Sitting of 6 April 1989

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    BRITISH RAILWAYS (No. 2) BILL
    Lords amendments agreed to:

    ASSOCIATED BRITISH PORTS (NO. 2) BILL
    Order for Third Reading read.
    To be read a Third time on Thursday 13 April.

    ASSOCIATED BRITISH PORTS (HULL) BILL (By Order)
      BIRMINGHAM CITY COUNCIL (No. 2) BILL (By Order)
        HYTHE, KENT, MARINA BILL (By Order)
          LONDON UNDERGROUND (VICTORIA) BILL (By Order)
            WENTWORTH ESTATE BILL (By Order)
              BRITISH FILM INSTITUTE SOUTHBANK BILL (By Order)
                CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
                REDBRIDGE LONDON BOROUGH COUNCIL BILL (By Order)

                KING'S CROSS RAILWAYS BILL (By Order)
                Orders for Second Reading read.
                To be read a Second time on Thursday 13 April.

Oral Answers to Questions
  NATIONAL FINANCE

    Unleaded Petrol
    Mr. Gregory: To ask the Chancellor of the Exchequer what is the anticipated excise revenue on unleaded petrol for the current year; and if he will make a statement.
    The Economic Secretary to the Treasury (Mr. Peter Lilley): The excise duty revenue on unleaded petrol will be about £665 million in 1989–90.
    Mr. Gregory: Now that the Chancellor has increased the tax differential between leaded and unleaded petrol to 14p per gallon, which I understand is the second highest in the EC after Denmark, does my hon. Friend agree that petroleum companies should extend the availability of unleaded petrol so that more motorists can do the green thing and support the Government?
    Mr. Lilley: My hon. Friend is correct when he says that our differential is now greater than that of any country apart from Denmark. Because of the additional changes that we made in the Budget affecting the price of two-star petrol, an even greater number of filling stations are transferring pumps and storage capacity from two-star and three-star petrol to unleaded petrol, and the response so far is encouraging.
    Mr. Frank Field: Why have the Government found it necessary to rig the free market in favour of unleaded petrol? Would it be right for voters to draw from that a conclusion that on the growing agenda of environmental issues an untrammelled free market does not serve the best long-term interests of mankind?
    Mr. Lilley: We have never believed that environmental considerations are best met by an untrammelled free market. We have always been prepared to introduce incentives, as we have done here, to encourage a better environment. By and large the measures announced by my right hon. Friend the Chancellor in the Budget have been warmly welcomed by all those concerned about the environment.

    Manufacturing Investment
    Mr. Colin Shepherd: To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of British manufacturing industry.
    Mr. Irvine: To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of British manufacturing industry.
    The Chancellor of the Exchequer (Mr. Nigel Lawson): The Financial Statement and Budget Report forecast is for business investment to rise by 8 per cent. in 1989.
    Mr. Shepherd: I thank my right hon. Friend for that response. Does he agree that it shows that under the Government manufacturing investment is growing satisfactorily? Will he confirm that in terms of GDP, total

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    manufacturing investment is now higher than it was at any time during the last Labour Administration? Can he say whether this growth is fully nationwide?
    Mr. Lawson: Yes, my hon. Friend is right. The investment boom that has been continuing now in this country for several years and is scheduled to continue in this current year is nationwide. It is perfectly true that total investment is a higher proportion of GDP than in any year under the last Labour Government and indeed business investment last year—1988—was the highest proportion of GDP since records began. As for manufacturing investment, the latest Department of Trade and Industry investment intention survey suggested that manufacturing investment will rise by 11 per cent. in 1989—far and away the highest figure ever.
    Mr. Irvine: Does my right hon. Friend agree that this continuing high level of investment is the best possible indication of confidence by industry and commerce in the Government's financial policy and in the fundamental strength of the British economy?
    Mr. Lawson: My hon. Friend is right. It has long been the case in this country that our two main problems—they have been identified in the past by many outside commentators—were a poor rate of growth of investment and a poor rate of growth of productivity. Now we have the highest rate of growth of investment in the 1980s of any major country in Europe. Indeed, over the past seven years total investment has grown more than twice as fast as consumption and we also have, of course, throughout the 1980s an unprecedented growth in productivity and so the fundamentals of the British economy are improving in the way that we always desired, but never before achieved.
    Mrs. Mahon: If the Chancellor believes that the economy is improving so much, why were 20,000 jobs lost in the textile, clothing and hosiery industry last year? Will he give us his forecast for the future of textiles over the next 12 months?
    Mr. Lawson: Of course I am well aware of the difficulties of the textile and hosiery industry, not least because I represent an east midlands constituency. But of course there are some industries that shed jobs and there are others that put them on. What we have seen is overall—taking the economy as a whole—unemployment falling further and faster than in any other country, and than in any other period. Indeed we now have a level of unemployment in this country well below the European Community average.
    Mr. Grocott: Can the Chancellor of the Exchequer confirm that, according to the Government's press release of 15 March, manufacturing investment in 1988 was £10,990 million while manufacturing investment in 1979—nearly 10 long years ago—was £11,137 million? Is that not a pathetic record?
    Mr. Lawson: I do not think that it is a pathetic record. As I pointed out, total business investment is at a higher proportion of GDP than it has ever been since records were first collected. What was happening in manufacturing industry under the Labour Government was that there was so much—[Interruption.] I am answering the hon. Member's question. He asked me a question and I am now answering it. What was happening then was that as a result of restrictive practices, inefficiency and, in many cases,
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    poor management the return on the capital then was very very poor. It was necessary to increase investment substantially in manufacturing, it was necessary to get more output—which is what we have got—more output and better and more efficient use of existing capital. Now the forecast is for manufacturing investment to rise, as it is set to do in the current year, to a record level and the quality of investment is far higher as is shown by the return on manufacturing investment. So the hon. Member does not know the first thing that he is talking about.
    Mr. Quentin Davies: Does my right hon. Friend agree that the continuing buoyancy of investment in this country is one of the most favourable and promising factors for the prospects of non-inflationary growth? It is vital that nothing should be done to damage that investment confidence. Does my right hon. Friend also agree that his very cautious Budget did a great deal to reassure industry and shore up that very important confidence?
    Mr. Lawson: I am grateful to my hon. Friend for his remarks about the Budget and of course he is quite right to emphasise the importance of confidence. Confidence in this country is very high and this is shown, of course, most recently by the CBI survey of investment intentions. It really is deplorable, the way in which the Labour party can do nothing but try to run Britain down and to deny the facts of investment success and of investment boom that are all around us.

    Balance of Payments
    Dr. Godman: To ask the Chancellor of the Exchequer what representations he has received on his Budget forecast for the balance of payments in 1989 and 1990.
    The Chief Secretary to the Treasury (Mr. John Major): None, Sir.
    Dr. Godman: After learning last week's figures, does the Chief Secretary's right hon. Friend, the Chancellor of the Exchequer, now predict that the balance of payments deficit for this year will rise or fall?
    Mr. Major: I see no reason to change the estimate that my right hon. Friend gave some time ago.
    Mr. Nicholas Winterton: Bearing in mind the answer given by my right hon. Friend the Chancellor to the last questions, does my right hon. Friend the Chief Secretary accept that if interest rates were lower, investment in this country would be higher and that our balance of payments would improve? Does my right hon. Friend agree that interest rates have affected, and will affect, investment, and that investment will have a direct impact on our balance of payments?
    Mr. Major: What would certainly have a very direct effect on investment would be a failure to take the action necessary to bring down inflation—and that is the purpose of the current short-term interest rate policy. One of the attractive aspects of investment over the past year or two is that so much of it has been made out of retained profits, whereas in previous years and under previous Governments, profits were not there to provide for investment.
    Mr. John Smith: Has the Chief Secretary seen the international monetary fund's prediction that the balance of payments deficit for 1989 will reach a record £17 billion? As the Chancellor got it so badly wrong this year, why should we believe his prediction this year as opposed to that of the IMF?
    Mr. Major: The right hon. and learned Gentleman will recall that the IMF was equally inaccurate last year, as were most other forecasters. The right hon. and learned Gentleman neglects to mention that the IMF report also described the Government's policies as being entirely appropriate, and it confirmed that our strong fiscal policies support monetary policy and strengthen confidence.
    Mr. Beith: Would the Government regard it as an achievement if, instead of being £10 billion out with their balance of payments forecast, this year they were only about £6 billion out? Will the Chief Secretary explain why he believes that exports will rise more than twice as fast as imports in order to make his promise come true?
    Mr. Major: There is no doubt that in recent years exports have been performing extremely well. The reasons why we believe that export performance will continue include the degree of investment and the improved supply-side performance.
    Mr. Sumberg: As we listen to the views of Opposition Members and hear their policies unfolded, is it not becoming clearer day by day that the Labour party remains the party of high taxation and of higher spending than we can afford, and that it wants to return to the days of public borrowing and public debt?
    Mr. Major: My hon. Friend describes the situation with precise accuracy.

    Profit-related Pay
    Dr. Reid: To ask the Chancellor of the Exchequer what percentage of the work force is currently participating in profit-related pay schemes as defined by the Inland Revenue.
    The Financial Secretary to the Treasury (Mr. Norman Lamont): Take-up of profit-related pay has been encouraging. So far, about 121,000 employees are participating in PRP schemes. In his Budget statement, my right hon. Friend announced several improvements and simplifications to the tax relief for PRP. We expect those further to encourage take-up.
    Dr. Reid: Why does the Minister not answer my question and say what percentage of workers are involved in such schemes? I have worked out that a total of 121,000 participating employees out of a work force of 28 million represents less than 0·5 per cent. Is that not an indication of the scheme's dismal failure? Why does not the Chancellor admit that the abolition of the 5 per cent. rule is an indication of yet another failure of one of his pet schemes? Why does he persist in throwing good money after bad, when there is no evidence that it has any beneficial effect on the economy? Why does he not get down to tackling the real problems facing the British economy?
    Mr. Lamont: I did not give the precise figure for which the hon. Gentleman asked because he is such a brilliant
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    mathematician that I thought that he could work it out. When he gave his figure, he worked it out wrongly. As one of my hon. Friends said, it is over ½per cent. but under 1 per cent.—[Interruption] This is just over a year after the scheme was introduced. The take-up is ahead of that of the all-employee share scheme when it was a year old. This scheme is being taken up more quickly than other schemes when they were introduced. I do not know why the hon. Gentleman wants to make out that the scheme is a failure. I should have thought that any Socialist Opposition might be interested in the idea of profit-related pay, which gives people a stake in their company and helps to make pay bargaining more flexible. Any sensible person should want to encourage that.
    Mr. Ian Taylor: Will my right hon. Friend note that this Budget has done an immense amount to boost the participation of workers in the success of the companies for which they work? Will he urge companies and trade unions to take up such schemes more often? It is not the Government's fault that the take-up rate has been slow, it is the fault of those in industry who have not realised that, in the long term, workers participating in the success of their companies, and not dependency on the annual wage round, is the way forward.
    Mr. Lamont: I know of my hon. Friend's great interest, particularly in employee share ownership plans. Again, we have introduced some tax reliefs, and we will certainly do everything we can to encourage employees and employers to take them up. I repeat the point that I made earlier. After 18 months, it is not surprising that only that proportion has taken up PRP. Contrary to what the hon. Member for Motherwell. North (Dr. Reid) said, the changes that were introduced in the Budget and the 5 per cent. rule will encourage more people. That is a good thing.

