have qualified the accounts of the BSC. That is not the case. The note that he read out was a clear and unqualified assessment of the company's account on an historic cost basis. In addition, a separate supplementary note within the accounts gave an historic cost basis.
      It is normal for private sector companies to have both distributable—revenue—and undistributable—capital—reserves. Any revenue reserve authorised under clause 7 will reflect the profits that the corporation has earned in recent years, with the result that the successor company's balance sheet is a more accurate depiction of the present position of the business. I should stress that the creation of reserves has no effect on the cash position of the company; the company receives no money from the Government. It is simply a matter of bringing the historical financial record, as shown in the balance sheet, up to date.
      Amendment No. 7 would delete subsections (2) to (4) of clause 7. These subsections define the uses to which the statutory reserve may be put, and which I have just described. It is normal practice for the functions of a statutory reserve to be defined by statute, so the subsections are necessary.
      The provision that the Secretary of State may direct, under subsection 2(b), that a specified amount of the reserve may be treated as if it were profits available for distribution is not the same as giving cash to British Steel. Most companies have a revenue reserve, which is a book-keeping record of accumulated realised profits. British Steel is now profitable and would have been able to credit its profit to a revenue reserve had it been able to apply to the court before now—as a private sector company certainly would have done—to reduce its capital, thereby eliminating its accumulated realised losses.
      990
      The BSC has not been able to do that because of its status as a public corporation. Its recent profits have therefore been set off against its accumulated realised losses. The Bill provides that the Secretary of State may direct that a part of the statutory reserve may be applied as if it were profits available for distribution. The successor company may thus be provided with a revenue reserve which reflects the company's recent profitability and therefore its true trading position. This is not a cash transaction; no money is being given to the company and no subsidy is involved.
      Amendments Nos. 6 and 28, to which the hon. Members for Bradford, South (Mr. Cryer) and for Alyn and Deeside (Mr. Jones) referred, provide for the statutory reserve to be used for investing in new capacity and training or to prevent plant closures. As I have said, the amendments are based on a fundamental misunderstanding of the nature of the statutory reserve. It is simply an accounting entry. It is not a pool of cash or a treasure trove that can be used in the ways that the hon. Gentlemen suggested. The successor company will have to generate profits to invest in new plant and equipment, as I am sure it will, and as the BSC does now. The investment policy of the privatised company must, in any case, be a matter for the company and not for the Government.
      Mr. Cryer: I was making the point that there are now problems through the non-payment of ISERBS payments by the Commission, and that it would be desirable for any new venture to be insulated against that. Will the Minister turn his mind to that and assure the House that he and his ministerial colleagues—one of them has had correspondence with me—will continue to press the Commission and bear in mind the desirability of that contingency being avoided in future?
      Mr. Lang: Although the hon. Gentleman's comments did not relate directly to the purpose of the statutory reserve, I intended to say that I have noted what he said about the need for help from the Commission for training and retraining purposes. One need only think back to earlier steel closures in the constituency of my hon. Friend the Member for Corby (Mr. Powell) to reflect on what can be achieved and what has been achieved. I know that my hon. Friend the Under-Secretary of State for Industry is taking a close interest in this matter and will have heard what the hon. Gentleman said.
      On amendments Nos. 25 and 26, it is clearly incorrect for Opposition Members to state that the public money paid to the BSC should he regarded as some form of debt to the taxpayer. The provisions in the Bill lead to no loss of taxpayers' money. The amendments are thus based on a complete misinterpretation of the position. It is wrong to assume that the BSC can somehow be valued solely in relation to the capital shown in its balance sheet. That is a book-keeping figure. A company's worth is a matter not of balance sheet arithmetic, but rather of its performance and prospects. I suggest that privatisation will provide a better return to the taxpayer than many years of dividend payments.
      The amendments are also unworkable. The hon. Member for Dagenham accused the Government of being too concerned with dividends and not enough with investments, but the amendments would land the successor

      991
      company with such a potentially crippling dividend burden that it would be unable to invest adequately in new plant and equipment for its future.
      What we have in mind in the proposals in the Bill is not, to use the phrase of the hon. Member for Dagenham, short-termism. The restructuring is not, as the hon. Member said, a fraud on the taxpayer; still less is it, as the hon. Member for Motherwell, North suggested, a swindle. It is a proposal to put the corporation on all fours with a Companies Act company. It reflects the recent trading position of the British Steel Corporation. It enables it to have a fair chance of a successful future, which I believe is in the best interests of the taxpayer and the industry. I urge the House to reject the amendments.
      6.30 pm
      Mr. Gould: When I moved the amendment, I posed a number of questions to the Minister about the capital restructuring provided for in the Bill. I asked him how much, in his estimation, had been saved by the non-payment of any dividend or interest on public dividend capital. He declined to answer that. I then asked how much of the public dividend capital would be written down. I asked what safeguards would be provided in the absence of the proceeding, on which he places great reliance, that would have been followed in the case of a private sector company where application to the court would be necessary. I asked him how much of the extinguished public dividend capital would be passed to the statutory reserve. I asked how much of that sum would be directed under clause 7(2)(b) to be deemed to be distributable. I asked whether that direction would apply to the successor company.
      We did not receive an answer to any of those questions, except, by implication, to the last, and there it was made clear—it is clear in the Bill—that any direction that the Secretary of State makes under that provision—it is intended to make such a direction—will inure to the benefit of the new private owners.
      In the light of the absence of answers and of the suspicions that we have about the purpose and effect of the capital restructuring, we are satisfied that what is proposed is not fair to the taxpayer and does not point the successor company in the appropriate direction. In other words, it encourages emphasis to be placed on the payment of dividends as a priority over and above the need for investment. We believe that that is the wrong direction for the British steel industry to take. For those reasons, we are extremely disappointed that the Government have not moved in the direction of the amendments and we intend to vote in support of them.
      Question put, That the amendment be made:—
      The House divided: Ayes 210, Noes 249.

      Division No. 311]

      [6.32 pm

      AYES

      Abbott, Ms Diane

      Barron, Kevin

      Allen, Graham

      Battle, John

      Alton, David

      Beckett, Margaret

      Anderson, Donald

      Beith, A. J.

      Archer, Rt Hon Peter

      Bell, Stuart

      Armstrong, Hilary

      Benn, Rt Hon Tony

      Ashdown, Paddy

      Bermingham, Gerald

      Ashley, Rt Hon Jack

      Blair, Tony

      Ashton, Joe

      Blunkett, David

      Banks, Tony (Newham NW)

      Boateng, Paul

      Barnes, Harry (Derbyshire NE)

      Boyes, Roland

      Barnes, Mrs Rosie (Greenwich)

      Bradley, Keith

      992

      Bray, Dr Jeremy

      Howell, Rt Hon D. (S'heath)

      Brown, Gordon (D'mline E)

      Howells, Geraint

      Brown, Nicholas (Newcastle E)

      Hoyle, Doug

      Bruce, Malcolm (Gordon)

      Hughes, John (Coventry NE)

      Buchan, Norman

      Hughes, Robert (Aberdeen N)

      Buckley, George J.

      Hughes, Roy (Newport E)

      Caborn, Richard

      Hughes, Sean (Knowsley S)

      Campbell, Menzies (Fife NE)

      Hughes, Simon (Southwark)

      Campbell, Ron (Blyth Valley)

      illlsley, Eric

      Campbell-Savours, D. N.

      Janner, Greville

      Canavan, Dennis

      John, Brynmor

      Carlile, Alex (Mont'g)

      Jones, Barry (Alyn & Deeside)

      Cartwright, John

      Jones, leuan (Ynys MÔn)

      Clark, Dr David (S Shields)

      Jones, Martyn (Clwyd S W)

      Clarke, Tom (Monklands W)

      Kaufman, Rt Hon Gerald

      Clay, Bob

      Kennedy, Charles

      Clelland, David

      Kinnock, Rt Hon Neil

      Clwyd, Mrs Ann

      Kirkwood, Archy

      Cohen, Harry

      l.ambie, David

      Coleman, Donald

      Leadbitter, Ted

      Cook, Frank (Stockton N)

      I.estor, Joan (Eccles)

      Cook, Robin (Livingston)

      Lewis, Terry

      Corbett, Robin

      Livsey, Richard

      Corbyn, Jeremy

      Lloyd, Tony (Stretford)

      Cousins, Jim

      Loyden, Eddie

      Cox, Tom

      McAllion, John

      Crowther, Stan

      McAvoy, Thomas

      Cryer, Bob

      McCartney, Ian

      Cummings, John

      McFall, John

      Cunliffe, Lawrence

      McKay, Allen (Barnsley West)

      Dalyell, Tarn

      McKelvey, William

      Darling, Alistair

      McLeish, Henry

      Davies, Rt Hon Denzil (Llanelli)

      Maclennan, Robert

      Davies, Ron (Caerphilly)

      McTaggart, Bob

      Dewar, Donald

      Madden, Max

      Dixon, Don

      Marek, Dr John

      Dobson, Frank

      Marshall, Jim (Leicester S)

      Doran, Frank

      Martin, Michael J. (Springburn)

      Douglas, Dick

      Martlew, Eric

      Dunnachie, Jimmy

      Maxton, John

      Dunwoody, Hon Mrs Gwyneth

      Meale, Alan'

      Eadie, Alexander

      Michael, Alun

      Eastham, Ken

      Michie, Bill (Sheffield Heeley)

      Ewing, Harry (Falkirk E)

      Michie, Mrs Ray (Arg'l & Bute)

      Ewing, Mrs Margaret (Moray)

      Millan, Rt Hon Bruce

      Fatchett, Derek

      Moonie, Dr Lewis

      Faulds, Andrew

      Morgan, Rhodri

      Fearn, Ronald

      Morley, Elliott

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

      Morris, Rt Hon A. (W'shawe)

      Fisher, Mark

      Morris, Rt Hon J. (Aberavon)

      Flannery, Martin

      Mowlam, Marjorie

      Flynn, Paul

      Mullin, Chris

      Foot, Rt Hon Michael

      Murphy, Paul

      Foster, Derek

      Nellist, Dave

      Foulkes, George

      O'Neill, Martin

      Fraser, John

      Orme, Rt Hon Stanley

      Galbraith, Sam

      Owen, Rt Hon Dr David

      Galloway, George

      Parry, Robert

      Garrett, John (Norwich South)

      Patchett, Terry

      Garrett, Ted (Wallsend)

      Pendry, Tom

      Gilbert, Rt Hon Dr John

      Pike, Peter L.

      Godman, Dr Norman A.

      Powell, Ray (Ogmore)

      Golding, Mrs Llin

      Radice, Giles

      Gordon, Mildred

      Randall, Stuart

      Gould, Bryan

      Redmond, Martin

      Graham, Thomas

      Rees, Rt Hon Merlyn

      Grant, Bernie (Tottenham)

      Reid, Dr John

      Griffiths, Nigel (Edinburgh S)

      Richardson, Jo

      Grocott, Bruce

      Roberts, Allan (Bootle)

      Hardy, Peter

      Rogers, Allan

      Hattersley, Rt Hon Roy

      Rooker, Jeff

      Haynes, Frank

      Ruddock, Joan

      Healey, Rt Hon Denis

      Sedgemore, Brian

      Heffer, Eric S.

      Sheerman, Barry

      Henderson, Doug

      Sheldon, Rt Hon Robert

      Hogg, N. (C'nauld & Kilsyth)

      Short, Clare

      Holland, Stuart

      Skinner, Dennis

      Home Robertson, John

      Smith, Andrew (Oxford E)

      Hood, Jimmy

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

      Howarth, George (Knowsley N)

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

      993

      Soley, Clive

      Wareing, Robert N.

      Spearing, Nigel

      Welsh, Andrew (Angus E)

      Steel, Rt Hon David

      Welsh, Michael (Doncaster N)

      Steinberg, Gerry

      Wigley, Dafydd

      Stott, Roger

      Williams, Rt Hon Alan

      Strang, Gavin

      Williams, Alan W. (Carm'then)

      Straw, Jack

      Wilson, Brian

      Taylor, Mrs Ann (Dewsbury)

      Winnick, David

      Taylor, Matthew (Truro)

      Worthington, Tony

      Thomas, Dr Dafydd Elis

      Wray, Jimmy

      Thompson, Jack (Wansbeck)

      Young, David (Bolton SE)

      Vaz, Keith

      Wall, Pat

      Tellers for the Ayes:

      Wallace, James

      Mr. Allen Adams and

      Walley, Joan

      Mr. Adam Ingram.

      NOES

      Adley, Robert

      Cran, James

      Aitken, Jonathan

      Currie, Mrs Edwina

      Alexander, Richard

      Davis, David (Boothferry)

      Alison, Rt Hon Michael

      Day, Stephen

      Allason, Rupert

      Devlin, Tim

      Amess, David

      Dickens, Geoffrey

      Amos, Alan

      Douglas-Hamilton, Lord James

      Arbuthnot, James

      Dover, Den

      Arnold, Jacques (Gravesham)

      Dunn, Bob

      Arnold, Tom (Hazel Grove)

      Durant, Tony

      Ashby, David

      Evans, David (Welwyn Hatf'd)

      Atkins, Robert

      Evennett, David

      Atkinson, David

      Fallon, Michael

      Baker, Nicholas (Dorset N)

      Farr, Sir John

      Baldry, Tony

      Fenner, Dame Peggy

      Banks, Robert (Harrogate)

      Field, Barry (Isle of Wight)

      Batiste, Spencer

      Fookes, Miss Janet

      Beaumont-Dark, Anthony

      Forsyth, Michael (Stirling)

      Bellingham, Henry

      Forth, Eric

      Bendall, Vivian

      Fowler, Rt Hon Norman

      Bennett, Nicholas (Pembroke)

      Fox, Sir Marcus

      Benyon, W.

      Franks, Cecil

      Bifien, Rt Hon John

      Freeman, Roger

      Biggs-Davison, Sir John

      French, Douglas

      Blackburn, Dr John G.

      Gale, Roger

      Blaker, Rt Hon Sir Peter

      Gardiner, George

      Bonsor, Sir Nicholas

      Garel-Jones, Tristan

      Boscawen, Hon Robert

      Gill, Christopher

      Boswell, Tim

      Goodhart, Sir Philip

      Bottomley, Mrs Virginia

      Goodlad, Alastair

      Bowden, A (Brighton K'pto'n)

      Goodson-Wickes, Dr Charles

      Bowden, Gerald (Dulwich)

      Gorman, Mrs Teresa

      Bowis, John

      Gorst, John

      Boyson, Rt Hon Dr Sir Rhodes

      Gow, Ian

      Braine, Rt Hon Sir Bernard

      Gower, Sir Raymond

      Brandon-Bravo, Martin

      Greenway, Harry (Ealing N)

      Brazier, Julian

      Greenway, John (Ryedale)

      Brittan, Rt Hon Leon

      Gregory, Conal

      Brooke, Rt Hon Peter

      Griffiths, Peter (Portsmouth N)

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

      Grist, Ian

      Browne, John (Winchester)

      Ground, Patrick

      Bruce, Ian (Dorset South)

      Gummer, Rt Hon John Selwyn

      Buchanan-Smith, Rt Hon Alick

      Hamilton, Hon Archie (Epsom)

      Budgen, Nicholas

      Hampson, Dr Keith

      Burns, Simon

      Hannam, John

      Butcher, John

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

      Butler, Chris

      Hargreaves, Ken (Hyndburn)

      Butterfill, John

      Harris, David

      Carlisle, John, (Luton N)

      Haselhurst, Alan

      Carlisle, Kenneth (Lincoln)

      Hawkins, Christopher

      Carrington, Matthew

      Hayes, Jerry

      Carttiss, Michael

      Heathcoat-Amory, David

      Chapman, Sydney

      Heddle, John

      Chope, Christopher

      Heseltine, Rt Hon Michael

      Churchill, Mr

      Hicks, Mrs Maureen (Wolv' NE)

      Clark, Sir W. (Croydon S)

      Hicks, Robert (Cornwall SE)

      Clarke, Rt Hon K. (Rushclitte)

      Higgins, Rt Hon Terence L.

      Colvin, Michael

      Hill, James

      Conway, Derek

      Hogg, Hon Douglas (Gr'th'm)

      Coombs, Anthony (Wyre F'rest)

      Howard, Michael

      Coombs, Simon (Swindon)

      Howarth, G. (Cannock & B'wd)

      Cope, John

      Howell, Ralph (North Norfolk)

      Couchman, James

      Hughes, Robert G. (Harrow W)

      994

      Hunt, David (Wirral W)

      Onslow, Rt Hon Cranley

      Hunt, John (Ravensbourne)

      Oppenheim, Phillip

      Hunter, Andrew

      Page, Richard

      Irvine, Michael

      Paice, James

      Irving, Charles

      Patnick, Irvine

      Jack, Michael

      Patten, Chris (Bath)

      Jackson, Robert

      Patten, John (Oxford W)

      Janman, Tim

      Pattie, Rt Hon Sir Geoffrey

      Jessel, Toby

      Pawsey, James

      Johnson Smith, Sir Geoffrey

      Peacock, Mrs Elizabeth

      Jones, Gwilym (Cardiff N)

      Porter, Barry (Wirral S)

      Jones, Robert B (Herts W)

      Porter, David (Waveney)

      Jopling, Rt Hon Michael

      Portillo, Michael

      Kellett-Bowman, Dame Elaine

      Powell, William (Corby)

      Key, Robert

      Raffan, Keith

      Kilfedder, James

      Raison, Rt Hon Timothy

      Kirkhope, Timothy

      Rathbone, Tim

      Knapman, Roger

      Redwood, John

      Knight, Greg (Derby North)

      Renton, Tim

      Knight, Dame Jill (Edgbaston)

      Rhodes James, Robert

      Knowles, Michael

      Ridsdale, Sir Julian

      Knox, David

      Rifkind, Rt Hon Malcolm

      Lang, Ian

      Roe, Mrs Marion

      Lawrence, Ivan

      Rossi, Sir Hugh

      Lee, John (Pendle)

      Rost, Peter

      Lennox-Boyd, Hon Mark

      Rowe, Andrew

      Lightbown, David

      Rumbold, Mrs Angela

      Lilley, Peter

      Sackville, Hon Tom

      Lloyd, Peter (Fareham)

      Sainsbury, Hon Tim

      Lord, Michael

      Shaw, David (Dover)

      McCrindle, Robert

      Shaw, Sir Michael (Scarb')

      Macfarlane, Sir Neil

      Shelton, William (Streatham)

      Maclean, David

      Shephard, Mrs G. (Norfolk SW)

      McLoughlin, Patrick

      Shepherd, Richard (Aldridge)

      McNair-Wilson, M. (Newbury)

      Sims, Roger

      McNair-Wilson, P. (New Forest)

      Smith, Tim (Beaconsfield)

      Madel, David

      Soames, Hon Nicholas

      Major, Rt Hon John

      Speller, Tony

      Malins, Humfrey

      Spicer, Michael (S Worcs)

      Mans, Keith

      Squire, Robin

      Maples, John

      Stanbrook, Ivor

      Marlow, Tony

      Stern, Michael

      Marshall, Michael (Arundel)

      Stevens, Lewis

      Martin, David (Portsmouth S)

      Stradling Thomas, Sir John

      Mates, Michael

      Summerson, Hugo

      Maxwell-Hyslop, Robin

      Taylor, John M (Solihull)

      Mayhew, Rt Hon Sir Patrick

      Taylor, Teddy (S'end E)

      Meyer, Sir Anthony

      Thorne, Neil

      Mills, lain

      Thornton, Malcolm

      Miscampbell, Norman

      Townend, John (Bridlington)

      Mitchell, Andrew (Gedling)

      Townsend, Cyril D. (B'heath)

      Moate, Roger

      Trotter, Neville

      Monro, Sir Hector

      Waddington, Rt Hon David

      Montgomery, Sir Fergus

      Waldegrave, Hon William

      Moore, Rt Hon John

      Walters, Dennis

      Moss, Malcolm

      Wheeler, John

      Moynihan, Hon Colin

      Widdecombe, Ann

      Mudd, David

      Wilshire, David

      Nelson, Anthony

      Wood, Timothy

      Neubert, Michael

      Young, Sir George (Acton)

      Newton, Rt Hon Tony

      Nicholls, Patrick

      Tellers for the Noes:

      Nicholson, David (Taunton)

      Mr. Richard Ryder and

      Nicholson, Emma (Devon West)

      Mr. Stephen Dorrell.

      Question accordingly negatived.

      Clause 3

        INITIAL GOVERNMENT HOLDING IN THE SUCCESSOR COMPANY
        6.45 pm
        Mr. Maxton: I beg to move amendment No. 9, in page 3, line 13, at end insert—

        995
        '(4A) One third of all Securities issued under this section shall he designated "employee shares" and held in trust for employees in the form of an Employee Share Ownership Plan with power to appoint directors'.
        Madam Deputy Speaker (Miss Betty Boothroyd): With this we may take amendment No. 11, in page 3, line 13, at end insert—
        '(4B) One tenth of all securities issued under this section shall be designated "pension shares" and shall be made available to former employees of the British Steel Corporation.'
        Mr. Maxton: The two amendments together deal with employee share ownership. It is nice to see the Secretary of State for Scotland here for this important debate, although if he is to be present, I hope that he will listen and not talk. He has not shown a great deal of interest in the Scottish steel industry so far—[Interruption.] He obviously does not intend to stay; I wonder whether he is going to Hampden.
        In an earlier debate, we raised the question of the involvement of the work force in the new company. The amendment represents a different way of ensuring such involvement, and the Under-Secretary of State for Industry, who replied to the debate, suggested himself that share ownership was the best way of involving the work force.
        I hope that we shall be able to debate a second matter. We shall, of course, be debating the amendment, but I hope that you, Madam Deputy Speaker, will give us some leeway and allow us some debate on the written answer yesterday in which the Government laid down their proposals for share ownership by employees. The House should know what the Government have in mind, and perhaps they will answer some questions—
        Madam Deputy Speaker: Order. I am afraid that we can deal only with the amendments on the Order Paper. We cannot deal with answers to questions unless they relate directly to these amendments.
        Mr. Maxton: I am sure that they do, Madam Deputy Speaker. The Government's proposals deal with employee share ownership, which is what this debate is about.
        The Government's proposals and ours are very different. We propose that one third of the shares should be designated as employee shares and held in trust for the employees in the form of an employee share ownership plan with the right to appoint directors to the board. That seems to us to be the best way of ensuring that the employees have a stake in the company, without the risks of direct personal ownership. They would have the right to make decisions and have a say in the future of the company in which they have already invested their labour, time and effort, without the possibility of losing their hard-earned money by investing directly in shares.
        I should have thought that that would allow exactly the sort of developments about which the Under-Secretary talked. That certainly cannot be called "tokenism"—the word used by Conservative Members to describe our plans for appointing two directors to the board. It cannot be called a "retreat"—the term used earlier by the hon. Member for Darlington (Mr. Fallon)—from our plans to involve workers directly in industry.
        Incidentally, it is surprising—for once, the Chancellor of the Duchy of Lancaster may agree—that in both the earlier debate on union representation on the board and
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        again now, when debating share ownership, representatives of the Social and Liberal Democratic party, which has always been an exponent of worker participation and share ownership, have not bothered to be present and to participate in the debate.
        We propose an innovative, imaginative and exciting way of ensuring the workers' involvement, even though that is not something the Government would like to see. We assume that those who will run the employees' share ownership plan will come, at least in part, from the trade union movement and will be nominated by employees through their trade unions. That would be the best way of involving the work force in share ownership and in directorships.
        It is worth comparing the Government's scheme with our own. In a written answer, the Chancellor of the Duchy of Lancaster explained exactly what will happen:
        "(i) employees will each be offered £70 worth of free shares plus a further £2 of shares for every year of service with the corporation. An employee with 15 years' service could therefore be eligible to receive, free of charge, £100 worth of shares;".
        One of the interesting points arising from the previous debate was that the Minister of State, Scottish Office said that the Government had no idea what would be the capital valuation of the new company. However, the Chancellor of the Duchy of Lancaster stated in his written answer:
        "All these arrangements will be subject to an overall limit of 10 per cent. of the shares on offer in the flotation."
        There are 52,000 employees in British Steel. If one takes the minimum £70 giveaway, its value will total about £3·5 million. If that sum represents 10 per cent. of the shares on offer, the minimum flotation value will be £35 million. I hope that the Chancellor intends that the figure should be higher than that. [Interruption.] He is prepared to concede £35 million, but the overall picture adds more to that. It appears to give some idea that, when the right hon. and learned Gentleman did his sums in terms of employee share ownership, he had some idea of what the final flotation structure and value would be. How could he arrive at his 10 per cent. limit otherwise?
        The Chancellor of the Duchy of Lancaster's written answer continued:
        "(ii) employees will also be offered 2 free shares for each one bought at the full share price on a matching basis, up to a maximum value in free shares of £330. An employee buying £165 worth of shares would thus receive shares worth in total £495;
        "(iii) employees will be able to buy shares, up to a maximum value of £2,200, at a discount of 10 per cent. on the full share price;
        (iv) employees and BSC pensioners applying for shares at the full share price, will be treated on a priority basis over the general public, up to a limit of £10,000 worth of shares"—
        presumably at the full share price—
        "per individual."—[Official Report, 17 May 1988; Vol. 133, c. 383.]
        I do not believe that many employees at Ravenscraig will take up more than their £70-worth of free shares plus £2 of shares for each year of service.
        The Government will have considerable difficulty in floating the British Steel Corporation, anyway. It will not be attractive to many investors in the market place and there is no reason why employees should risk their money by investing in it. The advantage of our scheme is that it would not put employees' money at risk. They would enjoy a shareholding through the plan, but their personal savings would not be at risk.

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        I know some members of the senior management of Ravenscraig, and I do not imagine that any of them have £10,000, or the maximum of £12,200, to spare for an investment that is as risky as the British Steel Corporation, unless it is for a short-term return—buying shares at the time of the flotation in the hope that there will be an upward movement in their price, with a view to making a quick profit by selling them shortly thereafter. It is not likely that large numbers of employees will invest in the company in the way that the Minister suggests.
        How many employees does the Minister expect will take up the various categories of share ownership? When he did his sums, he must have had some idea of the number of employees taking up even the £70 worth of free shares. Does the Minister expect them all to do so or only a certain percentage? How many employees does he expect will buy shares and then claim their entitlement to a further £2-worth of shares? How many employees does he expect will buy shares to the maximum value of £12,200 or £10,000?
        When the Chancellor of the Duchy of Lancaster prepared his written answer, he must have had some idea of the numbers involved. Otherwise how did he arrive at those figures? What was the premise of his information?
        Mr. John Home Robertson: Astrology.
        Mr. Maxton: I thought that it was my hon. Friend the Member for Carrick, Cumnock and Doone Valley (Mr. Foulkes), and not my hon. Friend the Member for East Lothian (Mr. Robertson), who was into astrology. However, judging by some of the answers we have received, astrology appears to have been the way by which the Government arrived at them. Perhaps this is another example of it.
        Having made all those calculations and arrived at an overall limit of 10 per cent. of the shares on offer, the Minister must have worked out what he considers should be the corporation's flotation value. If not, what will happen if, at the end of the year when he wishes to float the company, there is a slump in the share market? The share value may not be that which he anticipated but there may be the level of take-up which he expected from the employees. What will he do then? Will he downgrade the value of their shares? I am not sure whether the Chancellor of the Duchy of Lancaster nodded or whether it was only an involuntary movement of his head, but he appeared to nod, so it appears that, again, the offer he has made to the employees is not worth the paper it is written on. If there is a downward evaluation, the figures that he has produced will not materialise.
        I am sure that the House is more interested to hear what the Chancellor of the Duchy of Lancaster has to say about his scheme than in listening to me talking about our own, which we know the Minister will not accept.
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        Mr. Fallon: Some pretty curious amendments have been tabled by the Opposition, but amendment No. 9 is the most extraordinary so far. It is probably symptomatic of the Opposition's confusion about the whole concept of share ownership. For some years now they have been telling us that there is no demand for share ownership, either in the wider population or among those who work
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        for nationalised companies that have been privatised. That is what the Labour party has been telling us, and some of its members are still doing so. That is what the trade union leaders have been telling us.
        Mr. Maxton: As the hon. Gentleman accuses us of saying that there is no interest in share ownership, perhaps he would like to say who said it and when.
        Mr. Fallon: I do not think that I need to detail exactly who said it. [Interruption.] Every time that my hon. Friends have come to the House and proposed a piece of privatisation legislation, it has been the Opposition's view that the privatisation should not proceed and, in particular, that shares in the previously nationalised industries should not be offered. Yet what happens? We have found time and again—with British Telecom, and with British Gas—that employees respond in overwhelming numbers.
        Mr. Michael Brown: My hon. Friend is absolutely right. To illustrate the point that he has made about previous privatisation measures that have been brought before the House, the Opposition have reminded anyone who is thinking of becoming a shareholder that the shares would be confiscated, perhaps for very little value in return. Perhaps my hon. Friend would like to press the Opposition on what they will do to these shareholdings.
        Mr. Fallon: My hon. Friend must not tempt me too far along that line. Suffice it to say that thousands of individual shareholders in every constituency in the country now hold popular shares in formerly nationalised companies that have been privatised. That is probably why there are slightly more representatives on the Tory side of the House than there are on the Opposition side.
        The Opposition cannot have it both ways. They cannot say that there is no demand for share ownership, and then say that, if there is, the employees should have a third of the shares. That is nonsense. [Interruption.]
        Madam Deputy Speaker: Order. I can hear only one hon. Member at a time.
        Mr. Fallon: This suggests to me that some Opposition Members have learnt from the success of our privatisation programme, having seen the huge take-up by British Telecom and British Gas employees of the shares made available to them. They have had to cobble together this policy so that they can go back and say to those who work for British Steel, "We would have allocated you even more shares than the Government are proposing."
        We are bound to ask where that leaves the Opposition's share ownership policy. Will they revise the arrangements for British Telecom and British Gas to ensure that the work forces in those industries now have a third of the shares, as those in British Steel would have if the amendment were accepted? Will they revise the arrangements that the House has already put through, take shares from the public—indeed, from other trade unionists—and cobble them together in this extraordinary share ownership portfolio?The second reason I believe that Conservative Members should reject the amendment wholeheartedly is that the shares are not being offered to those who work for British Steel; they are being placed inside a trust. The employees will have no rights. They may in name have some claim to

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        a third of the share capital, but they will not have the right to buy more shares, to sell any of them, to hold them or to dispose of them as they wish. It is a very patronising approach to share ownership to say that the employees should have a third of the shares but that they should not he able to do anything with them—that the ownership and management of the shareholding should be confined to trustees.
        Who will those trustees be? We heard that the trade union barons would be the trustees of the scheme. That is not real share ownership. It is treating shareholders like children with pocket money—saying that they can have a third of the shares, but cannot do anything with them, and cannot have any rights. These will not be free shares in any real sense. In fact, they will be fake shares.
        Mr. Maxton: I wonder how the hon. Gentleman differentiates between that sort of share and unit trusts or investment accounts in banks? In those instances, people put in their money and then own shares as a result of investment made by the bank. But they have no direct say. The employees of British Steel will have considerably more say.
        Mr. Fallon: A unit trust is not controlled by the trade union leaders involved in the industry. It is perfectly possible for any individual to acquire more units in the trust or to dispose of them, as the case may be. The individual has some rights. But under amendment No. 9 the British Steel employee would have no rights whatever.
        This is a bogus amendment. It cannot be confused with any real extension of wider share ownership; nor can it he called "exciting", which was how the hon. Member for Glasgow, Cathcart (Mr. Maxton) described it. He said that the whole point of the share ownership proposal that he was advocating was to take out the risk so that not only would the shares not go down, but they would not go up. Those who work for British Steel would have no opportunity to benefit from their investment and their commitment to this new dynamic private company. They would have no real interest.
        In relation to an earlier amendment, the hon. Gentleman specifically spoke about employee interests. The employees would have no interest in these paper shares. They would not be able to benefit from increased productivity or the better performance of the company as a whole, nor would they be able to sell their shares, or acquire more, if they wanted to do so.
        This is a bogus share ownership proposal, and as such it should be treated with the contempt that it deserves.
        Mr. Morley: The hon. Member for Darlington (Mr. Fallon) displays the Tory party's attitude to share ownership, and demonstrates the original idea of what share ownership was all about. The original idea was to invest capital in a firm to help that firm to prosper, and to take a return from the profits in the form of dividends. But what is happening now, in Mrs. Thatcher's Britain—
        Madam Deputy Speaker: Order.
        Mr. Morley: I apologise, Madam Deputy Speaker.
        What is happening now is that shares are being used as some kind of casino economy. The City is becoming an up-market bookie: people are making money on the actual transaction of shares without having the slightest interest in the investment in the company or in the company itself.
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        The amendment gives a direct interest to those who have earned their rights to share ownership by the efforts that they have put into the company over the years, and the help that they have given it.
        We also feel that 10 per cent. should go to the pensioners who have worked all their lives in the industry. It is a shame that those who deal in shares are held. in higher esteem than, for instance, steel workers who have spent all their working lives in often appalling conditions and back-breaking work. They do not seem to receive the same esteem as people who sit in an office, press a button and transfer huge sums in shares in companies in which they have no interest and of which they have no knowledge. The amendment gives the people who have earned that stake some direct control of the company—a say in it, and a share and involvement in it. I am surprised that the Government should argue against that if they genuinely believe in any kind of shareholding democracy.
        We talk about the desire of people to buy shares, and the so-called success of the Government's policy in selling them. If people are offered a deal whereby they give £5 and are given back £10, of course they will jump at the chance. But the number of small shareholders in British Telecom and British Gas is not increasing; it is decreasing rapidly, as people take their profits and get out.
        Although many small investors had their fingers burnt in the October crash, it is worth remembering that the large institutions will still make money whether the stock market is booming or declining. Many of the small punters who were encouraged by the Government into the shareholding market have lost a great deal of money as a result. I do not see the Government shedding many tears about that. That is why it is right that the shares should be given to the steel workers. They have earned those shares through their labour, productivity and commitment to the industry.
        Mr. Morgan: I am grateful for the opportunity to contribute my sixpen'orth to the debate because the amendments concern some important issues about which there are strong feelings among the steel workers as to who should own what share of the industry.
        I listened aghast to the ignorance displayed by the hon. Member for Darlington (Mr. Fallon) about share ownership after privatisation. He appears to believe that the Government's privatisation programme completely excludes employee share ownership plans. He should be made aware that such plans have played a significant role over the past few years in privatisation involving parts of the bus and motor car industry.
        The two largest employee share ownership schemes in Britain have both followed privatisation. The first is operated by the Portsmouth bus company, which, I understand, has about 4,000 employees and was privatised through a management and worker buy-out with the workers' part of that buy-out being operated through a employee share ownership scheme. The second scheme is operated by Llanelli Radiators, which employs about 1,500 workers and was privatised as part of the sell-off of the fringe parts of the British Leyland and, later, Austin Rover empire. Those workers found themselves faced with the choice of closure or having to assist in funding a buy-out and chose to opt for an employee share ownership scheme.
        That was an extremely large company in manufacturing terms, certainly in Wales, and was privatised with no more

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        than one quarter of the employees taking part. Nevertheless, it is still a new concept that has not been immediately embraced by everyone. An employee share ownership plan, such as we are proposing here, was adopted and helped to save 1,500 jobs, which are like gold in the Llanelli area as they are elsewhere in south Wales.
        If the hon. Member for Darlington wants to exclude employee share ownership plans from privatisations, he has a considerable amount of retrospective work to do as a result of the Government's policy over the past four years. If he wants to defend the exclusion of the steel industry from such a scheme, he must explain why it is acceptable for the motor car components manufacturing industry and the bus industry to have such a scheme. Some extremely substantial privatisations have taken place in those industries with the assistance of employee buy-outs through employee share ownership plans.
        Our proposals are no different, although they are on a larger scale. Although it is true to say that scale can sometimes be a killer argument, as it is not always easy to scale up to a firm with 52,000 employees, the position with British Steel does not differ greatly from that of the National Freight Consortium management and worker buy-out. The employees were very much in the driving seat in that company, with about two thirds of the shares owned by one third of the employees. That firm is halfway between the Portsmouth bus company or Llanelli Radiators and the British Steel Corporation and has well over 20,000 employees, of whom one third participate in share ownership. That buy-out took place through a scheme similar to an employee share ownership plan.
        The Government must explain their reasons for rejecting the amendment, if they decide to do so, in spite of our best efforts to persuade them to support us. Why cannot such a scheme be set up in the steel industry when similar schemes have been set up in industries that are almost as large?
        7.15 pm
        Mr. Fallon: The hon. Gentleman referred to the example of the National Freight Consortium. The key difference between that share ownership scheme and the proposal that we are discussing is that the employees of the National Freight Consortium were free to buy as many shares as they wanted. As I understand the wording of amendment No. 9, the employees of British Steel will not have the freedom to buy as many or as few shares as they wish.
        Mr. Morgan: The hon. Gentleman introduces the philosophical and dogmatic flavour that characterises his contributions to our debates. He is in favour of a proposal, if someone is economically free to implement it, but, if there is an element of planning, he is against it, regardless of whether it helps to achieve wider share ownership and greater employee involvement.
        The hon. Gentleman is right to say that we accept that the Government have gone too far down the road towards the flotation of the successor company to involve the employees in majority share ownership in National Freight style. When the company had a low value, about a third of the employees would have come into the scheme and seen the value of their shares appreciate twentyfold, as has happened in the five-year period since the National
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        Freight Consortium was bought out by management and workers. That is not possible as the BSC is now a profitable company. The NFC was a highly unprofitable company when the arrangement was made and the shares bought by workers were therefore extremely cheap. Only they and the management had the faith, with a small number of venture capitalists backing them, to buy in cheap and watch the company appreciate. As the BSC has now returned to profit, that option is no longer available and an employee share ownership plan is more logical.
        It is a minor objection to claim that the Government could reject the proposal because it involves only one third of the shares or because it is compulsory to specify a figure of one third. If the Government wish to incorporate a flexible element in the scheme, we would be willing to discuss it with them. We want to ensure that, as far as possible, the firm's employees, including senior and middle management was well as shop-floor employees, should be in the driving seat.
        One of the primary reasons why the employees of the BSC and of Allied Steel and Wire are extremely interested in acquiring shares in the industry is the fear of being ripped off by speculators. They see employee share ownership as one way of warding off control by speculators and the financial community. They want to ensure that they have the maximum amount of elbow in the industry after privatisation to ensure that the industry is not taken over by speculators, companies which are primarily interested in shrinkage and sell-off of spare assets or foreign companies interested in further rationalisation.
        Some of those fears may be dealt with by the Government's announcement regarding a golden share. Following the experience with Britoil, the Government must accept that many employees of industries that were protected by golden shares do not have the same confidence in the golden share as a method of warding off takeovers as they did before the curious handling of the BP-Britoil takeover saga, in which the golden share was finally negotiated away by the Treasury.
        Obviously, there will be the attractions of a dividend. It is difficult for Opposition Members to recommend the prospect of capital growth, because it is greatly influenced by currency patterns. Within the past month the senior management of the next largest steel company to the BSC, United Engineering Steels, warned that the rising pound was already hitting its profits and performance. One imagines that, if the flotation were not in the offing, the management of BSC and Allied Steel and Wire would have said exactly the same. The steel industry by its nature is highly sensitive to the changing relationship between the pound, the deutschmark and the dollar.
        Those are all reasons why an employee share ownership plan is of great importance and why its structure is convenient to the industry, suspended as it is in a state of profitability, but with that profitability likely to be severely affected by currency changes, which are already upon us, and possibly by the changes which could occur on 30 June if quotas are not renewed and if dumping steel in the back gardens of other steel producers in Europe sets in as a way of removing surplus capacity, since that does not seem to be possible by negotiation.
        Employee share ownership plans have the great advantage that they achieve a greater measure of control. I hope that the hon. Member for Darlington agrees that a curious feature of share ownership is that, despite the

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        massive number of share owners in British Telecom, for example—I understand that the employees own no more than 1 per cent.—they have no control over the company. They have the ability to buy or sell, but that is not a measure of control, nor is it what we are seeking for BSC employees. We are seeking a measure of control and I implore the hon. Gentleman to understand that that is what BSC' employees are looking for. We intend to help them to achieve that.
        The Government have offered conventional share ownership on slightly preferential terms in this absolutely repellent form of tokenism, which might result in as many as 3 or 4 per cent. of the shares landing up in the hands of employees. That is three times what BT employees have, but it is still nowhere near what we are trying to achieve. That does not achieve control. If British Steel has 52,000 employees, of whom 10,000 buy shares because they can afford to, and if they are backed up by a certain number of steel industry pensioners—the BSC is one of those curious industries which we now have in Britain in which there are twice as many pensioners as workers—how do they get together to exert any influence over the broad strategy that management is pursuing? They cannot.
        An employee share ownership plan with the shareholders' power being exercised through proxy votes vested in trustees, who could be from trade unions—obviously those chosen to exercise proxy votes could be changed—means that a considerable amount of power is hands of employee or pensioner shareholders. That is the advantage.
        Shareholders in British industry simply act as sleeping shareholders and in the end their only power is to sell shares and move on. That is not an option which employees would ever want. They invest their careers in the industry and their families depend on it. There is no way that they can share that in-out attitude towards the industry in which they work. They want to exercise some sort of control and influence over the management, and they can do that only through and ESOP-type structure.
        That is how they will get together. Some will live in Scunthorpe and some on Teesside. The steel industry operates in the outer circle of the United Kingdom—in Wales, Scotland, the north-east and the east midlands. It is not all grouped together in one convenient region, so it is difficult for 10,000 shareholder employees to influence management's strategic decisions or to change the management if they think that its policy has deteriorated severely. Under the amendment, that can be done through proxy voting through the structure of an ESOP. That is why we commend it strongly as the best available option for maximising, not just share ownership but property control.
        How does the provision of an ESOP relate to the golden share aspects that the Government announced in their proposals for preferential access to share purchase and to the temporary five-year anti-takeover provision? A company with an anti-takeover clause is attractive to its employees. They would be worried about buying shares in a company which might be taken over. Therefore, an employee share option plan goes along with an anti-takeover provision.
        The Government have offered us temporarily a golden share of the classic kind. We are asking them also to consider the advantages of an ESOP proposal, such as we have here, which can incorporate not just the golden share for a temporary period, but a poison pill mechanism
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        against the devices which in recent years the shadier end of the finance capital industry has developed in both Wall street and the City of London. A poison pill defends, not so much against takeover as against the dawn raids which are of doubful virtue, but which have not yet been made illegal.
        Under the poison pill mechanism, additional shares will immediately be created if a dawn raid is carried out. If a dawn raid or concert party results in 15 per cent. of shares landing up in one pair of hands, it would be possible instantaneously, by articles of association and the relationship between the ESOP and the overall share of the company, to create an additional number of shares equal to that which landed up in the hands of the predator.
        I understand that the alternative to the poison pill defence against dawn raids is called the Pac-Man alternative. In that, additional voting rights can be conferred on the shares in the proposed ESOP. In the event of any owner acting on his own or through a concert party and landing up with 15 per cent. or more of the shares, instantly additional voting rights are temporarily conferred until the takeover bid is warded off. They last simply while the crisis lasts. That is made much easier by the ESOP proposal. I hope that the Government will realise how much more attractive employee share ownership is to the employees of an industry such as British Steel if it can incorporate one of those two variants.
        In that way, when the Government's golden share proposal expires, the ESOP can be used to achieve anti-takeover protection or semi-legal anti-takeover protection, against the dawn raid or concert party which we have seen so much of engendered by the wilder fringes of the financial community. That is simply not the kind of world in which potential employee share owners want to become involved. The ESOP proposal can be used constructively to maximise, not just employee share ownership, but long-term employee share ownership and an appropriate degree of control, so that if employees finish up with one third of the shares, they can wield one third of the power in the corporation. That is how it should be.
        It is no good simply saying, "If you wish to dispose of your shares you should be free to do so." That is not what employee share ownership is. about. It is an expression of the fact that employees have given their life's blood to the industry and wish to remain committed to it so long as they are employed there.
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        Yesterday we made an unsuccessful attempt to encourage employee share ownership in Allied Steel and Wire. We asked that an employee trust fund, similar to an employee share ownership proposal, should be set up. According to my information, the Minister, no doubt inadvertently, misled the House. I am sure that he would like to take this opportunity to correct what he said yesterday in reference to my speech:
        "I am attracted by the idea that the employees of Allied Steel and Wire Ltd. should have a stake in the company. Once again, the hon. Gentleman's chosen method, contained in amendment No. 32 … is generous but it goes over the top somewhat. Most of the employees already have a stake in the company".—[Official Report, 17 May 1988; Vol. 133, c. 834.]
        My information, from the trade union representing the employees, is that they do not have a stake in the company. What they took out last October was a £1 option which

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        could be converted into shares when the flotation was announced. That option cost them a nominal amount. The workers may or may not exercise the option.
        I offer amendments Nos. 9 and 11 to the House in the same spirit as I proposed the amendment yesterday. I am sure the Minister will take the opportunity later to correct the misinformation he gave the House yesterday, according to what I have heard from Cardiff, where Allied Steel and Wire has its headquarters. We are keen to encourage employee share ownership which does not exist yet in Allied Steel and Wire, although the Minister said yesterday that it did. We believe that employees require further encouragement towards share ownership. Amendment Nos. 9 and 11 would achieve that.
        Mr. Kenneth Clarke: I accept that the hon. Gentleman may be more up to date and more closely informed about Allied Steel and Wire than I was yesterday. I will check what he has said. The workers' shareholding in the company may take the form of options to be exercised in the flotation. I am grateful to the hon. Gentleman for pointing that out to the House.
        The amendments ought not to lead to too great a divide between us. It appears that we start roughly at the same place. We are now all in favour of the employees of companies that are being privatised having shares in those companies. Certainly the Government have never had any doubts about the desirability of encouraging employee share ownership in major companies. We have demonstrated that over and over again, because employee share ownership schemes have been a standard feature of almost every privatisation that the Government have carried out, although the exact terms have varied from case to case.
        We are also clear about why we put forward these offers to employees. We think that it is important that people should be rewarded for the contribution that they have made, in the case of British Steel by turning the corporation around from being a chronic loss maker to a profitable company that is ready for the market place again.
        It is right that, as far as possible, people's rewards in industry should be linked to the performance of the industry. Therefore, we are impressed when people take a stake in the industry and are prepared to look forward to gaining personally out of whatever improvement in performance they can contribute to. Obviously, it tends to reduce the divisions in industry if employees feel that they have a direct financial stake in the company for which they work.
        Over the last seven or eight years of our economic revival, we have seen a change of opinion. Most people realise that their interest as employees is identical with the interest of the company for which they work and that anything that underlines that is to be welcomed. For that reason, we have always made it clear that we proposed to make special arrangements for employees of the British Steel Corporation and its subsidiaries to take shares in the flotation that we are planning.
        Yesterday, in response to a parliamentary question from my hon. Friend the Member for Hertfordshire, South-West (Mr. Page), I gave details of what we propose. Employees will each be offered £70-worth of free shares, plus a further £2 of shares for every year of service with the corporation. That means that an employee with 15 years'
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        service could be eligible to receive free of charge £100-worth of shares. Employees will also be offered two free shares for each one that they buy at the full share price on a matching basis, up to a maximum value in free shares of £330. So an employee buying £165 worth of shares would receive shares worth in total £495.
        Employees will also be able to buy shares up to a maximum value of £2,200 at a discount of 10 per cent. of the full share price. Finally, employees and British Steel Corporation pensioners applying for shares at the full share price will be treated on a priority basis over the general public up to a limit of £10,000-worth of shares per individual. That is one of the most generous arrangements that we have proposed in a privatisation flotation. I hope that many employees will take advantage of it.
        So far, so good. While I am grateful to receive the support of the Opposition for the principle of share ownership, I find, as my hon. Friend the Member for Darlington (Mr. Fallon) said, that they still have not sorted out exactly what form of share ownership they favour. The bland assertion of the Labour party that it has always been in favour of workers' shares is an assertion which I greet with the same incredulity as my hon. Friend the Member for Darlington.
        I think I remember correctly—but I have not checked it—that the hon. Member for Dagenham (Mr. Gould) went to the last Labour party conference in a spirit of revisionism to lead the party back from the abyss into which it had fallen in June. He made a speech in which he was unwise enough to point out to fellow members of his party that he had found that many workers in industry were attracted by the idea of workers' shares. He was repulsed; he was rebuffed.
        It is all very well for Labour spokesmen to say how much they favour employee shares, but the attendance of Opposition Members is not much better than the attendance on the Government side for the debate. If some of the hon. Member for Dagenham's hon. Friends from below the Gangway were to hear these ringing remarks about the desirability of encouraging workers to take shares, I think that the hon. Gentleman would be in trouble again. I think he would find that his party has a long way to be led on the issue.
        Mr. Maxton: If my hon. Friend the Member for Dagenham (Mr. Gould) was repulsed, as the right hon. and learned Gentleman suggests, how was it that the constituency section of the Labour party elected my hon. Friend to the national executive of the Labour party so overwhelmingly?
        Mr. Clarke: I note that the constituency section also elected the hon. Member for Bolsover (Mr. Skinner) to the national executive. It seems that he does not intend to give us the benefit of his views on workers' shares this evening, but I suspect that they are dramatically different.
        Given that I am addressing the revisionists in the Labour party, having heard their amendment and the case which they put for it, I fear that they have not yet got the point of workers' shares. I have explained why we favour employee shares; we want to give employees a share of the reward that arises from the improved performance of the company and to lessen the divisions within industry.
        The Opposition have suddenly thought that workers' shares give the opportunity of worker control; at least, that is what I thought they were in favour of. The hon.

        1007
        Member for Glasgow, Cathcart (Mr. Maxton) said that they would not give the workers influence over the company, but that the trade unions would act as the workers' trustees and would ensure that the workers' interests were looked after by the route of worker share ownership. That explains the generosity of their amendment.
        So enthusiastic are the Opposition about workers' shares that when we come forward with our reasonable proposals they outbid us; they try to steal our clothing. They say that we should give a third of the entire equity to the workers. That is curious coming from hon. Members who have complained about that hard deal which the taxpayer is getting. Now they say that the taxpayer should see a third of the equity given to the workers. However, it would not actually be given to the workers because they would not be allowed to sell their shares. They would not be allowed to behave as shareholders because the shares would be held in trust by the trade union, which would make sure on their behalf that suitable influence was exercised over the management of the company to put the new democracy in place.
        Mr. Gould: I find that passage of the Minister's speech encouraging. After a long journey of incomprehension, he has at last grasped the point. Even he has been able to put in his own words, not quite accurately but just about right, the essential distinction which I and my hon. Friends have always maintained between the tokenism which he is offering to individual share owners and the rather doubtful investment which he is encouraging British Steel employees to make. There is a difference between that proposition and the idea, which has a long Socialist history, that worker share ownership held collectively is a means by which workers can exercise some control over their own destiny as workers in that enterprise. I am delighted that at long last the Minister has grasped that point.
        Mr. Clarke: I think that I have always grasped the point. We are both defining carefully the distinction that still lies between us. The Government favour wider share ownership among the general public and employees. We see it as a way of distributing wealth and rewarding performance in industry. We believe in a property-owning democracy and that employees who have shares should be entitled to get the same benefit and have the same influence over them as any other investor and use them as they wish.
        The Labour party, having discovered that it has been defeated in the general public argument of privatisation, employee shares and wider share ownership, has decided to return to all the old nostrums of worker control. I thought that workers' control was a very Left-wing part of the Labour party, but it seems to be winning new recruits tonight. The Labour party is not interested in every man being a capitalist and employees entering the property-owning democracy. If the Labour party cannot have state-owned nationalised industries, it is interested in having trade union-dominated industries by "giving" a third of the equity to the work force so that the trade unions can exercise control over it.
        It may be that it is not in the amendment and this is not the occasion to go into further detail but, if that is the Labour party's intention, I am not completely against the idea of ESOPs and workers' co-operatives even, if they operate in the market economy and on a sensible basis. I
        1008
        do not think that using them as a cloak for trade unionism control or as an anti-takeover device is one of their attractions. I am familiar with ESOPs. Russell Long was the chap who started ESOPs in the United States. I have corresponded with and met Russell Long. We have looked at the possibilities of extending ESOPs in this country.
        I agree with the hon. Member for Cardiff, West (Mr. Morgan) that the Portsmouth bus company is a good example of an experiment with an ESOP. As a Minister, I was involved in the privatisation of the National Freight Corporation, which was a successful example of employees taking shares. As my hon. Friend the Member for Darlington said, that privatisation led to an extremely successful company being formed. I might say that it was formed in the teeth of the opposition of the Labour party which, I recall, fought it night after night in Committee, because it did not want the employees to have shares. It wanted the company to be nationalised and loss-making and to stay as it was. Nevertheless, there is not need for us to have a deep divide over all these areas—increased worker involvement in industry, workers' ownership of shares and so on.
        There is a fundamental difference between us. We believe that our proposal is an attractive offer to the employees of British Steel to participate as shareholders in the future success of the company. What is being offered by the Opposition is an apparently generous offer of trade union control.
        Mr. Peter Hardy: The Minister is obviously enjoying himself, but he should realise that we are entitled to ask the Government to be consistent. Some of the shares that have accrued to workers in past privatisations have been given without voting rights. That does not tally with the suggestion that the Government are being generous to the steelworkers. When British Gas was privatised, the value of the free shares given to the employees was less than the cost incurred by the Government in promoting llts privatisation in the United States of America. We are perhaps seeing inconsistency in the Government's approach tonight.
        7.45 pm
        Mr. Clarke: The precise offers that we have made have varied from case to case. 1 am not sure, but I think the proposal that we announced yesterday for employees of British Steel is the most generous offer of shares that we have made so far. It is certainly one of the most generous and there is no question of non-voting shares or anything of that kind.
        We have made offers to the workers in every privatisation that the Opposition have fought. These offers have become increasingly popular with the employees. That is why Labour Members no longer get up during these discussions and flatly attack the idea of employees owning shares. Instead, they come up with alternatives of their own which are not quite the gift-wrapped presents that they seem to be.
        A third of the equity to be given to the workers is not an option which I or my hon. Friend the Member for Darlington find acceptable. The Government have met the underlying desire—apparently of both sides of the House—to give the employees a stake in this company. I ask the House to accept our proposals and to reject the amendments.
        Mr. Stan Crowther: I had no intention of intervening, but as the Minister is not prepared to give way, I must put this important point quickly. As far as I know, the Chancellor of the Duchy has no objection to institutional ownership of shares. I do not think that he will say that he objects to pension funds and insurance companies buying shares in the BSC. If that is the case, why cannot he be consistent enough to accept that an institution which represents the employees should also be entitled to hold shares? It is a simple point which I would like the Minister to answer.
        Mr. Kenneth Clarke: I have no objection to trade unions owning shares; many of them do. I expect that trade union pension funds will take a substantial stake in this privatisation, as they have in others. That will be after the Opposition, to which many unions are affiliated, have fought the privatisation tooth and nail. I do not mind the trade union institutions holding shares as investors, but I dislike the idea that the workers will be given a large number of shares and that the power over the management—which is what interests the Opposition—will be exercised by the trade unions on their behalf.
        Mr. Maxton: The hon. Member for South Ribble (Mr. Atkins)—in whose constituency is that famous bus company—attacked the Opposition earlier for tokenism. I have heard of tokenism, but, by God, the Chancellor of the Duchy's speech was the best piece of tokenism that I have heard from any Minister. [HON. MEMBERS: "It was robust tokenism."] I accept that it was robust tokenism, but it was still tokenism.
        The way that the Minister made his scheme out to be the most generous ever is quite remarkable. He did not answer any of my questions about what percentage of the total share ownership he expects to be owned by employees or how many employees he expects to take up the various aspects of the scheme. Perhaps my hon. Friend the Member for East Lothian (Mr. Home Robertson) was right when he said that all these figures were down to astrology and have little to do with realism.
        It is a generous offer of share ownership for employees, because the Chancellor of the Duchy knows that nobody else will take the shares. Of course he will try to get rid of as many of them as possible to the employees. That will get the shares on the market and enable him to say that the Government are getting rid of some of the shares. That is why, on the surface, the offer is so generous. However, many employees will not take up the share offer. He knows that the steel industry employees, like ordinary people and institutions buying shares, will not consider it to be a particularly worthwhile investment.
        One reason why our scheme is designed to give power and responsibility to workers in the industry, as opposed to giving individual workers a small stake in the industry, is that people—especially those who live and work at Ravenscraig—know that privatisation puts their jobs at risk. However, if they own one third of the company, they will have a say in whether Ravenscraig should close. Under the Government's proposals they will have no say in the matter even if they buy the shares.
        In fact, far from having a say, an employee at Ravenscraig who takes up his allotted number, or perhaps buys more than his allotted number, of shares under the Minister's scheme will be declared redundant, either because of a partial rundown at Ravenscraig or its closure.
        1010
        Then the DHSS will expect him to make a profit of 20 per cent. on each of those shares and will take that profit into consideration before it pays the redundant worker any income support that he may be entitled to. I do not know whether the Minister expects British Steel to pay a dividend of 20 per cent. on its shares. I think that that is rather unlikely, but perhaps he will tell us whether that is the case.
        People will not buy the shares, because they will not give them any protection against the threat of unemployment. Therefore, there is a major difference between the Opposition and the Government. The individual share ownership tokenism in which the Minister is indulging does not give the workers any directors, or any power, and gives them only a small bonus. The Minister has said that workers are entitled to some return for the hard work that they have put in to help turn the British Steel Corporation round. However, if a man has worked for 30 years in that company, his bonus for doing all that work to turn it round and make it a profitable organisation is the princely sum of £130. What a bonus to offer the employees.
        As there are other debates to come and although the Government are indulging in tokenism, as we accept that they will not take on board our genuine and imaginative approach to share ownership in the company, and as there comes a point at which it ceases to be enjoyable to bang one's head against a brick wall, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

        Clause 16

          CONSEQUENTIAL AMENDMENTS, REPEALS AND TRANSITIONAL PROVISIONS
          Mr. Atkins: I beg to move amendment No. 15, in page 9, line 39 after 'make', insert—
          '(a)'.
          Madam Deputy Speaker: With this, it will be convenient to take Government amendment No. 16.
          Mr. Atkins: Although we are dealing only with amendments Nos. 15 and 16, those amendments, together with amendments Nos. 17, 18 and 20 are consequential on the detailed investigations that have been carried out by my officials to ensure that no necessary provisions have been overlooked in terms of maintaining the status quo when the changes take place. Therefore, they are technical amendments.
          The small extension to clause 16(2)—provided in amendments Nos. 15 and 16—seeks to ensure that the subsection provides a comprehensive safeguard, in case we have omitted or overlooked some necessary provisions in relation to one of the very many pieces of subordinate legislation that affect the corporation.
          Mr. Gould: The Minister spoke, in effect, to all five of the Government amendments. He will want to move the second group formally when the time comes, but I can say straight away that we do not have a problem with that. However, there is a small question mark in our minds about the first group of amendments.
          The addition to clause 16 seems a widely drawn provision. For that reason, I should like to ask the Minister what precedents there are for such a provision.

          1011
          For example, I notice that in clause 83 of the Airports Act 1986, which is often prayed in aid by the Government as establishing the precedent for various provisions in the Bill, follows more or less the structure of clause 16 and that there is no equivalent provision to the addition that is proposed in the Government amendments. Perhaps the Minister owes us a slight explanation of why the amendment is required, given that, as I have said, it is drafted so widely.
          We should also like to know the limitations on the ability that the Secretary of State would be given by that provision. For example, does the Secretary of State's ability extend to the ability to amend primary legislation or is the omission of any reference to that point deliberate? What is the time limit? One assumes that the purpose of the provision is to provide for the possibility of exercising that power after the appointed day—and that power goes on for ever. It is certainly true that the provision, as drafted, speaks in terms of saving or transitional amendments. However, that may not be a substantial safeguard against what appears to be a widely drawn power.
          Therefore, while we do not believe that any great issue of principle is at stake, we should like a slightly fuller explanation of why the additional provision was thought necessary.
          Mr. Atkins: The hon. Gentleman has asked several specific questions. At this juncture, I can only tell him that this follows the precedent of a number of other Acts. I shall endeavour to find out the detail of all the Acts to which he refers, but, as he will understand, there are probably many.
          Mr. Maxton: That means, "Wait and see."
          Mr. Atkins: The hon. Member for Glasgow, Cathcart (Mr. Maxton) makes a sedentary intervention. He should recognise the amount of technical work done by officials to review all the possible loopholes. He is making suggestions, conveniently while he is not in a position to know exactly what his hon. Friend the Member for Dagenham ( Mr. Gould) is asking, let alone what I am about to reply. That does not help us to get to the point.
          The simple answer to the question is that this provision follows the precedent of other Acts. My officials have spent considerable time combing through all the legislation on which orders are made and which protects the position—
          Mr. Brian Sedgemore: It is coming—the information is coming.
          Mr. Atkins: Yes, all the officials have been working extremely hard to ensure that every possible loophole is filled. It is amazing what one can do if one tries. The relevant legislation is section 58(4) of the Merchant Shipping Act 1988, section 34(4) of the Dentists Act 1983 and section 13(5) of the Anatomy Act 1984. Those are the precedents for this provision. I hope that that will reassure the hon. Member for Dagenham.
          Mr. Gould: I am grateful to the Minister for his recital of that largely meaningless list of precedents. Can he now tell us what the provision is about? What is it meant to achieve?
          Mr. Atkins: I can answer those questions. The hon. Gentleman will be aware that under most Acts there are
          1012
          provisions for statutory instruments. We have to ensure that in the event of something being missed—I do not anticipate that anything will have been missed, judging by the amount of work that officials have put in, as they always do, in combing through all the legislation that is affected by enabling legislation such as this—we can save a statutory instrument that has been repealed inadvertently by virtue of an Act being amended, consequent upon this legislation. That is the precedent that we have followed previously and we shall endeavour to do so here.
          The hon. Member for Dagenham was right to spot that there is nothing particularly exotic about the amendment. It is a technical amendment. As ever, he has bowled a quick one, I have flashed and, I hope, not snicked the ball.
          Amendment agreed to.
          Amendment made: No. 16, in page 9, line 44, at end insert—
          '(b) such transitional or saving provision as appears to him to be necessary or expedient in connection with the coming into force of any provision of this Act; and any provision of an order made under this subsection after the appointed day may be made so as to have effect as from that or any later day.'.—[Mr. Atkins.]

          Schedule 1

            PROVISIONS SUPPLEMENTARY TO S/
            Mr. Atkins: I beg to move amendment No. 20. in page 11, line 41, leave out 'and' and insert'(2)'.
            Madam Deputy Speaker: With this, it will be convenient to take Government amendments Nos. 17 and 18.
            Mr. Atkins: Opposition Members will be pleased to know that these amendments bring about a small improvement in the Bill. They ensure that where, for pension purposes, a period of employment with another company is to be deemed as a period of employment with the corporation, that arrangement is not disturbed by the vesting under clause 1, but continues to apply with the successor company substituted for the corporation. This may be relevant, for example, for the purpose of calculating the pension entitlement of a corporation employee who was, prior to 1967, employed by a private sector steel company that was subsequently nationalised.
            Amendment agreed to.
            Amendments made: No. 17, in page 11, line 42, after 'day', insert—
            '(a)'.
            No. 18, in page 11, line 43, after second 'Corporation', insert
            ',and
            (b) any period of employment which would, immediately before that day, have been treated as such employment for the purposes of any such agreement or arrangement,'.—[Mr. Atkins.]
            8 pm
            Mr. Maxton: I beg to move amendment No. 8. in page 11, line 45, at end insert—
            '3A. There shall be no reduction in the value in real terms of the pensions, allowances and gratuities which the successor company becomes liable to pay under section 1 above.'.
            Madam Deputy Speaker: With this it will be convenient to take Government amendment No. 21.
            Mr. Maxton: I reiterate that the Opposition remain adamantly opposed to the concept of the privatisation of

            1013
            British Steel. We believe it to be bad for the economy and bad for the employees. However, as well as opposing, we have a responsibility to ensure that the best protection is available to employees if the privatisation goes ahead.
            Existing employees and past employees now retired are concerned about what will happen to their pensions. Those who are already retired want to ensure that the pensions that they are receiving will continue to be paid to them and will continue to be meaningful in real terms. Those who are paying into the scheme, with the employer paying in as well, want to know that the value of their contributions will remain the same under privatisation.
            We have tabled the amendment in an attempt to draw from the Government the exact nature of their plans. Since then, the Government have tabled amendment No. 21, which is considerably more detailed than our amendment No. 8. The Government have hard-working advisers who can give them help which, unfortunately, we do not have.
            I am happy to keep my remarks brief and invite the Minister to explain the Government's amendment.
            Mr. Morley: I appreciate that the Government have tabled an amendment that in some respects strengthens the protection of the pension fund. However, many British Steel workers in my constituency are worried about the future of the pension fund. In other companies there have been attempts to use pension funds as part of investment programmes. In some instances there has been a great deal of discontent and disagreement about the way in which the pension fund should be used.
            When the BSC is floated, the Government will have no involvement or control. I appreciate that the Government have responded to some of the fears that have been expressed for some time about the future of the pension fund, but I hope that the Minister will give some reassurances that I can pass on to my constituents to the effect that the value of the fund will be protected. I seek also some safeguards on the way in which the fund will be used in future.
            Mr. Atkins: Amendment No. 21 fulfils the promise that I made in Committee. The purpose of the amendment is to ensure that the repeal of schedule 3 to the Iron and Steel Act 1982 does not affect the continuation in force of any pension scheme, or any person's rights or liabilities in relation to any pension scheme, or the rights of any dependants, that derive from regulations that have effect as if made under that schedule. As I said in Committee, the amendment safeguards the continuity of the pension scheme after the appointed day, when schedule 3 to the 1982 Act is repealed.
            The hon. Member for Dagenham (Mr. Gould) placed great weight in Committee on the power in paragraph 2 of schedule 3 to the 1982 Act to enable regulations to amend or repeal pension schemes provided that persons affected are not placed in any worse position. That provision does not, however, provide the general guarantee that he suggested. The BSC's present pension scheme is the responsibility of the corporation and the trustee, within the terms of the trust deed. I can assure the House that the corporation's firm intention, as I think I predicted in Committee, is that its present pension scheme will go forward unchanged into the private sector. Pensions should therefore continue to be provided subject to, and in
            1014
            accordance with, the present trust deed, at least as far as present employees and pensioners are concerned. I understand that the corporation will shortly be making the position clear to all its employees.
            The imposition of a statutory requirement on the successor company and the trustees of the pension scheme of the sort proposed by amendment No. 8 is unacceptable to the Government. There is no such statutory constraint on the corporation at present. It is the terms of the trust deed that govern the corporation's pension scheme at present, and should continue, in our view, to apply to the successor company. That provides a very substantial assurance to all British Steel's pensioners and employees that their rights will be looked after.
            As I said in Committee, there are 28 directors of the trustee committee, of whom 14 represent the work force. The trustees are bound both by the provisions of the trust deed and by a substantial body of trustee legislation to act at all times in the interests of the trust's beneficiaries. That is the overriding consideration affecting the activities of all trustees. The ability of British Steel plc to alter its pension scheme will therefore be heavily circumscribed.
            British Steel's pensioners and employees have the assurance that all their present pension rights will pass unchanged to the successor company, and British Steel's clear intention is that they will continue unchanged into the private sector. Of course, I cannot offer absolute guarantees about the future any more than I could if British Steel were to remain a nationalised industry, but both the Government and British Steel are very well aware of the importance of this issue and fully understand the concerns that have been expressed.
            Mr. Morgan: The Minister has said that 14 of the 28 trustees of the corporation's pension fund represent the work force. I take it that he means that the 14 were appointed through the representative trade unions of the work force, as is common in nationalised industries. Given the remarks of the Chancellor of the Duchy of Lancaster about employee share ownership schemes—the right hon. and learned Gentleman poured much derision on the idea that trade unions might represent the work force in terms of proxy voting through their shareholdings—does the right hon. and learned Gentleman envisage any changes in the rights of the work force to have 50 per cent. trustee representation on the pension fund? Is that to be altered in any way so that trade unions will not be permitted to act through their general secretaries or other officers as the trade union half of the trustees of the successor company's pension fund?
            Mr. Atkins: The hon. Gentleman makes as convoluted a point now as he made in Committee when we discussed this issue at length. I promised in Committee that we would seek to persuade British Steel—British Steel seemed to have been persuaded—to maintain the same trust and pension fund when it became a privatised company as that which had applied in the past. The detailed arrangements of the constitution of the trust and the alterations to the trust are doubtless familiar both to the trade unions and the board of British Steel as it is now and as it will be. If there are to be amendments, they will be discussed through the normal channels within the company. If alterations have to be made, they will follow.
            The position will be the same in future, as near as we can guarantee, as it is now. We cannot give absolute

            1015
            guarantees, because the position under a privatised company or a nationalised company cannot be guaranteed absolutely. For example, I cannot predict whether the world will end tomorrow.
            All the signs are that, while the position of the pension fund is being reviewed, the liabilities will be adequately provided for. I understand the reasons that led to the tabling of amendment No. 8, but given the detailed spelling out of the meaning of amendment No. 21, which confirms the position as was and as will be, I hope that the Opposition will withdraw their amendment and support amendment No. 21.
            Mr. Maxton: I think that we would all like a slightly fuller explanation of the scheme. I understand that the Minister cannot give absolute assurances on the future of the pension scheme, and I am grateful to him for putting into the Bill some form of control over the new private company, but I should like to know whether the corporation is saying that, if someone joins the privatised company, he or she will be offered the pension scheme that we are discussing along with existing employees who will continue with it. Will someone who joins the company get the same pension scheme? I am not entirely clear about the relationship between British Steel's pension scheme and other public sector pension schemes. Will it have the same transferability rights as other pension schemes? Will people be able to pay into it and take out of it as they move?
            Mr. Atkins: The hon. Member knows that there is considerable precedent for this in other privatisations. I said, when I served on my first Standing Committee discussing British Aerospace, that pensions were one of the most important elements in any privatisation, and they still are. I undertook to bring forward on Report—as I have done—the Government's view on what the future pension scheme would be in relation to the past one, and I have explained that.
            It is for the company to make a detailed statement to employees in the near future—I am not sure exactly when. The future pension scheme for new employees will be spelt out, but I cannot say at this stage exactly what its terms will be, largely because it is still being worked out. It would be folly to suggest what might be in it.
            Pensioners and employees in the company will have a pension scheme that is, to all intents and purposes, exactly the same as the present one—except that I cannot give a guarantee about it, for the reasons I have given.
            Mr. Maxton: I suppose that it is pleasant to end the Report stage on a note of amicable accord, because we welcome the Minister's guarantee, although it is not as absolute as we would have hoped. We wish that privatisation was not taking place and that the employees could remain in the public sector. Given that they cannot, this is about as good an assurance from the Government as we are likely to get, and I welcome it as such.
            Accordingly, I beg to ask leave to withdraw the amendment.
            Amendment, by leave, withdrawn.

          Schedule 3

            TRANSITIONAL PROVISIONS AND SAVINGS
            Mr. Atkins: I beg to move amendment No. 19, in page 16, line 18 at end insert
            'any sum by virtue of paragraph 3 above or'.
            The amendment puts right a minor omission in the Bill and ensures that the Secretary of State remains under a duty to account for any outstanding Government loans made to the corporation before the appointed day that vest in the successor company.
            Amendment agreed to.
            Amendments made: No. 21, in page 16, line 19 at end insert—
            'Pensions and compensation payments
            7A.—(1) The repeal by this Act of Schedule 3 to the 1982 Act (pension rights of employees shall not affect—

            (a) the continuation in force of any pension scheme subsisting immediately before the appointed day in accordance with any regulations which then had effect as if made under that Schedule, or

            (b) any person's rights or liabilities then subsisting in relation to any pension scheme by virtue of any such regulations.