    Interest Rates
    Mr. Turner: To ask the Chancellor of the Exchequer what are interest rates in (a) Britain and (b) Japan.
    Mr. Lilley: Three month market interest rates on 4 April were 13 per cent. in the United Kingdom, 9·8 per cent. in the United States of America, and 4·6 per cent. in Japan.
    Mr. Turner: The Chancellor of the Exchequer has a reputation for straight talking. I do not think that we got straight talking in his answer to a question from the hon. Member for Macclesfield (Mr. Winterton). May I try again? In terms of the widely differing interest rates, how on earth does he expect British business to seek to reduce the balance of payments deficit? Will he give us a straight answer? He said that interest rates in Japan are 4·6 per cent., compared with 13 per cent. in this country.
    Mr. Lilley: The level of profitability of British industry has been restored to levels which it has not seen for a long time, and it is so healthy that it is clear that British industry can compete.
    Mr. Budgen: Is the Japanese economy a good example of what happens when Governments reduce interest rates too much? Is my hon. Friend aware that, when interest rates in Japan were reduced to their present low level at the beginning of 1987, the price of residential land was already

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    the highest in the world by a long way and was increasing by 9 per cent. per annum? It then started to increase by 27 per cent. The price of land and that increase is a major cause of the social and political turmoil that Japan is going through at present.
    Mr. Lilley: I am happy to say that my responsibilities do not extend to the Japanese economy. I am sure that my hon. Friend's remarks will be noticed there and that his concern for their current difficulties will be greatly appreciated.
    Mr. Radice: Has the Minister noticed that the Government urge a strong yen to reduce the Japanese surplus, whereas in Britain they urge a strong pound to reduce our deficit? Which is the right course of action?
    Mr. Lilley: It is clear that, in an economy such as ours, devaluation would largely feed increased inflation and would affect the value of the pound in the hon. Gentleman's pocket. Therefore, we believe that the exchange rate should not be allowed to depreciate. The Group of Seven Ministers reaffirmed the desire of the Finance Ministers of the leading countries to seek continued stability of exchange rates.
    Mr. Hanley: Does my hon. Friend agree that if levels of personal savings were as high in Britain as they are in Japan and if levels of personal borrowings were as low in Britain as they are in Japan, interest rates might be much more in parity?
    Mr. Lilley: My hon. Friend who, I am sure, does not share the view that I am responsible for the Japanese economy, makes a good point. We are anxious to see saving encouraged and borrowing discouraged, which is what higher interest rates achieve. I must point out that although personal savings have been low, there has been a good recovery in savings and investments by industrial companies.

    Inflation
    Mr. Buckley: To ask the Chancellor of the Exchequer how many members of the European Economic Community have inflation rates lower than that in the United Kingdom.
    Mr. Lawson: On the basis of comparable figures, seven EEC member countries currently have lower inflation than the United Kingdom and four have higher inflation.
    Mr. Buckley: Does the Chancellor of the Exchequer agree that the United Kingdom inflation rate of 7·8 per cent. is largely a consequence of Government policy in pushing up electricity, gas and transport prices and of the high mortgage rate, which is punishing people in this country?
    Mr. Lawson: No, I do not agree with any of that and, indeed, the higher mortgage rates, which are a consequence of higher interest rates generally, are necessary to get inflation down because I do agree that inflation is currently too high. Indeed inflation, which during the whole of our period of office has averaged 1 per cent. above the European Community average, is currently 3 per cent. above the European Community average. However, to put that in perspective, it is worth
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    recalling that during the whole of the period of the Labour Government, our inflation rate was 6 per cent. above the European Community average.
    Mr. Dykes: Is not the ominous truth now dawning that higher interest rates actually add to the rate of inflation, which in turn creates an additional spiral?
    Mr. Lawson: No, Sir.
    Mr. Gordon Brown: Will the Chancellor confirm that after the rises in gas, electricity and water charges, in rents and rates, including the poll tax in Scotland, and even in television licences, prescriptions and the new eyesight charges, the petrol price rise is the ninth rise in one week? How many more price rises must we have on his road to zero inflation?
    Mr. Lawson: The hon. Gentleman is extremely perceptive and he has noticed that he has just informed the House of the interesting fact that, until inflation is zero, prices tend to rise.
    Sir Dudley Smith: Is my right hon. Friend aware that despite all his great efforts in this respect, there will always be considerable difficulties for any Government in this country while we have the relentless annual wage awards in both the private and public sectors, irrespective of performance?
    Mr. Lawson: My hon. Friend is certainly right that it is desirable that British industry should keep a tight control of its costs and that, of course, includes, most importantly, pay costs. Nevertheless, that is not the primary cause of inflation, although it does add to the difficulties for British industry in dealing with the current situation. But the remedy is in its own hands. But inflation is the responsibility of the Government and it is the responsibility of the Government to get inflation down by pursuing an adequately tight monetary policy and that is what we are doing. The Opposition, by their repeated calls, which we have heard again today, for lower interest rates are revealing themselves, once again, as the party of higher inflation.

    Tax Relief
    Mr. Morgan: To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer of tax relief in relation to (a) enterprise zones, (b) business expansion schemes and (c) personal equity plans.
    Mr. Norman Lamont: The estimated costs of the business expansion scheme and personal equity plans are £100 million and £15 million respectively in 1988–89. The latest year for which estimates of the cost of the relief relating to enterprise zones are available is 1985–86, when the cost was about £60 million.
    Mr. Morgan: Does the Minister agree that what the Chancellor has done in making personal equity plans tax deductible to cover privatisation in the coming year is to admit that the privatisation of electricity and water cannot take place without creating a tax loophole? Will he tell us, therefore, what the cost of privatising electricity and water will be to the taxpayer, as the Government have again thought up a wonderfully socially progressive idea for getting the non-shareholding classes to subsidise the shareholding classes?
    Mr. Lamont: The hon. Gentleman seems terrified that the privatisation of water or electricity might be a success and, therefore, more difficult for the Labour party to reverse. The hon. Gentleman is exaggerating wildly. The purpose of the changes to personal equity plans that my right hon. Friend made in his Budget is to encourage wider share ownership. The point relating to new issues was one detail and the cost of that is extremely modest.
    Mr. Neil Hamilton: Does my right hon. Friend agree that the best form of tax relief is straight reductions in tax rates? As Opposition Members seem to have grasped that fact and, in their increasingly desperate scramble for office, are making their party more voter-friendly by following the lead that we have been giving for the past 10 years, can my right hon. Friend tease out of the right hon. and learned Member for Monklands, East (Mr. Smith) the bands at which the lower rates of tax that the Opposition propose would be payable?
    Mr. Lamont: My hon. Friend is absolutely right. The Leader of the Opposition made a tantalising speech earlier this week when he attempted to explain the tax policies of the Labour party. However, as my hon. Friend has identified, he left out the absolutely crucial point and most of us are wondering where the beef was in that speech.
    Mr. Chris Smith: Does the Financial Secretary accept that the business expansion scheme, especially now, when it is so overwhelmingly employed for the purposes of private rented property, has long ceased to be a genuine source of new equity for enterprise, and has become simply a principal means of tax avoidance for higher rate taxpayers? Is that not another example of what we have seen so often under this Government? For the great majority of taxpayers it is pay-as-you-earn, but for the privileged few it is pay-if-you-like.
    Mr. Lamont: I do not agree with the hon. Gentleman. The changes that we made to the business expansion scheme last year targeted it much more on small companies and, with the changes that have taken place in the equity and venture capital markets, I believe that that was the right change to make. The second change that we made was to target the business expansion scheme on the revival of the private rented sector. I am not at all embarrassed by the fact that £300 million to £400 million seems to have been invested in private rented accommodation because that is absolutely excellent.

    Pensioners (Income)
    Sir Trevor Skeet: To ask the Chancellor of the Exchequer what has been the change in the post-tax income of pensioners since 1979.
    Mr. Major: The average post-tax incomes of pensioners increased by 23 per cent. in real terms between 1979 and 1986.
    Sir Trevor Skeet: I welcome those figures and the fact that the Chancellor raised income support substantially in the Budget for the over-75s, but will my right hon. Friend bear in mind the plight of pensioners who are on only the single state pension and have no savings?
    Mr. Major: I understand my hon. Friend's concern. These days it is misleading to assume that most pensioners rely solely on the state retirement pension. At present
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    about 50 per cent. of all pensioners also have an occupational pension and that proportion rises to about 70 per cent. of those who retired in the past five years. Those who do not have an occupational pension could either receive an earnings-related supplement to their state pension or be entitled to income support and housing benefit additions.
    Mr. Shore: How much of the increase about which the Chief Secretary told us was due to reductions in income tax and how much was due to the secular increase in occupational pensions that has been taking place year after year?
    Mr. Major: To give the right hon. Gentleman the precise figure I shall need to write to him.
    Mr. Charles Wardle: Have not people who retired before the introduction of the state earnings-related pension scheme in 1978, without an occupational pension of their own, fared less well than the average? Therefore, will my right hon. Friend consider including in his welcome changes to the higher level of age allowance people of 70 and over to cater for all women who retired at 60 prior to 1978?
    Mr. Major: The principal problem that my hon. Friend outlines has been dealt with in the package for poorer pensioners that my right hon. Friend the Chancellor announced some months ago. It comes into effect from October this year and will provide an extra £2·50 for single pensioners who qualify and £3·50 for couples.

    Balance of Payments
    Mr. John Garrett: To ask the Chancellor of the Exchequer when he expects the balance of payments deficit will begin to fall as a percentage of gross domestic product.
    Mr. Galbraith: To ask the Chancellor of the Exchequer when he expects the balance of payments deficit will begin to fall as a percentage of gross domestic product.
    Mr. Lawson: Probably this year.
    Mr. Garrett: Does the Chancellor agree that the balance of payments deficit was 1·7 per cent. of GDP in 1979 and 4·4 per cent. of GDP in 1988? Does he further agree that we have become a country that imports capital goods and exports oil, and is that not characteristic of an underdeveloped economy?
    Mr. Lawson: The hon. Gentleman is wrong on pretty well all counts. His figures for the balance of payments current account deficit in 1988—it was 3·2 per cent. of GDP, not the 4·4 per cent. It is 3·2 per cent. That, of course, is a high figure but it is worth bearing in mind that the United States has had a current account deficit averaging over 3 per cent. for the past five years.
    As for the imports of capital goods, there the hon. Member is right. There has been a substantial increase in the imports of capital goods and that has been the counterpart of the massive investment boom which has been going on throughout British industry and which will stand us in very good stead in the future.
    Mr. Galbraith: Has the Chancellor read the report of the Institute of National Economics which states that

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    Britain's deficit is in a class by itself and is likely to reach £44 billion by 1992? What will the Chancellor do to prevent than horrendous outcome?
    Mr. Lawson: The statement by the organisation to which the hon. Member referred is wrong as, if the hon. Member would listen to what I said, the Americans have had a current account deficit of this order as a percentage of gross domestic product for the past five years—
    Mr. John Smith: The right hon. Gentleman criticised them.
    Mr. Lawson: —which I have not criticised. I am happy to answer questions from the Opposition Front Bench from a sedentary position since they have been put. I have criticised them for their budget deficit, not for their current account deficit. So it is certainly not in a class of its own, but it is obviously necessary that we get it down in due course and that is what we shall do.
    Mr. Batiste: My right hon. Friend will be aware of the scepticism with which the statistics on which the balance of payments figures are calculated are treated in many quarters. Is he satisfied with the accuracy of those statistics? If not, what action will he take to improve them?
    Mr. Lawson: My hon. Friend is right; the statistics are almost certainly inaccurate, as is indicated by, for example, the fact that for 1988 there was in the balance of payments a balancing item of £15 billion, greater indeed than the recorded deficit—and a balancing item is just a polite name for errors and omissions. We are concerned to improve the quality of Government economic statistics, and that is why the measures were announced yesterday involving a substantial reorganisation and enlargement of the Central Statistical Office and a number of other measures which, over time, will lead, I believe, to an improvement in the quality of statistics.
    Having said that, it is a balance that has to be drawn between the burdens on business—the burdens that are put on business through the collection of statistics—and getting the full amount of statistics; and also, now that the economy is a much more complex, more service-based economy, it is genuinely harder to get statistics of the quality that we had in the past. Clearly, we have got to do better, and the announcement yesterday is designed to do just that.
    Sir Richard Body: Will my right hon. Friend explain how there can be both a balance and a deficit? Surely the balance of payments deficit on current account is matched exactly by a capital account surplus, which may well be to our advantage?
    Mr. Lawson: My hon. Friend is absolutely right. Part of the point that I was making was that if my hon. Friend looks at the officially recorded figures he will see that there is a substantial deficit on the current account in 1988 but equally there is a recorded capital outflow, which clearly cannot be the case. The two things must match and counteract. Of course, my hon. Friend is also right that the overseas savings which are coming to the United Kingdom to finance investment here—because they feel that this is a very good place to invest—are extremely welcome and will strengthen the British economy.
    Mr. Robert Sheldon: Since the high pound and the high level of interest rates are a disadvantage to the balance of
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    payments, are not the Chancellor's remarks quite unconvincing on how he expects to improve the balance of payments so long as these factors remain?
    Mr. Lawson: I disagree with the right hon. Gentleman, even though he has at one time been a Treasury Minister. What has been happening is that domestic demand in this country has been running at an unsustainably high level, and one of the things that will happen is that the rate of growth of domestic demand will slow down and, as it slows down, import growth will slow down. That is one of the mechanisms by which there will be an improvement in the current account.
    What the right hon. Gentleman is proposing, however, which is lower interest rates and a lower exchange rate, would probably have very little benefit, if any, to the current account. What they would do is ensure that inflation took off in a major way, as it did during the period when he was a Treasury Minister.
    Mr. Gow: As forecasts and statistics prove so frequently to be made in error, would the world come to an end if we were to suspend both for a trial period of 12 months?
    Mr. Lawson: I can assure my hon. Friend that in those circumstances the world would not come to an end. However, it might be a somewhat controversial measure to put before the House.
    Mr. John Smith: Will the Chancellor tell us whether the IMF is wrong in predicting a £17 billion balance of payments deficit? Why should his prediction for 1989 be treated with any more credibility than his prediction for 1988?
    Mr. Lawson: My right hon. Friend the Chief Secretary answered that point earlier, when he pointed out that the IMF frequently gets its forecasts wrong. Indeed, it got its forecasts hopelessly wrong last year, just as all other forecasters did. If I may give advice to the right hon. and learned Gentleman, who is an up-and-coming politician, I suggest that, if he were to concern himself less with forecasts and more with what is actually happening in the British economy, he would do a great deal better.
    Mr. Redwood: Will the Chancellor confirm that the £15 billion unidentified item may include substantial under-recording of exports? Is that not very likely given the completely out-of-date basis for the survey of the service sector which is now such an important component in our overseas earning capacity?
    Mr. Lawson: My hon. Friend is absolutely right and that is why one of the recommendations of the scrutiny report that came out yesterday, which he will have read, is to try to improve just that sector. It would certainly strain credulity to believe that the entire £15 billion balancing item is accounted for by unidentifed capital flows and none of it by unidentified flows on the current account.

    Value Added Tax
    Mr. McFall: To ask the Chancellor of the Exchequer how much value added tax was paid per annum by an average family in 1978–79; and what was the comparable figure in 1988–89.
    Mr. Allen McKay: To ask the Chancellor of the Exchequer how much value added tax was paid per annum by an average family in 1978–79; and what was the comparable figure in 1988–89.
    Mr. McKelvey: To ask the Chancellor of the Exchequer how much value added tax was paid per annum by an average family in 1978–79; and what was the comparable figure in 1988–89.
    Mr. Lilley: A married man on average male earnings with two children would have paid approximately 2·6 per cent. of his earnings in value added tax in 1979–79 and 4·8 per cent. in 1988–89.
    Mr. McFall: Does the Minister realise that over the past 10 years the VAT paid by average families with two children and average male earnings had risen from £2 million to over £22 million in real terms, which represents a doubling of the VAT that people paid under Labour? Does the Minister not agree that this regressive tax hits the poorest people in society? When will he stop fooling the British people and his Back Benchers by chattering on about income tax cuts, when he is using the VAT sledgehammer to clobber the British people?
    Mr. Lilley: The hon. Gentleman does not appear to realise that since 1978–79, the take-home pay of a man on average earnings with one child has risen in real terms by 29 per cent., which takes account of all taxes. Under Labour that family saw an increase of less than 1 per cent. in its real take-home pay. The tax is not regressive, as the hon. Gentleman suggests.
    Mr. McKay: Does the Minister not agree that the £6·60 by which the average family would be better off if VAT represented a proportion of gross income, as it did under Labour, would be helpful to the average family? It would help to pay the mortgage interest that Government policies have increased.
    Mr. Lilley: As I have just pointed out, if the average family had to go back to the level of income that it possessed under the last Labour Government, it would be in dire straits. One of the benefits of VAT is that families at least have some choice about whether they pay it. A high proportion of spending goes on zero-rated items, such as food and housing.
    Mr. McKelvey: Does the Minister not realise that only an economic illiterate would argue that VAT is anything other than a regressive tax? Does he not understand the effect that it has on poor people, especially those in Scotland who have also been hit by that most obnoxious and regressive tax of all—the poll tax?
    Mr. Lilley: The hon. Gentleman is simply wrong. People on three quarters of average income pay less than 4½ per cent. of their income in VAT; someone on average income pays about 4·7 per cent. and someone on one and a half times average income pays 5·1 per cent. Therefore VAT is clearly a progressive and not a regressive tax. That is manifestly obvious and were the hon. Gentleman in contact with his constituents he would realise that the less well off spend a much higher proportion of their incomes on zero-rated items.
    Mr. Oppenheim: Given that VAT is not levied on most basic essential items, surely the figures merely prove that, under a Tory Government, people can afford more luxuries.
    Mr. Lilley: My hon. Friend is absolutely right. Under a Labour Government they would of course, be able to afford far less. It is sheer hypocrisy for the Labour party to show any concern about any tax because it is, after all, the party of high spending and high taxation.
    Mr. Holt: My hon. Friend will be aware that in the calculations of VAT in 1978–79 one major difference for many people was that the whip-round for the drinks and refreshments of one's opponents at sporting events were not VAT rated. That was brought in by the Government in 1982 and will be thrown out as a result of harmonisation. Why not do it in advance of that date?
    Mr. Lilley: I know my hon. Friend's strong feelings about the impact that VAT has had upon Beaconsfield rugby club. I have dealt with the matter as best I can. I think that my hon. Friend has a strong case about the treatment that he has received and I apologise to him and his son.

  PRIME MINISTER

    Engagements
    Mr. Alton: To ask the Prime Minister if she will list her official engagements for Thursday 6 April.
    The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham)rose—
    Hon. Members: Where is she?
    Mr. Speaker: Order.
    Mr. Wakeham: I have been asked to reply.
    This morning my right hon. Friend the Prime Minister presided at a meeting of the Cabinet. In the course of the day she will be having meetings with President Gorbachev. This evening she will give a dinner for him.
    Mr. Alton: While the House will want to give a generous welcome to the remarkable improvement in the human rights record of the Soviet Union, will the Leader of the House take this opportunity to underline the Government's continuing commitment to the 400,000 Jewish refuseniks seeking exit visas and to the 4 million Ukrainian Catholics who have been outlawed since 1946? Will he make it clear that conditional on our attendance at the 1991 human rights conference is the Soviet Union's pursuance of a zero option to end human rights abuses and the renouncement of the sale of weapons to regimes that are opposed to this country's interests and the interests of other Western democracies?
    Mr. Wakeham: I recognise the hon. Gentleman's long-standing concern with those matters. The Prime Minister will, of course, be raising the whole question of Soviet human rights with Mr. Gorbachev and will underline the need for fundamental reform. The Foreign Secretary will be pressing the Soviet Foreign Secretary on a range of specific questions, including those raised by the hon. Gentleman.
    Mr. John Marshall: To ask the Prime Minister if she will list her official engagements for Thursday 6 April.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Marshall: Will my right hon. Friend give an assurance that when the Prime Minister is discussing human rights with the Russians she will raise with Mr. Gorbachev the case of Mr. and Mrs. Zolotarevsky [HON. MEMBERS: "Reading."] It is not the easiest name to remember. Does my right hon. Friend agree that the only wish of that pensioner couple is to be reunited with their daughter and granddaughter in Israel? Does he agree that it is wrong for the Soviet Government forcibly to divide grandparents from a granddaughter? Will the strongest possible representations be made?
    Mr. Wakeham: My right hon. Friend the Prime Minister will be writing to my hon. Friend about this case. Although she will probably not have time to discuss individual human rights cases with Mr. Gorbachev, she has asked my right hon. and learned Friend the Foreign Secretary to raise that case with the Soviet Foreign Secretary.
    Mr. Kinnock: Will the Leader of the House tell us whether, when the person who leaked the inspectors' report on the House of Fraser is discovered, the culprit will be prosecuted, like Miss Tisdall and Mr. Ponting, or protected, like Mr. Ingham and Mr. Powell?
    Mr. Wakeham: I have nothing further to say on that except to remind the right hon. Gentleman that under this Government prosecution is a matter for the proper authorities and not for Ministers.
    Mr. Cormack: When my right hon. Friend the Prime Minister is discussing human rights with Mr. Gorbachev, will she make it plain that we recognise that there has been a significant improvement in that sphere in the Soviet Union? While we expect intentions to be honoured and lived up to, we recognise that progress has been made.
    Mr. Wakeham: My hon. Friend makes his point well. Certainly that must be part of the message.
    Mr. Robertson: The Prime Minister was absent yesterday as well and she sent the Leader of the House to apologise to the House for the unavailability in the Library of promised documents on Namibia. Is the right hon. Gentleman aware that the key document, the report of the secretary general of the United Nations to the Security Council, on which the Prime Minister based her blame on SWAPO alone for the continuing violence in Namibia, is still not in the Library, and will not be in the Library because it has now been classified as confidential? As the Prime Minister specifically and categorically said on Tuesday that hon. Members could read that report, will the Leader of the House again apologise to the House and ensure that the report is put in the Library today?
    Mr. Wakeham: If any apologies are required, they are from the hon. Gentleman for abusing points of order yesterday. That is not a matter for me.
    Hon. Members: Withdraw.
    Mr. Speaker: Order. The Leader of the House must accept that the point of order was not out of order.
    Mr. Wakeham: I withdraw what I said to the hon. Gentleman. I just noted that his point of order was somewhat long-winded. I apologise for saying what I did.
    As I told the House yesterday, relevant documents have been placed in the House of Commons Library. They include the Geneva protocol which has been made public by the South African Government. A further set of documents, which together comprise the United Nations plan, will be placed in the Library today. The secretary general has asked that the report on the recent fighting be kept confidential for the time being.
    Mr. Moate: Is my right hon. Friend aware of the widespread concern about the internationally and nationally important national fruit collections in my constituency—[Interruption.]—which, despite the reaction of the Opposition, are of considerable importance to the country, and which were supported so vigorously recently by His Royal Highness the Prince of Wales? Is my right hon. Friend aware that the collections are threatened by the Government announcement of the closure of that fruit centre? Will he please ask the Minister of Agriculture to take no further steps until there has been proper consultation, including—if it is not too much trouble—consultation with the local Member of Parliament?
    Mr. Wakeham: I am aware of the position in my hon. Friend's constituency. Final decisions on the closure of the Brogdale research station will not be taken until consultations with the industry are concluded. I shall see to it that my hon. Friend is included in the consultations. If research at Brogdale ceases, suitable arrangements will be made to continue the necessary work on the collection either at Brogdale or at another suitable site.
    Mr. Eastham: To ask the Prime Minister if she will list her official engagements for Thursday 6 April.
    Mr. Wakeham: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Eastham: Now that the Prime Minister has returned from her tour of central Africa and is able to apply herself to some of the problems at home, will the Leader of the House draw to her attention the homelessness crisis in Britain and the recent statements by Shelter pointing out that thousands of teenagers, who have nowhere to sleep at night and are staying under arches and in doorways, are turning to crime, prostitution and drugs? What will the Government do about it?
    Mr. Wakeham: The hon. Gentleman must recognise that housing in this country is of a much higher standard than it ever was under a Labour Government. The Government have taken particular steps to help those who are worse off.

    Economic Performance
    Mr. Goodlad: To ask the Prime Minister what representations she has received regarding the performance of the economy.
    Mr. Malins: To ask the Prime Minister what representations she has received regarding the performance of the economy.
    Mr. Wakeham: I have been asked to reply.