            (2) In sub-paragraph (1) above "pension scheme" means a pension scheme within the meaning of Schedule 3 to the 1982 Act.
            7B.—(1) Any provisions of the Iron and Steel (Pensions) (Dependants) Regulations 1969 having effect immediately before the appointed day as if made under Schedule 3 to the 1982 Act shall continue in force (subject to the following provisions of this paragraph) notwithstanding the repeal by this Act of that Schedule.
            (2) Any reference to the Corporation in those provisions shall have effect, as respects anything falling to be done or occurring on or after the appointed day, as if it were a reference to the successor company.
            (3) Those provisions may be amended or revoked in like manner as if Schedule 3 to the 1982 Act had not been repealed (but the reference to the Corporation in paragraph 4(2) of that Schedule shall be construed as a reference to the successor company).
            7C.—(1) Where—

            (a) any regulations made under section 24 of the Iron and Steel Act 1953 (compensation to employees of certain nationalised companies or of the Iron and Steel Corporation), or

            (b) any regulations having effect as if made under paragraph 2 of Schedule 4 to the Iron and Steel Act 1975 (compensation to employees of certain nationalised companies or of the Iron and Steel Board).

            are in force immediately before the appointed day, any such regulations shall continue in force (subject to the following provisions of this paragraph) notwithstanding the repeal by this Act of paragraphs 7 and 8 of Schedule 6 to the 1982 Act (saving for compensation regulations etc.)
            (2) Any reference to the corporation (including any reference which fell to be construed as such a reference immediately before the appointed day) in any regulations continued in force by virtue of sub-paragraph (1) above shall have effect, as respects anything falling to be done or occurring on or after that day, as if it were a reference to the successor company.
            (3) Any regulations continued in force by virtue of sub-paragraph (1) above may be amended or revoked in like manner as if the provision mentioned in paragraph (a), or (as the case may be) paragraph (b), of that sub-paragraph had not been repealed (but any reference in that provision to the Iron and Steel Holding and Realisation Agency or to the Corporation shall, unless the context otherwise requires, he construed as a reference to the successor company).'.—[Mr. Atkins.]
            Mr. Atkins: I beg to move amendment No. 22, in page 16, line 19, at end insert—
            'Savings in connection with transfers to the Corporation
            7D. The repeals made by this Act shall not affect—

            1017

            (a) any document or other thing which has effect immediately before the appointed day subject to any modifications prescribed by the Steel Companies (Vesting) Order 1970, or

            (b) anything not falling within sub-paragraph (a) above (other than an enactment) which then has effect or is continuing subject to, or to modifications in consequence of, the substitution of the Corporation for any other person or body;

            but, as from the appointed day, anything falling within sub-paragraph (a) or (b) above shall be further subject to such of the provisions of paragraphs 1 to 3 of Schedule 1 to this Act as are applicable.'.
            This amendment is a technical provision designed merely to ensure that the statutory vesting under clause 1 and the subsequent repeal of the 1982 Act do not disrupt existing arrangements or entitlements.
            Amendment agreed to.
            Mr. Atkins: I beg to move amendment No. 23, in page 16, line 30, leave out 'during that period, shall' and insert 'which is relevant to the making of that distribution, shall accordingly'.
            This is a technical amendment that follows precedence in earlier Acts. If the hon. Member for Glasgow, Carthcart (Mr. Maxton) wants me to spell it all out again I shall have to seek advice.
            Amendment agreed to.
            Order for Third Reading read.
            Motion made, and Question proposed, That the Bill be now read the Third time.
            8.14 pm
            Mr. Crowther: No one in the steel industry, whether employed directly by the BSC or working for a firm in which it has a substantial shareholding, can view the future with anything but great trepidation. Throughout the debates on this Bill, my hon. Friends have tried to introduce changes which would have improved the security of the industry and its work force in various ways. We welcome the minor provisions on pensions, but it seems unfortunate that the Opposition had to press the Government to make even those small concessions. The Government should have thought of them themselves.
            Otherwise, the Government have conceded nothing. They are throwing the BSC naked back into the private sector jungle from which it had to be rescued in 1967. The Bill is ideological—nothing else: so much is clear at the end of all these debates. Not the slightest commercial justification for the privatisation of British Steel has been advanced throughout the debates. The Government say only that it belongs in the private sector. Why does it belong there? No one has given us a good reason.
            If the BSC belongs in the private sector, why did not the Conservative Government who were returned to power in 1970 put it back there? Why did not this Government put it back in 1979, or in any of the eight subsequent years? We, and they, know the answer. They knew that the industry needed investment on a scale that the private sector could not or would not provide. So they brought in Mr. MacGregor to preside over the destruction of 111,000 jobs, the financial costs of which had to be met by the taxpayers and the social costs of which are still being suffered in steelmaking areas such as mine, where massive unemployment is still the order of the day.
            1018
            Now, because of these measures and because BSC now has modern plant—thanks to public investment—a greatly reduced work force and a high level of productivity, it is making a bit of profit—but not a lot. So the BSC has to go back to the private sector, which was so disastrous for the industry in the past. It is returning to that sector with no assurance that adequate resources will be available for new investment or that all its present plant will remain open. It returns with no assurance that it will continue to be profitable under the burden of increased electricity charges and the adverse exchange rates that are now beginning to affect it; and with no assurance that it will not be gobbled up by its ruthless foreign competitors. So, an industry which has been brought back to a state of high productivity and efficiency because by public ownership is being thrown back into the jungle. This is a sad day for the British steel industry and all who are associated with it.
            8·17 pm
            Mr. Kenneth Clarke: I am grateful to the hon. Member for Rotherham (Mr. Crowther) for starting the debate. I am not sure whether he moved the Third Reading—it is unlikely in the light of his comments—
            Mr. Crowther: On a point of order, Madam Deputy Speaker. You will recall that no one appeared anxious to make a contribution until I got on my feet. If the Minister had been present, he could have moved the Third Reading.
            Madam Deputy Speaker: I confirm that the hon. Member for Rotherham (Mr. Crowther) was the only one who rose at that time.
            Mr. Clarke: We all wait for the words of the hon. Member for Rotherham about the steel industry, and I am glad to have conceded the first word to him.
            I agree with the hon. Member for Rotherham that the issue we are debating is whether the British Steel Corporation should be owned by the state and remain in the public sector. This is an enabling Bill, to enable the corporation to be turned into a Companies Act company in which the Government will own all the shares for a short time before we proceed to flotation at the end of this year, at the earliest—or as soon thereafter as possible, if that does not prove possible.
            The Opposition remain opposed to the whole principle and we have one last opportunity to talk about whether a giant and important manufacturing company such as British Steel will do best as a state-owned company or whether it should be returned to the private sector. The hon. Member for Rotherham said that the company belongs in the state sector. I assume from the gist of most of the Opposition comments during the hours of debate on the Bill that they will restate their preference for state ownership. I have listened to the nuances of the debate during the course of protracted exchanges, and questions arise in my mind about exactly what ground now stands between us and the Opposition.
            I am not quite sure why the Labour party continues to prefer state ownership. I am no longer at all clear what form of state ownership the present day Labour party wants. I have listened to the debates but I still do not know what alternative future the Opposition propose for the industry. The hon. Member for Dagenham (Mr. Gould) vehemently refuses to say what any future Labour Administration would do if we proceed to privatisation and return the company to the private sector.
            Mr. Gould rose—
            Mr. Clarke: At this late stage, the hon. Member for Dagenham is about to tell us whether the steel industry would be renationalised by a future Labour Government.
            Mr. Gould: It may be a late stage for the Chancellor of the Duchy of Lancaster, because he was not a member of the Committee and was not present at any of the Committee sittings. If he had attended, and certainly if he had taken any interest in the proceedings, he would have discovered that, repeatedly, day in and day out, we made very clear our preference for public ownership. We also made clear our view that the status quo has served the British steel industry extremely well. Any mystery that remains in his mind could have been dispelled if he had bothered to listen to or read the many speeches that I and my hon. Friends made in Committee.
            Mr. Clarke: Once again, the hon. Gentleman has evaded the question that I put to him. Of course I understand that he has consistently stated a preference for public ownership. By its vote later tonight, the Labour party will be expressing its preference for the status quo. Whether that means that the Morrisonian corporation is in the opinion of the Opposition a desirable and permanent future status for the steel industry is very doubtful.
            The Opposition are not clear what form of state ownership they want, and the question that the hon. Gentleman rose to answer is one that he has consistently declined to answer. Given that he and all his hon. Friends know that we will return the corporation to the private sector, will he tell the House whether the Labour party would renationalise it? The Opposition have declined to answer that question. There are considerable difficulties in understanding what the Labour party means by a state-owned industry, and we do not know whether it is still wedded to the Morrisonian corporation, which, by their vote, the Opposition will appear to defend at the end of this debate.
            As the hon. Gentleman said, I was not a member of the Committee, but I studied its proceedings. I noted in particular that the hon. Member for Great Grimsby (Mr. Mitchell) who has been very active throughout proceedings on the Bill, although he is not in the Chamber at the moment, said in Committee when discussing a new form of public ownership:
            "Perhaps we should have thought of it earlier, because I concede that there are disadvantages to the Morrisonian corporation which has been the traditional form of nationalisation. The Labour party is thinking actively and strenuously about new varieties of ownership, involving the workers and making commercial returns and imperatives available to nationalised industries."—[Official Report, Standing Committee D, 14 April 1988; c. 524.]
            That sits oddly alongside the commitment to vote for the retention of the Morrisonian corporation whose existence the Government are about to bring to an end.
            I shall try again from another quote. The hon. Member for Great Grimsby said that the amendments that the Committee was discussing
            "propose that British Steel should demonstrate a track record before privatisation.
            We are not standing in the Government's way and saying, 'Thou shalt not privatise'. We are saying that we should privatise taking into account all the sense and virtues that the Government tell us are to be found in the Conservative party—the feeling of financial markets, financial rectitude and financial responsibility—by establishing a track record before
            1020
            this important national asset is launched on an uncertain sea."
            —[Official Report, Standing Committee D, 10 March 1988; c.59–60.]
            Both those quotations might leave the thought in some people's minds that the meaning is not altogether clear. Given that we are debating the principle of state ownership, the opportunity should be taken to make the meaning clear about the Labour party's position and the vote that it intends to cast.
            These curious excursions by the hon. Member for Great Grimsby match some of the statements by the Labour party's allies in the trade union movement. Mr. Roy Evans, the general secretary of the Iron and Steel Trades Confederation, said in the ISTC journal of February 1988:
            "In a highly competitive industry, the most efficient companies will survive and prosper. The industrial relations structure in steel must be rationalised to avoid any possibility of obstacles in the way of efficiency … The road to privatisation is not going to be easy, but we cannot present it without closing down the industry and putting all our jobs at risk. So we should use the opportunity to play a constructive role in creating a modern, profitable and humane industry able to provide guarantees of well-paid jobs for ourselves and our children."
            That leads us to the problem of the Labour party telling the House only that it prefers public ownership. All it will do is vote against the Bill in an attempt to retain the status quo. We know that that is not an alternative to the policy contained in the Bill and it leads us to a great problem. The Government say that this company will flourish and will be managed better, will perform better and will give a better future to its employees and certainly to its customers in the commercial arena as a private sector company. What is the Labour party saying? It is a listening party and will not have an industrial policy for a couple of years after the next election. The Opposition are in no position to cast a calculated vote for anything.
            Dr. Reid: Such is the Minister's grasp of the flexibility with which the Opposition are approaching the whole question of social ownership that I would be tempted to vouch for him as a future Minister in a Labour Government, except that in my hon. Friend the Member for Dagenham (Mr. Gould) we have a better candidate.
            The Minister finds it difficult to understand how we can oppose the principle of privatisation while in Committee we suggested ways in which it could he carried out in a better form than the way in which the Government propose to carry it out. May I quote to the Minister the parable that he has not read in Hansard and which I had to give to the Under-Secretary? We are opposed to violence but would rather be slapped in the face than shot through the head. The manner in which the Government are privatising the industry is a shot through the head for the industry, its workers and the taxpayer. We are suggesting within the privatisation format ways in which the Government could improve their approach to privatisation if they are intent on sticking to it.
            Mr. Clarke: With respect to the hon. Member for Motherwell, North (Dr. Reid) that is all very well for amendments when the Opposition can claim that they accept privatisation because it is forced upon them and they are seeking to improve it. At the end of the debate, they will vote on the principle of the Bill and will vote for public ownership. I am talking about the flexibility of the hon. Member for Dagenham and wondering where this flexible reasoning is leading the Labour party.

            1021
            These questions are crucial to Motherwell and elsewhere. What is the future of the steel industry and what do the Labour party propose? The Opposition defend nationalised industry, but what kind of nationalisation do they contemplate? The hon. Member for Dagenham is nodding and I am sure that he will speak on Third Reading. This is my best opportunity so far to discuss the matter with him, and where better than across the Dispatch Box? I thought that I would be discussing it with him on "Newsnight" on 9 May.
            The hon. Gentleman emerged as the author of a Labour party document on the future of public ownership and he and I were invited to have a discussion. However, the hon. Member for Dagenham made representations to the BBC and would not discuss the matter with me.
            Mr. Michael Foot: On a point of order, Mr. Deputy Speaker. We are all fascinated by the fantasies of the right hon. and learned Gentleman, but is it not a convention of the House, preceding even the presence of the right hon. and learned Gentleman in high office, that Third Readings should be devoted to discussing what is in the Bill? It is very different even from Second Reading. When does the right hon. and learned Gentleman intend to come to order?
            Mr. Clarke rose—
            Mr. Deputy Speaker (Sir Paul Dean): Order. I am grateful to the right hon. Member for Blaenau Gwent (Mr. Foot). I have only just come to the Chair and I am getting the distinct impression that both Front Benches are probably not keeping to the straight and narrow. May I remind the House that Third Reading speeches must be confined to the contents of the Bill?
            Mr. Gould: On a point of order, Mr. Deputy Speaker. The Opposition Front Bench has not yet risen to take part in the Third Reading debate.
            Mr. Deputy Speaker: I was going by my impression of the atmosphere of the House, and I am looking to both Front Benches to set a good example to assist the Chair.
            Mr. Clarke: I accept your guidance, Mr. Deputy Speaker. I have the greatest respect for the right hon. Member for Blaenau Gwent (Mr. Foot), so if I talk about his seniority, it is not out of disrespect. The old Labour party has risen to the rescue of the new. It may be—I accept your ruling, Mr. Deputy Speaker—that protracted discussion about the position of the Labour party is as impossible on this occasion as it proved to be on "Newsnight". Nevertheless, it is relevant to the content of the Bill and to whether or not the Bill will receive the support of the House that we should know what is the Labour party's view of public ownership.
            I am sure that it is not beyond the ingenuity of the hon. Member for Dagenham to help us, although I know that he and his hon. Friends have avoided this question for at least 80 hours in Committee and many more on the Floor of the House. The Labour party has the opportunity—I am sure that it can slip it in within the rules of order—to give us some enlightenment about what kind of nationalised industries it now favours and what kind of nationalised industry it is seeking to defend.
            1022
            I shall revert to order. The right hon. Member for Blaenau Gwent wishes to know about the Bill. It is an enabling Bill, which will enable the Government to transfer the status of British Steel from a public corporation to a Companies Act company in which the Government will own all the shares. The Government intend to sell the shares at an appropriate time, thus returning British Steel to the private sector—the right and proper place for it. The Bill does not dictate the timing or manner of privatisation, but as I have told the House, it is our intention to privatise British Steel as soon as is practical and as a single entity in its present configuration.
            The essence of the Bill is that all the property, rights and liabilities of the corporation will vest in a successor company. That company will be a Companies Act company, limited by shares that will be wholly owned by the Government. Therefore, while there will be a change in the legal status of British Steel, from corporation to plc, there will be no material change in its commercial activity or the extent of its assets and liabilities.
            The successor company will require a capital structure compatible with the requirements of the Companies Act. Therefore, the Bill makes provision for the necessary financial restructuring of the corporation. These provisions constitute simply a rearrangement of the balance sheet and are not a write-off of liabilities or a subsidy. We discussed this at length on Report. No money changed hands at any stage. The first step is to reduce the corporation's public dividend capital in order to write off past trading losses so that the capital shown in the balance sheet will accurately represent the value of the assets. This process is not a write-off of debts. Past trading losses are not debts—they are a record of past losses which have been incurred, accounted for at the appropriate time, and recorded in the balance sheet. They represent public money that is lost and gone for ever, during the record of the company as a nationalised company.
            It is not true to say, as Labour Members, including the hon. Member for Rotherham, have tried to imply throughout our debates, that the taxpayer will receive a raw deal either from the capital reduction or from the privatisation. It is a completely unrealistic estimate of what the taxpayer ought to receive to say that he should receive back all the money that he has put into the corporation in the past. That money has been used to fund past trading losses. It represents the cost of keeping uneconomic capacity going for too long and it also met the costs of rationalisation. That money is lost and gone. It represents in large measure the cost of imposing decisions on the business that often did not accord with commercial realities, and it is unrealistic to suggest that the money should be repaid.
            If the Opposition were to win the vote this evening, that money would never, and could never, be repaid. The corporation has not paid a dividend since 1975. Even with the payment of a large and regular dividend from now on, the corporation could never repay to the state what it has received from it, and it is unrealistic to think otherwise. The taxpayer will get the best available terms through privatisation, because whatever value is realised from the proceeds of the sale would be considerably greater than whatever is realised in many years of dividend payments.
            That is the essence of the Bill, and that is in order. The House is riveted by a speech that is in order on Third Reading, but I hope that my minor excursion earlier will arouse a somewhat wider response from the hon. Member

            1023
            for Dagenham. He shares with me the view that this is a vital industry, and we wish British Steel and those who work in it great success in the future. When the hon. Member was talking about the importance of such utilities on the programme to which I inadvertently returned earlier, he said:
            "When you see the document you will see we set out our broad approach, which certainly talks about the general and unique importance of the major utilities as servants of the economy, as deliverers of services to consumers, as providers of essential facilities to the national economy. And that leads us to certain conclusions. But we don't, by any means, rule out, indeed we specifically recognise that in some instances some form of ownership, or control, in addition to the regulation that we initially refer to, that some form of ownership or control may well be required."
            He then set out some options. He continued:
            "But we have yet to do the work which will enable us to decide exactly what form that should take, and in what instances."
            That is his policy. Ours is the one that I have described and that is embodied in the Bill, and ours is a tribute to the success of the corporation and its work force.
            We recognise the enthusiasm and commitment of the management and the work force, which have turned around the performance of the corporation. That is why the package of benefits that I have described will be available to the employees on flotation. We anticipate that, on its return to the private sector, BSC will continue to thrive. It will be better able to respond quickly and flexibly to the market conditions. It will not be subject to the control of the Treasury or Ministers. It will not, thank heavens, be subject to the trade union control that the Opposition were urging upon us as an improved form of private sector ownership.
            The BSC is now one of the most profitable steel producers in the world. Its record of achievement in recent years is impressive and the results are plain for all to see. It has continued to invest in its business and to improve efficiency and productivity. We believe that British Steel's future is best assured in the private sector, subject to no more and no less a degree of Government regulation than any other private sector company.
            The Bill enables the Government to set in motion the transformation from nationalised corporation to private sector plc. We know what we want. We have an extremely clear policy. We believe that this policy is backing the BSC and all who work in it, and offering them a better future. I do not believe for one moment that the Opposition have the slightest idea of what they propose to do with the steel industry or any other major industry, yet they are about to cast a vote that clings to the old Morrisonian corporation because they cannot think of anything better and they certainly cannot agree among themselves on anything better. As we have a clear policy, taking forward the logic of our position, I commend the Third Reading of the Bill to the House.
            8.37 pm
            Mr. Gould: I suppose I should find it flattering that the Chancellor of the Duchy of Lancaster tried so hard, even though it meant that he strayed out of order, to deal with remarks that I have made on television rather than trying to explain the Bill. However, I will not follow him in that course because I propose to stay in order and devote my brief remarks to the Bill. After all, the Government have
            1024
            introduced this Bill and we must respond to it. I hope that the Chancellor will be satisfied by the end of my speech, and that he will realise that our position is clear.
            The Bill began with the statement that the right hon. and learned Gentleman made on 3 December, but it began with a mystery. We tried to unravel that mystery in Committee, in a process that took many hours, during which we had to do without the help and assistance of the Chancellor. Despite our hard work, we got nowhere near unravelling the mystery of why the Bill was introduced at this time. We learned a little more about the Bill, but not much. Ministers were not very forthcoming about the reasons for its introduction and were extremely shy about answering one specific question. It may be that, now we have the Chancellor here, I will be able to do what he could not, and ask a question that is in order. Why was the Bill suddenly introduced when it had not been presaged by any reference to it either in the Conservative party manifesto or in the Queen's Speech?
            We found that puzzling. Rather fruitless efforts were made by some Ministers in Committee to assure us that all sorts of footling little measures might be slipped through without being mentioned in the Queen's Speech, but that is not a good answer. We thought that that answer did not attach sufficient importance to this measure. If, as we suspect, the Government regard it as an important measure, it would have been reasonable to expect some reference to be made to it in the Queen's Speech.
            Of course, as the Chancellor knows, reference was there none. We are interested to know why, between drawing up the Queen's Speech and the Conservative party manifesto and the statement on 3 December, there was some sudden change of heart and some reason was considered to be sufficiently pressing to induce the Chancellor and his Department to bring forward the Bill. We received no answer in Committee, but I hope that the Minister will now offer us an explanation.
            Mr. Kenneth Clarke: I am sure that the hon. Gentleman will recall that statements from Conservative Ministers that the aim of the policy of this Government was to return the British Steel Corporation to the private sector as soon as it was practicable and reasonable to do so go back to well before the last election. It is true that there was no specific reference to it in the manifesto, but there was in speeches, and there certainly was in the campaign guide produced by the Conservative party, which I am sure is consulted as regularly by those at the headquarters of the Labour party as it is by those at the headquarters of the Conservative party.
            In the course of the year, British Steel's recovery became so fast and so strong that it was quite obvious—certainly when we received the half-yearly results—that its performance had reached a stage at which it was ready to return to the private sector, and therefore we proceeded. It was trailed in the Gracious Speech by the words
            "Other measures will be laid before you."—[Official Report, 25 June 1987; Vol. 118, c. 40.]
            Other measures were.
            Mr. Fallon: Will my right hon. and learned Friend give way?
            Mr. Clarke: If the Government can move so steadily and purposefully towards our stated intentions, why does

            1025
            it take the Labour party so long to decide whether it will renationalise the company once we have returned it to the private sector?
            Mr. Gould: I am surprised that the Chancellor should follow the faltering footsteps of his junior ministerial colleague, as that is exactly what he told us in Committee. We found it pretty unconvincing; the whole Committee found it pretty unconvincing. Judging by the attempt of the hon. Member for Darlington (Mr. Fallon) to intervene in the Minister's intervention, I suspect that he too found it pretty unconvincing.
            Mr. Fallon: I intervened to help not the hon. Gentleman but my right hon. and learned Friend. There is a much clearer and more obvious text than that rather dubious phrase from the Queen's Speech. If the hon. Member for Dagenham (Mr. Gould) will look closely at the 1987 Conservative manifesto, he will find a sentence reiterating the Government's commitment to returning all state industries to the private sector. The British Steel Corporation is a state industry; therefore, it is being returned to the private sector.
            Mr. Deputy Speaker: Order. I hope that we shall not spend too long on manifestos. We should be discussing the Third Reading of the Bill.
            Mr. Gould: I am very happy to do so, in the comfortable knowledge that the hon. Member for Darlington has agreed that the reason advanced by the Chancellor is pretty dubious. We are all agreed on that.
            The origins of the Bill go back not just the few years to which the Chancellor referred, but perhaps 25 years. That is as long as Conservative Ministers have promised to privatise the steel industry. The very generality of the commitment, as the hon. Member for Darlington explained, and its long history lead us still to be puzzled about why the Bill was brought forward with so little fanfare and so little notice. That mystery remains unresolved.
            A possible explanation which, to some degree, is borne out by what the Chancellor has just said is that it suddenly occurred to the Chancellor, the Secretary of State and his Department, that a window of opportunity had opened. That window of opportunity was based entirely on the current, but possibly short-lived, profitablity of the British Steel Corporation. With their very sensitive regard for the competitiveness and profitability of British industry, they knew that that window of opportunity would close very shortly. Perhaps they knew last year that the Prime Minister would win the famous battle over the exchange rate, and that the pound would rise to the dizzy heights of DM3·18, or whatever it stands at today, and that that would place a very large question mark over the prospects of the steel industry and the corporation.
            For all those reasons—one can picture the scene—those very wise and clever people who sat with us throughout the passage of the Bill in Committee and who are present in the box today said to the Minister and to the Secretary of State, "It looks good for the moment, but if you want to privatise it and get some sort of price from the market, you had better do it in a hurry." That is why the Bill was suddenly rushed forward.
            1026
            As my hon. Friend the Member for Rotherham (Mr. Crowther) made clear, once one has unravelled the mystery, the Bill is clearly born of ideology. There is all the familiar rhetoric of liberalisation, competition and the drive for efficiency, but none of that hangs together. The hon. Member for Darlington and I probably agree that yesterday we established that none of that could apply, since privatisation had nothing to do with liberalisation. In this instance, it was the very careful preservation of monopoly. Therefore, there is no reason to expect a privatised British Steel Corporation suddenly to feel the full force of market pressures because nothing will change, except that this time, instead of being publicly accountable, the industry and the corporation will be answerable only to those who want to make an immediate profit.
            Throughout the Committee, and again yesterday, the astonishing doctrine was advanced that we need not worry too much about the monopoly which was being enshrined in this form of private ownership because British Steel, even in its new privatised form, would be kept under control by the market pressures exercised by imports. By implication, we were asked to conclude that the level of imports and the penetration of imports in the British market—no doubt that applies across the board to cars, ships and manufactured goods—is nothing to worry about. Indeed, it is to be applauded as a great success of Government policy.
            As the tide of imports washes over British industry, closes down British firms and throws British workers on the dole, as the level of import penetration rises for virtually every manufacturing industry, it is to be regarded as a great triumph as part of the Government's much touted but extremely elusive competition policy. They do not have much else by way of a competition policy. We look in vain for the criteria which they might wish to apply. Ever-rising imports are the Government's competition policy. That is an extraordinary doctrine, which certainly is rejected by the Opposition.
            Stripped of all the rhetoric and dogma about competition, efficiency and liberalisation, as the right hon. and learned Gentleman made clear in his speech, there is the simple belief, unsustained by any evidence—a gut feeling, no doubt—that it is right for the industry to be in private hands and that the concept of private ownership and the search for private profit, whether it produces better or worse performance, or whether it increases efficiency, do not matter; the mere fact of private ownership and private profit is ipso facto a good thing.
            The Minister and his right hon. and hon. Friends are entitled to that view, but we are entitled to ask for a little more evidence. We are not convinced by that simple assertion of faith by Ministers, because we are prepared to look at the experience of the ownership of the industry. We know, and Ministers know, that, historically, the private ownership of the industry has been a disaster. Time and again, private owners have not been prepared to make the long-term commitment and investment in an industry which is essentially cyclical.
            It is in the nature of private ownership and private owners and the drive for private profit which is so admired by Ministers, it is in the nature of that attitude towards industrial ownership, that when the going gets rough one bails out, closes down capacity, and abandons the industry. That pays no attention whatsoever to the national economic interest, to the rest of the industry or to

            1027
            the work force whose livelihoods depend on that industry. That is in the nature of private ownership. Because there is no match between the short-term interests of private owners and the long-term need of the industry for a commitment and an investment pattern to carry on through the troughs as well as the peaks, private ownership has consistently failed the steel industry. That is why we are in no doubt that the Bill must be opposed. We believe that it jeopardises the future viability of an essential British industry.
            If the industry were placed at risk, as we believe that it is by this measure, it would matter considerably to the British economy. The Minister recognizes—at least, he mentioned it in his speech—the importance of the industry. There were occasions in Committee—we had long debates on this sort of issue—when Ministers and others suggested that the industry has a certain importance but that they can take it or leave it. They seem to think that it is no different from any other industry and that if it went down a little it would not matter. We do not take that view. We believe that it is a strategically important industry. It is perhaps not at the commanding height that it once was because we recognise that new technology and new production methods have introduced new materials and so on. However, it is still an industry of major strategic importance.
            There was some debate in Committee as to what was meant by the word "strategic". Effort was made to limit its meaning to its military sense. Of course there is a military sense in which steel is strategically important; I accept that. However, it is strategically important in a wider sense. It is one of the foundations and sinews of our industrial economy. If we were to have a substantially weakened steel industry by virtue of the failures of private ownership, I am certain that we would be dealing a mortal blow to much of our industrial economy.
            The Government may be willing to get shot of the industry on almost any terms for reasons of their own ideology. They may be prepared to take that sort of risk with our industrial future. We do not believe that that risk is justified. For the avoidance of doubt—there have been occasions during the passage of the Bill when doubts have been expressed by Conservative Members—let me make it clear—I have the authority to speak on behalf of the trade unions as well—that we are opposed to privatisation. That is why we will vote against the Bill.
            It is true that, while repeatedly and firmly making our opposition to privatisation clear, we have also been realistic enough—when we are not realistic enough we are criticised, and quite rightly—to recognise that, with the Government's present majority, it is likely that the Bill will reach the statute book. As well as expressing firmly our reasons for opposing the principle of the Bill, our duty and obligation has been to try to ameliorate its bad effects as best we can. I am sorry to say that we have had little success in doing that, partly because the Bill concentrates on the relatively narrow objective of restructuring the British Steel Corporation, but partly because Ministers simply rejected any argument on the basis of a simple ideology which we reject.
            We have tried to ameliorate the short-termism built into the Bill. We object to the emphasis on private profit, the emphasis on profitability now and in the immediate future. We object to the fact that that means that attention is diverted from the investment that is so badly required. We have tried repeatedly in various ways to ensure that
            1028
            investment is recognised as an obligation of the new owners, whoever they may be. The Minister and the Government have resolutely resisted those attempts.
            We have been extremely concerned for employee representation in varying ways. The concept of worker directors, which has worked extremely well in the British Steel Corporation until now, is to be lost. Ministers have expressed little concern about that. We believe that that is important and would have been an important amelioration of the Bill.
            We are extremely concerned about the inadequate protection against takeovers, particularly foreign takeovers. It is true that the Government brought forward a limited provision on a special share. However, they found themselves constrainted by the requirements of the EEC Commission, and the protection offered is extremely limited and is time-limited as well. Therefore, we do not believe that that is adequate.
            Virtually no attention is paid to the pressing and specific problem of Ravenscraig. We have taken the opportunity at every stage during the passage of the Bill to express our concern for the future of that great steel plant. Nothing in the Bill enables us to tell our constituents and those in Scotland who voted for us that Ravenscraig's future is assured. All the evidence and logic is that privatisation is simply a means of shuffling off responsibility for the decision as to Ravenscraig's future and that that decision will be disowned by the Government, when and if the time comes.
            There is much to object to in the Bill. As I have said, our attempts to ameliorate it have been largely unsuccessful and that is why we return to the principle. The Government simply do not recognise the obligations of this great industry to the national economy. The Government, for ideological reasons, are blind to the evident risks that are run by handing it over to private owners who have so often failed the industry in the past. We believe that the best future for the industry is in public ownership and that is why we oppose the Bill and will vote against Third Reading.
            8.56 pm
            Mr. William Powell: I congratulate my right hon. and learned Friend the Chancellor of the Duchy of Lancaster and my hon. Friend the Under-Secretary on successfully piloting the Bill through Second Reading, the Standing Committee, of which I was privileged to be a member, Report and Third Reading. The Bill is of considerable importance to the country and will enable the British Steel Corporation to operate without the shackles that the state has so often imposed upon it.
            The hon. Member for Dagenham (Mr. Gould) talked about private ownership being a disaster for the steel companies in the old days. Those of us who served on the Standing Committee will never forget the speech of the hon. Member for Motherwell, South (Dr. Bray) in moving the first of his amendments. I am delighted to see that he is in the Chamber. The hon. Member moved a number of amendments and always made interesting contributions to our proceedings. However, none of his contributions was more interesting than the speech he made on the first set of amendments he proposed. The hon. Gentleman has experience in such matters and he talked about the relationship that existed between the chairman of the

            1029
            British Steel Corporation and Labour Governments of which he was a member or with which he was closely associated.
            I invite all hon. Members and members of the public to read our proceedings and I should like them to refer particularly to the proceedings in Committee. They should look closely at the speech of the hon. Member for Motherwell, South because it was a seminal speech. It set out the reasons why nationalisation and the relationship between Ministers and the BSC was so disastrous both for Ministers and the corporation. It explained why it is necessary that Parliament should pass a measure that will mean that such things will never occur again. I am fully aware that the hon. Gentleman thought that he was advancing a case in favour of public ownership, but no Conservative Member who heard his remarks will have identified them as anything other than a classic illustration of the reasons why nationalisation has been a disaster for the British Steel Corporation. The Bill will end that once and for all.
            I have the privilege to represent a constituency which still has a residual steel interest. My constituents remember with nostalgia the days of Stewart and Lloyd, whose operations in Corby made a profit every year. They are less impressed by the fact that British Steel's operations in Corby have made a loss every year since nationalisation. They recall—how could they ever forget?—that the coupling of Stewart and Lloyd's tube works with the British Steel Corporation led to industrial catastrophe in the late 1970s.
            Lest Opposition Members feel that restructuring in the steel industry occurred under a wicked Conservative Government, I remind them that the important day for Corby was 3 March 1979—some two months before the general election that brought this Government to power. It was on 3 March 1979 that British Steel announced that it would close the Corby steelworks. Restructuring has taken place under Conservative and Labour Governments alike.
            I do not accept Opposition Members' contention that private ownership has been a disaster for the steel industry—far from it. Private ownership worked, and worked well, in Corby and in many other places. I am certain that when British Steel is privatised, its work force—in Corby or elsewhere—and its shareholders will find that it works much more successfully than it has with the intervention and interference that have been such disfiguring features of nationalisation.
            I welcome the Bill, and my constituents will welcome it. I have listened with interest to the Opposition's case against privatisation. I have fought two general elections in a steel constituency—one of them less than a year ago. I never sought to hide the fact that I was in favour of privatisation. Privatisation was not a great issue between my Labour opponent and myself a year ago, although my opponent was a distinguished and popular official of the ISTC. We did not argue about the merits of privatisation. There was considerable discussion of the terms for British Steel pensioners after privatization—and quite right too. There was considerable concern to ensure that those who work in the industry are given the best possible opportunity to acquire a stake in the industry—and quite right too. However, the fundamental question whether the
            1030
            industry should be in the public or the private sector was not a matter of great party political controversy in my constituency.
            I respect the fact that Opposition Members, the ISTC and other unions would prefer the industry to remain in state hands. Nevertheless, I am in no doubt that under the Bill the future prosperity of those who work in the industry will be more assured than it could ever be in the state sector where it would be dependent on all the factors that govern state financing and the public purse.
            As I said, I welcome the Bill and I wish it fair speed. I hope that it will receive substantial approbation in another place. All being well, it will reach the statute book before the summer recess and in a few months the steel industry will be returned to the private sector, like so many other industries and with the same success. There is nothing to fear and everything to look forward to in that prospect. The industry can continue to build on the restructuring on which Ministers have insisted in the past few years. With a tried and trusted leadership and an experienced work force, knowing that it has a good future, the prospects for British Steel have never been better.
            9.3 pm
            Mr. Foot: I may have caused the Chancellor of the Duchy of Lancaster some inconvenience by intervening on a point of order in his speech. I do not necessarily apologise for that, but I should like him to appreciate my excellent reasons for doing so, it seemed to me that he thought that he was appearing on the "Newsnight" programme rather than in the House of Commons, and I thought it courteous to draw his attention to that misapprehension. It is not because I dislike him in any sense, either in the House of Commons or on television. I prefer him to some of his colleagues—particularly the right hon. Member for Chingford (Mr. Tebbit). I do not want to pay the right hon. and learned Member any reckless compliments, but I much prefer him to his right hon. Friend.
            I return to that part of the Chancellor of the Duchy's speech that was in order. He referred to the achievement of the steel industry, and he was right to do so. It was one of the factors that led to the presentation of the Bill. On the figures given in recent months, there have been considerable achievements at the British Steel Corporation. Sir Robert Scholey deserves considerable credit for that; he should have been appointed to his current position some time ago, because he was doing most of the real work. He has had the assistance of those who have been prepared to confront the industry's appallingly difficult transformation, which has imposed huge burdens upon the communities involved, such as my own. It is because we in the steel communities know the difference between public and private ownership that we are so bitterly opposed to the Bill, despite the industry's achievements over recent months.
            Those considerable achievements would not have been possible, as my hon. Friend the Member for Dagenham (Mr. Gould) so skilfully underlined in his speech, had it not been for the different forms of investment, the greater foresight and the long-term planning which public ownership offers an industry such as steel. I can cite my own constituency by way of illustration. Had it not been for the £70 million or £80 million invested in the tin plate and finishing plant in Ebbw Vale in 1978 and 1979, it

            1031
            would not have had the slightest chance of surviving into the late 1980s as it has done. I hope that it will carry on for the next 10 or 20 years.
            That investment would not have been made—I am certain that the same applies to Ravenscraig and to other places—and carried through, partly under a Labour Government and partly under their successors, at a time when many European steel industries were being knocked out altogether, had it been in private ownership. Yet that investment allowed it to survive and has enabled the Chancellor of the Duchy to talk about a prosperous steel industry.
            It was not only that long-term investment which was important to the steel industry. There was all the accompanying investment necessary to carry through the change from the older industries to the new. It is false to make the charge sometimes made against the Labour party, that it was not in favour of those changes. We understood that they were needed in many areas, such as Corby and Ebbw Vale. However, we said that the pace of that change should be one that the communities involved could absorb, and that the rundown should be accompanied by the introduction of new industries in a planned way. I will not say that we carried out that philosophy perfectly, but we undertook it on an intelligent and planned basis, whereby the steel industry itself provided special investment in many of the new industries introduced into those areas.
            The Labour Government invented the British industries enterprise scheme. We introduced it as part of the effort to ensure that the rundown of the steel industry should go forward only as we were bringing in new industries. It was all part of our scheme to ensure that the balance was kept and that we should not be thrust through such a change with 25 per cent. unemployment, which is what we have had since 1979–80. It is bad enough to have to try to carry through a change on that scale with the 5, 7 and even 12 per cent. unemployment that existed before 1980, but there is a considerable difference between carrying out such a process on the basis of 12 per cent. unemployment and doing so on the basis of 20 or 25 per cent. unemployment, which is what we have had ever since 1979–80.
            We had a much better idea of how the change should be carried through. Part of it was that the money allocated to the steel industry, and part of the investment programme, should be accorded to the planning. I remember Mr. MacGregor coming in with all his brilliance and foresight and saying, "We cannot have anything to do with this. It is not the Government's business to provide the other industries. We must concentrate solely on the market." That was the only test that he was able to provide. We stopped him doing it then, and even the present Government stopped him applying the same doctrines to the coal industry a little later. He did enough damage in many other directions, but we checked much of the damage at that time.
            If the Chancellor of the Duchy of Lancaster had studied these matters a little more carefully, he would never have brought forward a Bill which does not take into account all the other aspects of the effect on the steel communities and the communities that still have to carry through many of these changes. We will oppose the Bill bitterly and will vote against it, which will not surprise the right hon. and learned Gentleman. When a new Labour Government come in—which I trust will happen very soon—one of
            1032
            their major objectives will be, I am sure, to restore to our communities which have been so ravaged by the right hon. and learned Gentleman and his friends the compassionate, intelligent, long-term planning that only public ownership can provide in such great industries.
            9.12 pm
            Mr. Fallon: First, let me clear up the misapprehension on the Opposition Benches that the contents of the Bill were not foreshadowed in the Conservative manifesto. The quotation from the manifesto—I am trying to help my right hon. and learned Friend the Chancellor of the Duchy—runs as follows:
            "We will privatise more state industries in ways that increase share-ownership, both for the employees and for the public at large."
            Let there be no doubt on Conservative Benches that the Bill is fully consistent with the aims of our manifesto. I know that my right hon. and learned Friend prides himself on being on the more radical wing of our party, and he may think that he is in advance of that manifesto, but the plain fact is that the proposals to privatise British Steel are fully consistent with our manifesto and do not result from any last-minute decision during the autumn.
            Mr. Gould: I am grateful to the hon. Minister—[laughter.] I am grateful to the hon. Gentleman—he may well become a Minister. As he seems so much more familiar with the hidden meaning of the opaque words that he has just read out, perhaps he could enlighten us on what other specific industries not yet mentioned in any Queen's Speech, or figuring in any legislation, that form of words now covers. Clearly, he can enlighten his right hon. and hon. Friends on his own Front Bench as well as the rest of the Chamber.
            Mr. Deputy Speaker: Order. I have allowed every hon. Member a preamble, and I hope that the hon. Gentleman, if he is going to respond, will do so briefly.
            Mr. Fallon: The hon. Member for Dagenham (Mr. Gould) will have observed—certainly, he will have done so by 10 pm—that the number of state industries is diminishing. All that I will say is that it ought to be further diminished.
            We are now reaching the end of Report and Third Reading, and I feel that we are entitled to wonder yet again at the generosity of my right hon. Friend the Leader of the House in allocating two full days to the Report stage. I appreciate that there may have been some embarrassment on the Opposition Benches about the meagre part played by Opposition Members in Committee, as a result of which we have had to stretch out the proceedings over two days. Barely half a dozen Opposition Members have been present and they have presented a string of muddled and inconsistent amendments.
            Opposition Members said, first, that they opposed privatisation. Then they tabled an amendment calling For a Celtic steel company comprising the Ravenscraig and Welsh plants. They then complained that the British Steel Corporation would be a monopoly, yet, a few hours later, they moved an amendment requesting that it be protected from competition and takeover. They then said that there was no demand for shares. yet, a few hours ago, they moved an amendment suggesting that one third of all the shares should be given, in trust, to the work force That is a wholly inconsistent and muddled approach.

            1033
            I do not want to labour the Labour party policy, because that would stretch the rules of order on Third Reading. This is not simply a debate between the Front and Back Benches. The steel workers in my constituency will study the Bill carefully when it is passed. The first question that will occur to them is what will happen to the Act if a Labour Government ever come to power again. Will it be repealed? What will be the policy of an incoming Labour Government? I appreciate the difficulties of the hon. Member for Dagenham in completing his series of speeches, listening to the New Zealand Minister for Finance and working on his economic review, but he owes it to the steel workers in my constituency to leave them in no doubt that the industry will not be renationalised if a Labour Government come to power.
            As my hon. Friend the Member for Corby (Mr. Powell) well illustrated, the BSC work force is now in much better shape than Her Majesty's Opposition. The work force understands the requirements and is looking forward to being a great private British company.
            There will be no greater welcome for the change than on Teesside. It should not be forgotten that many of the steel plants are in areas of high unemployment and assisted areas in Scotland, Wales and the north. For far too long, those areas have depended on the decisions taken by politicians in London which have then been overruled by Treasury Ministers or civil servants. Why should not people in those areas and working in those industries have the same freedom and opportunities to progress, to manage their businesses and to make a success of those industries, free from bureaucracy and control?
            The Bill is part of that process, and clauses 1 and 10 have implications for a company in my constituency, which is a perfect illustration of why the corporation should now pass into private ownership. Darlington and Simpson rolling mills is a major company, half owned by British Steel and half owned by Norcros, a company that enjoys the benevolent chairmanship of my hon. Friend the Member for Wokingham (Mr. Redwood).
            That half-and-half ownership means that all the key decisions on investment, management, exploring new markets and developing new technologies have to be referred to two different owners and two different managements. It is impossible for the management and work force of that company to be in charge of their own destiny. When the Bill is enacted, that company will be free to build up its own sales, to explore new markets and to develop new technologies without being partly answerable to state bureaucrats in London.
            The Bill is important for the regions and, above all, for our economy and for those who work in the steel industry. Had I been told even in 1983 that within five years the BSC would be passing on to the open market I might have had my doubts. It is an enormous achievement. It is a testimony to the strength of the economy, the strength of our commitment to free enterprise, and above all, to the Department of Trade and Industry, the Department for enterprise, that in a single parliamentary Session, with the passage of the Bill, the BSC will join parts of British Shipbuilders and the Rover Group in the market sector. Places that we thought were trapped for ever in the
            1034
            dependency culture—Longbridge, Govan and Ravenscraig—will now be free-standing parts of successful companies.
            It is an achievement not only for Ministers, but, above all, for the work force. The BSC work force made the transformation possible. The improvements that it has succeeded in making in productivity and performance, the necessary job losses that it had to accept and its commitment and enthusiasm are the best possible guarantee of the success of the sale of this corporation.
            Conservative Members salute that achievement in passing the Bill. It is a crying shame that Opposition Members cannot likewise salute our British steelworkers.
            9.20 pm
            Mr. Hardy: The Treasury Bench will be grateful to the hon. Member for Darlington (Mr. Fallon), but I do not know whether the steel workers of Darlington will be. The hon. Gentleman told the House what he would say to them, and he asked us what we would say to our constituents who may be adversely affected by this measure.
            I wonder whether he will tell his steelworkers—I shall certainly tell mine—that the Bill offers serious disadvantages to them and perhaps to Britain. For example, the Bill's horizon is five years and there is no certainty beyond that. There is no certainty about investment, or the future of research and development or ownership. The hon. Gentleman may be happy to see others come and buy his steelworks and make his workers dependent on those who may not have this country's interests at heart, but we are certainly not.
            My hon. Friend the Member for Rotherham (Mr. Crowther) and I are anxious about the future of United Engineering Steels' Rotherham works. I recall, as my hon. Friend, who was then the mayor, will recall, the considerable demonstration of co-operation between management and workers when we set up the Thrybergh bar mill and broke world records, which are still held, for production and the speed of commissioning. That was not achieved because we had some peculiar owner who was not even identifiable. It was done because workers and management together recognised that they could make a substantial contribution to the national interest. Where will that motivation be when this Bill becomes law and the BSC has been privatised?
            The hon. Gentleman may feel that he is doing the workers a favour by offering them £70-worth of shares free. My workers in the Thrybergh bar mill in Aldwarke and those working in Concast in my hon. Friend's constituency would prefer to know that investment would continue and be aware that management would be responsible to them and the nation rather than to some foreign interest which may not even want the British steel industry to survive. That fear may well not be compensated for by £70 of free shares.
            Ministers have sought to distract our attention by asking what the Labour party policy is. I hope that it will continue to be a commitment to ensure that the United Kingdom creates wealth. That must be the priority of my party. That aim has been sadly neglected throughout the 1980s. The Government and the Conservative party have been eager not to give priority to the creation of wealth,

            1035
            but to give rewards and recognition to those who shift money about. In my area, we do not have much money to shift about.
            The hon. Member for Brigg and Cleethorpes (Mr. Brown), who was smiling a moment ago when I referred to the need to create wealth, may be seeking in his way to undermine the capacity of areas like mine to maintain their wealth. I notice that he removed himself rapidly from a steel constituency at the general election. His footwork may be admirable, like that of many other practising politicians on the Conservative Benches, but the commitment and wisdom which they have revealed, and continue to reveal in the Bill, will ensure that the steelworkers in their constituencies, or in his case in the constituencies nearby, will realise that the Government have no commitment to Britain. to wealth, to markets, to research and development or to ownership and very little commitment to anything which we regard as a necessary long-term consideration of this essential industry.
            9.25 pm
            Mr. Tim Janman: Like my hon. Friend the Member for Corby (Mr. Powell), I served as a member of the Standing Committee and I add my congratulations to the Chancellor of the Duchy of Lancaster and to the Under-Secretary of State for guiding the Bill through Second Reading, Committee and now Third Reading.
            It was an interesting Committee to take part in, not just because there were many occasions on which a new Member like myself could observe how Opposition Members tested the Chairman's patience as to how far they could extend the elasticity of the remit of the matter under debate.
            Another interesting aspect was that a high proportion, if not 100 per cent., of the New Zealand contingent of the British parliamentary Labour party were members of the Committee. In the light of the recent speech of the Finance Minister for New Zealand, and because of the general drift of the policies of the Labour Government of New Zealand over the past few years, throughout the Committee we hoped that part of the enlightenment which has got through to the Socialist Administration in New Zealand would reach the heads of the Opposition Front Bench spokesmen. Alas, we still wait.
            Mr. Michael Brown: I can give my hon. Friend some help. There is a rumour that the hon. Member for Great Grimsby (Mr. Mitchell), who entertained us well in Committee, is about to go to New Zealand. Perhaps he will find out how things should be done and come back with the correct solution.
            Mr. Deputy Speaker: Order. Every hon. Member has been allowed a little preamble, but I remind the House that we are dealing with the Third Reading of the British Steel Bill in the United Kingdom, not with anything in New Zealand.
            Mr. Janman: I thank my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) for his intervention. I hope that when the hon. Member for Great Grimsby (Mr. Mitchell) comes back he will reflect on the statement which he made in the House last night, that the Opposition remained totally opposed to denationalisation of the British steel industry. If the Opposition are honest with themselves, with us and with the country, they should continue to make it clear that in their gut they are still
            1036
            totally committed to nationalisation of the key core industries. Because they know that the vast majority of the electorate understand that nationalisation has been a recipe for complete economic failure, they dress it up with fancy terminology to try to hide from the electorate the fundamentals of their industrial policies.
            Mrs. Margaret Ewing rose—
            Mr. Janman: I will not give way, because time is short and other hon. Members wish to speak.
            It is not the Government who are ideological. We believe in the natural way of doing things. The use of economic resources should be dictated by customers, investors, shareholders and the people who manage industry in recognition of the competitive forces and the profit motive that guide them. We are not the party that is ideological. We do not believe that these key industries should be run by politicians and bureaucrats, with decisions being made for short-term political gain rather than long-term economic considerations and prosperity.
            The point has often been made in this debate that in some ways the steel industry is different: it is a large industry; it is too big for the private sector to run it efficiently and effectively. What drivel. Many industries throughout the world have major private companies within them and they are being run very successfully—for example, the aircraft, motor vehicle, and computer industries. There are British examples in all those industries.
            I welcome the Bill and add my support to it. It will enable the British Steel Corporation to be added to the long list of privatisation successes that this Government have to their name. The quicker that privatisation takes place, the better.
            9.30 pm
            Mrs. Margaret Ewing: I am grateful for the opportunity to speak on Third Reading. I apologise to the House for the fact that I was not able yesterday to attend the first day of the Report stage as I was recovering from an illness. I have listened with interest to some of the comments made on Third Reading. I am concerned that there appears to have been little movement by the Government on the future of the steel industry since Second Reading.
            The Government claim that they are listening to the views of the population, but it seems that in this case they have not listened very carefully, and certainly have not been seen to act. There is little recognition of the significance of the steel industry, not just in Scotland, but throughout the United Kingdom economy. Although I speak from a Scottish perspective, I understand the significance of the steel industry to many hon. Members' constituencies in England and Wales. I have listened to their views with respect.
            There is a symbolism about the steel industry which is perhaps difficult for many people to take on board. Symbolism may be something which many people do not accept should be argued in the House. However, the symbolism of British Steel is something that we should understand. If the Prime Minister talks of particular items of legislation as being flagships, she is talking in symbolic terms. When we talk about this industry, why cannot we place a similar emphasis on the symbolism of it to many parts of the United Kingdom?

            1037
            I do not speak as a sycophantic follower of the idea of public ownership. My party has always stood for a combination of private and public ownership. Over the years, when there has been nationalisation and centralisation of various public assets within the United Kingdom, too often they have been at the expense of places such as Scotland, Wales or the north of England.
            We are seeing almost the reverse of that coin in the privatisation of the steel industry, when I believe we shall see a continuation of centralisation. There is little doubt in my mind that privatisation will mean that the steel industry will fall into the hands of the people with money in this country—the people in the south-east of England. After all, that is the money centre of the economic world. The Government are more concerned with profits than with people. But we are talking about the future of the people employed in the steel industry.
            I have not heard throughout the Second Reading, Committee, Report or Third Reading stages anything from the Government that convinces me that the interests of the people working in the steel industry are being taken to their heart. We are almost playing a Monopoly game, where the Government are saying to the workers in the steel industry, "This is a Monopoly game. Do not pass go; do not collect your shares; go directly to the unemployment benefits office." That is not the sort of message that should come from this House. Many people who work in the steel industry fear that the privatisation of the industry will mean further unemployment. We heard earlier that 134,000 people have been made redundant in the steel industry since 1979. How many more people's jobs will be lost as a result of this legislation?
            In all seriousness, I advise Conservative Members to remember what happened in the wake of the closure of Gartcosh in Lanarkshire. One of the more senior members of their party, a former chairman of their parliamentary candidates committee, resigned. He was also the proponent of the idea that Conservative policies should be expounded more seriously and effectively in Scotland. However, he resigned because of the closure of the Gartcosh steel works. That man was lain Lawson who, together with the hon. Member for Motherwell, North (Dr. Reid) and many other people, walked to Downing street to argue against the closure of Gartcosh.
            The kind of arguments that have been put forward by Conservative Members during the passage of this legislation will ensure not only that people of the calibre of Iain Lawson will resign from the Conservative party and join the Scottish National party, but that the Conservative party will not revive in Scotland. I am sure that the hon. Members for Motherwell, North and for Motherwell, South (Dr. Bray), who have spoken so eloquently in all the stages of this legislation, have echoed the sentiments of many people in Scotland that the Conservative Government are not holding out any hope for the steel industry in Scotland.
            As I have said, I am not taking a sycophantic approach to the idea of public ownership. However, I believe that the steel industry in Scotland did have a future in public ownership and that, by putting it into private ownership, the Government are tolling its death knell. For that reason, my colleagues and I will vote against the privatisation of the industry and against the Bill because
            1038
            we have heard nothing in the last few months to give us any confidence that the Government are holding out hope for people in the Scottish steel industry.
            9.37 pm
            Mr. Geoffrey Dickens: It is important that hon. Members remind themselves that before the Conservative Government came to power there was no hope for the continuation of the British steel industry. The industry was uncompetitive. It took about seven man days for every tonne of steel produced, compared with three man days for South Korea and Japan. People who sought to win competitive orders from around the world sought to buy their steel from British Steel. They asked British Steel to sharpen its pencils and get the price right so that they could buy from it, only to find that British Steel could never match the prices that could be obtained abroad.
            British Steel was on a slippery slope. The taxpayers were, if I remember correctly, putting about £600 million a year into the steel industry in subsidies. That was unfair to the private steel industry, which was having to compete against the subsidised national steel industry.
            As a commercial director, I have personal experience of trying to buy many thousands of tonnes of steel from British Steel. I wished to place my orders with British Steel, but I found that it could not match foreign prices. I had to win international contracts abroad against fierce international bids. We won those contracts, but we had to get the steel at the right price to meet the bid price with which we had won the contract. Until Mr. MacGregor was appointed and sorted out the steel industry, British Steel had no hope of survival.
            I remember the day when we voted £75 million to help soften the blow of redundancies and to enable proper entitlements and rewards to be given to those who had lost their jobs. We could not afford to have overmanning and restrictive practices, because they would not allow us to compete with the rest of the world.
            Opposition Members have short memories. When I first became a Member of this place I remember that the Chamber was packed when there was a steel debate. On those occasions the Opposition Benches were full. Since then the credit of Opposition Members has been lowered and we have only a handful of Opposition Members in their places for this important debate.
            I want to be fair to the Opposition because they have the next business and I am aware that if I detain the House I shall be losing them precious time. I wish to be brief, but the clear message must be issued that if it had not been for a Conservative Government there would have been no hope for our steel industry. The industry now has a rosy future. There is staff security, and steel is being delivered at the right quality and standard and at the right price. That is accompanied by a good after-sales service. All these elements are now right because a Conservative Government came to power and had the guts to ensure that the industry was sorted out. It has been sorted out to such advantage that it is ready for privatisation. Let there be some entrepreneurs and risk takers moving into British Steel. Let us give the workers a better future, along with the industry and the country, by voting for the Third Reading.
            9.42 pm
            Mr. Bell: It is always a pleasure to be called to speak after the hon. Member for Littleborough and Saddleworth (Mr. Dickens), a future Prime Minister, has spoken. I shall follow with great interest the hon. Gentleman's career over the next few years.
            It is right that the authentic voice of Teesside should be heard this evening. The hon. Member for Darlington (Mr. Fallon) represents the authentic voice of Durham. I want the authentic voice of Teesside and Middlesbrough to be heard so as to echo the roar from Ayresome park as the play-off takes place for the first division. As extra time is being played in Middlesbrough, so we come to the final in our debates on the Bill.
            We have had an interesting debate, but it seems that the Chancellor of the Duchy of Lancaster and Conservative Back Benchers wish to speak about Opposition policies and how the Opposition will run the economy when we come to power rather than direct attention to the real reason behind the Bill. Although we have not had it explained to us by the Chancellor of the Duchy of Lancaster or Conservative Back Benchers, the Bill is before us so that the Government can secure another £2,000 million to assist the British economy and to keep the public sector borrowing requirement in credit rather than deficit. The Government have announced tonight that the PSBR is £925 million in credit, and their rush to get the Bill on the statute book reflects their desire to obtain another £2,000 million next year so that the books can be balanced.
            I am reminded of the occasion when ICI's Sir John Harvey-Jones came to Middlesbrough when a local bank opened a new branch. When I asked, "What are you doing here?" he said, "I am here for the same reason as you, except that my overdraft is bigger." The British Government run no overdraft and ICI has an overdraft of about £5,000 million. A successful company is prepared to borrow to invest in its future, but the Government sell their assets and the shares of the British people to make money for those in the City, not for those who invest in industry on Teesside.
            People on Teesside are interested in the Bill. The hon. Member for Corby (Mr. Powell) said that during the last election there was no discussion about the privatisation of the steel industry except for pension rights, but there is deep concern and anxiety on Teesside about the consequences of privatisation.
            I remember going to the United States many years ago and seeing what had happened to the steel town of Birmingham, Alabama and the steel towns of Pennsylvania. There was no investment by the state, and the steel industry was left to run its own affairs as a private industry. Japanese competition came in and laid low those steel towns, decimating the industry and making thousands unemployed.
            The hon. Member for Darlington referred to the possibility of greater private sector participation in steel in Darlington, but my hon. Friend the Member for Wentworth (Mr. Hardy) asked what would happen if the growth did not come about. Steel is a cyclical industry, and there would certainly be more redundancies. What will happen if a multinational firm buys this global outpost in Darlington and decides to close it down when the next recession arrives?
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            It is not true that people in the steel industry are asking what a future Labour Government will do; they are asking how they will fare under privatisation. What will happen when the investment does not come? What will happen to their jobs, their investment in their work and their future? Those are the questions being asked on Teeside and such concerns were never alleviated in Committee, when we never had a straight answer to a straight question from a Minister. Ministers read the briefs that had been prepared for them but made no positive statements to explain, highlight or illuminate the contents of the Bill.
            I associate myself with the Opposition Front Bench. We shall oppose the Bill and bring forward our own common ownership proposals at the next general election. We shall see how our industries should be governed and run when the European single market arrives. We shall examine the future with some reflection and certitude and put people in the industry first, not the City slickers who are waiting for the shares to come on the market.
            9.47 pm
            Mr. Morley: Tonight we have heard no justification for selling British Steel, because British Steel stands wholly justified as it is. If it is compared with any private steel company in Europe or the rest of the world, it can be seen to be out-performing them. It is making more profit and is more productive than any of its rivals. How can Conservative Members argue that public ownership has been a failure, when the BSC is a monument to the success of public ownership? It is so because it was given the investment that it needed.
            The reward for people who work in the BSC is a patronising pat on the head to show them how well they have done and a tip of £70 as they are shown the door to an uncertain future. While it remains in public ownership, the BSC has a guaranteed future, and so do the people who work in it. The supply of steel to our industry is guaranteed, as is long-term planning for industry. Now we are faced with uncertainty.
            No Conservative Member can give any guarantee that the BSC will prosper as a privatised company. That is the BSC's reward for reaching profitability. Why throw it all away? It is wrong for the Chancellor of the Duchy of Lancaster to dismiss the £5 billion that have gone into British Steel as money that is to be forgotten and cannot be recovered. While the BSC remained in public ownership, that money would have been recovered because the taxpayers would have received the return on their investment that has been wiped out by the Government.
            The case for public ownership has been proved and the Government have failed to make their case for throwing the industry into uncertainty. I point out to the hon. Member for Corby (Mr. Powell) that the argument about privatisation was very much an issue in my election. That is why Scunthorpe has a Labour Member of Parliament after eight years of Tory control. The people of Scunthorpe saw a Labour Member of Parliament as more likely to protect their interests and their future. They are not wrong and I am glad to be here arguing to protect their long-term interests because the Government do not care.
            9.50 pm
            Mr. Morgan: Conservative Members have presented us with a series of wondrous paradoxes. There has been an

            1041
            almost obsessive interest not in the purpose of the Bill but in what the response of the Opposition will be at the next election. Conservative Members seem to have invented a new principle. They seem to say that, since they did not put this measure in their manifesto, they have a right to claim that we must put some measure about steel in our next manifesto.
            The hon. Member for Darlington (Mr. Fallon) said that in the steelworks in his constituency, the Darlington and Simpson rolling mills, one of the consequences of privatisation will be that his steelworkers will be able to govern themselves up north and will no longer have to refer to an overweight corporate bureaucracy in London. He told us that a 50 per cent. share in the Darlington and Simpson rolling mills was owned by Norcros. He also told us with great pride that the chairman of Norcros is the hon. Member for Wokingham (Mr. Redwood). When his steelworking employees want to see their chairman and do not want to see anybody from an overweight bureaucracy down south, they will merely have to come to London. In between his demanding duties as an hon. Member and his duties for Rothschilds, the hon. Member for Wokingham may be able to spare five minutes of his time. That is a wonderful example of UDI for the north of England.
            We had a wonderful last-minute intervention by the hon. Member for Littleborough and Saddleworth (Mr. Dickens). He was not seen in the earlier part of the debate and was not in the Committee, but he wanted to demonstrate his expertise in how to make corporate bodies lean and hungry. His eagerness to do that was more than I am prepared to speculate.
            Mr. Dickens: I have a great affection for the hon. Member for Cardiff, West (Mr. Morgan), particularly as he gave way. The hon. Gentleman mentioned his hon. Friend the Member for Workington (Mr. Campbell-Savours) but I think that he meant my right hon. Friend the Member for Woking (Mr. Onslow) I would not like to steer the hon. Gentleman in the wrong direction.
            Mr. Morgan: The right hon. Member for Woking (Mr. Onslow) sits on the Government side and my hon. Friend the Member for Workington (Mr. Campbell-Savours) normally sits behind me and I was perfectly clear on identity.
            The Chancellor's speech was the most paradoxical of all the speeches about the purpose of the Bill. He said that its purpose is to stop politicians interfering incompetently in the industry. We realise what he meant and it was perfectly clear from his speech that he takes no interest in this industry. The Fe content of his speech was about 30 per cent. He attempted, as all good lawyers do when they have a lousy case, to use the ad hominem argument. He simply attacked the Opposition and attempted to demonstrate his new-found desire to be the Vinny Jones of the Government Front Bench.
            The Minister spoke about the steel industry for about one third of the time. It is obvious from that that the Government are not interested in the steel industry. They are saying that they will be happy to get rid of it now and that it bores them. They do not want to know about it and if they can get any kind of return for it they will get shot of it. They say that, even though it was not in the Queen's
            1042
            Speech or in the manifesto, they want to get rid of it now. They are saying that the industry does not interest them in the long, short or medium term.
            9.53 pm
            Dr. Reid: As my hon. Friend the Member for Cardiff, West (Mr. Morgan) has said, we have seen some extraordinary spectacles in the debate. When the hon. Member for Littleborough and Saddleworth (Mr. Dickens) rose I assumed that a witches' coven had been formed at Ravenscraig, because I do not remember him making a contribution or showing an interest at any earlier stages in the steel debate.
            An even greater revelation was the hon. Member for Darlington (Mr. Fallon), who attempted to shroud his support for the Bill in calls for decentralisation, devolution and at one stage workers' participation. He stopped just short of all power to the Soviets. None of those reasons will be accepted by the Opposition as the real reason for the Bill. No reason at all for it was to be found in the Minister's speech. I was looking for a word to describe the Minister's speech. "Vacuous" sprung to mind, but I thought it was a little too substantial. There was nothing in that speech to justify privatisation of steel, and, as my hon. Friend the Member for Cardiff, West said, the Minister spent three quarters of his speech searching for solutions to the future problems of the industry by demanding answers from my hon. Friend the Member for Dagenham (Mr. Gould).
            The Minister claimed that the Bill was well thought out, despite the fact that he did not know how the company was to be floated, when it was to be floated, what price would be asked or to whom it was to be sold. The process of the enabling Bill was described by my hon. Friend the Member for Dagenham as a mystery. That was a gross understatement. The Bill fulfils every criterion of Churchill's definition of the Soviet Union. It is a mystery within an enigma, wrapped up in a riddle. That applies to both the reasons and the process for the sale of British Steel.
            The Minister told us that there was no write-off of debt, but a trading loss; but no write-down of the taxpayers' capital, but a restructuring. I thank the Minister for his advice. Tomorrow morning, I will phone up the hire purchase company to say that I do not have a debt, I merely have a continuing trading loss and I shall discuss with my bank manager the fact that I would like a restructuring of my mortgage to ensure that it is written off.
            A more simple and straightforward word was used earlier. The Bill is a swindle. It represents half the public dividend capital value, a write-off of debts and a snub to the taxpayer. It is the product of prejudice and dogma, not of good, long-term policy thinking. It was not in the manifesto or in the Queen's Speech. The only justification for it was the Minister quoting a colleague saying, "At some stage, somebody once said it."
            We also had the offer that one phrase in the Queen's Speech refers to "other measures". As far as we can make out, that would justify the declaration of war tomorrow by the Government, on the basis that it was in the Queen's Speech. The Bill is the Government's responsibility. They have refused every amendment. Should the predictions

            1043
            about Ravenscraig or the steelworks in Lanarkshire come true, the responsibility will rest fairly and squarely on the Government.
            9.57 pm
            Dr. Bray: In their different ways, both sides of the House want to he rid of the Bill, but it has some lessons for us. We need to give more attention to monopoly and competition policy and their effect on jobs and output as well as on profit. For the industry, the lessons are that it needs to give continuing attention to the rapid changes that are still taking place in the market, technology and the national and international economic environment and, above all, to give more attention to its people and the communities in which it lives.
            The Minister and the House need to give more attention to our relations generally with the industry. It is a misapprehension to suppose that the mere act of privatisation discontinues that relationship. It is like supposing that a floating exchange rate abolishes foreigners. Even if the Chancellor of the Duchy of Lancaster shuts his door, his eyes and his ears, he will find that the chairman of BSC and his successors will come along to knock on his door about a dozen issues. This will not be the last steel Bill that comes to the House. Whatever the results of the next election, if only to win another 22 years before the next major steel Bill, I urge the House to reject the Bill.
            9.58 pm
            Mr. Atkins: We have had an interesting debate, and I suspect that the House will not wish me to detain it for long. I am rather sad that one of the Opposition Members who participated at some length in our Committee debates—the hon. Member for Great Grimsby (Mr. Mitchell)—cannot be here today. I am sure that he has a good reason for that. He would have enlivened the Third Reading debate in the way that he enlivened the Committee debates, largely by the number of fairy stories with which he regaled us. Members of the Committee may recall and the House may be interested to know about Godzilla and about the bardic steamroller to which he referred. That just about sums up the quality of the debate offered by the Opposition.
            We have heard from the Motherwell mafia, the hon. Members for Motherwell, North (Dr. Reid) and for Motherwell, South (Dr. Bray), the harbingers of doom who last night, finding themselves pushed to a Division by the SNP, had to abstain on their own amendment. Such is the commitment and the concern about the so-called controversial issue. We heard about capitalism and labour from the hon. Member for Middlesbrough (Mr. Bell)—
            It being Ten o'clock, the debate stood adjourned.

            BUSINESS OF THE HOUSE
            Ordered,
            That at this day's sitting, the British Steel Bill may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]
            Question again proposed, That the Bill be now read the Third time.
            Mr. Atkins: We also heard from the hon. Member for Dagenham (Mr. Gould) about the designer Socialism which he is seeking to create for the Labour party. In the context of the debate on the enabling Bill for the British
            1044
            Steel Corporation, he did not tell us exactly what the Labour party will do for the future. We have had to admire him, because he has talked about everything except the issue. We have not heard whether the Labour party will renationalise the BSC, and the House is aware of that fact. [HON. MEMBERS: "Long speech."] If Opposition Members seek to provoke me, I could refer to a great deal more. Since they well know that their prayer follows this debate and that Scottish Labour Members have delayed my winding up, they had better be very careful.
            There were interventions from my hon. Friends the Members for Darlington (Mr. Fallon) and for Corby (Mr. Powell), both of whom know what they are talking about—one was a member of the Committee, and the other represents a constituency which contains a steel-processing plant. Conservative Members will agree that their contributions were a succinct summary of why we believe that the Bill is the right way to go.
            Above all, the speech that sums up the Opposition was from the right hon. Member for Blaenau Gwent (Mr. Foot), an extremely distinguished Member. At least we know where we stand with him. The traditional View of old-fashioned Socialism rules supreme. Nothing changes; steel must always be nationalised and must be in public ownership. However, as hon. Members will remember, steel had its problems in his day. Does the right hon. Gentleman not remember the closures at Ebbw Vale when he was Secretary of State for Employment which made him somewhat unpopular because of the difficulties faced by the steel industry at that time?
            Steel has had its difficulties in public ownership and doubtless will in future. However, we have brought the Bill to the House, we have been through Committee and have reached Third Reading, because we believe that the future is very bright indeed.
            Mr. Tim Devlin: Just before my hon. Friend finishes, does he agree that the Bill will be extremely good for regions such as mine in the north-east, because it will give the competitive management on Teesside a great deal more scope for its imagination in the years to come, and provide wider share ownership in a region which needs further encouragement for enterprise and weaning from the bosom of the state?
            Mr. Atkins: Like my other hon. Friends, my hon. Friend the Member for Stockton, South (Mr. Devlin) makes his point extremely well.
            We look to the future and seek to give British Steel the means to secure lasting success for itself, for employees and for shareholders, and in so doing to contribute to the national interest. The company must have the freedom to make rapid decisions and to adapt to a changing market. I am confident that, as a private sector company, British Steel will do the nation proud. The Bill marks the first step in the privatisation process, and I commend it to the House.
            Question put, That the Bill be now read the Third time:—
            The House divided: Ayes 263, Noes 199.

            Division No. 312]

            [10.04 pm

            AYES

            Adley, Robert

            Amess, David

            Aitken, Jonathan

            Amos, Alan

            Alexander, Richard

            Arbuthnot, James

            Alison, Rt Hon Michael

            Arnold, Jacques (Gravesham)

            Allason, Rupert

            Arnold, Tom (Hazel Grove)

            1045

            Ashby, David

            Franks, Cecil

            Atkins, Robert

            Freeman, Roger

            Atkinson, David

            French, Douglas

            Baker, Rt Hon K. (Mole Valley)

            Gale, Roger

            Baker, Nicholas (Dorset N)

            Gardiner, George

            Baldry, Tony

            Garel-Jones, Tristan

            Barnes, Mrs Rosie (Greenwich)

            Gill, Christopher

            Batiste, Spencer

            Goodhart, Sir Philip

            Beaumont-Dark, Anthony

            Goodlad, Alastair

            Bellingham, Henry

            Goodson-Wickes, Dr Charles

            Bennett, Nicholas (Pembroke)

            Gorman, Mrs Teresa

            Benyon, W.

            Gorst, John

            Biffen, Rt Hon John

            Gow, Ian

            Biggs-Davison, Sir John

            Gower, Sir Raymond

            Blackburn, Dr John G.

            Greenway, Harry (Ealing N)

            Blaker, Rt Hon Sir Peter

            Greenway, John (Ryedale)

            Bonsor, Sir Nicholas

            Gregory, Conal

            Boscawen, Hon Robert

            Griffiths, Sir Eldon (Bury St E')

            Boswell, Tim

            Griffiths, Peter (Portsmouth N)

            Bottomley, Peter

            Grist, Ian

            Bottomley, Mrs Virginia

            Ground, Patrick

            Bowden, A (Brighton K'pto'n)

            Gummer, Rt Hon John Selwyn

            Bowden, Gerald (Dulwich)

            Hamilton, Hon Archie (Epsom)

            Bowis, John

            Hamilton, Neil (Tatton)

            Boyson, Rt Hon Dr Sir Rhodes

            Hampson, Dr Keith

            Braine, Rt Hon Sir Bernard

            Hannam, John

            Brandon-Bravo, Martin

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

            Brazier, Julian

            Harg reaves. Ken (Hyndburn)

            Brittan, Rt Hon Leon

            Harris, David

            Brooke, Rt Hon Peter

            Haselhurst, Alan

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

            Hawkins, Christopher

            Bruce, Ian (Dorset South)

            Hayes, Jerry

            Buchanan-Smith, Rt Hon Alick

            Hayhoe, Rt Hon Sir Barney

            Budgen, Nicholas

            Hayward, Robert

            Burns, Simon

            Heathcoat-Amory, David

            Burt, Alistair

            Heddle, John

            Butcher, John

            Hicks, Mrs Maureen (Wolv' NE)

            Butler, Chris

            Hicks, Robert (Cornwall SE)

            Butterfill, John

            Higgins, Rt Hon Terence L.

            Carlisle, John, (Luton N)

            Hill, James

            Carlisle, Kenneth (Lincoln)

            Hordern, Sir Peter

            Carrington, Matthew

            Howard, Michael

            Carttiss, Michael

            Howarth, G. (Cannock & B'wd)

            Cartwright, John

            Howell, Ralph (North Norfolk)

            Cash, William

            Hughes, Robert G. (Harrow W)

            Chapman, Sydney

            Hunt, David (Wirral W)

            Chope, Christopher

            Hunt, John (Ravensbourne)

            Clark, Sir W. (Croydon S)

            Hunter, Andrew

            Clarke, Rt Hon K. (Rushcliffe)

            Hurd, Rt Hon Douglas

            Colvin, Michael

            Irvine, Michael

            Conway, Derek

            Irving, Charles

            Coombs, Anthony (Wyre F'rest)

            Jack, Michael

            Coombs, Simon (Swindon)

            Jackson, Robert

            Cope, John

            Janman, Tim

            Couchman, James

            Jessel, Toby

            Cran, James

            Johnson Smith, Sir Geoffrey

            Currie, Mrs Edwina

            Jones, Gwilym (Cardiff N)

            Davis, David (Boothferry)

            Jones, Robert B (Herts W)

            Day, Stephen

            Jopling, Rt Hon Michael

            Devlin, Tim

            Kellett-Bowman, Dame Elaine

            Dickens, Geoffrey

            Key, Robert

            Dorrell, Stephen

            King, Rt Hon Tom (Bridgwater)

            Douglas-Hamilton, Lord James

            Kirkhope, Timothy

            Dover, Den

            Knapman, Roger

            Dunn, Bob

            Knight, Greg (Derby North)

            Durant, Tony

            Knight, Dame Jill (Edgbaston)

            Dykes, Hugh

            Knowles, Michael

            Emery, Sir Peter

            Knox, David

            Evans, David (Welwyn Hatf'd)

            Lang, Ian

            Evennett, David

            Lawrence, Ivan

            Fallon, Michael

            Lee, John (Pendle)

            Farr, Sir John

            Lilley, Peter

            Fenner, Dame Peggy

            Lloyd, Sir Ian (Havant)

            Field, Barry (Isle of Wight)

            Lloyd, Peter (Fareham)

            Finsberg, Sir Geoffrey

            Lord, Michael

            Fookes, Miss Janet

            Luce, Rt Hon Richard

            Forsyth, Michael (Stirling)

            Lyell, Sir Nicholas

            Forth, Eric

            Macfarlane, Sir Neil

            Fowler, Rt Hon Norman

            MacGregor, Rt Hon John

            Fox, Sir Marcus

            MacKay, Andrew (E Berkshire)

            1046

            Maclean, David

            Raffan, Keith

            McLoughlin, Patrick

            Raison, Rt Hon Timothy

            McNair-Wilson, M. (Newbury)

            Rathbone, Tim

            McNair-Wilson, P. (New Forest)

            Redwood, John

            Madel, David

            Renton, Tim

            Major, Rt Hon John

            Rhodes James, Robert

            Malins, Humfrey

            Ridsdale, Sir Julian

            Mans, Keith

            Roe, Mrs Marion

            Maples, John

            Rost, Peter

            Marlow, Tony

            Rowe, Andrew

            Marshall, Michael (Arundel)

            Rumbold, Mrs Angela

            Martin, David (Portsmouth S)

            Ryder, Richard

            Mates, Michael

            Sackville, Hon Tom

            Mawhinney, Dr Brian

            Sainsbury, Hon Tim

            Maxwell-Hyslop, Robin

            Shaw, David (Dover)

            Mayhew, Rt Hon Sir Patrick

            Shaw, Sir Michael (Scarb')

            Meyer, Sir Anthony

            Shelton, William (Streatham)

            Miller, Hal

            Shephard, Mrs G. (Norfolk SW)

            Mills, lain

            Shepherd, Richard (Aldridge)

            Miscampbell, Norman

            Sims, Roger

            Mitchell, Andrew (Gedling)

            Smith, Tim (Beaconsfield)

            Moate, Roger

            Soames, Hon Nicholas

            Monro, Sir Hector

            Speller, Tony

            Montgomery, Sir Fergus

            Spicer, Michael (S Worcs)

            Moore, Rt Hon John

            Squire, Robin

            Moss, Malcolm

            Stanley, Rt Hon John

            Moynihan, Hon Colin

            Stern, Michael

            Mudd, David

            Stevens, Lewis

            Neale, Gerrard

            Stradling Thomas, Sir John

            Nelson, Anthony

            Summerson, Hugo

            Neubert, Michael

            Taylor, John M (Solihull)

            Newton, Rt Hon Tony

            Thompson, D. (Calder Valley)

            Nicholls, Patrick

            Thornton, Malcolm

            Nicholson, David (Taunton)

            Thurnham, Peter

            Nicholson, Emma (Devon West)

            Townsend, Cyril D. (B'heath)

            Onslow, Rt Hon Cranley

            Twinn, Dr Ian

            Oppenheim, Phillip

            Vaughan, Sir Gerard

            Owen, Rt Hon Dr David

            Waddington, Rt Hon David

            Page, Richard

            Walker, Bill (T'side North)

            Paice, James

            Walters, Dennis

            Patnick, Irvine

            Widdecombe, Ann

            Patten, Chris (Bath)

            Wiggin, Jerry

            Patten, John (Oxford W)

            Wilshire, David

            Pawsey, James

            Wood, Timothy

            Peacock, Mrs Elizabeth

            Porter, Barry (Wirral S)

            Tellers for the Ayes:

            Porter, David (Waveney)

            Mr. David Lightbown and

            Portillo, Michael

            Mr. Alan Howarth.