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    My right hon. Friend receives a wide variety of representations.
    Mr. Goodlad: Will my right hon. Friend confirm that, as a result of the Government's management of the economy, the number of jobs in this country has increased since 1983 by 2·75 million—which is the biggest increase of any comparable period since the war—employment is now at its highest-ever level and that those trends are particularly reflected in the north-west of England and are set fair to continue?
    Mr. Wakeham: My hon. Friend is absolutely right. The number of people in employment is at a record level—nearly 1 million higher than in 1979. Unemployment has been falling steeply and the figure is now more than 1 million lower than at the time of the last election campaign. The fall has been achieved in less time than the Labour party claimed that it would be able to achieve it—not that the British people remotely believed that claim any more than they believed the forecast of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) that unemployment would rise after the Conservative victory.
    Mr. Malins: Bearing in mind the importance of small businesses to our economy, does my right hon. Friend agree that we should take yet further steps to minimise the impact of the uniform business rate on smaller businesses, many of which—especially in areas such as Croydon, which has a good record on rates—face swingeing rises under the present proposals?
    Mr. Wakeham: I am sure that my hon. Friend will agree that the new arrangements will produce a much fairer distribution of rate burdens on commerce and industry. However, the changes are to be phased in gradually and my right hon. Friend the Secretary of State for the Environment has proposed a generous level of protection for small businesses to give them plenty of time to adjust to the new uniform business rate.
    Mr. Harry Ewing: The Leader of the House began his reply by saying,
    "I have been asked to reply."
    When the Leader of the House uses those words does he not worry greatly? Is he aware that, since 1979, all his right hon. Friends who have been "asked to reply" are either in the other place or have returned to the Back Benches? Where does the Leader of the House expect to be by October this year?
    Mr. Wakeham: I am always delighted when my right hon. Friend asks me to reply to questions, particularly to those from the hon. Gentleman. However, my right hon.
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    Friend told the Leader of the Opposition that she would not be able to be here this afternoon because she has made herself available to President Gorbachev—[Interruption.]
    Mr. Speaker: Order.
    Mr. Wakeham: I think, perhaps, I have finished my answer.
    Mr. Campbell-Savours: Is it not strangely incongruous that, while the Prime Minister warmly embraces Mr. Gorbachev in London and the chemistry is good, she is perfectly willing to build Trident missiles and point them towards the Soviet Union? Will the Leader of the House—
    Mr. Speaker: Order. What has this to do with the performance of the economy?
    Mr. Campbell-Savours: The Prime Minister points them towards the Soviet Union and so may undermine the Soviet economy. What is the target? Is it the Soviet Union or Raisa?
    Mr. Wakeham: If, on the 40th anniversary of NATO, the hon. Gentleman has not yet realised that over those 40 years a great part of the West's strength has been our defence, he has a great deal more to learn than even I thought.

    Engagements
    Sir Richard Body: To ask the Prime Minister if she will list her official engagements for Thursday 6 April.
    Mr. Wakeham: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Sir Richard Body: If, as a result of Mr. Gorbachev' s visit, my right hon. Friend believes that there may be more opportunities for expanding trade between East and West, would it not be advisable for Britain to play a more lively part in the affairs of the Economic Commission for Europe, which has been responsible for several hundred agreements and conventions with the object of bringing down trade barriers?
    Mr. Wakeham: My hon. Friend is right, but I think that he will also agree that my right hon. Friend the Prime Minister has played a most important part in just those discussions, and I am sure that all my right hon. and hon. Friends will join me in congratulating her on her achievements.

Dock Labour Scheme
3.31 pm
The Secretary of State for Employment (Mr. Norman Fowler): With permission, I should like to make a statement about the future of the dock labour scheme.
The scheme was introduced just after the end of the second world war under the Dock Workers (Regulation of Employment) Act 1946. An amended scheme was brought into being in 1967 and remains in operation today. It now covers 40 main British ports responsible for handling some 70 per cent. of our national trade. A further 35 ports are outside the scheme because they were not significant for cargo handling in the immediate post-war years.
The scheme is administered by the National Dock Labour Board and its 20 local branches which are made up of equal numbers of trade union and employer members. The boards have very wide powers to control employment in scheme ports, including the numbers employed and ultimate decisions on discipline.
Only those who are on the registers of the boards are permitted to do dock work in scheme ports. An employer who, without approval of the board, uses non-registered dock workers commits a criminal offence. The nature of the dock work itself and the exact areas where the scheme applies are subject to statutory definitions which have remained unchanged since the war.
The original purpose of the scheme was to ensure greater regularity of employment for dock workers. However, since then there have been radical changes in cargo-handling technology. Dock work today, by its very nature, requires a permanent and skilled work force. In ports where none of the scheme's restrictions apply, casual working, which was such a feature of dock work before the war, is very small. In big non-scheme ports like Felixstowe and Dover, it is effectively non-existent.
Over the last 10 years the number of dockers employed in non-scheme ports has risen by a third to around 4,000. During the same period the number of registered dock workers has dropped by nearly two thirds, from 27,000 to 9,400 today.
As the House will know, it is a major objective of the Government to remove barriers to employment and in the last year we have published two White Papers in this area. As part of this continuing process the Government have now reviewed the dock labour scheme and I am publishing today a White Paper which sets out our conclusions. In summary, we believe that the scheme suffers from a range of fundamental defects and that the time has now come to put the position right.
The scheme provides a statutory monopoly in dock work. No one other than employers and workers registered by the dock labour boards can engage in dock work. Given the changes in the nature of dock work, this is not only unnecessary but also totally at variance with the practice in any other industry. It has created two classes of employees in the ports—registered dock workers, and the majority of other workers—and it has certainly not secured good industrial relations in scheme ports.
Management is unable to manage its own work force effectively, and restrictive practices add to the costs of the ports. The public have to pay for the costs of the scheme, both as customers for goods that come through the ports, and as taxpayers. Since the early 1970s the taxpayer has contributed over £420 million, in today's prices, in
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payments for voluntary severance, the only means of reducing any surpluses of registered dock workers. A further £350 million of public money has gone to help certain scheme ports survive.
Just as important is the effect that the existence of the scheme has on prospective investment in scheme port areas. Companies are deterred from investing for fear that they will be caught by the scheme. The Government believe that without this constraint there would be more investment and more jobs in our ports and in their surrounding areas.
In short, the dock labour scheme today is a total anachronism. We rely on our ports for the bulk of our trade. We must ensure that they can prepare for the intensified competition that free movement of goods in the European Community after 1992 will bring.
The scheme will not simply wither away of its own accord. For that to happen, our great historic ports, as well as smaller ports all around the country, would have to close permanently. That would involve abandoning major facilities, with all their natural advantages of location and tidal waters, fixed assets and infrastructure, much of it provided at public expense over many years. Local business activity in port areas would suffer equivalent damage.
The Government have concluded, therefore, that positive action is needed to free the scheme ports from their present artificial constraints. Our intention is to bring all port employers and dock workers into exactly the same position as other employers and other workers. The only way in which this can be effectively achieved is through the abolition of the dock labour scheme. Its amendment or restriction would not remedy present defects, and would merely create new problems.
The Government therefore propose to introduce a Bill to repeal all the existing legislation connected with the scheme. The Bill will provide for the National Dock Labour Board to remain in being temporarily to transfer medical and training facilities as the industry requires, and then to wind up its affairs. The Government will assist financially—for example, by meeting redundancy payments due to board staff.
The legislation will also make special provision for registered dock workers. The Government are introducing a new statutory compensation scheme for anyone made redundant during a transitional period after the scheme is abolished. This will provide for individual payments of up to £35,000 until early 1991, and up to £20,000 in the following 18 months. The costs of these payments will be shared equally between the Government and the individual employer concerned. In addition, as soon as the Bill is enacted, dock workers will acquire all the normal employment protection rights which are available to other workers but from which they are currently excluded by virtue of the scheme.
The necessary Bill will be presented to the House tomorrow. As long as the scheme continues to operate, it will remain the biggest obstacle to a modern and efficient ports industry in this country. That is why the Government have decided that the time has now come to abolish the scheme.
Mr. Michael Meacher: Is the right hon. Gentleman aware that it is an act of wilful sabotage against this country's economic interest to plunge the nation into politically motivated strife in the docks, as his