            Powell, William (Corby)

            NOES

            Abbott, Ms Diane

            Caborn, Richard

            Adams, Allen (Paisley N)

            Campbell, Menzies (Fife NE)

            Allen, Graham

            Campbell, Ron (Blyth Valley)

            Alton, David

            Campbell-Savours, D. N.

            Anderson, Donald

            Canavan, Dennis

            Archer, Rt Hon Peter

            Carlile, Alex (Mont'g)

            Armstrong, Hilary

            Clark, Dr David (S Shields)

            Ashley, Rt Hon Jack

            Clarke, Tom (Monklands W)

            Ashton, Joe

            Clay, Bob

            Banks, Tony (Newham NW)

            Clelland, David

            Barnes, Harry (Derbyshire NE)

            Clwyd, Mrs Ann

            Barron, Kevin

            Cohen, Harry

            Battle, John

            Coleman, Donald

            Beckett, Margaret

            Cook, Frank (Stockton N)

            Beith, A. J.

            Cook, Robin (Livingston)

            Bell, Stuart

            Corbett, Robin

            Benn, Rt Hon Tony

            Corbyn, Jeremy

            Bermingham, Gerald

            Cousins, Jim

            Blair, Tony

            Cox, Tom

            Blunkett, David

            Crowther, Stan

            Boateng, Paul

            Cryer, Bob

            Boyes, Roland

            Cummings, John

            Bradley, Keith

            Cunliffe, Lawrence

            Bray, Dr Jeremy

            Dalyell, Tam

            Brown, Gordon (D'mline E)

            Darling, Alistair

            Brown, Nicholas (Newcastle E)

            Davies, Rt Hon Denzil (Llanelli)

            Bruce, Malcolm (Gordon)

            Davies, Ron (Caerphilly)

            Buchan, Norman

            Dewar, Donald

            Buckley, George J.

            Dixon, Don

            1047

            Dobson, Frank

            Howell, Rt Hon D. (S'heath)

            Doran, Frank

            Howells, Geraint

            Douglas, Dick

            Hoyle, Doug

            Dunnachie, Jimmy

            Hughes, John (Coventry NE)

            Dunwoody, Hon Mrs Gwyneth

            Hughes, Robert (Aberdeen N)

            Eadie, Alexander

            Hughes, Roy (Newport E)

            Eastham, Ken

            Hughes, Sean (Knowsley S)

            Ewing, Harry (Falkirk E)

            Illsley, Eric

            Ewing, Mrs Margaret (Moray)

            Ingram, Adam

            Fatchett, Derek

            Janner, Greville

            Fearn, Ronald

            John, Brynmor

            Field, Frank (Birkenhead)

            Jones, Barry (Alyn & Deeside)

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

            Jones, Martyn (Clwyd S W)

            Fisher, Mark

            Kennedy, Charles

            Flannery, Martin

            Kirkwood, Archy

            Flynn, Paul

            Lambie, David

            Foot, Rt Hon Michael

            Lamond, James

            Foster, Derek

            Leadbitter, Ted

            Foulkes, George

            Lestor, Joan (Eccles)

            Fraser, John

            Lewis, Terry

            Galbraith, Sam

            Livsey, Richard

            Galloway, George

            Lloyd, Tony (Stretford)

            Garrett, John (Norwich South)

            Loyden, Eddie

            Garrett, Ted (Wallsend)

            McAllion, John

            Gilbert, Rt Hon Dr John

            McAvoy, Thomas

            Godman, Dr Norman A.

            McCartney, Ian

            Gordon, Mildred

            McFall, John

            Gould, Bryan

            McKay, Allen (Barnsley West)

            Graham, Thomas

            McKelvey, William

            Grant, Bernie (Tottenham)

            McLeish, Henry

            Griffiths, Nigel (Edinburgh S)

            McTaggart, Bob

            Grocott, Bruce

            Madden, Max

            Hardy, Peter

            Marek, Dr John

            Healey, Rt Hon Denis

            Marshall, Jim (Leicester S)

            Heffer, Eric S.

            Martin, Michael J. (Springburn)

            Henderson, Doug

            Martlew, Eric

            Hogg, N. (C'nauld & Kilsyth)

            Maxton, John

            Holland, Stuart

            Meale, Alan

            Home Robertson, John

            Michael, Alun

            Hood, Jimmy

            Michie, Bill (Sheffield Heeley)

            Howarth, George (Knowsley N)

            Michie, Mrs Ray (Arg'l & Bute)

            1048

            Millan, Rt Hon Bruce

            Skinner, Dennis

            Moonie, Dr Lewis

            Smith, Andrew (Oxford E)

            Morgan, Rhodri

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

            Morley, Elliott

            Soley, Clive

            Morris, Rt Hon A. (W'shawe)

            Spearing, Nigel

            Morris, Rt Hon J. (Aberavon)

            Steel, Rt Hon David

            Mowlam, Marjorie

            Steinberg, Gerry

            Mullin, Chris

            Stott, Roger

            Murphy, Paul

            Strang, Gavin

            Nellist, Dave

            Straw, Jack

            O'Neill, Martin

            Taylor, Mrs Ann (Dewsbury)

            Orme, Rt Hon Stanley

            Taylor, Matthew (Truro)

            Parry, Robert

            Thompson, Jack (Wansbeck)

            Patchett, Terry

            Vaz, Keith

            Pendry, Tom

            Wall, Pat

            Pike, Peter L.

            Wallace, James

            Powell, Ray (Ogmore)

            Walley, Joan

            Randall, Stuart

            Wareing, Robert N.

            Redmond, Martin

            Welsh, Andrew (Angus E)

            Rees, Rt Hon Merlyn

            Welsh, Michael (Doncaster N)

            Reid, Dr John

            Williams, Rt Hon Alan

            Richardson, Jo

            Williams, Alan W. (Carm'then)

            Roberts, Allan (Bootle)

            Wilson, Brian

            Robinson, Geoffrey

            Winnick, David

            Rogers, Allan

            Worthington, Tony

            Rooker, Jeff

            Wray, Jimmy

            Ruddock, Joan

            Young, David (Bolton SE)

            Salmond, Alex

            Sedgemore, Brian

            Tellers for the Noes:

            Sheerman, Barry

            Mr. Frank Haynes and

            Sheldon, Rt Hon Robert

            Mrs. Llin Golding.

            Short, Clare

            Question accordingly agreed to.
            Bill read the Third time, and passed

  Community Charge (Students)
  Mr. Speaker: We now come to the prayer on community charges in Scotland. I remind the House before we start that the debate must end at 11.30 pm, and there is great pressure to take part. May I ask for brief contributions from both the Back Benches and the Front Benches.
  10.19 pm
  Mr. Donald Dewar: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Personal Community Charge (Students) (Scotland) Regulations 1988 (S.I., 1988, No. 632), dated 28th March 1988, a copy of which was laid before this House on 30th March, be annulled.
  These are deceptively simple regulations, which define the categories of students who will qualify for a poll tax rebate. They do, however, raise many questions and problems which I believe will haunt those collecting the tax for many a long year.
  First, there is the problem of how to define students. The regulations set out to try. We are told that a student is someone who is studying at an educational establishment and attends it for 24 weeks or more during the year, or someone who is studying at a further education or teacher training college and working there for 21 hours in the week, again for a minimum period of 24 weeks.
  The first general question that I must ask the Minister is whether he is satisfied that those definitions are precise and comprehensive. Perhaps, when he is addressing himself to that, he will tell us whether students on sandwich courses are likely to be treated differently. After all, many students on this kind of course meet the requisite number of weeks, but only if we include the practical placements which are an integral part of their qualification, and many of those are not within the normal academic year. That seems to raise substantial problems of definition.
  Then is the problem of foundation courses. I have experience of this in my own family. People go for two years to an institution, but the only qualification that they obtain is the right to enter a degree course. They do not get any qualification per se. It is not clear to me, at least, that they will be entitled to the rebate.
  There is also the problem of bridging courses. There may be a relatively short course when someone is converting from one discipline to another. When that is completed, there is an automatic right to proceed to the second course. It is not clear whether that is taken as a complete entity, and whether the person will be covered by the definition.
  I should also like the Minister to say a word or two about non-degree courses. We are told very precisely in regulation 3(a)(iii) that those people will have to undertake a period of study averaging at least 21 hours a week. I stress the words "of study". I should like to know whether that includes placements which are part of, for example, a social work or teacher training course, or indeed a sandwich course. How is it compatible with 3(c), which seems to contradict and run counter to it?
  Having looked at the schedule, I believe that there may be difficulties, particularly in regard to further education, for people following, for instance, hairdressing or
  1050
  secretarial courses. I am not entirely satisfied—perhaps the Minister can reassure me—that they are all covered. He might also deal with the question of nursery nurses and English courses for overseas students. Overseas students will have to pay the poll tax even if they are not on the present electoral register. There is a ragged fringe around the edge of the definitions which may well cause problems.
  I also ask the Minister to calculate, or give an estimate of, how many students in Scotland are likely to qualify for a rebate. A parliamentary question some time ago suggested around 70,000.
  The Minister of State, Scottish Office (Mr. Ian Lang): At this early stage in the debate it might be helpful to point out that we are not talking about rebates; we are talking about exemptions.
  Mr. Dewar: That is a nice semantic point. As I understood it, we are talking about the 80 per cent.—
  Mr. Jeff Rooker: It is automatic rebate.
  Mr. Dewar: I called it a rebate. I take the point. I mean the reduction in the poll tax charge to 70 per cent. I am asking the Minister how many students in Scotland are likely to qualify. Is the figure 70,000—which I think was mentioned earlier—or 100,000, as the National Union of Students has suggested?
  I also ask the Minister to say a word or two about the impact on local government. Obviously, if a local authority is losing 80 per cent. of the poll tax that would normally be paid by an adult, in the case of students there is a substantial loss.
  As I understand it, it was originally intended that students would pay the full poll tax and a compensatory award would be made to them. I appreciate the benefits of the approach that has now been adopted, but what guarantees are there for local authorities? An amendment was tabled in Committee in the other place by Lord Ross of Marnock. The then Minister, Lord Glenarthur, said that the point would be taken into account in setting the rate support grant. That is the equivalent of, "Your cheque is in the post," and will inspire no confidence among Scottish local authorities. I calculate that the sum involved is likely to be about £25 million, or about 1 per cent. of RSG. The Minister should give an assurance that that will be properly covered when the calculations are made.
  Mr. John Butterfill: Does the hon. Gentleman agree that this does not apply only to students? There are many other cases, such as holiday populations, that equally give rise to concern about the level of RSG and the factors that should be taken into account in assessing it.
  Mr. Dewar: That is no doubt true, but we should keep to the subject of students.
  When the category of students has been defined, the problem arises how to establish individuals' claims. Perhaps the Minister will take this convenient opportunity to comment on the vital matter of verification and on the state of the art and say how, when students are registered, they will establish their claim to the reduction to 20 per cent. which is at the heart of the scheme. For example, is it intended that universities and colleges will supply lists of those qualified to the registration officers in their areas? If so, a great deal of work is involved for the universities

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  because the definition of a student for the purposes of the regulations cuts across many other definitions that are used at present in the universities. The category applicable in this case would have to be teased out from the general student body.
  If universities are to have that duty, what sanction will there be if they fail to comply? After all, a responsible person has a legal duty placed upon him and faces a financial penalty if he does not carry it out. Would that sanction apply in respect of such institutions, if that approach were to be adopted? Have the views of vice-chancellors been sought on the matter? The Minister will be aware that many civil rights issues involving the denial of individual responsibilities would arise. Many of us take the view that such information should not be supplied by the university or college without the permission of the individual student concerned.
  Another possibility is simply that the onus should be on the student to apply for the exemption and to prove his or her entitlement. Perhaps we could have a composite solution in which the onus should be on the student to apply and the registration officer then had the power to check with the university or college. The Minister must comment on that tonight and give an indication of the Government's thinking.
  I very much want an assurance that we shall not go down the road taken by the Department of the Environment south of the border. I have here a letter from the hon. and learned Member for Folkestone and Hythe (Mr. Howard) who, I understand, is the Minister for Local Government, to my hon. Friend the Member for Copeland (Dr. Cunningham) which announces that the first step that will be taken in England to deal with the problem
  "is a requirement that universities and colleges should issue certificates to full-time students confirming their status. These certificates will make it straightforward for students to claim the student discount".
  That looks unpleasantly and uncommonly like an identity card thinly disguised as a certificate to establish a student's status for poll tax purposes. That is totally unacceptable to Opposition Members. It should be ruled out now, and I invite the Minister to do exactly that.
  It is clearly desirable that students should receive any possible remission from the burden of poll tax. I am in favour of that, as are my hon. Friends, but that does not mean that we must not be satisfied that there is confidence in the system and that it is workable and equitable. Even with the discount it is worth remarking that few, if any, students look forward in any sense to the arrival of the poll tax. They have many and manifold worries. Perhaps the Minister could do himself some good by giving assurances and addressing himself to some of the problems.
  There is, for example, the matter of the rent levels paid by students. As the Minister knows, these are often set on the basis that the landlord will pay a substantial rates bill. The rates bill will disappear for the landlord, and students will shoulder perhaps £60 or £70 a year or more as their 20 per cent. of the normal poll tax in the area. Yet, so far as I am aware, there is no machinery for ensuring that the rents are adjusted to a lower level to compensate for this change. It is important that the Minister says a word or two about that during the debate. That is essential because students are hard pressed—no doubt in all parts of the United Kingdom, but I can speak from personal experience of Scotland only.
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  Students have suffered from the falling value and purchasing power of the grant over many years and from the failure to rate properly against inflation. They will suffer from changes in housing benefit, perhaps not so dramatically as some of my constituents, but nevertheless significantly and substantially. In the long term they will suffer from the Government's determination to end all support for students from the benefit system. In those circumstances it is absolutely vital that we have some assurance that efforts will be made to adjust those rents to ensure that students do not bear an additional burden which few of them can afford,.
  We want the best possible protection for students, but we do not believe that these regulations are properly thought out. They are full of gaps, distortions and anomalies. It is a case of doubtful means being employed to achieve a thoroughly undesirable end. The House should reflect the anger and vehement opposition of students to the poll tax in every part of Scotland. We intend to vote against the regulations and the tax. The regulations are part and parcel of an unsound, unpopular scheme, which we believe is essentially unworkable.
  10.32 pm
  Mr. Bill Walker: I am happy to speak about the community charge regulations as they apply to students. I declare an interest because some members of my family are students and will obviously benefit from the 80 per cent. rebate.
  I am worried about the way in which the community charge is being presented to the people of Scotland, including students. Only this week I received through my letter box The Tayside Digest—not one of my favourite pieces of reading material—which is issued by Tayside regional council. The digest advises us that an estimated £1,775,000 will be required for additional staff to operate the community charge, together with about £300,000 more for property costs, about £580,000 extra for administration costs, about £2 million for temporary office accommodation and about £4·5 million for permanent offices. The way Tayside is proceeding gives rise for anxiety. The council seems determined to spend money regardless. In those curcumstances students must he concerned about the 20 per cent. that they will be required to pay.
  Kept at present levels and without escalating costs, the charge will be equivalent to a colour television licence fee. I should have thought that, for the value to students, certainly in my family, of libraries and other facilities, that is a small contribution towards the cost of local government. Non-students would pay substantially more for the recreational and other facilities that students use extensively. So is is good value, but it will remain good value only if my hon. Friend the Under-Secretary keeps a careful note of how much Tayside and other regions spend on collection. For instance, Tayside has opted for an NCR system, and I wonder whether it is paying extra for that equipment.
  I am also worried about the misinformation which is being put out about the community charge, its likely cost and the way it will be administered. During the local government election recently the Scottish National party, true to form, put out its usual bunch of lies in my

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  constituency. [Interruption.] It does that all the time in my constituency and I am sure it does the same in others, including Labour constituencies.
  The community charge will be affected by the way in which local authorities deal with housing. One lie put out by the Scottish National party was:
  "The Government is determined that local authority housing should be sold off to the highest bidder…Council housing as we know it today will disappear and the only beneficiaries will be faceless city investors."
  All that will affect the community charge and will worry students. I am worried about the downright lies that have been circulated to students and others by the Scottish National party in my constituency, and I welcome the opportunity to ask my hon. Friend the Minister to note that.
  Because I have been asked to be brief, I will not deal with the other aspects of the regulations. I repeat that students will get marvellous value for what they pay. As I said, I have students in my family; they will enjoy the benefits, provided my hon. Friend keeps a close eye on the cost of administering the charge.
  10.37 pm
  Mr. Thomas Graham: Some time ago I asked a question to which the answer was one of the most sinister that I have heard in Britain for many a day. I asked whether the Minister was suggesting that petitions would be used for the purpose of gathering names and addresses for the register. He said yes. That is incredible in Britain, where we have a history and tradition of using petitions to petition the Queen or the Government. There has never before been any suggestion that a Government would use a petition as a source of information. Now the Government intend to use petitions as a source of information to complete the disastrous poll tax register.
  It is a sinister move. Students who are on the threshold of life and who are trying to get an education will be frightened to put their names to anti-poll-tax campaigns because the Government may use the information to compile the register. What else could the Government use the information for? They could use it for many other purposes. The Minister must tell the House and the country how the Government will use petitions. [Interruption.]
  I know that other hon. Members wish to speak, so I do not want to take up too much time. I believe that the 20 per cent. is a tax on education. It is a tax on young people who cannot affort to pay it. We have recently seen in the House the push for Scottish Homes. The Opposition know that that will cause rents to escalate. On top of that, young people will need to find 20 per cent. of the poll tax. Does the hon. Member for Tayside, North (Mr. Walker) believe that £70 is chickenfeed? Seventy pounds buys £70-worth of books. The Government will punish young people who can ill afford their education. They will drive young people away from further education.
  The Government are on the road to stifling free speech. They cannot be allowed to use petitions in this way. The Minister should make it clear to the House that the Government have no intention of changing the traditions and values of this country and that they will use petitions for their proper purpose. It is disgraceful that any
  1054
  Minister, especially a Scottish Minister, should take away from the Scottish people the right to sign a petition, and the petition they sign should be used only for its proper purpose. It should not be used for any sinister means thought up by the registration office.
  10.41 pm
  Mr. Alistair Darling: We are discussing those lucky students who will be exempted from paying the full amount of the community charge and will only pay 20 per cent. of it. One of the objections to the regulations is that they exclude many people who, in any sense of the words, are students or trainees. However, they will not be exempted from paying the full amount, as are students of universities, colleges and so on.
  It is worth noting that students who become liable to pay poll tax in their first year of education will have no allowance made in their student grants. That is because no adjustment will be made to the student grant until poll tax is payable throughout the whole of the United Kingdom. In other words, students attending Scottish universities and colleges will be disadvantaged.
  Why is the group eligible for the allowance so narrow? Why does it not include part-time students, who attend universities and colleges for less than 21 hours a week? What about trainees? Are they not students? We constantly see advertisements that are paid for by the taxpayer and promoted by Lord Young, telling us that there will be more training and more students, yet those people are not to be included.
  Student grants this year amount to £38 a week if one is living away from home, or £28 a week if one is living at home. If one compares those figures with the amount paid to YTS trainees— £29 a week in the first year and £35 a week in the second year—one sees that there is not much
  difference between the payments. Yet the students attending universities or colleges have to pay only 20 per cent. of the poll tax—I do not grudge them that—and trainees on, for example, YTS will pay the full amount if they do not come within the very restrictive benefit scheme. Although there is little difference, the Government are treating the YTS trainees differently. We suspect that that is because they are attempting to buy off the parents of the students attending colleges and universities.
  One of the major anomalies involves student nurses. Why are they not included? What have the student nurses done to offend the Government so much? Why will they not be entitled to pay only 20 per cent. of the poll tax? What about the young unemployed?
  Mr. Ian Bruce rose—
  Mr. Darling: I hope that hon. Members will forgive me, but I am reluctant to give way to hon. Members who have shown little interest in the poll tax legislation for Scotland. We see them only when they are brought in to filibuster on behalf of the Government.
  Mr. Tim Devlin: Will the hon. Gentleman give way?
  Mr. Darling: No, I shall not give way.
  The House must consider the double standards that are being applied—on the one hand, to students at colleges and universities, and on the other, to those who are on YTS and to student nurses.

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  For people on YTS, the poll tax may account for as much as £7 a week out of a weekly income of £29. On top of that, the unfortunate individual also has to pay for rent, food and rising electricity prices.
  As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, who will guarantee that student rents will come down when rates are abolished? In too many cases, what is likely to happen is that rents will stay exactly the same and the landlords will pocket the difference and, on top of rent, the student will have to find the money for the poll tax.
  If the Minister refers to the rebate system in his reply, let no one be fooled. We have already seen, in the benefit changes, students being hit time and again along with thousands of others. The rebate system has been restricted, which will result in many people who wish to improve themselves by undergoing further education losing out, together with those who want to train and those who want the advantages to which they are entitled.
  The regulations are full of inconsistencies—that is typical of the legislation as a whole. The one thing that is certain is that the Minister will say nothing to justify it, because there is no justification. Once again, he will mumble his way through the brief. People in Scotland, and in the United Kingdom, have every right to be worried about what is coming their way. The Government will pay the penalty for that. The regulations typify the double standards and unjust nature of the poll tax and that is why we shall vote against them.
  10.46 pm
  Sir Hector Monro: It seems strange that after a year the Opposition have still not got away from their yah-boo attitude to the House. They refuse to treat it as a debating Chamber, or to observe the normal courtesy of giving way. All they do is make a lot of noise without ever considering the issue at stake. The sooner they realise that they are the "feeble 50" and have a singularly incompetent year's work behind them, the better.
  This is a good scheme to help whole-time students to deal with the community charge. The 80 per cent. reduction is significant and worth while and will be well received by the students concerned, bearing in mind that if everything is fair there will be a significant reduction in the rates that they are already paying.
  Opposition Members have spent the past year giving out misinformation. They have totally ignored the rebate scheme for the community charge and have put the fear of God into people when that cannot be justified in any way. The misinformation in some of the documents that have been produced since the last election must make the consciences of Opposition Members turn even redder.
  Mr. Tam Dalyell rose—
  Sir Hector Monro: They have put in some— [HoN. MEMBERS: "Give way."] Of course I give way to the hon. Gentleman.
  Mr. Dalyell: Why is it, then, that the vice-chancellors should have expressed so many anxieties on behalf of the students?
  Sir Hector Monro: I am afraid that they have been misled by the Labour party. When the vice-chancellors read the Minister's reply, they will realise that they were
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  ignorant of the facts. That is why they have put out more misinformation than the hon. Gentleman's party in recent months.
  There is no doubt that the Labour party—the Scottish National party is even worse—and the social democrats have been putting the most fearful and totally incorrect information before the people of Scotland. All Opposition Members, especially those in the Scottish National party, should apologise to the people of Scotland for the way in which they have behaved during the past year over the community charge.
  Mr. Bill Walker: Another interesting aspect of the position of the Scottish National party is that the Scottish National party provost in Perth and Kinross and nationalist councillors in Angus are telling people to live within the law and obey the law, which is contrary to the nonsense that we hear from Opposition Members.
  Sir Hector Monro: Indeed. Those who follow the advice of the SNP will be remarkably few. The majority will realise that it is far better to keep within the law, which is what most citizens of Scotland have done for generations.
  My hon. Friend the Minister has brought forward regulations that will help whole-time students and will be well received by them. I hope that the prayer is rejected.
  10.50 pm
  Mr. Menzies Campbell: I doubt whether I can attain the lofty forensic heights of the hon. Member for Dumfries (Sir H. Monro), but I shall do my modest best. In the houses of the vice-chancellors—we prefer to call them principals in the Scottish universities—it will be noted that it is the hon. Gentleman's view that the robust Scottish education tradition is so lacking in vigour that the principals have been deluded by Ministers of the Scottish Office. I have no doubt that that will ring loudly in their ears.
  Sir Hector Monro: I should be grateful if the hon. and learned Gentleman would refer accurately to what I said. I said that the vice-chancellors have been misinformed by the Labour party, not by Ministers.
  Mr. Campbell: That can be only because they have not accepted the alternative views of Ministers at the Scottish Office. It is unconvincing to suggest that the vice-chancellors are so unreceptive to good argument that they cannot distinguish between what is right and what is wrong. No doubt they will regard the hon. Gentleman's judgment of their inability to distinguish between what is right and what is wrong as a measure of the importance that the Government attach to higher education in the United Kingdom.
  In the interests of brevity I do not propose to repeat many of the observations so pungently made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). However, I invite the Minister to give some consideration to the position of overseas students. As a result of the Government's policies, the university of St. Andrew's, which lies within my constituency, has had to make the attraction of students from overseas an important part of its economy. Anything which operates as a disincentive to such students to come to St. Andrew's might have serious repercussions for the financial stability of that institution. I hope that the Minister will make clear precisely what the position is on overseas students.

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  We are concerned this evening not with the principle of the community charge but with its consequences. The regulations are offensive for what they contain and what they do not. The imposition upon students of even 20 per cent. of the community charge is deeply offensive because since 1981 the real value of student grants has fallen by about 21 per cent, and there is to be no increase in the grants in Scotland in the first year for which the community charge is payable. I know of students at St. Andrew's university who genuinely face hardship as a result of the low level of grants on which they are now forced to exist—[Interruption.] If they were present, they would give those who are interrupting from a sedentary position a clear account of their difficulties.
  The imposition of even 20 per cent. of the community charge will add to the hardship of many students. It is nothing but an illustration of the lack of regard that the Government have for higher education and the opportunities that it offers for our young people that they should adopt such a policy.
  I am interested that there are so many English Members present in the Chamber for the debate. I welcome their attendance, because the debate will give them an opportunity to prepare themselves for the onslaught in their constituency surgeries when constituents realise what the consequences are for their children when the community charge is imposed.
  Mr. Devlin: English Members are already seeing their constituents in their surgeries on this issue. During my surgery at Stockton-on-Tees on Saturday I was met by half a dozen pensioners who wanted to know why the local council was organising a petition against the poll tax and I was not organising a petition in its favour. They told me that if I were to organise such a petition, they would be enthusiastic to sign it.
  Mr. Campbell: I think, Mr. Deputy Speaker, that that intervention taxed your tolerance of what is relevant to a debate on regulations that determine the position of students.
  The regulations are offensive for what they do not contain. They fail to recognise the position of student nurses and of apprentices and trainees, who are necessarily engaged in full-time training or education and are poorly rewarded for that, not having the opportunity to take vacation jobs—
  Mr. Ian Bruce: The hon. and learned Gentleman cannot have looked at the regulations. He must surely know that all the people on low wages whom he has described could well be entitled to a full 80 per cent. rebate. Students automatically get it, and do not have to go through the paperwork to do so.
  Mr. Campbell: That is correct. It may be a measure of the importance that the Conservative party attaches to nurses that it thinks it reasonable to pay them a level of remuneration that results in their receiving an 80 per cent. rebate.
  Mr. Butterfill rose—
  Mr. Campbell: I shall not give way. I have done my best so far to bring knowledge to the ignorant, and do not propose to permit further interruptions.
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  The regulations are an illustration of the flawed principle upon which the community charge is based. They are therefore inherently flawed themselves, which is why the House should have no hesitation in wholly rejecting them.
  10.57 pm
  Mr. Harry Ewing: I want to take up a point about student nurses that was made by my hon. Friend the Member for Edinburgh, Central (Mr. Darling) and reinforced by the hon. and learned Member for Fife, North-East (Mr. Campbell). Before doing so, however, I want to answer the point made by the hon. Member for Dumfries (Sir H. Monro), who accused the Labour party in Scotland of having successfully persuaded the people of Scotland to oppose the poll tax by generating misinformation about it. I take that as something of a compliment.
  What has been done to advise people in Scotland about the poll tax? At great expense to the taxpayer, the Scottish Office produced a glossy book that was delivered to every household in Scotland by the much maligned Scottish Post Office. At great expense, the Scottish Conservative party employed a former information officer from the Scottish Office to generate what it considered to be correct information about the poll tax.
  All these efforts have failed to convince the people of Scotland of the value of the poll tax. They have chosen instead to believe the explanation given by the Scottish Labour party. The hon. Member for Stockton, South (Mr. Devlin) fairly described how, at his surgery on Saturday, he was confronted by six old-age pensioners, who chastised him for not organising a petition in favour of the poll tax.
  There are 10 Tory MPs in Scotland. I challenge one or all of them, or the Scottish Conservative party, which does not amount to many more than 10 members, to organise a petition and see how many signatures they can get in Scotland in favour of the tax. My guess is that they could be contained on the two sides of an A4 sheet, with enough room left over on it to write the address of the House of Commons.
  To return to the point raised by my hon. Friend the Member for Edinburgh, Central about student nurses, I do not think that the Government—I notice that the debate has been graced with the presence of the Minister of State responsible for Scottish health—have fully appreciated the impact on nurse training in Scotland that the imposition of the poll tax will have, four years before it is applied in England and Wales.
  At its annual conference in the Scottish exhibition centre in Glasgow last year, the Royal College of Nursing went on record as saying that it will advise student nurses not to train in colleges of nursing and midwifery in Scotland while the poll tax legislation is being implemented in Scotland and not implemented south of the border.
  Mr. Butterfill rose—
  Mr. Ewing: The hon. Member for Bournemouth, West (Mr. Butterfill) is desperate to make a point and I shall give way to him so that he may sleep peacefully.
  Mr. Butterfill: Does the hon. Gentleman not agree that it is for the nurses' review body to decide what will be necessary to compensate nurses for the liability that the

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  hon. Gentleman talks about? Does he not also agree that the Government have implemented the review body's recommendations in full?
  Mr. Ewing: Nurses in Scotland will be worse off to the extent of the poll tax than their counterparts in England and Wales. We now have two views from Tory Members—the one expressed by the hon. Member for Bournemouth, West and the one expressed by the hon. Member for Dorset, South (Mr. Bruce). The hon. Member for Bournemouth, West says that it is for the review body to consider the remuneration of student nurses. The hon. Member for Dorset, South said that nurses received such low pay that they might well qualify for an 80 per cent. rebate.
  Mr. Ian Bruce rose—
  Mr. Ewing: I propose to finish on this point and I hope that the Minister will take it on board. Whatever may be said about the Under-Secretary of State for Scotland, he believes in what he says. I do not dispute that for a moment.
  Mr. Ian Bruce: On a point of order, Mr. Deputy Speaker. The hon. Member for Falkirk, East (Mr. Ewing) has misquoted me. I clearly said that the income of those classes of people would be looked at and that they could receive a rebate of 80 per cent.
  Mr. Deputy Speaker (Sir Paul Dean): That is a matter for debate and not a point of order for the Chair.
  Mr. Ewing: Sometimes I think that the Under-Secretary of State for Scotland is a fair person. I have to be personal here and I hope that he does not take offence. I am sure that he sees the total unfairness and injustice in the fact that student nurses whom he represents in Stirling royal infirmary and in other Health Service establishments in his constituency are faced with the possibility of the imposition of the poll tax while he will save £1,200 a year. There is simply no justice in that and student nurses training in Scotland will suffer as a result. That will be on the shoulders of Conservative Members.
  11.3 pm
  Mr. Dick Douglas: I shall be extremely brief and have no intention of giving way.
  What concerns me about the regulations is the way that they affect education and universities not only in Scotland but elsewhere. Universities are collegiate organisations and a family. I watched with some interest the smirks on the faces of Conservative Members when my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) suggested that part of the thrust of the regulations was to invite universities to issue to students what is tantamount to an identity card. Many Conservative Members said, "Why not?"
  Most universities have some form of identification, for libraries and so on, because it bestows on the students some privilege. If the regulations bestow a privilege, they go against the thrust of the poll tax and accountability. Although it goes partly along the lines of ability to pay, the main thrust of the poll tax is to impose burdens on people so that those burdens will be reflected in their voting behaviour.
  The Secretary of State and the proponents of the tax argued at first that the students should pay the whole tax
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  and get rebates, remission or exemptions. That is a range of words, but the Minister used the word "exemptions" because the students get grants from the Scottish Office. I want an assurance from the Minister, because I predict that there will be enormous difficulties in determining who is a student. I suspect that when the Scottish Office is faced with that problem it will go to its central records of those who apply for student grants. [HON. MEMBERS: "Why not?"] Why not? If that is not an infringement of civil liberties, I do not know what is. For the first time, we have an admission that if parents of students freely give information for one purpose, when the Secretary of State or those who desire to impose on young Scots a head tax with no real basis in ability to pay cannot get their way, they will use any device to hand.
  If the Minister does not deny that, the suspicion will lie. People will not apply for student grants because they will not want to pay the poll tax. Students will not pay even the 20 per cent.; parents will. Tory Members are smirking. We want more children from working class backgrounds to go in for higher education, but their parents will not be able to pay the tax. It will be a further imposition and a further—
  Mr. Devlin: Will the hon. Gentleman give way?
  Mr. Douglas: I have made it plain that I shall not give way, and I shall certainly not give way to hon. Members who have scant regard for what is being proposed in Scotland.
  The regulations have an extremely eclectic definition of students. We have had some debates about the future of Newbattle Abbey. Do students attending that college qualify under the regulations? As far as I know, they will have to pay the poll tax, although they will be in the college for periods of 24 hours or 21 hours. What will happen to Scottish students who go to organisations such as the college I went to—the co operative college at Loughborough—not necessarily to take degrees, but for some other educational qualification?
  We have no information as to the cost of imposing these regulations. I have made it plain that this is a monstrous tax that the people of Scotland want nothing to do with. I have warned my colleagues and I shall warn the Government. The Prime Minister may be doing us a good turn by visiting Scotland—and I do not mean the electoral chances of the Tory party. The more she tries to thrust down the throats of Scottish people what she thinks is good for them, the more the Scottish people will reject it. Come 1 April 1989, the revulsion that will be displayed by the Scottish people towards the poll tax will rock the unity of the United Kingdom.
  11.9 pm
  Mr. Roy Beggs: The community charge, or poll tax, which comes into effect in Scotland in 1989 and in England and Wales from 1990 onwards, will affect students from Northern Ireland studying at mainland universities. Like other students, they will be required to pay 20 per cent. of the tax. They will be registered for collection at their term-time addresses in Great Britain.
  Is the Minister aware that students from Northern Ireland studying at English, Welsh and Scottish universities—
  Mr. Tony Marlow: On a point of order, Mr. Deputy Speaker. You will be well aware of

  1061
  the fact that Conservative Members who have been present throughout the debate have tried to get involved in the debate—[Interruption.]
  Mr. Deputy Speaker: Order. The hon. Gentleman must not question the judgment of the Chair in calling hon. Members to speak. Mr. Beggs.
  Mr. Marlow rose—
  Mr. Deputy Speaker: Order. I have dealt with the hon. Gentleman's point of order and I ask him now to reflect upon what I said. Mr. Beggs.
  Mr. Marlow: On a point of order, Mr. Deputy Speaker. I seek your advice— [Interruption.]
  Mr. Deputy Speaker: Order. I am not taking another point of order from the hon. Gentleman. Mr. Beggs.
  Mr. Beggs: This has gone a little too far. It is quite unnecessary.
  Is the Minister aware that students from Northern Ireland at English, Welsh and Scottish universities—
  Mr. Barry Porter: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. This is a very short debate and the House must leave it to the discretion of the Chair as to who should be called to speak. I appeal to hon. Members, whose frustration I fully understand, not to rise on points of order which are questioning the discretion of the Chair.
  Mr. Beggs: Is the Minister aware that students from Northern Ireland who study at mainland universities will be adversely affected by the poll tax? Their parents are already paying domestic rates—
  Mr. Barry Porter: On a point of order, Mr. Deputy Speaker. As an English Member, I have listened with great interest to the debate, and to some extent I understand how you have exercised your honest discretion in calling Scottish Members. Equally, this is a matter for the United Kingdom, and it is difficult to understand why, after four Opposition Members have spoken consecutively, you have called an hon. Member from the Province, and my hon. Friend the Member for Northampton, North (Mr. Marlow) has not been called. We have a right to be heard.
  Mr. Deputy Speaker: Of course I understand the frustration of hon. Members on both sides of the House when they do not have the opportunity to be called in debates, but the whole House knows very well that that is one of the discretions—and it is a very difficult discretion—which the House has given to the Chair. I am exercising that discretion to the best of my judgment.
  Mr. Beggs: Parents of students attending mainland universities are already paying domestic rates at the same level as is paid in Humberside. When the poll tax is introduced in Humberside, Northern Ireland ratepayers will pay domestic rates at the same level as the poll tax levied in Humberside. Those parents will then be required to provide additional financial assistance for their sons or daughters attending mainland universities. I understand that that could amount to as much as £70—[Interruption.]
  Mr. Nigel Griffiths: On a point of order, Mr. Deputy Speaker. Opposition Members are keen to listen to contributions to the debate, but we are unable to do so because of squabbling and speaking between Government Whips and Conservative Members. If the Government Whip cannot control the hon. Members, they should leave the Chamber and carry on—
  Mr. Deputy Speaker: Order. There is little time left in the debate and I ask the House to listen quietly to the hon. Member who has the Floor.
  Mr. Beggs: I am sure that there is no intention to discriminate against me. I hope that there is no intention by the Government to discriminate against those Northern Ireland students who are attending universities on the mainland, who have taken the initiative to seek places and have been awarded courses appropriate to their needs.
  Will the Minister undertake to discuss the problem with his colleagues in the Northern Ireland Office and request that consideration be given urgently to increasing student grants for Northern Ireland students at universities in Britain? Such students are already badly penalised by the high costs of travel to and from the mainland and we all know that travel assistance has been cut.
  Will the Minister also bear in mind the fact—this is important and I hope that the Minister will understand and be sympathetic—that Northern Ireland is a low-wage economy? We have high unemployment. The future prosperity of Northern Ireland is dependent on our students getting the best education possible. We do not want anything that will dissuade them from seeking courses at mainland universities.
  The additional burden of the poll tax puts at risk for many of those students the possibility of attending mainland universities. I hope that the Minister can inform us whether, taking account of the low incomes, such people will be entitled to a rebate of 80 per cent. of the 20 per cent. being levied or whether they will qualify for benefit to help pay the 20 per cent. that is expected from them.
  It would appear that the cost of collecting that small amount of poll tax from our students may far outweigh the value of the money collected. It should be dropped altogether. Students should be exempted.
  11.18 pm
  The Minister of State, Scottish Office (Mr. Ian Lang): From the tone of this evening's debate one would not have thought that the proportion of gross domestic product going on student maintenance in this country is higher than in any other Western country, that student incomes overall have risen by 5·5 per cent. in real terms since 1982 and that there are more students than ever before.
  Mr. Alex Salmond: On a point of order, Mr. Deputy Speaker. Given the respect with which the Chair treats the rights of minority parties in the House, it cannot have escaped your notice that the Scottish National party has again not been allowed to make a contribution to this debate on an important issue facing Scotland. That is particularly surprising given that the SNP emerged as the second party in Scotland in terms—
  Mr. Deputy Speaker: Order. I must say to the hon. Gentleman—as I have just said to Conservative Members—that this is a matter for the discretion of the Chair.
  Mr. Lang: As the Scottish National party does not support the rule of law, I do not see why they should seek its protection in this House.
  The regulations embody a generous and sensitive response to students' status in the application of the community charge. The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked me whether I was satisfied that the definitions are precise and comprehensive, to which I answer yes, and I shall come to details of that in due course.
  Mr. Salmond rose—
  Mr. Lang: No. I shall not give way to the hon. Gentleman.
  First, however, I should like to answer some points arising from the debate. The hon. Member for Garscadden asked me about the number of students. In 1986–87, 81,600 full-time and sandwich course students were engaged in higher education in Scotland, the great majority of whom would qualify for the 20 per cent. concession. In general, students on short courses and bridging courses leading to entry to higher courses but not producing qualifications in themselves would not be eligible for the 20 per cent. concession, although they will, of course, be eligible for rebate. The definition of term time at regulation 3(c) provides for sandwich course students to attend their courses
  "at such place or places as the educational establishment may specify or approve."
  That covers sandwich courses. Provided that students undertaking sandwich courses or practical placements meet the requirements of the regulations, they will be liable only for the reduced rate of personal community charge throughout their course.
  The hon. Member for Garscadden asked me about the financial implications for local authorities in the context—
  Mr. Marlow rose—
  Mr. Lang: No, I am very sorry. If my hon. Friend will forgive me, I have very limited time. I apologise; on another occasion I would happily give way to my hon. Friend.
  I assure the hon. Member for Garscadden that account will he taken of the number of students in each area in the distribution of the revenue support grant. The hon. Gentleman and his hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) estimated that the cost of the community charge to students in Scotland would be £70. The hon. Member for Renfrew, West and Inverclyde asked whether that was chickenfeed. I point out that my hon. Friend the Under-Secretary of State for Education and Science has been conducting a survey of student expenditure, which discloses that 60 per cent. of students already pay something towards rates in their rent payment. The average payment is between £70 and £80. I hope that that puts the matter in context. [Interruption.]
  The hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) asks whether rent will go down. If they do not already have a registered rent, which is, of course, exclusive of rates, those who are already tenants will be able to apply to the rent officer for a rent to be registered if they are not satisfied that their landlord has reduced the amount that they pay to reflect the abolition of domestic rates. I acknowledge that that protection is not available to some students at present. 'The Rent Act has never sought
  1064
  to impose control on certain kinds of lettings, such as those where board is provided. In other cases—for example, where there is a resident landlord—the control is much less.
  Any attempt to disentangle landlords' liability for rates from their other overheads would be impossible and would not necessarily lead to a reduction in what people pay. In that sector of the market, landlords charge what the market will bear rather than building up a charge based on the separate identification of rent and rates. In future, people in such accommodation may very well be offered short assured tenancies under the proposals of the Housing (Scotland) Bill. In those circumstances, they will be able to apply for the determination of a rent which would not include rates and therefore have the assurance that the total amount that they were called upon to pay was not excessive in the light of prevailing market conditions in the area. So Opposition Members' fears are not justified.
  The hon. Member for Edinburgh, Central (Mr. Darling) and the hon. and learned Member for Fife, North East (Mr. Campbell) referred to student nurses. Students differ from student nurses and other trainees in two important respects. First, their financial situation is different. A student nurse's salary is considerably higher, for example, than even the highest student grant. The student grant outside London is under £2,000, whereas the starting salary for a first-year student nurse is £4,825 and for a third-year student nurse is £5,575. The average earnings of a student nurse in Scotland are about £5,500, which is about two and a half to three times what a student gets.
  We shall take no lessons from members of the Labour and Liberal parties, as, under the last Labour Government, supported by the Liberals, nurses' pay fell by 40 per cent. whereas under this Government it has risen by an average of 44 per cent. in real terms. The crucial difference is that students will not be eligible ('or community charge rebates whereas trainees on low incomes will be eligible for rebates and other help through the social security system.
  The hon. Member for Edinburgh, Central asked about the young person with an income of £29 per week, suggesting that he would have to pay £7 per week community charge. That, as the hon. Gentleman must be aware, is totally misleading and inaccurate, as it takes no account of that person's entitlement to rebate.
  The rebate details have not yet been published—[HON. MEMBERS: "Oh!".] However, on a rough calculation and based on present allowances, a single person having the income and of the age mentioned by the hon. Gentleman would enjoy a rebate of between £4.50 and £5.
  Mr. Darling rose—
  Mr. Lang: No, I will not give way to the hon. Gentleman.
  The hon. Member for Falkirk, East (Mr. Ewing) suggested that nurses in training in Scotland would suffer a four-year disadvantage. He must be aware that the English community charge will be introduced in 1990 and only in parts of London will there be transitional arrangements beyond 1990.
  Mr. Dewar rose—
  Mr. Lang: I am sorry, but I must press on; I have a number of points still to answer.
  We have always intended that there should be a special community charge registration regime for students, in the sense that they should be deemed to be mainly or solely resident at their term-time address. That is a matter of administrative practicality, as it will ensure that students having a term-time address different from their home address will not have to be deregistered and then re-registered up to six times a year, at the beginning and end of each vacation.
  It was the Government's original intention that, as far as possible, payment of the personal community charge by students—
  Mr. Dewar: What about identity cards?
  Mr. Lang: I hope to deal with that point later.
  As to the payment of the personal community charge, students—like all other adults—will be liable to pay the full charge, but assistance will be made available through the student awards system. During the passage of the Abolition of Domestic Rates, Etc. (Scotland) Bill through the House of Lords, it was agreed that a 20 per cent. proportion with an 80 per cent. reduction was a more appropriate system.
  A number of Opposition Members raised questions about the registration process as it affects students. I am informed that the hon. Member for Garscadden held a press conference in Scotland today at which he characterised the registration process as going badly, simply because the Government have not claimed that it is going well. I assure him that we have, and it is. Registration for the community charge is proceeding smoothly and as planned. [HON. MEMBERS: "Rubbish!"] We are still only one quarter of the way through the registration period provided for drawing up the first registers, but it is already clear from press reports that return rates of higher than 75 per cent. are being achieved generally in the initial canvass, approaching 90 per cent. in some areas.
  That is substantially better than would be expected from the first stage of the traditional canvass process for electoral registration. It leaves those who have been trying to disrupt the registration process looking as ridiculous as they are contemptible.
  The hon. Member for Garscadden asked about identity cards. We are considering the possibility of inviting the university authorities to co-operate in the matter of registration, as our English colleagues have already made plain that they are doing. We have had a consultation process and are considering the outcome. We shall make our announcement shortly.
  The hon. Member for Garscadden claimed great success for the campaign to send forms back. People have been sending them back—completed. It is clear that registration officers throughout Scotland are finding no insuperable difficulties in completing the tasks given to them by statute. Those who decided to adopt a postal canvass have almost completed the first stage. Lothian and Strathclyde, the two most populous regions, are well on track to completing the canvass by the end of June, as they planned to do.
  Not only is the Labour party failing in its campaign—and there is nothing new about failure where Labour is concerned—but it is also demeaning itself by lending
  1066
  support to a campaign that encourages people to disregard their civic obligations. I regard Labour Members' posture of nudging the people of Scotland towards disruption and law-breaking as a squalid and demeaning exercise. It is undemocratic and unprincipled, and hon. Gentlemen know that. But they underrate the Scottish people, who are obeying the law, returning the registration forms and rejecting the Labour party's cyhical blandishments. The result will be a fairer and more broadly based means of contributing to the cost of local government through the community charge. The regulations bring that system closer, and I commend them to the House.
  Mr. Brian Wilson (Cunninghame,North)rose—
  It being half-past Eleven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 15 ( Prayers against statutory instrumunt, &c. ( negative procedure)):
  The House divided: Ayes 190, Noes 304.

  Division No. 313]

  [11.30

  AYES

  Abbott, Ms Diane

  Dewar, Donald

  Adams, Allen (Paisley N)

  Dixon, Don

  Allen, Graham

  Dobson, Frank

  Alton, David

  Doran, Frank

  Anderson, Donald

  Douglas, Dick

  Archer, Rt Hon Peter

  Dunnachie, Jimmy

  Armstrong, Hilary

  Dunwoody, Hon Mrs Gwyneth

  Ashton, Joe

  Eadie, Alexander

  Banks, Tony (Newham NW)

  Eastham, Ken

  Barnes, Harry (Derbyshire NE)

  Ewing, Harry (Falkirk E)

  Barron, Kevin

  Ewing, Mrs Margaret (Moray)

  Battle, John

  Fatchett, Derek

  Beckett, Margaret

  Faulds, Andrew

  Beggs, Roy

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

  Bell, Stuart

  Fisher, Mark

  Benn, Rt Hon Tony

  Flannery, Martin

  Bermingham, Gerald

  Flynn, Paul

  Blair, Tony

  Foot, Rt Hon Michael

  Blunkett, David

  Foulkes, George

  Boateng, Paul

  Fraser, John

  Boyes, Roland

  Galbraith, Sam

  Bradley, Keith

  Galloway, George

  Bray, Dr Jeremy

  Garrett, John (Norwich South)

  Brown, Gordon (D'mline E)

  Garrett, Ted (Wallsend)

  Brown, Nicholas (Newcastle E)

  Gilbert, Rt Hon Dr John

  Bruce, Malcolm (Gordon)

  Godman, Dr Norman A.

  Buchan, Norman

  Golding, Mrs Llin

  Buckley, George J.

  Gordon, Mildred

  Caborn, Richard

  Graham, Thomas

  Campbell, Menzies (File NE)

  Grant, Bernie (Tottenham)

  Campbell, Ron (Blyth Valley)

  Grocott, Bruce

  Campbell-Savours, D. N.

  Hardy, Peter

  Canavan, Dennis

  Haynes, Frank

  Carlile, Alex (Mont'g)

  Healey, Rt Hon Denis

  Clark, Dr David (S Shields)

  Heffer, Eric S.

  Clarke, Tom (Monklands W)

  Henderson, Doug

  Clay, Bob

  Hogg, N. (C'nauld & Kilsyth)

  Clelland, David

  Holland, Stuart

  Clwyd, Mrs Ann

  Home Robertson, John

  Cohen, Harry

  Hood, Jimmy

  Coleman, Donald

  Howarth, George (Knowsley N)

  Cook, Frank (Stockton N)

  Hoyle, Doug

  Cook, Robin (Livingston)

  Hughes, John (Coventry NE)

  Corbett, Robin

  Hughes, Robert (Aberdeen N)

  Cousins, Jim

  Hughes, Roy (Newport E)

  Cox, Tom

  Hughes, Sean (Knowsley S)

  Crowther, Stan

  Hughes, Simon (Southwark)

  Cryer, Bob

  Illsley, Eric

  Cummings, John

  Janner, Greville

  Cunliffe, Lawrence

  John, Brynmor

  Dalyell, Tarn

  Jones, Barry (Alyn & Deeside)

  Darling, Alistair

  Jones, Martyn (Clwyd S W)

  Davies, Rt Hon Denzil (Llanelli)

  Kaufman, Rt Hon Gerald

  Davies, Ron (Caerphilly)

  Kennedy, Charles

  1067

  Kirkwood, Archy

  Rees, Rt Hon Merlyn

  Lambie, David

  Reid, Dr John

  Lamond, James

  Richardson, Jo

  Leadbitter, Ted

  Roberts, Allan (Bootle)

  Lestor, Joan (Eccles)

  Robinson, Geoffrey

  Lewis, Terry

  Rogers, Allan

  Lloyd, Tony (Stratford)

  Rooker, Jeff

  Lofthouse, Geoffrey

  Ruddock, Joan

  Loyden, Eddie

  Salmond, Alex

  McAllion, John

  Sedgemore, Brian

  McAvoy, Thomas

  Sheerman, Barry

  McCartney, Ian

  Sheldon, Rt Hon Robert

  McFall, John

  Short, Clare

  McKay, Allen (Barnsley West)

  Skinner, Dennis

  McKelvey, William

  Smith, Andrew (Oxford E)

  McLeish, Henry

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

  McTaggart, Bob

  Smyth, Rev Martin (Belfast S)

  Madden, Max

  Soley, Clive

  Marek, Dr John

  Spearing, Nigel

  Marshall, Jim (Leicester S)

  Steel, Rt Hon David

  Martin, Michael J. (Springburn)

  Steinberg, Gerry

  Martlew, Eric

  Stott, Roger

  Maxton, John

  Strang, Gavin

  Meale, Alan

  Straw, Jack

  Michael, Alun

  Taylor, Mrs Ann (Dewsbury)

  Michie, Bill (Sheffield Heeley)

  Taylor, Matthew (Truro)

  Millan, Rt Hon Bruce

  Thompson, Jack (Wansbeck)

  Moonie, Dr Lewis

  Vaz, Keith

  Morgan, Rhodri

  Wall, Pat

  Morley, Elliott

  Wallace, James

  Mowlam, Marjorie

  Walley, Joan

  Mullin, Chris

  Wareing, Robert N.

  Murphy, Paul

  Welsh, Andrew (Angus E)

  Nellist, Dave

  Welsh, Michael (Doncaster N)

  O'Brien, William

  Williams, Alan W. (Carm'then)

  O'Neill, Martin

  Wilson, Brian

  Parry, Robert

  Winnick, David

  Patchett, Terry

  Wray, Jimmy

  Pendry, Tom

  Young, David (Bolton SE)

  Pike, Peter L.

  Powell, Ray (Ogmore)

  Tellers for the Ayes:

  Randall, Stuart

  Mr. Nigel Griffiths and

  Redmond, Martin

  Mr. Adam Ingram

  NOES

  Aitken, Jonathan

  Brandon-Bravo, Martin

  Alexander, Richard

  Brazier, Julian

  Alison, Rt Hon Michael

  Bright, Graham

  Allason, Rupert

  Brittan, Rt Hon Leon

  Amery, Rt Hon Julian

  Brooke, Rt Hon Peter

  Amess, David

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

  Amos, Alan

  Browne, John (Winchester)

  Arbuthnot, James

  Bruce, Ian (Dorset South)

  Arnold, Jacques (Gravesham)

  Buchanan-Smith, Rt Hon Alick

  Arnold, Tom (Hazel Grove)

  Budgen, Nicholas

  Ashby, David

  Burns, Simon

  Atkins, Robert

  Burt, Alistair

  Atkinson, David

  Butcher, John

  Baker, Rt Hon K. (Mole Valley)

  Butler, Chris

  Baker, Nicholas (Dorset N)

  Butterfill, John

  Baldry, Tony

  Carlisle, John, (Luton N)

  Banks, Robert (Harrogate)

  Carlisle, Kenneth (Lincoln)

  Batiste, Spencer

  Carrington, Matthew

  Beaumont-Dark, Anthony

  Carttiss, Michael

  Bellingham, Henry

  Cash, William

  Bendall, Vivian

  Chalker, Rt Hon Mrs Lynda

  Bennett, Nicholas (Pembroke)

  Channon, Rt Hon Paul

  Bitfen, Rt Hon John

  Chapman, Sydney

  Blackburn, Dr John G.

  Chope, Christopher

  Blaker, Rt Hon Sir Peter

  Churchill, Mr

  Body, Sir Richard

  Clark, Sir W. (Croydon S)

  Bonsor, Sir Nicholas

  Clarke, Rt Hon K. (Rushcliffe)

  Boswell, Tim

  Colvin, Michael

  Bottomley, Peter

  Conway, Derek

  Bottomley, Mrs Virginia

  Coombs, Anthony (Wyre F'rest)

  Bowden, A (Brighton K'pto'n)

  Coombs, Simon (Swindon)

  Bowden, Gerald (Dulwich)

  Cope, John

  Bowis, John

  Couchman, James

  Boyson, Rt Hon Dr Sir Rhodes

  Cran, James

  Braine, Rt Hon Sir Bernard

  Currie, Mrs Edwina

  1068

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

  Jones, Robert B (Herts W)

  Davis, David (Boothferry)

  Jopling, Rt Hon Michael

  Day, Stephen

  Kellett-Bowman, Dame Elaine

  Devlin, Tim

  Key, Robert

  Dickens, Geoffrey

  King, Rt Hon Tom (Bridgwater)

  Dorrell, Stephen

  Kirkhope, Timothy

  Douglas-Hamilton, Lord James

  Knapman, Roger

  Dover, Den

  Knight, Greg (Derby North)

  Dunn, Bob

  Knight, Dame Jill (Edgbaston)

  Durant, Tony

  Knowles, Michael

  Dykes, Hugh

  Lamont, Rt Hon Norman

  Eggar, Tim

  Lang, Ian

  Emery, Sir Peter

  Lawrence, Ivan

  Evans, David (Welwyn Hatf'd)

  Lee, John (Pendle)

  Evennett, David

  Lennox-Boyd, Hon Mark

  Fallon, Michael

  Lightbown, David

  Farr, Sir John

  Lilley, Peter

  Favell, Tony

  Lloyd, Sir Ian (Havant)

  Fenner, Dame Peggy

  Lloyd, Peter (Fareham)

  Field, Barry (Isle of Wight)

  Lord, Michael

  Finsberg, Sir Geoffrey

  Luce, Rt Hon Richard

  Fookes, Miss Janet

  Lyell, Sir Nicholas

  Forsyth, Michael (Stirling)

  McCrindle, Robert

  Forth, Eric

  Macfarlane, Sir Neil

  Fowler, Rt Hon Norman

  MacGregor, Rt Hon John

  Fox, Sir Marcus

  MacKay, Andrew (E Berkshire)

  Franks, Cecil

  Maclean, David

  Freeman, Roger

  McLoughlin, Patrick

  French, Douglas

  McNair-Wilson, M. (Newbury)

  Gale, Roger

  McNair-Wilson, P. (New Forest)

  Gardiner, George

  Madel, David

  Goodlad, Alastair

  Major, Rt Hon John

  Goodson-Wickes, Dr Charles

  Malins, Humfrey

  Gorman, Mrs Teresa

  Mans, Keith

  Gorst, John

  Maples, John

  Gow, Ian

  Marland, Paul

  Gower, Sir Raymond

  Marlow, Tony

  Greenway, Harry (Baling N)

  Marshall, Michael (Arundel)

  Greenway, John (Ryedale)

  Martin, David (Portsmouth S)

  Gregory, Conal

  Mawhinney, Dr Brian

  Griffiths, Sir Eldon (Bury St E')

  Maxwell-Hyslop, Robin

  Griffiths, Peter (Portsmouth N)

  Mayhew, Rt Hon Sir Patrick

  Grist, Ian

  Miller, Hal

  Ground, Patrick

  Mills, lain

  Grylls, Michael

  Mitchell, Andrew (Gedling)

  Gummer, Rt Hon John Selwyn

  Moate, Roger

  Hamilton, Hon Archie (Epsom)

  Monro, Sir Hector

  Hamilton, Neil (Tatton)

  Montgomery, Sir Fergus

  Hampson, Dr Keith

  Moore, Rt Hon John

  Hannam, John

  Morris, M (N'hampton S)

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

  Morrison, Hon P (Chester)

  Hargreaves, Ken (Hyndburn)

  Moss, Malcolm

  Harris, David

  Moynihan, Hon Colin

  Haselhurst, Alan

  Mudd, David

  Hawkins, Christopher

  Neale, Gerrard

  Hayes, Jerry

  Needham, Richard

  Hayward, Robert

  Nelson, Anthony

  Heathcoat-Amory, David

  Neubert, Michael

  Heddle, John

  Newton, Rt Hon Tony

  Hicks, Mrs Maureen (Wolv' NE)

  Nicholls, Patrick

  Higgins, Rt Hon Terence L.

  Nicholson, David (Taunton)

  Hill, James

  Nicholson, Emma (Devon West)

  Hogg, Hon Douglas (Gr'th'm)

  Onslow, Rt Hon Cranley

  Holt, Richard

  Oppenheim, Phillip

  Hordern, Sir Peter

  Page, Richard

  Howard, Michael

  Paice, James

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

  Parkinson, Rt Hon Cecil

  Howarth, G. (Cannock & B'wd)

  Patnick, Irvine

  Hughes, Robert G. (Harrow W)

  Patten, Chris (Bath)

  Hunt, David (Wirral W)

  Patten, John (Oxford W)

  Hunt, John (Ravensbourne)

  Pattie, Rt Hon Sir Geoffrey

  Hunter, Andrew

  Pawsey, James

  Hurd, Rt Hon Douglas

  Porter, Barry (Wirral S)

  Irvine, Michael

  Porter, David (Waveney)

  Jack, Michael

  Portillo, Michael

  Jackson, Robert

  Powell, William (Corby)

  Janman, Tim

  Price, Sir David

  Jessel, Toby

  Raffan, Keith

  Johnson Smith, Sir Geoffrey

  Raison, Rt Hon Timothy

  Jones, Gwilym (Cardiff N)

  Rathbone, Tim

  1069

  Redwood, John

  Thompson, D. (Calder Valley)

  Renton, Tim

  Thompson, Patrick (Norwich N)

  Rhodes James, Robert

  Thorne, Neil

  Ridley, Rt Hon Nicholas

  Thornton, Malcolm

  Ridsdale, Sir Julian

  Thurnham, Peter

  Rifkind, Rt Hon Malcolm

  Townend, John (Bridlington)

  Roe, Mrs Marion

  Townsend, Cyril D. (B'heath)

  Rost, Peter

  Tracey, Richard

  Rowe, Andrew

  Tredinnick, David

  Rumbold, Mrs Angela

  Trippier, David

  Ryder, Richard

  Trotter, Neville

  Sackville, Hon Tom

  Twinn, Dr Ian

  Sainsbury, Hon Tim

  Vaughan, Sir Gerard

  Scott, Nicholas

  Waddington, Rt Hon David

  Shaw, David (Dover)

  Wakeham, Rt Hon John

  Shaw, Sir Giles (Pudsey)

  Waldegrave, Hon William

  Shaw, Sir Michael (Scarf)

  Walden, George

  Shelton, William (Streatham)

  Walker, Bill (T'side North)

  Shephard, Mrs G. (Norfolk SW)

  Walker, Rt Hon P. (W'cester)

  Shepherd, Richard (Aldridge)

  Walters, Dennis

  Shersby, Michael

  Wardle, Charles (Bexhill)

  Sims, Roger

  Warren, Kenneth

  Skeet, Sir Trevor

  Watts, John

  Smith, Tim (Beaconsfield)

  Wheeler, John

  Soames, Hon Nicholas

  Whitney, Ray

  Speller, Tony

  Widdecombe, Ann

  Spicer, Michael (S Worcs)

  Wiggin, Jerry

  Stanbrook, Ivor

  Wilkinson, John

  Stanley, Rt Hon John

  Wilshire, David

  Steen, Anthony

  Winterton, Mrs Ann

  Stern, Michael

  Wolfson, Mark

  Stevens, Lewis

  Wood, Timothy

  Stewart, Andy (Sherwood)

  Woodcock, Mike

  Stokes, John

  Yeo, Tim

  Stradling Thomas, Sir John

  Younger, Rt Hon George

  Sumberg, David

  Summerson, Hugo

  Tellers for the Noes:

  Tapsell, Sir Peter

  Mr. Robert Boscawen and

  Taylor, John M (Solihull)

  Mr. Tristan Garel-Jones.

  Question accordingly negatived.

  WELSH GRAND COMMITTEE
  Ordered,
  That, during the proceedings on the matter of Education and Training for Employment in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee have considered that matter for two hours at the sitting.—[Mr. David Hunt.]
  11.43 pm
  Mr. Barry Porter: On a point of order, Mr. Deputy Speaker. On the Welsh order, in view of what has happened this evening, I understand that only Welsh and Irish Members will be called to represent—
  Mr. Deputy Speaker (Sir Paul Dean): Order. We cannot debate the matter now. The House has passed the motion.

  Mr. Patrick McManus
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
  11.44 pm
  Dr. Jeremy Bray: My constituent, Mr. Patrick McManus, of 40 Aster gardens, Motherwell, submitted to the Law Society of Scotland four sworn statements from witnesses accusing a local solicitor of failing to respond to their pleas to visit his sister-in-law before her death to finalise her will. His brother, John McManus, died on 2 October 1986 without leaving a will and since there were no children of the marriage his whole estate passed to his widow, Mrs. Eileen Patricia McManus.
  The local solicitor attended at the home of Mrs. Eileen McManus on 6 October 1986, four days after the death of her husband, and took instructions on the winding up of the estate. He was also told that she wished him to prepare a will for her, though he did not take instructions at that meeting to prepare a will. Her health deteriorated over the ensuing month, and she died on 6 November 1986. During that period numerous attempts were made to contact the solicitor to get him to see Mrs. Eileen McManus and prepare a will for her. He failed to do so. There are independent witnesses who hold that it was her intention to leave her estate to her brother-in-law, Mr. Patrick McManus, and her sister-in-law. Instead, her whole estate passed to her relatives. The estate was approximately the value of a house.
  Mr. Patrick McManus complained to the Law Society of Scotland a few days after his sister-in-law died intestate. The Lay Observer for Scotland, in a report dated 19 November 1987, confirmed that Mr. McManus had complained to the Law Society in a letter dated 24 November 1986. The Law Society had immediately written to the solicitor, asking for his account of the circumstances. It received a detailed, five-page document dated 4 December, with accompanying documents. This was sent to Mr. McManus, who returned full comments on 20 December. The solicitor replied in detail on 5 January 1987.
  Mr. McManus, the lay observer continued, had referred to certain people who allegedly had tried to contact the solicitor to get him to attend the late Mrs. McManus. The Law Society, on 21 January, asked for sworn statements by witnesses. Four such sworn statements were sent on 28 January. These were copied to the solicitor, who again sent full comments on 5 February.
  Meanwhile, the whole file was circulated to two members of the Law Society for their opinion. It was decided that precognitions should be taken in order to ascertain the strength of evidence of Mr. McManus and his witnesses. These were taken by the Law Society complaints investigator and the whole case was submitted to the complaints committee on 7 May 1987.
  The complaints committee took the view that the solicitor's failure to see his client and take her instructions for the preparation of a will in urgent circumstances amounted to a serious professional misconduct, and recommended that the papers be referred to a society fiscal for prosecution before the Scottish solicitors disciplinary tribunal, the strongest possible action.
  The council, however, referred the case back to the committee for reconsideration, and it was then decided

  1071
  that instead of prosecution a reprimand be issued, but subject to interview. This changed decision, according to the lay observer, was taken after a member of the council, but not of the complaints committee, wrote strongly disputing that there had been professional misconduct. The committee alleges that this letter did not influence the decision.
  On 27 August, the solicitor was interviewed by a panel of the Law Society, with his legal representative. Further evidence from the solicitor, in particular an alleged log book of telephone calls and personal callers kept by the solicitor's firm, was presented. It apparently conflicted with parts of the sworn statements of witnesses. I am told that in court a telephone log is not accepted as firm evidence. Yet the Law Society accepted it in preference to the sworn statements of Mr. McManus's witnesses, and without an opportunity for him or his representatives to examine the log. The complaints committee decided that the proposed reprimand should be withdrawn without further inquiry, or Mr. McManus being shown the new evidence. This was later endorsed by the council. Mr. McManus was informed of the Law Society's decision.
  The lay observer
  "argued that the complainer should first have been advised what information in the log hook contradicted the evidence he had submitted and given an opportunity to comment."
  The lay observer recommended, in her 1987 annual report,
  "that whenever decisions to discipline are taken 'subject to interview' of the solicitor, the Council should, before reviewing those decisions, give complainers:—

  (a) an opportunity to study new information produced at the solicitor's interview and to submit comments;

  (b) an opportunity to be interviewed themselves, if they so wish."