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statement this afternoon will do, in order to end a scheme covering only 9,500 workers? None of his allegations today remotely provides any economic justification for the abolition of the scheme. I will deal with it point by point.
The right hon. Gentleman talks about restrictive labour practices. How, then, does he explain that over the past 20 years productivity in scheme ports has increased by 700 per cent? There are not many industries that can match that record of productivity.
The right hon. Gentleman talked about job creation in British maritime industries. If he is really concerned about that, why does he not stop the far bigger job losses from allowing British shipowners to flag out their vessels to foreign flags of convenience?
The right hon. Gentleman talks about inhibiting port development. Why is he so blind to the fact that tens of millions of pounds are today being invested by employers—£30 million at Hull, £8 million at Tilbury, £10 million at Newport. £5 million at Bristol and similarly at Dartford—in new multi-million-pound terminals and huge new riverside ro-ro berths, all in scheme ports?
The right hon. Gentleman says that casual working is a small feature of non-scheme ports. How does he square that with the recent statement of Mr. Peter de Savary that he intends to open a new container terminal on the Isle of Grain with a return to the casual system because that suits his needs best?
How does the right hon. Gentleman justify the statement that the scheme increases port costs when, of the £7 to £15 per tonne charged by British companies, only 1½p can be attributed to the scheme?
Why did the right hon. Gentleman not mention that all our main competitors, such as Germany, the Netherlands and Belgium, operate dock labour schemes similar to ours? If they all believe that a dock labour scheme is essential to the efficient control of manpower and for good standards of training, medical—[Interruption.]
Mr. Speaker: Order. The hon. Gentleman must be given a fair hearing.
Mr. Meacher: If a dock labour scheme is essential on the continent for the efficient control of manpower and for good standards of training, medical services and amenities, why is it not necessary here?
Is it not absolutely cynical of the Secretary of State to abolish a scheme which provides 3,300 training places a year, from induction courses to advanced cargo handling, in an industry desperately in need of modernisation and increased competitiveness at a time when he is exhorting the rest of industry to invest in training, which it is not doing?
Will the right hon. Gentleman acknowledge that, if there are deficiencies in the scheme, it is because of employers who increase standbys because of their reluctance to train their work force and who will not purchase the mechanical equipment needed for the proper use of their own manpower? Is it not the employers who have brought about the under-use of their labour force by indiscriminately releasing fully fit skilled men from the industry and by allowing the registers to fall below the levels required for a sound, safe and efficient service in the docks?
This statement has a great deal more to do with Thatcherite dogma than with any genuine concern with advancing Britain's economic interest.
Mr. Fowler: No one defends the indefensible as badly as the hon. Gentleman. All he appears to be in favour of is a museum economy in this country. On all the issues that he has raised he is typically wrong.
There is no question but that restrictive practices have reduced the productivity of scheme ports by devices such as ghosting, bobbing and demarcation disputes. If the hon. Gentleman does not know about that, he should look more clearly at the scheme.
The hon. Gentleman asked about employment. In the past 10 years, the number of registered dock workers in scheme ports has dropped from 27,000 to 9,400. Over the same period dock workers in non-scheme ports doubled in number. There is no doubt that the scheme deters investment to the great disbenefit of the port and the area around it. Companies are deterred from investing because of the fear that they will be covered by the scheme.
The hon. Gentleman is also wrong about costs. As far as we can estimate, it adds about 20 per cent. to labour costs and there is no question but that the costs of the scheme have been picked up by the customer and the taxpayer.
The hon. Gentleman spoke about casualism. I obviously accept and sympathise with points made about what the position was like in the past, but it is a non-issue today. Once again, the hon. Gentleman is fighting the battle of half a century ago. There is no evidence of significant casual working in non-scheme ports. No industrial action has been taken on that issue in ports such as Felixstowe and Dover, and it ignores the real requirements of modern ports in a capital-intensive industry.
The hon. Gentleman spoke about other Governments. I remind him that the Socialist Government in New Zealand are doing much the same thing to the dock work regulation scheme in that country. The dock work regulation scheme is a statutory monopoly. It is a criminal offence for an employer to employ anyone other than a registered dock worker. That cannot be right under modern working conditions. It is a historical anachronism that is bad for employment and means that management cannot manage. The scheme is out of date, as is the hon. Gentleman's attitude. We need to rid Britain of the scheme.
Mr. Jacques Arnold: I thank my right hon. Friend for responding so effectively to the widespread Back-Bench opinion in favour of the abolition of the scheme. Does he appreciate that his statement will be welcome on Thameside and in other inner-city dockland areas because of the opportunities that will now open for the redevelopment of dock areas and the creation of far more dock jobs?
Mr. Fowler: My hon. Friend is absolutely correct. I pay tribute to him for what he has done in the legitimate campaign against the dock labour scheme. There has been long discussion and much debate about the scheme and there is a growing consensus that it should be abolished. That consensus has been joined not only by Conservative Members but by some in the Opposition parties. One of the reasons for people wanting to see this scheme ended is precisely that which my hon. Friend has given. They see the prospect of development and new jobs and businesses being created.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that the Secretary of State has said that there is to be a Bill on this matter. I shall allow questions to go on until 4.15 and then we shall move to the business statement.
Mr. Eric S. Heffer: Many years ago Aneurin Bevan said that Conservatives or Tories were lower than vermin. Until today, I thought that that was an overstatement. However, on the basis of the disgraceful baying that we have heard this afternoon by Conservative Members, who have never been near a dock in their lives, I now think that it is true. Their attitude will not go unnoticed by the people of this country, because they are lower than vermin. I say that without any qualification. Is it not clear that the scheme, which has been in existence all these years, has given stability—[Interruption.]
Mr. Speaker: Order. The hon. Gentleman has every right to put his point of view.
Mr. Heffer: —to workers in the industry and to the industry?
Is it not absolutely clear that once the scheme is abolished there will be a return to casual employment? This is one of the most backward steps that the Government have taken. The Minister had better be quite clear that dock workers and those connected with them will resist this proposal in every possible way. I hope that we shall have a clear statement from my colleagues on the Opposition Front Bench that once we get back into office, as we will at the next general election, we will introduce a scheme which operates in every port in the country.
Mr. Fowler: I will leave the hon. Gentleman to take up that issue with his hon. Friend the Member for Oldham, West (Mr. Meacher).
I must point out to the hon. Gentleman that many of my hon. Friends represent constituencies which have docks in them. He must not think that he has a monopoly of concern on this subject. Under the scheme there have been job losses. Over the past 10 years, jobs have been reduced from 27,000 to about 9,000. Industrial relations have also been appalling not simply over one year or two years, but over 10 years or 20 years.
I repeat what I said to the hon. Member for Oldham, West about casualism. In non-scheme ports, casual working is minimal, and it scarcely exists in big ports.
With regard to the comments made by the hon. Member for Liverpool, Walton (Mr. Heller) about action, I hope that he—and if not he, then the Opposition Front Bench—will confirm that the proper place for the abolition of the scheme to be debated and decided is in this House. The hon. Gentleman should confirm my view that this is a decision for Parliament and say that he will oppose any steps outside Parliament.
Mr. Terence L. Higgins: Is my right hon. Friend aware that I have been advocating the abolition of the dock labour scheme for even longer than the abolition of the earnings rule for pensioners, and the achievement of both within a month is something on which the Government should be congratulated?
In the light of the remarks of the hon. Member for Liverpool, Walton (Mr. Heifer), will my right hon. Friend make it clear to those privileged few in the scheme who have benefited for so long at the expense of the consumer and taxpayer that the party is now over, and that the present he is proposing and its terms are, if anything,
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over-generous and should be enthusiastically accepted by those who must recognise that we cannot look to the past of our industrial relations but must look to the future of our economy?
Mr. Fowler: It has obviously been a good month and a good year for my right hon. Friend. I am not sure whether I would agree with him that our proposal is over-generous. I think that it is fair. We are proposing £35,000 for those with 15 years' service who are made redundant. That is certainly much more generous than any statutory redundancy provision in this country. I hope that hon. Members on both sides of the House will recognise that this is a generous redundancy arrangement. Once the scheme is abolished, there is no reason why the ports presently covered by the scheme should not prosper and why new business should not develop. There is no reason why there cannot be more jobs, particularly in some of the inner-city areas.
Mr. James Wallace: Whatever the necessity for the scheme and its merits when it was introduced, the Minister will agree with us that it has outlived its usefulness. We welcome his announcement to end it. He said that there were two classes of employees in the ports. Does he agree that there are two classes of ports? His announcement today will give scheme ports the opportunity to develop, and it will also bring benefits to them.
As we consider the list of scheme ports, we discover that many are in areas of high unemployment. What analysis has the Minister made of the employment impact of this measure? Although the Bill is to be introduced tomorrow, will the Minister give an undertaking that there will be consultation with the industry, the unions and local authorities in the areas so that job opportunities can be created at the earliest possible opportunity?
Mr. Fowler: I am grateful for the hon. Gentleman's comments about the scheme and about the need to abolish it. I believe that they will be widely repeated and echoed throughout the country. The hon. Member for Oldham, West is entirely out of touch with public opinion.
As to jobs, I repeat what I said a moment ago. Without the scheme there is absolutely no reason why we should not see more investment and more business being created in these areas. The result will be more jobs and more employment. That is what I would like to see. I entirely agree with the hon. Member for Orkney and Shetland (Mr. Wallace).
Mr. Malcolm Thornton: Does my right hon. Friend accept that all who use the port of Liverpool, which I had the privilege of serving for 24 years before entering the House, will be delighted by his statement? Will he confirm that a company such as the Mersey Docks and Harbour Company, now that it is no longer the employer of last resort, will no longer be held back from investment in the port because of its position? It will be able to do the sorts of things about which it has been talking to my right hon. Friend's Department, attract trade across the Atlantic and take advantage of the land bridge to Europe from 1992. This is a good step for Liverpool and will be welcomed.
Mr. Fowler: I entirely agree with my hon. Friend. When I was Minister of Transport between 1979 and 1981, I went to the Mersey Docks and Harbour Board on a number of

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occasions. There is potential there, and it is beginning to be realised at what is a first-class port. The ending of the scheme will be good for Liverpool and good for its port.
Mr. Robert Hughes: Will the Minister tell the House why he is acting with such provocative haste by publishing a White Paper today and publishing a Bill tomorrow, when for years employers have been told that if they wanted amendments to the scheme they should be prepared to discuss them and to negotiate? Why is the Secretary of State being so provocative? Why is he prepared to risk confrontation, when there is not one word in the document, published only a few minutes ago, showing that there has been any discussion with the unions or with the work force? The right hon. Gentleman is taking away people's livelihood without giving them any opportunity to respond. If he has trouble, that trouble will have been caused by him and by him alone.
Mr. Fowler: Few subjects have been debated more over the past few years than the dock labour scheme. The issues are clear, and there is no question about what they are. We looked at halfway houses. I do not think that halfway houses exist. The hon. Gentleman talks about compromise and about discussion. Compromise and discussion were not forthcoming from the Transport and General Workers Union or in any of the statements—and I have a whole list of them that I can show the hon. Gentleman—from Mr. Connolly. of the union's ports section.
The hon. Gentleman asks, why now? The reason is that I believe that there is an emerging consensus in this country that the scheme should go. I believe that the public will support a Bill to abolish the dock labour scheme.
Sir Ian Lloyd: As someone who has spent much of his life in this industry and has probably seen more ports and port systems than the hon. Member for Liverpool, Walton (Mr. Heller) has, I greatly welcome the announcement. Seldom have I heard an announcement which I can welcome with greater sincerity, enthusiasm and conviction than this one.
My right hon. Friend suggested that, so far, the total cost of the scheme has been about £800 million, or £30,000 per docker, to defend what has amounted to the most indefensible, unjustifiable and destructive restrictive practices that the economy has known. Does he think that we should now spend what seems on the face of what he has announced a roughly similar sum to compensate those who are still there?
Mr. Fowler: There is a misunderstanding about that. We propose that people who are made redundant should be paid up to £35,000. That means that a registered dock worker who is made redundant would be paid up to £35,000. Obviously it would depend upon his length of service, but that maximum figure would go to those with 15 years' service. It is specifically not the proposition that every registered dock worker should be paid £35,000.
Mr. Alan Roberts: Will the Minister expect cheering similar to that which we heard from Conservative Back Benchers when the Government announce getting rid of security of employment in the legal profession? [Interruption.] Is the Minister aware—[Interruption.]
Mr. Speaker: Order. Interruptions take up a lot of extra time.
Mr. Roberts: Is the Minister aware that the scheme is not a bar to employment? It provides security of employment. It has created the successful, profitable port of Liverpool, in my constituency, a successful grain container terminal, and the only free port that the Government have announced which has been successful. That is directly because of the operation of the scheme and the dockers functioning through it in that free port. All that and the good industrial relations on Merseyside are likely to be destroyed by the Minister's statement. If Conservative Members do not think that there are good industrial relations in the port of Liverpool, they should talk to the hon. Member for Crosby (Mr. Thornton), because there are, and it is a successful port because of them.
Mr. Fowler: The hon. Gentleman started with a peculiar point about the legal profession. He may or may not have noticed that we have put forward proposals on the legal profession. His next two points were no stronger than that. There is no question but that the dock labour scheme is a barrier to employment. Apart from anything else, it prevents investment taking place in any of the scheme areas which will create employment. I will not deal with industrial relations specifically in Liverpool, but industrial relations in scheme ports have been bad over a long period—certainly for the length of the scheme since 1967—and they remain bad today.
Mr. David Shaw: Will my right hon. Friend confirm that, in his Department's submission on the White Paper on expenditure, about £44 million of loans to the National Dock Labour Board must now be written off by Parliament? Will he confirm that that is taxpayers' money which will be lost? Will he confirm further that the port of Dover is self-financing and does not cost the taxpayer that sort of money?
Mr. Fowler: That is certainly the case. That decision has been taken. As has already been announced, in addition to the figures that I have given, employers are paid £125 million in cash—that is, over £200 million in real terms—to cover the cost of severance.
Mr. Simon Hughes: As somebody who represents a constituency with a large number of dock workers, I cannot welcome the statement as enthusiastically as my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) did. Given that the Government have a commitment to regenerate the inner cities, how soon will the loss of jobs occasioned in London and elsewhere in port communities by the abolition of the scheme be compensated by increased substitute employment for those who may now find it difficult to get work?
Mr. Fowler: There is a great deal more chance of that happening without the scheme than under present circumstances. Much of the development has been in building. One reason for that has been the restrictions of the scheme itself, so that is one way in which the scheme will no longer have an impact. If one wants jobs and investment that use the skills of local people, one does not need the scheme. I must point out to the hon. Gentleman that not only he but the hon. Member for Gordon (Mr. Bruce) is in favour of abolishing the dock labour scheme. According to The Scotsman of 5 April, the hon. Member for Gordon said:
"It has now become a debilitating, restrictive practice."