  In the course of nine months there had been a complete volte-face by the Law Society, following representations from a fellow solicitor, and without opportunity for Mr. McManus to examine new evidence. The solicitor in question finally escaped without even a reprimand.
  Mr. McManus contacted the lay observer, whose report, though couched in carefully measured terms, is scathing. He also contacted me. I had a lengthy correspondence with the lay observer, the Law Society, and the Minister responsible for home affairs in the Scottish Office, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). At the suggestion of the lay observer, and with my encouragement, Mr. McManus requested the Law Society to appoint a troubleshooter to
  investigate the case. The troubleshooter produced, in the estimation of the lay observer, a "very responsible analysis".
  This report found that. if it were clearly established that it had been brought to the solicitor's attention that the making of a will was urgent, and that he failed to do so within a reasonable time scale. that could be professional negligence. His explanation that he required to wait until the finalisation of the husband's estate before making a will for the wife is difficult to accept. Unfortunately for Mr. McManus, while in the opinion of the troubleshooter he suffered economic loss, there were no grounds for holding in connection with the making of a will for Mrs. McManus that he was employing the solicitor for that purpose. Mrs. McManus could sue for damages for a professionally negligent act as the client, but she is dead.
  There has long been a demand for stiffening the procedures of the Law Society's complaints committee, so that it is less susceptible to pressure from solicitors, and
  1072
  does more to safeguard the interests of clients. The case has been accepted by the Law Society itself. The Solicitors (Scotland) Bill, which is now making rapid progress through Parliament, is a Bill initiated by the Law Society, and agreed by the Law Society, the lay observer, and Scottish Office Ministers. It has all-party support. However, it has been gathering dust in the in-tray of Scottish Office Ministers in one form or another for years. The lay observer has been energetically pressing for the increased powers that the Bill will give her office in report after annual report.
  Specifically as a result of a recommendation made by the lay observer on this case, if new evidence is presented, the Law Society's procedure now requires it to be put to the complainer. I welcome unreservedly the increased powers in the Bill given to the lay observer to refer cases to the disciplinary tribunal, and the new powers to discipline solicitors in Scotland in cases of inadequate professional services. I believe that the case of Mr. McManus has played some part in bringing the new Bill before the House. My only regret is that this important Bill was not introduced by the Government, and the issues properly aired. It was left to my hon. Friend the Member for Edinburgh, Central (Mr. Darling) to introduce it as a private Member's Bill. The Bill has gone through Second Reading and Committee on the nod.
  Had the Bill been enacted in 1986, Mr. McManus's ease would have been handled very differently. As it is, he has so far been left without prospect of recompense. If there was negligence, or reasonable grounds for believing there to be negligence, by a travel agent, a quantity surveyor, or an engineer, there would be some fund from which a person like Mr. McManus could be compensated as a matter of judgment, not of law. It is my hope that the Law Society, and, influenced by colleagues, the solicitor whose failure to act has resulted in Mr. McManus's loss, will find some way of compensating him for his loss. The accumulation of such cases is bound to strengthen the case for lay panels to judge the complaints brought against solicitors. I hope that the Minister will be able to deal with Mr. McManus's case, and, in particular with the means of compensation, and with the complaints procedure generally.
  I hope that I have allowed the Minister adequate time to make a full reply.
  11.55 pm
  The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I am grateful to the hon. Member for Motherwell, South (Dr. Bray) for raising this important matter. I was aware of his considerable interest through correspondence I have had with him. I was sorry to learn of the difficulties encountered by his constituent following the deaths of both his brother and sister-in-law. The case concerns the dissatisfaction of the hon Member's constituent, Mr. McManus, with the Law Society's handling of a complaint alleging professional misconduct against the solicitor who handled the estate of his late brother and sister-in-law.
  Although the hon. Gentleman has given an extremely clear exposition of the facts, this is a complicated case, and I should like to run briefly through the main points. The background is as follows. The constituent's brother died in October 1986 without leaving a will. There were no children of the brother's marriage, so his whole estate

  1073
  passed to his widow. The widow in turn died in November 1986, also without leaving a will. As a consequence of her death without leaving a will, her whole estate passed to her relatives, and Mr. McManus and his sister were not entitled to any part of that estate.
  Shortly after the death of her husband, a solicitor was called to the home of the widow and was instructed to take action to wind up her husband's estate and to prepare a will for her. Subsequent to that meeting, the health of the widow deteriorated rapidly until she herself died the following month. It is alleged by witnesses that, during the period between the meeting at the family home and the widow's death, numerous attempts were made to contact the solicitor to have him call upon her and prepare a will.
  In a total of five sworn statements, two witnesses claimed to have visited the solicitor at his office on two occasions to advise him of the lady's failing health and her concern that he had not called upon her in connection with the preparation of a will. It is further claimed by those witnesses that, had a will been drawn up, in all probability the estate of the deceased would have passed to Mr. McManus and his sister. Mr. McManus complained to the Law Society of Scotland about the solicitor's handling of his sister-in-law's instructions as regards her will.
  For the benefit of the House, it may be worth while if I explain the general procedure for handling complaints against solicitors. These are a matter in the first instance for the Law Society of Scotland, which under the Solicitors (Scotland) Act 1980 has a general duty to promote the interests of the solicitor profession in Scotland and the interests of the public in relation to that profession. The Law Society will investigate a complaint made to it and has power in the case of a justified complaint to refuse to renew a solicitor's practising certificate, which he or she needs to practise, or at any rate to issue one subject to conditions.
  If the Law Society considers that there has been professional misconduct by the solicitor, it may refer the case to the independent Scottish solicitors' discipline tribunal which has power to censure, fine, suspend or strike off the solicitor concerned. The Law Society can also provide a "troubleshooter", who is a solicitor prepared to take action on behalf of a complainer against another solicitor—for example, for negligence.
  Should the complainer remain dissatisfied with the Law Society's handling of the complaint after the society has reached its final decision, it is open to the complainer to approach the lay observer for Scotland, who is an independent person appointed by the Secretary of State, to examine complaints about the Law Society's handling of allegations against solicitors. The lay observer, who sees the Law Society's files, can issue an opinion analysing the case and setting out her conclusions, which may include recommendations that the Law Society should take certain action on the complaint. However, the lay observer's opinions are not legally binding upon the Law Society. As the Minister responsible for matters affecting the solicitors' profession, I have general oversight of these arrangements, but am not involved in decisions about individual cases.
  Returning to the case raised by the hon. Gentleman, his constituent took all the appropriate steps in pursuit of his complaint. He approached the Law Society for Scotland
  1074
  but, dissatisfied with the way in which it handled his allegations, he took his case to the lay observer for Scotland. The lay observer's opinion expressed concern about a number of aspects of the Law Society's handling of the investigation.
  First, the Law Society's investigating committee had taken the view that the solicitor's failure to see his client and take instructions for the preparation of a will in urgent circumstances amounted to serious professional misconduct, and it recommended to the council of the Law Society that the solicitor should be prosecuted before the Scottish solicitors discipline tribunal. The council referred the case back to the committee for reconsideration and the committee then decided that its previous recommendation to prosecute was inappropriate but that a reprimand be issued. The decision to reprimand was accepted by the Council "subject to interview". The solicitor was invited to an interview to restate and elaborate upon the information already provided.
  At this point, the society received a submission from a solicitor who was also a member of the society's council supporting the solicitor in respect of whom the complaint had been made, disputing strongly that there had been professional misconduct and questioning the issue of a reprimand. It is recorded in the minutes of the investigating committee and the committee was not influenced by this submission. The solicitor, supported by his legal representative, was interviewed by a panel of the Law Society and, in the light of the information put forward at that interview, the council of the society ultimately decided that the proposed reprimand should be withdrawn. The complainer was informed of the outcome and was sent a full extract from the record of the interview. This was the Law Society's final decision.
  As a result of her consideration of the case, the lay observer questioned several aspects of the Law Society's procedure: first, the apparent practice of taking disciplinary action "subject to interview" with the solicitor concerned; secondly, the timing of such interviews; thirdly, the dismissal of evidence contained in five sworn statements from witnesses on the basis of an interview with the solicitor; fourthly, the fact that the complainer was not given an opportunity to comment personally on the points put forward at the solicitor's interview; and, fifthly, the involvement of a council member in presenting personally a case on behalf of a solicitor against whom a complaint had been made. The lay observer noted in particular that failure to give the complainer an opportunity to comment personally on the points put forward at the solicitor's interview was a frequent source of concern to her and that she intended to raise the point in her annual report to the Secretary of State.
  The complainer sought the assistance of a troubleshooter to establish whether the facts of the case entitled him, as someone who would have benefited from his late sister-in-law's will, had she made one, to raise an action against the solicitor based upon professional negligence. The troubleshooter took the view that, under existing legislation, even if the solicitor had been negligent, such an action would have little chance of success if pursued through the courts, because the complainer in this case was not the client of the solicitor. In other words, the solicitor was not employed by the complainer for the purpose of preparing a will for his late sister-in-law. A further point at issue, which was derived from the sworn statements of witnesses but which can only remain speculative, is

  1075
  whether the complainer's sister-in-law, had she made a will, would have excluded succession by her sister and bequeathed her estate to the complainer and his sister.
  It would seem that the hon. Gentleman's constituent has exhausted the existing procedures for pursuing his complaint against the solicitor concerned. The lay observer has, as she promised, drawn attention to certain aspects of the Law Society's practice in relation to complaints procedures as highlighted by this case and others like it in her annual report for 1987 which she presented to the Secretary of State for Scotland in March.
  I can assure the hon. Member that the Secretary of State and I pay very close attention to the views expressed by the lay observer in her annual reports and to all representations about the Law Society's handling of complaints. The legislation governing solicitors' complaints is kept under continuous review. I understand from the Law Society that it has now changed its procedures so that the complainer will have an opportunity to comment on any points made by the solicitor, no matter at what stage. That was one of the hon. Gentleman's key points about this case.
  I should stress that the Law Society's present complaints procedures are geared to alleged professional misconduct. They may be compared with the role of police officers in investigating crime. They are not essentially about civil remedies or making good a loss to a complainer. So even if the solicitor had been found guilty of misconduct, and perhaps fined, he could not have been obliged to make any payment to Mr. McManus.
  As regards a civil remedy or recompense, the troubleshooter is firmly of the opinion that no contractual relationship existed between Mr. McManus and his sister-in-law's solicitor and that therefore the solicitor had no professional obligations towards him. A solicitor certainly has a duty of care for the interests of a third party, such as a beneficiary. In this case, however, since his late sister-in-law did not leave a will, Mr. McManus could not be regarded as a beneficiary, despite the assertions of witnesses about the late Mrs. McManus's intentions.
  It seems to me that there are no circumstances, therefore, in which the question of ex gratia payments or compensation can arise in this case, which is of course a very unusual one. The legislation governing the procedures for dealing with complaints against solicitors already makes provision for the payment of compensation in certain cases, which I went into thoroughly.
  The Scottish solicitors guarantee fund, administered by the Law Society, to which all practising solicitors in Scotland must contribute as a condition of receiving their practising certificate, exists for the purpose of making grants in order to compensate persons who in the opinion of the Law Society suffer pecuniary loss by reason of dishonesty on the part of any solicitor, employee of a solicitor or an incorporated practice. Also, in the interests of consumer protection, the Law Society requires that all practising solicitors must take out and maintain an insurance policy under the society's master policy for the purpose of providing indemnity against any class of professional liability.
  In Mr. McManus's case, it seems to me that he would be unlikely to qualify for redress from the guarantee fund for two reasons. First, the Law Society's investigations failed to produce any evidence of dishonesty on the part of the solicitor against whom complaint had been made. Secondly, it cannot be said that Mr. McManus lost his
  1076
  own money as a result of the actions of the solicitor. In the case of recompense through the indemnity fund, the troubleshooter has advised strongly against Mr. McManus raising an action for damages because of the cost involved and on the grounds that he would be unlikely to succeed as he was not a direct beneficiary.
  As the hon. Gentleman will be aware from recent correspondence, one important recommendation made by the lay observer in her 1986 annual report was that she should have powers to refer complaints direct to the Scottish solicitors discipline tribunal when she believes that the Law Society has reached a faulty decision. This recommendation has been incorporated into the provisions of the Solicitors (Scotland) Bill which is currently before the House. The Bill is sponsored by the hon. Member for Edinburgh, Central (Mr. Darling) and has benefited from Government assistance with drafting, and I strongly support it.
  The Law Society of Scotland has demonstrated a strong case for introducing this Bill in the current Session so as to give it the powers it desires as quickly as possible. I recognise the point made by the hon. Member for Motherwell, South that he would have preferred the Government to do this. Unfortunately, pressure on the legislative programme meant that there was no Government time available to devote to the Bill. We were pleased to give drafting assistance for a private Member's Bill as the most appropriate method of bringing these provisions, which are considered to be worth while by hon. Members from all sides of the House, into force at the earliest convenient opportunity. The first solicitors' Bill was a private Member's Bill.
  As the hon. Gentleman will know, the handling of the Bill is the responsibility of the Member promoting it. The Bill is designed, among other things, to extend the powers of the council of the Law Society and the discipline tribunal to enable them to deal with cases of inadequate professional services in addition to cases of professional misconduct as at present. The Bill would also enable such complaints to be made not only by the solicitor's client but by anyone having an interest in the services provided by the solicitor. It is intended that the Bill will come into effect six months after enactment, but its provisions will not be retrospective except in relation to services whose provision is continuing. It would not be appropriate to impose penalties on solicitors under the new arrangements for work carried out before the new disciplinary powers had been defined and set in place.
  I fully recognise that these legislative proposals cannot benefit the hon. Gentleman's constituent. Beyond empowering the lay observer to report a case to the discipline tribunal, I do not think that they would help Mr. McManus directly, since he was not a beneficiary of a will. Nevertheless, his case was very much in mind in the drafting of the Bill and I hope that the assistance we have provided for the Bill will stand as evidence of our concern that these matters should be properly regulated, and of our willingness to take action when the circumstances require it.
  It is very much to the credit of the hon. Gentleman that he has taken this case as far as it is possible to take it. This case has highlighted the need for reform in a number of areas. It highlights, for example the capacity of anyone having an interest both to report complaints to the Law

  1077
  Society and discipline tribunal and also to have the opportunity to respond to new evidence put before the Law Society on behalf of the solicitor.
  These reforms are being introduced in the first case by the Solicitors (Scotland) Bill and in the second case by the reformed practices of the Law Society. This leads to the question whether reform should be retrospective. The case against retrospective legislation is that it is very difficult to observe a law that is not enacted, not in force and not known about. Furthermore, it is unfair to expect solicitors
  1078
  to conform to laws that are not in existence. While I sympathise very much with the hon. Gentleman's constituent, the disadvantages of retrospective legislation outweigh any possible advantage to his constituent. None the less, the hon. Gentleman and his constituent can take some consolation from the reality that their perseverance and dedication were factors giving rise to the terms of the Solicitors (Scotland) Bill, which I hope will receive its Third Reading before long.
  Question put and agreed to.
  Adjourned accordingly at thirteen minutes past Twelve o'clock.

PRIME MINISTER

  Fast Reactor Programme
  Dr. Thomas
  To ask the Prime Minister if she will make a statement on the results of the review conducted by the chief scientific adviser to the Cabinet on the future prospects for the fast reactor programme in the United Kingdom.

  The Prime Minister
  I have nothing to add to the reply given by my right hon. Friend the Secretary of State for Energy to the hon. Member for Ashfield (Mr. Haynes) on 9 May 1988, at columns 6–7.

  Health Authorities
  Mr. Alfred Morris
  To ask the Prime Minister, what arrangements are made for co-ordination between the Secretary of State for Social Services and the Secretary of State for Education and Science in regard to the statutory duty imposed on health authorities by the Education Act 1981.

  The Prime Minister
  Co-ordination between the two Departments takes place at all levels as necessary over the operation of the Education Act 1981.

  Progress on the implementation of the Act continues to be monitored by both Departments. They are at present reviewing the relevant legislation, regulations and guidance.

TRADE AND INDUSTRY

  Information Technology Research (Disabled People)
  Mr. Alfred Morris
  To ask the Chancellor of the Duchy of Lancaster what arrangements have been made to ensure that the new national advisory body on co-ordination of publicly funded information technology research meets the needs of disabled people in this area.

  Mr. Butcher
  The new advisory arrangements have been established to provide co-ordinated advice to the Department and the Science and Engineering Research Council about their support for IT research. Virtually all this is now pre-competitive research into IT enabling technologies and is not concerned with specific applications. Nevertheless, this should strengthen the United Kingdom's capability in this field and, in due course, enable United Kingdom suppliers to meet better the needs of users of IT, including those with special needs such as disabled people.

  Monopolies and Mergers Commission
  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster how many references have been made to the Monopolies and Mergers Commission in each year from 1978–79 to 1987–88; and if he will list them, giving in each case the reason stated for the reference.
  450
  Mr. Kenneth Clarke
  Sixty-five mergers have been referred to the Monopolies and Mergers Commission over the period 1978–79 to 1987–88. This excludes newspaper mergers and monopoly and competitive practice references. The 65 merger references are listed in chronological order.

  Press notices issued at the time of the reference give details of the reason for reference. In the majority of cases the reason for reference was competition.

  1978

  Lonrho/Suits/House of Fraser

  Hepworth Ceramic/H & R Johnson Richards Tiles

  General Electric Company/Avery's

  FMC/Merck & Co. Inc./Alginate Inds. Ltd.

  1980

  Hiram Walker-Gooderham & Worts/Highland Distilleries Co. Ltd.

  Blue Circle Inds. Ltd./Armitage Shanks Ltd.

  S & W Berisford/British Sugar Corp.

  Europcar/Godfrey Davis

  Grand Metropolitan Hotels/Coral Leisure Group

  1981

  Lonrho/House of Fraser

  Enserch/Davy

  European Ferries/Sealink

  Hover Lloyd/BR Hovercraft

  Standard Chartered Bank/Royal Bank of Scotland

  BTR/SERCK

  Argyll Foods/Linfood Holdings

  1982

  Rowntree Maclntosh/Huntley and Palmer

  Nabisco Brands/Huntley and Palmer

  ICI/Arthur Holden

  GUS/Empire Stores

  Chartered Consolidated/Anderson Stratchelyde

  Sunlight/Jhonson/Initial

  Prosper de Mulder/Midland Cattle Products (Thomas Borthwick and Sons)

  Linfood/Fitch Lovell

  Abele/Illingworth Morris

  1983

  Redland/Ibstock Johnson

  Ibstock Johnson/London Brick Co.

  Knoll International/Sothebys

  Taubman/Sothebys

  Hepworth Ceramic/Steetley

  Grand Metropolitan/Pleasurama/Trident

  P and O/Trafalgar

  GKN/AE

  1984

  Lonhro/House of Fraser

  Scottish and Newcastle Breweries/Camerons

  Dee/Booker McConnell

  BET/Initial

  1985

  Imperial/Permaflex

  Scottish and Newcastle/Matthew Brown

  British Telecom/Mitel

  McCorquodale plc/Richard Clay plc

  Elders IXL/Allied Lyons

  BET/SGB

  1986

  GEC/Plessey

  Imperial/United Biscuits

  Guinness/Distillers

  Cope Allman/Firth Cleveland Steel Strip

  McCorquodale/Norton Opax

  Tate and Lyle/S and W Berisford

  Hillsdown/S and W Berisford

  Ferruzzi/S and W Berisford

  451

  London International/Wedgewood

  P and O/European Ferries

  Trusthouse Forte/assets of Hanson Trust

  Strong and Fisher/Garnar Booth

  Gulf Resources/IC Gas

  1987

  Co-op/House of Fraser Funerals

  Swedish Match/assets of Allegheny International

  MAI/London and Continental Advertising Holdings

  BA/British Caledonian

  Book Club Associates/Leisure Circle

  Warner/Chappell

  1988

  Hanson/Armitage

  Mitek Industries/Gang Nail

  KIO/BP

  Contested Takeover Bids
  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster whether his Department has any evidence as to the involvement of private investigators or security firms in contested takeover bids.

  Mr. Kenneth Clarke
  No.

  Emray (Investigation)
  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster when his Department's investigation into Emray was instigated.

  Mr. Kenneth Clarke
  Mr. Philip Henry Bovey and Mr. Ian George Salter were appointed on 3 September 1984 under section 172 of the Companies Act 1948 (now section 442 of the Companies Act 1985) to investigate and report on the membership of Emray plc (now Equity and General plc).

  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster whether any legal proceedings are contemplated against those accused by his Department's report into Emray of taking part in illegal concert parties to buy shares.

  Mr. Kenneth Clarke
  We are still considering whether such action should be taken.

  Companies Act Investigations
  Mr. Blair
  To ask the Chancellor of the Duchy of Lancaster how many investigations have been ordered under(a) section 432 and (b) section 447 of the Companies Act, for each of the years 1978–79 to 1987–88; and how many have been made in the present year.

  Mr. Kenneth Clarke
  Relevant particulars are as follows:

  Companies Act 1985

  Year

  Investigations under section 432 (formerly section 165 Companies Act 1948)

  Enquiries under section 447 (formerly section 109 Companies Act 1967)

  1978

  8

  69

  1979

  4

  74

  1980

  1

  74

  1981

  2

  98

  1982

  9

  79

  1983

  6

  103

  452

  Companies Act 1985

  Year

  Investigations under section 432 (formerly section 165 Companies Act 1948)

  Enquiries under section 447 (formerly section 109 Companies Act 1967)

  1984

  1

  99

  1 April to 31 March

  1984–85

  1

  130

  1985–86

  1

  111

  1986–87

  1

  130

  1987–88

  2

  133

  1988–date

  0

  10

  Welsh Water Authority
  Mr. William Powell
  To ask the Chancellor of the Duchy of Lancaster when the Monopolies and Mergers Commission's report on the efficiency and costs of, and the service provided by, the Welsh water authority will be published.

  Mr. Maude
  The report is published today.

  The commission was asked to assess the extent to which it is possible for WWA to make net cost savings by end March 1990, and indicate the scale of gross increases and reductions in spending. This is the first time the commission has been asked to suggest specific figures for savings, making this reference unique among the 28 made to date under section 11 of the Competition Act 1980.

  The report explains that in addition to making its own inquiries into the efficiency of WWA's operations, the commission discussed with the WWA the latter's own efforts and plans to reduce costs. During the course of the inquiry WWA reviewed its estimates to produce new savings, to yield a net cost reduction of £2·9 million in comparison with its actual costs in 1986–87.

  In noting the scope for further improvements in efficiency, the commission recognise that WWA has already taken important steps in this direction and has embarked on a number of major programmes to improve its efficiency. Since 1984, WWA has made substantial and worthwhile changes in its management structure, and measures to improve its management information systems and to improve productivity are under way. It is modifying its capital appraisal procedures and aiming to give higher priority to cost-saving investment. The commission considers that, although many initiatives might have been taken earlier, the right policies are now in place.

  The commission found serious problems in the area of customer accounting and debt collection and considered that arrears of debt have risen to unacceptable levels under the existing customer billing system. While the deficiencies had been recognised previously the priority afforded to the development of a new system was not fully reflected in the support and resources given to it. Only now is a new computerised system in the final stages of development. The commission considers it essential that the new system should be in operation in time for the 1989 billing and emphasises that the authority will have to ensure that sufficient resources are available to keep inputs up to date and take prompt action to collect identified debts. The commission accepts that WWA is now giving sufficient attention to the customer accounting system and to the collection of debts and so does not find that in these or any other matters the authority is operating against the public interest.
  453
  Overall the Commission concludes that WWA should be able to achieve a new target of net savings amounting to a cost reduction of £2·9 million on 1986–87 costs and that particular areas in which savings might be made are increased manpower efficiency, closer attention to the charges made by agencies (mainly district councils) which provide sewerage services, and improved benefits from cost-saving investment.

  The authority will be producing a preliminary response to the commission's findings within three to four months in the light of which my right hon. Friend the Secretary of State for Wales will make a statement.

  Value of textiles (Division 65) imported into United Kingdom from MFA signatories OTS basis (cif) by country of consignment2

  Signatory to MFA

  1979 £th

  1Per cent. of total

  1980 £th

  1Per cent. of total

  1981 £th

  1Per cent. of total

  1982 £th

  1Per cent. of total

  1983 £th

  1Per cent. of total

  1984 £th

  1Per cent. of total

  1985 £th

  1Per cent. of total

  1986 £th

  1Per cent. of total

  Bangladesh

  5,941

  0·35

  5,681

  0·37

  4,054

  0·23

  7,125

  0·37

  9,566

  0·41

  16,296

  0·60

  12,869

  0·42

  9,265

  0·29

  Brazil

  9,769

  0·58

  7,119

  0·46

  8,701

  0·49

  9,413

  0·49

  10,917

  0·47

  13,235

  0·49

  13,156

  0·43

  9,849

  0·31

  Yugoslavia

  1,228

  0·07

  818

  0·05

  834

  0·05

  1,842

  0·10

  4,474

  0·19

  7,107

  0·26

  9,898

  0·33

  8,673

  0·27

  Colombia

  1,907

  0·11

  1,472

  0·10

  1,026

  0·06

  1,460

  0·08

  2,365

  0·10

  2,429

  0·09

  3,450

  0·11

  2,922

  0·09

  Czechoslovakia

  5,221

  0·31

  4,888

  0·32

  3,928

  0·22

  4,565

  0·24

  5,340

  0·23

  6,271

  0·23

  8,689

  0·29

  9,045

  0·29

  Guatemala

  6

  0·00

  31

  0·00

  0·00

  0·00

  0·00

  0·00

  0·00

  0·00

  0·00

  0·00

  11

  0·00

  0·00

  0·00

  Haiti

  222

  0·01

  117

  0·01

  127

  0·01

  122

  0·01

  58

  0·00

  64

  0·00

  28

  0·00

  29

  0·00

  Hong Kong

  65,945

  3·90

  49,481

  3·21

  54,581

  3·10

  53,163

  2·76

  63,384

  2·73

  63,726

  2·36

  62,275

  2·05

  71,551

  2·26

  Hungary

  4,540

  0·27

  3,498

  0·23

  2,675

  0·15

  2,675

  0·14

  3,398

  0·15

  3,863

  0·14

  4,398

  0·15

  3,635

  0·11

  India

  69,250

  4·09

  56,933

  3·69

  40,490

  2·30

  32,590

  1·69

  46,687

  2·01

  67,523

  2·50

  69,877

  2·30

  52,727

  1·67

  Indonesia

  916

  0·05

  905

  0·06

  513

  0·03

  3,612

  0·19

  6,404

  0·28

  9,973

  0·37

  9,338

  0·31

  9,665

  0·31

  South Korea

  19,949

  1·19

  18,678

  1·21

  26,095

  1·48

  27,064

  1·40

  24,694

  1·06

  27,581

  1·02

  31,774

  1·05

  36,184

  1·14

  Macao

  410

  0·02

  2

  0·00

  10

  0·00

  7

  0·00

  10

  0·00

  93

  0·00

  6

  0·00

  3

  0·00

  Pakistan

  26,787

  1·58

  22,530

  1·46

  23,802

  1·35

  29,422

  1·53

  30,319

  1·31

  33,491

  1·24

  46,680

  1·54

  50·800

  1·61

  Peru

  1,258

  0·07

  1,140

  0·07

  872

  0·05

  1,024

  0·05

  2,219

  0·10

  3,078

  0·11

  2,987

  0·10

  2,439

  0·08

  Philippines

  334

  0·02

  237

  0·02

  399

  0·02

  480

  0·02

  382

  0·02

  696

  0·03

  752

  0·02

  930

  0·03

  Poland

  4,366

  0·26

  4,135

  0·27

  2,942

  0·17

  2,969

  0·15

  3,829

  0·17

  3,947

  0·15

  5,682

  0·19

  5,777

  0·18

  Romania

  2,534

  0·15

  1,632

  0·11

  1,840

  0·10

  735

  0·04

  2,148

  0·09

  2,564

  0·09

  2,421

  0·09

  3,068

  0·10

  Singapore

  4,776

  0·28

  2,566

  0·17

  2,983

  0·17

  2,499

  0·13

  3,264

  0·14

  1,656

  0·06

  1,786

  0·06

  2·732

  0·09

  Sri Lanka

  359

  0·02

  289

  0·02

  439

  0·02

  544

  0·03

  576

  0·02

  906

  0·03

  1,427

  0·05

  1·270

  0·04

  Thailand

  3,890

  0·23

  3,019

  0·20

  3,765

  0·21

  5,730

  0·30

  5,602

  0·24

  7,851

  0·29

  8,801

  0·29

  10,044

  0·32

  Uruguay

  1,554

  0·09

  1,312

  0·08

  2,109

  0·12

  1,085

  0·06

  1,261

  0·05

  2,221

  0·08

  988

  0·03

  1,080

  0·03

  China3

  26,189

  1·55

  24,829

  1·61

  33,562

  1·91

  36,891

  1·91

  44,756

  1·93

  51,238

  1·89

  58,594

  1·93

  50,574

  1·60

  Egypt3

  5,285

  0·31

  3,719

  0·24

  3,930

  0·22

  3,851

  0·20

  4,635

  0·20

  7,242

  0·27

  8,068

  0·27

  6,897

  0·22

  Malaysia

  3,817

  0·23

  3,133

  0·20

  4,947

  0·28

  3,992

  0·21

  5,177

  0·22

  6,623

  0·24

  5,636

  0·19

  6,531

  0·21

  Mexico

  3,396

  0·20

  2,212

  0·14

  1,931

  0·11

  2,773

  0·14

  1,750

  0·08

  3,744

  0·14

  3,310

  0·11

  6,486

  0·21

  Argentina

  1,674

  0·10

  654

  0·04

  361

  0·02

  480

  0·02

  0

  0·00

  0

  0·00

  21

  0·00

  3

  0·00

  Taiwan

  7,912

  0·47

  7,660

  0·50

  7,903

  0·45

  13,770

  0·71

  15,759

  0·68

  15,558

  0·58

  15,599

  0·51

  25,948

  0·82

  Total United Kingdom imports

  1,691,142

  1,543,711

  1,761,624

  1,927,560

  2,320,228

  2,705,437

  3,032,026

  3,162,369

  1 Each MFA signatory's percentage of total textiles (Division 65) imported into United Kingdom.

  2 Bulgaria is not included as an MFA signatory because it is not a signatory to the General Agreement on Tariff and Trade (GATT). Costa Rica is not included as an MFA signatory because, although it has applied, a bilateral agreement has not yet been signed.

  3 For all but two of the MFA signatories the agreement was initialised in 1986. For China, the agreement was initialised in 1984 and for Egypt it was initialised in 1979 and ended in 1986.

  Source: Overseas Trade Statistics on general trade and country of consignment basis.

EDUCATION AND SCIENCE

  Pupil Records
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Education and Science when the results of the consultations on the keeping and disclosure of pupil records will be published and the regulations made.

  Mrs. Rumbold
  We shall announce the results of the consultation and lay regulations before the end of this year.

  Education at Home
  Mr. Lester
  To ask the Secretary of State for Education and Science (1) how many children are being educated at home by their parents under section 36 of the 1944 Act in England and Wales;

  Textile Imports
  Mr. Tom Clarke
  To ask the Chancellor of the Duchy of Lancaster if he will publish a table in the Official Report showing the value, and the percentage it constitutes by value, of textile imports into the United Kingdom for each year signatory to the multi fibre arrangement for the years 1979 to 1987.

  Mr. Alan Clark
  [holding answer 16 May 1988]: The answer is as follows:

  (2) what change there has been in the numbers of children being educated at home by their parents under section 36 of the 1944 Act in England and Wales over the past five years;

  (3) how his Department monitors the education of children who are taught at home by their parents.

  Mr. Dunn
  It is for the local education authorities to monitor the education of children who are taught otherwise than at school. The Department does not do so, and has no information on the numbers being educated at home.

  The Education Acts lay a duty on the parent to ensure that a child receives suitable full-time education, either by regular attendance at school or otherwise, and require the LEA to take action if it appears that the parent's duty is

  455
  not being performed. Her Majesty's inspectorate of schools' powers to inspect do not extend to education at home.

  Student Support
  Mr. John M. Taylor
  To ask the Secretary of State for Education and Science whether a period of full-time education during which a student supports himself from accumulated earnings, earned within the qualifying period, counts towards the aggregated three-year period of self-support in the interpretation of awards regulation 3(1)(b).

  Mr. Jackson
  Yes. A student is independent in the meaning of the regulation if he has supported himself out of his own earnings for any periods adding up to three years before the first year of his course. It is immaterial whether he supported himself out of current earnings or savings from previous earnings.

  Higher Education
  Mr. Fatchett
  To ask the Secretary of State for Education and Science when he expects to publish for consultation the draft articles of government for higher education corporations within the ambit of the Polytechnic and Colleges Funding Council; and if he will make a statement.

  Mr. Jackson
  We intend to publish draft model articles of government for the higher education corporations in June for consultation, so that, assuming the Education Reform Bill is passed, model articles can be issued shortly after Royal Assent.

  Research Reactor (Grenoble)
  Dr. Thomas
  To ask the Secretary of State for Education and Science, pursuant to the reply to the hon. Member for Meirionnydd Nant Conwy, 29 April,Official Report, column 333, on international collaboration involving the United Kingdom, what involvement the United Kingdom has in the multilateral high flux research reactor in Grenoble in partnership with France and the Federal Republic of Germany; how long the United Kingdom has been a participant in the project; and if he will make a statement.

  Mr. Jackson
  The United Kingdom is involved with the multilateral high flux research reactor in Grenoble through its partnership in the Institut Max von Laue—Paul Langevin (ILL) with France and West Germany. It has a 33 per cent. share in the partnership. The United Kingdom joined the partnership in 1972 for an initial period of 10 years and this was extended so that the present agreement continues until 1992. The basis of United Kingdom membership after 1992 will be a matter for negotiation with the other parties to the agreement. Originally the ILL was a project between France and West Germany which started in 1967. The United Kingdom subscription currently costs about £8·6 million per annum.

WALES

  Further Education
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Wales how many pupils, and what percentage,456
  remained in full-time education after 16 and 17 years of age in each local authority in 1978–79 and the latest date available and the total for Wales.

  Mr. Wyn Roberts
  Figures are not available for 1978–79. The latest information available is for the 1986–87 academic year and is as follows:

  Welsh Pupils in Full-Time Education in Schools and Colleges of Higher and Further Education in Wales1

  Home Authority

  Aged 162

  Aged 172

  Number

  Per cent.3

  Number

  Per cent.3

  Clwyd

  3,023

  49

  2,105

  32

  Dyfed

  2,661

  52

  1,912

  36

  Gwent

  3,350

  49

  2,309

  33

  Gwynedd

  1,947

  53

  1,266

  33

  Mid Glamorgan

  4,069

  50

  2,580

  31

  Powys

  963

  57

  702

  41

  South Glamorgan

  2,860

  45

  2,020

  31

  West Glamorgan

  2,519

  47

  1,953

  35

  Total Wales

  21,392

  49

  14,847

  33

  1 As at January 1987 for schools and November 1986 for colleges of higher and further education.

  2 Age as at 31 August 1986.

  3 As a percentage of the 1986 mid year home population estimates.

  Nurses (Pay)
  Mr. Alan Williams
  To ask the Secretary of State for Wales what estimate he has made of the cost in Wales of the nurses' pay settlement in 1988–89 and in each of the next two years; and how much of the extra cost in each year is to be met from within the existing Welsh expenditure programmes.

  Mr. Grist
  [holding answer 16 May 1988]: The cost in Wales of the nurses' pay settlement in 1988–89 is estimated at £40·295 million. After taking account of the allowance for pay and price inflation built into health authorities' 1988–89 allocations the additional cost to be met by district health authorities this year is estimated to be £27·41 million. Authorities will receive their full shares of the estimated cost from extra funds that we shall shortly be making available.

  It is not possible at present to estimate the additional costs in future years as this will depend on the effects of the new grading structures to be introduced.

  Pre-school Playgroups Association
  Mr. Barry Jones
  To ask the Secretary of State for Wales how much he has paid to the Pre-school Playgroups Association movement in Wales in real terms for each of the years from 1980 to 1988–89.

  Mr. Grist
  [holding answer 17 May 1988]: The annual grants paid to the Pre-school Playgroups Association in Wales at 1987–88 prices in respect of its headquarters expenses for the years ending 31 March 1980–88 is as follows:

  Pounds

  to 31 March 1981

  84,297

  31 March 1982

  94,192

  31 March 1983

  106,687

  31 March 1984

  114,820

  31 March 1985

  111,970

  31 March 1986

  110,382

  31 March 1987

  124,425

  31 March 1988

  122,997

  457
  Grant assistance for 1988–89 is currently under consideration.

  Mr. Barry Jones
  To ask the Secretary of State for Wales if he proposes to pay Pre-school Playgroups Association, Wales, all-Wales mental health strategy moneys; and how much, in real terms, he has paid from this source in each of the years from 1983 to 1987–88.

  Mr. Grist
  [holding answer 17 May 1988]: On the assumption that the hon. Gentleman is referring to the all-Wales mental handicap strategy, funding from this source has been provided direct to the Pre-school Playgroups Association (PPA) (Wales) as set out in the following table (1987–88 constant prices):

  Year

  £

  1983–84

  1,415

  1984–85

  7,383

  1985–86

  27,447

  1986–87

  30,250

  1987–88

  21,500

  We are currently considering an application for further funding.

  As indicated in my answer to the hon. Gentleman on 10 May, at column 73, all-Wales mental handicap strategy moneys are also made available to voluntary groups, including PPA, through local authorities.

  Rating Reform
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will list the average rate paid by a domestic ratepayer in each Welsh district in 1988–89, together with his estimate for the community charge which would be payable by each payee in 1988–89 had the proposed system been in operation.

  Mr. Grist
  [pursuant to his reply, 10 May 1988, c. 72]: Average rate bills per household for 1988–89 are given in the following table:

  Community charge and average rate bill for each Welsh district 1988–89

  Average rate bill per household1 £

  Alyn and Deeside

  352

  Colwyn

  351

  Delyn

  344

  Glyndwr

  287

  Rhuddlan

  339

  Wrexham Maelor

  313

  Carmarthen

  243

  Ceredigion

  257

  Dinefwr

  213

  Llanelli

  262

  Preseli Pembrokeshire

  239

  South Pembrokeshire

  280

  Blaenau Gwent

  221

  Islwyn

  249

  Monmouth

  348

  Newport

  349

  Torfaen

  297

  Aberconwy

  324

  Arfon

  222

  Dwyfor

  247

  Meirionnydd

  246

  Ynys Mên

  279

  Cynon Valley

  200

  Merthyr Tydfil

  235

  458

  Average rate bill per household1 £

  Ogwr

  308

  Rhondda

  159

  Rhymney Valley

  274

  Taff Ely

  289

  Brecknock

  255

  Montgomeryshire

  236

  Radnor

  237

  Cardiff

  354

  Vale of Glamorgan

  343

  Port Talbot

  296

  Lliw Valley

  274

  Neath

  298

  Swansea

  381

  Total Wales

  288

  1 Average domestic rate bills per household are on a basis comparable with community charge figures and exclude any use of balances. Households are defined, for this purpose, as domestic hereditaments.

ENERGY

  Radioactive Waste
  Mr. Cohen
  To ask the Secretary of State for Energy what is the current total level of radioactive wastes returnable to each country under British Nuclear Fuels plc contracts.

  Mr. Michael Spicer
  The volumes of waste which are likely to arise from BNFL's existing overseas reprocessing contracts with return of waste options are:

  high-level waste, 200 cu m;

  intermediate-level waste, 3,500 cu m;

  low-level waste, 23,000 cu m.

  The waste mentioned will arise from contracts with electricity utilities in the Federal Republic of Germany, Italy, Japan, the Netherlands and Switzerland. The volume arising from each country is commercially confidential.

  Sellafield (Emergency Exercise)
  Dr. Thomas
  To ask the Secretary of State for Energy if he will make a statement on(a) the planning assumptions adopted, (b) the effectiveness of tide communication within and between the emergency services, (c) the lessons learnt by his Department, the emergency services and Her Majesty's Nuclear Installations Inspectorate, and (d) the total cost incurred for the simulated emergency exercise conducted at British Nuclear Fuels plc, Sellafield on 4 May.

  Mr. Michael Spicer
  An emergency exercise to test the offsite centre for BNFL's Sellafield site was held under the supervision of Her Majesty's Nuclear Installations Inspectorate on 4 May. The exercise was designed to test the procedures for responding to an accident involving an offsite release of radioactivity. A detailed assessment of the exercise is now being carried out by BNFL, in close consultation with the nuclear inspectorate, local authorities, local emergency services and Government Departments and agencies involved. The lessons learnt will be incorporated in revised arrangements and procedures for the Sellafield site and, where appropriate, in the emergency plans for other nuclear installations. It is not
  459
  possible to calculate the full costs of the exercise, which were largely confined to staff time involved, as some dozen different organisations participated.

TRANSPORT

  Ships (Refuse Discharge)
  Mr. Heathcoat-Amory
  To ask the Secretary of State for Transport if he has any plans to change the regulations governing the discharge of refuse from ships near British coasts.

  Mr. David Mitchell
  There are at present no regulations governing the discharge of ship-generated refuse (garbage) into the sea. However, with the coming into force of annex V of the international convention for the prevention of pollution from ships 1973, regulations are being prepared to implement its provisions so as to come into force on 31 December 1988.

  Channel Tunnel
  Mr. Warren
  To ask the Secretary of State for Transport what increase in road traffic is anticipated to arise from the completion of the Channel tunnel; and if he will take steps to ensure that the road transport system for the south-east will be sufficient to meet the increased demand.

  Mr. Peter Bottomley
  The effect of the tunnel on traffic volumes in the south-east will vary from route to route. For example, on the M20 in the vicinity of the tunnel, average daily August flows are predicted to increase from about 29,000 (without a tunnel) to 34,000 by the year 2008; for the A259 the increase is predicted to be less than 1,000 vehicles per day.

  The trunk road programme is kept under constant review. Schemes are added as need is identified.

  A number of major trunk road improvements in the south-east are already programmed, in particular on the M20/A20 and A259 routes. The Hastings eastern bypass, St. Mary's bay and Dymchurch bypass on the A259, and the M20/A259 Hythe improvement were added at the last programme review in 1987.

  Mr. Adley
  To ask the Secretary of State for Transport if he will detail the latest traffic forecasts available to him for Channel tunnel passengers and freight(a) to London and (b) to destinations beyond London; and what plans he is making to keep these forecasts up to date.

  Mr. David Mitchell
  The latest available forecasts of Channel tunnel passengers and freight on through rail services was released by British Rail at a recent seminar and I am sure that British Rail would make its forecasts available to my hon. Friend. Eurotunnel plc has also produced its own forecasts of Channel tunnel traffic which are available to my Department. Eurotunnel's forecasts were published in part in its share flotation offer for sale published, inter alia, in the Financial Times of 18 November 1987—available from the Library. British Rail, Eurotunnel and the other organisations that have produced Channel tunnel traffic forecasts will no doubt update their forecasts whenever they think it necessary.

  Although the Channel tunnel is a private sector undertaking the level of Channel tunnel traffic has wide implications for transport in the United Kingdom and
  460
  therefore my Department forms its own view on the available forecasts where they have implications for the public sector.

  Mr. Adley
  To ask the Secretary of State for Transport whether his Department treats applications from commercial operators seeking to provide themselves with environmentally acceptable links to Channel tunnel rail infrastructure as fulfilling the criteria for eligibility for section 8 grants; and if he will make a statement.

  Mr. David Mitchell
  It is open to any consignor or freight handler to make an application for section 8 grant towards private rail facilities where moving freight by rail, rather than by road, will lead to environmental benefits. Such applications, whether they involve Channel tunnel traffic or not, will need to meet the normal freight facilities grants criteria and will be considered on their merits.

  City Commuter Services Group
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if he has discussed the report of the city commuter services group with the chairman of British Rail; and if he will make a statement.

  Mr. David Mitchell
  I refer the hon. Member to the reply I gave the hon. Member for Wrexham (Dr. Marek) on 16 May 1988 at column 664.

  British Rail Stations (Toilet Facilities)
  Mrs. Dunwoody
  To ask the Secretary of State for Transport if, when he next meets the chairman of British Rail, he will raise with him the provision of toilet facilities at all British Rail stations; and if he will make a statement.

  Mr. David Mitchell
  This is entirely a matter for the board's commercial judgment.

  Stansted Rail Traffic
  Mr. Adley
  To ask the Secretary of State for Transport what information he has about the new works required to bring Stansted rail traffic into Liverpool street; and what future plans there are for diverting this traffic to St. Pancras.

  Mr. David Mitchell
  I understand from British Rail that it plans to complete work on the rail link to Stansted airport by January 1991, allowing it to operate a fast, direct service to Liverpool street station. The total cost, including specially built new trains, will be £45 million at today's prices. I understand that BR has no plans at present to divert any of this traffic to St. Pancras, but that it will avoid taking any action to preclude its doing so in future should the need arise.

  Railway Electrification
  Mr. Adley
  To ask the Secretary of State for Transport if he will indicate the change in statistical information which has resulted in his recent decision to approve electrification of the Portsmouth to Southampton and Portsmouth to Eastleigh railway lines; and if he will make a statement.

  Mr. David Mitchell
  I approved the board's formal proposal for electrification of these lines on 20 April on the grounds that the project would help BR reduce its operating costs and improve the service to passengers.

  Manchester Airport
  Mr. Alfred Morris
  To ask the Secretary of State for Transport what was the outcome of his Department's meeting with representatives from Manchester airport on 13 May in regard to United States carrier access to the airport; and if there is any further action he will be taking.

  Mr. Peter Bottomley
  There was a useful exchange of views; further action will be taken at the appropriate time.

  Road Safety (Departmental Staff)
  Mr. Tony Lloyd
  To ask the Secretary of State for Transport what statistical information is available on the numbers of personnel employed by his Department on road safety matters.

  Mr. Peter Bottomley
  Road and vehicle safety directorate, which includes the vehicle inspectorate and driver training and testing organisation, employs 3,755 staff. Other parts of the Department directly contributing to road safety include the highways command, the transport and road research laboratory, the traffic area offices and, as regards vehicle records and documentation, the driver vehicle and licensing centre at Swansea.

  Driver Licensing System
  Mr. Simon Coombs
  To ask the Secretary of State for Transport what responses he has had to the consultation document on proposals for a new driver licensing system in the 1990s.

  Mr. Peter Bottomley
  The replies indicate general support for the concept of harmonisation with other EC member states.

  The idea of a single licence showing all driving entitlement was favourably received. Support for the traffic commissioners retaining responsibility for the conduct of vocational drivers was virtually unanimous. Some reservations were expressed about the proposal to bring the level of medical checks for HGV drivers into line with those that currently apply to drivers of public service vehicles.

  The categories of driving entitlement in the EC model system caused serious concern among voluntary and community transport organisations as well as motor manufacturers.

  Over 80 per cent. of the responses suggested that tighter controls on drivers of minibuses and light goods vehicles would seriously impair the operation of these services as well as the demand for the vehicles in question.

  The entitlement of existing ordinary licence holders to drive minbuses and light goods vehicles will be preserved in the new licensing system.

  The Department will press strongly in the negotiations on the forthcoming second Community driving licence directive to preserve the existing arrangements for new drivers. This should not affect the other changes which are considered worth while.

  We shall be seeking the necessary legislation at the first available opportunity.

HOME DEPARTMENT

  Police National Computer
  Mr. Cohen
  To ask the Secretary of State for the Home Department what new facilities will be available to the new police national computer through its proposed link to the driver and vehicle licensing centre; and what police national computer facilities will be available to the driver and vehicle licensing centre.

  Mr. Douglas Hogg
  A comprehensive survey of the requirements of the police for PNC services is presently in hand and a direct link to the DVLC is one of the potential applications being considered. No decisions on new applications will be taken, however, before the results of this user requirements survey have been carefully considered in terms of their technical, financial and any other relevant implications.

  Police (Complaints)
  Mr. Frank Field
  To ask the Secretary of State for the Home Department if he will introduce legislation to set up an independent non-police body under the control of the Police Complaints Authority to investigate allegations of serious misconduct on the part of the police officers.

  Mr. Douglas Hogg
  No. The Police Complaints Authority already has extensive powers to supervise and direct the progress of the investigation of serious allegations against police officers.

  Police Officers (Notebooks)
  Mr. Frank Field
  To ask the Secretary of State for the Home Department if he will introduce a system of time-stamping police officers' notebooks where it is intended that the contents of these notebooks are to be used as evidence in court proceedings.

  Mr. Douglas Hogg
  We are not persuaded of the necessity for such action. If an occurrence is not written up at the time, or very shortly after it takes place, the officer concerned will be expected to record the date and time at which it is subsequently noted. In the Metropolitan police this is a requirement in standing orders.

  Mr. Roc Sandford
  Mr. Frank Field
  To ask the Secretary of State for the Home Department if he will call for a report from the Commissioner of Police of the Metropolis as to why no response has been received by Mr. Roc Sandford or his solicitors to a complaint addressed to the Commissioner of Police of the Metropolis on 27 February 1986 alleging criminal activities on the part of police officers at West End Central police station.

  Mr. Douglas Hogg
  I understand that the letter of 27 February 1986 from Mr. Sandford's solicitors was handled as a letter before action in civil litigation. Its contents have been dealt with in subsequent communication between the Metropolitan police solicitor and Mr. Sandford's legal advisers.

  Mr. Frank Field
  To ask the Secretary of State for the Home Department if he will make public the reports of the two internal police complaints bureau investigations in to the circumstances of the arrest and prosecution of Mr. Roc Sandford.
  463
  Mr. Douglas Hogg
  No. It is not the practice to publish reports of this kind.

  Radio Surveillance Equipment
  Mr. Cran
  To ask the Secretary of State for the Home Department (1) how many prosecutions have been brought over the last 10 years against those contravening the Wireless Telegraphy Acts by using radio surveillance equipment without a licence;

  (2) how many prosecutions have been brought over the last 10 years against those contravening the Telecommunications Acts by using radio surveillance equipment in conjunction with telephone instruments and/ or telephone lines without a licence.

  Mr. John Patten
  It is not possible to distinguish prosecutions for such offences from the records of court proceedings held centrally.

  Sports Clubs (Sex Discrimination)
  Mr. Frank Field
  To ask the Secretary of State for the Home Department if he is yet in a position to report on the Government's response to the Equal Opportunities Commission's paper on sex discrimination in private sports clubs.

  Mr. John Patten
  I refer the hon. Member to the reply which I gave to a question from the hon. Member for Barking (Ms. Richardson) on 14 March at columns 422–23.

  Police (Airborne Transport)
  Mr. Greg Knight
  To ask the Secretary of State for the Home Department (1) what information he has as to the total cost to police forces in England and Wales of using

  (i)

  (ii)

  (iii)

  (iv)

  (v)

  Police Air Unit1

  Number of occasions where aircraft called to incidents involving

  Number of occasions in (ii) where arrests made

  Number of arrests (where information available)

  Period Covered

  Burglary

  Theft

  Devon and Cornwall

  —

  —

  14

  —

  12 months to May 1988

  Hampshire

  35

  45

  10

  —

  12 months to May 1988

  Midlands (comprising West Midlands, Staffordshire, West Mercia and Warwickshire)

  7

  32

  29

  94

  July 1987 to May 1988

  TOTAL

  42

  77

  53

  94

  1 Excludes the Metropolitan police and Thames Valley air support units, where information is not kept in the form requested.

  Mr. Greg Knight
  To ask the Secretary of State for the Home Department if he has any plans to discuss with chief constables the circumstances in which aeroplanes are used for the purpose of crime detection and prevention; and if he will make a statement.

  Mr. Douglas Hogg
  No, but it is intended to circulate to chief constables later this year:

  (i) an information package containing advice and guidance about the use of aircraft for police operations; and

  464
  aeroplanes or other airborne transport, including fuel, maintenance and staff costs, for detecting or apprehending motorists exceeding speed limits over the past 12 months;

  (2) what information he has as to which police forces have utilised aeroplanes or any other airborne transport during the past 12 months for the purpose of detecting or apprehending motorists exceeding speed limits, and on how many occasions.

  Mr. Douglas Hogg
  A Home Office-sponsored experiment was carried out by the West Midlands police air support unit in February 1988, over a stretch of the M42, covering the West Midlands and West Mercia force areas, to assess how the presence of a police aircraft on patrol affected motorists' speed and road safety generally. There were three flights over a two-week period, totalling four hours 45 minutes. The experiment was funded by the Home Office and the cost to the forces concerned was limited to the salaries of the police observers. There is no record of other police air support units in England and Wales using aircraft for this purpose during the past 12 months.

  Mr. Greg Knight
  To ask the Secretary of State for the Home Department (1) what information he has as to which police forces have utilised aeroplanes or any other airborne transport during the past 12 months for the purpose of detecting or clearing up offences of burglary, not connected with terrorism; and on how many occasions;

  (2) what information he has as to which police forces have utilised aeroplanes or any other airborne transport during the past 12 months for the purpose of detecting or clearing up offences of theft, not connected with terrorism; and on how many occasions.

  Mr. Douglas Hogg
  The available information is as follows:

  (ii) a report on the cost-effectiveness of the midlands air operation which was set up on a trial basis in 1987.

  Police Priorities
  Mr. Greg Knight
  To ask the Secretary of State for the Home Department what assessment he has made of the effectiveness in maintaining law and order generally of the relative priority in terms of manpower and resources accorded by different police forces to(a) detecting and

  465
  preventing crimes of violence and burglary and (b) detecting and apprehending motorists exceeding speed limits; and if he will make a statement.

  Mr. Douglas Hogg
  Chief officers of police determine their objectives and priorities in relation to local circumstances, in consultation, where appropriate, with local police authorities. Her Majesty's inspectors of constabulary report annually on the efficiency and effectiveness of all provincial police forces. Their professional assessment of overall performance takes into account such matters as the extent and nature of policing problems, and the priority given to the prevention and detection of different types of crime.

  Arms Cache (Discovery)
  Mr. Adley
  To ask the Secretary of State for the Home Department what information he has as to which police force or forces have carried out inquiries following the discovery of an arms cache in a city in the north of England in 1987; and if he will call for a report from the appropriate chief constables as to the size and nature of the cache, as to the progress of the police inquiries and as to what lines of investigation the police are pursuing concerning the source of the arms, the purpose for which they were intended and any involvement by foreign Governments or their agencies.

  Mr. Hurd
  My hon. Friend may have in mind a case which is sub judice at present. It would not be right to comment.

  NHS Lottery
  Mr. Pendry
  To ask the Secretary of State for the Home Department to what extent his Department and the Gaming Board are monitoring the establishment and operation of the privately promoted National Health Service lottery with a view to assessing the implications for Government policy towards the geographical extent of, and size of prizes offered by, lotteries; and if he will make a statement.

  Mr. John Patten
  The Department and the Gaming Board are taking a close interest in any information about this lottery which is available, because of the promoters' statements that they have found a means within the Lotteries and Amusements Act 1976 to offer a first prize considerably in excess of the maximum amount which the law allows for a single lottery. The Gaming Board has recently brought to the notice of the Crown Prosecution Service aspects of the enterprise, to consider whether or not they may be in breach of the 1976 Act.

  Accused Persons (Defence)
  Mr. Hind
  To ask the Secretary of State for the Home Department whether he will give details of the further work he proposes on the consequences when an accused person produces at his trial a line of defence which he has not previously mentioned to the police.

  Mr. Hurd
  As I said on Second Reading of the Criminal Justice Bill on 18 January 1988, at column 687, I started a discussion, beginning with a lecture to the Police Foundation in July, on a recommendation made by the Criminal Law Revision Committee in 1972. This was that the court should be able to draw whatever inferences 466
  appeared proper from the accused's failure, when interviewed by the police, to mention facts later relied on in his defence, and such failure should also be able to corroborate other evidence against him.

  There has been a lively debate, and I have listened carefully to the arguments for and against change. I am not convinced that the protection which the law now gives to the accused person who ambushes the prosecution can be justified. The case for change is strong. But I am persuaded by some of the comments which have been made that more careful work needs to be done before we can bring forward with confidence a specific proposal for legislation. I do not see the Criminal Justice Bill, which is already long and detailed, as the right vehicle for such a proposal.

  The work which needs to be done covers matters such as the precise form of the change in the law which would best achieve our purposes given the significant changes in police and criminal procedure in England and Wales in recent years, and of any warning given by the police to suspects before commencing interviews; the practical implications, both for police interviews and in court; and the relevance of other measures to encourage early disclosure of the defence case. I am asking a small working group under the chairmanship of a senior Home Office official to carry this work forward, and advise me by early next year, with a view to legislation in due course. The group will include a senior police officer, experienced members of both branches of the legal profession and a senior member of the Crown Prosecution Service. Since there will be implications for law and practice in Northern Ireland, I am, with the agreement of my right hon. Friend the Secretary of State, also arranging for an official from his office to serve on the group.

  The members of the working group will be:

  Mr. W. J. Bohan

  Head of the Criminal Policy Department,

  Home Office

  (Chairman)

  Mr. K. R. Ashken

  Crown Prosecution Service

  Mr. Colin Bailey

  Assistant Chief Constable (Crime),

  West Yorkshire Police

  Mr. B. A. Blackwell

  Northern Ireland Office

  Mr. Michael Kalisher QC

  Barrister and a Recorder of the Crown Court

  Mr. P. M. Raphael

  Solicitor

  Provincial Police Force Establishments
  Mr. Soames
  To ask the Secretary of State for the Home Department whether he has reached decisions on the applications from police authorities for increase in provincial police force establishments in 1988–89.

  Mr. Hurd
  I have approved 450 additional posts with effect from 1 June as follows:

  Police authority

  Posts approved

  Avon and Somerset

  20

  Bedfordshire

  10

  467

  Police authority

  Posts approved

  Cambridgeshire

  20

  Cheshire

  15

  Devon and Cornwall

  25

  Essex

  20

  Gwent

  9

  Hampshire

  23

  Kent

  30

  Norfolk

  20

  Northamptonshire

  20

  Northumbria

  30

  North Wales

  10

  Nottinghamshire

  35

  South Yorkshire

  20

  Staffordshire

  10

  Thames Valley

  40

  West Midlands

  70

  West Yorkshire

  23

  With the 50 additional police posts previously authorised for Thames Valley with effect from 1 April 1988, I have now approved 500 police posts for provincial forces for 1988–89. This is part of the phased programme of about 2,000 additional posts for provincial forces which I announced in May 1986 and brings to 5,553 the posts approved since 1979.

  Residential Care Television Licence Scheme
  Mr. Lord
  To ask the Secretary of State for the Home Department what changes he proposes to the accommodation for residential care television licence scheme; and if he will make a statement.

  Mr. Hurd
  I am today laying amendment regulations, which will come into force from midnight tonight, which set out revised criteria for eligibility for the accommodation for residential care concessionary television licence.

  The purpose of the concessionary scheme is to enable pensioners and disabled people who live in residential homes or in sheltered housing provided by a local authority or a housing association to obtain a television licence at a reduced fee. Following a High Court judgment last year it is clear that under the current regulations many people whom the scheme was never intended to benefit would now qualify. The purpose of the new regulations is to reinstate the original intention.

  The new regulations therefore define more closely the accommodation which will qualify. In future, in order to qualify for the concessionary licence, the accommodation in question will have to form a group of at least four dwellings, within a common boundary, specially provided by way of erection or conversion only for elderly or disabled people, and provided or run by a local authority or housing association, with a dedicated warden and a common facility for the use of all the occupants.

  These amendments will not affect the application of the regulations to residential homes, which will continue to qualify for the concessionary licence if they meet the statutory requirements. However, as a result of changes in the pattern of care for elderly people, I have decided additionally to extend the scope of the concession to nursing homes registered under the relevant legislation. At present, people in such nursing homes who have their own television in their private rooms have to pay the full licence fee. In future, they will be able to enjoy the benefits of the concessionary licence on the same footing as people in residential homes. This will remove an anomaly in the present scheme.
  468
  The new regulations will apply only to new applications received after today. The position of existing beneficiaries is preserved by a provision in the regulations which will enable them to continue to enjoy the concession. This means that anyone living in accommodation which is now covered by the concessionary licence will continue to have the benefit of that concession for as long as he or she occupies that accommodation. This will include most, if not all, of the outstanding applications made before the new regulations come into force.

  I have also decided that the concessionary licence fee should be increased from 5p to £5 per year. The fee has not been increased since it was first introduced in 1969, and is now considerably less than the cost of collecting it. During this period the single pension has increased tenfold. The increase is about the same as that which all other pensioners will pay this year for the standard colour television licence, so the concession will remain a valuable benefit. The additional licence revenue will compensate for the enlargement of the scheme over a period.

  We do, of course, recognise that there are many elderly and disabled people who do not live in sheltered accommodation, and who do not always find it easy to pay the television licence fee. I have therefore decided to introduce a pay-as-you-go scheme which will enable everyone to pay for their television licence by instalments. This will be available in 1989. Unlike the present instalment scheme, which requires someone to pay a full year's licence in advance before joining the scheme, it will be possible under the new scheme to get a television licence on payment of the first instalment. The aim is to give the licence payer the widest possible choice of ways of paying for the television licence, and of spreading the cost.

ATTORNEY-GENERAL

  NHS Lottery
  Mr. Pendry
  To ask the Attorney-General if he will prosecute the directors of Loto for distributing coupons in connection with a National Health Service lottery which falsely state that the lottery has been registered in accordance with the statutory requirements; and if he will make a statement.

  The Attorney-General
  The Director of Public Prosecutions has recently received a complaint which alleges that the lottery to which the hon. Gentleman refers contravenes the Lotteries and Amusements Act 1976. The Director is considering the matter.

  Visas
  Mr. Tony Lloyd
  To ask the Attorney-General what is the length of time it currently takes to complete an appeal against refusal of a visitor's visa from the Indian subcontinent.

  The Attorney-General
  Statistics about the time taken to complete individual appeals are not available. However, it is estimated that such an appeal would currently take at least seven months to complete, broken down as follows:

  (i) from receipt of an appeal at posts in the Indian subcontinent to preparation of the Entry Clearance Officer's explanatory statement and dispatch of papers to the appellate authorities in London: three to six months;

  (ii) from receipt in London to dispatch of papers to both parties: up to four weeks;

  469

  (iii) from receipt of papers by both parties to issue by each party of a certificate of readiness to proceed: this is in the hands of the parties and times vary from a few weeks to many months;

  (iv) from certification of readiness to proceed to hearing date: up to two months, but longer where parties request adjournments;

  (v) from hearing date to issue of appeal decision: about two weeks.

  Following the transfer of administrative responsibility for the immigration appelate authorities to the Lord Chancellor, the working methods and procedures of the authorities, including the question of time limits, are presently under review.

SCOTLAND

  Pre-Five Schemes
  Mrs. Fyfe
  To ask the Secretary of State for Scotland whether he will make further urban programme provision available to assist plans for pre-five schemes.

  Mr. Lang
  Applications for assistance under the urban programme for pre-five schemes will continue to be considered within the criteria and priorities of the programme, in competition with all other bids for funding at the particular time.

  Housing Accommodation
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will compile information on the incidence of overcrowding in housing accommodation in each district and islands area.

  Lord James Douglas-Hamilton
  No. However, the Housing (Scotland) Bill makes an amendment to part VII of the Housing (Scotland) Act 1987 which will again allow local authorities to make surveys of the extent of overcrowding in their areas.

  Mortgage Defaults
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will seek to obtain information from building societies and local authorities about the incidence of mortgage defaults in each district and islands area in Scotland, together with information about the causes of this problem and arrangements made for rehousing the people concerned.

  Lord James Douglas-Hamilton
  No

  Salmon Stocks
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will place in the Library any scientific evidence which is available to him concerning the effect of legal netting operations on salmon stocks in Scottish rivers; and if he will review the weekly close time for such operations before the start of the 1989 season in the light of such evidence.

  Mr. Michael Forsyth
  No. The scientific evidence available to the Government reflected the outcome of research and monitoring work on the state of salmon stocks in Scotland and was discussed in the course of the consideration of the weekly close time regulations by the Second Standing Committee on Statutory Instruments on 470
  4 May. The Government have no plans for a further review of the weekly close time for salmon net fishing in Scotland.

  Afforestation
  Ms. Quin
  To ask the Secretary of State for Scotland whether the Forestry Commission is planning to carry out or commission any surveys to locate areas where further afforestation in Caithness and Sutherland can best be integrated with other interests.

  Lord James Douglas-Hamilton
  The Highlands regional council set up a working party to prepare a land use strategy for Caithness and Sutherland. The Forestry Commission attends the working party as an observer and provides advice based on information the commission currently holds. The commission has no plans to carry out any separate surveys of land use in the area.

  Children (Special Educational Needs)
  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland if he will issue guidance to health boards on the provision of information to parents of deaf children and all children with special educational needs.

  Mr. Michael Forsyth
  Information to parents is already available from the health professionals who care for their deaf children. The Scottish Home and Health Department issued guidance to health boards in 1982 on the identification, assessment and recording of children with handicap and with special educational needs, and I do not consider that further guidance is required.

  Infant Mortality
  Dr. Moonie
  To ask the Secretary of State for Scotland what was the infant mortality rate for Scotland in the latest three years for which figures are available.

  Mr. Michael Forsyth
  The information is as follows:

  Infant mortality rates, Scotland, 1985–87

  Rate per 1,000 live births

  1985

  9·4

  1986

  8·8

  11987

  8·5

  1 Provisional figure.

  Heart and Lung Disease
  Dr. Moonie
  To ask the Secretary of State for Scotland what percentage of the total Scottish population suffered from(a) heart disease and (b) lung disease in the latest: three years for which figures are available.

  Mr. Michael Forsyth
  This information is not routinely available.

  Forestry (Hampshire)
  Mr. Barry Field
  To ask the Secretary of State for Scotland what information he has about the total value of forestry products from Hampshire for the last five years.
  471
  Lord James Douglas-Hamilton
  The value of timber and Christmas trees removed from Forestry Commission woodlands in Hampshire between 1 April 1983 and 31 March 1988 was approximately £6·9 million.

  The value of produce from private woodlands over that period is not known.

  Milk Marketing Boards
  Sir Hector Monro
  To ask the Secretary of State for Scotland what action he has taken in regard to the three milk marketing boards in Scotland in the light of the Touche Ross study commissioned by the Minister of Agriculture, Fisheries and Foods into the England and Wales Milk Marketing Board's commercial activities.

  Mr. Rifkind
  My Department has recently completed a study on Scottish Pride Quality Dairy Food, the Scottish Milk Marketing Board's commercial arm. Copies of the report are now available in the Library of the House. Discussions with interested parties on the report's conclusions will now begin. Studies on the other two boards in Scotland will start shortly.

  RPI (Error)
  Sir Hector Monro
  To ask the Secretary of State for Scotland what decisions have been taken on the disbursement of money to charitable bodies in Scotland following the error in the retail prices index.

  Mr. Michael Forsyth
  The balance of the funds available for distribution from this source to charities in Scotland is £0·696 million. My right hon. and learned Friend has decided to allocate £0·34 million to Scottish Television's Telethon Trust, health boards and the other bodies mentioned in the table. Discussions will take place with these bodies to agree arrangements for the distribution of these allocations to appropriate charitable purposes at the local level. The remaining £0·355 million will be available for allocation to individual bodies in the relevant fields and within the voluntary sector more widely to groups most likely to contain persons in the relevant categories. These groups will include the elderly, the physically and mentally handicapped and the mentally ill, single parents and children. Projects will be expected to provide some immediate and significant benefit to members of the client group concerned, for example, by increasing mobility or providing ease of access to learning, recreational or leisure opportunities. Voluntary organisations will be advised of the purposes for which grant applications may be made and the procedure to be followed in submitting applications.

  £

  Telethon 88

  120,000

  Health Boards

  100,000

  Community Trusts

  70,000

  Unemployed Voluntary Action Fund

  50,000

  Total

  340,000

  Road Works (Tenders)
  Sir Hector Monro
  To ask the Secretary of State for Scotland what proposals he has to increase the proportion of local authority general road works that is subject to competitive tender.
  472
  Lord James Douglas-Hamilton
  Following a second survey of road works we have decided, as already proposed, that the threshold above which each individual job of road works is required to be submitted to competition by local authorities under the Local Government, Planning ane Land Act 1980 should be reduced from £50,000 to £25,000. We believe that the additional competition will be beneficial in securing better value for money. I shall be laying the necessary regulations to give effect to this change which is to come into operation from 1 July 1988.

  Health Boards (Employment Disputes)
  Mr. Macdonald
  To ask the Secretary of State for Scotland how many employment disputes are current between local health boards and the British Medical Association; what is the average time for settlement of such disputes over the past five years; and what is the average cost to the Health Service in locum salaries, exgratia settlements and administrative costs of such disputes.

  Mr. Michael Forsyth
  [holding answer 9 May 1988]: The information sought is not available centrally. The hon. Member may wish to address his questions to individual health boards.

  Mr. Macdonald
  To ask the Secretary of State for Scotland whether he has any plans to reform the procedures governing disputes between the British Medical Association and local health boards; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 9 May 1988]: While disciplinary procedures for medical consultants include a right of appeal to the Secretary of State against dismissal, procedures governing disputes between representatives of recognised staff organisations, on the one hand, and health boards, on the other, are matters for local determination. There are no plans at present to review the General Whitley Council agreement setting out the guidance on local disputes procedures, but the council is currently reviewing its agreement on procedures relating to individual employees' grievances with a view to possible changes.

AGRICULTURE, FISHERIES AND FOOD

  Pesticides (Replacements)
  Mr. Flynn
  To ask the Minister of Agriculture, Fisheries and Food if he will consider allocating substantial governmental incentives for the development of products which lead to the replacement of wide spectrum chemical pesticides with host-specific biological agents.

  Mr. MacGregor
  The Agriculture Departments and the Department of Education and Science through the research councils already support a good deal of strategic research into alternatives to pesticides including biological methods of control. The development of products is for the industry.

  Canary Seed
  Mr. Teddy Taylor
  To ask the Minister of Agriculture, Fisheries and Food what was the total amount of canary
  473
  seed imported in the most recent annual period for which figures are available; what tax was charged per ton on these imports; and what proposals the EEC has advanced for adjusting such taxes.

  Mr. Donald Thompson
  For the calendar year 1987 the total amount of canary seed imported into the United Kingdom was 10,300 tonnes. The import levy payable on this canary seed varied between £15·78 and £45·62 per tonne.

  In its price-fixing proposal for 1988–89 the Commission of the European Communities has proposed that this import levy be aligned with that for barley which over the same period varied between £112·48 and £124·63 per tonne.

  New Zealand Butter
  Mr. Alfred Morris
  To ask the Minister of Agriculture, Fisheries and Food whether it remains his intention, as stated in the House on 7 June 1984,Official Report, column 430, and 5 July 1981, Official Report, column 452, that imports of New Zealand butter shall not be taken into account by the EEC in determining the United Kingdom's milk production quota.

  Mr. Donald Thompson
  National reference quantities were based on delivery and sales levels in member states and took no account of imports. That remains the position. 1 am not aware of any proposals to change this basis.

  Council of Ministers
  Mr. Summerson
  To ask the Minister of Agriculture, Fisheries and Food what was the outcome of the Council of Agriculture Ministers' meeting on 16 and 17 May in Brussels; and if he will make a statement.

  Mr. MacGregor
  The Council of Agriculture Ministers met in Brussels on 16–17 May 1988. I represented the United Kingdom.

  The Council pursued discussion of the Commission's price proposals for 1988–89, without reaching conclusions, and will resume this discussion at its next meeting.

  The Council addressed in particular the need to decide on new terms for charging the cereals coresponsibility levy, to reflect the decisions of the European Council, in southern member states from 1 June since their harvest begins in that month. The Council considered a Commission proposal which included provision for small producers to be exempted from the levy on the basis of present arrangements, which allow national discretion, for one further year, but on the basis of a Community definition thereafter. I and a majority of my colleagues decided that the question of a Community definition needed to be studied further, and the Council came close to unanimous agreement on amending the proposal so as to leave this question open whilst making the arrangements necessary for applying the basic and additional coresponsibility levy in the southern member states from 1 June. Reservations by Denmark and Greece prevented for the time being the unanimity required for this amendment.

  In the absence of agreement on prices for the next marketing years the Council took decisions to extend the marketing years for beef and milk by a further month.

  The Council adopted an amendment to the new directive on the use of hormones in animals and meat,
  474
  providing that animals treated for a therapeutic or management purpose and the meat of such animals may be traded within the Community provided the hormone treatment has been withdrawn for a certain period before export or slaughter.

ENVIRONMENT

  New Town Assets
  Mr. Hind
  To ask the Secretary of State for the Environment what plans he has to meet the chairman of the Commission for the New Towns to discuss the disposal of assets in former new towns by the commission.

  Mrs. Roe
  I meet the chairman of the Commission for the New Towns regularly to discuss, among other matters, the disposal of assets.

  London Docklands Development Corporation
  Mr. Bevan
  To ask the Secretary of State for the Environment how much public money has been spent in total on the London Docklands development corporation; and how much private money has been attracted as a result.

  Mr. Jacques Arnold
  To ask the Secretary of State for the Environment how much money he estimates to have been levered in as a result of public funding given 10 the London Docklands development corporation; and if he will make a statement.

  Mr. Trippier
  LDDC received £396 million of Exchequer grant in aid between July 1981 and 31 March 1988. It currently estimates that some £4 billion of private sector investment commitments have been secured over that period.

  Pollution Monitoring Equipment
  Mr. Martlew
  To ask the Secretary of State for the Environment if there has been any funding for pollution monitoring equipment through the inner area programme for 1986–87 and 1987–88; and if he will make a statement.

  Mr. Trippier
  My Department's records of projects funded under the urban programme do not reveal any funding of pollution monitoring equipment in the years in question. The urban programme is targeted on helping selected urban authorities to tackle exceptional problems resulting from structural economic and social change.

  Urban Development Corporations
  Mr. Kirkhope
  To ask the Secretary of State for the Environment how much public money in total has been given to the seven urban development corporations created in December 1987.

  Mr. Bowis
  To ask the Secretary of State for the Environment how much public funding has been given to the seven urban development corporations set up in December 1987; and if he will make a statement.

  Mr. Trippier
  In December 1987 my right hon. Friend announced proposals for three new urban development corporations and the extension of the Black Country development corporation to cover parts of Wolverhampton. The necessary designation order, and an
  475
  order to designate the Sheffield DC announced in March, have now been laid. Resource allocation will be decided after Parliament has approved the orders.

  Mr. Patnick
  To ask the Secretary of State for the Environment if he has decided who will be chairmen of the seven urban development corporations he set up in December 1987.

  Mr. Trippier
  I refer my hon. Friend to my earlier answer to my hon. Friend the Member for Leeds, North-East (Mr. Kirkhope): chairmen-designate have been announced for all four urban development corporations awaiting parliamentary approval.

  Local Authority Expenditure
  Mr. Robert Hicks
  To ask the Secretary of State for the Environment whether he has any plans to alter the capital receipts limits for local authority expenditure; and if he will make a statement.

  Mr. Ridley
  No.

  Housing Waiting Lists
  Mr. Sedgemore
  To ask the Secretary of State for the Environment what is the total number of families on local authority housing waiting lists for the latest convenient date.

  Mrs. Roe
  In their 1987 housing investment programme returns, English local authorities reported 1,289,000 households on the waiting lists at April 1987. (Local authorities' criteria for inclusion of names on the waiting lists are not uniform and the frequency of reviewing the lists varies).

  Waste Disposal
  Mr. Cran
  To ask the Secretary of State for the Environment how much special waste is now imported into the United Kingdom; what consultations he has had with waste disposal authorities concerning the revision of the special waste regulations; and what plans he has to introduce new regulations.

  Mr. Moynihan
  During 1986, 53,000 tonnes of special wastes were imported into the United Kingdom. Figures are not yet available for 1987. It is intended to issue a consultation paper to local authorities and other interested parties on a revision of the special waste regulations later this year. It is also intended that regulations to implement the EC directive on transfrontier shipment of hazardous waste will be laid before the summer recess.

  Bed-and-Breakfast Accommodation
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what are the latest figures for families in bed and breakfast in England and Wales.

  Mr. Ridley
  At the end of 1987 about 10,400 households, who had been accepted as homeless by English local authorities, were temporarily in bed-and-breakfast accommodation.

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

  Mrs. Roe
  In 1987 91,000 tenants bought their homes from English local authorities and new towns, who also sold 3,200 vacant dwellings. In addition, the London residuary body transferred some 5,500 homes to Thamesmead Town Limited.

  For sales in Wales I refer the hon. Member to my right hon. Friend the Secretary of State for Wales.

  Nirex
  Mrs. Ewing
  To ask the Secretary of State for the Environment when he last had a meeting with the chairman of Nirex; and what matters were discussed.

  Mr. Moynihan
  I last met the chairman of Nirex on 22 October 1987, when a number of matters relating to Nirex were discussed.

  Amusement Arcades
  Miss Lestor
  To ask the Secretary of State for the Environment how many local authority refusals of permission to open amusement arcades have been overturned on appeal by his Department.

  Mrs. Roe
  Of 304 planning appeals involving amusement arcades decided since January 1984, the earliest date from which such information is available, 203 were allowed.

  Carrion Crow (London)
  Mr. Summerson
  To ask the Secretary of State for the Environment what steps he is taking to reduce the carrion crow population in Greater London.

  Mr. Moynihan
  None.

  Lead-free Petrol
  Mr. Squire
  To ask the Secretary of State for the Environment if he is satisfied with the rate of progress in the use of lead-free petrol.

  Mr. Moynihan
  Before the Budget, the level of use of unleaded petrol was disappointingly low, and my right hon. Friend the Chancellor of the Exchequer therefore increased the duty differential in its favour. Use of the new fuel is increasing, but it is too early to say whether the rate of progress is satisfactory.

  Ms. Walley
  To ask the Secretary of State for the Environment when he envisages the attainment of 10 per cent. supply of unleaded petrol in United Kingdom garages.

  Mr. Moynihan
  I expect 10 per cent. of United Kingdom garages to be selling unleaded petrol by about the end of this year.

  Radioactivity Detection
  Mr. Hood
  To ask the Secretary of State for the Environment what are the present arrangements for an effective system of radioactivity detection in the United Kingdom.
  477
  Mr. Moynihan
  The existing arrangements for the monitoring of radioactivity in the United Kingdom are set out in an HMSO publication "Monitoring of Radioactivity in the United Kingdom Environment", published earlier this year. A copy has been placed in the Library of the House.

  Housing Co-operatives
  Mr. Wallace
  To ask the Secretary of State for the Environment when he intends to publish the result of his Department's review of policy on housing co-operatives; and if he will make a statement.

  Mrs. Roe
  My hon. Friend the Minister for Housing and Planning, will make an announcement about the review shortly.

  Dearne Valley
  Mr. Hardy
  To ask the Secretary of State for the Environment what steps he will now take to assist the local authorities involved to secure environmental improvements in the Dearne Valley.

  Mr. Moynihan
  The Department is already assisting the local authorities involved to secure environmental improvements in the area through the provision of derelict land grant and additional support under the urban programme. In addition, European money is being used to provide essential infrastructure, some of which also has environmental benefits.

  It is the Department's intention to continue this support and explore with the local authorities new ways of improving the environment of the area. A recent example is the bid for European assistance towards environmental schemes in the Dearne valley which forms part of the measures contained within the integrated operation for the Yorkshire and Humberside steel area.

  Olympic Games
  Mr. Canavan
  To ask the Secretary of State for the Environment what recent discussions he has had with the appropriate sporting authorities about United Kingdom participation in the Olympic Games.

  Mr. Moynihan
  None. Participation in the Olympic Games is a matter for the British Olympic Association and the governing bodies of sport.

  Dersingham Bypass
  Mr. Bellingham
  To ask the Secretary of State for the Environment what representations he has received from the Nature Conservancy Council in connection with the A149 Dersingham bypass.

  Mr. Moynihan
  In February 1987 the Nature Conservancy Council made the Department aware of objections it had made to Norfolk county council (in a letter of 2 February 1987) about the route of the proposed A 149 Dersingham bypass through the Dersingham bog (a site of special scientific interest). On 17 March 1987, the director of the Nature Conservancy Council wrote to the Department stressing the conservation importance of the site and the impact on it of road construction and stating his belief that less damage would be caused if a more north-easterly route which did not traverse the bog could 478
  be substituted for that approved by Norfolk county council on 19 February 1987. The Department also received a copy of the letter of 19 April 1988 sent by the Nature Conservancy Council to Norfolk county council and letters sent by it on 11 and 12 February 1988 to the Department of Transport setting out its objections to the compulsory purchase and side roads orders relating to the proposed bypass.