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I agree with that.
Mr. John Townend: Is my right hon. Friend aware that I have been advocating the abolition of the scheme not only for the past 10 years in Parliament, but for the 10 years previously when I was a councillor in Hull and then leader of the county council? Does my right hon. Friend accept that the abolition of the scheme will be welcomed in east Yorkshire? When I was a boy, Hull was the third port, but it has been devastated by the scheme. Now it is not in the first 10 and its container port has been closed as a result of the scheme. Will my right hon. Friend accept that we shall be eternally grateful that we shall be able to compete with Felixstowe on equal terms?
Mr. Fowler: That is right. I want to pay tribute to what my hon. Friend has done, said and campaigned for over the past years. On the last occasion on which I spoke from the Dispatch Box when he was here, he intervened in exchanges on the dock labour scheme. I hope that he is satisfied with the action we have taken.
Mr. Austin Mitchell: What we see today is what happens when little men grapple with big issues. The real intention behind the proposal is to bring down wages and conditions for workers in the docks. There has been no consultation, and no consideration has been given to proposals to extend the benefits of the scheme to the other non-scheme ports, which is the point at issue. Is this not just a decision that this is a time when the Government can afford to face a stoppage in the docks to cut the Chancellor's bloated import figures? The question that has not been answered today is, "Why now?" Why has the decision been taken after 10 years when there is an alternative? If the scheme had the consequences that the Secretary of State claims, it could have been referred to the Monopolies and Mergers Commission, which could then have held a genuine inquiry, not just an assertion of party political prejudice.
Mr. Fowler: If the hon. Gentleman had been listening, he would have heard me answer the question about why the decision has been taken now. Few issues have been more debated and more considered than the dock labour scheme. The issues are clear. There are no halfway houses available and, as the hon. Gentleman will know from his own experience, no compromise has ever been put forward by the Transport and General Workers Union and Mr. Connolly over a long period. For a range of reasons, the scheme is a statutory monopoly and an anachronism with restrictive practices and bad industrial relations. The case for repeal and abolition of the scheme is overwhelming.
Mr. Robin Maxwell-Hyslop: Has my right hon. Friend noticed to what extent the little harbours like Teignmouth and Exmouth have prospered without the dock labour scheme, while the whole hinterland of the areas with dock labour schemes has been crucified by the strangulation of their ports? Is my right hon. Friend aware that I am satisfied that our ports can continue to thrive even with fair competition from those which are now released? Will that not give the reality of economic life to the areas previously strangled? Why are the official Opposition opposing the expansion of employment in the areas that will benefit from the measures that my right hon. Friend has announced today?
Mr. Fowler: The hon. Member for Oldham, West will have to answer that question for himself. What my hon. Friend has said is correct. The most significant feature of the past 20 years has been the fact that the non-scheme ports have developed employment, business and investment. At the same time, we have seen a real reduction in employment in the scheme ports. That is a significant contrast. My hon. Friend has put his finger on the point.
Mr. Ron Brown: If the scheme ceases to operate, is not the House and the country giving a charter for cowboys to chase a fast buck at the expense of their employees and of the country? If the dock labour scheme is a hindrance to progress, what about the stock exchange? Will the Secretary of State abolish that? Of course not.
In many ports, including Leith in my constituency, vast efforts have been made to improve productivity and conditions are good for the employees and for the employers. If the Government's proposal goes through, there will be a fight back throughout the country, north and south of the border. The people that I represent will say that the jobs are not to be sold, because they belong to the local community. The Secretary of State must take note of the fact that there will be a struggle.
Mr. Fowler: The first part of the hon. Gentleman's comments took us into areas which even his hon. Friend the Member for Oldham, West did not seek to enter. The hon. Gentleman should bear in mind that this is essentially a decision for Parliament. We shall be putting a White Paper and a Bill before Parliament. A Second Reading will be arranged for the Bill in due course. It seems entirely right that the decision on a statutory scheme such as this should be taken here in Parliament. The hon. Gentleman will get little public support for the vague statements that he is making.
Mr. Allan Stewart: In contrast to the comments of the hon. Member for Edinburgh, Leith (Mr. Brown), does my right hon. Friend agree with me that his announcement today will be warmly welcomed by industry in Scotland because the scheme has caused great economic damage in Scotland, where an efficient port industry is of particular importance? Does my right hon. Friend further agree that recent events in Aberdeen have highlighted the absurdity and the total unacceptability of the present arrangements?
Mr. Fowler: My hon. Friend is entirely right. There is no question but that the Government's proposal will be welcomed in Scotland. The situation in Aberdeen is one of the anomalies that the scheme inevitably produces and Aberdeen, as well as Scotland as a whole, will welcome the change.
Mr. Paul Flynn: My hon. Friend the Member for Oldham, West (Mr. Meacher) mentioned my constituency, in which the port of Newport is situated. I wish that the attention of the House had been concentrated on ports such as Newport which has enjoyed extremely good industrial relations and a good degree of prosperity for a number of years. There has also been an increase and a heightening in the skills at that dock, which handles explosives. It has a marvellous record and was paid a tribute by Customs and Excise for its contribution

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in keeping down the import of drugs into the town. The port also handles cargoes that can deteriorate in a short time.
The message that is being given today to the people of Newport is that this is not the act of a reasonable Government. The Government are to introduce a Bill without giving even 24 hours' notice. This announcement will come as a bolt from the black and from the darkness of the prejudice of a deaf and arrogant elective dictatorship.
One point will worry many dockers—knowing that the likelihood is that this proposal will be implemented. What protection will be given for the pensions of those who are involved in the scheme now?
Mr. Fowler: The proposals do not in any way affect the pension rights of registered dock workers. I can give the hon. Gentleman that assurance straight away.
On the strike record, whatever the position in Newport, one point is absolutely certain—the scheme has not ensured good industrial relations. I shall give the hon. Gentleman two figures. Since 1967, when the amended scheme was introduced, we have lost more than 4 million working days because of disputes in scheme ports. Since 1967 there have been 3,569 disputes in scheme ports; and even today the number of days lost in scheme ports is three times the average for industry as a whole.
Dame Peggy Fenner: My right hon. Friend will be perfectly well aware of the pleasure that I share in his at last recognising with me that not to have done this would have been the defence of the continuously and continually indefensible. As I made my maiden speech on the iniquities of the closed shop, perhaps my right hon. Friend could tell me whether he will make it a really good year this year and include that one as well.
Is my right hon. Friend aware that in Medway, a great port which has had to suffer a good deal from the loss of the dockyards. the workers will appreciate the chance to compete fairly with the non-scheme ports and will look forward to a continuing growth of that lively port industry in my constituency?
Mr. Fowler: I entirely agree, and pay tribute to what my hon. Friend has done over a long time in her statements on the scheme. Perhaps I may add in parenthesis that I already have proposals in a Green Paper on the closed shop.
My hon. Friend is quite correct: our proposals will enable ports like Medway to compete much more effectively than ever before. That is why I say that they will be good not just for non-scheme but for scheme ports. They will be good for industry and for employment.
Mr. Stuart Bell: Will the Secretary of State note that the public at large may feel it the height of cynicism and arrogance for the Government to seek to reverse the mandates of two past Labour Governments while not having a mandate of their own to abolish the dock labour scheme? Will he note that there will be considerable unease tonight on Teesside where there is a dock registered scheme, where there has been steady expansion with the full co-operation of the work force and where there will be genuine fears that redundancy will be a passport to unemployment, which we have so often seen in the past?
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I welcome the comments made by the Secretary of State in response to my hon. Friend the Member for Newport, West (Mr. Flynn) to the effect that the pension rights will be safeguarded but, when the Bill comes before the House, I can assure the Secretary of State that we shall do all we can to ensure full dockers' rights in the future such as they have had in the past.
Mr. Fowler: It is entirely open and sensible for the hon. Gentleman to say that in the debate on the Bill he and his hon. Friends will want to scrutinise the proposals and to make their own. The right and proper place for that to be done is in Parliament. The scheme is a statutory one. The debate should take place in the House and in Committee in the normal and sensible way in which we organise things.
Mr. Jonathan Sayeed: My right hon. Friend is to be warmly congratulated on announcing the abolition of a regressive, expensive and anachronistic scheme. Will he confirm that it has cost the country billions of pounds to maintain the dock labour scheme, that the scheme has deeply damaged investment in ports, that it has damaged employment in those same ports and that it has sent ships fleeing to mainland Europe to deal with their cargo?
Mr. Fowler: That is substantially correct. One of the effects of the scheme has been to bring development blight in particular areas where it operates. When the scheme is removed, one of the results will be more investment and the creation of more new jobs in such areas. I am grateful for my hon. Friend's support.
Mr. Gavin Strang: May I make it clear to the right hon. Gentleman that we do not accept the case that he has put forward this afternoon and that we reject his statement about future investment in these ports and the risk of the reintroduction of casual labour? It is for these reasons, among others, that we will oppose the Bill.
Has the Secretary of State not totally failed to explain to the House why he has made this statement at this time, a timing which, according to a telephone call that I made this morning, makes it as big a surprise to the employers as it is to the union? Is it not hard to resist the conclusion that the Government have decided that, at a time when we have a huge and growing deficit on our balance of payments, it may be expedient to run the risk of a long stoppage in our ports?
Mr. Fowler: No, that is not the position, although. t welcome the tone of what the hon. Member for Edinburgh, East (Mr. Strang) has said rather more than I welcome the tone of what the hon. Member for Oldham, West said.
I will repeat the position. Few subjects have been more debated than the dock labour scheme. The issues are very clear. It is a statutory monopoly. The fact that a criminal offence was created by this scheme is completely out of kilter with anything else in industrial relations today. It is bad for employment and investment, and it means that management cannot manage effectively. I believe that abolition of the scheme will lead to a better future for those areas that are at present covered by the scheme.
What I detected in what the hon. Gentleman said and what I welcomed is that those are matters to be debated essentially in the House. I hope that the hon. Gentleman and his colleagues will make that absolutely clear.

Business of the House
4.20 pm
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): With permission, Mr. Speaker, I should like to make a statement. The business for next week will be as follows:
MONDAY IO APRIL—Conclusion of remaining stages of the Electricity Bill (3rd day).
Motion on the Lord Chancellor's Salary Order.
Motion on the Medicines (Fixing of Fees Relating to Medical Products for Human Use) Order.
TUESDAY II APRIL—Opposition Day (6th Allotted Day). Until about seven o'clock there will be a debate entitled "The Inadequate Uprating of Pensions and Other Benefits". Afterwards there will be a debate entitled "Safety in the Construction Industry". Both debates will arise on Opposition motions.
Motion to take note of EC document on weights and measures. Details will be given in the Official Report.
Motion to take note of EC document on the driving licence. Details will be given in the Official Report.
WEDNESDAY I2 APRIL—Debate on a Government Motion on the Fennell report on the investigation into the King's Cross Underground fire (Cm 499).
Motion relating to National Health Service regulations. Details will be given in the Official Report.
THURSDAY I3 APRIL—Second Reading of the Road Traffic (Driver Licensing and Information Systems) Bill [Lords].
Afterwards Second Reading of the Atomic Energy Bill [Lords].
FRIDAY I4 APRIL—Private Members' Bills.
MONDAY I7 APRIL—Opposition Day (7th Allotted Day). There will be a debate on an Opposition motion, subject for debate to be announced.
[First Debate on Tuesday 11 April

Relevant European Community Document

4102/89

Weights and measures

Relevant Reports of European Legislation Committee
HC 15-xii (1988–89), para 2 and HC 15-xvii (1988–89), para 1
Second Debate on Tuesday 11 April

Relevant European Community Document

10357/1/88

Driving Licensing

Relevant Report of European Legislation Committee
HC 15-xvi (1988–89), para 1
Debate on Wednesday 12 April:
National Health Service (Optical Charges and Payments) Regulations 1989 (SI 1989 No. 396)
National Health Service (Optical Charges and Payments) (Scotland) Regulations 1989 (SI 1989 No. 392)
National Health Service (Dental Charges) Regulations 1989 (SI 1989 No. 394)
National Health Service (Dental Charges) (Scotland) Regulations 1989 (SI 1989 No. 363)
National Health Service (Charges for Drugs and Appliances) Regulations 1989 (SI 1989 No. 419)
National Health Service (Charges for Drugs and Appliances) (Scotland) Regulations 1989 (SI 1989 No. 326)
National Health Service (General Opthalmic Services) Amendment Regulations 1989 (SI 1989 No. 395)
National Health Service (General Opthalmic Services) (Scotland) Amendment Regulations 1989 (SI 1989 No. 387)
National Health Service (Travelling Expenses and Remission of Charges) Amendment Regulations 1989 (SI 1989 No. 517)
National Health Service (Travelling Expenses and Remission of Charges) (Scotland) Amendment Regulations 1989 (SI 1989 No. 393)]
Mr. Frank Dobson: I thank the Leader of the House for his statement.
I shall refer first to the point raised by my hon. Friend the Member for Hamilton (Mr. Robertson) at Prime Minister's Question Time. Will the Leader of the House make it his business to ensure that the report of the secretary general to the United Nations Security Council is placed in the Library of the House next week, as was promised by the Prime Minister on Tuesday of this week? Will he bear in mind the convention of which he and the right hon. Lady will be aware—that, when Ministers at the Dispatch Box quote from an official document, they should make that document available to everyone else? Documents that Britain receives at the Security Council must fall into that category, especially as it was not simply that the Prime Minister—
Mr. Harry Greenway: The hon. Gentleman did not listen to Prime Minister's Questions.
Mr. Dobson: I am talking about the business for next week. Will the hon. Member for Ealing, North (Mr. Greenway) contain himself?
Mr. Speaker: Order. The hon. Gentleman will have his chance later.
Mr. Dobson: As the Prime Minister not only mentioned that document, but also told the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) that he could obtain all the details he needed from that document and that it was available, it appears that the burden falls on the Leader of the House to ensure that, in line with the conventions of the House, that document is made available to everyone.
In view of Sir Leon Brittan's recent confirmation of many people's suspicions of the degree of involvement of the Prime Minister's closest advisers in the leaking of the Attorney-General's letter on Westland, will the Leader of the House tell us whether the Prime Minister will come to the House next week to make a statement and to answer further questions on that matter, and especially to clarify once and for all who knew what and when they knew it?
Will the Leader of the House tell us when we can expect the long-promised and the equally long-delayed debate on student loans?
As there is mounting concern throughout the country about the threat that the Government's National Health Service review poses to the health care of most people, will we have an early debate in Government time to give the Secretary of State the opportunity to answer questions in the House rather than spending taxpayers' money roaming around the country on a Tory party political propaganda exercise?
On the subject of the Department of Health, when can we expect a statement on the Government's response to the Griffiths report on care in the community? The

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Department has had that document in its possession for more than a year and surely it should be moving towards giving us some suggestion of the Government's intentions.
In view of the particularly precipitate way in which the Government have managed to come forward with a Bill to abolish the national dock labour scheme, when will they come forward with the Bill that they have promised and on which civil servants have been working for four years—if parliamentary answers of 1985 were truthful—to outlaw the buying and selling of human organs?
Mr. Wakeham: I am grateful to the hon. Member for Holborn and St. Pancras (Mr. Dobson) for asking me six questions about the business for next week. I wondered whether he might have found time today just to say "Thank you" to me for having arranged for the debate on the Fennell report, for which he has been pressing me and also for managing to fit in two Opposition days in the business for next week.
Mr. Dobson: They are not both next week.
Mr. Wakeham: If the hon. Gentleman had listened, I announced two full Opposition days in the business statement for next week.
With regard to the United Nations plan and the documents concerned, I told the House yesterday that the relevant documents have been placed in the Library. They include the Geneva protocol, which has been made public by the South African Government. A further set of documents, which together comprise the United Nations plan, will be placed in the Library today. The secretary general has asked, however, that the report on the recent fighting should be kept confidential for the time being. On reflection, I hope that the hon. Gentleman will consider that the right thing would be to respect the request of the secretary general. Obviously I shall look into the matter in view of the question asked, but I cannot promise that anything will be revealed at the present time.
With regard to the recent television coverage of a television programme, which neither you, Mr. Speaker, nor I have seen, I understand that Sir Leon Brittan made certain statements which he suggested did not add anything new to the position. That is as I understand the matter and, therefore, I see no need for any further statement on the position, which has been well ventilated in the past.
The hon. Gentleman knows that consultations are taking place about student loans and I believe that the right time for a debate on that matter would be later rather than at present.
I agree with the hon. Gentleman that there is a need for a National Health Service debate and I agree that it would be right for the Government to find time for that. The exact timing of it is best left for discussion through the usual channels. I also recognise the consistency with which he has pressed me on the Griffiths report. I understand his disappointment that it has taken rather longer to deal with that matter than he wanted. We are giving active consideration to the report and hope to bring forward our proposals in the near future. We recognise the concern that our response should not be unduly delayed, but it is vital that we reach the right solution in this important area.
There has been some discussion between the Government and the hon. Gentleman's Front-Bench colleagues about the abhorrent trade in kidneys. If we are
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to make progress as fast as we can—both of us are agreed on that, I believe—it is probably best for those discussions to continue through the usual channels.
Mr. James Hill: My right hon. Friend will know that, from time to time, I have asked questions regarding a ports policy for the United Kingdom. The statement by my right hon. Friend the Secretary of State for Employment, who said that the national docks labour scheme is to be reviewed, obviously makes my question about a ports policy null and void. Nevertheless, there is a need not to demoralise the employees of certain ports, because I know that they will put their shoulders behind the new review. The port of Southampton was closed for a whole year in 1981 due to militancy. It is now working well. If we can persuade the Transport and General Workers Union to adopt a reasonable approach, there will be further co-operation. That can only do good to Southampton.
Mr. Wakeham: I agree with my hon. Friend. I am grateful to him for his support for the way the Government are approaching the problem. With the inevitability of these matters, there will be plenty of opportunity for my hon. Friend to raise the issue constructively in the debates that we shall have in forthcoming weeks.
Mr. James Wallace: Will the Leader of the House arrange for a Minister to come to the House next week to explain why those who were demonstrating in Whitehall today against human rights abuses in the Soviet Union were told to take down their placards before Mr. Gorbachev arrived, which seems to be almost a contradiction in human rights terms?
Secondly, given that we will debate the Lord Chancellor's salary next week but that we do not have a Select Committee on the Lord Chancellor's Department or on the Law Officers' Department, will the Leader of the House consider setting up an ad hoc Select Committee with powers to call for witnesses and papers to look into the Government's proposals for the reform of the legal profession?
Finally, when did the Prime Minister find out that the United Nations secretary general wished the report on the Namibian incidents to be kept confidential?
Mr. Wakeham: I am not in a position to answer the question about the placards in Whitehall, but I shall make inquiries and see that the appropriate answer is given to the hon. Gentleman.
I do not propose to set up a special Select Committee to deal with our law proposals. I believe that the right procedure is that which the Government have adopted, which is to issue Green Papers for discussion. We hope to get as many constructive views as we can. Then the Government will have to make up their mind how best to act.
I cannot answer the hon. Gentleman's third question, but it was certainly not until after my right hon. Friend had said what she did in the House.
Mr. Henry Bellingham: Can the Leader of the House tell us when the Second Reading of the Bill on the dock labour scheme is likely to take place? Is he aware that today's announcement will be warmly welcomed by the vast majority of people connected with and working in King's Lynn docks, who realise that the

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abolition of the scheme will lead to more jobs? It will also lead to much more cargo being handled at King's Lynn and will enable it to compete with non-scheme ports in East Anglia.
Mr. Wakeham: I welcome what my hon. Friend has said. The Bill will be introduced tomorrow and the House will have an opportunity to debate it in the usual way, subject to the usual conventions. I hope to make a business statement including the Second Reading of the Bill in the not-too-distant future.
Mr. Max Madden: May I draw the attention of the Leader of the House to two early-day motions standing in my name, numbers 672 and 673, concerning freemasonry?
[That this House notes, as reported in the book, Inside the Brotherhood by Martin Short, that most Right honourable and honourable Members who completed a questionnaire issued by Mr. Short in 1986 said that councillors, local government officers, civil servants, policemen, judges and honourable Members should be required to disclose Masonic membership; therefore urges the Select Committee on Members' Interests to make necessary arrangements for appropriate resolutions to be considered by the House to require Right honourable and honourable Members to disclose Masonic membership in the Register of Members' Interest; further urges Parliamentary journalists who are Masons to be required to make an appropriate declaration; and finally urges the appointment of an Ombudsman to whom public servants, including police officers, can make complaints of discrimination in public employment.
That this House congratulates Martin Short on the publication of his book, Inside the Brotherhood; notes that the honourable Members for Ilford South, Croydon South, Chichester, Erewash, Banbury and Belfast North told Mr. Short they were Masons; further notes that Mr. Short believes that the honourable Members for Bury South, Reading East and Keighley are Masons; and finally notes Mr. Short reveals the Masonic Lodge to which Right honourable and honourable Members, Parliamentary Officers and staff belong is called the New Welcome Lodge (5139 ) which was consecrated in 1929 and meets five times a year at Freemason's Hall in London, and that Parliamentary Journalists who are Mason's belong to the Gallery Lodge (1928).]
May I unusually ask the Leader of the House himself to make a statement next week in view of the support of more than 200 hon. Members from all parties for the proposal that hon. Members who are masons should be required to declare their masonic membership in the Register of Members' Interests? Will the Leader of the House next week ask the Select Committee on Members' Interests to consider the matter urgently so that the necessary motions may be brought to the House?
Mr. Wakeham: As I told the hon. Gentleman in answer to a written question on 3 March 1988:
"Any consideration of changes in the scope of the Register of Members' Interests or the Register of Parliamentary Journalists would, in the first instance, be a matter for the Select Committee on Members' Interests."—[Official Report, 3 March 1988; Vol. 128, c. 638.]
That is where he should pursue the matter.
Mr. Michael Latham: Will my right hon. Friend ensure that the debate on the Health Service that he has promised takes place at an early date and allows us to discuss the proposed contract for general practitioners? I think that he will have noticed that it has not been received with unanimous rapture by the practitioners.
Mr. Wakeham: Whether that is within the scope of the debate is not a matter for me but for you, Mr. Speaker. I should think that my hon. Friend, with his usual ingenuity, will be able to make the points that he wants to make on that subject.
Mr. Pat Wall: May I bring to the attention of the Leader of the House a recent report by John Bourn, the Comptroller and Auditor General, regarding serious underpayments in the national insurance fund and the social fund—in particular, an estimate of underpayment of unemployment benefit of between £34 million and £89 million? That is very serious because it affects some of the most deprived people in our society. The money was not paid because of an error by Government Departments. The Minister responsible, if he is not prepared to initiate a debate in the House, should make a statement on payment to the unemployed. He should give an explanation and describe what measures will be taken to rectify the matter.
Mr. Wakeham: I do not know whether this is the same report from the Comptroller and Auditor General as that which I looked at the other day. I thought that there had been errors in allocation of costs rather than beneficiaries going short of anything to which they were entitled. However, I shall investigate the matter and I believe that the Public Accounts Committee will also consider some of these issues in the near future. If something has not been properly answered, I shall ensure that it is.
Mr. Charles Wardle: My right hon. Friend will be aware of the recent consultation about possible amendments to the Financial Services Act 1986. Will he find time for a debate on the subject, with particular reference to the role of merchant banks? Does he recall that in the debate on the financial services White Paper in April 1985, several hon. Members, including me, referred to the possible conflicts of interest in merchant banks, but subsequent legislation left out that aspect?
Mr. Wakeham: I cannot promise that we shall have a debate in the near future but I shall certainly refer my hon. Friend's point to my right hon. Friend the Secretary of State for Trade and Industry to see what can be done in the future.
Mr. Robert Parry: Does the Leader of the House recall a question that I put to him some weeks ago regarding early-day motion 395?
[That this House calls upon the South African Goverment to release Mr. Oscar Mpetha a 79 year old trade union leader imprisoned since 1980; notes that he had his leg amputated in 1983, that he is a diabetic with complications and was refused permission to leave prison in 1986 to attend his wife's funeral; believes that his imprisonment is solely due to his struggle on behalf of black workers and as a member of the South African Congress of Trades' Unions and as President of the African National Congress in the