  Basildon (House Sales)
  Mr. Amess
  To ask the Secretary of State for the Environment what information he has as to the total number of council and new town commission houses sold in Basildon since 1979.

  Mrs. Roe
  From April 1979 to December 1987, 1,655 local authority dwellings and 5,754 new town commission dwellings were sold.

  Private Estate Development
  Mr. Dykes
  To ask the Secretary of State for the Environment if he has any plans to give guidance to outer London local planning authorities about the case for modernising their local density and structure plans to take account of the latest trends in private estate development; and if he will make a statement.

  Mr. Waldegrave
  The density of new development is a matter for the borough to decide in the light of local circumstances and taking account of any general guidance. We will consider whether any new general advice on density policies would be appropriate in the Secretary of State's strategic guidance to be issued early next year. The guidance will take account of the advice to be put forward by the London planning advisory committee.

  Acid Rain
  Mrs. Ann Taylor
  To ask the Secretary of State for the Environment what was the relative degree of acidity of the rain which fell on 27 April; and if he will make a statement.

  Mr. Moynihan
  The acidity of rainfall on 27 April measured by the national acid rain monitoring network (operated by Warren Spring laboratory on behalf of my Department) ranged from pH 3.33 in East Anglia to pH 5.86 in Northern Ireland. Data for 1986 show that an event as acid as that measured at East Anglia occurred only once in that year. As on this occasion events of high acidity typically follow dry spells.

  Housing Defects Act
  Mr. Illsley
  To ask the Secretary of State for the Environment whether there are any proposals to include any further category of dwelling within the provisions of the Housing Defects Act.

  Mrs. Roe
  I refer the hon. Gentleman to the reply which I gave to the hon. Member for Bradford, West (Mr. Madden) on 20 April at column 490. In addition, we have received local designations in respect of certain properties in Taunton Deane and Wolverhampton, and are currently considering whether these should come into operation.

  Chlorofluorocarbons
  Mr. Alan W. Williams
  To ask the Secretary of State for the Environment what assessment he has made of the reduction in world consumption of chlorofluorocarbons which would be sufficient to prevent further damage to the ozone layer.

  Mr. Moynihan
  The Montreal protocol requires global consumption of certain chlorofluorocarbons to be halved before the end of the century. When the protocol was signed last September there was scientific consensus that this, together with a freeze on consumption on halons, should be sufficient to prevent significant depletion of the ozone layer. There are provisions for regular review and should new scientific evidence point to the need for stricter measures the protocol can be amended.

  Mr. Fearn
  To ask the Secretary of State for the Environment if he will make a further statement on his policy concerning the control of production of ozone-depleting chlorofluorocarbons.

  Mr. Moynihan
  I refer to the answer I gave to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on 31 March at column 720.

  House building
  Mr. Nicholas Baker
  To ask the Secretary of State for the Environment if he will bring forward proposals for a new planning circular relating to house building.

  Mr. Waldegrave
  Advice on planning issues relating to the supply of land for housing was recently consolidated and restated in planning policy guidance note 3. We intend to consult shortly on a new draft circular stressing the importance of up-to-date local plans as a basis for sound planning decisions.

  Mr. Roy Hughes
  To ask the Secretary of State for the Environment how many houses in England were built before 1919.

  Mrs. Roe
  It is estimated that in December 1986 5·2 million of the dwellings in England had been built before 1919.

  Overdevelopment
  Mr. Tim Smith
  To ask the Secretary of State for the Environment what guidance is given to local authorities on overdevelopment; and if he will make a statement.

  Mr. Waldegrave
  County structure plans may give general guidance on densities. It is for district planning authorities to decide what detailed policies on density it is desirable to include in their local plans. Such policies should help authorities in dealing with individual applications. Planning policy guidance note No. 3 ("Land for Housing") emphasises that schemes should be well integrated with the existing pattern of settlement and surrounding land uses and that new housing in towns and villages should be sympathetic in scale and character. Planning policy guidance note No. 7 ("Rural Enterprise and Development") re-emphasises the scope for better layouts, more landscaping and lower densities.

  Low-cost Rented Accommodation
  Ms. Primarolo
  To ask the Secretary of State for the Environment whether he has any proposals to increase the supply of low-cost rented accommodation for skilled and semi-skilled workers in south-east England.

  Mrs. Roe
  An overall increase in the supply of rented accommodation is the central objective of our proposals in the Housing Bill. This will increase job mobility.

  For 1988–89 we have provided an additional £50 million for Housing Corporation support for housing association schemes for rent and for sale and plan further increases to take the total programme to £850 million by 1990–91. Some 45 per cent. of the corporation's rented programmes are allocated to London and the home counties and the proposals in the Housing Bill will help housing associations attract private finance to provide more homes for rent within the reach of low income groups.

  The Local Government Act 1988 includes an explicit power for local authorities to assist in the provision of privately let accommodation, subject to my right hon. Friend's consent. This power could be used to help provide accommodation such as that described by the hon. Member.

  Development Corporations (Finance)
  Mr. Robert G. Hughes
  To ask the Secretary of State for the Environment how much private money has been attracted to the London Docklands development corporation and Merseyside development corporation as a result of the public finance given them.

  Mr. Trippier
  I refer my hon. Friend to the answers I gave earlier today to my hon. Friends the Members for Birmingham, Yardley (Mr. Bevan) and for South Hams (Mr. Steen) today.

  Nuclear Waste
  Mrs. Michie
  To ask the Secretary of State for the Environment how many local authorities have adopted a policy of opposing the location of a nuclear waste repository in their area.

  Mr. Moynihan
  We understand a number of local authorities have responsed to UK Nirex Ltd., expressing their views on the options for a radioactive waste repository outlined in the discussion document "The Way Forward." It will not be known how many are opposed to the location of a repository in their area until after the consultation exercise finishes at the end of May, and until the responses have been analysed by Nirex.

  Homelessness
  Mr. Fraser
  To ask the Secretary of State for the Environment what are the latest figures for homelessness in(a) England and (b) Wales.

  Mrs. Roe
  The number of households accepted as homeless by English local authorities appears in table I of "Local authorities' action under the homelessness provisions of the 1985 Housing Act: England—Statistics for the fourth quarter of 1987", which is available in the Library. For Welsh figures I refer the hon. Member to my right hon. Friend the Secretary of State for Wales.
  481
  Mr. Livsey
  To ask the Secretary of State for the Environment what measures he intends to take to combat the problem of homelessness in rural areas.

  Mrs. Roe
  The measures in the housing White Paper will increase housing choice generally, including that available in rural areas. We have already announced that the Housing Corporation will aim to double the present level of provision by housing associations in rural areas. After discussion with representatives of rural communities we are considering further action that may be needed.

  Mr. Caborn
  To ask the Secretary of State for the Environment whether his Department will publish monthly figures of homelessness in England and Wales.

  Mrs. Roe
  The information received on local authorities' action under the homelessness provisions of the Housing Act 1985 is provided by English local authorities in quarterly returns: it is not proposed to change the frequency of reporting.

  Ms. Mowlam
  To ask the Secretary of State for the Environment if he will provide figures for each year between 1979 and 1988 for the estimated number of people homeless in(a) the United Kingdom, (b) Dorset and (c) Bournemouth.

  Mrs. Roe
  The numbers of households for whom Bournemouth and the other local authorities in Dorset reported accepting responsibility for securing accommodation in the years 1981 to 1986, appear in a table placed in the Library in May 1987. Information for the years 1979 and 1980 is available in "Local Housing Statistics" issues No. 54 (table 14), No. 59 (table 9) and No. 62 (table 13) which are also in the Library.

  Total acceptances reported by the authorities in Dorset for 1987 are 845, of which Bournemouth reported 217. Christchurch has not provided returns for the first and fourth quarters and Wimborne made no returns.

  Acceptances by all English authorities including estimates for missing returns, are as follows:

  Acceptances

  1979

  53,110

  1980

  57,200

  1981

  62,920

  1982

  70,010

  1983

  74,800

  1984

  78,240

  1985

  83,550

  1986

  94,530

  1987

  105,280

  A new reporting system was introduced for non-metropolitan districts from the fourth quarter 1980 and for the other authorities from the third quarter 1982, so that figures are not strictly comparable over the whole period.

  For corresponding information for Scotland and Wales, I refer the hon. Member to the respective Secretary of State.

  Rotten Row
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment if he will seek to extend Rotten row, Hyde park, over the full perimeter of that park; and if he will make a statement.
  482
  Mr. Colin Moynihan
  We have no plans to extend Rotten row. The idea has been considered from time to time but ruled out on the grounds of high costs for the limited use that would be made of it.

  Construction Output
  Mr. David Evans
  To ask the Secretary of State for the Environment what are the most recent set of construction output figures; and if he will make a statement.

  Mr. Trippier
  Provisional figures of construction output in Great Britain in 1987, in constant 1980 prices, are as follows:

  Type of work

  £ million

  New housing

  (i) Public sector

  700

  (ii) Private sector

  3,660

  Other new work

  (i) Public sector

  3,240

  (ii) Private Industrial

  2,740

  (iii) Private Commercial

  4,570

  All new work

  14,910

  Housing repair and maintenance

  5,200

  Other public sector repair and maintenance

  2,510

  Other private sector repair and maintenance

  1,950

  All repair and maintenance

  9,660

  All work

  24,560

  Total output in 1987 was at its highest level since 1973, and there have now been six successive years of growth. Almost two thirds of the 1987 output was accounted for by work for private sector clients. The volume of output in the private commercial sector reached a new record level in 1987, while private sector housing output was at its highest level since 1973. The continuing high level of new orders placed in recent months supports the generally held view that there is likely to be further growth in construction output in 1988.

  National Rivers Authority
  Mr. O'Brien
  To ask the Secretary of State for t he Environment what procedures he has proposed for regional water authorities to discuss with consumer consultative committees the introduction of the National Rivers Authority; and if he will make a statement.

  Mr. Moynihan
  Consultations with their consumer consultative committees is a matter for the water authorities themselves. Several of the committees responded to the consultation paper on the National Rivers Authority which we published last July.

  Rating Reform
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what is the Government's projection of likely poll tax rates in the Carrick district council and Restormel borough council areas, on the basis of the 1988–89 rates year.

  Mr. Howard
  I hope to publish illustrative community charges for each local authority area shortly.
  483
  Mr. Patnick
  To ask the Secretary of State for the Environment what guidance his Department intends to provide to local authorities about the implementation of the community charge.

  Mr. Howard
  In November 1987 the Department of the Environment set up an implementation sub-group of the community charge working group to discuss issues arising from the implementation of the community charge. The group comprises officials of the Department of the Environment, the Department of Health and Social Security and the Welsh Office, the Association of Metropolitan Authorities, the Association of District Councils, the Association of County Councils, the London Boroughs Association and the Association of London Authorities.

  One of the group's remits is to provide advice to local authority practitioners about matters such as registration for, billing, collection and recovery of the community charge and community charge benefits. It is proposed to do this by means of a series of practice notes covering all aspects of implementation. The first of these notes, entitled "An Introduction to the Community Charge", is being published today and will be sent to local authorities and those other interested bodies who have asked to receive copies. Copies have also been placed in the Libraries of the House.

  Lorry Parks
  Mr. Butler
  To ask the Secretary of State for the Environment if he will give guidance to local authorities regarding the handling of planning applications for lorry parks in green belt land.

  Mr. Waldegrave
  Advice on the handling of all types of planning applications in the green belt is given in my Department's planning policy guidance note 2. A copy is in the Library. In green belt there is a general presumption against development, except for a narrow range of uses which are appropriate to such areas.

  Local Authority Property Estates
  Mr. Heddle
  To ask the Secretary of State for the Environment what proposals he has to implement the Audit Commission's recommendations on the management of local authority property estates.

  Mr. Trippier
  Implementation of the Audit Commission's recommendations is primarily a matter for individual local authorities and their auditors. My Department will, however, be monitoring progress closely in consultation with the commission and the local authority associations.

  Housing Starts, Leicester
  Mr. Janner
  To ask the Secretary of State for the Environment what information he has as to how many housing starts there were in the public sector in the city of Leicester in the years 1977 and 1987, respectively.

  Mrs. Roe
  Reported public sector housebuilding starts are published in the quarterly "Local Housing Statistics", which is available in the Library. The figures for 1977 appear in issue 45; in 1987, six starts for housing associations were reported in Leicester.

  County Councils
  Mr. Holt
  To ask the Secretary of State for the Environment what representations he has received seeking legislation to reorganise local government by abolishing county councils; what response he has made; and if he will make a statement.

  Mr. Chope
  Representations have been received from two associations (the Association of District Councils and the Society of Local Authority Chief Executives), two local authorities, and three members of the public. We said that we have no plans for change; our priorities are to ensure the efficient and economical functioning of local government and its accountability to the public.

  Regional Assistance
  Mr. Devlin
  To ask the Secretary of State for the Environment how much financial assistance has been given to the inner city areas under the urban regeneration and urban development schemes in the last six months.

  Mr. Trippier
  I refer my hon. Friend to the answer I have today given to my hon. Friend the Member for Wolverhampton, North-East (Mrs. Hicks).

  Council Houses
  Mr. Flannery
  To ask the Secretary of State for the Environment how many council houses have been built in each year since 1979.

  Mrs. Roe
  The English local authorities' figures for 1979 to 1986 are given in table 6.1(a) of the annual "Housing and Construction Statistics 1976–1986" and for 1987 in table 1.2(a) of the quarterly "Housing and Construction Statistics Part 1" No. 32; copies of these publications are available in the Library.

  Home Improvement Grants
  Mr. Boateng
  To ask the Secretary of State for the Environment whether he has developed any new proposals concerning home improvement grants.

  Mrs. Roe
  I refer the hon. Member to the consultation paper on home improvement policy issued by my Department on 5 November 1987, a copy of which was placed in the Library of the House.

  Local Government Finance Bill
  Mr. Knox
  To ask the Secretary of State for the Environment how many people and how many organisations have now made representations to him in favour of the Local Government Finance Bill.

  Mr. Roy Hughes
  To ask the Secretary of State for the Environment how many organisations have now made representations to him concerning the introduction of the community charge in England and Wales.

  Mr. Kirkwood
  To ask the Secretary of State for the Environment what representations he has received on the proposed unified business rate.

  Mr. Howard
  A summary of the 1,271 responses received by 31 October 1986, when the consultation period on the Green Paper ended, was placed in the Library on 15 December 1986. Since June 1987, my Department has
  485
  received some 9,300 letters, the majority of which are from private individuals. The letters contain a variety of comments on specific aspects of our proposals, or requests for further information, and for this reason do not readily lend themselves to an analysis of correspondents' views.

  Housebuilding (Rural Areas)
  Mr. Barron
  To ask the Secretary of State for the Environment what is his policy towards the level of housebuilding in rural areas; and if he will make a statement on proposed changes to home county structure plans providing for the release of additional land.

  Mrs. Roe
  Provision for housebuilding in rural and other areas is made in structure and local plans, taking into account the likely overall need for housing and the suitability of the proposed ways of meeting those needs. My right hon. Friend has invited Serplan (the South East Regional Planning Conference) to consider the new projections of population and household formation over the next decade and to discuss with him its implications for housing and land supply in the south-east.

  Juvenile Crime
  Mr. Favell
  To ask the Secretary of State for the Environment if he will make a statement on his latest plans to develop measures within the areas of his responsibility in order to combat juvenile crime.

  Mr. Trippier
  The Department is funding a number of projects under the urban programme which help to combat juvenile crime. These include workshop training schemes for offenders and ex-offenders, probation day centres, disruptive pupil projects, day centres for unemployed ex-offenders and hostels for ex-offenders. The Department is also funding under the urban programme projects providing facilities for sport, recreation and play which help to develop social and other skills as well as reducing vandalism and juvenile crime.

  Ozone Layer
  Ms. Quin
  To ask the Secretary of State for the Environment when he last met his European Economic Community counterparts to discuss measures to protect the ozone layer; and what was the outcome of the discussions.

  Mr. Moynihan
  I refer to the answer I gave to my hon. Friend the Member for Sheffield, Hallam (Mr. Patnick) on 24 March at columns 186–87.

  Water Supplies (Nitrate Content)
  Mr. Teddy Taylor
  To ask the Secretary of State for the Environment what discussions he has had with water authorities about the cost of bringing all public water supplies within the 50mg limit of nitrate contents; and if he will make a statement.

  Mr. Moynihan
  Water undertakers have been asked to assess the cost of reducing nitrate concentrations in drinking water below 50mg per litre, and these assessments are now awaited.

  Local Authority Services (Tendering)
  Mr. David Nicholson
  To ask the Secretary of State for the Environment if he will make a statement on progress towards the implementation by local authorities of competitive tendering for local authority services.

  Mr. Chope
  With the exception of parish councils—which are being consulted separately—all English local authorities have been informed of my right hon. Friend's decisions on the latest dates by which they must expose their services to competition under the Local Government Act 1988, I welcome the fact that a significant number are seeking tenders earlier than these dates, as this will hasten the delivery of cost savings to ratepayers.

  Merseyside Development Corporation
  Mr. Steen
  To ask the Secretary of State for the Environment how much private funding he estimates to have been levered in as a result of public funding of the Merseyside Development Corporation.

  Mr. Trippier
  Since its inception in 1981 Merseyside development corporation has secured private sector investment totalling £64 million.

  Planning Applications
  Mr. Chapman
  To ask the Secretary of State for the Environment if he has any plans to seek to extend the powers of local planning authorities to refuse applications which are out of scale and character with existing developments in residential areas.

  Mr. Waldegrave
  Questions of scale and character are material considerations which planning authorities are entitled to take into account in considering applications for development in residential areas. Authorities can also incorporate density policies in local plans where they consider it appropriate to do so. Where they have such policies, they should generally be able to implement them through development control, provided that individual decisions are supported by adequate reasons.

  London Bridge City
  Mr. Pawsey
  To ask the Secretary of State for the Environment what representations he has received concerning his decision to call in the planning application which relates to phase II of London Bridge city.

  Mr. Waldegrave
  My Department received two representations in respect of the called in applications. These representations were concerned principally with the height, bulk, massing and design of the proposed development and the demolition of the listed building on the site.

  Micro-organisms (Release)
  Mr. Lofthouse
  To ask the Secretary of State for the Environment if he will make it his policy to require public hearings and independent scientific review for each proposed environmental release of genetically engineered micro-organisms in the United Kingdom

  Mr. McCartney
  To ask the Secretary of State for the Environment if he has any plans to change United
  487
  Kingdom regulatory provisions for the control of the release of genetically engineered micro-organisms to the environment.

  Mr. Moynihan
  The Royal Commission on environmental pollution is currently reviewing the area of release of genetically engineered organisms and expects to report by early next year. The Government will be considering what changes, if any, are required to existing arrangements in the light of this advice. In the meantime the Health and Safety Executive has published a consultative paper on the review of the Health and Safety at Work (Genetic Manipulation) Regulations 1978 which proposes the compulsory notification to the Health and Safety Executive of planned releases to the environment.

  Ramsar Sites
  Mr. Buckley
  To ask the Secretary of State for the Environment if he will list those areas which have been notified to his Department by the Nature Conservancy Council for designation as Ramsar sites or special protection areas, indicating the date on which each completed proposal was forwarded by the Nature Conservancy Council.

  Mr. Moynihan
  We are currently considering NCC proposals for the classification of eight sites as special protection areas and/or Ramsar sites. Details are as follows:

  Site

  Date of submission

  1. Orwell/Stour Estuaries

  16 January 1986

  2. Medway Estuary

  1 April 19861

  3. Bury Inlet

  11 September 1986 (Ramsar)

  28 January 1988 (SPA)

  4. Mersey Estuary

  25 November 1985

  5. Benfleet and Southfleet Marshes

  27 May 1987

  6. North Norfolk Coast

  18 November 1987

  7. Llyn Idwal

  6 May 1987

  8. Llyn Tegid

  22 April 1987

  European Football
  Mr. John Carlisle
  To ask the Secretary of State for the Environment what discussions have taken place between Her Majesty's Government and the football authorities in Europe concerning the readmittance of English clubs to European competitions.

  Mr. Moynihan
  I met the president of UEFA on Saturday 14 May together with the chairman of the Football Association and the president of the Football League.

  It was agreed that the decision on the readmittance of English clubs was for UEFA and that it would take it in the light of my report of the domestic season and events during the European championships finals.

  Nitrogen Dioxide Levels (London)
  Ms. Gordon
  To ask the Secretary of State for the Environment whether nitrogen dioxide levels in central London exceeded World Health Organisation and European Economic Community guidelines in November 1987; and what has been the trend in nitrogen dioxide levels in central London over the last decade.

  Mr. Moynihan
  The World Health Organisation's recommended guidelines for hourly and daily nitrogen 488
  dioxide levels, given in the WHO regional publication "Air Quality Guidelines for Europe", European Series No. 23, were exceeded in central London on 29 and 30 November 1987. The Department has asked the Warren Spring laboratory to examine its records of nitrogen dioxide levels in central London over the last decade. The laboratory reports a slight downward trend in annual means but no discernible trend in peak values.

  The European Community directive (85/203/EEC) gives guidelines, expressed not in monthly terms but in terms of the calender year, and results in any individual month cannot be compared with them.

  House Price Inflation
  Mr. Nellist
  To ask the Secretary of State for the Environment if he has any proposals to combat house price inflation.

  Mrs. Roe
  I refer the hon. Member to the reply I gave to the hon. Member for Edinburgh, Central (Mr. Darling) on 4 November at column 736.

  Land Use Survey
  Sir Geoffrey Johnson Smith
  To ask the Secretary of State for the Environment if he will establish a national land use survey to determine what land is available for housing and other purposes.

  Mr. Waldegrave
  My right hon. Friend has no plans to establish a national land use survey. My Department already monitors and publishes information from the Ordnance Survey on land use changes at national and regional level. Over the last two years 46 per cent. of land developed for housing came from previously developed sites or vacant land within urban areas. To help in preparing and monitoring structure plans, local authorities and housebuilders are strongly encouraged to prepare joint studies of housing land availability in each county.

  Thamesmead Estate
  Mr. Soley
  To ask the Secretary of State for the Environment ( 1) what was the total debt outstanding on the Thamesmead estate after its sale by the London residuary body; and when and to whom he anticipates the debt will be repaid;

  (2) which company approached his Department to reduce the price following the valuation of Thamesmead estate for the London residuary body by chartered accountants; and what adjustment was made;

  (3) when the valuation was made of Thamesmead estate by the chartered accountants; and what value was assigned;

  (4) what price per house was paid for the Thamesmead estate to the London residuary body;

  (5) to which company the Thamesmead estate was sold by the London residuary body; and what was the price paid;

  (6) what is (a) the total rent income on the Thamesmead estate and (b) the total service charge income; and how much of this will be used to pay the outstanding capital debt owed to the former Greater London council.

  Mr. Chope
  Accountants were employed by the Government to produce a business plan (not a valuation)
  489
  which would enable terms to be set for the disposal of the Thamesmead estate to Thamesmead Town Ltd. which would maximise the return to London boroughs while enabling the company to remain viable. For the terms of the sale, I refer the hon. Member to the answer given by my hon. Friend the Minister for Housing and Planning to the Member for Erith and Crayford (Mr. Evennett) on 20 July 1987, Official Report, column 106. Particulars of rent and service charge income can be obtained from the company. The debt outstanding on abolition of the GLC was £138·8 million which was included in the total of debt for which servicing arrangements by the London boroughs, pro rata to population, were made in the Local Government Reorganisation (Repayment of Loans) (Greater London) Order 1986 (SI 1986/439). The boroughs have however been relieved of an onerous burden and they will receive a share of lettings and of receipts from sales of housing.

  Rights of Way
  Mr. Nicholas Baker
  To ask the Secretary of State for the Environment what steps he takes to ensure that claims for the addition of rights of way to the definitive maps are considered in their historic, geographical and social context and against the background of any old map or other evidence available.

  Mr. Moynihan
  The role of my right hon. Friend in relation to the addition of rights of way to definitive maps is confined to the determination of opposed orders made by surveying authorities, and appeals against the refusal of applications for such an order. In exercising those responsibilities he is obliged to take into consideration all evidence submitted by the parties insofar as it relates to the existence of the alleged right of way.

  Established Use Certificates
  Mr. Heddle
  To ask the Secretary of State for the Environment if he has any plans to review the established use certificate procedure.

  Mr. Waldegrave
  In the recent report of an efficiency scrutiny of planning enforcement notice appeals, the repeal of the provisions (in section 94 of the Town and Country Planning Act 1971) for issuing established use certificates, after a prior notice period of two years, is recommended. The report of the efficiency scrutiny, and my Department's action plan in response to it, are about to be published. This recommendation requires further study, and we shall consult interested organisations and professional bodies about the recommendation and its likely consequences.

  Tenancies
  Mr. David Nicholson
  To ask the Secretary of State for the Environment how soon after Royal Assent he intends to commence the implementation of(a) the assured tenancy and (b) the assured shorthold tenancy provisions of the Housing Bill.

  Mr. Waldegrave
  Under clause 115(3) of the Bill these provisions will come into force two months after Royal Assent.

  Water Supply
  Ms. Ruddock
  To ask the Secretary of State for the Environment if he will bring forward a code of guidance on water disconnections for the water industry to take account of the new social security legislation.

  Mr. Moynihan
  The water industry has successfully operated a voluntary code of practice on disconnections for some years. I understand that it intends shortly to publish a revised code, reflecting the recent changes in the social security system.

  Water Consumption
  Mr. Summerson
  To ask the Secretary of State for the Environment what the estimated consumption of water was in(a) the United Kingdom and (b) Greater London in each of 1958, 1968 and 1978; and what it will be in 1988.

  Mr. Moynihan
  The estimated quantities of water supplied are as follows:

  Average per day in megalitres

  Year

  Quantity

  United Kingdom

  1958

  11,750

  1968

  15,300

  1978

  18,050

  1988

  119,900

  Greater London

  1958

  1,492

  1968

  1,687

  1978

  1,918

  1988

  12,180

  1Predicted.

  Inner Area Programme
  Ms. Ruddock
  To ask the Secretary of State for the Environment if he will list schemes covering recycling and energy conservation funded by the inner area programme in 1986–87, 1987–88 and 1988–89; and if he will make a statement regarding the funding of these specific schemes.

  Mr. Trippier
  A number of schemes to improve energy conservation and to assist the recycling of waste products have been funded by my Department under the urban programme. There are no plans to alter the way applications for funding of such projects are dealt with under the urban programme. I will today be placing in the Library copies of lists for such projects funded in 1986–87 and 1987–88. Similar information for expected funding in 1988–89 is not yet available.

  Rent Acts
  Mr. Callaghan
  To ask the Secretary of State for the Environment how many private properties there are for rent outside the control of the Rent Acts in London.

  Mr. Ridley
  The information is not available.

  Rating Reform
  Mr. Warren
  To ask the Secretary of State for the Environment if his Department is making arrangements to assist county and district councils in the introduction of the community charge by the preparation of a standard
  491
  computer software package, and if his Department will take action to co-ordinate the use of councils' existing hardware systems to reduce the cost of the introduction of the community charge; and if he will make a statement.

  Mr. Howard
  It is for authorities to decide on the computer software they need to administer the community charge. My Department will be issuing practice notes on the community charge which will provide charging authorities and the computing industry with the details they need to design the software required. In addition, the independent firm of Price Waterhouse will be providing a summary of best practices which, if followed by local authorities, should help to reduce their costs.

  Fish Disease
  Dr. Cunningham
  To ask the Secretary of State for the Environment when the Southern water authority carried out its investigation into fish disease at the Weir Wood reservoir; what were its conclusions; and if he will arrange for a copy of the report to be placed in the Library.

  Mr. Ridley
  [holding answer 16 May 1988]: I am aware of the matters giving rise to the hon. Gentleman's question. These are being looked into. I will write to him as soon as I can.

  Waste Dumping (Bristol Channel)
  Mr. Speller
  To ask the Secretary of State for the Environment how many outlets of raw sewage are at present being deposited in the Bristol channel; how often they are monitored; by whom they are monitored; and when any of these outfalls will be extinguished.

  Mr. Moynihan
  [holding answer 16 May 1988]: Such information is not held centrally. Water authorities are generally responsible for monitoring and the public registers which they are required to maintain contain details of authorised discharges including details of monitoring results. Increasingly, sewage receives treatment before being discharged to estuaries and coastal waters. A major national programme of schemes for improving bathing waters is under way to replace existing unsatisfactory short outfalls.

  Mr. Speller
  To ask the Secretary of State for the Environment in how many places in the Bristol channel the dumping of raw sewage, sewage sludge, industrial waste, industrial spoil, nuclear waste of other abnormal deposits has been authorised by his Department, directly or in liaison with other Departments.

  Mr. Moynihan
  [holding answer 16 May 1988]: No dumping at sea of solid nuclear waste takes place. The Department keeps no records of the locations where any of the other wastes referred to might be dumped in the Bristol channel. Authorisations for the deposit of wastes at sea are given by the Ministry of Agriculture, Fisheries and Food under part II of the Food and Environment Protection Act 1985. I have replied separately on the discharge of liquids to the Bristol channel.

  Mr. Speller
  To ask the Secretary of State for the Environment what quantities of low level or other nuclear waste are being discharged into the Bristol channel; what is the specification of low level waste; what were the last two dates on which these discharges were monitored; and what were the results.
  492
  Mr. Moynihan
  [holding answer 16 May 1988]: Details of radioactive liquid discharges from nuclear sites are set out in the annual report of the Paris Commission. The latest (November 1987) edition of the report has been placed in the Library of the House. The limits for low-level radioactive waste discharges to the Bristol channel are specified in certificates of authorisation issued under the Radioactive Substances Act 1960. All liquid radioactive wastes are monitored prior to discharge. The results are summarised in the annual report of the Paris Commission.

  Public Sector (Private Investment)
  Dr. Cunningham
  To ask the Secretary of State for the Environment if he will publish in the Official Report (a) the Ryrie rules of 1981 and (b) his recent note to the National Economic Development Council, on the scoring of private investment in the public sector; and if he will make a statement on their applicability to capital investment involving joint ventures between local authorities and the private sector.

  Mr. Ridley
  [holding answer 17 March 1988]: My right hon. Friend the Chancellor of the Exchequer placed in the Library of the House in February copies of the paper entitled "Private Finance in Public Expenditure" which was prepared by the Treasury for the civil engineering economic development council and which includes the so-called Ryrie rules as an appendix. The principles set out in that paper relate to the use of private finance in the public sector generally, including local authorities.

SOCIAL SERVICES

  Nitrogen Dioxide Levels (Leicester)
  Mr. Vaz
  To ask the Secretary of State for Social Services what research has been carried out, or is being carried out, concerning the effects of nitrogen dioxide on the health of children at levels currently being experienced in Leicester.

  Mrs. Currie
  We are not aware of any research projects in Leicester. Health effects were extensively reviewed when the limit value for the EC air quality directive for nitrogen dioxide (85/203/EEC) was set, and when the recently published World Health Organisation guidelines were drawn up. Measurements of nitrogen dioxide commissioned by the Department of the Environment indicated that Leicester was unlikely to breach the directive limit value or exceed the WHO guideline. Adverse health effects for even particularly sensitive children or adults are most unlikely, even at the limit value or guideline levels.

  Woolwich Office
  Mr. Cartwright
  To ask the Secretary of State for Social Services what staffing level was designated for his Department's Woolwich office in the years 1986–87, 1987–88 and 1988–89; how many staff were actually in post on 1 May in each year; and what has been the alteration in work load over the same period.

  Mr. Portillo
  The information requested is as follows:

  Number

  Complement 1986–87

  237

  Complement 1987–88

  279

  493

  Number

  Complement 1988–89

  247

  Staff in post 1 May 1986

  221

  Staff in post 1 May 1987

  236·5

  Staff in post 1 May 1988

  254·5

  17 December 1985

  16 December 1986

  17 November 1987

  Supplementary benefits live load

  18,315

  19,136

  19,028

  Short-term benefits live load

  1,898

  2,267

  2,175

  Comparable figures are not available for the full range of contributory benefits. The 1987 work load figures are provisional and subject to amendment.

  Direct comparisons between the numbers of staff and the live load are misleading as work loads vary considerably by type and duration of claim and the action that has to be taken. All these factors vary over time as a result of legislative, policy and procedural changes.

  Child Benefit
  Mr. Beith
  To ask the Secretary of State for Social Services why the letter recently issued to all child benefit recipients inviting them to receive their benefits through a bank lists the advantages, but not the disadvantages, of doing so.

  Mr. Scott
  Child benefit recipients are sometimes initially concerned about when payment will start, notification of how much has been paid and what happens if the wrong amount is paid. These matters are explained at items 2, 3 and 4 on page 2 of the letter which also makes it quite clear that beneficiaries may continue to receive their benefit by order book if they prefer.

  Benefits (Homeless Claimants)
  Mr. Jim Marshall
  To ask the Secretary of State for Social Services what information he has as to the effect on the income to charitable and voluntary organisations, which assist the homeless, of benefit payments being paid in arrears rather than in advance; and if he will make a statement.

  Mr. Portillo
  The national figures on the benefit income are not held centrally and could be obtained only at disproportionate cost. However, we are considering representations from a small number of such organisations on the effects of these new arrangements.

  Mr. Jim Marshall
  To ask the Secretary of State for Social Services if he will consider making special arrangements to monitor the level of payments in respect of homeless people made directly from his Department to charitable and voluntary organisations assisting the homeless and if he will make a statement.

  Mr. Portillo
  Information on direct payments to landlords is collected centrally, but it is not possible to identify separately those made to voluntary organisations and charities.

  Mr. Jim Marshall
  To ask the Secretary of State for Social Services what level of payments were made by his Department's local office at Leicester, Norton street, in respect of homeless people to the Leicester night shelter project in April 1987 and in April 1988.
  494
  The latest case load counts, based on a 100 per cent, count of all cases in action, and the corresponding figures for previous years are as follows:

  Mr. Portillo
  For the period 30 March 1987 to 26 April 1987, £7,316·55 was paid in respect of accommodation charges for people staying in the Leicester night shelter. For the period 28 March 1988 to 26 April 1988, £5,120·70 was paid directly to the night shelter in respect of accommodation charges.

  Mr. Jim Marshall
  To ask the Secretary of State for Social Services (1) if he will consider extending the list of priority groups included within the social fund guidance to include all homeless people, with a view to enabling homeless claimants to be considered for crisis loans to pay charges for accommodation in advance of moving into such accommodation; and if he will make a statement;

  (2) if he will consider making special arrangements for the payment of benefit to homeless people and people staying in hostels and board and lodging accommodation generally to enable them to receive payment in advance, rather than in arrears as prescribed in the new regulations introduced on 11 April; and if he will make a statement.

  Mr. Portillo
  Applicants for social fund crisis loans are not categorised on the basis of priority groups. Crisis loans may be considered for rent in advance to a private landlord or to secure board and lodging accommodation in the light of the directions and guidance covered in the social fund manual. We have no plans to make payments of income support in advance to these groups.

  Mr. Jim Marshall
  To ask the Secretary of State for Social Services if he will consider extending the practice of making payments in respect of hotel and board and lodging accommodation by means of vouchers payable directly to the providers of such accommodation, rather than to claimants; and if he will make a statement.

  Mr. Portillo
  Payments to a third party, including payments made by voucher, may be made if this is in the claimant's best interest, for example where there is evidence that he is unable to manage his finances. There are no plans to extend these arrangements in respect of other claimants.

  Low-income Families
  Mr. Robin Cook
  To ask the Secretary of State for Social Services if he will now publish the low-income families table derived from the family expenditure survey for 1985.

  Mr. Portillo
  I refer the hon. Member to my reply to my hon. Friend the Member for Hornchurch (Mr. Squire) on 25 April at column 28.

  Mobility Allowance Savings Scheme
  Mr. Alfred Morris
  To ask the Secretary of State for Social Services how long the mobility allowance savings scheme set up by the mobility allowance unit has been established; how it was publicised; how many mobility allowance recipients are using the scheme; at what rate savings attract interest; and if he will make a statement.

  Mr. Scott
  The Department does not run a savings scheme for mobility allowance recipients.

  Cervical Cancer Screening
  Mr. Morley
  To ask the Secretary of State for Social Services what assessment he has made of the number of extra staff needed to implement a full cervical cancer call and recall system in every district health authority.

  Mrs. Currie
  Computerised call and recall systems for cervical screening are now operational in every district health authority in England. Much of the work of taking smear tests will be carried out by general practitioners and their staff. The number of any additional staff needed for the screening programme will vary from district to district according to local circumstances. It is a matter for individual health authorities and family practitioner committees to make their own assessment and to ensure that an adequate number of staff is allocated to the programme.

  Mr. Morley
  To ask the Secretary of State for Social Services what has been the backlog in the laboratory examination of cervical cancer smears in Scunthorpe district health authority in each year from 1980.

  Mrs Currie
  The Department has collected such information centrally only since October 1987. The latest month's return from the Scunthorpe district health authority shows an average reported processing time for cervical smear tests of eight weeks. Departmental guidance states that laboratories should aim to return results to the doctor concerned within one month. I understand the health authority plans to recruit more staff in order to meet that target. The hon. Member may wish to contact the chairman of Scunthorpe health district to ascertain whether information relating to earlier years is available locally.

  Heart and Lung Disease
  Dr. Moonie
  To ask the Secretary of State for Social Services what percentage of the total population in England and Wales suffered from(a) heart disease and (b) lung disease in the latest three years for which figures are available.

  Mrs. Currie
  Data on the total number of people suffering from various stages of heart disease and lung disease are not available.

  The nearest available statistics can be found in the most recent "Morbidity Statistics from General Practice" (Third National Study, HMSO 1986), a study of the experiences of 48 general practices, carried out between 1 July 1981 and 30 June 1982. Data relating to hospital records for England only can be found in the "Hospital Inpatient Enquiry", for which the latest data year is 1985. Copies of both these publications have been placed in the Library.

  Abortion
  Mr. Campbell-Savours
  To ask the Secretary of State for Social Services (1) pursuant to his reply of 10 May,Official Report, column 91, how many of the five abortions performed in 1986 under ground 4 in West Cumbria were carried out at or before (a) 18 weeks, (b) 20 weeks, (c) 22 weeks, (d) 24 weeks or (e) after 24 weeks;

  (2) pursuant to his reply of 10 May, Official Report, column 91, how many of the 222 abortions performed in 1986 in West Cumbria under all grounds other than ground 4 or ground 5 were carried out at or before (a) 18 weeks, (b) 20 weeks, (c) 22 weeks, (d) 24 weeks, and (e) after 24.

  Mr. Newton
  Of the 222 abortions performed in 1986 to usual residents of West Cumbria district health authority under all grounds other than ground 4, 221 were carried out at or before 18 weeks' gestation, and 1 at 19 weeks or more gestation.

  Further information on the gestation of this latter abortion, and of the five performed under ground 4 cannot be released for reasons of confidentiality.

  Nursing Aids
  Mr. David Nicholson
  To ask the Secretary of State for Social Services if he will take steps to extend to patients in private nursing homes the responsibility currently exercised by health authorities for supplying nursing aids free to patients in their own homes or in residential homes; and if he will make a statement.

  Mr. Newton
  We have no plans to extend to people in private nursing homes the discretionary arrangements under which health authorities supply nursing aids, free of charge, for people living in their own homes or in residential homes. Private nursing homes generally set their fees at a level which will cover the costs of any nursing aids they may need to provide.

  Benefits (Appeals)
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Services if he will give the average time taken to complete the appeal process against refusal of benefit for different benefits from his Department's local offices at Chorlton, Rusholme and Sale.

  Mr. Portillo
  The national administrative statistics for social security appeal tribunals, which are the source for average durations between the lodging of appeals and hearing, are not disaggregated for areas smaller than a social security region.

  In north-western region, which includes Chorlton, Rusholme and Sale, for the quarter ending 30 June 1987 (the latest available figures) the average time taken between lodgement and hearing of an appeal for all social security benefits was 20.3 weeks.

  Health District Waiting Lists
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Services what information he has about lengths of waiting lists for each appropriate health district for colposcopy and laser treatment.

  Mr. Newton
  I regret that this information is not collected centrally.

  North-Western Region (Staff)
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Services what information he has for district health authorities in the north-western region about the number of(a) secretarial staff and (b) ancillary staff as a proportion of all employees.

  Mr. Newton
  Information held centrally is shown in the table. It is not possible to identify all staff undertaking secretarial duties, therefore "secretarial staff" has been interpreted as "administrative and clerical staff".

  National Health Service staff North Western Regional Health Authority at 30 September 1986

  District Health Authorities

  Adminstrative and Clerical staff as apercentage of all staff1

  Ancillary staff as apercentage of all staff1

  Lancaster

  10·0

  17·3

  Blackpool Wyre and Fylde

  11·6

  15·4

  Preston

  11·6

  16·2

  Blackburn, Hyndburn and Ribble Valley

  11·2

  18·9

  Burnley, Pendle and Rossendale

  9·8

  18·0

  West Lancashire

  13·2

  15·4

  Chorley and South Ribble

  14·1

  12·4

  Bolton

  12·2

  15·7

  Bury

  13 5

  9·7

  North Manchester

  12·6

  19·4

  Central Manchester2

  14·9

  15·4

  South Manchester2

  14·1

  16·7

  Oldham

  14·1

  14·8

  Rochdale

  12·9

  14·3

  Salford2

  11·4

  16·6

  Stockport

  12·4

  14·1

  Tameside and Glossop

  13·0

  16·1

  Trafford

  15·3

  16·6

  Wigan

  13·1

  18·2

  Total: Region

  12·9

  15·7

  Source: DHSS Annual Censuses of NHS Medical and Non-Medical Manpower.

  1 Percentages are calculated on unrounded figures.

  2 Denotes Teaching Districts.

  Social Fund Budgets
  Mr. Tony Lloyd
  To ask the Secretary of State for Social Services if he will give details of the date on which the social fund budgets were exhausted during their first month of operation for his Department's local offices in Sale, Rusholme and Chorlton in Manchester.

  Mr. Portillo
  As I explained in my reply to the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) on 4 March at column 746, local offices do not have fixed monthly budgets but monthly profiles of expected expenditure to assist them in planning their social fund payments. I announced in my reply to the hon. Member for Derby, South (Mrs. Beckett) on 6 May at column 656 that I will provide on a monthly basis data on the operation of the social fund for each local office.

  Child Care Act 1980
  Mr. Madden
  To ask the Secretary of State for Social Services if, pursuant to the reply of 9 March,Official
  498
  Report, column 244, he will provide the information on expenditure under section 1 of the Child Care Act 1980 at constant prices.

  Mr. Newton
  The figures are given in the table.

  Net current expenditure under Section 1 of the Child Care Act 1980 at constant 1986–87 prices using the GDP deflator England

  Year

  £ million

  1982–83

  4·283

  1983–84

  4·781

  1984–85

  7·939

  1985–86

  6·775

  11986–87

  8·262

  1 Provisional.

  Hearing-impaired Children
  Mr. Alfred Morris
  To ask the Secretary of State for Social Services (1) what consideration he has given to the finding of a survey by the National Deaf Children's Society, details of which have been sent to him by the society, that many health authorities are failing. to discharge a statutory duty to newly diagnosed hearing-impaired children under the Education Act 1981; and if he will make a statement;

  (2) if, arising from the finding of a survey by the National Deaf Children's Society, details of which have been sent to him by the society, that many health authorities are failing to discharge a statutory duty to newly diagnosed hearing-impaired children under the Education Act 1981. he will now issue guidelines drawing the attention of health authorities to their duties under the Act.

  Mr. Scott
  I refer the right hon. Member to my reply to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on 13 May at columns 272–73.

  Wound Care Products
  Mr. Wood
  To ask the Secretary of State for Social Services whether he has any plans to make new wound care products available on prescription.

  Mr. Newton
  In the White Paper "Promoting Better Health" published on 26 November 1987, the Government announced that a new range of wound care products would be made available on prescription. I am pleased to say that two of these new products, Granuflex and Sorbsan dressings, will be available on prescription from 1 July 1988.

  Departmental Forms
  Mr. Fearn
  To ask the Secretary of State for Social Services (1) what was the cost of providing stationery for the administration of the social fund since April;

  (2) what has been the cost to his Department of providing new forms for (a) income support and (b) the social fund since the implementing of the Social Security Act 1986.

  Mr. Portillo
  [holding answer 16 May 1988]: The combined costs of printing forms and stationery for supplementary benefits work, income support and the social fund were £4·447 million in 1986–87, £9·169 million in 1987–88 and are estimated to be £6·3 million in 1988–89.
  499
  Information on the separate costs of forms and stationery for income support and the social fund could be made available only at disproportionate cost.

  Benefits
  Mr. Clay
  To ask the Secretary of State for Social Services if he will publish a table showing the numbers of families with children who were in receipt of family income supplement and are now receiving family credit who will(a) gain, (b) lose and (c) experience no change, after allowing for housing costs, in cash terms and structural terms.

  Mr. Portillo
  [holding answer 20 April 1988]: Family credit has been put into payment to over 190,000 families who were receiving FIS up to 11 April. All except under 100 families (who have been given transitional cash protection) gain in cash terms from the replacement of FIS (plus the value of free school meals and welfare milk) by family credit. After allowing for housing benefit changes, and on the modelled assumptions (but calculating gains or losses to the nearest penny), around two thirds are likely to be cash gainers overall and around a half to be

  Clerical Officers1 employed by each regional health authority at 30 September

  Whole-time equivalents2

  Region

  1982

  1983

  1984

  1985

  1986

  Northern

  126

  129

  123

  128

  119

  Yorkshire

  155

  154

  160

  149

  142

  Trent

  212

  332

  349

  350

  341

  East Anglian

  82

  82

  106

  93

  77

  North West Thames

  89

  81

  62

  51

  43

  North East Thames

  91

  93

  140

  125

  117

  South East Thames

  122

  108

  117

  142

  139

  South West Thames

  158

  162

  136

  142

  216

  Wessex

  106

  109

  99

  78

  75

  Oxford

  150

  224

  232

  213

  192

  South Western

  150

  148

  129

  119

  106

  West Midlands

  314

  286

  298

  284

  283

  Mersey

  122

  110

  108

  110

  136

  North Western

  229

  196

  193

  191

  184

  Source: DHSS annual census of National Health Service non-medical manpower.

  1 Staff employed on Higher Clerical Officer, Clerical Officer (full duties) and Clerical Officer (reduced duties) pay scales.

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

  National Health Service (Compensation Payments)
  Miss Widdecombe
  To ask the Secretary of State for Social Services if he will now publish the outturn figures for 1986–87 for compensation payments to National Health Service staff in respect of redundancies and early retirement in the manner described in the Government's reply to the first report from the Social Services Committee of Session 1984–85, breaking down the figures to distinguish between competitive tendering and other cases.

  Mrs. Currie
  [pursuant to her reply, 31 March 1988, c. 660]: I regret that the outturn figures supplied for "other cases" under the heading "Total cost including superannuation" were incorrect. The corrected figures are set out in the table.

  The outturn figures for 1986–87 are as follows:
  500
  hypothetical structural gainers in 1988–89. Overall cash losers may be eligible for transitional protection under the recently announced housing benefit arrangements. Details about the methods of calculation were issued last week to supplement the freepost and freeline telephone facilities already in place.

  RHAs (Clerical Officers)
  Mr. Fearn
  To ask the Secretary of State for Social Services if he will list in the Official Report the number of clerical officers employed by each regional health authority for each year since 1979 until the latest year for which figures are available, together with the estimated number of clerical officers required by each regional health authority.

  Mr. Newton
  [pursuant to his reply, 29 February 1988, c. 462]: The figures for each year since 1982 are shown in the table. For the years prior to 1982 information on staff in post by region is not available in a form consistent with the later years.

  The same functions are not undertaken in each authority.

  Number of cases

  Compensation cost £

  Total cost including superannuation £

  Competitive tendering

  New cases

  1,935

  3,999,000

  8,808,000

  Continuing cases

  1,479

  1,487,000

  2,099,000

  Other cases

  New cases

  1,767

  6,100,000

  22,501,000

  Continuing cases

  7,790

  12,098,000

  36,283,000

  Infant Mortality
  Dr. Moonie
  To ask the Secretary of State for Social Services what is the infant mortality rate in England and Wales in the latest three years for which figures are available.

  Mr. Currie
  The table shows the infant mortality rates for England and Wales for 1985 to 1987.
  501

  Infant, neonatal and postnatal mortality rates, England and Wales, 1985 to 1987

  Year

  England

  Wales

  England and Wales

  Infant mortality rates2

  1985

  9·23

  9·84

  9·36

  1986

  9·49

  9·50

  9·55

  19871

  9·09

  9·49

  9·20

  Neonatal mortality rates3

  1985

  5·32

  5·85

  5·38

  1986

  5·24

  5·59

  5·28

  19871

  5·04

  5·02

  5·06

  Postneonatal mortality rates4

  1985

  3·91

  4·00

  3·98

  1986

  4·24

  3·91

  4·27

  19871

  4·05

  4·47

  4·14

  1Provisional.

  2Infant deaths: deaths at ages under one year.

  3Neonatal deaths: deaths under 28 completed days of life.

  Number of births; rates for live births, maternal mortality, perinatal mortality, forcepts delivery and Caesarean section England and Wales 1979 to 1987, hospital data England only 1982 to 1985

  Year

  1979

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  61987

  Number of total births

  643,153

  661,007

  638,699

  629,870

  632,765

  640,461

  660,062

  664,567

  684,934

  Number of live births

  638,028

  656,234

  634,492

  625,931

  629,134

  636,818

  656,417

  661,018

  681,511

  Crude live birth rate1

  12·9

  13·2

  12·8

  12·6

  12·7

  12·8

  13·1

  13·2

  n/a

  General fertility rate2

  63·3

  64·2

  61·3

  59·9

  59·7

  59·8

  61·0

  60·6

  62·0

  Maternal mortality rate3

  0·12

  0·11

  0·09

  0·07

  0·09

  0·08

  0·07

  0·07

  n/a

  Perinatal mortality rate4

  14·7

  13·3

  11·8

  11·3

  10·4

  10·1

  9·8

  9·6

  8·9

  Forceps delivery rate5

  11·6

  11·3

  11·1

  10·3

  9·8

  9·7

  9·1

  n/a

  n/a

  Caesarean section rates5

  8·4

  9·0

  9·3

  10·1

  10·1

  10·1

  10·5

  n/a

  n/a

  1Live births per 1,000 population all ages.

  2Live births per 1,000 women aged 15–44 years.

  3Maternal deaths registered per 1,000 total live and still births.

  4Still births and infant deaths in the first week of life per 1,000 total live and still births.

  5Per 100 maternities; England only from 1982.

  6Provisional

  n/a Not available.

NATIONAL FINANCE

  Top Tax Rate
  Mr. Canavan
  To ask the Chancellor of the Exchequer what percentage of income taxpayers will benefit from reducing the top rate of tax to 40 per cent.; and what is the revenue effect of this measure.

  Mr. Norman Lamont
  About 4·5 per cent. of income tax payers will benefit from reducing the top rate of tax to 40 per cent. at a direct revenue cost of £2,070 million in a full year.

  Oil Industry
  Mr. Barry Field
  To ask the Chancellor of the Exchequer what representations he has received from the oil industry on the Budget; and whether he will list them in the Official Report.
  502
  4 Postneonatal deaths: deaths at ages 28 days and over and under one year.

  All rates are per 1,000 livebirths.

  Births
  Ms. Richardson
  To ask the Secretary of State for Social Services whether he will state for each year since 1979 in England and Wales(a) the number of births, (b) the number of live births, (c) the live birth rate, (d) the maternal mortality rate, (e) the perinatal mortality rate, (f) the forceps rate as a percentage of deliveries and (g) the caesarean rate as a percentage of deliveries.

  Mrs. Currie
  [holding answer 9 May 1988]: The available information is given in the table. The change in the method of collection of national (England and Wales) hospital data between 1985 and 1987 means that there will be no English data analysed for 1986 and 1987 on mode of delivery. Hospital statistics for Wales from 1982 are the responsibility of my right hon. Friend the Secretary of State for Wales. The data shown for 1987 are provisional.

  Mr. Lilley
  I and my right hon. Friend have received a number of representations from the oil industry.

  Taxation Statistics
  Mr. Gordon Brown
  To ask the Chancellor of the Exchequer if he will give for those tax units on higher marginal rates of tax the number of gainers earning(a) less than £40,000, (b) £40,000 to £50,000, (c) £50,000 to £70,000, (d) £70,000 to £100,000 and (e) over £100,000; and if he will give for each of these categories the total reduction in tax liability resulting from the cut in the higher rates of tax, the basic rate and the changes in personal allowances and tax bands.

  Mr. Norman Lamont
  [holding answer 21 April 1988]The information is given in the table. I regret that reliable estimates for those with income over £100,000 per year are not available as estimates are based on a projection of the 1985–86 survey of personal incomes. All estimates are provisional.
  503

  Gains made by higher-rate tax units2 in 1988–89 from changes in income tax allowances, rates and thresholds in 1988 Budget

  Total income

  Number of higher rate tax units1

  Reduction in tax liability

  Average3 reduction in tax liability

  ('000)

  (£ million)

  (£ per annum)

  Less than £40,000

  980

  670

  690

  £40,000–£50,000

  170

  290

  1,700

  £50,000–£70,000

  135

  470

  3,470

  Above £70,000

  100

  1,430

  15,210

  All higher rate taxpayers

  1,380

  2,860

  2,070

  1Married couples and single people.

  2Tax units who would have been liable to tax at the higher rates under the 1987–88 tax regime indexed to 1988–89.

  3Based on unrounded figures.

  Personal Taxation
  Mr. Gordon Brown
  To ask the Chancellor of the Exchequer if he will give for the year 1988 (i) the projected tax revenue forgone as a result of the abolition of each of the(a) 60 per cent., (b) 55 per cent., (c) 50 per cent. and (d) 45 per cent. marginal rates of tax assuming indexation of personal allowances and tax bands to inflation only, (ii) the projected reduction in income tax liability of each of the groups of taxpayers in those tax bands following the changes to taxation announced in the budget and (iii) the number of tax units that would have fallen into each category.

  Mr. Norman Lamont
  [holding answer 18 April 1988]The information is in the tables.

  Direct revenue costs in a full year of successively abolishing the higher tax rates above 40p at 1988–89 levels and tax units1benefiting compared with 1987–88 tax regime indexed to 1988–89

  Higher tax rate abolished

  Direct revenue cost £ million

  Number of tax units1'000s

  60p

  770

  180

  55p

  580

  290

  50p

  420

  540

  45p

  320

  930

  All rates above 40p

  2,090

  930

  1 Married couples and single people.

  Direct revenue costs in a full year of changes in income tax allowances, thresholds, and rates in 1988 Budget at 1988–89 income levels and tax units' benefiting compared with 1987–88 tax regime indexed to 1988–89 by taxpayers marginal rate of tax

  Marginal rate of tax under 1987–88 indexed tax regime

  Direct revenue cost £ million

  Number of tax units1'000s

  60p

  1,810

  180

  55p

  240

  110

  50p

  300

  250

  45p

  260

  390

  All rates above 40p

  2,610

  930

  1 Married couples and single people.

  Tax Liability
  Mr. Gordon Brown
  To ask the Chancellor of the Exchequer if he will estimate the tax liability in respect of the tax year 1988 of a married man aged 51 with no dependent children who is in receipt for that year of a salary from his employer of £1 million assuming he has a mortgage of £30,000, a BES investment of £40,000, an investment of £810,000 in a new enterprise zone unit trust of which 94 per cent. is attributable to building costs and where 50 per cent. of the purchase price is borrowed in 504
  circumstances where guaranteed rent receivable equals the interest outgoing, and who makes a contribution to a retirement annuity scheme amounting to £195,000.

  Mr. Norman Lamont
  [holding answer 12 April 1988]Liability to income tax in 1988–89 would be nil.

  Taxation (Harmonisation)
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer what assessment he has made of the likely increase or decrease in the consumption of alcohol and tobacco in consequence of the recommendation of the EEC Commission on tax harmonisation; and if he will make a statement.

  Mr. Lilley
  [holding answer 11 May 1988]We estimate that consumption of alcoholic beverages would increase by between about 10 and 35 per cent., depending on the beverage; whilst consumption of tobacco products would increase by between about 5 and 20 per cent. depending on the product. The scale of the duty changes envisaged by the Commission is such that these estimates are subject to wide margins of error.

  Post Office (Surplus Properties)
  Mr. Bright
  To ask the Chancellor of the Exchequer what assessment he has made of the problems which the rules on the external financing limits for nationalised industries cause for the Post Office in disposing of surplus properties; and if he will make a statement.

  Mr. Butcher
  I have been asked to reply.

  The Post Office's plans for disposing of assets as well as its requirements for additional capital are taken into account in the setting of external financing limits.

FOREIGN AND COMMONWEALTH AFFAIRS

  Non-oil Developing Countries
  Mr. Tom Clarke
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish a table in the Official Report showing for each of the years from 1973 to 1987, as a total for all non-oil producing developing countries, the current account balance excluding interest payments on external debts and official transfers, and the interest payments on external debt.

  Mrs. Chalker
  The information requested is as follows:
  505

  $billion

  Current account deficit1

  Interest payments

  1973

  5·2

  6·7

  1974

  27·7

  9·4

  1975

  33·8

  11·5

  1976

  21·2

  13·4

  1977

  15·4

  15·6

  1978

  20·9

  21·0

  1979

  29·4

  32·2

  1980

  36·4

  49·5

  1981

  43·6

  68·3

  1982

  12·1

  78·4

  1983

  -15·4

  71·2

  1984

  -38·5

  78·5

  1985

  -31·9

  77·1

  1986

  -43·8

  74·6

  1987

  -62·1

  73·9

  1 Excluding interest payments and official transfers.

  Source: International Monetary Fund 'World Economic Outlook, April 1988' (tables A39 and A43) and IMF staff.

  GCHQ Staff
  Mr. Harry Barnes
  To ask the Secretary of State for Foreign and Commonwealth Affairs for what period after retirement security clearance is automatically required for former Government Communications Headquarters employees who wish to travel to Communist countries.

  Mr. Mellor
  The normal period is three years.

  Prisoners of War (Compensation)
  Mr. Tredinnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Japanese Government seeking compensation for those surviving former British military personnel who were held prisoner by the Japanese during world war 2; and if he will make a statement.

  Mr. Eggar
  No. Under the terms of the 1951 treaty of peace with Japan certain sums were made available to the United Kingdom. Article 14 provided for payment of"reparations to the Allied Powers"
  and article 16 for indemnification of
  "those members of the armed forces of the Allied Powers who suffered undue hardships while prisoners of war of Japan."

  Article 14(b) of the peace treaty waived all reparations claims of the allied powers and their nationals except as otherwise provided in the treaty.

  Rainbow Warrior
  Dr. Thomas
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) if he will direct Her Majesty's ambassador to the United Nations to place on record United Kingdom disapproval of the French Government's release of Dominique Prieur and Alan Maffart from Hao;

  (2) if he will make representations to his French counterpart, following the release of Dominique Prieur and Alan Maffart from Hao.

  Mr. Eggar
  No. This is a matter for France and New Zealand to resolve.

  Entry Clearance Refusals
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will give details 506
  of the length of time it currently takes to provide an explanation of the decision to refuse entry clearance at each port within the Indian sub-continent.

  Mr. Eggar
  An applicant refused entry clearance in the Indian sub-continent and elsewhere is given a written "Notice of Refusal" which explains the reasons for refusal, as soon as a decision on the application has been taken.

  Anglo-Indian Relations
  Mr. Dicks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Indian Government regarding the implications for Anglo-Indian relations of the attacks and intimidation currently being suffered by the Sikh community in some areas of India; and if he will make a statement.

  Mr. Eggar
  We sympathise with the efforts of the Indian Government to protect innocent people from the attacks and intimidation by Sikh terrorists which so far this year have resulted in over 900 deaths among the Sikh and other communities in Punjab. We co-operate closely with the Indian Government in combating the activities of Sikh extremists.

  Punjab
  Mr. Dicks
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will arrange for one of his Department's officials to visit the Punjab to view and report back to him on conditions there and on the safety of those persons with relatives and friends in the United Kingdom; what representations he has received with regard to the interests of the constituents of the hon. Member for Hayes and Harlington in this context; and if he will make a statement.

  Mr. Eggar
  We receive full and regular reports from Her Majesty's high commissioner in New Delhi and his staff. They are regular visitors to the Punjab. The high commissioner last visited Punjab on 26 and 27 April and discussed the situation there with the Governor of Punjab and other prominent figures.

  My hon. Friend has made frequent representations with regard to the interest of his constituents in this context.

  Sikhs
  Mr. Dicks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Indian Government about the safety of those Sikhs who are, or who have relatives who are, British passport holders; and if he will make a statement.

  Mr. Eggar
  None. We look to Governments worldwide to ensure the safety of all United Kingdom nationals whatever their ethnic origin.

  Racial Discrimination
  Mr. Dicks
  To ask the Secretary of State for Foreign and Commonwealth Affairs what criteria he uses in deciding whether, and in what form, to make representations to foreign Governments about racial discrimination suffered by their citizens; if he will specify
  507
  how these criteria have been applied in the recent conduct of the United Kingdom's relations with (a) South Africa and (b) India; and if he will make a statement.

  Mr. Eggar
  The criteria used are fully consistent with our own policy, practice and international legal obligations, and distinguish appropriately between countries whose Governments practise policies of racial discrimination and those like India where it is illegal.

NORTHERN IRELAND

  Climbing Frames (Safety)
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland if he will make available grant aid to district councils in Northern Ireland towards the cost of replacing concrete, flagstones or other hard surfaces under climbing frames in public parks as a means of reducing injury to infants and young children when they fall.

  Dr. Mawhinney
  No. Subject to available resources, the Department of Education may offer grant-aid to district councils on the capital cost of providing public recreational facilities. Grants are not, however, payable towards the cost of ongoing maintenance or adaptations.

EMPLOYMENT

  Restart
  Mr. Malcolm Bruce
  To ask the Secretary of State for Employment whether he has any plans to extend the communication service for the deaf to restart interviews and job clubs.

  June 1986 to March 1988

  London and South East

  South West

  West Midlands

  East Midlands and Eastern

  Yorks and Humberside

  North West

  Northern

  Wales

  Scotland

  Interviews

  770,169

  192,979

  416,444

  311,733

  369,443

  569,772

  268,132

  205,654

  428,787

  Referrals:

  OP

  35,244

  12,292

  37,769

  19,617

  35,210

  48,310

  32,969

  19,052

  44,151

  Jobclub

  69,481

  16,016

  31,504

  24,056

  24,752

  51,243

  22,803

  19,918

  42,047

  EAS

  43,657

  11,894

  14,895

  10,717

  11,354

  21,245

  4,916

  7,042

  11,808

  Training (Including New JTS)

  115,295

  26,743

  74,813

  43,641

  64,945

  86,735

  35,954

  24,769

  53,271

  Restart Course

  47,791

  18,218

  30,095

  25,658

  21,958

  44,161

  28,717

  23,024

  36,605

  VPP and Voluntary Work

  14,696

  7,312

  8,613

  7,712

  8,445

  14,299

  4,478

  5,513

  6,422

  Jobs

  61,056

  12,013

  35,763

  23,076

  26,694

  51,016

  22,235

  27.245

  47,165

  Communication Service for the Deaf
  Mr. Malcolm Bruce
  To ask the Secretary of State for Employment whether he has any plans to extend the communication service for the deaf to cover disablement resettlement officer interviews.

  Mr. Lee
  There are no plans at present to extend the communication service for the deaf to cover disablement resettlement officer interviews but clients with hearing difficulties can usually be helped by other methods.
  508
  Mr. Lee
  There is currently no general provision for communicators to be made available in job clubs, though job clubs have in practice been able to arrange for help to be given with communication in particular cases. The employment service is currently reviewing the needs for special help of job club clients with disabilities.

  There are no current plans to extend the communication service for the deaf to restart interviews, but clients with hearing difficulties can usually be helped by other methods.

  Mr. McLeish
  To ask the Secretary of State for Employment if he will provide statistics concerning the destination of the long-term unemployed under the restart programme for the period June 1986 to the most recent complete month for which figures are available, for each standard region and for the number of people(a) interviewed, (b) placed on the community programme, (c) placed in job clubs, (d) placed on enterprise allowance, (e) placed on training schemes, (f) placed on restart courses, (g) on voluntary projects programmes and (h) in jobs.

  Mr. Lee
  [holding answer 17 May 1988]The number of people interviewed under the restart programme in each employment service region and the numbers referred to the various menu items, are shown in the table. We do not know how many of those interviewed ultimately end up in a job or other opportunity as a result of the restart interview.

DEFENCE

  Faslane Submarine Base
  Mr. Cohen
  To ask the Secretary of State for Defence what are the latest estimates for increases in(a) cost and (b) time for construction of the Faslane submarine base due to geological faults; and if he will make a statement.

  Mr. Freeman
  I refer the hon. Member to my Adjournment debate with the hon. Member for Dumbarton (Mr. McFall) on 10 May 1988, columns 292–300.

  Trigat Anti-tank Missile
  Mr. Cohen
  To ask the Secretary of State for Defence what is the proposed contribution of the United Kingdom to the Trigat anti-tank missile system; and if he will make a statement.

  Mr. Sainsbury
  The development cost to the United Kingdom of the Trigat anti-tank missile system programmes will be in the order of £300 million at current economic conditions. Subsequent production costs will depend on quantities procured and decisions on this have yet to be taken.

  Newquay (Incident)
  Mr. Cohen
  To ask the Secretary of State for Defence if he will establish an inquiry into incidents involving British and American service men in Newquay on 7 May 1988; and if he will make a statement.

  Mr. Freeman
  The incident referred to concerned a disturbance in a public house. I understand that no charges are being brought by the local police but the commanding officers of each of the units involved will carry out their own investigation into what took place and taking such disciplinary action as may be necessary.

  Vanguard Submarines
  Mr. Cohen
  To ask the Secretary of State for Defence on what dates he expects to place orders for Vanguard submarines SSBN07 and SSBN08.

  Mr. Sainsbury
  An invitation to tender for the construction of SSBN07 was issued to VSEL on 15 March, and an order is expected to be placed within the next year. The order for SSBNO8 will follow at a later date.

  Military Lands Act 1892
  Mr. Cohen
  To ask the Secretary of State for Defence if he will list in chronological order the byelaws made under the Military Lands Act 1892 since May 1979.

  Mr. Freeman
  Since May 1979 the following byelaws (and amendments to byelaws) have been made under the Military Lands Act 1892:

  Byelaw

  Year made

  The Merrivale Range Byelaws

  1979

  Okehampton Range Byelaws

  1980

  Otmoor Range Byelaws

  1980

  The Otterburn Training Area (Amendment) Byelaws

  1980

  Willsworthy Range Byelaws

  1980

  HM Naval Base Portsmouth Byelaws

  1981

  The Proof and Experimental Establishment Pendine (Amendment) Byelaw

  1981

  Salisbury Plain Military Lands Byelaws

  1981

  The Warcop Principal Training Area Byelaws

  1981

  Longmoor Ranges and Demolition Training Area Byelaws

  1982

  The Tregantle Range Byelaws

  1982

  The Proof and Experimental Establishment, Eskmeals Byelaws

  1982

  Ash Ranges Byelaws

  1983

  Purfleet Range Byelaws

  1983

  Kibworth Range Byelaws

  1983

  The British Underwater Test and Evaluation Centre Byelaws

  1984

  The Bellerby Moor and Wathgill Range Byelaws

  1984

  RAF Molesworth Byelaws

  1985

  510

  Byelaw

  Year made

  RAF Alconbury Byelaws

  1985

  The Upper Hulme Range Byelaws

  1985

  RAF Greenham Common Byelaws

  1985

  Royal Air Force St. Magwan Byelaws

  1986

  Atomic Weapons Research Establishment Aldermaston Byelaws

  1986

  Royal Air Force Waddington Byelaws

  1986

  Royal Air Force Caerwent Byelaws

  1986

  Royal Air Force Upper Heyford Byelaws

  1986

  HMS Forest Moor and Menwith Hill Station Byelaws

  1986

  Royal Air Force Mildenhall Byelaws

  1986

  Royal Air Force Lakenheath Byelaws

  1986

  Royal Air Force Burtonwood Byelaws

  1986

  The Aeroplane and Armament Experimental Establishment Boscombe Down Byelaws

  1986

  Royal Air Force Brawdy Byelaws

  1986

  Royal Ordnance Factory Cardiff Byelaws

  1986

  The Royal Ordnance Factory Burghfield Byelaws

  1986

  Faslane, Coulport and Rhu Narrows Byelaws

  1986

  The Dockyard Port of Rosyth Byelaws

  1986

  The Castlemartin RAC Range Byelaws

  1986

  The Holy Loch Byelaws

  1986

  Royal Air Force Fylingdales Byelaws

  1987

  Glen Fruin Road Byelaws

  1987

  Trident
  Mr. Cohen
  To ask the Secretary of State for Defence what is his latest estimate for the cost of the Trident programme; whether the costs for development of the warhead for the Trident missile are included in that figure; and if he will make a statement.

  Mr. Sainsbury
  The estimate for Trident remains as announced by my right hon. Friend the Secretary of State on 21 January at column 775. Development costs for the warhead are included in this overall total. It has been the policy of successive Governments not to release more detailed information on such costs for reasons of security.

  Greenham Common
  Mr. Cohen
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Newbury (Mr. McNair-Wilson), 29 April,Official Report, columns 310–11 (a) what are his plans for the future use of RAF Greenham Common, (b) what further construction on the base is planned with the exception of those buildings required to comply with the INF treaty and related agreements and (c) whether his Department proposes to remove the legal obstacle referred to in his answer by legislation; and if he will make a statement.

  Mr. Freeman
  RAF Greenham Common has been designated as a NATO standby operating base for many years and we envisage that this role will continue after the cruise missiles are withdrawn in three years' time. No decisions have yet been taken on any additional roles for the base thereafter. At present the main proposals for further construction, apart from buildings required for INF inspection purposes, are plans to build a communications mast and to replace outdated accommodation for single airmen. However the Ministry of Defence must retain flexibility over the use of this important base consistent with the normal planning procedures appropriate to Crown land. The decision announced on 29 April to negotiate fair compensation for
  511
  the legal extinguishment of the rights of common under the provisions of the Defence Act 1954 should ensure this flexibility without recourse to legislation.

  Priddy's Hard Armaments Depot
  Mr. Cohen
  To ask the Secretary of State for Defence what proposals his Department has received for the future use of land at the Priddy's Hard armaments depot, Gosport once it has been vacated by his Department; and if he will make a statement.

  Mr. Freeman
  The RNAD Priddy's Hard site will cease to be required for defence purposes early next year. It will then be disposed of against the background of a development brief which is being prepared by the local planning authority, Gosport borough council, with which we are in close consultation. This brief will establish the precise planning requirements for the future use/development of the site.

  Copehill Down (Training Village)
  Mr. Cohen
  To ask the Secretary of State for Defence what is the latest estimate of costs for construction of the training village at Copehill Down in Wiltshire; if he will list the contracts that have been(a) agreed and (b) tendered for construction associated with this site; at what stage construction is at present; and if he will make a statement.

  Mr. Freeman
  The latest estimate of the cost of the training village project at Copehill Down on Salisbury plain is £8.169 million. The main contractor for this work is ARC Construction Ltd. Other tenders for the contract were received from:

  Balfour Beatty Ltd.

  Cementation Construction Ltd.

  M. J. Gleason Group Ltd.

  Haymills (Contractors) Ltd.

  Higgs and Hill Building Ltd.

  The Miller Group Ltd.

  A. Monk and Co. plc.

  Edmund Nuttall Ltd.

  The major sub-contractors are as follows:

  Rapid Structures.

  N. G. Bailey and Co. Ltd.

  Blakedown Landscapes Ltd.

  Oxford Asphalt Ltd.

  Blackfords Services.

  The construction work is about 12 per cent. complete and on present plans it is anticipated the project will finish on schedule late in 1989.

  United States Special Operations Forces
  Mr. Cohen
  To ask the Secretary of State for Defence if he will list the United States special operations forces units based in the United Kingdom; and which of these are assigned to the North Atlantic Treaty Organisation or in support of other units assigned to the North Atlantic Treaty Organisation.

  Mr. Ian Stewart
  In addition to the United States air force's 21st special operations squadron at RAF Woodbridge, whose role I set out in my reply to the hon. Member on 29 April at column 307, elements of the United States navy's special warfare unit based at RAF Machrihanish would also undertake certain duties in support of NATO in time of war.

  USAF Space Command
  Mr. Cohen
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Leyton on 26 April,Official Report, column 152–53, to which unit of the United States air force space command the proposed deep space tracking station will be assigned; if any United Kingdom governmental agency or armed forces unit will have access to information gathered at this site; and if he will make a statement.

  Mr. Freeman
  The proposed deep space tracking centre at RAF Feltwell will be under the operational control of the United States air force space command wing at Falcon air force station, Colorado. Data from the station will be made available to Her Majesty's Government.

  Tornado
  Mr. Dykes
  To ask the Secretary of State for Defence if he will give a progress report on the sale of Tornado aircraft and equipment by his Department to the kingdom of Saudi Arabia.

  Mr. Sainsbury
  Good progress continues to be made with the sale of Tornado and other aircraft to Saudi Arabia. Delivery of the first 20 Tornado IDS aircraft, together with associated weapons, equipment and spares, has now been completed, and the majority of PC-9s and Hawks have also been delivered. Development of the associated support facilities in Saudi Arabia is proceeding satisfactorily, as is the training programme for Saudi personnel.

  Nuclear Weapons
  Mr. Morgan
  To ask the Secretary of State for Defence what discussions he has had with his North Atlantic Treaty Organisation counterparts about battlefield and short-range nuclear weapons.

  Mr. Ian Stewart
  I refer the hon. Member to the reply I gave to the hon. Member for Edinburgh, East (Mr. Strang) on 23 February at column 165.

  Rosyth Dockyard
  Mr. Gordon Brown
  To ask the Secretary of State for Defence what alternative sites have been investigated for the storage of intermediate nuclear waste arising from nuclear submarine refits at Rosyth dockyard.

  Mr. Sainsbury
  The Nuclear Industry Radioactive Waste Executive is investigating suitable sites for deep disposal of low level and intermediate level radioactive waste. Until a Nirex site is developed and operational the Ministry of Defence must make its own arrangements to store its intermediate level waste. In common with the civil nuclear industry, our practice is to locate the temporary stores in the areas in which the waste originates. Six such sites within the area of the Rosyth naval base and dockyard were investigated.

  RAF Leuchars
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what sums have been spent on the provision of ground facilities for search and rescue operations at RAF Leuchars in the last 10 years for which information
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  is available; what amounts have been provided from sources other than the Treasury; and what were those sources.

  Mr. Freeman
  I refer the hon. and learned Member to my reply on 13 May 1988 to the hon. Member for Angus, East (Mr. Welsh) at column 262.

  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what sums have been spent on the provision of ground facilities at RAF Leuchars in the last 10 years for which information is available; what amounts have been provided from sources other than the Treasury; and what were those sources.

  Mr. Freeman
  Over the past nine years RAF Leuchars has undergone a major redevelopment programme to equip the station for its role as a Tornado F3 base. To date some £60 million has been expended on works services, of which approximately £28 million is expected to be contributed by other members of NATO through the NATO infrastructure fund.

  Helicopters (Cookstown)
  Mr. Hume
  To ask the Secretary of State for Defence (1) if he will make a statement regarding the damage to local houses due to helicopters taking off and landing at the Ulster Defence Regiment base at Chapel street, Cookstown, detailing the number of householders who have made claims in respect of such damage, the total number of such claims, the date of each claim and the compensation paid in each case.

  (2) if he will make a statement regarding the use of the helicopter pad at the Ulster Defence Regiment base at Chapel street, Cookstown, indicating what level of use is regarded as acceptable and reasonable for those living close to the pad; and whether consideration has been given to the acquisition or use of an alternative site.

  Mr. Ian Stewart
  I am looking into the matters raised by the hon. Member and will write to him as soon as I am in a position to do so.

  Nuclear Submarines
  Mr. Barry Field
  To ask the Secretary of State for Defence to what extent United Kingdom nuclear submarines can avoid detection through magnetic anomaly; and if he will make a statement.

  Mr. Ian Stewart
  The Royal Navy is aware of the risk of detection of nuclear submarines by magnetic anomaly and takes appropriate countermeasures.

  Porton Down
  Mr. Key
  To ask the Secretary of State for Defence when the destructor unit at the chemical defence establishment Porton Down began operation; and for what purpose.

  Mr. Ian Stewart
  The destructor unit at the chemical defence establishment Porton Down commenced operation in 1986. Its main purpose is to undertake the safe destruction of toxic wastes and laboratory solvents arising from the CDE research programme. In addition, old chemical agent, dating back to the two world wars, is discovered from time to time around the country. The United Kingdom abandoned its offensive CW capability in the 1950s and these materials are of no military significance but remain potentially dangerous. They are therefore removed to CDE for safe destruction.

  Royal Dockyards
  Mr. Matthew Taylor
  To ask the Secretary of State for Defence what consultations he has had with the work force of the royal dockyards concerning commercial management.

  Mr. Sainsbury
  Throughout the planning for commercial management of the royal dockyards my Department offered the trades unions extensive consultations, which they declined, except for a brief period between November 1986 and February 1987. 1n addition, the Department issued numerous consultative documents to both the unions and members of the work forces.

  Since vesting day, 6 April 1987, the responsibility for consultation has rested with the dockyard contractors.

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

NHS Estate Management
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
When they will be ready to comment on the report by the National Audit Office on estate management in the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Skelmersdale): My Lords, the Public Accounts Committee examined the chairman of the National Health Service management board on the findings of the National Audit Office report on 9th May. The Government will follow the usual practice of responding to the Public Accounts Committee's report within weeks of its publication.
Lord Campbell of Croy: My Lords, I thank my noble friend for his reply. Since a sample has shown that as much as 40 per cent. of land owned by health authorities may be surplus to requirements is there anything the Government can do, bearing in mind the cost of maintenance of that land and the alternative use to which the value of the assets could be put to benefit the care and treatment of patients?
Lord Skelmersdale: My Lords, yes, absolutely. The figure of 40 per cent. mentioned in the report is an estimate derived from a small sample of eight health authorities. Over the National Health Service estate as a whole the Government estimate that almost 13 per cent. of property is available for disposal in the immediate future and a further 12 per cent. should be available over the next 10 years. All proceeds from the sale of surplus property are retained within the health service for reinvestment within that service.
Lord Ennals: My Lords, does not that reply conceal what I consider to be two scandalous facts in the report of the Comptroller and Auditor General? First, the DHSS has not even monitored the claim made five years ago that there is now a maintenance backlog of £2 billion in NHS properties. Secondly, health authorities have failed to achieve annual savings of between £300 million and £500 million. That money could have been saved by the effective disposal of surplus property. It could have gone into patient care or contributed towards the maintenance bill.
Lord Skelmersdale: My Lords, for someone who is leading a campaign not to close a hospital, that is an extraordinary question, if I may say so. I point out that the backlog of maintenance has been reduced by £500 million in the past five years. About 68 per cent. of the estate is in a condition described as category A or B; namely, as good as new, or adequate with only minor deterioration. If the trend continues, 70 per
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cent. of the estate should reach this condition during the year 1987–88.
Lord Ennals: My Lords, why then did the report not give those figures? Why was it stated that the DHSS had not even monitored the figures claimed five years ago? Was that information available?
Lord Skelmersdale: My Lords, as I said, much of the report was based on a very small sample. When the Government respond to the report in full in connection with their response to the Public Accounts Committee, the noble Lord and the House will receive a full answer.
Lord Kilmarnock: My Lords, the noble Lord said that the proceeds of such sales are retained inside the health service. Can he clarify that a little further? Are the proceeds retained purely on capital account or are they used for additional revenue expenditure? Perhaps the Minister can amplify.
Lord Skelmersdale: My Lords, the normal form is for capital receipts to go into the capital budget for capital improvements.
Lord John-Mackie: My Lords, can the Minister say where this land is available? Is it around hospitals?
Lord Skelmersdale: My Lords, one example might be a large mental illness hospital with a large amount of land surrounding it. It could be nurse accommodation in a very bad state which it was advantageous to sell and build elsewhere rather than put into a satisfactory condition. It could be an administrative headquarters or anything comprised in the word "estate".
Lord Harmar-Nicholls: My Lords, in view of the very clear innuendo behind the question put by the noble Lord on the Front Bench opposite, is there any evidence at all that the National Audit Office enquirers asked questions to which answers were refused?
Lord Skelmersdale: No, my Lords, absolutely not. As I said in my original Answer, the Public Accounts Committee which has the right and duty to call officials of my department examined the chairman of the National Health Service management board. I have had no suggestions that he did not fully answer its questions.
Lord Ennals: My Lords, bearing in mind the question put and the answer just given, perhaps the Minister would take note of page 4 of the report. At paragraph 11 there is a quite clear statement.
Lord Skelmersdale: My Lords, I believe that my answers have been equally clear this afternoon.
Earl Alexander of Tunis: My Lords, I declare an interest as a director of a hospital management company. Is my noble friend aware that negotiations are in progress to enable health authorities to make the best use of available land for medical purposes?
Lord Skelmersdale: Yes, my Lords. I am grateful to my noble friend for bringing out that point. Health

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authorities now have a full guidance package to enable them to proceed with a systematic rationalisation of their estates. And they are doing just that.
Lord Cledwyn of Penrhos: My Lords, is it not the case that paragraph 11 of the National Audit Office report makes it clear that the noble Lord's department has not monitored the level of expenditure required to clear backlog maintenance and does not know whether the position has improved or deteriorated since it was assessed at £2 billion in 1982? The noble Lord must reconcile what he has said with what is said in the report. What has he to say about that?
Lord Skehnersdale: My Lords, what I can say is that earlier this year a minimum data set on the estate was agreed and issued to the National Health Service as part of the KŐrner initiative on health service information. I do not accept that we are doing absolutely nothing in this area.

Airport Security: Kuwaiti Hijacking
2.44 p.m.
Lord Gridley Lord Gridley asked Her Majesty's Government:
Whether an investigation has been completed to ascertain how and where terrorists were able to board the Kuwaiti Airways jet hijacked on 6th April 1988, and whether they consider that adequate international co-operation is forthcoming.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, the Airports' Authority of Thailand officially announced on 28th April that its investigation had shown that weapons used to hijack the aircraft were not taken aboard the plane at Bangkok Airport. We are pressing in ICAO, Summit Seven and the EC for a team of international experts to be set up under ICAO auspices to investigate future hijackings. We always seek to improve international co-operation against terrorism. The five-point plan which my right honourable and learned friend the Foreign Secretary put forward on 25th April contains concrete proposals to that end.
Lord Gridley: My Lords, I thank my noble friend for that Answer. With reference to the recent hijack, will he accept that there is considerable anxiety among business people who have many miles to travel by air on duty and among others who travel? They wonder whether they might land up in a difficult situation. I accept what my noble friend says and I am grateful for the information he has given to the House.
Lord Glenarthur: My Lords, I am grateful to my noble friend. I appreciate that there is anxiety but I hope that he will realise that we are doing what we can. With our EC colleagues and in ICAO we have put forward the five-point plan to which I referred of
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proposals to strengthen international obligations and procedures in relation to hijacks. I hope that it meets with success.
Baroness Burton of Coventry: My Lords, arising from the Minister's reply, do the Government feel able to push a little further with ICAO in suggesting that a report on security at all airports throughout the world could usefully be published for the benefit of travellers and airlines alike? Does he feel that the Government could put this forward at the next meeting of ICAO?
Lord Glenarthur: My Lords, the noble Baroness will be aware that two of the proposals in my right honourable and learned friend's five-point plan are aimed at strengthening airport security. The difficulty is that it is essential to secure international agreement if any of the provisions are to work. We are striving for that at the moment, but that is precisely why our efforts must lie in ICAO. I cannot say whether it will be possible to put this forward at the next meeting but certainly those two factors go a long way towards meeting the noble Baroness's point.
Lord Mellish: My Lords, the Minister will be aware that the terrorist incident in Kuwait shocked the whole civilised world. Is he aware that one of the most shocking parts of the story is that the terrorists involved seem to have got away scot-free? What has been done to find out who they were, and what will happen to them?
Lord Glenarthur: My Lords, we understand the motivation of those who wished to save the lives of the people on the aircraft, and we were relieved that the remaining hostages were freed unhurt. However, we regret that the terrorists seem to have been allowed to go free.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that we support the Government's stand on this matter generally and also the five-point plan to which he referred? Can he say what response the Government have received from our EC partners to the five-point plan? Can he further say where there is any chance or hope that Algeria will sign the 1975 Hague Convention and whether France will support Her Majesty's Government in the five-point plan and in persuading Algeria to do that?
Lord Glenarthur: My Lords, we shall have to hope that the last point of the noble Lord's supplementary question is achieved. On the outcome with our European Community colleagues, Foreign Ministers of the Twelve agreed on 25th April that counterterrorism experts should meet soon to examine the hijacking and its aftermath. Our proposals were discussed by an ICAO sub-committee on 29th April and 11th May. The United Kingdom representative was asked to provide a paper for further substantive discussion in early June, and we shall follow closely discussions in ICAO and are pressing EC and Summit Seven partners to support our proposals.
The Earl of Selkirk: My Lords, have the Thai Government offered any explanation of how weapons got on to the aeroplane before it reached

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Iran? Surely the staff on the aeroplane must have had some information about where they came from.
Lord Glenarthur: My Lords, the Airports' Authority of Thailand carried out an investigation which showed that the weapons used to hijack the aircraft were not taken on board the plane at Bangkok Airport. I am afraid that I can go no further than that.
Lord Wigoder: My Lords, if the weapons were not taken on board in Bangkok, will the Minister remind us of the other possibilities?
Lord Glenarthur: My Lords, I should imagine that they are legion. However, I can only report the result of the Thai authority's investigation.
Lord Mackie of Benshie: My Lords, I gather that the Minister is in some doubt as to the outcome of the investigation in Thailand. What kind of international authority can we have to ensure that international airports throughout the world, which are under the control of their own governments, are in fact secure?
Lord Glenarthur: My Lords, I think that my right honourable and learned friend's five-point plan goes a long way to addressing that particular matter. However there are already a number of relevant international conventions to deal with international co-operation on aircraft terrorism; such as, the 1963 Tokyo Convention, which required states to take all appropriate measures to restore unlawfully seized aircraft which land within their territory to lawful control. There was also the 1970 Hague Convention and the 1971 Montreal Convention which are also concerned with ensuring that offenders are brought to justice. The International Civil Aviation Organisation also produced guidance on responses to hijacking.
Lord Mackie of Benshie: My Lords, the Minister is reading from his brief but the fact of the matter is that, somewhere along the line between Bangkok and Kuwait, all those conventions did not work. Is that not the case?
Lord Glenarthur: My Lords, the noble Lord is quite right. It is all very well having such conventions but of course it is most important that they should function properly. That is precisely why my right honourable friend put forward a five-point action plan which covered many of the matters which concerned all of us and which we hope will lead to preventing the repetition of such a terrible incident.
Lord Campbell of Alloway: My Lords, does the Minister agree that although security measures on boarding an aircraft lie at the heart of the matter even if they are agreed internationally they are not really enough unless there is some further dimension, or further convention, to allow for some form of entirely new international verification that they will be carried out?
Lord Glenarthur: My Lords, that is what the procedures are designed to achieve. There are a number of different possibilities which we encourage
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all those with whom we have dealings—whether within Europe or elsewhere—to improve, build upon and to think further about. I can assure my noble friend that we do not cease to press where we can in that regard.
Lord Brougham and Vaux: My Lords, can the Minister say whether there is any truth in the rumour that the weapons might have been put into the plane with the food?
Lord Glenarthur: My Lords, I can go no further than to say that the investigation in Thailand showed that the weapons used to hijack the aircraft were not taken on board in Bangkok.

Salmon: Protection of Stocks
2.55 p.m.
Viscount Thurso Viscount Thurso asked Her Majesty's Government:
Whether in view of the high level of drift net catches being landed by the Donegal fishery they are concerned that Scottish salmon are being illegally intercepted on the high seas and whether it is intended to order the fishery protection squadron to take any action to protect Scottish salmon stocks.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, any illegal activity affecting Scottish salmon stocks, wherever it be carried out, is a matter of concern to the Government. As in previous years, fishery protection vessels will be deployed within the Scottish sector of the UK fishery limits with a view to maintaining the effort towards enforcing fisheries legislation at sea with particular problems targeted for special attention. Additionally, aerial surveillance will be undertaken by fixed-wing aircraft and helicopters in order to curb the activities of those who fish illegally.
Viscount Thurso: My Lords, I thank the Minister for his Answer. However, is he aware that illegal fishing is supposed to be taking place as far as 200 miles out on the high seas? Does he agree that the tonnages of salmon being landed in Donegal are probably twice those reported and could account for the whole of the missing Scottish salmon catch?
Lord Sanderson of Bowden: My Lords, that is a fairly wide question. I agree with the noble Viscount that it is each nation's responsibility to protect the fishery within the 200-mile economic zone of that nation—in this case, Ireland. Under international agreements an Irish vessel could be pursued from within our waters if it is caught within our 200-mile economic zone. However, we have no record of that "hot pursuit" process having occurred so far.
As regards catches, I understand that the nominal figure for 1986 was approximately 1,730 tonnes—that is, the Irish figure of landed and reported catch—as opposed to the Scottish figure of 1,270 tonnes.
Lord Campbell of Croy: My Lords, is my noble friend aware that at least two responsible bodies

323
within the Republic of Ireland have drawn attention to damage being caused to stocks of salmon in rivers belonging to other countries? Will the Government raise the matter with the Irish Government?
Lord Sanderson of Bowden: My Lords, I understand the Irish Government commissioned a report, published in November 1987, which dealt with their own salmon fishery problems and the illegal fishing of salmon and its possible impact on stocks and angling opportunities. The report of the Irish Salmon Review Group, issued last year, referred to illegal fishing and made recommendations for additional central measures. However, none of those measures has yet been accepted by the Irish Government with the exception of the weekly close time which they intend to change.
Lady Saltoun of Abernethy: My Lords, do the Irish have a fishery protection squadron and, if so, where does it patrol? In any event, who is responsible for policing the high seas outside the in-shore fishing limits?
Lord Sanderson of Bowden: My Lords, I am sorry if I did not make myself clear. The responsibility lies with the fishery protection service of the nation state concerned up to the 200-mile economic zone. That, of course, includes its own 12 mile in-shore limit. As regards the size of the Irish fishery protection service, yes, it is smaller than our own. However, there are good relationships between our own fishery protection service and the Irish service.
Lord Morris: My Lords, can my noble friend tell me what criteria determine the nationality of a salmon?
Lord Sanderson of Bowden: My Lords, no; I cannot.
Lord Mason of Barnsley: My Lords, is the Minister not aware that the Atlantic Salmon Trust and the Salmon and Trout Association have constantly expressed concern about illegal drift-netting off Ireland and in the Atlantic? Surely much more must be done by Her Majesty's Government if they are going to treat salmon conservation seriously. Secondly, the noble Lord ought to consider banning the nylon monofilament gill net. Thirdly, in view of the large expansion of the grey seal population in Scottish waters—90,000 grey seals are devouring thousands of Atlantic salmon every year—there ought to be a grey seal cull as well. If the Minister took those three positive steps we would be more interested in his positive intent to conserve the salmon.
Lord Sanderson of Bowden: My Lords, I am aware of all three points raised by the noble Lord. However, a seal cull is well wide of this particular Question; no doubt the noble Lord can table a Question for me to answer on the subject. Coming from north of the Border, I agree, of course, over the monofilament net situation.
Lord Kimball: My Lords, without in any way wishing to downcry the damage that is done by the
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Donegal fishery, will my noble friend bear in mind that 1985 was a dry summer. The toll of salmon taken in nets around the coasts of Great Britain, and also Ireland, was very large indeed. It accounted for the fact that in the autumn of 1985 there were only one-third of the fish there should have been on the spawning grounds—to reproduce themselves. Surely that must be a factor causing the bad spring fishing now.
Lord Sanderson of Bowden: My Lords, I am grateful to my noble friend for that information. We are particularly concerned about the returning grilse to Scottish waters. In fact that is a matter which causes us some concern in the whole question of the amount of salmon being taken, as has been indicated by the noble Viscount, Lord Thurso, in his Question.
Lord Grimond: My Lords, I apologise if I misheard the Minister. While he told us that there have been various reports commissioned by the Irish Government, did he actually answer the question as to whether Her Majesty's Government have approached the Irish Government, or had conversations with them, on the problem which is clearly a joint one?
Lord Sanderson of Bowden: My Lords, I think I clearly indicated that there were ongoing discussions between the fishery protection services of both countries. That is the area where we have to look as regards safeguarding stocks. I can assure the noble Lord that as far as enforcement is concerned, dialogue is taking place between my department and the department concerned in Dublin. I can say no more than that.
Lord Moran: My Lords, is the Minister aware that the tagging of smolts has shown that salmon heading for Welsh rivers as well as Scottish—
Noble Lords: Reading!
Lord Moran: —are endangered by the fishery? Does he recall that the Irish report to which he referred pointed out that drift netting off Ireland is putting at risk other nations' stocks? Will he therefore take every opportunity to raise this matter with the Irish Government at ministerial level in Dublin, Brussels and elsewhere?
Lord Sanderson of Bowden: My Lords, I am very well aware of what the noble Lord says about the effect that the over-fishing of salmon stocks can have not only on Welsh rivers but on Scottish, and other rivers for that matter. This is a matter that must be addressed on an international basis.
Lord Carmichael of Kelvingrove: My Lords, will the Minister respond to the statement made by the noble Viscount, Lord Thurso, about the official figures of landings in Ireland and the suggestion that the unofficial figures were much higher? Will he say whether there have been any visible signs that that is having an effect on salmon going back to the rivers in Scotland?
Lord Sanderson of Bowden: My Lords, the noble Lord will realise the difficulty in establishing the correct figures. Therefore, I should not like to speculate on how much greater the actual catch is than the officially registered catch. We are concerned about the effect that it is having on Scottish rivers and we shall look carefully at what is happening not only in Irish territorial waters but within its 200-mile economic zone.

Coal Industry: Future
3.2 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What plans they have for the privatisation of the coal industry.
Viscount Davidson: My Lords, the percentage of our energy consumption met by private sector industries has increased from 41 per cent. in1979 to 73 per cent. now, and will increase to 87 per cent. with the privatisation of electricity. This demonstrates Her Majesty's Government's commitment to return nationalised industry to the private sector. Coal is no exception. While Her Majesty's Government have no plans at present for coal, we clearly have ambitions.
Lord Dormand of Easington: My Lords, in view of the slight indication at the end of the Answer, why do not the Government come clean and say that they will privatise the coal industry at the earliest possible moment? We all know that an increasing amount of work within the industry is being given to private contract. Is the Minister aware that if the coal industry is privatised it will receive no support from the miners, not least because of the closure of unprofitable pits, with the loss of thousands of jobs—that is still going on—and because new and profitable pits will prove rich pickings for people whose only concern is to make money and who have no interest in the industry or the country?
Viscount Davidson: My Lords, your Lordships will appreciate that the measures required to transfer and allocate mining reserves and liabilities are complex and will take some time to prepare. Her Majesty's Government do not want to deflect the industry's management from its objective of the restructuring of the industry so that it can compete profitably in the market place.
Lord Strabolgi: My Lords, in the event of nationalisation, what is to happen—
Noble Lords: Privatisation!
Lord Strabolgi: My Lords, it means the same thing. What is to happen to the coal research station which is doing such important work with regard to coal liquefaction to replace petrol? Is the noble Viscount aware that in the days before the last war when the coal industry was owned by private colliery companies nothing was done in that direction?
Viscount Davidson: My Lords, I am grateful to the noble Lord for pointing out that matter. As I said, at present we have no plans to privatise coal.
Lord Harmar-Nicholls: My Lords, if it ever were decided to put the coal industry on offer, in view of the questions that we have just had, does he think that there will be any takers in this country or anywhere else?
Viscount Davidson: My Lords, by the time we come to privatise coal, I am sure that my noble friend will realise that there will be takers.
Lord Mason of Barnsley: My Lords, is the noble Viscount aware that privatising the coal industry could mean that there will be many dire days ahead for the coal communities in the North of England? With the privatisation of electricity, which is the forerunner to coal, it is estimated that up to 160,000 jobs will be lost, again mostly in the coal communities. With unrestrained cheap coal imports and, after privatisation, fewer mines, there will be a serious unemployment problem, again in the North, which will emphasise the North/South divide. The policy is unwise, dangerous and should be abandoned.
Viscount Davidson: My Lords, I do not want to get into a political debate at this stage because I have already said that we have no plans to privatise coal. For those who work in the coal industry I can say that the necessary investment in mines will be provided by private capital markets subscribing to a profitable enterprise.
Lord Orr-Ewing: My Lords, has my noble friend considered loosening the regulations which prevent people from doing open-cast mining for coal? Is it necessary to continue with those regulations which have been in effect unnecessarily for a long time?
Viscount Davidson: My Lords, I shall convey that point to my right honourable friend.
Lord Stoddart of Swindon: My Lords, the noble Viscount denies having plans to privatise the coal industry, but he spoke of ambitions. Is he aware that the coal industry was nationalised because of the enormous chaos that was caused by the private ownership of the coal industry pre-war'? In his ambitions, does he advocate a return to that chaos and the closing of mines before their economic reserves are used up? Is that not against the national interest?
Viscount Davidson: My Lords, I did say that I did not not think that this was the occasion for a political debate as we do not have any plans. It is a hypothetical question and I do not believe it requires a hypothetical answer.
Lord Dormand of Easington: My Lords—
Noble Lords: Order!
Lord Denham: Will the noble Lord give way?
Noble Lords: Order!
Lord Denham: My Lords, we have been 30 minutes on Question Time today. The House generally accepted that 20 minutes was the ideal. We sometimes go a little over. I believe that we should end. If the noble Lord, Lord Dormand, would like to put his question and my noble friend to answer it, we can then perhaps move on to the next business.
Lord Dormand of Easington: My Lords, I am grateful for that sympathetic view. I was merely going to point out—
Noble Lords: Question!
Lord Dormand of Easington: My Lords, from my short time in the House I understand that the convention is that we are allowed a second question.
Lord Denham: My Lords, may I put the noble Lord right, because this point has been misunderstood? No noble Lord who asks a Question has the right of reply at the end. The general consensus is that the noble Lord who puts the Question may ask one supplementary question. Out of politeness he then gives way to other noble Lords in different parts of the House. If he wishes to ask a further supplementary question later on, provided that it is not too much later on, he is entitled to do so.
Lord Dormand of Easington: My Lords, I am grateful for that advice. In view of the kindness which is always shown in the House, I now put a second question. Does the noble Viscount accept that privatisation will inevitably mean more open-cast mining, which has few friends anyway, and a considerable increase in coal imports?
Viscount Davidson: My Lords, no.

Business
3.8 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I say a word about the length of speeches in today's debate standing in the name of the noble Lord, Lord Basnett, to which your Lordships have agreed to apply a five-hour time limit. The number of speakers is such that it is not necessary to apply a formal time limit, but I am sure that noble Lords would agree that it would conform with the spirit of these debates if they would keep their speeches within the 15 minutes maximum time limit of speeches recommended by the Procedure Committee.

Petition: Education Reform Bill
Baroness Seear: My Lords, I beg to present a Petition from members of university communities, which prays that this House will amend those Clauses in the Education Reform Bill which seek to stifle and fossilise our universities and inhibit them from continuing to make their contribution to the life and prosperity of the
United Kingdom.
The Petition bears 20,600 signatures.
Petition presented.

The Mentally III and Handicapped
3.10 p.m.
Lord Basnett Lord Basnett rose to call attention to the needs and problems of people who are mentally ill and mentally handicapped and their families; and to move for Papers.
The noble Lord said: My Lords, it is with a sense of humility that I move the Motion standing in my name on the Order Paper. It is with humility because I know that some of your Lordships speaking after me, because of close associations with organisations concerned with mental health and handicaps, will speak with more authority than I. I speak with humility because my experience has made me more intimate with the questions than the answers.
However, I believe that there are three questions which clearly deserve an answer. First, are we sufficiently aware of the size of the community of people with mental illness and disability and the scale of their needs and their families' needs and problems? Without knowing that, we do not have a sufficient political priority to provide the resources. Secondly, are we aware of our failure sufficiently to meet their needs and the consequences for them of that failure? Lastly, as an inevitable consequence of the second question, if we are becoming aware of those matters, why has this failure occurred and what do we need to do about it?
The scale of the problem is fairly well documented. The 1975 White Paper stated that each year some 5 million people consult their general practitioner about a general health problem, with 600,000 of them being referred to a specialist service. More recently, MIND has said that over a lifetime one in four people will experience psychiatric symptoms. Of those, more than one in five will seek help from a general practitioner while over one in 10 will be treated with drugs. Out of every 1,000, 17 will be referred to outpatients. According to MENCAP the figure for mental disability shows that there are 1.2 million people with that handicap; over 2 per cent. of our population.
That large and, with the growth of dementia, growing population has led one author, taking an international view, to describe this as, a pandemic of mental disorder, the scale of which has not entered the public's awareness, not drawn the attention it deserves from the media and not gained the political priority and resources it deserves.
A doctor friend of mine has explained that last point by suggesting that there are no votes in mental health. That is no doubt unjustified and perhaps as unjustified as drawing your Lordships' attention to the fact that when the National Health Service was debated on 28th March, of the 30 speakers in that debate not one mentioned the issue of mental health. While MIND and MENCAP are doing sterling work in arousing public awareness, this is a task which needs government resources. A government funded educational campaign would increase public awareness and understanding.
As we become more aware of the failure properly to implement current policies, the consequences of that failure become more and more obvious. Care

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and support by the professionals has been too little available, with a consequent and sometimes unbearable pressure upon the family. In the absence of family support, in too many cases the mentally ill or mentally disabled face unsuitable temporary accommodation, institutional hostels, prison or the company of vagrants. There is no doubt that that has occurred.
The Audit Commission Report of 1986 stated:
"It must be a matter for grave concern that although there are 37,000 fewer mentally ill and mentally handicapped patients today than there were 10 years ago, no-one knows what has happened to many of those who have been discharged".
Despite the 1986 Audit Commission report, the DHSS has not funded a full-scale enquiry to discover what has happened.
However, there is some anecdotal evidence. The Esther Rantzen programme "That's Life" has on three Sundays dealt with community care and mental health; two were concerned with what happened to people discharged from mental hospitals and one with families which care for them. On our screens was a picture of distress, chaos and disorder. After the programme they received far more letters than usual, which divided into five categories: from parents about the distress of parents trying to cope with a mentally ill relative; from relatives and hospital staff about the fate of those discharged without parents who because they have no parents cannot cope; from relatives, patients and staff about the fear of relatives and patients at the prospect of hospital closures; and from relatives and prison staffs about the plight of the mentally ill who commit offences; and lastly, from the general public, outraged at the state of mental health care.
The Minister of State has asked for a selection of those letters. Perhaps I may quote a passage from one of them. It is from a family who has a mentally ill daughter and who has had to put the other children in boarding school in order to take care of her. It describes the circumstances at home, and says:
"I get a higher rate of attendance allowance and invalid care allowance. It comes to about £50 altogether and those few pounds absolve the State from any further responsibility".
There is no doubt of the misery, chaos and disorder of some of the mentally ill and their families in our society.
The causes arise from a combination of the failure to provide or ensure the provision of resources and a reduction of essential support from housing and social security, together with a failure to co-ordinate our services. On available financial resources, the hospital and community health service spending has increased by only 1 per cent. per year in real terms since 1980–81. The Government have agreed that 2 per cent. growth per year is necessary to meet demographic changes and advances in medical technology. On this basis hospital and community health services have been substantially underfunded since 1980. In addition to that, local authority expenditure has not risen to provide the services needed to take account of the fact that in the past 10 years hospital in-patients have decreased by 16,800. In order to meet the needs of those people the Audit
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Commission has said that local authorities needed to have spent £240 million more in the past decade. In fact they spent £20 million more.
More generally, because of Government policy the low level of local authority response to the needs of community care is depressing. Less than one local authority in five spends as much as £2 per head of population per year on mental health services; three out of five have not increased their expenditure to keep pace. A further nine have actually cut their expenditure in real terms. And all that undermines the community care programme.
Housing is of course an essential component of community care and yet the housing investment programme has been cut by 60 per cent. in real terms since 1979. Housing subsidy has been eroded and council house starts are at an all time low. All of that again undermines the community care programme as do the problems of personal financial support. Debt and budgeting problems play a significant part in reducing a person's ability to continue living independently in the community and can cause an otherwise unnecessary return to hospital.
The impact of the Social Security Act 1986 can only mean fewer basic rights, more means testing and reduced financial support for many. In particular the introduction of a cash limited and discretionary social fund will worsen the plight of rather than assist the people with mental health problems who are trying to re-establish themselves in the community.
The familiar pattern of personal poverty, growing financial debt, poor housing and deteriorating physical and mental health is being reinforced. And that occurs within a structure of a mental health service which is confused and where responsibility and accountability are fragmented between different tiers of the National Health Service and local government. That must affect the way in which public funds are used to support community care policy. That makes the absence of recommendations from the Griffiths Report concerned with the coordination of health, social services, housing and the voluntary and private sector puzzling.
No doubt others will comment more fully on the Griffiths Report. I shall content myself with observing that there are welcome and unwelcome recommendations. For instance the recommendation that a Minister of State should oversee community care is seen by most as a good idea as is the recommendation that social service authorities should be supported by general and specific targeted grants providing a significant proportion of the total cost of the programme.
But while the emphasis on individual needs is welcome there is no mention of the service user's right to challenge the decisions. The clear implication that families or informal carers should provide the necessary care—only if this is impossible should public funds be spent—must be unacceptable to many while the question of means-testing which runs right through the Griffiths Report would make many people a good deal poorer.
One statement however within the body of the report reflects what I believe is a consensus as to how community care should be introduced. It is that:
"no person should be discharged without a clear package of care devised and without being the responsibility of a named care worker.".
I wish to conclude by suggesting five essential developments to bring about that situation. The first must be to ensure the availability of more financial resources to make a reality of community care. MIND has estimated that £500 million in five years is needed to finance the transition from hospitals to community care and that in addition a national care fund is needed.
Secondly, I think that consideration of personal income problems must have priority. A comprehensive disability income would begin to relieve these problems but would have to be linked to the provision of other forms of help, support and treatment. Perhaps as important is improving the availability of employment. The Government really should try to be more helpful in this area than they were, for instance, in insisting on the removal of your Lordships' amendments to the Local Government Act.
The third important consideration is the help for carers. Those relatives or friends who care informally for people with mental illness need help in cash and in kind. A proper carer's benefit would assist those who wish to care for a disabled relative, and effective support from health and social services would ensure that carers were able to continue caring for longer than they can at present.
Fourthly, there is the key problem which was not addressed by the Griffiths Report—that is, the coordination of health, social services, housing, the voluntary sector and the private sector. A good quality community mental health service will provide psychiatry, psychology, community nursing, occupational therapy and support to general practice linked to the provision of social services through field social work and home helps, together with housing management and peripatetic support to clients. Effective means of co-ordination of these are essential.
A mental health service development group which would have delegated budgets and would draw representatives from each of the agencies mentioned above is one suggestion for achieving that. A joint consultative committee could perhaps do that work. The Government in their review of the National Health Service will, I hope, give a higher priority to the question of mental health than we have seen in resource terms recently. Fifthly there is the key component of community care which is good quality housing and appropriate support. Most patients need support, help and attention at least from time to time; but they also need decent housing, either as individuals or in small groups, where they can obtain the support they need and where they can rebuild valued lives and go out into the community to make friends and build relationships.
If the Government are inactive on those issues, care will not be there in the community for those who need it. What will be there will be a growing demand
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to slow down releases from hospitals and institutions. None of us wants that. However, it is a situation which is a consequence of a series of policies, from the availability of resources through social security support to housing, all of which converge to the further disadvantage of the most disadvantaged group on our society—the mentally ill and the mentally disabled. The Government need to act now to repair the damage which has been done and to establish community care on a more caring basis. I beg to move for Papers.
3.30 p.m.
Lord Skelmersdale: My Lords, it is not often in this House that a junior Minister is asked to explain the Government's policy on an issue for which he has some executive responsibility. Mental illness and mental handicap are two such issues, and so I am grateful to the noble Lord for raising this important subject.
As we all know, nothing very fast or very dramatic happens in this area. But down in the jungle of statutory and voluntary provision something has been stirring in recent years. In the mental illness field, modern treatments such as the major tranquillisers and the anti-depressive drugs have led to enormous changes in the need for hospital provision brought about by a marked fall in the number of patients resident in hospital by half, to just over 60,000 in the last 20 years. Over the same period the policy of providing services better suited to the individual needs of mentally handicapped people has meant that the number of people destined to spend their lives in large mental handicap institutions has also fallen by about half to around 31,000.
That has resulted in a two edged approach to provision of care both inside and outside hospital. Care in the community has become the buzz word. This means moving towards a modern, locally-based mental health service involving very much more than the redistribution among health authorities of the resources presently contained in the large multi-district hospitals. Delivering a comprehensive range of services involves or should involve health authorities, local authorities (especially social services, housing, education and leisure services), the voluntary sector, the private sector, the families and friends of people with mental disabilities and last but by no means least, those suffering from mental illness or a mental handicap themselves. As health districts develop their plans for new mental health services, it will be essential for them to consider not only the span of services that they need to provide but also the extensive resources available from this range of interested bodies and individuals who can contribute to the development of a successful service.
The words of the Motion are interesting because they call attention to the needs and problems of mentally ill and mentally handicapped people and their families. Although I shall deal with those separately, I know I am about to shock many of your Lordships by asking, are they so very different? Indeed, almost the first question I asked when I took up my present portfolio was, what is the difference between mentally ill and mentally handicapped

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people? I got a very quick reply: the ill are potentially curable. Of course there are fundamental differences in the forms of care or treatment required by each group. However, going round the country as I do I am struck by the many similarities in services needed for those who are severely mentally handicapped or who are chronically mentally ill. In my view it is right that this should be so because the definition of care in the community covers both groups.
What we need in this country is an acceptance of the basic philosophy that people should not need to live in large hospitals unless there is no alternative. Government policy is that people should be encouraged to live at home for as long as it is practical and desirable for them to do so. That sounds obvious, but let us examine it. We know that almost all mentally handicapped people and most long-term mentally ill people can now live better lives in the community. Their position must be made secure by providing alternative accommodation, properly planned, to take account of the alternative facilities available; the capabilities of the caring and treating authorities, whether statutory or voluntary, public or private; and most importantly the views of parents and, whenever possible, those of the people themselves. In other words, the ideal is a personalised care plan.
However, before we can get to that we need, as my noble friend Lord Jenkin said in Care in Action in 1981, to set three tasks for the mental illness services. We have stuck firmly to those priorities and they remain at the centre of our current policy aims.
The first of these tasks was to create as quickly as possible a local service in those districts which still had little local provision. That involved reducing the catchment areas of mental illness hospitals to their own local health districts. The second was to provide in every district enough suitable accommodation for the care of elderly mentally ill people, taking account of the likely increase in numbers. The third task was to make arrangements satisfactory to patients and staff locally for the closure over the next 10 years or so of those mental illness hospitals which were not well placed to provide a service reaching out into the community and which were already near the end of their useful life.
It is by no means a matter of chance that in listing these three policy objectives I spoke of development of local services before I mentioned hospital closures. There is a good reason for that. Closure of mental illness hospitals is not a primary objective of mental illness policy. Any closures occur as a consequence and a consequence only of the development of local services and of the continuing fall in numbers of resident patients. I am most concerned to emphasise that no hospital should close until there has been a re-provision of a full range of replacement services. It is not our intention that all the large mental illness hospitals should close and, indeed, the majority of existing hospitals are likely to be incorporated within the future district-based services.
Our aim is to have a full range of local services, including day centres, residential homes, hostels, sheltered accommodation, supported lodging
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schemes, ordinary housing, group homes, social clubs, drop-in centres, sheltered workshops and self-help groups, as well as education, training and employment services. Achieving this calls for a considerable degree of co-ordination and collaboration among the providing agencies as well as improvements in communication between the caring professionals and their patients and families.
As in other areas of health and personal social services, it does not matter who provides the facilities so long as they are provided. I know that much still remains to be done to improve collaboration. There are many reasons—geographical, administrative and financial—why some health authorities and local authorities are still finding it difficult to get together to plan and provide integrated services. I do not shy away from the question of resources. There are always calls for more spending but innovation and good practice can be achieved in spite of all the difficulties. Health and local authorities in areas ranging from inner London boroughs such as Hackney on the one hand to West Dorset on the other have shown how things can be done to the great benefit of the users of the service.
I was surprised to hear the noble Lord, Lord Basnett, describe that as depressing. I hope that no speaker in the debate will blame rate capping. Noble Lords will remember that Hackney is one of the rate-capped boroughs. If Hackney can show the way forward, so too should those London boroughs which have not benefited from that financial reprimand.
I have mentioned the need for more resources. But it is equally, if not more, important to consider the management of those resources and to look at whether improvements are possible to secure the right services at the right time for those in the most need. It was for this reason that we asked Sir Roy Griffiths to undertake his overview of community care policy. Sir Roy has produced a very interesting report which we are studying closely. The issues it raises are important, too important to be buried, as Sir Roy said the other day, and demand the most careful scrutiny from all concerned with the future of care services. There are no easy answers to many of the points raised—to quote Sir Roy again
"no Rubik Cube which will be easily solved"—
and it is therefore right that we take the time necessary to analyse his recommendations thoroughly before deciding on the way ahead. We need, for example, to set the recommendations in the wider context by looking at the conclusions of other relevant work such as Lady Wagner's report on residential care. We also need to ensure that the outcome of this exercise is complementary to the results of our review of the health service.
I note what the noble Lord has said about a Minister of State with responsibility for care in the community, for example. There are other points in the report with which the noble Lord agreed but equally some with which he did not agree. That emphasises how difficult it is to come to a conclusion.
I should like to emphasise one point. We have said that we will bring forward our own proposals in due course. I can firmly repeat that commitment this

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afternoon. Weare listening carefully to all the views put to us as we frame those proposals and will particularly note your Lordships' comments this afternoon and take account of them in deciding on action.
I should now like to turn to some areas of special concern. Although an increasing proportion of mentally ill people have been discharged from hospital, it is sadly true that many people do not make a full recovery and are left with disabilities, at times severe, which leave them with special needs. How well those patients are cared for and how well the needs are met must be one of the standards by which the new pattern of service is judged. In the past far too much of the care for that group was available only in the large distant hospitals. The development of locally based services does not imply any lower degree of commitment on the part of Government to provision of adequate care for this most vulnerable group of patients. The problem that each local service must solve is how to provide that care without adding the burden of institutionalism to the disabilities of illness and handicap.
The provision of effective continuing care for those discharged from in-patient treatment is of central importance. Ministers have repeatedly emphasised in this House, in another place and elsewhere the importance of professional teams agreeing individual care plans with each patient, and where appropriate with their families, at the time of discharge. Clearly such a plan is likely to be in the interests of the patient once he or she is back in the community. With proper monitoring and co-ordination, especially in the case of those who are chronically ill or regarded as most vulnerable, it will help clinical teams to identify any problems as they develop and to act accordingly.
I have been speaking of those coming from long-term care. But we need to look critically at the needs of those who have come through an acute stage of their mental illness. The House will be aware that consideration has been given to the feasibility of some form of compulsory treatment in the community to prevent relapse in the case of certain chronically mentally ill people who do not see the need to continue medication voluntarily. This is a complex matter and there are conflicting views on the principle and practicality of such an approach. Several groups are party to the continuing deliberations, including the relevant professional groups, the Mental Health Act Commission and the patients' rights lobby. No specific proposals have yet been put to Ministers.
I believe the time is nigh when the interested parties must come to a decision one way or the other, otherwise we shall continue to drift from pillar to post. It is the patients who have had short-term admissions for treatment who will suffer.
I am particularly concerned that staff in the range of facilities within the community pattern of care—for example, day hospitals, day centres, outpatient clinics—work closely together so that the patient or his relatives do not lose touch with services and do not face the problems of having to find out for themselves what help is available.
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A measure of our concern is that we are currently considering what might be done to provide a system of co-ordinated continuing care for people chronically disabled by mental illness. I attended a working conference in February of this year, organised jointly by the department and the National Unit for Psychiatric Research and Development, at which a number of people from the health and social services discussed the detailed requirements of such a system. I also intend to be present at the national unit's annual conference in September when that work will be carried forward. A report of the February conference will be published by the national unit and I shall be studying its contents very carefully.
The Government recognise of course the immense contribution made by informal carers, and I should like to pay tribute to their dedication and humanity in the face of the daunting but worthwhile tasks they face. It is clear that those carers need advice and information about how to cope both with emotional and with practical problems, as well as the back-up of effective services which will enable them to lead as normal a life as possible. The department has instigated a number of measures aimed at improving matters in this direction.
First, we are funding a programme of research being undertaken by the University of York to investigate the financial circumstances of a sample of adult carers of working age, to investigate the nature and impact of caring responsibilities of spouses and to evaluate support services for carers. This will supplement the information derived about carers from the Government's general household survey and the national survey of disabled people, and will enable planning for community care to take account of the needs of all carers.
We are supporting a number of national voluntary organisations directly or indirectly interested in carers through our general scheme of Section 64 grants. These organisations include MIND—with which the noble Lord, Lord Ennals, has a long but sometimes interrupted connection—the Association of Carers and their Elderly Dependants and the Alzheimer's Disease Society. We are also providing funding through our Helping the Community to Care initiative for a number of projects specifically aimed at the needs of carers.
In 1986 the entitlement to claim the invalid care allowance was extended to married women, and as the overwhelming majority of carers are understood to be married women, this should offer some compensation for many people who have to give up work to look after a disabled relative.
I am aware of the concerns of many families and others involved in the provision of services that the community at large may not provide a welcoming environment for mentally handicapped people. In this context we have continually stressed the importance of consultation with the local authorities and winning the good will and support of potential neighbours. Authorities have been advised that possible initial resistance from neighbours should be considered when selecting sites for accommodation and that special steps such as liaison with local councillors,

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community groups, schools and youth groups are likely to mitigate those difficulties.
In the care of mental handicap in the community much depends on individual determination and good will to get together to make the machinery work. When we talk about joint planning for mental handicap services we naturally, as I have already said, first look to health authorities and social service departments to take the lead. However, other agencies are much involved.
I cannot overemphasise the fact that, like everyone in the community, mentally-handicapped people have a wide variety of needs. Some they share with the rest of us but others are special requirements depending on their disabilities. Consequently the range of general and specialised services necessary to meet all their needs will be provided not just by statutory bodies, whether local authority or health departments, but also by the voluntary and private sectors which have made and will continue to make an essential contribution. The Government do not passively welcome that contribution: we actively encourage it.
I should like to conclude by returning to what I said in my introduction. One of the central themes of our years in office has been the development of community care services. The Government remain committed to that and are constantly reviewing how it can best be achieved. We have a good record in providing more resources for service development. At 1985–86 prices gross expenditure in hospital and community health service spending on mental illness grew by 16 per cent. in real terms between 1978–79 and 1985–86 to £1,077 million. This year hospital and community health services expenditure will increase by about 10 per cent. in cash terms and personal social services expenditure by about 8 per cent., compared with forecast general inflation of 4.5 per cent. in the last year. This has benefited community care developments enormously and helped to extend the range of services provided throughout the country.
However, I agree finally with the noble Lord, Lord Basnett, that there is no room for complacency. The task of managing the resources devoted to community care is a major challenge for management and professionals at all levels. We must ensure that the result is the right services for those who need them most.
3.50 p.m.
Lord Winstanley: My Lords, the noble Lord, Lord Basnett, is to be congratulated on bringing forward for debate a subject of such immense importance.
It is a field in which he had a very distinguished record in his public life before he came to this House. As we know, he has done a great deal for the people with whom this Motion is concerned. In your Lordships' House there are many other people who have been concerned with this matter for very many years. This House has a proud record in this field. In 1983 the Mental Health Bill was debated night after night and a whole number of amendments were made to it. It was improved enormously before it was finally enacted. The noble Earl, Lord Longford,
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initiated two or three debates on this subject in the House and set up a committee of inquiry serviced by the Richmond Fellowship—a splendid body, which does such good work in this field. It presented a most detailed report, after lengthy inquiries, to Her Majesty's Government—to which we have not yet received a response. The noble Lord, Lord Allen of Abbeydale, who is to speak to us later, has always taken a very close interest in this subject, as indeed have many other noble Lords.
The noble Lord who introduced this debate was absolutely right in putting the figures with regard to the size of this problem quite starkly before your Lordships' House. It cannot be disguised. I do not want to guess the ratio but there can hardly be a family in Britain now in which there is not some member who at some time will require psychiatric treatment. Indeed in many families there will be several members who will need residential treatment, sometimes compulsory treatment within a mental health institution of one kind or another. This is a large problem that cannot be hidden or forgotten. As the noble Lord said, it is a growing problem.
The Motion draws attention to the needs and problems of people who are mentally ill and mentally handicapped and their families. We must never forget that the needs of those two groups—the people who are mentally ill or mentally handicapped and their families—are not always identical. Indeed sometimes they are in fairly sharp conflict. That is a matter about which we have to think constantly when making effective provision for the care of the mentally ill. We also have to think about the families and the impact on local communities and on other members of the family who are not mentally handicapped or mentally ill.
We are fortunate, as the noble Lord, Lord Skelmersdale, has told us in responding to the debate, that the reply will be given by the Minister who has departmental responsibility for this subject. We also have a noble Lord who has a deep personal commitment to it and parts of his speech today sounded to me as if they were his own words, not just those of his private office. I believe that his heart is in the right place—whether he is free to do with it what he wishes we do not know. However, it is reassuring to know that we have a Minister with some departmental responsibility for the subject and who takes a great interest in it.
By curious coincidence—something of which I am quite sure the noble Lord, Lord Basnett, was unaware—shortly this afternoon the All-Party Mental Health Group of both Houses of Parliament (of which I have the honour to be vice-chairman) will be meeting to hear an address by Professor Robin Priest, Professor of Psychiatry at St. Mary's Hospital, Paddington, and Registrar of the Royal College of Psychiatrists, entitled, What is Parliament Doing to Psychiatric Patients? I should have liked to hear that address before speaking to your Lordships. However, I have managed to extract one or two notes from it and perhaps it would not be altogether inappropriate for me to mention them—though it would not be entirely proper for me to make Professor Priest's speech before he makes it himself in about an hour's time upstairs.

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To noble Lords and to Members of another place, he will say:
"Mental health care has improved beyond recognition since the founding of the National Health Service".
That is absolutely true. Further, he will say:
"Psychiatry has been taken into the main body of medicine".
That is something which has taken a very long time. For many years it was regarded as totally separate. It was hidden away in separate institutions and not regarded as part of the ordinary body of medicine. He will also say:
"The standards of mental hospitals have been raised towards the levels expected in general hospitals. Almost all health districts have some psychiatric beds for their population".
That is encouraging, but how has that improvement been effected?
It has not been done by this Government, the last government or any previous government, but in the main by a gradual change in public attitude and an increasing understanding of the nature of mental illness and mental handicap. Without that increased public understanding, almost nothing could have been done. The fear and misunderstanding of mental illness and the stigma attached to it did so much to delay and obstruct developments of many kinds.
In his response the noble Lord, Lord Skelmersdale, said many things of great interest—I wish I had the text of his speech before me. There is so much of it that I should like to look at later. He said that we want to see modern, locally based mental health services everywhere. I should like to see that too but I should also like to know by whom it will be controlled. I will come to that point in a moment. Later in his speech he went on to say that no hospital should close until there had been a re-positioning of the services previously provided by the hospital.
We have been saying that for years. We are all in favour of community care. We are aware that community care is not a cheap option. But in very many cases it is the better option for the patients and their families. This is not a party matter; members of all parties and of none have said that we should not start closing down the large mental institutions and hospitals until we are quite sure that we have in place in the community the organisations and the services to provide community care. If we do the one before the other, two things will result. We shall put the patients and their families in jeopardy and dislocate the local communities. This will cause a great deal of trouble and in the end do something to change the mental attitudes, which, as I have said, have improved so much in recent years. If one once causes that kind of trouble in local communities by not providing properly for the people who are mentally ill, it will be no time at all before the prejudices start to return and we find the old biases returning—and once you have those you have a battle indeed.
The noble Lord said that it does not matter who provides the various services as long as they are provided. I say that too. I am most interested in the Griffiths Report, which he will remember was released in almost total silence the day after the Budget. Fortunately it has since received a great deal
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of publicity. He will remember when we recently debated the report of Sir Donald Acheson on the public health function, and the noble Lord said, absolutely rightly, that those two reports would have to be looked at closely together. I agree with that. They will have to be looked at in conjuction. But they will have to be considered very soon.
It is not a subject that can be left. Something must be done urgently. We have seen so many committees of inquiry that have produced reports which moulder in pigeon-holes. The Griffiths Report must not do so. I am not saying that the Government must accept all the recommendations, but they must do something about the issue to which the report is addressed.
Who is to be responsible in the community for community care? Sir Roy Griffiths clearly says that it should be the local authority social services departments. In some ways that is putting the clock back. I do not think that that is too bad a thing. I said in the earlier debate concerning Sir Donald Acheson that if we did that, and if local authority services departments suddenly found themselves responsible for community care and other such services, there may be a case for reinstituting the old, very powerful and influential office of medical officer of health. One would then have a known, responsible official. Everyone knew who he was and where he was. The two reports must be considered in conjunction and very soon.
Looking again at the brief notes of the speech that Professor Priest intends to make at any moment, he refers to the local authorities' responsibilities. He may not state this in his speech but I can say it:
"Social workers are employed by local authorities—even those that work in hospitals. Some years ago the hospitals agreed to hand over the responsibility for providing Social Workers"—
we no longer have lady almoners in hospitals—
"to local authorities and the money for their salaries".
He goes on to say:
"Now the local authorities are unilaterally withdrawing the Social Workers from the hospitals and pocketing the change"
I am not at all sure that that is right, but if it is going to be suggested at an important meeting of Members of both Houses later today, I should like to know what the Minister has to say.
Social workers in hospitals do a very important job indeed. They take most of the pressure off the ward sister. They answer questions. They deal with immensely complicated forms concerning this, that or the other benefit and the information that has to be sent to the department if an individual's circumstances change. Those workers are immensely important. They are employees of the local authority social services department. Is it true that the local authorities are withdrawing them? If they are, what is being done about it? I should like to hear an answer to that question.
I should also like to hear the preliminary reactions of the Government to the suggestion of Sir Roy Griffiths about giving specific responsibility for community care to local authority social services departments. I am not taking sides on this for a moment, but I should like to know the answer. I hope that somebody will be put in charge and that we shall

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know who is in charge and who is responsible if things are going wrong.
I said in an earlier debate that I have had personal experience of this in many ways. I have had many years in general practice and working in hospitals. I did my medical training long before the National Health Service started in 1948. Such knowledge as I gleaned about mental health—and teaching was very rudimentary in psychiatry—was in the huge mental institutions which were the most dreadfully impersonal places. I am delighted to see the improvement that has been achieved in recent years, brought about very much by a change in public attitudes rather than by government. That change has been of immense value. But I should be terrified if I thought that we were going to return to the old days.
However, let us look at some of the problems of introducing the concept of community care. I again quote two examples. One can have disasters of both kinds. In many cases it is better for the patient and the patient's family if he or she can be cared for adequately in the community. Of course one must have the back-up services; one has to have the social workers. One has to have the occasional respite for holidays with residential centres and day care centres to give everyone a proper rest. However, if these matters are not dealt with properly on both sides there can be disasters.
I had experience of two such disasters. One concerned a young man in a hospital who was almost institutionalised, having been there for many years. He was about to be discharged. The local authority had found him a flat which he had been taken to see. There was a social worker attached to him who was going to look after him. He had been in hospital for so long that he had no idea how he would manage in the community. We made a television programme, which included an interview with this young man, explaining the concept of community care. Before that programme was transmitted, so frightened was this man of being discharged that he committed suicide in the hospital. That is one case on one side.
The other case concerns a consultant pathologist in the Manchester area whose daughter was a social worker in a hospital in the South-East. She had a patient in hospital who was mentally disturbed and who was discharged for community care and put into a hostel which he did not like very much. He rather blamed the social worker for the conditions in the hostel. One day he marched into the hospital and stabbed her to death. I do not wish to say anything about the lack of security arrangements in the hospital; the fact that the panic button did not work; or that a patient could walk into a private office in a hospital without being stopped. I say nothing about that. However, the dangers of pursuing community care without immense sensitivity and without providing all the necessary resources are very serious indeed and should be borne in mind.
I hope therefore that when the noble Lord speaks to us again, as I know he will with leave, he will tell us that the Government will not pursue this question of closing down the institutions without first making
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sure, as he said he feels we ought, that the services are already in place in the community. We should halt the one until the others are in place. Perhaps we should also look at other legislation that is going through the other place and your Lordships' House which also affects the mentally ill and the mentally handicapped. The social security legislation, as I pointed out in another debate initiated by the noble Lord, Lord Banks, recently, makes the position immensely complicated. I have explained to noble Lords that the form of application for one benefit is now 17 pages long. It took me all day to help a person to fill it in. I cannot conceive that a mentally ill or mentally handicapped patient will ever be able to fill it in. They will need help.
We shall shortly have the community charge. We have many carers who are doing a great deal of work looking after mentally ill or mentally handicapped people. They are extremely concerned about what will be their situation under the new law, if and when it is finally enacted.
I am quite sure that I have said enough. If I sit down soon I may be able to hear the speech of Professor Priest from which I have quoted so often. It will be made in a committee room upstairs. I say once again that it is a very important subject, as your Lordships' House has shown many times. We have in our House the first chairman of the Mental Health Act Commission. The commission has done very interesting work. We have a new mental health Act, which has done a great deal to increase the rights of detained patients. However, psychiatrists point out to me that as a result of that Act, and very properly, much of their time is taken up in adversarial situations, pleading one or other side of an argument about the release or further detention of a patient, rather than in looking after patients.
The situation in this field is not wholly satisfactory, although I acknowledge, as do others, that it has improved vastly in recent years. But there is room for much more improvement. I hope that we shall hear soon a firm and definitive statement about what Her Majesty's Government intend to do about the recommendations of Sir Roy Griffiths.
4.8 p.m.
The Lord Bishop of Southwark: My Lords, I too should like to thank the noble Lord, Lord Basnett, very much for enabling us to talk and think about this subject today. I realise that I shall cover some of the same ground that has already been covered in all three speeches. It is almost impossible to avoid this with such a wide topic, but perhaps I can discuss it from a slightly different angle. I found the speech of both the Minister and the noble Lord, Lord Winstanley, very interesting and helpful.
There is a fascinating comment in paragraph 7 of the introduction of the report by Sir Roy Griffiths where he says:
"To talk of policy in matters of care except in the context of available resources and timescales for action owes more to theology than to the purposeful delivery of a caring service".
The implication of that sentence, I fear, is that theology offers little help to those who have to get on with the job. Not so. Whatever the constraints—and we all recognise that they are considerable—those on

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the ground need to know in which direction they are trying to move and why. Otherwise there are real dangers in any walk of life, but notably in this field, that administration can become an end in itself and bureaucracy will ride triumphant over the weightier matters of justice and mercy and hope. Theologians are well aware of the constraints imposed by human limitation and human sinfulness, but that does not render their insights valueless.
I shall illustrate that. I believe that it is very important to preface any consideration of the proper care of mentally ill or mentally handicapped people with a consideration of why we are doing it and what we hope to achieve. Like the Minister I was a bit surprised to find that we are discussing both mental illness and mental handicap at one time, because they are still so often confused in the public's mind, whereas it is true that mentally ill people usually recover or at least achieve significant improvement with the help of modern drugs. So their needs are usually rather different, if only in timescale or physical mobility.
The General Synod of the Church of England debated the role of the local church in relation to the needs of mentally handicapped people in 1984. In the course of that debate many speakers stressed the importance of changing public attitudes towards those who are mentally ill or handicapped. There is still so much to do in helping each other to recognise our common humanity and none of us is as sane or as stable as we sometimes like to think. That is something to which the L'Arche communities bear conspicuous and moving witness. I can commend them to your Lordships as places which are really very moving and very encouraging. They are one way of helping the mentally handicapped.
In our discussion we recognised how difficult it can be to change attitudes at first, because of the many fears and prejudices that exist. Belief in the goodness and care of God for all his people helps us to sustain and develop that conviction about our common humanity and that we are in a deep sense all of equal worth, no matter how damaged a person's brain may be.
I have recently been in touch with the chaplains of several large mental hospitals which lie in my diocese. As one of them put it, what mentally ill or mentally handicapped people need to know above all else is,
"that they are accepted, they are loved, they are listened to, they are cared for".
So the question is, as we have already heard, how best, with the help of all our modern medicine and economic wealth, can this be done?
That takes us to the debate about the relative merits and costs of care in the community or care in hospital. Within those two broad distinctions there are others. It is important to underline what has already been said: community care may mean—in fact it usually does mean—care at home by relatives, who are still the main providers. It may mean care in the small residential hostels, which may be purpose built and very good for that. It may mean living on one's own in a house or flat. Hospital can mean a huge Victorian mental hospital, albeit modernised in parts, and much has been achieved, as the noble
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Lord, Lord Winstanley, particularly emphasised. It may mean a psychiatric ward or wing in a ultra-modern district hospital, or—and this is important—it may mean a geriatric ward, not so marvellous, or a prison cell, and Brixton is a good example on my own doorstep.
Ever since the early 1960s there has been this strong pressure to empty the large mental hospitals and return people to the community, but what is now being recognised is that community care is a very broad term which can mean almost anything. It is far from proven yet that some forms of community care now on offer are an improvement on what patients had before in a more structured environment. Ethical questions arise about the quality of life which exists for the mentally ill or mentally handicapped and whether, for example, the supposed freedom which they now enjoy outside the institution is real freedom at all. What kind of freedom is it to sleep rough because there is nowhere else to go or, because someone is so confused and has fallen out of what little provision there was when he or she first came out, deliberately to break a window in order to get back into the relative warmth and security of a prison cell?
It is ironic that the number of mental hospitals we are closing at present is matched almost exactly by the number of prisons we are building. The savings may not be quite so great as we imagine. Security and a measure of control even in a large hospital can also mean—I do not say it always does and it certainly often did not in the past—a measure of affection, friendship and support which is not always available and certainly not automatically so in the wider community. We need to keep that in mind.
So the question of the quality of community care and the volume and use of resources to make it good is crucial to the whole debate, as the Minister pointed out very strongly. Cutting costs cannot be an end in itself. That is a profoundly ethical point. I should like to end by illustrating what I have been trying to say in a rather more general way and perhaps, as was also said in the earlier speeches in the same general way, by drawing on the experience of a relative of mine who died 18 months ago in her fifties. For many years Jean—I shall call her that—was a schizophrenic and she had spent many years in hospital. It was for the most part a rather poor, restricted life that she led there and she was not happy. Then, with the help of modern drugs, somewhere at the end of the 1960s or in the 1970s (I cannot remember exactly when) she went home once again to live with her elderly mother. The strain on both of them was very great. Her mother had to cope as best she could. Sometimes her daughter refused to take her drugs and became violent.
Apart from the little help that the general practitioner could offer—for the most part only on demand in a crisis—there was no trained support for either of them and some apprehension existed among the neighbours. Eventually that arrangement came to an end and it shows us clearly why drugs and discharge by themselves are not enough. Jean went to live in a part of the country where the health authority was one of the relatively few which were

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experimenting with a much wider range of support in the community. Jean had a place of her own in which to live. She had a patient and sympathetic GP who knew what to expect and did not mind the occasional bursts of rather irrational behaviour or demand. A community psychiatric nurse called regularly and a day centre was there, to which she went every week. There was also the availability of residential care for a week or two whenever she had a bad patch and needed some stabilisation.
For ten years she lived much more happily in that place, befriended by many neighbours and members of her local church. That is a picture of what good community care is all about. But it does require at least all those basic ingredients; without them it does not work. The Griffiths Report, if it is implemented in broad terms, will certainly help to target attention more effectively. I hope that that will happen, but unless the actual resources of trained nurses—and I do not think that has been much mentioned but it is extraordinarily important—and community psychiatric nurses, support for carers, the day centres and so on are also in place, and of course appropriate housing accommodation, we are doing mentally ill or mentally handicapped people no kindness by simply placing them in the community. In this, as in so many other things, there are no short cuts or cheap solutions. I am talking not just about money but even more about human care and, I would want to say, prayer.
4.21 p.m.
Lord Ennals: My Lords, it is a long time since we had a debate which concentrated purely on mental illness and mental handicap. I suspect there has not been one since the debates to which the noble Lord, Lord Winstanley, referred in connection with the 1983 Act. As a Member of the other place at the time, I was extremely grateful to your Lordships' House for making some improvements to that legislation. I wish the House equally well in dealing with other legislation still before us.
The debate takes place on the initiative of my noble friend Lord Basnett. I congratulate him on a very well-informed—in spite of his modest introduction—and sensitive speech which has produced most interesting contributions from the Minister, who introduced several additional issues, from the noble Lord, Lord Winstanley, and from the right reverend Prelate whose every sentence showed the tremendous human sympathy and understanding required in the debate.
We have now a very disturbing situation. On the one hand, there are public statements suggesting that mental illness and mental handicap are priority services and have been so for years and years. On the other, we have a situation of appalling human neglect, of which this House really must take urgent notice. The noble Lord the Minister gave some figures of expenditure including some increases. I suspect the increases—he was talking about community care—are mainly due to the increasing age of our population and the increasing incidence of senile dementia as well as the greater life expectancy
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of the mentally handicapped and the greater improvement rate of the mentally ill.
I became involved in this issue 20 years ago when, as a Minister, I had to deal with the report of the Ely Hospital in South Wales. That was the first of the "horror" reports on conditions in psychiatric hospitals for the mentally ill and the mentally handicapped. It was the first of many, awakening the government of the day—and the then Opposition too, because it was not a party matter—to a sense of urgency in dealing with the problem. All parties resolved that it had to be an issue of priority.
A start was made with new resources for improving old hospitals and building psychiatric wards in district general hospitals. My friend and boss at the time, Richard Crossman, played a very important role. Those involved then started to contemplate the planned reduction and eventual closure of old hospitals and the development of care in the community. I must say that I was a little disturbed to hear the Minister suggest today that it may be necessary to go slow on the plans for hospital closure. If he did not mean that, I will give way now to him. I do not want to misunderstand what he said.
Lord Skelmersdale: My Lords, may I intervene briefly to correct an obviously wrong impression. I did not in the least intend to suggest that we should go slow. I was suggesting that the policy should be strictly and rigidly adhered to. My own responsibilities include this matter. Where there is local argument over whether mental illness or mental handicap hospitals should close, this is something I look at most particularly.
Lord Ennals: My Lords, I am grateful to the Minister. I shall say what I was going to say in case he should come under pressure. It has taken a long time to initiate the movement towards hospital closure and the improvement of community services. It took a long time before the first hospital was closed in Banstead. If we turn our back on this, as I know some people are suggesting, it would be a terrible tragedy and we might not get the impetus again. I believe the emphasis must be on additional resources for community care.
Certainly, there is a severe problem of resources and of keeping a balance between the community services and hospital closures. Mental illness inpatient days have fallen by 20 per cent. since 1977 while expenditure on hospitals has increased by 7 per cent. in real terms since that time. This is partly because of increased unit costs as the number of patients has gone down. But as my noble friend said, the figures for local authority expenditure on community health services are moving nothing like so fast as the offsetting hospital rundown. To give one or two examples, day hospital and day centre places have risen by only 9 per cent. over five or six years and by only 9,000 in that period. In 1985, 24 local authorities still had no day care services at all for people with mental illness. The number of psychiatric nurses has risen, but only modestly. And that applies also to occupational therapists, of whom there is a gross inadequacy in the community. There is also the fact that housing provision has been greatly reduced

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as a result of the 60 per cent. cut in the housing investment programme.
A severe situation faces those who are discharged from hospital. An interesting question has been raised by the National Schizophrenia Fellowship. The director said:
"We badly need your help in asking Ministers what is actually happening and going to happen to people with a severe mental illness like schizophrenia. In 1986 25,000 people were admitted to hospital with schizophrenia, and of these 90 per cent. were re-admissions. Where were they between admissions—in the community of course—but where were they living and what care did they get?".
We know too of the very severe problem, touched upon by the right reverend Prelate, of the increasing number of people who are discharged from psychiatric hospitals and become homeless. In 1983 over 170,000 households applied to local councils because they had nowhere to live; only half were provided with accommodation. Many more of course did not trouble to apply because they did not believe they had a chance. Many mentally ill people living in large hospitals are there only because they have nowhere else to go. Often when they are discharged into the community there is not the careful planning there is supposed to be. Many of them end up sleeping rough on park benches, in grossly unsatisfactory temporary shelters, or in old institutions with emergency bed and breakfast services. Some—I am afraid an increasing number—simply take their own lives. That is a terrible tragedy which should not be allowed to occur.
Several years ago it became clear that the mental health services were heading for a crisis. People were daily discharged from hospital into a community which was not adequately prepared to look after them. The consequences have been very serious. I have been looking at the evidence given to the Social Services Select Committee of another place. I should like to pick out at random some of the quotes in the introduction to the report. MIND told the inquiry:
"A number of inappropriate discharges from hospitals are taking place when no real support exists in the community to care for that person.".
The Psychiatric Rehabilitation Association said:
"Many patients are being discharged to the community unable to cope with day to day living.".
The National Schizophrenia Association wrote that most chronic schizophrenics:
"are returned to their 'families', if any. The rest are on park benches, in prisons, doss houses or seedy and rapacious lodgings".
The Society of Clinical Psychiatrists wrote of:
"turning the mentally ill and unrecovered onto the streets, boarding houses, lodging houses, gutters and prisons.".
So it goes on. The report was published during 1984–85.
Shortly after that the right honourable Norman Fowler decided to ask Sir Roy Griffiths to recommend a course of action. In December 1986 the Audit Commission published a report which made a reality of community care and documented the grim situation. That was taken almost as a basis of evidence for Sir Roy Griffiths' report.
Clearly this is not the occasion for a detailed debate on the Griffiths Report. However, some of the
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comments that have been made today cause me a great deal of concern as regards the timing. The Minister implied that the Government would not reach conclusions until after they had decided on the outcome of the NHS review. That is a very long delay. It is not merely a matter of what the Government recommend but of what Parliament will accept. Surely the Minister will not say that, for example, by the end of this year the shape of the National Health Service will be absolutely clear. I plead with the Minister and the Secretary of State because if they are saying that they will not respond to Sir Roy Griffiths' report until the future of the National Health Service is decided I believe that to be a grave and serious error. We cannot wait that long.
Sir Roy Griffiths pointed to local authorities as having the main responsibility. How can they plan if they do not know whether the Government accept that basic recommendation or will reject it? A debate in the near future is urgent and decisions should be taken before the summer if local authorities are effectively to take the action that is required. I have chronicled the year after year delay—the Audit Commission, the Select Committee and now Sir Roy Griffiths' report—but meanwhile no decisions are being taken. That imposes terrible problems not only on patients and authorities but on families and voluntary organisations.
I should like rapidly to pay tribute to the voluntary organisations: MENCAP; MIND; the Richmond Fellowship; the Mental Aftercare Association; the Mental Health Foundation, which has a major role in research and grant making; the various local and housing associations set up for this purpose and working closely with social service departments. I believe that the voluntary organisations co-operate well together. For example, MIND and the Richmond Fellowship are members of a joint working party on the quality of care, a subject which has already been touched upon by the right reverend Prelate. It is very much the actions and the success of the voluntay organisations that have brought about a change in attitudes which all noble Lords warmly welcome.
We must deal rapidly with the main recommendations of the report from Sir Roy Griffiths. I shall not now enter into the details but only touch on important aspects. I believe that funding will be the central issue. I suspected that in his comments the Minister was a little complacent about the funding situation. I believe that if responsibility goes to the local authorities there must be a major injection of funds to enable them to develop community care facilities. I am talking not merely of institutional and residential care but of the support that must be given to families to enable them properly to look after the mentally ill or mentally handicapped person living within the family. Such people impose an almost intolerable strain upon the family unless support facilities are available.
It is important to note that the need is not only for additional revenue funds. I have argued MIND's proposal many times. There needs to be a bridging fund to provide additional resources allocated specifically for local authority use during the move-over period before the National Health Service can

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spare any of the savings for local authorities. The Minister has not commented on that proposal but I hope he will do so in his final speech.
Other proposals have been put forward by MIND and other organisations but I shall not now take time to enter into them. I plead with the Minister for an opportunity to debate the matter in this House in order to look at a whole series of proposals not only from Sir Roy Griffiths but from responsible organisations. I also plead with the Minister to deal with the issue that was rightly raised by the noble Lord, Lord Mottistone, on 4th May. It was the problem of families and relatives not being informed when patients were discharged and therefore creating extreme difficulties. The Minister accepted the difficulties but did not suggest any way in which the situation could be resolved. How can local authorities and families of patients being discharged from hospital make proper provisions unless they know that they will be discharged? We sought to achieve that in the Disabled Persons (Services, Consultation and Representation) Act 1986.
Today we are calling for a greater realisation of the effects on the happiness and mental health of so many people in society. They are suffering because they are in inadequate or inappropriate accommodation either in the health service or local authorities. I hope that action can be taken quickly by the DHSS and Ministers concerned and that there will not be delays. We need a properly funded major initiative in order to establish care in the community for those who do not need a regime of hospital-based treatment. That cannot wait for another year or so. It is required immediately if we are to fulfil the responsibilities which we have as a community for the growing number of people, including those with senile dementia, at present under the care of either the health service or local authorities.
4.38 p.m.
Lord Campbell of Croy: My Lords, I should like to join other noble Lords in congratulating the noble Lord, Lord Basnett, on raising this important subject today. He has drawn our attention to the needs and problems of the mentally ill and mentally handicapped. He has rightly separated them because they are in different categories.
I shall concentrate on mental illness, which can afflict anyone who has previously been normal and mentally well. Although the illness can last for long periods there is a prospect of improvement or cure. However, mental handicap is normally the result of a defect in or damage to the brain. While a great deal can be done for the person, complete transformation to normality cannot be expected.
Both serious mental illness and mental handicap cause disability. When we refer to disabled people we must include those who are physically entirely sound but are unable to function effectively or rationally with their minds. During 1981, the International Year for Disabled People, some of us made special efforts to promote public awareness of mental illness and handicap. As some noble Lords will know, I was chairman of that year for Scotland. Unless the population are informed and ready to encounter
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mental illness in public places, they may well react unkindly to what they see simply as eccentricity, blankness or aggressive attitude in a stranger whom they meet or observe.
Thirty years ago and more, people suffering from serious mental illness were put inside institutions, out of sight. Here I emphasise that a complete change in treatment has taken place. This requires more public knowledge and understanding. Advances in medicine and treatment in recent years have made it possible for many mentally ill persons to live nearly normal lives outside institutions. They usually continue to need supervision and may be on a regime of tablets, medicines or injections. Some also need access to a refuge, even to hospital, if there is a relapse. They cannot be thrown into the outside world and left to fend for themselves entirely. Of course, what I have been describing does not apply to those who are dangerous to others or to themselves. Those are a small proportion, I am glad to say, but they must still be kept under restraint.
The fact that more of these people can live and circulate in the community is to be welcomed. It is better for them, unless they are suffering acute distress; and it relieves the burden on the resources of mental nurses, who are specially trained and need a high degree of dedication. They, too, of course are also needed in community care. At the same time, arrangements must be made for care to be available in the community for those who have come out of institutions.
Reference is sometimes made to the Italian experience. This is not the occasion to go into it. I shall briefly record that, by national policy, the hospitals and institutions dealing with mental patients in Italy were closed over a short period, and in some areas of Italy virtually nothing was done to cater for the patients so dispersed. That has been an object lesson to other countries which observed what then happened.
Besides the necessary community care, there should be widespread awareness of what is entailed. That would be our aim. I believe that a valuable service was performed in a series of articles by Marjorie Wallace in The Times newspaper about a year ago. The subject of her articles was the illness which is responsible for about one-half of the serious mental disorders in this country, that is, schizophrenia. I understand that the cause of that illness is still not known for certain, or understood, and that there is as yet no cure for it. Progress has been made in successful treatment to reduce its unfortunate effects. In the public mind, it is unfortunately still regarded as a kind of Jekyll and Hyde phenomenon instead of what it in fact is; namely, a severe and distressing mental illness. I suggest, as I have on other occasions, that parliamentarians would make a contribution to better understanding by carefully refraining from using the terms "schizophrenia" and "schizophrenic" in other, usually derogatory, contexts. My only minor criticism of the series of articles is of its title. It was called "The Forgotten Illness". In my view the illness was never recognised or known by most people outside the medical profession so it had made no impression for the

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public to forget. For me, it is "the misunderstood illness."
Descriptions have already been given by earlier speakers of the mentally ill living in desperately inadequate conditions, in no state to look after themselves, so there is no need for me to add to those descriptions. The Motion of the noble Lord, Lord Basnett, includes reference to
"the needs and problems of … families".
That is highly relevant. There are far more problems for families with mentally disabled members than for those with physically disabled members. There are paradoxes, of which the public may not be aware. For example, schizophrenia does not normally strike and appear until the ages of about 14 to 16, and then it persists for life or for many years. The medical profession normally warns parents that the teenager concerned is likely to sever links with the parents as part of the illness and that that must be accepted by the parents. The advice given to them is that their presence, let alone any pressure, can make the condition worse. The result is that worried and willing parents are restricted in what they can do to help, and often cannot provide a home for the sufferer on doctor's orders. That is indeed a paradox that makes even more difficult the treatment of sufferers with that mental illness in the community.
I suggest that much more should be done to inform and brief officials and others whose work involves dealing with the public. This was illustrated by a case that the noble Lord, Lord Harris of Greenwich, raised in a debate on 4th March. It can be looked up in Hansard. Unfortunately, the case had a tragic ending—the suicide of a young man in custody. The behaviour of that young man while he was in custody exhibited the classic, easily recognisable symptoms of schizophrenia to anybody with any knowledge or experience of mental illness. It should be possible in future for such a case to be identified quickly as requiring medical, psychiatric attention.
I turn briefly to mental handicap. I wish to make one point. I believe that it is a mistake to generalise. Degrees of mental ability vary widely within the handicapped fraternity. I take as an example Down's syndrome. There are some who have great potential to enable them to live almost a normal life. It is wrong to assume, however, that they are all capable of reaching the same standards of attainment.
In making arrangements for Down's syndrome children, it must be recognised that some parents will have difficulties arising from complete inability to communicate by speech and from the problems of constant violence. In other cases the Down's syndrome child will be almost normal. One Down's syndrome family can have enormous problems requiring virtually 24-hour close supervision, while another can enable the child to live a near normal life. In both cases the parents will be devoted and caring, but the demands are of a quite different order.
A great deal remains to be done in spreading information and guidance about the mentally disabled. I urge the Government to play their part in full.
4.48 p.m.
Lord Thurlow: My Lords, we are privileged to have at the Dispatch Box the Minister whose special brief is specifically related to community care. We welcome this and wish him well.
Community care, as the noble Lord, Lord Ennals, told us, is very much under-rated in its requirements. I have had personal experience as a parent. I know the dangers, the risks and the embarrassments. I think that it is almost impossible to over-rate the problems that may ensue from any further escalation of the numbers of those who are coming out of the big institutions.
Looking back over 10 years we can acknowledge, as the noble Lord, Lord Winstanley, said, significant progress in public understanding. There has been a remarkable change. We are very grateful, as the noble Lord, Lord Ennals, said, to the voluntary organisations which are largely responsible for this. In particular, I should like to mention the National Schizophrenia Fellowship which does wonderful work in bringing us up to date. I am afraid the picture I still have is that, in spite of all the improvements and the increase in understanding, the amount of human suffering continues to grow. I believe that the numbers of patients are, if anything, increasing and likely to continue to increase. I am referring to the mentally ill and not to the mentally handicapped with whom I have had no particular personal association.
The Griffiths Report can be a milestone. We have had many excellent reports, as has been pointed out. But, in many ways, this report is different from its predecessors: it pinpoints a whole range of practical possibilities for action and does so in a very concise and forthright way. If many of the recommendations made in the report were implemented fairly quickly, this could create a revolution for many of the mentally ill. Sir Roy Griffiths has emphasised the fundamental need to have someone in a position to apply priorities and to see that those in need receive due care. There are so many overlapping authorities that it is necessary to have someone at the centre whose ministerial responsibility it is to keep track and to pull everything together, to encourage local authorities that are backward and to keep things moving generally.
In the other place on 31st March the Parliamentary Under-Secretary said that,
"we share the view that not enough resources have followed the patient out of hospital into the community".
She continued:
"The 31 planned closures of large hospitals will help to put that right".—[Official Report, Commons, 31/3/88; cols. 1313–1314.]
I do not follow that argument. Further "planned closures" imply a further great aggravation of the demand for community care which costs a great deal more per head if it is properly carried out with the right facilities and properly trained staff. It costs a great deal more per head than care in the big institutions. There still seem to be very great dangers ahead.
One of the main concerns is the number of separate services that all cater for different aspects of the problems of patients. For instance, the Griffiths Report proposes that the community care element of

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the social fund should be withdrawn from the social security system and the funds earmarked transferred to the social service authorities. We know that no department likes to lose part of its empire and one can see a ready-made scenario for the "Yes, Prime Minister" programmes. The Prime Minister calls in the Cabinet Secretary and says, "We have to stop this wrangle that goes on and on between the DHSS and the Department of the Environment", or whatever department is concerned; I do not point the finger at any particular one. Sir Humphrey Appleby draws himself up in his inimitable way and says, "Prime Minister, what a bizarre and what an amusing suggestion! As long as the departments disagree no clear-cut budget demands can be brought forward. The health vote is the main millstone around our necks. We do not want to do anything to make it easier to show that more money is needed. Oh no, Prime Minister, do nothing. That is the golden rule of bureaucracy. Let the departments argue forever".
That, of course, is an absurd caricature. I paint the picture simply to illustrate the strength of my view that there is—I am sure your Lordships will agree—a tremendous difficulty of continuing delay in a field in which the difficulties are so great. I can only express my earnest good wishes to the Minister in his work to try to knock heads together and get on with co-ordinated action.
There is an urgent need for more key workers to whom patients and relatives may turn. As we have been told, there are now 2,600 community psychiatric nurses. According to the estimate we need 10 times as many; that is, 26,000. That sounds a great deal and of course it is a very big increase. However, we have 60,000 staff working in the big institutions. One can consider the parallel of the military services and what must be done to remedy urgent requirements for specialised manpower. There are blitz programmes for training. If the need is accepted people will be forthcoming and training could be given.
I doubt whether public opinion, though it is much more alive to the problems than it used to be, has yet faced up to the unpalatable fact of the extent to which the costs of care in the community are greater than the costs incurred under the old system. For their part I hope that the Government acknowledge this change. In principle, are they prepared to make the extra resources available to local authorities to keep pace with discharges? If not, in spite of what the noble Lord, Lord Ennals, said, I hope that the programme of closures will be slowed down.
We now have an effective and quite-easy-to-understand blueprint. I hope that the Government will take hold of this and bring before us shortly a programme for new action.
5 p.m.
Lord Rea: My Lords, the fact that all is not well in community care for the mentally disabled has been made clear in the speeches we have heard. Even the Minister admitted this when he said that the Government were not complacent, which may be a way of saying that they are actually quite worried.
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This disquiet is reflected in a recent crop of reports on the subject. The most recent is the Griffiths Report. There is also the Wagner Report on residential care in the community. It is a long report. The book and the lyrics are very good, although they may not be to everyone's taste. Those are perhaps suitable Wagnerian characteristics. At the end of last year there was the widely praised Audit Commission report.
To me the document that best summed up the problem and made the most sensible recommendations was the report of the Select Committee on Social Services of another place on Community Care for the Mentally Ill. The evidence was taken in 1984 and the report was published in 1985. It should be remembered that the committee had a Conservative majority and that at the time of its inquiry into community care one of its members was Mrs. Edwina Currie.
Perhaps I may give a few quotations from the report. On costs, paragraph 21 said:
"A decent community based service … cannot be provided at the same overall cost as present services … We are at present providing a mental disability service which is underfinanced and understaffed, both in its health and social aspects".
The Minister of Health at the time—I cannot remember who it was as different ones have moved past our eyes very quickly; it could have been one of two but I am not sure which—was quoted as saying that, "If the functions of a hospital facility which has been greatly underfunded in the past are transferred to community care the cost will go up". In the light of those statements the request by MIND for £500 million of additional money over five years as part of its response to the Griffiths Report seems entirely reasonable.
As a practising general practitioner in inner London I find that the policy of community care has provided us with more experience of dealing with the continuing care of seriously mentally disabled people. We have found it more difficult to get acutely mentally ill patients admitted, but if they are admitted they bounce back again quicker. It is not so much long-stay patients being discharged into the community who provide the problems—in many cases, at least in Camden, they have so far been reasonably well cared for—but those who should have been in the long-stay category but never stayed in hospital long enough to qualify.
The population of mental hospitals has gone down from 131,000 to 60,000 in the past 20 years, but much of that reduction has been due to natural wastage. I do not mean that those tall chimneys emitting black smoke are used to dispose of the elderly inmates of those institutions. I refer to death from natural causes. At the same time there has been a limitation in "starting off" new patients as long-stay cases. It is the short-stay but possibly severely ill cases who give rise to most anxiety and for whom provision is least good.
Paragraph 24 of the Social Services Committee report states:
"The almost obsessive concentration in public policy on the mechanisms of 'getting people out of hospital' has sometimes obscured the basic fact that most mentally ill or handicapped people already live in the community … A common claim is that 90 per cent.

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of care is provided by hospitals while 90 per cent. of the patients are in the community".
It may have changed a little since 1985 but I doubt whether it has changed by more than 1 per cent. or so.
It is worth looking at the term "community", which suggests that there is a caring body of people ready and able to take on the role of nurturing mentally disabled people when they are cast into their midst. In the case of patients being in their own families, this has always been so. As other noble Lords have mentioned, families still provide most of the care available in the community, but it is often a severe burden for them.
Providing care for people who are not related to you is a very different matter. Such people are not welcomed. In fact, resistance to small residential units is often manifest, as the Minister pointed out. Community care can be a euphemism. At worst it can mean dumping mentally ill patients on to an unconcerned or even hostile population, or requiring families to provide 24-hour care to their sometimes difficult and unpredictable relatives. A somewhat cynical view of a psychiatrist friend is that community care is a form of "newspeak." (It is perhaps interesting that the social services report which I mentioned was compiled in 1984.)
I do not want to be unduly pessimistic. The concept of community care is a good one. It is just that, to be effective, it needs adequate resources not only in terms of bricks and mortar but also in adequately trained staff. If skilfully handled, many community organisations can and do make a significant contribution. I am able to report a success story, in that my own practice has assumed responsibility for the care of eight residents in a hostel recently opened in Camden through combined funding. It is for patients discharged from Friern. It works well, though some of the residents still have to return all the way to Friern for daytime occupational therapy. It is also a pleasure to record how productive team work with community psychiatric nurses has proved to be, especially with some of our most disturbed patients.
Many of the "free living" mentally ill patients are in need of much more in the way of day care facilities. Some of these were mentioned by the Minister. It sounded an impressive list but they are by no means evenly distributed through the country. We need many more of them. The community psychiatric nursing service is crucial to the success of the community care policy. In this respect I echo the noble Lord, Lord Thurlow, and should like to ask the Minister for information about how this branch of the nursing profession will grow in the future.
I am aware that some nurses who are transferred from the psychiatric hospitals can be retrained to work in the community but in fact the community psychiatric nurse, working outside a hospital, is a new and rather special type of nurse; such people are invaluable in this whole move into the community. We are told that there is something in the region of 2,000 to 2,500 at present. A desirable ratio, as a minimum, would be one per 10,000 of the population, which would mean 5,000 or 6,000 throughout the country. Indeed, the noble Lord,
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Lord Thurlow, actually mentioned 26,000 as being an even more appropriate figure. I would be most interested to hear what the noble Lord has to say about the matter.
While on the subject of nursing staff, I should like to voice the disquiet felt by both the psychiatric and the mental-handicap nurses in the Royal College of Nursing. They feel that the Griffiths Report has not given sufficient weight to the part which psychiatric nurses should play in the planning and the operation of community care. I must say that I think they are right, especially as social workers since the—to coin a nasty word—"genericisation", or the reorganisation, which followed the Seebohm Report have lost some of their mental health expertise. Of course I hope that with the increased length of training for social workers, which has not been agreed, some of that expertise will be recovered.
There is also much anxiety among the nursing staff of the psychiatric hospitals about their future redeployment, especially with regard to their pension rights and security. I think the Government should fully meet those concerns.
I have not talked about the mentally handicapped because on the whole their health care needs are less than those of the mentally ill, if—and it is a big "if"—they are in a stable and caring environment. In fact, as a doctor, I find most mentally handicapped people easier to deal with than some patients who are supposed to be psychiatrically normal. Nevertheless, their physical care is of the utmost importance as they are a most vulnerable group.
As we all know the mental health service is often called a "Cinderella" service. We should not forget that Cinderella left a slipper behind at the ball, which eventually led her to riches and happiness. I do not think that we can ever expect a "happily ever after" solution to mental health problems. However, some robust footwear may be in the hands of the noble Lord and in my view that could at least alleviate much of the current distress.
5.14 p.m.
Lord Mottistone: My Lords, notwithstanding the encouraging remarks that we have just heard from the noble Lord, Lord Rea, I do not believe that I am exaggerating when I say that there is a crisis in our midst in some parts of the country, especially with regard to the mentally ill. Although more will always need to be done for those people, society at large seems to have become aware of the needs of the mentally handicapped. Thus I propose to concentrate my remarks on the mentally ill in general, especially those suffering from schizophrenia.
As Marjorie Wallace said in her illuminating articles which have appeared in The Times over the past two years,
"Schizophrenia is the forgotten illness",
although my noble friend Lord Campbell of Croy might prefer the phrase "the misunderstood illness".
Two and a half years ago I initiated a debate on just this subject and I am therefore deeply indebted to the noble Lord, Lord Basnett, for bringing the matter once again to your Lordships' attention. The debate

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will help to ensure that the illness is not forgotten or misunderstood. In the previous debate practically all the speakers, including myself, sought to bring home to the Government that the policy of closing mental health beds faster than care in the community was developing was placing an intolerable burden on the sufferers from schizophrenia and on their families. However, the situation is now worse in some parts of the country and it is a tragedy that the Government have not done more during the past two and a half years. I am sure that they have done some things, and I am sure that they have done their best to allocate some of the money, but it has not been enough. The problem stems from the fact that care in the community is provided to a large extent by local authorities and not by the health authorities.
The noble Lord, Lord Ennals, in a most powerful and impressive speech gave examples which emphasised the need to speed up care in the community. The information he gave us has assisted me in that I do not need to waste so much of your Lordships' time. However, while I entirely agree with what he said, I did not find it consistent with his almost equal emphasis on not slowing down the closing of beds. I agree that it would have been better if care in the community had progressed faster, but it has not done so. Therefore it is a terrible mistake to close the beds down at one rate and have the provision of care in the community progressing at a totally different rate. So the noble Lord's insistence on not slowing down on bed closures is inconsistent with his general approach, which I applaud.
Lord Ennals: My Lords, what I was really saying was that the priority should be to do what we have to do as regards community care and not to take the easy course, which is to slow down the whole procedure.
Lord Mottistone: My Lords, I shall not pursue the argument. I have made my point and I think the noble Lord has probably made his.
During the period between 1975 and 1985 the shortfall in replacement for closed beds by places in the community both in day care and residential came to a total of about 32,000. Indeed, I think my noble friend the Minister mentioned that fact; he implied that that was all that was necessary. However, I am advised that the number of cases of schizophrenia has not decreased by anything like that amount. Some of those people may now be more capable of living in the community than they were before 1975, but that does not mean to say that the total problem has gone away. The figure of 32,000 is a measure of the addition to the problem for families and sufferers, which was already intolerable for many of them before 1975. Therefore, it is not at all satisfactory at this stage to allow health authorities to grind away at shutting down beds in hospitals when they have not made absolutely certain that there was suitable provision in the community.
However, those country-wide figures cover a wide variation of family burdens. Some parts of the country are faring better than others. I am lucky that the Isle of Wight—although of course more could be
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done by both the health authority and the county council—seems to be meeting the need better than most. That is partly due to the fact that the two authorities deal with exactly the same area—to wit, the island. That is where we are lucky.
I hope that when the Government come forward with their expected overall new proposals for the NHS—I make this strong recommendation to my noble friend—they will include the rearrangement of health service geographical boundaries to coincide with those of the counties and districts. It would make a tremendous difference. I know from experience that it will make for much better coordination of effort. My noble friend mentioned that point and I say that this is the way to do it. It is possible that he and his colleagues have not thought much about the matter. I strongly urge him to do so. It will also help to achieve greater understanding with a third party whose unseen efforts to assist in coping with the mentally ill do not receive the recognition they deserve—namely, the police—whose own boundaries generally accord with those of counties.
When a schizophrenic is discharged from hospital, refuses to take his or her drugs and rejects family help, an all too common experience, he or she often breaks the law in desperation to obtain some sort of care. By chance, last weekend I read in the Isle of Wight County Press of a case which illustrated that point. A 39 year-old chronic schizophrenic threw a brick through the window of an elderly person's flat. The magistrates were told that he had been discharged from the local mental hospital a year or so previously to share a home in the community with five other former patients. He did not settle down in that environment, because the brick throwing was one of several similar cases during the previous year. The object, so the newspaper reported, was to get back to Whitecroft Hospital, our local hospital, or into prison where he could be cared for.
The newspaper article concluded happily by saying that he now felt comfortable in a new home with other former patients. Let us hope for his sake, and that of the police, that that position will continue.
That example shows that community care does not always provide asylum, even when the accommodation has been reduced to five former patients. Our director of social services was telling me the other day that they had one home built to take about 30 former patients. They found that the schizophrenic patients would not stay there because there were too many of them. They now have about 20 carefully selected landladies who take in not more than five schizophrenic former patients. They try to handle those patients in that way.
It is an experiment which shows that the earlier provision did not work. That is another reason why we must be flexible and why having the two community care sources, health and local government, together can achieve that solution much better than when they cross boundaries. That example also shows that the police often have to treat as criminal cases those for whom medical care has been withdrawn and to provide the care for a mental patient which should be met by health or social service workers.

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To conclude, I return to the families. The families founded the National Schizophrenia Fellowship some 16 years ago so as to share their problems. It has made great advances, especially in the past five years, establishing a network of branches all over the country. It is doing its best to raise funds with minimal resources. I have joined with others to found a parallel fund-raising campaign entitled SANE (Schizophrenia, A National Emergency). That organisation seeks to make people aware of the seriousness of the problem and to gain a basic sympathy for schizophrenics as a way of raising vast sums for research and for carers.
Thirty years ago people dared not speak of cancer and sought to ignore, for example, the mentally handicapped. The community now has a much healthier and more sympathetic view of both types of sufferers. Last year, for example, the Isle of Wight hosted the special Olympics, which provide international competition for the mentally handicapped. Her Royal Highness the Duchess of Gloucester most graciously came to those games and it was a joy to see how loving she and others were to the friendly advances of mentally handicapped people.
A similar ready acceptance of the mentally ill is not so forthcoming from the community as a whole. I can understand that because in some cases the mentally ill can be frightening. We need to achieve that acceptance; but in the meantime the pressure on patients and families, as I described earlier, remains and the NSF in particular desperately needs more of a share of funds from government sources to enable it to develop its resources now while charitable interest slowly develops. It responds to over 6,000 calls for help a year nationally, plus many more locally.
Out of the £1·2 million DHSS budget for voluntary mental illness organisations, the NSF receives only £83,000. Other new organisations, such as the Manic Depression Fellowship, which also deserves to be funded scarcely get a look in or receive very small grants. However, among the numerous small and very small grants given by the DHSS for mental illness the grant for MIND stands out. It is £415,000, which takes over a third of the entire budget. MIND receives three times as much as the next organisation—the Alzheimer's Disease Society—which receives £120,000, after being given special priority by my noble friend. That seems to be an inequitable sharing of resources. I hope that my noble friend will be able to rectify that position in future years.
As well as contributing more fairly to the burdens of those fledgling charities in their early years from whatever sum can be made available, I emphasise to my noble friend that a substantial increase in the overall budget to get those worthy charities for a hitherto unpopular problem in society off the ground could be a worthwhile investment for the future.
5.26 p.m.
Lord Allen of Abbeydale: My Lords, this is a debate on an important topic. We are much indebted to the noble Lord, Lord Basnett, for arranging it, even if it
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seems to have attracted an attendance a little less than we had about 24 hours ago. I propose to limit my remarks in the main to the mentally handicapped. Perhaps I may be permitted to start on a personal note. I recently succeeded the noble Lord, Lord Renton, as president of MENCAP, having followed him previously as chairman of MENCAP. I should like to take the opportunity to pay tribute to the work that he has done over the years on behalf of the mentally handicapped, not least in reminding your Lordships from time to time of their needs and problems.
I find it a little sad that not all the members of the noble Lord's party have listened to him. Like many of us, I looked at what was said in the Conservative Party Manifesto about poll tax. I read that it was to be a fixed charge for local services paid by those over 18, except the mentally ill and elderly people living in homes and hospitals. I am afraid that it stands out a mile that the author did not have the slightest idea that the phrase "mentally ill" did not cover the mentally handicapped.
It is interesting to recall that when we were discussing the Bill dealing with the Scottish poll tax the Government agreed to an amendment exempting the severely mentally handicapped. Incidentally, there was no hint of protest from anyone that the House was exceeding its proper functions. When subsequently the English Bill was introduced, it contained a comparable provision about the severely mentally handicapped; but, hardly surprisingly, not a word differentiating the mental illness of the manifesto from other forms of illness.
That lack of knowledge of what is a simple, basic issue is the more disappointing in that in 1981 the Conservative Policy Group on Mental Health produced a rather good report. It enunciated two underlying beliefs. The first was that life was not nearly as good for the mentally handicapped as it could and should be. The second was that there were ways in which the lot of that substantial section of the community could be improved. In the seven years since, has life for the mentally handicapped become as good as it could and should be?
There have been changes. As has been explained, there has been a greater public awareness, but I am afraid that it is still not possible to answer that question with a resounding affirmative. It is not that the Government have done nothing. No one who heard the noble Lord, Lord Skelmersdale, could possibly maintain that. He can properly point to a number of legislative and other changes for which the Government can rightly claim credit. One is still bound to ask whether enough has been done or is in prospect. The uncomfortable fact remains that there is a widespread belief among the mentally handicapped and their families that their problems are still not understood and that there is an inadequate appreciation of the need to foster their independence and their right to a life as nearly normal as possible with the freedom of choice which is open to more fortunate citizens.
In the next few minutes I shall try to explain some of the reasons that uneasiness and discontent are so widely felt despite the various steps which have been

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taken. Perhaps I may start with the subject of education. First, as the noble Lord, Lord Basnett, reminded us, in Britain there are something like 1.2 million people with some kind of mental handicap. Of these, perhaps 160,000 are severely mentally handicapped and some 60,000 of those are children. Of the severely mentally handicapped, about one in three has a sensory or motor disability in addition to permanently impaired mental ability. It is a small wonder that there was a very warm welcome for the Education Act 1981 following the Warnock Report and heralding, so it seemed, a new dawn for those with special educational needs. However, the working of that Act has so far proved to be very patchy. For example, one local education authority in the course of a year issued statements for 1,200 children, whereas another managed a miserable 25. Waiting periods for well over a year for the completion of statements are not uncommon. The Government are well aware of these imperfections but the noble Baroness, Lady Hooper, at col. 1125 on 11th May, could offer no more than a review of the Act later this year.
This happens to be one of the few days on which we are not talking about the Education Reform Bill and I do not propose to do so. However, against that background it is not surprising that the discussions on the Bill have caused a good deal of anxiety lest children with learning difficulties will be put at even greater risk than hitherto of finding themselves outside the main stream, and anxiety about the effects of opting out on those children. It has also been noted that although the Government have made a number of proposals affecting these children, some of the more important ones were not in the Bill as originally introduced.
I next turn briefly to the history of the Disabled Persons (Services, Consultation and Representation) Act 1986. That Act received Royal Assent in July 1986 and some of its most important provisions, including the assessment of those coming from long stay hospitals, have still not been implemented. I am in no doubt that the noble Lord, Lord Skelmersdale, will be ready to remind us yet again that the Government have always said that implementation must wait until resources are available. However, many people are increasingly asking why, when we are nearly two years on and the Government say that they are serious about care for the disabled, there is still a failure to provide the comparatively modest resources which will be needed.
I turn now to the Local Government Finance Bill. Again I have no intention of embarking on any detailed discussion of that Bill today—not even the definition of "severe mental handicap". However, I must make the point, echoing something said by the noble Lord, Lord Ennals, that the prospects are viewed with alarm by many parents in the community who have grown up children living at home who do not qualify as "severely mentally handicapped". There is also anxiety on the part of individuals who find the prospect of the tax something of a deterrent to any plans for independent living—a policy which they thought was looked on with approval by the Government.
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Looking at the noble Lord, Lord Carter, I must return for a moment to yesterday's Question about the Independent Living Fund. I believe it is conceptually wrong to take the payment of benefit outside the statutory system but, apart from that, there are still many unanswered questions about this fund: how long is it to last and so on? Apart from anything else, it was not ready when the statutory changes were made last month.
I do not want to add anything to what has been said about care in the community, particularly on the very day when a report on this topic has been published by the Public Accounts Committee in another place. It is a somewhat critical report and to me made rather uncomfortable lunch-time reading. However, as it seems to be the fashion in this debate to quote Sir Roy Griffiths perhaps I could have my pennyworth and refer to the passage in which he states that although community care has been talked of for 30 years, in few areas could the gap between political rhetoric and policy on the one hand, or between policy and reality in the field on the other hand, have been so great. I recognise that the recommendations of the Griffiths Report are not free from controversy and are likely to give rise to a good deal of argument. However, I go along with the hope that something will soon be decided, and I noted the commitment into which the Minister entered when he spoke earlier this afternoon. It has been observed that the report was not received by the Government with any great fanfare of publicity.
I could go on, but I shall content myself with one more addition to my cumulative list and that is the instruction to those operating the social fund to consider whether charities may meet an applicant's needs with the implication that charities may now be looked to in order to finance public policies. I know that this is not a new point but it is still causing anxiety among some of those who believe that they pay tax and national insurance contributions in order to ensure that statutory help will be available to those in need.
I have tried to highlight a few areas where there is disquiet and apprehension among a sizeable but inarticulate section of the community. I appreciate that others beside the Government have responsibilities, including local and health authorities. I also believe that the commitment and personal attention which the Minister has given to these matters has been widely appreciated.
I believe that the Government have compassion for the less fortunate members of society and wish them to share in the nation's rising prosperity. I believe that they have a social conscience. The trouble is that they do not always show very much imagination in seeing how their policies will work out for some, and they continue to look as though concessions are being forced out of them when they run across difficulties raised by other people which one would have thought they might have foreseen for themselves. There is certainly an impression that they are not over-generous with resources for the kind of problems that we have been discussing.
In the time at my disposal I shall not attempt a measured assessment of the Government's

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performance, diagnostic, formative or summative. But perhaps a more old-fashioned end-of-term report might have read something like this—"in the end has the right approach and tries hard but is not very imaginative and finds it difficult to keep up; could do better".
5.40 p.m.
Lord Prys-Davies: My Lords, we are very grateful to my noble friend Lord Basnett for giving us this opportunity of discussing this important subject. We thank him for his comprehensive review of the problems of the mentally handicapped and the mentally-ill patients and the problems of their families and for presenting that review in an outstanding speech.
I think that one of the crucial messages which emerges from the debate is as follows. The sensitive and difficult process of change from hospital care to community care, which we welcome, is running into problems in many parts of the country. That is because the development of community facilities is not keeping pace with the run down of large mental hospitals or their closure.
The noble Lord, Lord Mottistone, speaking from the opposite side of the House, produced very telling figures to show that as the result of the run down and closure of large hospitals there is by now a huge shortfall of places in day hospitals and local authority day centres. In the result, a substantial part of the burden of looking after patients who were formerly accommodated in hospitals, or who would have been formerly so accommodated, is now too often shouldered by parents and families without adequate facilities in support.
Again, we have been told this afternoon by many speakers that some patients are very lonely in the community at large when they find themselves in substandard hostels or bed-and-breakfast hotels without adequate support. We have been told that a small number end up on the streets or railway stations or even prisons.
When we write as we do from time to time to Ministers questioning the imbalance between hospital care and community care we are repeatedly told that the Government's policy:
"is not the running down and closure of hospitals, but better provision for individuals according to their assessed needs".
That is the stock answer which I have received over the past two years. But to many parents, families and to some voluntary organisations the reverse appears to be the case. It appears that there is a gap between the stated policy and the reality as it exists.
The National Schizophrenia Fellowship is not aware of any evidence to back up the Government's claim that there is no imbalance between hospital care and community care. According to the Royal College of Nursing it is evident:
"in many parts of the country that community care facilities are not operational when the long-stay institutions have been closed".
This conclusion is consistent with a number of authoritative reports published since 1985 including the report of the Public Accounts Committee published today.
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But while the Government now seem to accept that community care is not a cheap option, they have yet to accept the need for additional resources on the scale required during this difficult crossover period when both the hospital and the community services have to run in parallel.
When I wrote to the noble Lord, Lord Skelmersdale, last year about the problems of a particular hospital for the mentally handicapped, he gave me this answer in his letter of 13th July:
"The original plan would have taken a number of years to achieve the transition to community care, [it] would have presented difficulties for maintaining services and would have been financially wasteful in keeping parallel provision in both the hospital and the community."
That was a frank answer, as one would expect from the noble Lord, Lord Skelmersdale, whose contribution in this field is appreciated by all Members of the House. But one has to keep the hospital facilities and the community facilities for some time to come both available for mentally-ill patients and mentally-handicapped patients.
If the bridging costs, although they may appear to be financially wasteful, are not made available, one finds oneself in the position that on the one hand one cannot allow expenditure on essential improvements to a hospital for those patients who require high dependency because the hospital has no future and therefore its condition worsens. But on the other hand, one cannot spend as one would wish on building up the community facilities because one has to maintain the hospital facilities. So at the end of the day this particular problem is essentially a problem of shortage of money. This is a problem which only the Government can solve. But it can be solved given the will.
I strongly endorse the powerful plea made by my noble friend Lord Ennals that significant bridging funds should be made available during this difficult crossover period in order to build up the services which are required. I trust that the Minister will be able to comment on my noble friend's plea when he comes to reply to the debate.
In view of the great difficulty of hospitals running down their services before provisions are available in the community, I would urge the department to make it mandatory on health authorities to satisfy themselves that sufficient care facilities are available locally before they discharge more patients from their hospitals to the community.
Lord Winstanley: My Lords, I am interested in the noble Lord's argument all of which I support. I am also interested in the question that he has just put to the Minister. But I hope that in elaborating his argument the noble Lord will bear in mind that the difficulty is that the catchment area of some of the large institutions which are to be closed is so wide that one does not know to which community discharged patients will actually go. They do not all go to one community or to the immediate locality of the hospital. If they did, things would be much simpler. But what one does find is that as a hospital closes so some of the long-term patients go to far flung parts of the country in very different areas altogether.
Lord Prys-Davies: My Lords, that is a fair point. Whether the patient is to be returned to a local community or a distant community, the health authority ought to satisfy itself that the facilities are available.
I anticipate that the Minister may answer by telling us that the department has already made it known in either the 1985 circular or the 1986 document that patients should not be discharged before facilities are available in the community. He may plead either the circular or the document. To that answer, we reply that all too often the circular and the document are overlooked. We ask the department to consider taking the further step of making it mandatory for health authorities to satisfy themselves that the facilities are available. It is essential that the imbalance should be corrected. Otherwise, with 28 hospitals for the mentally handicapped scheduled to close between now and 1990 and about 35 large mental hospitals scheduled to close between now and 1995, the imbalance could undermine public confidence in the policy of community care, not only as a practical proposition but also as a philosophy.
Turning to an allied matter which has been touched on by a number of speakers, where the facilities which are required are not available either in hospital or in the community, a heavy and unfair burden is put on families who care at home for the mentally ill or mentally handicapped. There are distressed parents and families who undertake such tasks 24 hours a day for 365 days a year with inadequate support. In far too many districts there is a dearth of short-term respite facilities for families. Will the department press the regional authorities to consider how they can best ensure the provision of respite facilities for those hard-pressed families, and encourage the setting up of such facilities in districts within their regions? I hope that that item can be placed on the agenda.
Another worrying matter is that parents who are now in their 50s, 60s and 70s may be worried about what will happen to a son or daughter when the surviving parent dies if there are no care facilities available. Mr. Jackson, the chairman of Rescare, writes:
"The disturbing question that hangs over all caring parents is, 'What will happen when I die and am no longer here to care?' And the disturbing fear is that the son or daughter will ultimately be left to wander the streets unkept, unwanted, abused and exploited".
I am not sure how best to answer Mr. Jackson's difficult question in the short-term and in the absence of residential services for such a son or daugher. It has been suggested to me that the department and its lawyers, possibly with the help of the Charity Commission, should consider setting up a national trust or encouraging others to set up such a trust. Although it would be difficult, the trust should be charitable. Parents could bequeath to it their estate or the proceeds of sale from a home to be applied for the benefit of a son or daughter during his or her lifetime in addition to statutory support. Thereafter, proceeds could be applied for the benefit of the orphaned mentally ill or mentally handicapped.
Lord Mottistone: My Lords, perhaps the noble Lord might like to suggest that such proceeds should be sent to the new charity which I mentioned, SANE.
Lord Prys-Davies: My Lords, I am grateful for that suggestion. I shall consider the matter and possibly offer advice on the basis of that intervention.
We are all conscious that there are a number of important gaps in the services which do not make headline news. Services for some small goups of patients are sadly lacking in many parts of the country. One such group is the 80,000 autistic persons who have many unmet needs. I understand that in many parts of the country, early diagnosis of the condition is inept and treatment is lacking or inappropriate. The National Autistic Society, which has a well-proven track record in the field, and its local societies, such as the South Wales Autistic Society, which I support, have during the last 20 years provided 16 schools and 19 adult centres. Their education programmes are yielding rewarding results. Yet those schools and centres care for no more than about 1 per cent. of autistic people. More research to establish the cause of the illness is urgently needed. More residential schools and centres are also urgently needed. I urge the department, possibly in conjunction with the DES, to consider what assistance it can give in that direction.
In the course of our debate there have been many references to voluntary bodies which are working with other such bodies and with the statutory bodies and local authorities to improve services for the mentally ill and the mentally handicapped. They do a tremendous job. They bring support, understanding and hope to thousands of people. However, the voluntary organisations are handicapped—some more than others. They are handicapped by a shortage of funds. Will the department fund those organisations more generously in order to help them in their work for the mentally ill and mentally handicapped? That is my last plea to the department, at least for today.
5.58 p.m.
Lord Skelmersdale: My Lords, this has been an invaluable debate, as I envisaged in my previous remarks. I am very grateful to the noble Lord, Lord Basnett, for initiating the debate and to all noble Lords who have spoken in it. However, it oocurs to me, as I stand to wind up for the Government, that, as the noble Lord, Lord Winstanley, predicted might happen, we have had many equations today but remarkably few solutions. If I had hoped for guidance from the debate on how to conduct my responsibilities in the area, I would be to a great extent a rather disappointed man.
Indeed, anyone coming new to the subject would believe that the problems of long-term patients coming out of hospital are the same as those of patients who come from normal family homes and who go for short stays in hospitals for treatment before coming out again. The media constantly make that mistake. Reference has been made this afternoon, for example, to the recent Esther Rantzen programmes on this subject. One of the first television programmes in which I took part when I took up this particular responsibility was one of Roger Cook's. In both those sets of programmes these mistakes were made.

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In my travels around the country—on average one day a week during the time when Parliament is sitting and, I am glad to say, three days a week when it is not—I have discovered that the problems are quite different. In the past, I admit, there have been difficulties with the discharge policy proceeding too fast. I do not believe that that has been the case over the past two years.
Restricted community care—which is not supposed to be a new catch phrase but I hope explains what I mean—is in good shape in most health authority areas. However, the problems occur where there are ex-short stay patients or those whose stability in the restricted sector (as I have called it) has become such that they have decided to move into other accommodation. If it is properly conducted that is the ultimate in community care; people move from the ultra care situation into more and more limited requirements for personal care. It is there that the problems really arise.
As I implied earlier, the speed and detail of the development of services in any one area will depend primarily upon the relevant health and local authorities making the best use of resources available to them. I was interested in and I take the point of my noble friend behind me concerning what is termed in the jargon "coterminosity"—in other words the same geographical areas of local authorities and health authorities. I admit that there is a lot to recommend it. However, it is not necessarily a logical decision but a highly political decision as to whether coterminosity should apply in those parts of the country where it does not occur. Although applied for the best of reasons, it upsets a great many people. Indeed I seem to remember that a previous Conservative Government is believed to have lost a General Election because they were so brave as to muck around with county boundaries. I should not like that to happen.
However, there are ways in which central government can make a direct contribution to the development of community care projects. For instance, under our mentally handicapped children initiative we have made available to health authorities and the voluntary sector a total of £11½ million to help finance projects aimed at moving mentally handicapped children out of hospital into more suitable forms of care. Some 340 children have been helped directly through that initiative. Equally important, our initiative has played an important role in helping to demonstrate to authorities what can be done. The number of children in large mental handicap hospitals has fallen from 2,400 in 1980 to below 400 at the end of 1986. Most authorities have plans to make alternative provision in the near future for those remaining.
What else can central government do to help? There is, as we all know, no magic wand that we can wave. But we can and we do encourage health authorities. The regional review system enables the National Health Service Management Board and Ministers to discuss with regional health authorities points of concern on planning or the provision of services and to set objectives for action. Good collaboration is one of the points we look out for, or
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rather the absence of it. In the review process we tackle regions if there seem to be problems.
The noble Lord, Lord Basnett, asked the crunch question at the beginning of the debate: how many mentally ill and mentally handicapped people are we talking about? I regret to have to tell him that that is not known in any definitive sense. Hospital admissions and discharges are known but I assume that the noble Lord was referring mainly to those in the community. It is estimated that there are 50,000 to 100,000 people in the community who are chronically disabled by mental illness, and that schizophrenia affects about 1 per cent. of the population. We shall have a guide certainly to the numbers of mentally handicapped and I hope to an extent to the mentally ill when we receive the reports of the Office of Population Censuses and Surveys, the first of which is expected later this year.
Not surprisingly most speakers in the debate have referred to the Griffiths Report. I should like to say particularly to the noble Lord, Lord Ennals, that I understand his impatience. But I think that it is much more important to get it right than to get it fast. Anyone would have thought, listening to the noble Lord's speech, that absolutely nothing is happening in this field and that there is a great hesitation while we await consideration of the Griffiths Report, Lady Wagner's report and the interaction of the two, and the possible results of my right honourable friend the Prime Minister's review of the health service.
I suspect that the noble Lord moves around the country to an even greater extent than I do. He will know that all kinds of units are being built in the community. There are very impressive schemes in some parts of the country which we should all like to see duplicated elsewhere. It strikes me that many of those schemes are new. We will not put a stop to the innovation that is taking place around the country if we wait a little longer for the Griffiths Report and, as I said, get it right.
I should like to make two points about the Griffiths Report. For many years local authorities have been resistant to central government moneys being targeted at and spent totally on the services for which they are provided. It is my personal belief that local authorities are changing their ideas. However, before the Government come down on one side or the other in this matter, we must obtain the views of the local authority associations. I am very conscious that the people who run local authorities are elected locally. It is only right that they should have a major say in this decision.
As far as concerns which Minister, if any, should do the job and in which department he or she should be situated, the noble Lord, Lord Thurlow, gave us an amusing caricature of what may or may not go on in No. 10 Downing Street. He is right in one sense because it is indeed in the gift of my right honourable friend the Prime Minister to decide who and which department does what.
To come back to the central points of the debate, the noble Lord, Lord Winstanley, pressed for an indication of the Government's response to the Griffiths Report. All I would add to what I have just

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said is that I shall not ask my right honourable friend to rush his response, for the reasons I have given.
Local authority funding of mental health services was mentioned. I believe that we cannot look at that issue solely in terms of increased rate support grant support. Questions of the priority which local authorities attach to mental health services in comparison with, say, child health or the care of the elderly are—because they are elected—a matter for them. That funding is supplemented to a great extent from the rate fund and so it is up to them to prioritise.
The noble Lord, Lord Ennals, quoted a number of sources complaining about the discharge of mentally ill patients into the community. The Government continue to stress that patients should not he discharged without an adequate plan of care. I said that at the beginning of the debate, but I regard it as very important indeed. Many are short term patients who return to their existing home background. The future of long stay patients who are discharged must be most carefully assessed because it is the long stay patients for whom the state has been responsible for so long.
So far as concerns bridging finance, most regional health authorities have made their own arrangements in the district allocations. If this was the major problem that the noble Lord, Lord Ennals, suggested, regional chairmen in meetings with my right honourable friend would have continually pressed the Government for action on bridging finance. But that has not happened.
The noble Lord, Lord Thurlow, spoke of providing care for mentally disordered offenders on release from prison. That brought a new factor into this debate. It was one of the issues looked at by the inter-departmental working group on mentally disturbed offenders in the prison system. As a result, discussions are taking place and we are seeking further to encourage regional health authorities to develop a comprehensive network of provision to meet the mental health needs of mentally disordered offenders and to develop a network of services within the community for the chronically mentally ill who may lose touch with services and then commit petty crimes, whether or not they intend to do so (and that refers to another point that was raised), and find themselves in prison. Further, we are discussing ways of ensuring that those mentally disordered offenders on leaving prison can be put into touch with psychiatric services. Noble Lords remarked on the idea in the Griffiths Report of a named carer. I believe that this should come in here as well.
Many points have been raised. In all conscience I do not think, having spoken once, that I should refer to all of them; but I shall reply in writing. However, I should like to call particular attention to the very important role played by the voluntary sector in the provision of respite facilities and care attendance schemes. I should like to pay tribute to the enormous contribution made by a whole host of different people and organisations in this field. Together they form part of the long tradition of voluntary services in this country, which is one that Ministers are keen to see preserved. We shall continue to support the
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voluntary sector to best of our ability—by that, I mean giving organisations both moral and financial support.
In the mental illness field, for example, we shall spend nearly £1.5 million on grants this year to over 20 voluntary organisations. These and other organisations make a vital contribution to the total provision of community care services. We greatly admire the imagination and resourcefulness that enables the voluntary sector to provide a level and quality of service that belies the limited resources available to them.
I can tell my noble friend Lord Mottistone that I am well aware of the imbalances in the Government's mental health budget for voluntary bodies. This is largely for historical reasons. I had a naughty thought when listening to my noble friend that some of this imbalance may be reflected in the fact that the noble Lord, Lord Ennals, was particularly interested in this area and could—I put it no higher than that—have influenced it. However, I am seeking over a number of years to rationalise this situation. But my support, respect and gratitude for charities in the mental illness field come second only to my feelings for those who appear for and support the needs of sufferers of mental handicap and their families. In the last financial year I was able to authorise grants totalling more than £800,000.
It has been quite constructive in this debate to find that the only person to zero in, as it were, on the problems of the mentally handicapped in the community was the noble Lord, Lord Allen of Abbeydale. I know of his interest in this area and of his new appointment at MENCAP (in which we are all extremely interested). I do not know whether the noble Lord was in the House yesterday when I answered a Question on the Independent Living Fund; but I think he will find that some of his questions today have already been answered. There is one question of great interest which I did not answer, and that concerns the £5 million which is the Government's start-up money. The Government believe that it will be more than adequate for the first year; but, if it is not, clearly we shall top it up. So far as the time is concerned, I gave three to five years for it.
Finally, in response to one point made by the noble Lord, Lord Prys-Davies (of which he gave me previous notice for which I am grateful) I sympathise with the concern of parents about future provision for their mentally handicapped sons and daughters when the parents are no longer there to provide a home. The MENCAP Homes Foundation, with help from the department I have the honour to represent, has led the way in helping parents make provision for their children along the lines that the noble Lord has suggested. But I shall certainly consider whether there is anything further that we can do to help, either within the direct or the indirect public sector.
Your Lordships may feel that I have spoken quite long enough for one afternoon. Perhaps I may conclude by thanking all noble Lords and again the noble Lord, Lord Basnett, for introducing this fascinating debate.
6.14 p.m.
Lord Basnett: My Lords, there remain for me only two tasks to perform. First, I join the Minister in thanking all those who have taken part in what, as he says, has been a fascinating debate, but which equally has been a well-informed and caring one. Secondly, I should like to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Access to Medical Reports Bill
6.16 p.m.
Lord Tordoff: My Lords, I beg to move that the Bill be now read a second time.
Some of your Lordships may remember—and it may have been noticed at the time—that my honourable friend in another place, Mr. Archy Kirkwood, last year presented a Bill on access to personal records, which I had the pleasure of moving and getting through all its stages in one day just prior to the general election. This dealt with a number of matters—access to records for housing, and so on. At that stage, we should have liked to have put in something about access to medical records. It was fortuitous that again Mr. Kirkwood, who seems to have a remarkable streak of luck in these matters, came high in the ballot in another place this year and introduced the Bill which I am now introducing to your Lordships.
It is a very limited Bill. It seeks to deal only with access to medical reports and not access to medical records. I would that it went further than it does, but one has to take these things slowly. In brief, the objective of the Bill is to give people a chance to see medical reports that their own doctors send to an employer or to an insurer so that they can correct any inaccuracies, and discuss and up-date the doctor on anything that is recorded on the medical record that is not up to date. It gives them the opportunity to know what they are consenting to when they sign a form authorising a medical report for employment or insurance purposes. They can make representations on any proposed disclosure which they would regard as an unnecessary breach of their privacy. Ultimately, if they are wholly dissatisfied with the proposed report, they can withdraw consent for it to be supplied.
If they do not make use of the opportunity to see the report before it is sent, and for some inexplicable reason they are later turned down for a job or for an insurance policy, after the event they can check whether the mistake in the doctor's report might have been responsible. Even at that stage they might be able to reverse the decision or prevent that mistake recurring in a future application.
A number of case histories have been reported in another place. I propose to quote only two, one of which is new and one of which has been mentioned before. The first case which illustrates the need for access to information of this kind is from a woman who said that certain clinical data regarding herself had come to light and recently, on opening a referral
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letter from her GP, she found that the GP had written:
"I know nothing about her, except that she has had emotional problems since the death of her husband".
This lady goes on to say:
"I married my husband in 1961. I was a spinster, he a bachelor. My husband is alive and living here with me in our home…At no time in my life have I ever had to consult a Doctor because of emotional problems".
She adds that the GP has no direct personal knowledge of her. Although on the list of Dr. A for some years she has never sought a consultation with him. The truth is that she has never met or set eyes on Dr. A. She was very upset and angry about this because she regarded the suggestion that she suffered from emotional problems as extremely damaging to her. She had held high positions in management in charge of staff, and with the label of emotional disturbance she would expect the level of her standing to be greatly reduced. It was obviously damaging her possibilities of obtaining employment in the future. That is one case.
Another case was quoted in Hansard in another place at col. 678 on 29th April in which the speaker said:
"Not long ago I went to the family practitioner committee in my neighbourhood. It has very good people and has recently computerised its records. It proudly punched up my cervical smear test record and said, 'You have not had one for ages. You are due for one now'. I said, 'But you haven't got any of my cervical cancer smear test records on your computer, I had one as recently as—"
and the date was given.
"It punched more buttons and the computer record was a total blank.
"The reason for that was that it had the wrong NHS number. It had one digit wrong. I knew that and I was probably the only person in the entire country who did. It had punched 'LNUN' instead of 'LNVN'. That was clearly a mistake in somebody's handwriting".
That was a quotation from Edwina Currie speaking on this Bill in another place. Mrs. Currie has been extremely helpful in the process of this Bill. I realise that the Government will wish to maintain a neutral postion on this Bill. Nevertheless, I should like to go on record as saying that Mrs. Currie has been extremely helpful to my honourable friend and I think that the Bill is all the better for the co-operation that we have had.
Access to reports for employers may be particularly important where there is anything in the medical record to suggest a history of mental illness. A 1978 report by MIND described repeated cases of employment discrimination against people with a past history of mental illness who were presumably currently healthy and otherwise qualified for work. We must ask ourselves whether patients who consent to the revealing of their medical history understand what that entails. Do they hope and expect that the doctor will be somewhat choosy in presenting the information? I doubt whether the consent of patients may be described as informed consent. Do they realise that their written consent amounts to much more than most of us would believe? People would suppose that there would be some brief, factual report of their general health. But it can be much more, and not all of it always objective. It is somewhat inaccurate, as we have seen in those two case histories.

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With people worrying about AIDS—and no one is more worried about AIDS than the insurance companies, and one can understand why and I do not criticise them for that—the result is that they are becoming much more intrusive in the questions they ask. There is no doubt that jobs can be missed and insurance refused by the reporting of misleading. Inappropriate or even thoroughly wrong information.
Let me deal with the scope of the Bill. The Bill applies only to reports produced by a doctor who has been responsible for the clinical care of the individual—that is to say the patient's GP or a psychiatrist or a consultant who has treated the person. It does not cover reports produced by a doctor who has not treated the patient—for instance, a company medical officer who has carried out a pre-employment medical examination—or a doctor who has carried out an independent medical examination on behalf of an insurance company. Although the Association of British Insurers has questioned whether a strict reading of the Bill as drafted supports this interpretation, we believe that it does, and we have the support of the DHSS in that belief. Nevertheless, the DHSS has been good enough to say that it will have this confirmed by parliamentary counsel, and if there is any doubt we can provide an amendment at a later stage of the Bill; and I undertake to do that.
The reason for concentrating on reports produced by a doctor who has treated the person is that the doctor will have acquired information from the patient on the understanding that it is only to be used for medical purposes and protected from disclosure by mutual confidentiality. Disclosure of this information to an insurer or an employer for commercial rather than medical purposes involves virtually an enforced breach of this confidentiality. This is not the case when the individual submits to a medical examination for an insurer or employer. The person knows from the outset that the examination is carried out for the benefit of the company rather than for his or her own health.
As the Bill stands, the definition of employment— the "employment purposes" covered by the Bill—relates strictly to employees. Again the Government have said that they will be content to see the definition widen to bring in reports relating to self-employed persons acting under contract. Again I am hoping that we shall have some advice on that before we reach the next stage of the Bill when it might be necessary to propose a further definition in Clause 2.
Clause 3(1)(a) is the part of the Bill that requires an insurer or employer to have the written consent of the applicant before approaching the applicant's doctor for a medical report. Originally the Bill limited the validity of that consent to 90 days. But that caused problems for the insurers in that it would have prohibited their approaching the doctor on the death of the insured, perhaps in cases of suggested fraud. We found it impossible to secure a form of words that would be acceptable both to the Association of British Insurers and the BMA. The Bill, therefore, is now silent on this matter and preserves the present
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situation whereby doctors will limit consent to the particular transaction. There is no change from the current practice.
Perhaps I may say a few words on how to apply for access to a report before it is sent. The Bill allows an applicant to have access to a report before the doctor supplies it, and for six months after it has been supplied. The procedure for applying for access to a report which the doctor intends to supply is as follows. First, the insurance/employment application form which asks for consent to take up a medical reference will invite the applicant to indicate whether he or she wants to see the report before the doctor sends it. Secondly, if the applicant says, no, or does not indicate, yes, the company can approach the doctor and the doctor can reply immediately. Thirdly, if the applicant says, yes, he or she has 21 days in which to contact the doctor and make arrangements for access. The company has to notify the applicant that it is seeking a medical report—reports are not sought in every case—and the 21-day period starts from the date on which that notification is given. Finally the company also has to notify the doctor that the applicant wishes to have access and to tell the doctor to wait for up to 21 days before sending the report to give the applicant time to arrange for access.
A parallel procedure exists under Clause 4(3) which deals with those cases where the company gets the applicant to pass the request for a report on to the doctor. It will also be possible, as I indicated before, to apply for access after a report has been sent. The doctor is required to keep a copy of the report for at least six months. Originally there was some suggestion that there should be a much longer period. However, I recognise that in practice six months will be long enough because this will probably come into effect only when people who have been turned down for a job or for an insurance policy wish to look back to see whether there is any reason in their medical report.
The exemptions are contained in Clause 6 and they are based on those in the Data Protection Act—about which the noble Lord, Lord Mottistone, knows far more than I do—and in the order which regulates access to health records under the Act. Thus the words in Clause 6(1) about disclosure, which:
"would indicate the intentions of the practitioner in respect of the individual".
are included at the suggestion of the Government to bring it into line with the Data Protection Act. Similarly the words in Clause 6(3) about exemptions have also been included at the Committee stage in another place at the fairly firm suggestion of the Government.
Clause 8 deals with disputes over the contents of reports and when the applicant sees a report which the doctor intends to supply and disagrees with something, there are three options open. First, if the information is demonstrably wrong the doctor should correct it under Clause 5(2)(a). If the doctor unreasonable refuses, when it is obvious that the information is inaccurate, the applicant can as an ultimate step go to court for an order under Clause 8(1) requiring the doctor to comply.

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If there is a difference of opinion which is not provable one way or the other, the doctor is not required to amend the report in any way. He would merely invite the applicant to provide a written account of his concerns, and the doctor would send that to the employer or insurer with his medical report. Finally, if the applicant is wholly dissatisfied with the report he or she can withdraw consent of it to be sent at all, bearing in mind that that would probably jeopardise the application for employment or for insurance but it is an option that the applicant should have open to him.
The most important aspect is that the Bill does not give the applicant the right to force the doctor to suppress any relevant information or to change a professional opinion.
The Bill does not apply to Northern Ireland, but I understand that the Government have undertaken to give effect to that by an Order in Council if the Bill receives Royal Assent. I shall be glad if, when the Minister replies, he will confirm that.
As I have said, I understand that the Government wish at some stage to suggest an amendment relating to the definition of "employment records". That exposition takes us through the Bill. It is a limited Bill and Mr. Kirkwood and I are beginning to learn that we have to move slowly on these matters. We certainly wish to include other medical reports such as those for social security and housing, but we decided that we did not want to take on too many Government departments at one time. Discussions are taking place between doctors and the department on the wider issue of access to medical records. Indeed I wish that that were in the Bill before us today, but there has to be time for the doctors to try to come to some agreement with the Ministry on how access to medical records can be achieved. However, I feel that they cannot go on dragging their feet for ever. Meanwhile the more modest but important proposals on medical reports are before the House.
We believe that openness will in the end lead to greater accuracy, perhaps even to greater honesty, but it is important that the Bill leads to greater accuracy. People will not find themselves failing to get jobs or insurance policies because of inaccurate or misleading information in reports about which they know nothing. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Tordoff.)
6.34 p.m.
Lord Mottistone: My Lords, I am in general in favour of the Bill as drafted and welcome it. However, there is one worry, and that is that it does not fully protect all persons who might in certain circumstances be attacked by a mentally ill person who has access under the provisions of Clause 6 to a medical report, even if restricted under the terms of the clause. I should add that I am advised in this respect by the National Schizophrenia Fellowship.
What we should like to see in Clause 6 is the addition of "or others" after the word "individual" in line 34 on page 3. A researcher reporting in The Lancet on 6th December 1986 about giving psychiatric patients access to their medical files, also
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drew attention to the small but not negligible number of patients—I emphasise "not negligible" because he reckoned the number is eight out of 100—who already had a history of violence and might react aggressively. The researcher mentioned factors which might trigger off a reaction. For example, a report for an employer forming part of a medical report might say, "This man would be a poor employment risk and I do not advise taking him on". That would put at risk the person who wrote the part of the report concerned, such as a previous employer who might have been consulted.
It may be argued that that person could be protected by Clause 6(2). However, even that subsection is not wholly protective in all cases. The NSF had a recent case of a member whose sister (once in Broadmoor) was allowed to see her notes by a GP. There were statements made by members of the family which caused the sister to write threatening vengeance. Suitably edited in accordance with Clause 6(2) the family members might be protected, but their children could be at risk. It might be further argued that perfectly applied Clause 6(1) and (2) provide the necessary protection.
As I have attempted to show, however, there are potential loopholes which could arise from inadequate editing. These could simply be dealt with by including an amendment on the lines that I have suggested. I believe that the Government might support such a safeguard because a recent DHSS consultation paper sent out in March 1988 about regulations under the Access to Files Act, says at paragraph 10:
"The regulations will enable access to be refused if it would be likely to result in serious harm to the physical or mental health or emotional condition of the individual requesting access or to any other person".
I emphasise the addition at the end of the quote, "or to any other person"; and it is just such a phrase that I am seeking to add to the Bill.
Thus, knowing all the difficulties of amendments to Private Members' Bills from another place, I most sincerely hope that it will be possible for the Government to back a simple amendment on the lines that I have described when we come to the next stage of the Bill and will help the Bill if it has to return to another place through that process which I believe the Government can readily do if, as I suspect they might, they agree to what I am suggesting.
6.38 p.m.
Lord Rea: My Lords, I wish to speak extremely briefly as a member of the profession most concerned in the Bill. The Bill will be very helpful and I fully support it. Here I am speaking not only for myself but for the British Medical Association, which I understand has been working on the Bill with the original sponsor in another place.
Many patients who give consent to the release of confidential information about themselves are not aware of the extent and the probing nature of the questionnaire submitted to their doctors. Access to such reports would improve their awareness and validate their consent.
There are just one or two points upon which I should like the noble Lord's comments. I am not sure

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why the access is restricted to reports for employment or insurance purposes only: why not all reports which are prepared for patients by their doctors for a third party? Although most medical reports which are used for legal purposes are shown to clients, not all of them are.
Some reports to housing or social service departments are not made available; perhaps they should be. Can we be sure that the provisions in Clause 4, which require a delay of up to 21 days in the submisson of reports when access has been requested, do not unduly delay the sending off of those reports? Usually I am under pressure from the patient himself to produce the report absolutely as soon as possible, because a mortgage or a job may depend upon it. Is it not possible that by requesting access, a delay, possibly unwittingly, might be incurred? Could the noble Lord say whether pressure by the requesting firm or person might in fact dissuade a patient from requesting access to a copy of his report?
One small and useful aspect of the Bill is that it will require medical practitioners to keep a copy of the report they make for at least six months. This is useful not only for purposes of the Bill but also for the clinical records, because the report often provides a useful summary of the patient's medical history to date.
I should like to make one last point on Clause 6. I think it is essential to allow the withholding of information in certain cases. It has to be inserted for the very small number of patients who might be damaged by hearing or reading some bad news about themselves which has so far not been given to them. This would concern only a very small proportion of patients, certainly in my own case; but I think it has to go in.
I may have missed the point made by the noble Lord earlier in his introduction of the Bill but at the end of Clause 6(1) it refers to a medical report whose disclosure:
"would indicate the intentions of the practitioner in respect of the individual".
One can think of all sorts of things that that might mean. Could the noble Lord perhaps spell out what is actually meant by these words in the Bill? I think that this is a very useful Bill and I intend to support it fully.
6.43 p.m.
Lord Ennals: My Lords, I do not need to add much to what has already been said. I very much welcome this Bill and congratulate Archie Kirkwood on introducing it in another place and the noble Lord, Lord Tordoff, on introducing it here in a somewhat amended form following its passage through the other place.
Until I read the report of the debate, I had not fully realised the importance of this small piece of legislation. I had not clearly thought, as I should have done, that when any of us applies for a life insurance policy we are in a sense giving permission for information to be made known to other people that we may not precisely know ourselves; nor would we realise how many people may be involved.
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It is essential that we should at least have the protection of being able to see the information which is being passed from one person to another, particularly as, as the noble Lord, Lord Tordoff, said, there may be a mistake. It could be that the information given not only includes something about another person but may contain something which is quite incorrect about ourselves. We simply would not know that such information had been passed on and we do not know what has been passed on. It is absolutely essential that such problems are dealt with. The doctor may have mixed us up with another patient or he could have made some reference about sexual behaviour or drug addiction which could be extremely damaging whether or not it is true.
The purpose of the Bill is absolutely right and it may be that as a result of the representations that I am sure several of us will have received from the British Insurance Association some amendments may need to be introduced.
I heard the point that was made by the noble Lord, Lord Mottistone, who is not in his place at the moment. I would not wish to comment on the point made by the National Schizophrenia Fellowship without studying it more carefully. I would be concerned if anything were done in this House that would prevent the Bill achieving Royal Assent. We would have to look very carefully at an amendment proposed at this stage, bearing in mind that any amendment approved by this House would have to go back to the other place. It is perhaps a pity that any such changes could not have been introduced in another place. However, I am encouraged to know that the Bill at this stage has the approval of the BMA, and if there have to be amendments we will look very carefully at them from these Benches. I hope we can pass this Bill, which is already a compromise Bill, pretty rapidly through your Lordships' House.
6.46 p.m.
The Earl of Arran: My Lords, perhaps I may begin by paying tribute to the noble Lord, Lord Tordoff, who has given us such a clear and lucid explanation of the Bill, and to the honourable Member for Roxborough who introduced this Bill in another place.
Although the Government would not have chosen to legislate in this area, they believe that as a matter of principle people should have the right to know what is recorded about them. Where somebody finds that information is incorrect or misleading, it is only right and proper that they should have the opportunity to amend or modify that information.
The Bill provides for individuals to have the right of access to medical reports relating to themselves provided by medical practitioners before they are passed to a prospective insurer or employer. Where considered necessary, the individual has the right to amend the report or even prevent it being sent. This Bill is confined only to reports prepared by the medical practitioner who is or has been responsible for the clinical care of the patient.
The medical history provided in those reports prepared for employment or insurance purposes will

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be reflected in an individual's medical record. The Government gave an undertaking last year that they would enter into talks with the medical profession with a view to opening up medical records to patients on a non-statutory basis. This Bill comes at a time when such talks are taking place, and indeed had they been completed it may not have been necessary. It is nevertheless compatible with our general philosophy and we do not therefore seek to oppose it. The complications of trying to legislate on even this limited front are illustrated by the Bill before us. In many ways the practical difficulties of implementing a Bill of this kind confirm our belief that the non-statutory approach is to be preferred if at all possible.
The Government have an interest in seeing that legislation that reaches the statute book is satisfactory. We wish this Bill well in its passage through your Lordships' House and we shall be taking advice to see whether any technical deficiencies exist in its drafting which can be put right at Committee stage.
In the meantime I can confirm to the noble Lord, Lord Tordoff, that it is the intention to apply the Bill to Northern Ireland by Order in Council once it receives Royal Assent. Furthermore, in response to my noble friend Lord Mottistone, we shall be looking at the points made by him before it is considered in Committee.
6.49 p.m.
Lord Tordoff: My Lords, I am most grateful to everybody who has joined in the debate today on this short but important Bill. The noble Lord, Lord Mottistone, has clearly raised an important point and one which I should like to take away and look at to see what might be done. My initial feeling is that perhaps it is covered by Clause 6(1) and (2), but if I am wrong about that let us by all means find some way of covering it. I believe also that his comment is probably more applicable to medical records than to a report of this kind where the whole record would be exposed and quotations from other people may be seen and need to be expunged. It is less likely that such quotations will be contained in a medical report, but we shall look at the matter and see what can be done.
I am grateful to the noble Lord, Lord Rea, who raised the question of housing and social services and other matters about which I spoke. It is a fact that we must go step-by-step and it is foolish to try to educate too many government departments at once. Once one moves away from the step-by-step approach, one often finds oneself in the crossfire of a number of interested parties. To a certain extent that occured between the BMA and the insurers, but I believe that we have come through that all right.
The 21 days' delay is as much in the hands of the applicant as anyone else. It is a maximum period of 21 days. If the applicant is in a tremendous hurry to obtain the results, he can see them as soon as he is in a position to see the report. In other words, once the doctor has produced the report, it should be possible for the person to see and agree it. It can then be sent off straightaway and there is no question of having to delay for a period of 21 days. That is the maximum
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period during which the doctor may have to hold it back in order that access might be given.
Clause 6(1) indicates the intentions of the practitioner. Apparently it contains some kind of magic wording from the Data Protection Bill. It was not included by us but at the suggestion of the Government. I cannot pretend to be an expert on the subject in the way in which the noble Lord, Lord Mottistone, is; but I gather that it is a formulation which needs to be included.
I am grateful to the noble Lord, Lord Ennals. I am glad that now he has read the debate which took place in another place he realises that the issue is perhaps more important than it appears at first sight.
The Minister said that the Government prefer a non-statutory approach. I should like to think that that is true, but I fear that there must be carrots and sticks in such matters and this is a fairly gentle stick. If by the passage of this modest measure we encourage the medical profession to move more quickly into a non-statutory situation regarding other matters connected with medical records, the Bill will have achieved a bonus. However, the Minister rightly says that that is not incompatible with the kind of approach that the Government are making. I am grateful for his comment on Northern Ireland and the Order in Council.
I am grateful to all noble Lords for their participation in the debate.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Companies (Audit Committees) Bill
6.53 p.m.
Lord Bruce of Donington: My Lords, I beg to move that the Bill be now read a second time. If noble Lords do not already know, they will be sorry to learn that unfortunately the promoter of this Private Member's Bill, Sir Brandon Rhys Williams, died in the small hours of this morning. I am sure that the whole House will wish to send a message of sympathy to Lady Rhys Williams and their three children.
Noble Lord: Hear, hear.
Lord Bruce of Donington: My Lords, he fought his last illness with great bravery and it is a shame that at the early age of 60 he should be taken from the House in another place and from us in this House.
For some time Sir Brandon Rhys Williams fought a battle for what he conceived to be the rights of ordinary shareholders in large companies. He wrote several works on the subject, among which I commend to your Lordships his book entitled More Power to the Shareholders.
I should like to explain how I, who belong to the opposite political party to Sir Brandon Rhys Williams, find myself in the position of moving the Motion today. On 28th April of this year I received a telephone call from Sir Brandon Rhys Williams. He was in hospital and he asked me to see that his Bill is passed through the House of Lords because it is a

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non-party measure which has the support of nine prominent Members of the Conservative Party in another place, a Member of the Labour Party and a Member of Plaid Cymru. It went through the House of Commons on the nod. I looked in the House of Commons record on the subject and found that it had given him leave to introduce the Bill on 22nd March of this year. It passed through all its stages on 15th April. I looked at Hansard and there it was. The entry contained 12 lines indicating Second Reading, Committee, Report and Third Reading. In due course the Bill came to your Lordships' House.
The moment I learnt of that and checked it I went to my Whips and said: "The Bill will go through as a formality. Do you mind if I propose it?" They raised no objection and so I went to the Government Whips' Office and asked if I could have a date. They said that it would be 18th May and asked how much time I required. I said that on the basis of its performance in another place I thought that two minutes would suffice. I thought that I would merely say, beg to move", and that the Bill would go through all its stages.
From that moment onwards all hell broke loose and the the CBI erupted. The noble Lord, Lord Mottistone, who will presently move an amendment, indicated that he wanted the whole issue postponed for six months. The Motion that he will move to that effect will virtually have the effect of ensuring that the Bill goes nowhere. Moreover, noble Lords must believe me when I say that I thought I would speak for two minutes and that the Bill would go through on the nod. However, today, instead of a comparatively small debate we have no fewer than 17 Members of your Lordships' House who wish to speak on this subject. They include some of the leading captains of industry who are easily recognisable.
In order to avoid any misunderstanding as to the contents of the Bill, it would be right to acquaint your Lordships with the provisions. It has only three provisions. In the case of public companies it provides that its directors shall state,
"which, if any, of the directors at the end of the relevant financial year were independent directors.".
That is all they must do—just state that—and it is all that is required for the information to the ordinary shareholders. I cannot see that that smacks of dictatorship. I believe that it is a normal concomitant of the new capitalism, as described by the Prime Minister, where shareholders should receive information of that kind.
The second provision, together with the third, relates to what is described in the Bill as a "major public company". Within the terms of the Bill, a major public company is one that has an annual trading figure of £300 million and at least £100 million in its balance sheet total and employs over 2,000 people. I believe that there are some 250 to 300 in the country. They are very big and very powerful.
Sir Brandon's Bill requires, first, that in the case of major public companies the directors shall state whether it is their policy to make appointments of independent directors. That is all. The Bill does not
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require the directors to appoint them. I should have thought that that was fairly innocuous.
The second provision of the Bill relating to major public companies is that all the shareholders should be afforded the opportunity at an annual general meeting to say whether they wish an audit committee to be appointed comprising independent directors. Nothing in the Bill says that the company must appoint them willy nilly by virtue of the Bill. It provides that shareholders may be given the opportunity to decide whether such an audit committee should be appointed. If a majority of the shareholders decide not, that is the end of the matter. The Bill does not order that they shall do so. All that these powers mean is that the shareholders, if they wish, can decide upon these principles.
I know that in the course of the Bill—it would follow—there are definitions of the duties of such an audit committee when appointed. There is laid out a schedule of the proceedings that take place in the audit committee. The conditions under which the audit committee shall report to the directors are described. There is also a definition clause that seeks to define what an independent director is.
I willingly concede, as Sir Brandon conceded, that there must be ways of defining "independent director" more precisely. These, I submit, are Committee points. Similarly, some changes may be desired in the way that the audit committee itself is comprised and in the manner in which it conducts its affairs. There may be such variations. Indeed, I discussed them with Sir Brandon when he was still alive.
I submit that nothing in the Bill should have sent such a tremor of terrified horror into the august ranks of the CBI. Indeed, I am given to understand that the CBI is not without representation in another place any more than it is without representation here. How come that the CBI did not know what was happening in another place? I do not want to make too much of it, but it does not smack of too much efficiency to me. I should have thought that the most minute attention would have been paid by the CBI and its members to the proceedings in another place.
I submit that the Bill in principle should be given a Second Reading by the House on the basis of establishing the complete validity of the principles with which I have endeavoured to acquaint your Lordships. Either people's capitalism means something or it does not. The general public, or those who have the money, were told in the privatisation campaign that they were now going to become capitalists, which means of course that they would have some power. If their shares entitled them to no more than the same kind of privileges but without the security that a building society deposit would give them, there would seem little point, while of course asking them to subscribe to shares, in calling it a popular capitalism because, on the face of it, the CBI and its august members would seem to be unduly sensitive about the matter.
One is well aware that the larger companies—though not all of them—are director controlled. The directors may have only a minority of the shareholding themselves. Their shareholdings may be

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widely diffuse. It is so in some cases; it is not so in others. I am reluctant to think that the CBI will throw its weight behind directors purely because directors do not want shareholders nosing into the business that they control, as that would surely be an unworthy posture of the CBI.
I come now to the position of the Government in this matter. They had an opportunity of considering a Bill in May 1987. They considered it in Committee, and were most helpful to Sir Brandon Rhys Williams. It went through with the approval of the Committee, which had all parties sitting upon it. Then it could not be taken because of the pressure on parliamentary time in the 1987 session. My friend—and I call him that—Sir Brandon Rhys Williams, benefiting from the counsel that he had received in the meantime to improve it slightly, then brought it back.
What is the attitude of Her Majesty's Government? I am given to understand that it is one of neutrality. What a posture for a government supposed to be full of dynamic and to have the positive or negative answer to everything! If that be the attitude of the Government, I suggest that it reflects a weakness that has so far remained concealed but apparently can be concealed no longer. One can almost say to the noble Lord: why—what stretch of the intellectual perception is necessary to say "Yes, we approve it" or "No, we do not"? What ambiguity of policy, what nod from the Prime Minister, is necessry before an imprimatur of either yes or no can be given to a Bill of this kind? Why the paralysing, shivering indecision? Is it because Her Majesty's Government are afraid of the CBI? The noble Lord of course will have much to answer for.
I hope that the House will give the Bill a Second Reading. That will enable the House and the country to arrive at a decision on whether the principles that I have outlined, which I have not sought to stretch in anyway and which are in the Bill, are broadly acceptable with the oft expressed desire to protect the interests of the small shareholder. I concede that, there may be parts of the Bill, more particularly the detail, that may give rise to legitimate arguments. I shall seek to answer or to accommodate on behalf of Sir Brandon Rhys Williams, as many of those as possible. Tonight I cannot speak for my party but, as your Lordships' will be well aware its position will be in the very capable hands of my noble friend Lord Williams of Elvel.
I hope that the House may find that in the present circumstances the decent and honourable thing to do is to allow Sir Brandon's Bill to have its Second Reading. I beg to
move.
Moved, That the Bill be now read a second time.—(Lord Bruce of Donington.)
Lord Mottistone Lord Mottistone rose to move as an amendment to the Motion that the Bill be now read a second time, to leave out ("now") and at end to insert ("this day six months").
The noble Lord said: My Lords, I am indeed sorry that Sir Brandon Rhys Williams has died. For perfectly genuine reasons I did not have the privilege of knowing him, but he was obviously an important Back-Bencher in another place who had the courage
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of his convictions. That stands out from this Bill. It is extremely sad, that he should have died this very day. I have spoken with people about whether or not to postpone consideration; but, on the whole, I think perhaps not. We have consulted the Clerks on this matter. The Bill may have been initiated by Sir Brandon and could be described as his Bill, but once it appeared before Parliament it became Parliament's Bill. It is as Parliament's Bill that we should consider it today.
If, as I hope, your Lordships will back me, my amendment will dispose of the Bill for the rest of this Session. I am fully aware that by convention we do not normally treat Private Members' Bills from another place so drastically. However, this is no normal Bill and it has arrived before us somewhat unusually. The convention to which I have referred is normally exercised for balloted Bills that reach us. This Bill was a Ten Minute Rule Bill which slipped through all its stages in under an hour and when few people knew that it was being taken. The CBI, which is advising me on this matter, knew that there was such a Bill but did not receive the usual warning that it receives when company Bills are being taken. Indeed, it had no warning at all.
It is not reasonable of the noble Lord, Lord Bruce, to imply that the CBI was somehow deficient in this area. There are arrangements that take place but in this case they did not. One may question why that was so, but it is old history and is not the point. It is relevant in this case because it means that this is an unusual Bill. Therefore, I believe strongly that this Bill—the previous versions of which have failed in another place over 15 years—is a had Bill and it is proper for us to reject it.
The Bill is bad because it stems from the draft European Community Fifth Directive and the draft Vredeling Report which proposes a form of two-tier boards on the lines of company direction in Germany, both of which directives were rejected by your Lordships' European Community Select Committee about 10 years ago. Although the Bill does not produce the same two-tier boards as Vredeling, it effectively undermines the unitary board structure as practised in this country to our own very great advantage. For example, Germany is in sharp decline at present, industrially. There was an excellent article explaining this on page D9 of The Sunday Times last week emphasising the fact that the fall in competitiveness was due in no small measure to the Germans catching what used to be called "the British disease"; namely, wages too high for work done, inflexible working practices, etc. Although the article does not say so, a strong contributor to the German decline will have been the two-tier boards because they divide and weaken the authority of top management.
Britain's top management was weakened in other ways in the 1960s and 1970s and we do not want that situation to return ever again in any form. The Bill seeks to establish by law, as the noble Lord, Lord Bruce, has told us, that all companies employing more than 2,000 people should have at least three non-executive directors—I call them non-executive directors although they have a different title in the Bill—who shall form an audit committee half of

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which shall be non-executive with a non-executive chairman. Ironically, the CBI is currently encouraging voluntary adoption of just about the same system in all companies. Furthermore, most medium and large companies already have non-executive directors and many also have audit committees.
Your Lordships might therefore wonder why it is so terribly wrong to confirm this practice by statute. The trouble is the small print in the Bill. Voluntary audit committees are now formed by companies from wise and knowledgeable, mainly non-executive, directors because the companies want the kind of advice that such committees can provide. There is no question but that the audit committee is other than subordinate to the main board and its reports are made accordingly. The schedule to the Bill gives much independent power to the audit committee and in paragraph 16 it makes the audit committee report directly to the shareholders. This feature alone, I suggest, introduces two-tier boardism with all the disasters of divided control that can stem from it.
Although the schedule is nominally voluntary guidance—it says so in the Bill—it is not hard to see that its very existence will gradually create a demand for its enforcement; insidiously, company by company. Thus the Bill does not harmlessly enact a good practice which the CBI encourages; it creates a monster which could destroy a good company from within. In any case, if we have a good practice used sensibly by successful companies and encouraged by the CBI, why enforce it legally with all the dangers that could come from that?
I trust therefore that your Lordships will support my Motion. I note that there are many noble Lords who are to speak. I thank them very much because I believe that some of them may agree with me on this point. I hope that for the benefit of all they think it suitable to say a few words in support but to restrict their contribution to under a minute or two. I beg to move.
Moved, as an amendment to the Motion that the Bill be now read a second time, to leave out ("now") and at the end to insert ("this day six months")—(Lord Mottistone.)
7.19 p.m.
The Earl of Halsbury: My Lords, I am greatly obliged to my noble friend Lord Milne for allowing me to intervene in the debate at this point. Sir Brandon Rhys Williams was my cousin and my friend. He was 20 years my junior and I had known him from the day he was born until this morning when he died in the small hours. Nothing is sadder for a person in my age group, as he totters into his ninth decade, than to watch the departure from active affairs of younger people who had so much promise and so much to give.
Heroically, he arose from his deathbed to move the Third Reading of the Bill in the House of Commons. Last week, knowing that his life was ebbing to its close, he sent me a message. He asked me to support my noble friend Lord Bruce of Donington on the Bill. I sent him a message saying that I would. Having
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given my word, I must keep it. My noble friend must therefore accept that if he needs a Teller at the end of the debate there will be at least two of us.
I do not want to oppose the temperate speech of the noble Lord, Lord Mottistone, with whom I have been friends for many years, as I was with his noble father for many years, but he has produced what I might call a battery of industrial heavyweights in support of his thesis. I have to ask myself: does he represent the voice of British industry or the voice of British industrial complacency? I regard myself as a British industrialist who in permanent opposition to British industrial complacency has forged a career. Before I was 30 I had conceived an industrial process, built the plant to operate it, taken the product on to the road and sold it at a profit, and then passed on to my text task. I ask all those who think they stand for British industry as opposed to British industrial complacency whether they did what I did before they were 30; and I have been doing it ever since. Many of them seem to be administrators, share manipulators and merger administrators, but have they ever held in the hand the product they designed? I ask them to ask their consciences whether that is so before they oppose the views expressed by my noble friend Lord Bruce of Donington.
I think I have said enough to comply with the pledge I gave to my counsin that I would support the noble Lord, Lord Bruce, in his promotion of the Bill.
7.23 p.m.
Lord Milne: My Lords, I rise to support the amendment in the name of the noble Lord, Lord Mottistone. I believe that the Bill is unnecessary. Most of the large groups already have an audit or a similar committee, while the principle of the non-executive or independent director for quoted companies is well accepted. It is untimely because directors are still reeling from the weight of unassimilated legislation of the past three years. It is impractical. When it is already difficult enough to recruit non-executive directors it will place upon them duties which I would not relish and which some, if not professionally qualified, will not be capable of carrying out. In an acquisition or takeover, when time is all important, separate reports are almost impossible. Any director who has been involved in a takeover will know the truth of that statement.
This brings me to what I think is the most unfortunate attitude of the whole Bill. It is thoroughly divisive. It introduces a "we" and "they" concept into company management. At paragraph 15 of the schedule the chairman of the audit committee is required at the annual general meeting to read out a report on the board of which he is a member. I dread to think what the noble Lords, Lord Hanson, Lord Weinstock or Lord Forte, who I see in his place, will say. It might even be negative. The Bill virtually sets up a mini-board alongside the main board.
While I share the grief of noble Lords at the sad death of the author of the Bill, I would not wish to consider it in Committee and I therefore support the amendment proposed this evening.
7.26 p.m.
Lord Lucas of Chilworth: My Lords, I rise to support my noble friend Lord Mottistone in his amendment but at the outset I should like to endorse what the noble Earl, Lord Halsbury, had to say about the late Member for Kensington, a man of untold energy. It is sad that the efforts he spent over the years on Bills of this nature should be thwarted.
The Bill is intolerable in a number of respects. It is intolerable that a Bill of this kind should require that certain companies must state a particular classification of director, the first point in the division between members of a board, as the noble Lord, Lord Milne, pointed out. It is intolerable that shareholders should, subliminally, be advised as to what they should ask of their board at the annual general meeting.
I have never been a director of a public company but I have been a shareholder of a number of companies. Shareholders are well able to ask of their board at an annual general meeting almost anything they want, or find ways and means of having those questions raised. I do not believe that this subliminal interest, as set out in Clause 3 of the Bill, is in the best interests of the company. All directors, whatever one calls them—non-executive or independent—have an equal responsibility in the conduct of the company's affairs. That, in the light of recent examples of perceived failures to observe proper practices and procedures, may give rise to concern, but this Bill does nothing to deal with that problem.
It may equally be that changing conditions and new pressures on companies make reliance on custom and practice and personal relationships established over many years perhaps less sensible and appropriate. One especially significant feature of recent incidents seems to be that, at best, methods were lacking to ensure that board members and senior executives were informed about events, or at worst, the apparent ease with which a minority of directors and senior executives were able to conceal from their colleagues what was happening. It is not that the hitherto informal, and typically British, mainly unwritten framework within which most major boards tend to work has been wrong or is unworkable. However, there may be a need to bring some degree of certainty to the relationships between the board, the individual directors and the secretary and to the internal workings of the board.
I understand from the Institute of Chartered Secretaries and Administrators that it is not opposed to the introduction of audit committees by companies. However, it has reservations about a statutory requirement. That view is worth upholding in the course of this debate. Some parameters, within which improved self-regulation by companies must fall, are emerging. Any requirements must involve the minimum of direct legislation, the minimum interference with commercial activities and the minimum of bureaucracy within the company. I mentioned the Institute of Chartered Secretaries and Administrators because the company secretary is the only officer whose role is expressly defined. It may be that his or her responsibilities to and relationships with the board should be examined. Whatever may
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be deemed necessary, any change should be within the context of a review of company legislation; perhaps a total updating. Therefore, I ask my noble friend Lord Beaverbrook whether his department the Department of Industry—now I think called the Department of Enterprise, although perhaps it should be called the "Department for Enterprise"—has any such review and further action in hand?
7.30 p.m.
Lord Benson: My Lords, audit committees are a well-established principle of company administration. The accounting profession, of which I am a member, has advocated them for many years. I have publicly and privately supported them. I have sat on numerous audit committees, sometimes on one side of the table and sometimes on the other. The difficulty with this Bill is that its defects are so obvious and so deep-seated that I do not think it will be possible to tinker with it by amendment. For that reason I think that there is only one possibility and that is to take the Bill away and, if necessary, rewrite it altogether. I shall return to that point later in my speech.
Before I comment on the Bill's defects, I should like to make two general comments. The first is that audit committees are primarily designed so that the auditors can bring to the attention of the directors, especially the non-executive directors, points and matters arising out of the audit—that is, not just the audit of the parent company but the audit of all the subsidiaries, not only in the United Kingdom but also overseas. Occasionally the chairman of the board, or the board itself, will give the audit committee specific tasks. However, the way in which they now operate, and have done so with great success for many years, does not give the non-executive directors a supervisory role over the executive directors.
My second general point concerns the functions of the non-executive director. In practice a non-executive director's function is to provide general advice to the hoard. Sometimes—as in the case of audit committees—the chairman of the board, or the board as a whole, will ask the non-executive directors for such advice. However, the advice they give is related to policy and principle. They are confined to doing that because it is quite impossible for them to do anything else. Any attempt to invest the non-executive directors with greater powers and responsibilities is, I suggest, doomed to failure.
There are five defects in the Bill which make it impossible for it to continue in its present form. The first is that the apparent object of the Bill—certainly its effect—is to impose a policing or supervisory function on the non-executive directors over the executive directors. That is highly divisive and will be deeply resented by the executive directors. It is also a function which the non-executive directors—as I have just explained—are quite incapable of exercising. Apart from anything else the provisions of the Bill add a top hamper of administration, meetings and reports, which will only clog the administration

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of commercial and industrial companies. Companies are already over regulated and such an additional provision will merely add fuel to those flames.
The second defect is that Clause 3(a), which goes to the heart of the Bill, is totally unworkable. It provides that the non-executive directors should review the financial statements. However, there is no definition as to what "financial statements" are or as to the meaning of "review". I wonder whether it is realised just what financial statements really involve. They are prepared by the executive directors with the aid of subordinate staff. They have to comply with an enormous raft of particular provisions from the Companies Act and they must also comply with accounting standards. The possibility of non-executive directors making a review of such statements, which sometimes have taken weeks or months to prepare, is really ludicrous. Apart from anything else, many of the non-executive directors have no financial skill whatever; they are appointed for different purposes—for example, because of their skills in research, in personnel or in international affairs. Therefore to load them with the responsibility of making a review on something which has been prepared by the executive directors is out of the question. If financial statements have to be reviewed at all, the proper body or organisation to do it is the auditors. Such people are skilled in the task and they spend their life on the job.
The third defect is that if the Bill becomes enacted, every public company in the country will be required to state whether or not its directors are independent. Again, this leads to a misunderstanding of the role of the hoard of directors. The members of a board of directors have a collective responsibility for directing and administering the company. The idea that any directors can be identified as being independent is quite unrealistic and, if it is allowed to go through, it will mislead the public.
The fourth defect is this. There are many audit committees already in existence and others will be appointed. They work very well in practice. However, if the Bill goes through it means that some audit committees, appointed under the provisions of what will then be an Act, will have certain statutory obligations. As a result there will be a hotchpotch of audit committees up and down the country with differing responsibilities. The public will not know what an audit committee actually intends to do and what safeguards it provides. Again, the public will be misled.
The fifth defect of the Bill is that the definition of what is called an "independent director"—wrongly I think—is so narrow that it will be most unlikey that enough independent directors will be found to staff the boards of the companies to which the Bill is directed.
In any event, I think the Bill will be self-defeating. No responsible board I have ever dealt with would dream of appointing an audit committee which complied with the provisions of the Bill. They would know that it would be divisive; they would resent the task put upon the non-executive directors and they would know perfectly well that the non-executive
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directors could not possibly comply with the directives put upon them by the Bill. For that reason the Bill will fail, in any case, should it become an Act.
The other objection to the Bill is that it will imply in the public's mind the fact that the non-executive directors can give a much greater supervisory role than is possible—again the public will be misdirected, and misled. Therefore, for all those reasons, there is no alternative but to reject the Bill in its present form. In any event, I doubt whether legislation is necessary. However, if it is thought to be necessary, I should like to point out that the duties of non-executive directors have been well set out in authoritative publications for many years past. Oceans of professional ink have been used in defining the duties of audit committees and as a result of all that such committees have worked well.
If the introduction of a Bill is necessary, I suggest that it should be drawn from what is already in operation and already well documented in authoritative publications. However, there is one other alternative. If the Government are convinced that such legislation is necessary—although I think it unlikely—the proper place to implement it is in a revision of the Companies Act 1985. That will happen in any case probably next year or the year after in order to comply with the provisions of the European Community and its directives.
Under all those circumstances I suggest that the Bill should not receive a Second Reading.
7.40 p.m.
Lord Hanson: My Lords, I should like to associate myself with the tributes paid to Sir Brandon Rhys Williams. I should also like to say that the noble Lord, Lord Benson, has more than covered all the points that we consider to be undesirable about the Bill. However, my reasons for opposing the Bill and supporting the amendment moved by my noble friend Lord Mottistone are that it is unnecessary; it would be detrimental to industry and shareholders; and it is unworkable.
As your Lordships have heard from other noble Lords, the Bill would change company law as we have known it for generations, and known it to work successfully. The present system has been built up over many years, refined by voluntary means as needed, and has stood the test of scrutiny by companies' auditors, the Stock Exchange, the media, and, most important, the shareholders.
It is a system based on equal responsibility and mutual trust between executive and non-executive directors, meeting on a monthly, quarterly or annual basis to protect the interests of their shareholders, employees and customers. Surely there is a great deal to be said for that old saw, "if it isn't bust, don't fix it".
We in industry are not against the appointment of non-executive directors; we welcome them. We are not opposed to sub-committees, wages committees, charity committees, investment committees or even audit committees. What we do oppose most vigorously is the imposition by statute of a requirement that seeks to place non-executive directors in a position of having legal authority over that of the rest of the board.

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I was recently a member of an audit committee of a major joint stock bank. As the noble Lord, Lord Benson, has said, its function was to examine the facts and figures, question management and the auditors, and then report back to the chairman and the main board for them to take such combined action, if any, as they felt necessary. That works very well.
The Bill would undermine the powers of the main board—the whole board—a board properly appointed by the shareholders. My 40 years as a director of many companies, private and public, at home and overseas, warns against a step that would be to the detriment of all major companies and would in no way help British industry.
From personal experience in business I say, away with restrictions. Regulations of this kind, in the midst of a most welcome upturn in the fortunes of British industry, will do nothing at all to increase our country's new-found prosperity. I urge the House to support my noble friend Lord Mottistone in his amendment.
7.43 p.m.
Lord Marshall of Leeds: My Lords, I also join noble Lords in their regret at the death of Sir Brandon Rhys Williams. Nothing I say, shortly I hope, in opposition to the Bill is to be taken as indicating that I am against non-executive directors. I have been one for over 35 years and I still am. Neither am I opposed to audit committees. I have served on audit committees. I currently serve on a voluntary audit committee.
Audit committees will be seen as the thin end of the wedge. I agree with my noble friend Lord Mottistone that in due course they will lead to a suggestion for two-tier boards. It is for those reasons that I say the Bill is ill-conceived. Many plcs currently do not have independent directors. That is either because they do not believe in them or because they just do not want them, or, if they do believe in them, they cannot get them. They cannot recruit them because they will not pay enough fees for them. A whole army of non-executive directors will be required if the Bill goes much further.
The undesirable consequences inherent in the Bill would be that the audit committee would be placed in a preferred position in regard to the consideration of financial material. Secondly, it would distance the auditors from all members of the board who are not members of the audit committee and vice versa. It would appear to authorise the audit committee to dictate to the board as a whole the matters to which it thinks the board should give its attention. That, I believe, is the consequence—whether intended or not—of Clause 3. In so doing, it would create first and second-class board members. In plain words, it would be a denigration of those directors who are not selected to sit on the audit committee. It would delay the provision of financial information for the entire board. It would run completely counter to the concept that all directors are, in the eyes of the law, responsible and liable to the shareholders for the proper conduct of the company. They are liable both individually and collectively; both jointly and severally.
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I would not care to serve on any boad of which I was not a member of the audit committee. I have never been an executive director so I would have much more chance of being on the audit committee, if my age were not against me.
There is one final point, which I think is a serious one. Your Lordships will recall that the recent insolvency legislation has significantly enhanced the liability of directors when a company goes into liquidation and where the liquidator becomes a litigator and inquires into the company's affairs. There is now this new concept that without having been actively dishonest, a director can, by his passive indifference, or his failure to pay attention, place his personal assets at risk and put himself in the position of having himself declared by the court to be disqualified from acting as a company director for a period of years.
I remember that the noble Lord, Lord Bruce of Donington, was much involved in that Bill in the House. It would be an ironic mitigation for any company director who falls foul of the company insolvency laws to be able to plead that as he was not on the audit committee he received only a garbled ex post facto statement from the audit committee as to the financial state of the company, and that it was rather too late for him to do anything about it. He could have his personal wealth put at risk.
It is because I feel that the concept of the single-tier board should not be eroded that I believe it would be wrong to dictate that the concept of audit committees should be put on the statute book. It is also wrong for the appointment and remuneration of auditors to be removed from the decision of the board as a whole and to be vested instead in the audit committee. The Bill will not commend itself to many people in business and commerce. For those reasons I support the amendment.
7.48 p.m.
Lord Wilberforce: My Lords, I hope that I may be permitted to add my voice to those who have paid tribute to the sponsor of the Bill in another place. Like the noble Earl, Lord Halsbury, I can claim that Sir Brandon was related to me by marriage. I live in Kensington, which he represented with such distinction for a long time. Apart from those connections with him, I long admired him in politics as an independent and socially-minded advocate of useful reforms. If there is one thing for which he was renowned it was for the care with which he consulted interests which might have been involved in any legislation. One has seen that in many other measures he brought forward.
I refer to Sir Brandon Rhys Williams's speech in another place on the First Reading of this Bill. He consulted the following bodies: the Bank of England, The Stock Exchange, the Takeover Panel, the CBI, the Institute of Directors, the Institute of Chartered Accountants, the Chartered Association of Certified Accountants and colleagues on both sides of the House, with useful hints from the Department of Trade and Industry. It cannot be said that wide interests have not been consulted, but perhaps one

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can weigh the benefits of those consultations against the powerful voices which have been heard this evening from one interest.
With some diffidence I raise only a small voice against a powerful artillery which has been assembled against the Bill. However, I suggest that this is not a monster of a Bill in any sense. It is a modest but useful piece of legislation. Let us consider why we need it at this point. I believe that there is a greater need now than there has ever been for understanding and openness about the financial affairs of our great companies. They no longer simply make articles and sell them. They engage in an enormous number of very complicated activities involving huge sums of money. They are managing other people's money in the institutions and pension funds for private shareholders. Necessarily, and often beneficially, they engage in huge financial operations, mergers, takeovers and so on. In principle it is surely good that greater openness as regards the shareholders should be available and should be taken into account by those who ultimately own the companies.
There is nothing very terrible about audit committees. Many speakers have pointed out that they exist anyway and have been found to be very useful, and that in effect this Bill comes very near to what is already a fairly good and well established practice. One has to bear in mind that auditors of the great companies are not always independent and certainly not independent of the board. In some cases to have another committee looking at the financial statements can only be for the benefit of the shareholders.
As to outside directors—and I use the word "outside" at the moment without prejudice—many speakers have said that they recoginse their value. They exist in a number of our greatest companies. They are liable to have not much to do until calamity strikes, and then their role becomes very important. This Bill gives them a little more power and a few more duties but not—and I shall return to this—in any way a divisive power. I believe that it is a misconception that their power is divisive. That misconception lies at the root of much of the opposition of the Bill and is not well founded.
This is a permissive Bill and is in no sense authoritarian. It does not impose anything on anybody. It leaves everything in the hands of the shareholders. There is no obligation on anybody to set up an audit committee. It says that an audit committee may be established by ordinary resolution. Everybody who has been to a general meeting of a company knows perfectly well that an ordinary resolution with a large number of shareholders is a fairly difficult measure to pass if the board opposes it. The chairman will be there with a whole sheath of proxies in his hands, and large institutions will have made up their minds. However, unless the shareholders, supported by the board or at least by the major institutions, wish an audit committee to be established it will not be established.
In essence this Bill enables an audit committee to be set up without the necessity of altering the articles of association. Any meeting of a company altering
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the articles with a three-quarters majority can set up an audit committee. The Bill simply gives power to the shareholders without the necessity of altering the articles if they wish and if they can muster the majority of an ordinary resolution to set up an audit committee. The directors can oppose it and if they do it is not very likely that it will be carried.
I shall not deal in detail with some of the points urged, particularly by the noble Earl, because I feel sure that the noble Lord who sponsored the Bill will reply more effectively than I can. However, perhaps I may make a few points which are contrary to the suggestions from previous speakers. First, there is no imposition on any company to appoint independent directors. It does not, as I have seen the CBI suggest in correspondence, fix a set number of independent directors. It does not create any obligation to appoint any independent directors. It merely states that if there are no independent directors, that that should be reported to the shareholders and one then has to see what happens. There is no mandatory obligation to appoint independent directors.
The second point—and I have already made this to some degree—is that there is no compulsion for an audit committee. One cannot be set up without an ordinary resolution and that depends either on the wishes of the directors or the institutions.
Thirdly, and I believe this to be very important, the Bill does not promote or encourage a split in the board of directors. It does not create a division on the board between one set of directors and another. One has only to look at the schedule to see that the audit committee is a committee of directors and not a particular section of directors. Paragraph 1 states:
"The audit committee shall be composed of such directors of the company as the directors shall determine".
It is simply a body of directors.
The schedule goes on to say that there have to be at least three independent directors, and there must be as many independent directors as there are ordinary directors, and it gives a casting vote to the chairman. If anybody is afraid of that let them amend the schedule by taking out the casting vote of the chairman. If they wish, let them give the majority vote to the ordinary directors.
However, the concept of the schedule is perfectly sound, is it not? It does not create a separate body over and above the board of directors. It creates a committee of the directors to do the job which the audit committee should do. What is it to do? It merely reports to the directors. It does not override anybody. It does not take over the powers of the directors. It reports to the directors and the directors have to decide what to do.
A reference was made by one noble Lord to paragraph 16 of the schedule, which says that it has to be attached to the balance sheet and read before the company in general meeting. If anybody thinks that that is too strong meat, let them take it out. There is liberty to amend the schedule. A company does not have to adopt the schedule if it does not want to. It can produce its own regulations. If noble Lords feel that its presence in the optional schedule is too strong, let them move to have that paragraph taken out.

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Fourthly—and this is a development of the same point—it does not set up a supervisory board German style. There is no foundation whatever for saying that. Why frighten us with a supervisory board German style? Why frighten us with European directives? This matter has nothing to do with that at all. It creates an audit committee of the directors. There is no separation of one board above another and no interference with the directors' powers.
One can argue about many of the directors. If this Bill continues I shall want to say something about the definition of an independent director, which is taken from the Insolvency Act 1986 and is an enormously complicated definition, involving nephews, persons associated in all sorts of ways and so on and so forth. I should want to have some restriction and clarification placed on that section of the Bill, but that is a matter which can be discussed in Committee.
I suggest that the principle of the Bill is quite harmless. If one wished to criticise one could say that it was not strong enough and that it has not got enough teeth in it; it is too permissive and too gentle. But to describe it as a monster imposing all kinds of unacceptable restrictions on boards of directors and creating a division within them represents a misunderstanding of the Bill. I am afraid that I have spoken for too long. But with such vigour as I can command from these Benches, I venture to suggest that the Bill should be given a Second Reading and if necessary be approved in Committee.
8 p.m.
Lord Rippon of Hexham: My Lords, I wish to be associated with the tribute paid by the noble Lord, Lord Bruce of Donington, to Sir Brandon Rhys Williams and with his expressions of sympathy to Sir Brandon's family on this sad day. He was a friend and colleague of mine for many years both in another place and in the European Parliament. In both places he played a notable part particularly in promoting social and economic ideas.
Undoubtedly the provisions of this Bill were a matter close to his heart. He presented a similar Bill over many years in the House of Commons. I am not sure that he had wholly recognised the extent to which the practice of appointing non-executive directors and audit committees had advanced but certainly he could have had no more worthy supporter and promoter of this Bill in the House than the noble Lord, Lord Bruce of Donington. I am sure that he would have appreciated what the noble Lord had to say.
As someone who has been a non-executive director and chairman of a number of companies, both industrial and financial, over a period of more than 30 years, I have no doubt myself of the importance of the non-executive director. I think that he plays an important part on the boards of many companies. Sometimes that is a different part and sometimes there are companies in which there is no need for a non-executive director. I thought that the definition of the role of the non-executive director advanced by the noble Lord, Lord Benson, was perhaps necessarily simplistic. It has, as he said, been the subject of much ink over many years. I gave a speech
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not so long ago which lasted 40 minutes to an American business graduates' association. Fortunately I have not brought it with me but I am sure of one thing and that is that I never suggested and I never would suggest that the appointment of a non-executive director should be mandatory.
Equally I can see that in many companies there is a value in an audit committee. It may depend on the size of the main board. Also, if there is to be an audit committee, I do not believe that that should be mandatory in any way and certainly the shareholders would not be in the best position to judge whether or not that was necessary. I do not think it should report to anyone but the chairman of the board as a whole.
I do not like the concept, however defined, of a so-called independent director. On all the boards on which I have ever served I have always seen the board as a team. It has been put together as a team and the members of the board fulfil different functions whether they are executive or non-executive. This matter must be left to the discretion of the board itself. But the board is appointed by shareholders and if at a shareholders' meeting dissatisfaction is expressed then no doubt note can be taken of that.
It has been said that this Bill is just guidance. I do not believe that legislation is the proper place for guidance nor do I think in this particular case that the guidance is necessarily right or appropriate. The public would obviously regard an Act of Parliament as not simply guidance. They would consider that it was intended to be implemented. To that extent it would be misleading.
I also take the view which has been expressed by various noble Lords that if there is to be legislation it should be legislation promoted by the Government as part of a general review of company law. I take up the point of the noble Lord, Lord Bruce of Donington. I cannot see any reason why we should not now, faced with a Bill which many of us believe to be fatally flawed and incapable of reasonable amendment, say quite clearly yes or no. For my part I shall support the amendment of the noble Lord, Lord Mottistone.
8.4 p.m.
Lord Bruce-Gardyne: My Lords, I too wish to join other noble Lords who have already spoken in tribute to Sir Brandon Rhys Williams. We served together in the House of Commons on and off for 15 years and he was a good friend. It is indeed tragic that he was unable to live to witness this evening's events as I am sure he would have wished to do, because, as a number of noble Lords have pointed out, he had promoted a Bill analagous to this one on numerous occasions over a great many years. I am sure that he would have wished to see the first occasion when this particular proposition got as far as it has.
I must admit that in the 1960s, when I believe Sir Brandon introduced his first Bill on this subject, he asked me to be a sponsor of the Bill. I had to tell him that I would not do that. I must honestly say that my reason for not doing so then was more or less precisely the same as the reason for which I shall be supporting my noble friend Lord Mottistone and his amendment tonight.

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Let me hasten to say to the noble Earl, Lord Halsbury, that I would not remotely claim to belong to the battery of heavy industry. I do not think that I am even a bombardier in that respect. But I have served for the past 15 months as a non-executive director member of the audit committee of the TSB. So I have, not surprisingly, everything in favour of the propositions behind this Bill. But unlike Sir Brandon Rhys Williams and others who have spoken in favour of this Bill tonight I am bound to say that I do not believe that we advance this cause by the route of legislation. I am bound to confess that in general I have never subscribed to the view that legislation is conducive to the sum total of human happiness. I certainly do not think that that is the case today.
Above all I share the anxieties which have been expressed by a number of noble Lords about the inevitable division which this Bill would create inside the boardroom between what one might call the sheep and the goats. I am not quite clear whether it would be more invidious to be designated as a sheep or as a goat.
I listened with care to what the noble and learned Lord, Lord Wilberforce, had to say when he explained that there was nothing which imposed such divisions within this Bill but I have to confess with the greatest respect to the noble and learned Lord that his reading of the Bill is somewhat different from mine. For all those reasons I personally hope that your Lordships will decide that this Bill is not the right vehicle to achieve the purpose which many of us believe in—the desirability of major companies having on a voluntary basis an audit committee in which non-executive directors should be involved. I hope that your Lordships will agree to support my noble friend Lord Mottistone and his amendment tonight.
8.8 p.m.
Lord King of Wartnaby: My Lords, it is of course a sad time to be discussing this Bill. Therefore one feels perhaps a little inhibited about what one might say about it. But my noble friend Lord Mottistone has reminded us that this is now a Parliament Bill. I think it a clumsy, ill-considered piece of legislation. I am surprised that it received such scant attention in another place. No one is quarrelling with the view that audit committees and non-executive directors can and do make valuable contributions to our corporate affairs. Some of my best friends are non-executive directors. What the Bill seeks to do is to discriminate in an insidious way between the two categories of directors. The effect of the Bill would be to derogate from the collective unity and responsibility of the board. It would be interpreted as a move in the direction of a two-tier structure which this country plainly does not need and, on the evidence, does not want.
I am strongly opposed to dictating by statute the number of non-executive directors which a company shall appoint and to which committees they shall be appointed. Anyone who wants to gain a bit of experience in how a board is put together should become the chairman of a nationalised industry. That
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is something which anyone speaking on the matter should experience. I am strongly opposed to the prescription by statute to an audit committee of the functions stated in Clause 3. I am strongly opposed to making the appointment of an audit committee a direct and exceptional responsibility of the annual general meeting of a company in the way that is envisaged in Clause 2 of the Bill.
I do not doubt the good intentions of the author of the Bill. However, the protection of commercial integrity and the promotion of virtue are not achieved by a mechanistic approach. Some things can be achieved by legislation; some must be achieved by persuasion. If, by legislation, we require a corporation to appoint against its will and judgment a minimum number of outside directors, what calibre of directors do we think that company will appoint? How competently can we expect them to discharge the duties imposed on them? We may stipulate that the category of non-executive directors will be imposed on a company as guardian of its morals. Pray, who will guard the guards?
We should be well advised to scrap the Bill. If we feel that there is a need for a better understanding among companies of the importance and value of audit committees and the place of non-executive directors on the committees, we should listen not only to the advice of businessmen but also to the views of the professional institutes and representative organisations such as the Institute of Directors, the Confederation of British Industry—I am not in touch with them—and the Stock Exchange. All those bodies are in favour of greater use of non-executive directors. They have their own codes of practice and advice for members. They are opposed to the measures being enforced by legislation. It would be ill advised for us to disregard their views. I urge noble Lords to vote for the amendment.
8.15 p.m.
Lord Polwarth: My Lords, I speak for no particular interest and without the vast experience of some noble Lords who have spoken this evening. I speak with experience as at various stages an auditor, a non-executive director of various public companies, a non-executive chairman of two companies and a member of the audit committee of a major American corporation. Indeed, I have been the chairman of that committee for two years.
From my experience I believe in audit committees. They have a valuable function to perform. I hope that more British companies will adopt them. However, I hope that they will be adopted by companies in their own way and in their own time. Their great virtue is maximum flexibility in what they consider and how they consider it.
We found in the company in which I served that it was a marvellous opportunity for the chairman to confide in the non-executive director and to let his hair down. It was also an opportunity for non-executive directors to satisfy themselves to the maximum that they had done all they should to see that the company was being run properly. I do not think that that will be achieved by a measure as legalistic as this one, which will result in a straitjacket.

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I hope that we shall see more audit committees. I believe that we shall, and for that reason I do not support the Second Reading of the Bill.
8.17 p.m.
Lord Weinstock: My Lords, I am sorry to have missed the opening speeches of the noble Lords, Lord Bruce of Donington and Lord Mottistone. I was unable to arrive more promptly. I am also sorry to have learnt of the death of the mover of the Bill in another place.
I agree with the noble Lords, Lord Benson and Lord Hanson, that the Bill in its present form is neither necessary nor effective. In that sense I also agree with the noble and learned Lord, Lord Wilberforce, as to the modesty of the Bill. It is unnecessary because a voluntary code of recommended practice on non-executive directors was published in April 1987 with the imprimatur of the Bank of England, the Stock Exchange and the Confederation of British Industry. In September 1987 the Stock Exchange introduced an amendment to its regulations (21(T), Chapter 2 of Section 5) making it mandatory for listed companies to identify independent non-executive directors in their annual reports, complete with photographs.
The term "independent director", which appears to trouble the noble Lord, Lord Rippon, is not in that context so novel as was suggested in a letter published in today's issue of the Financial Times. The Bill is ineffective because, as the noble and learned Lord, Lord Wilberforce, has told us, it does not impose any obligation as to either of the matters with which it is concerned; the appointment of non-executive directors and the appointment of audit committees. It only requires that they be considered. Many public companies already have non-executive directors and audit committees. The GEC, for which I work, has six non-executive directors, all of them independent both financially and personally. We also have an accounts committee, which is approximately the same as an audit committee. On that committee non-executive directors form a majority. Similarly there is a directors' remuneration committee.
I doubt whether such arrangements would be thought objectionable by any serious manager. I do not share the view of the noble Lord, Lord Benson, that the first job of non-executive directors is to supply advice. Certainly that is a valuable function. However, I should have thought that the first duty is to see that the management of a company is competent and honest and that the interests of shareholders are not traduced.
If management does not believe that the appointment of independent directors is in the best interests of the company, its view is unlikely to be overridden by a shareholders' meeting. The restrictive definition of "independent" which is contained in the Bill makes knowing absolutely nothing about the company the only necessary qualification.
As to audit committees, the formal rules specified in the Bill are likely to make management less likely to accept it than it is now with the existing voluntary
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code. The Bill raises but does not answer questions about the responsibilities of non-executive directors. Would they bear heavier responsibilities than other directors? What special responsibilities, if any, do directors of audit committees have to shareholders? To what liabilities will they be exposed?
Perhaps more important is the fact that the Bill bypasses the serious consideration which will sooner or later have to be given to the Fifth Directive of the European Commission. At that time we shall have to confront such issues as two-tier boards, to which I understand there is strong objection in the CBI and elsewhere. We have heard some reverberations of those matters in your Lordships' House this evening.
There are certainly disadvantages to two-tier boards. There are also disadvantages to the present system. As things are today, accession to the main board of a big company is seen by executive managers as an important overt mark of success conferring business and social status, which are perhaps even more coveted than higher remuneration or other benefits. Who can blame them in our society? However, it can be rather a nuisance when there is not enough room round the board table! Too frequently such managers do not have sufficiently wide experience outside their own speciality. In contrast in the United States the position of company vice-president without a main board seat is readily acceptable to very senior executives.
These are serious matters and they need serious contemplation. If there is to be legislation it should be introduced by the Government and its impact on the Companies Acts taken fully into account. I suggest with respect that the best thing for your Lordships' House to do tonight is to accept the amendment of the noble Lord, Lord Mottistone, and take up the matter at the appropriate time and in the proper circumstances.
8.20 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to my noble friend Lord Bruce of Donington for taking up this Bill, which was passed under what Madam Deputy Speaker in another place described as extraordinary procedures. No government spokesman was apparently present to comment upon the Bill, and I must admit that no opposition spokesman was there to comment upon the Bill either. It went through in a rather curious manner.
The Bill was promoted by Sir Brandon Rhys Williams. I should like to say officially from these Benches how sorry we are that Sir Brandon is no longer with us. Although he was not of our political persuasion, over the years we have admired the effort and determination he put into the causes that he adopted. The fact that he was Welsh may have had nothing to do with that but it must certainly have contributed to the determination with which he pursued those causes.
The Bill which my noble friend has put before the House following Sir Brandon's efforts in another place arouses intense passions, as we have heard during the debate this evening. Like the noble and learned Lord, Lord Wilberforce, I am rather surprised that it arouses such passions. As he said, it

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is a permissive Bill. It allows a certain number of people to do certain things and it does not compel anybody to do anything.
I have listened this evening to very distinguished industralists—heads of important companies speaking on the subject. Not so very long ago in your Lordships' House we had a debate on business education. That is a very important subject. I believe that it is also very important to the noble Lord, Lord Young, and the Government. Not one of those distinguished industrialists who has spoken today addressed us on the subject of business education. I am sorry if special interests, if I can put it that way, come to the fore on an occasion like this, but the noble Lords do not attend for a general subject such as business education. I said that on a slightly sour note, for which I apologise, but I wanted to make that point.
I should like to spend a little time—but not too much time because I do not want to detain the noble Lord, Lord Beaverbrook, too long before he responds to the debate—on the substance of the Bill. I find the argument that it is in some way encouraging a two-tier board system to be quite extraordinary. I think that the noble Lord, Lord Mottistone, implied that the two-tier board system was leading Germany into some form of financial or economic crisis. I find that argument even more extraordinary. I do not believe that the Bill has anything to do with a two-tier board system. Anyone who has looked seriously at the two-tier board system—the Aufsichtsrat Vorstand and the Conseil de Surveillance Directoire system—and how it works (for, as the noble Lord, Lord Weinstock, said, we shall have to deal with all that in the course of time) and at the way audit committees operate in the United States will understand that there is a very clear difference between the establishment of an audit committee and a two-tier board system. I cannot take that argument very seriously.
I think that all noble Lords who have participated in the debate agreed that audit committees are desirable. I cannot think of any speaker who has said that we should not have them or that they are in some way wrong. The question is whether there should be a requirement in statute for shareholders to be able to ask for an audit committee. There will be those who will say, quite properly, that it should be part of Stock Exchange regulations or should be part of something else but should not be in statute.
Perhaps I may say to the noble Lord, Lord Lucas, that I found his views on this topic quite extraordinary. I remind him that only two years ago he was promoting the Financial Services Bill in your Lordships' House from the Government Dispatch Box. That Bill contained statutory definitions of practically everything one can think of. Here he is today saying that it is utterly intolerable that this kind of thing should be put into statute. I must say to the noble Lord in the greatest friendliness—for I am a friend of his although not in the same political party—that we cannot in this House have one attitude, even from the Government Front Bench, on one subject and another attitude on another subject.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord Williams, but if he quotes me I should be grateful if he would quote me in entirety. I said, "By virtue of this Bill". I found it intolerable that the Bill should be used for this purpose. I concluded by saying that if change was necessary, it should come about within the context of the review of the Companies Act, and I asked my noble friend what was happening in that respect. That is rather different.
Lord Williams of Elvel: My Lords, I am most grateful to the noble Lord, but I notice that he did not tell me that my quotation of his use of the word "intolerable" in this connection was wrong. We have to take a balanced view as to what is proper in statute and what is not.
I found the arguments of the noble Lord, Lord Benson, to be well expressed and well balanced. He is in favour of audit committees. I hope that the noble Lord will intervene if I have misinterpreted him. He believed that the Bill espoused a good cause but was too flawed to be put into statute. I would agree with him that it espouses an appropriate cause but would argue that in Committee it could be amended to the point where it could be put into practice.
I believe that there are many points in this Bill which need amendment. If your Lordships give it a Second Reading we from these Benches will be moving amendments designed to clear up a number of points which have been raised by noble Lords this evening. We shall be looking at the question of independent directors. I believe with a number of noble Lords that that presents a problem as drafted. The definition is not right. We should like to see it, as one noble Lord put it, in a form in which someone who is interested in becoming a director can become a director rather than being excluded. We also believe and would like to incorporate into the Bill that representatives of employees should have a place and be entitled to a place on audit committees. And I hope that we will come to employee stock option programmes, if I may use the American expression.
We would wish to clean up the definition of financial statements. That is a point which the noble Lord, Lord Benson, raised. We would also like to clarify the relationship between what is included in a financial statement approved by an audit committee and what is approved by the board of directors as a totality under the terms of the Companies Act. My own view is quite plain. I think that the board of directors takes complete responsibility for all documents and all statements issued by companies. In Clause 4 we wish to redefine a number of expressions. We shall have many comments to make if your Lordships decide to give this Bill a Second Reading.
However, I come back to the principle. All noble Lords whom I have heard speak today have said that they are in favour of audit committees. I believe—although I have no evidence—that the Government are in favour of audit committees. If the Bill is not to be given a Second Reading, the Government have to make a commitment to bring forward legislation which will do what the noble Lord, Lord Rippon, said it should do, which is to

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consider, consult and bring forward legislation which will incorporate the measures contained in this Bill. Failing that from the Government, I ask your Lordships to oppose the amendment of the noble Lord, Lord Mottistone, and give the Bill a Second Reading.
8.31 p.m.
Lord Beaverbrook: My Lords, on behalf of the Government I fully support the compliments that have been paid this evening to Sir Brandon and to his persistence and tenacity over the years on matters including the one before us tonight, in which he passionately believed. He was a powerful advocate who earned widespread respect for the skilful and professional way in which he approached whatever task to which he set his mind. He will be a sad loss to Parliament and our sympathies go out to his wife and family.
Turning to he Bill itself, as has been pointed out, the Government have adopted a neutral attitude towards it. This is not because we believe that the matters that it covers are not worthy of attention. On the contrary, they are of major significance touching as they do on the way in which public limited companies conduct their business.
The Bill relates to two particular areas affecting the running of PLCs—independent directors and audit committees. The Government are among those who believe that independent or non-executive directors have an important contribution to make to the affairs of many companies. I do not think that anyone here tonight has said anything against the contribution that non-executive directors can make. We also believe—and I would say this particularly to the noble Lord, Lord Williams—that audit committees can play a valuable part in many companies and I know that business and accounting circles are becoming increasingly interested in extending their use.
But the Government believe very firmly that it should be left to a company's directors and shareholders to decide whether or not it should make use of either independent directors or audit committees. That is why we resisted for so many years the proposals which were regularly put forward by Sir Brandon. Although Sir Brandon's proposals changed in detail over the years, their common feature was a requirement that both non-executive directors and audit committees be made compulsory for some categories of companies. In the present proposals there is a major change from those earlier ideas. The purpose and scope of this latest set of proposals have already been explained in detail and I need do no more than emphasise that they now contain no element of compulsion. They do not attempt to take from shareholders and directors the duty and responsibility of deciding whether a company should have independent directors or audit committees. This aspect is fundamental to the Government's decision to take a neutral line on this Bill.
My noble friend Lord Lucas asked whether the Government have any general review in hand to update the totality of company law. There is no such
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review in hand but I have noted my noble friend's suggestion that when there is the subject should be included in it.
The Government would not themselves have brought forward such a measure. But with a Private Member's Bill, such as this, the issue for the Government is rather different and, all things considered, we do not see the actual proposals in the Bill as sufficiently objectionable to cause the Government themselves to oppose it. However, if the Bill proceeds to a Committee stage the Government will bring forward a series of technical amendments which will be designed to improve a number of drafting deficiencies in the Bill.
8.35 p.m.
Lord Bruce of Donington: My Lords, I am most grateful to those noble Lords who have taken part in the debate this evening. I am particularly grateful on behalf of Sir Brandon for the support from the noble Earl, Lord Halsbury, and the noble and learned Lord, Lord Wilberforce, as well as from my noble friend Lord Williams of Elvel. I must confess to some disappointment this evening with the contributions from some of those reputed to be among the leading industrialists and financiers in our country. It is quite clear from the debate that has taken place that some of them at least had not even bothered to acquaint themselves with the precise contents of the Bill. They must have been extremely grateful to the noble and learned Lord, Lord Wilberforce, for having given them adequate instructions where my initial speech must obviously have failed. It seems that the captains of industry are in favour of audit committees. Or are they? Some were, some were not. If they are set up voluntarily, completely ignoring the fact that this is precisely what the Bill does, it gives the company or its shareholders—for they are the owners—the option of appointing an audit committee by a majority.
There has been a mixed reception to the whole concept of an independent or non-executive director. Some noble Lords appear to think that such directors are of little consequence and that some of them would probably not be capable of doing their work. Other noble Lords expressed considerable support for the whole concept provided that the directors were there voluntarily. It seems that some noble Lords, particularly those who are leaders of powerful enterprises, can be said to be guilty of talking with forked tongues. When there are developments in industry involving the ordinary people of this country or their trade unions there has to be legislation— there is no question of it being voluntary. If, however, the interests of boards of directors are affected, it seems that legislation is unnecessary and the voluntary way is much better.
I have nothing more to offer your Lordships, especially after the excellent support that I was privileged to have from the noble and learned Lord, Lord Wilberforce. I hope that noble Lords, after expressing their views this evening, if necessary in the Lobbies, will re-read what they have said in the debate that has taken place and consider its relevance to the contents of the Bill as distinct from the fears

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that have been put about at the behest of the CBI and those who are prominent in its counsels.
I intend to honour my own promise to Sir Brandon Rhys Williams. I shall do my very best to continue to press the virtues of the Bill so far as I am capable, bearing in mind the very necessary amendment which I have already admitted may have to be made.
I therefore urge your Lordships to give the Bill a Second Reading and enable it to have further consideration, rejecting the amendment of the noble Lord, Lord Mottistone, which I think is entirely inappropriate on this occasion.
8.40 p.m.
Lord Mottistone: My Lords, I always enjoy the fierceness with which the noble Lord, Lord Bruce, seeks to convince his opponents. Somehow I feel that fierceness is not the best way to impress people.
I should like to thank all noble Lords who have taken part in the debate, including those who have been opposed to my amendment. I have two points to make. The noble Earl, Lord Halsbury, asked me whether I represented the heavyweights or industry. I have to tell him that I am a non-executive director of two very small companies which are far below the effects of this Bill. To that extent I represent industry. However, as we all do when we speak in this House, I am representing myself. I should like to think that my noble friends and the noble Lords opposite have also spoken for themselves.
I was intrigued by the arguments of the noble and learned Lord, Lord Wilberforce, because it struck me—and I hope that he will not take this amiss—that unlike most of the other people involved, he had not had practical experience of trying to run a big company. That came through because when one has that experience—and I have been an administrative director in a big company; I have never been a board director—it gives one a different perception.
I was also interested in the arguments of the noble Lord, Lord Williams of Elvel, who rubbished my warning about two-tier boardism and then proceeded to talk about employee-directors, which comes to the same thing. I rather thought that his rubbishing was not to be taken too seriously.
That is quite enough speech. I ask the House to agree to my amendment. I commend it to the House.
8.42 p.m.
On Question, Whether the said amendment shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 22.

DIVISION NO. 1

CONTENTS

Ampthill, L.

Craigavon, V.

Bathurst, E.

Craigmyle, L.

Bellwin, L.

Cross, V.

Benson, L.

Cullen of Ashbourne, L.

Brougham and Vaux, L.

Dilhorne, V.

Bruce-Gardyne, L.

Forte, L.

Cayzer, L.

Gowrie, E.

Colville of Culross, V.

Grantchester, L.

Colwyn, L.

Hanson, L.

Cowley, E.

Harris of High Cross, L.

406

Havers, L.

Mottistone, L. [Teller.]

Hylton-Foster, B.

Remnant, L.

King of Wartnaby, L.

Rippon of Hexham, L.

Kinnoull, E.

St. John of Bletso, L.

Lauderdale, E.

Seebohm, L.

Liverpool, E.

Selkirk, E.

Lucas of Chilworth, L. [Teller.]

Sharples, B.

Stevens of Ludgate, L.

McAlpine of West Green, L.

Stockton, E.

Marshall of Leeds, L.

Taylor of Hadfield, L.

Merrivale, L.

Weinstock, L.

Milne, L.

Wyatt of Weeford, L.

NOT-CONTENTS

Blease, L.

Nicol, B.

Bruce of Donington, L.

Parry, L. [Teller.]

Dean of Beswick, L.

Prys-Davies, L.

Elwyn-Jones, L.

Rea, L.

Ennals, L.

Sefton of Garston, L.

Falkland, V.

Tordoff. L.

Graham of Edmonton, L.

Underhill, L.

Halsbury, E. [Teller.]

Wilberforce, L.

Hylton, L.

Williams of Elvel, L.

McNair, L.

Wilson of Langside, L.

Morton of Shuna, L.

Winstanley, L.

Resolved in the affirmative, and amendment agreed to accordingly.

Bishops in the House of Lords
8.49 p.m.
Lord Tanlaw Lord Tanlaw rose to ask the Leader of the House whether it is now appropriate for the bishops to continue to have to wear robes and sit and speak from the spiritual Benches when taking part in the proceedings of the House of Lords.
The noble Lord said: My Lords, I beg leave to ask the Unstarred Question standing in my name on the Order Paper.
I am extremely grateful to the Leader of the House for allowing time for me to raise this Question during what has obviously been a very busy period in your Lordships' House.
It was with some trepidation that I sent the wording of this Unstarred Question to the most reverend Primate to inquire whether or not there would be any objection to the phrasing of the words that are before your Lordships this evening. I am most grateful to the most reverend Primate that he did not object, and noble Lords therefore have an opportunity to proceed with this short debate. I am hopeful that the Leader of the House in his reply will be able to throw some much needed light on this ancient convention of the House, the background to which is obscure and which is considered by some to have become an historical anachronism.
I realise that as a simple layman and a Lord Temporal I must proceed with extreme caution in those areas where even angels fear to tread and which are the sole province of the Lords Spiritual. However, it is my contention that there may be some confusion in the minds of other laymen besides myself both inside and outside the Chamber as to what is the role of the Lords Spiritual and what precisely is the significance, if any, of the robes they wear when taking part in the proceedings in this Chamber. I believe that the confusion extends beyond the procedural conventions of this House when in a number of situations outside this country bishops,

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both Protestant and Roman Catholic, have felt it incumbent upon themselves to take part, often at great personal risk, in political action or debate against the established policies of their respective governments. The governments concerned, which are notably of an authoritarian or non-Christian institution, have become unsure as to whether to treat the bishops as political activists of societas humana or as inspired ministers of societas mystica. This confusion will continue to arise in my view, with all its attendant dangers, so long as bishops continue to make strong political statements while wearing clerical apparel associated in the minds of laymen and government officers alike with institutional religion.
My fear is that in some countries the net result could be the subsequent persecution of all Christians through classification as political agitators. Therefore I should like to ask the noble Lord the Leader of the House why it is apparently necessary for the noble Lords Spiritual to take part in the proceedings in this House relating to secular issues associated with societas humana while wearing clerical robes representing the ritual and dogma of societas mystica.
The existence or non-existence of societas mystica is a matter of private and personal interpretation. However, it can be described as an invisible communion of sentients, not necessarily tied to institutionalised religion, who possess the knowledge of personal enlightenment. Access is voluntary, the route arbitrary and the journey continuous, therefore ritual, dogma and religious instruction are only accessories, to be retained or discarded at will by the traveller.
Clerical robes are also an accessory, and it would be interesting to know from the noble Lord the Leader of the House when and why they became obligatory apparel for the Lords Spiritual taking part in the proceedings of this House. Could it be that the original instructions for this convention are to be found in the Royal Declaration of the 39 Articles of Religion of 1562, or do they appear in the subsequent Act of Ratification of the Book of Articles of 1571? Can the Leader of the House say whether these Acts are still on the statute book and, if so, have they any relevance to the Question before us this evening? I must confess that after a cursory investigation the only reference I can find to apparel appears in the Book of Articles of Religion, Article XXXV, Second Book of Homilies, Homily VI which holds forth "against excess of apparel".
Whether or not this ruling is to be found in the Acts of Parliament I have mentioned or in the Act of Uniformity of Common Prayer passed in 1562 or, as is more likely, in the Act for the Placing of the Lords in 1539, has the time not come to look again at this convention and to ask if it is really necessary or relevant to the secular work carried out in this House, or for the Lords Spiritual who participate in it to be encumbered by an "excess of apparel"? If the Leader of the House in his reply deems it necessary for the Lords Spiritual to continue with this practice, can he then explain why the noble and learned Lords, except for the noble and learned Lord who sits on the
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Woolsack, are excused the wearing of their robes of office? Similarly can he explain why the noble and gallant Lords do not have to wear full dress uniform while taking part in the proceedings?
The second part of my Unstarred Question relates to the seating of the Lords Spiritual. In his reply, the Leader of the House will almost certainly quote to me from the Act of the Placing of the Lords 1539. If he does, can he explain why the Lords Temporal seem to have been able to ignore the contents of the said Act without incurring the displeasure of Their Majesties' Governments, regardless of their political tendency, for the past 50 years or so? If it turns out to be the fact that all the Acts I have quoted are in need of revision or repeal because they are outdated, will the noble Lord the Leader of the House not agree that now would be a good opportunity to bring this convention up to date by abandoning it?
However, I suspect that the noble Lord may not be able to consider this very reasonable suggestion until he has first established in what capacity the Lords Spiritual make their very constructive contributions to the proceedings of the House. Can he say in his reply if Lords Spiritual are contributing solely as representatives of the Church of England to the exclusion of all other churches, including Scotland and Wales, and the other denominations? Or do the Lords Spiritual sit as moral and spiritual guardians of Protestant Christian doctrine? The clerical robes which they wear indicate that either or both these postures are correct. However it is my contention that neither may be correct because the Lords Spiritual appear to me to act in this Chamber to all intents and purposes as though they were Lords Temporal who could sit as free agents on these Cross-Benches.
The right reverend Prelate the Bishop of London and his spiritual colleagues have demonstrated considerable political impact in the past few weeks by moving secular amendments to a secular Bill with notable assistance from the Cross-Benches but usually against the wishes of Her Majesty's Government.
However, when, during the course of these manoeuvres, the right reverend Prelate was confronted with a simple doctrinal—as opposed to political—question, he avoided a direct reply. That is recorded in Hansard at cols. 427–28 on 3rd May. Nor did any other of the Lords Spiritual give an authoritative answer to what in my view was a very fair question, considering that the amendment was about the religious education of children. I have since received a letter from the right reverend Prelate the Bishop of London, and from the noble Lord, Lord Sefton, which has explained to me that his intervention was a technicality and the reason he was asked that he be no longer heard in this Chamber was for this reason and not because he had asked a doctrinal question.
If noble Lords will bear with me, I believe it would be helpful if the noble Lord the Leader of the House could now give a ruling whether, in spite of the fact that the Lords Spiritual wear clerical robes—which presumably represent their high qualifications relating to the doctrine of the established Church—any questions on this subject by Lords Temporal

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are to be ruled out of order. Similary, are any other doctrinal questions raised in the future to be considered disrespectful to the proceedings in the House if they are raised by Lords Temporal?
Anyone who read the Official Report of the proceedings on 3rd May may be left as I was, perhaps wrongly, with the impression that such a ruling may already he in existence. What would happen in future if the Lords Spiritual or their equivalent were to take their seats on the Cross-Benches without the robes of office? Would the noble Lord the Leader of the House not approve of this move, which would publicly demonstrate that the functions of the Lords Spiritual within your Lordships' Chamber were entirely confined to secular matters relating to societas humana? Would he also not agree that philosophical and doctrinal questions could then be addressed to the Lords Spiritual or their equivalent only in their capacity as members of Synod, of the House of Bishops or of any other establishment associated with societas mystica, where the wearing of robes would correctly reflect their authority and ability to answer questions of this nature?
If this simple convention were to be implemented, might it not pave the way for more ecumenical representation to become acceptable in your Lordships' Chamber—perhaps similar to the suggestions made in a recent issue of the Church Times? Can the noble Lord the Leader of the House foresee the day when the Lords Spiritual could be replaced by a similar number of ecclesiastical Life Peers, who could sit on the Cross-Benches without robes and who would represent the episcopalian churches, with the Church of England in the majority and the balance filled with other denominations?
Finally, if a convention were to be accepted globally by bishops of every denomination that they would decline to wear ecclesiastical apparel while indulging in political activities, would that not reduce the risk of persecution, especially in non-Christian and totalitarian countries, of Christians who might wish to worship in public out of spiritual rather than political motivation?
It is clear that since Christianity became institutionalised in the third and fourth centuries AD, bishops have always been involved in secular activities connected with the establishment of the Church as part and parcel of societas humana. The recent encyclical, The Social Concerns of the Church, which was written personally by His Holiness Pope John-Paul II, confirms it and so do the contents of the address given last month by the most reverend Primate at the global forum of spiritual and parliamentary leaders.
All I am asking through this Unstarred Question is that bishops or any other officials of institutionalised religion who wish to take part in political activities may be able to do so on equal terms with their secular counterparts, without the props of excessive apparel. If the noble Lord the Leader of the House would kindly agree to look into this matter, I am sure there would be benefits to all concerned through clarification of the respective roles which we, whether
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Lords Temporal or Lords Spiritual, are intended to play within this secular Chamber of Parliament.
9.3 p.m.
The Lord Bishop of Southwark: My Lords, when some of the bishops first heard about this Question we asked ourselves what lay behind it. Was the noble Lord perhaps a friend of the honourable Member for Chesterfield in another place who is today proposing to disestablish the Church of England? Our researchers produced no obvious connection and it seemed unlikely, so we settled on the possibility that it was an oblique way of expressing disapproval either of one of us or possibly all of us but that I would have to wait for this evening in order to be sure.
I am somewhat relieved to hear the noble Lord's very interesting comments and to realise that we were a bit wide of the mark. But before coming to the more precise points which he raised about taking off our robes and changing our places, I should first like to say a word about certain things which need to be stressed rather clearly in relation to the Bench of Bishops in your Lordships' House. We do not regard ourselves, any of us, in any sense as party politicians. I realise that the noble Lord did not make that point, but it ought to be said because of the confusion that often arises here. We may occasionally make a speech or cast a vote this way or that which will support or criticise a policy, be it of government or of opposition. But few of us are card-carrying members of any party and still fewer of us, if any, would ever wish to be bound by some kind of party Whip—looking in the right direction while making that comment!
We sit in this House, as has been pointed out, as spiritual Peers, and of course the robes are a very visible reminder of this. We would be happy to answer doctrinal questions—I want to assure the noble Lord about that—but the case that he cited, as he explained, was one in which the right reverend Prelate the Bishop of London found himself in some difficulty because he believed that it was not the right moment to be dealing with that question, and indeed it was out of order, as the House subsequently decided.
However, I think I am right in recalling some debates not so very long ago about divorce and remarriage; for instance, where Members of this Bench made what might certainly be regarded as philosophical or doctrinal comments on the points at issue. That does not mean that we can never pronounce an opinion on any of the subjects which your Lordships discuss or debate here, since all are in the strict sense political. To say that we are dressed as members of what has been called the societas mystica makes a distinction which is very difficult to sustain unless you are going to attach enormous significance to this particular dress at this particular moment.
There is for us no sharp distinction between the spiritual and the temporal of such a kind that we can live our lives, as it were, in two distinct compartments. We shall come back to the question of whether the dress in some way marks an emphasis which is particularly confusing. I believe that the noble Lord used that word, and that may be the point

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around which this Question revolves. But I want to stress that politics, as distinct from party politics, is about the science and art of government, and it is difficult to see why Her Majesty should summon us here at all if she then requests us to be silent after Prayers.
So the issue is and always has been how and where to draw the line between the principles of justice, moral considerations and the assessment of human consequences—all of which must be our primary concern as spiritual Peers—and those details of legislation and administration about which we are certainly as fallible as anyone else.
Let me give your Lordships an historical illustration of the way in which this has often worked in the past. We are not talking about a relatively new issue. Herbert Hensley Henson was Bishop of Durham in the 1930s—a firm supporter of Tory principles and government, and known as such, and certainly not a prelate who could ever be accused of courting popularity. Yet in 1938 he came to this House one day to debate on foreign policy—an area normally regarded as somewhat outside a bishop's concerns and perhaps outside societas mystica—and began with these words:
"My Lords, there could have been no Englishman, whatever his denomination or political description, who did not read with a sense of dismay and humiliation the report of the recent proceedings at Geneva. … The representative of Great Britain was the noble Viscount, the Foreign Secretary, a man whose character stands so high" —
and there is more along those lines—
"and from his lips one heard the language—he must forgive me—the cold sophistry of cynical opportunism."—[Official Report, col 138; 18th May, 1938.]
Reading that again it struck me that the language used is a good deal stronger than any we have heard from these Benches in recent years. Here was moral outrage, as I suppose one could call it, not party politics, although sometimes it is easy to confuse the two. At one point I wondered whether the noble Lord, Lord Tanlaw, was actually raising the question of disestablishment, though for quite other reasons to some. The noble Lord is shaking his head, and that is fine because the issue is obviously far too large and complex to be dragged in by the tails of robes and benches, so to speak.
I should like to turn briefly to the specific proposals that he has made and the confusion about which he is concerned. I believe it is true that, if one asks most bishops, they will say that it is a bit of a nuisance to have to keep taking off one's robes and putting them on again every time one wants a cup of tea or something a little more fortifying, or to go into the Library. I do not believe that we have a sense of changing our personality, character or concern by putting our robes on and taking them off.
It is true that robes belong more naturally to the sphere of church and worship and one feels a little out of place wandering about in them here. I take the point that there may be a connection between the wider point that the noble Lord is making and how we sometimes feel. However, I should not wish to exaggerate that. They are perfectly appropriate for the prayers. They identify us and, with television in
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your Lordships' House, that may be more important than it was. If we dropped the custom of wearing them all the time your Lordships might wish another custom to grow quickly by which the sartorial habits of some of the more radical clergy did not spread to the Bishops' Benches.
If the robes went, I believe that there would then be an even stronger case for continuing to sit here. In any event, I believe that there is a strong case for sitting here because we are near the Throne. It reminds us and noble Lords that we are here by courtesy of a royal choice and summons of long standing and have a particular loyalty to the Crown. We are near the Government Benches because the Christian faith requires us to pray for and support good rulers. But we are not part of government, so as a lighthearted ending perhaps I may suggest that when the House is due for redecoration and upholstering we may have little mitres at the end of the two benches rather like those on the top of church wardens' wands. That would indicate that there is something a little different about these two benches.
Finally, I should like to say a word about members of other Churches. I cannot speak for all but I believe that many of us would undoubtedly welcome a further infusion of Church leaders of other Christian Churches or other faiths, as happened recently. There are still very few, though I must recognise, as I am sure do many noble Lords, that we keep tipping over into a question of reform in this House and it is a more difficult question than is sometimes realised. However, were that to happen, even on a modest scale, I am sure that many of us would be happy to share our benches with them. After all, the noble and Methodist Lord, Lord Soper, always wears a cassock so he should feel quite relaxed among us.
9.13 p.m.
Lord Williams of Elvel: My Lords, from time to time we have some interesting Questions in this House and the Question that has been tabled by the noble Lord, Lord Tanlaw, has been one of the most interesting. I have enjoyed the intervention of the right reverend Prelate the Bishop of Southwark.
There are a number of oddities relating to the bishops, if I may say so without disrespect. The Church in Wales was disestablished in 1921 and Buggin's turn does not appear to apply to Welsh bishops. As a result of disestablishment they lost their right to hold seats and be summoned by the Crown to Parliament. Similarly the Church of Scotland is established yet still has no representation in this House in the same way as Church of England. The noble Lord has done a service in drawing attention to those oddities.
I believe that there are three parts to the noble Lord's Question: first, should the bishops wear robes; secondly, should they speak from the Spiritual Benches; and thirdly, should they be involved in party-political or contentious political issues?
First, as to whether they should wear robes, I believe that they should because that identifies them, if I may so put it, as temporary Members of the House holding membership as long as they are bishops, unless of course through retirement and

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other appointments they become Members of the House. However, that is a separate procedure. While they hold episcopal or archepiscopal office, they have a certain role in the House and should be distinguished because they have that role. Therefore, they should wear robes.
However, there remains the question of what "robes" really means and what is the definition of episcopal dress. I believe that in the early 19th century a bishop was refused access to the Division Lobby in your Lordships' House because he was not wearing lace cuffs. The division was lost by one, therefore, because the bishop in question was improperly dressed. I notice that one right reverend Prelate sitting on the Spiritual Benches is wearing lace cuffs; the right reverend Prelate the Bishop of Southwark, I am afraid, is not. How do we distinguish?
I ask the noble Lord the Leader of the House to give us an instruction on how to distinguish between a bishop who is properly dressed and one who is improperly dressed. Is a pectoral cross a vital appurtenance of a bishop if he wishes to speak? Is the episcopal ring an important quality of the robes of which the noble Lord, Lord Tanlaw, speaks? I very much hope that the noble Lord the Leader of the House will be able to give some clear instruction on how we recognise a bishop when we see one and how we recognise a properly dressed bishop as opposed to an improperly dressed bishop when we see one.
Noble Lords who have visited Russia will be well aware that at Christmas time one sees, particularly in the streets of Leningrad, where it is an important festival—they call it the new year, but it is still part of the Christian tradition—a figure that to all intents and purposes looks like Father Christmas. It is in fact Father Frost, because the Soviet Union does not officially recognise the Christian religion. In Leningrad that figure is popularly known as Lenin in drag. I very much hope that we shall not reach the point where we have bishops in mufti simply because they have to take off their robes, whatever those robes may be, in order to speak on points that are not particularly pertinent to the Church of England.
Perhaps I may go back in time like the right reverend Prelate the Bishop of Southwark. In 1188 a certain Archbishop Baldwin of Canterbury went through Wales—mid-Wales, I should tell my noble and learned friend Lord Elwyn-Jones—and through the princedoms of Elvel and Maelienydd. He wore chain mail. At that time the Archbishop of Canterbury, as he was, wanted to recruit people for the crusade and was undoubtedly entitled to wear chain mail. I am sure that the right reverend Prelate the Bishop of London, had he had a suit of chain mail, might have felt yesterday that it was appropriate to wear it. Is a bishop who enters the Chamber in chain mail, following the example of the Archbishop of Canterbury of 1188, out of order?
I turn to the question of whether bishops should speak from the Spiritual Benches. In terms of the First World War song, which your Lordships will no doubt remember, it seems to me that we are here because we are here because we are here. I suspect that the answer to the question is that they are there because they are there because they are there. I do not
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believe that the noble Lord the Leader of the House will be able to give us any clear, logical definition of why the bishops happen to sit where they do rather than anywhere else. I make just one comment. Since the other side of the House is known as the Spiritual Benches because of the presence of the bishops, to enter a slighty political note, I find it very curious that the Government are sitting on the spiritual side of the House rather than on the temporal side of the House. Surely the Opposition should be on the spiritual side of the House and the Government should be on the temporal side. No doubt the noble Lord the Leader of the House will be able to clear up the point.
The noble Lord, Lord Tanlaw, raised another point of a quite serious nature. It came down to whether the bishops were entitled in some curious way to speak on secular matters at all. The right reverend Prelate addressed himself to this point. I wholly agree with him that there is no serious distinction between societas mystica and societas humana. I do not think that the practice of religion can be separated from the practice of governance of society. I believe that that is the fundamental point that the right reverend Prelate made. We on these Benches would certainly agree with that. I think that it was said that some churchmen were political agitators.
I am greatly looking forward to hearing what the noble Lord the Leader of the House has to say, particularly concerning the distinction between a properly dressed Bishop and an improperly dressed one. In the meantime, I believe that the noble Lord has raised one or two serious points but, having occupied the attention of the House for a little too long, I conclude.
9.20 p.m.
The Lord Privy Seal (Lord Belstead): My Lords, I am grateful to the noble Lord, Lord Tanlaw, for asking the Question this evening which has led to interesting speeches from the noble Lord himself, from the right reverend Prelate and from the noble Lord, Lord Williams. The noble Lord asked whether it is now appropriate that bishops should need to continue to wear robes and to sit and to speak from the Spiritual Benches when taking part in the proceedings of your Lordships' House.
First, perhaps, I may deal with the question of whether right reverend Prelates should continue to wear robes when taking part in the proceedings of the House. That is really a matter for your Lordships, Spiritual as well as Temporal, having regard to the custom of the House. The Companion to the Standing Orders provides that a bishop, on introduction, should wear episcopal robes, but the practice of wearing such robes at ordinary sittings of the House appears to rest on custom alone. In answer to the first of the questions put to me by the noble Lord, that does not arise from any of the ancient Acts which he itemised.
Episcopal robes comprise a white rochet with black bands, a black chimer and scarf. I understand that rochet and chimer were the ordinary outdoor habit of bishops in the 16th century; and 16th century bishops attended in their everyday dress. While the everyday dress of bishops in the world outside has

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changed somewhat, old customs die hard in your Lordships' House. However, I have to confess that there are colleagues of mine on the Front Bench who deprecate the passing of both the gaiters and the apron. I am sure that your Lordships respect the customs of the House and as regards this particular custom I am not aware that your Lordships would wish to see it changed.
The second question asked by the noble Lord, Lord Tanlaw, was, if that is the case, why not a particular dress for certain other noble Lords; for instance, the Law Lords. My only answer to that is that there is simply no historical custom of dress for other Members of your Lordships' House other than for right reverend Prelates. At that point the noble Lord, Lord Williams, asked about some other items of dress. As I say, I am advised that episcopal dress consists of a white rochet with back bands and a black chimer and scarf. As ruffs are not to be found in the Companion to the Standing Orders, presumably ruffs are not part of the episcopal dress for parliamentary purposes. I am advised that neither is chain mail. Of course, if a right reverend Prelate were to wear chain mail under his rochet, probably that would be acceptable.
I now turn to the seating arrangements and here again I believe that we have to look at custom which pre-dates even the 16th century. Your Lordships' seating arrangements seem to have evolved from medieval times. Until the 16th century I am advised that the normal seating arrangement of the House had the most reverend Primate the Archbishop of York to the left of the King and the most reverend Primate the Archbishop of Canterbury to the right. The bishops and abbots sat on Benches below the Archbishop of Canterbury; that is to say, on the right hand side of the House. The earls and barons sat below the Archbishop of York; that is to say, on the left-hand side of the House.
Lord Tordoff: Will the noble Lord forgive an intervention? I am grateful to him. He refers to left and the right, but looking in which direction?
Lord Beistead: My Lords, looking down the House from the Throne. I understand that was the way that the right reverend Prelates and the noble Lords disposed themselves. The reason for separate "sides" was doubtless due to the fact that before the Reformation there were rather more Spiritual Lords than there were Temporal Lords. This arrangement was broadly confirmed by the Act for Placing of the Lords of 1539, which is still in force to this very day. Under the Act, the Archbishops were moved to join the other Bishops on the right-hand side while the Lords Temporal continued to sit on the left in their degrees and according to the "ancienty" of their peerage.
It is unlikely, however, that the legal requirements of the Act were rigidly adhered to for long. Following the dissolution of the monasteries, the Lords Spiritual numbered only the two archbishops and the 24 diocesan bishops of the Church of England, while the Lords Temporal continued to grow in number and spilled over on to the spiritual side of the House, which is why one finds noble Lords who are
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temporal sitting on the side of the House on which I am my colleagues are sitting this evening.
The present convention is that, consistent with the statute of 1539, the bishops sit on the two Benches nearest to the Throne. Lords Spiritual must, by convention, speak from those two Benches. So we find that the seating arrangements, partly laid down by statute and partly by custom, go back a very long way. Here again, I detect no reason for change. Nor, I suspect, does your Lordships' House. Incidentally, it may be of interest that it is thought that the Government moved on to the spiritual side of the House after the union with Ireland in 1800.
One of the reasons the noble Lord, Lord Tanlaw, brought the Unstarred Question to the House this evening was to ask whether it is right that the bishops, sitting in the way that they do and dressed in the way that they are, should take part in the proceedings of your Lordships' House in the way that they do. I am most grateful to the right reverend Prelate the Bishop of Southwark for making the simple point that right reverend Prelates are summoned in the same way as all other noble Lords, personally, by Her Majesty, to come and give advice. It would be very strange if the advice was not wanted.
I have been interested to find that bishops could not originally be tried by their peers, nor could they take part in such trials. This was because canon law forbade spiritual persons from participating in judgments of blood. Therefore they are not Peers. Bishops are, however, Lords of Parliament and there are no restrictions on their right to vote. Not holding peerages, however, bishops leave the House on retirement. As we all know, in some cases peerages are conferred upon retiring archbishops in order that they may continue as Members of your Lordships' House.
It is to misunderstand the presence of right reverend Prelates to think that in some way on coming to the House there is something amiss by being on the Bishops' Benches but not taking full part in that capacity. The Writs of Summons are individually sent by Her Majesty. They are commanded to give counsel upon the "arduous and urgent affairs" which have occasioned the summoning of the Parliament. I therefore repeat that I very much agree with what the right reverend Prelate said: it is most important that the advice of the Bishops' Bench should be given on matters. Those are bound to include matters of political moment. I was most glad that the noble Lord, Lord Tanlaw, made the point that, when the advice is given, it is important advice given always in a constructive way. The fact that the Welsh, the Irish and the Scots are not represented by the Bishops' Bench has been covered by the noble Lord, Lord Williams, and I will not improve on that.
I should like to say a brief word to put a gloss on what the right reverend Prelate said about the question of doctrinal matters. The noble Lord, Lord Tanlaw, asked whether the bishops were answerable on doctrinal matters. Technically, I am advised, that is not so. The bishops sit in response to their writs; where necessary they act on behalf of the Church in promoting measures, for example. But they are not answerable to the House. Technically, they do not

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represent the Church of England. Indeed, the Companion to the Standing Orders of the House states that it is undesirable to ask questions in your Lordships' House on Church of England matters.
I think that leaves me with one last question to answer from a noble Lord who asked: should not bishops be replaced by leaders of other Churches and right reverend Prelates possibly sit in a new capacity with the other leaders? Of course there is no reason why life peerages cannot be conferred in such a way upon leaders of other Churches. Although their peerages are personal to them, it could be said that some noble Lords, who are colleagues of ours now, are looked upon as being representative of their religions. However, I repeat that their peerages, in all those cases, are personal to those particular noble Lords and I am not aware of any present plans to alter the composition of the House in that respect.
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I hope that I have gone some way, together with the noble Lord, Lord Williams, and the right reverend Prelate in covering the ground that the noble Lord, Lord Tanlaw, wanted covered.
I am most grateful to the noble Lord for raising what I think has been an extremely interesting debate. That is all I have to say except once again to thank the noble Lord for tabling the Question.

Matrimonial Proceedings (Transfers) Bill [H.L.]
Returned from the Commons agreed to.
House adjourned at twenty-nine minutes before ten o'clock.

  MALAYSIA: DETENTIONS
  MALAYSIA: DETENTIONS
  ISRAEL: NUCLEAR WEAPONS PROGRAMME
  ISRAEL: NUCLEAR WEAPONS PROGRAMME
  COMMUNITY CHARGE IMPLEMENTATION
  COMMUNITY CHARGE IMPLEMENTATION
  MERCHANT SHIPS: USE IN WAR
  MERCHANT SHIPS: USE IN WAR
  FIREARMS AMNESTY
  FIREARMS AMNESTY
  FIREARMS: "BUY-IN" SCHEME
  FIREARMS: "BUY-IN" SCHEME