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Cape; welcomes Her Majesty's Government's representations to the South African Government on his behalf; and calls upon the South African authorities to release Mr. Mpetha as a matter of urgency.]
That is supported by 118 hon. Members. Mr. Mpetha, who is imprisoned in South Africa, lost his son last week when he was killed in an accident. Will the Government make urgent representations for his immediate release on compassionate grounds?
Mr. Wakeham: As I have said on previous occasions, the Government have made representations to the South African Government on at least five separate occasions. I shall refer the hon. Gentleman's point to my right hon. and learned Friend the Foreign Secretary.
Dr. John G. Blackburn: Will my right hon. Friend give serious consideration to the report of the Monopolies and Mergers Commission, published on 22 March, on the production, distribution and sale of beers in this country? It will have a widespread effect on the brewing industry. Many of the major breweries are established in the midlands and there is a wave of uncertainty running through the industry. I should value it if my right hon. Friend would give an assurance that there will be a debate on this important subject.
Mr. Wakeham: It is an important subject and, in another capacity, as chairman of the Government's committee on the misuse of alcohol, I know that changes in the structure of the brewing industry are important for us to consider. However, many of my Government colleagues are also considering the matter, so it is being carefully examined.
Mr. D. N. Campbell-Savours: In light of the fact that Mr. Tiny Rowland has repeatedly used the Lonrho broadsheet to call for the prosecution of the Al-Fayeds over their trading practices, is it not now time for the Government to review the decision taken in 1977, which meant that prosecutions would not be brought under section 84 of the Larceny Act 1861, section 19 of the Theft Act 1968, and section 7 of the Exchange Control Act 1947 or for conspiracy to commit breaches of the Southern Rhodesia (United Nations Sanctions) (No. 2) Order 1968? Is it not time to review the decision and bring prosecutions under all four headings against the owners of The Observer?
Mr. Wakeham: As the hon. Gentleman knows, questions of prosecution are not for me. He may or may not have a case on the reforms of such matters, about which he is knowledgeable, but I regret that, even if they were acceptable to everybody, I could not find time for a debate next week. However, I shall refer the matter to my noble Friend the Secretary of State for Trade and Industry.
Mr. Tony Marlow: I did not catch all of my right hon. Friend's statement, but may I draw his attention to the fact that during yesterday's sitting of the Select Committee on European Legislation the recommendation was made that a heavily amended draft directive on broadcasting should be brought before the House for debate before the common position is agreed? As that common position may well be agreed next Thursday, will my right hon. Friend look into that matter?
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This is an important matter, as the directive has been much amended since it was last debated by the House as long as two years ago.
Mr. Wakeham: I understand my hon. Friend's concern and those expressed in the debate on the original proposals in January 1987, most of which have been met by the latest draft directive on broadcasting. I accept that the proposal has changed, but there has been a debate on the subject and I hope that my hon. Friend agrees that the changes were largely foreseeable and will generally find favour in the House. We have a heavy business programme next week which I cannot easily alter, but I am having discussions with my hon. Friend the Minister of State, Home Office on the subject.
Mr. Merlyn Rees: Will the Leader of the House reconsider the need for a statement next week as a result of Sir Leon Brittan's further revelation, for which we do not have to wait until Friday night; we have already heard it on television and read it in the newspapers. There is a strict constitutional convention in Britain, which does not have a written constitution, that Law Officers' letters should not be revealed. Two Law Officers nearly resigned on the issue and we now find that two civil servants at No. 10 took it upon themselves to reveal that letter, self-authorised. Two basic questions arise: first, why did they do it, and, secondly, why have they not been removed from their posts for doing so?
Mr. Wakeham: The right hon. Gentleman, who has a reputation for objectivity in such matters, should look at the report of the Select Committee on Defence and the debates in the House at the time. If he does that, he will see that nothing new has arisen. These matters were referred to. If the hon. Gentleman is interested in names he should look at the Select Committee's report, which was published and debated a long time ago. All the issues have been well ventilated. There is nothing fresh or new in the statement made by Sir Leon Brittan, as he confirmed yesterday.
Mr. Harry Greenway: Is my right hon. Friend aware that, if President Gorbachev had arrived 24 hours earlier and had used the Underground, he would not have been able to keep his appointments, like many other Londoners, owing to the most uncalled for strike by the drivers, and, according to a CBI report, if he comes in 10 years' time, unless he uses a helicopter he will not be able to move because London traffic will be at a standstill. Therefore, may we have a debate next week on the management of traffic in London, and could the motion include the possibility of a Minister with responsibility for London's traffic?
Mr. Wakeham: I was at the airport yesterday to meet President Gorbachev, when adequate road transport was available for him. However, I have every reason to believe that those arrangements were made regardless of whether there was a strike of Underground workers. I regret that, against the advice of the union, Underground workers took unofficial action yesterday. It would be much better if proper negotiations to settle the dispute were entered into without delay. On my hon. Friend's wider question about ministerial changes, I do not think that that is a matter for me or that it arises today in particular.
Mr. Nigel Griffiths: Will the Leader of the House make time for an early debate on the repeal of rent legislation which has brought about a fourfold increase in the rents in housing association properties in my constituency, which has been forced on retired people and highlighted so well in The Scotsman today? Will the right hon. Gentleman give time for an early debate on the plight of retired people in retirement homes?
Mr. Wakeham: I cannot promise the hon. Gentleman a debate, but I should be tempted to have one because I suspect that his analysis of the situation was not a particularly balanced one. However, the points he has raised about elderly people seem to be relevant to the debate that I have managed to arrange for Tuesday of next week.
Sir Ian Lloyd: My right hon. Friend will be aware of the widespread concern in all parts of the House as a result of the tragic events on the Namibia-Angola border. He may also be aware that those of us who recall the record of the United Nations in Katanga do not exactly have the utmost confidence in the ability of that organisation to react expeditiously and impartially. My right hon. Friend may not be aware of recent reports that aerodromes for advanced fighter aircraft are being constructed on the Angolan border, and that specialist Vietnamese troops are being brought into Angola to replace the Cubans. In the light of these very serious events, may we have an early opportunity to debate this matter?
Mr. Wakeham: I recognise the importance of the matter, and I recognise my hon. Friend's knowledge of that area, based on many years' experience. I wish that I could offer a debate in the near future. I shall certainly bear the matter in mind, but I cannot give my hon. Friend a promise.
Ms. Diane Abbott: May I draw the attention of the Leader of the House to early-day motion 44 on cosmetic experiments on animals?
[That this House is appalled by the failure of the Animals Act 1986 to prevent the testing of animals for cosmetic purposes; notes that in 1987 there were still 14,534 animals being used in cosmetic experiments and considers this totally unacceptable; and calls upon the Home Secretary to cease the granting of any further licences for cosmetic testing and furthermore to put a time limit on those existing licences for the same purposes.]
May I draw to his attention the fact that this is a completely barbaric and unnecessary practice, about which I have had very many letters from constituents? The early-day motion has been signed by more than 200 hon. Members. In the light of the feelings of millions of people up and down the country, will the Leader of the House make time for an early debate on this issue?
Mr. Wakeham: I have seen the hon. Lady's early-day motion. The term "cosmetic" covers not only beauty preparations, such as lipstick and perfumery, but hygienic products, such as toothpaste and anti-dandruff shampoos, as well as preparations to combat other problems, particularly for workers in industry. It is essential that all these products are safe to use and safe to produce. Safety testing, for mildness only, involves some use of animals. All applications for cosmetic testing licences are examined
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by the Animal Procedures Committee, whose first report, published on 6 December, describes the difficult issues involved and its approach to them. I cannot promise the hon. Lady a debate at the present time, but it is a matter that I shall certainly bear in mind.
Mr. Neil Hamilton: I warmly endorse my right hon. Friend's decision not to waste any more of our time debating the Westland affair and its aftermath. Sir Leon Brittan, in his most recent remarks, has added nothing to what we knew already. He has not said anything that is inconsistent with anything said by the Government in the past. Although the endearing, but slightly barmy Member for Linlithgow (Mr. Dalyell) and his friends may have an obsession—
Mr. Speaker: Order. I think the hon. Gentleman can do better than that. I do not think that we will have "barmy" here.
Mr. Hamilton: It was a slip of the tongue, Mr. Speaker, which I certainly withdraw.
Although the hon. Member for Linlithgow and many of his hon. Friends are obsessed by this topic, the country at large has no interest in it whatsoever.
Mr. Wakeham: As I have indicated, I do not think that there is anything new to be debated or discussed, and I am glad to have the support of my hon. Friend.
Mr. Tam Dalyell: Is the Leader of the House suggesting that the recent statement by Sir Leon Brittan is in any way consistent with the evidence given, on behalf of the Government, by Lord Armstrong of Ilminster to the Select Committee? Is he saying that the Select Committee had any notion that there was explicit approval by two of the most senior civil servants? Would the Leader of the House feel it right next week to make a statement on his own position, in the light of the assertions by his hon. Friend the Member for Aldershot (Mr. Critchley) in the book "Heseltine"—the unauthorised biography—page 153, that he was present on 4 and 5 January 1986 when there were discussions at Chequers on tactics in relation to the Law Officers' letter, that he was present on 18 December 1985, with Mr. Bernard Ingham and Lord Whitelaw, when the strategy was being discussed, and that he was party to the inner Cabinet decisions on 9 January? Can he confirm his hon. Friend's statements, which are in writing?
Mr. Wakeham: The last time the hon. Gentleman raised the subject in that form he seemed to have got stuck at page 153 of the book. I suggest that he finishes the book, but I do not think that anything in it will give him any grounds for saying that the Government have not been forthcoming and that there have not been proper inquiries. Nothing new has come out in what Sir Leon Brittan has said. There is not just my word for it; Sir Leon himself, said there is nothing new. I see no grounds for an inquiry.
Mr. Ian Taylor: Will my right hon. Friend find Government time for a debate about the inadequacies of the law on travelling people, some of whom may be gipsies? Many of my constituents have suffered great invasion of privacy and often abuse, from these people, who just camp without invitation. The police find it very difficult to move them on under the current legislation. Will he find time for this debate at an early date and will

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he ask his right hon. Friend the Secretary of State for the Environment for a White Paper on the Caravan Sites Act 1968?
Mr. Wakeham: I cannot promise my hon. Friend a debate, but I recognise that this matter causes concern in quite a number of constituencies, including his and, as a matter of fact, mine. I wonder whether my hon. Friend might consider raising the matter on an Adjournment debate.
Mr. David Winnick: Would it not be appropriate for the Prime Minister to make a statement next week to try to explain to the House and the country how her private secretary and her press secretary could approve and authorise the leak of the letter from the Solicitor-General unless they knew quite well that it would be her wish that they should do so? The Leader of the House tells us that what was said yesterday by Sir Leon Brittan is nothing new, and all the rest of it, but does he not recognise and appreciate that what is at stake here is the Prime Minister's integrity and truthfulness? My hon. Friend the Member for Linlithgow (Mr. Dalyell), although he has been mocked and baited by the Tories over this issue, has been absolutely right.
Mr. Wakeham: These issues were well and truly debated at the time and nothing new has come up. Whether the hon. Gentleman likes it or not, that is the position. He might have got a little excited yesterday, but he really has missed the point. There is nothing new to discuss.
Mr. Doug Hoyle: Will the Leader of the House take time to read the two contributions on the Westland affair by his right hon. Friend the Prime Minister? If he does he will find that she suggested that her office had nothing to do with it. Sir Leon Brittan said yesterday quite categorically that Mr. Ingham and Mr. Powell approved the action. Will the right hon. Gentleman ask his right hon. Friend to come to the House and make a statement on why those two close associates of hers have not resigned? Will she at the same time give us a full, factual, detailed account of this squalid matter of the missing letter?
Mr. Wakeham: The hon. Gentleman invites me to take a quiet moment to read all these documents and speeches again. I did that just this morning in order to refresh my mind because I thought that some of these matters might come up in business questions. I suspect that the hon. Gentleman has not read them and I suggest that he should, because he would then probably agree with me that nothing new has arisen and therefore there is no need for a debate.
Mr. Harry Cohen: I have a two-part question. First, will the right hon. Gentleman give an assurance that the Prime Minister will make a statement to the House early next week on her discussions with President Gorbachev? Secondly, just in case President Gorbachev asked to see me, I thought that I would brush up on a video on nuclear disarmament from the Library, only to find after a short viewing that another Member wanted to watch the television, and I was chucked out of the room. That is not the first time this has happened. Can we make sure that there is a room in this place in which Members can look at videos to do with work?
Mr. Wakeham: Any time the hon. Gentleman wants to watch the television and he cannot find a place to do so, if he will drop me a note I will look into it immediately. I am very happy to assist him in any way on that part of his question. On the first part of his question, I cannot give any undertaking that the Prime Minister will be making a statement on her talks with President Gorbachev.
Mr. Greville Janner: Surely the Leader of the House can and ought to give an undertaking to the House that the Prime Minister will report not merely to the press but to the House on this very important and welcome visit by Mr. Gorbachev. Does the right hon. Gentleman know that, while the Jewish community in this country unanimously welcomes the visit, it remains deeply concerned at the large number of Jewish families still not allowed to emerge from the Soviet Union in spite of the fact that there has been a most welcome change in the Soviet Union's attitude both to emigration and to the rights of Jewish people within the Soviet Union? In particular, there are families such as the Upspensky family, the Chernobilsky family and the Lurie family who have been waiting over 10 years.
I was disturbed to hear the right hon. Gentleman say that there was to be no raising of individual cases by the Prime Minister with Mr. Gorbachev. Will he please reconsider his remarks and his failure to assure the House that there will be a statement on both human rights and the allegations that have been made about the sale to the Libyans by the Soviets of long-distance aircraft, which of course would have amazing potential in the hands of somebody like Gaddafi?
Mr. Wakeham: I am not in a position to say anything about the details of the talks, which are still going on. What I said was perfectly sensible and fair. My right hon. Friend the Prime Minister will, of course, raise the general matters in her talks with Mr. Gorbachev, but it seemed to be the best use of the day for my right hon. and learned Friend the Foreign Secretary to raise the individual cases with him. As the hon. and learned Gentleman has great knowledge of, and long experience in, these matters and his contribution is acknowledged by hon. Members on all sides of the House, I certainly take seriously what he says. Statements in the House are governed by custom and practice and my right hon. Friend the Prime Minister will observe the normal customs in dealing with these matters. It is not for me to say at the Dispatch Box what she will or will not do. It is not the practice always to have statements after bilateral discussions.
Mr. Bob Cryer: Can the Leader of the House confirm that the two EEC documents on Tuesday will be debated for only one and a half hours each? If that is the case, surely it is an inadequate amount of time when dealing with the EEC bulldozer yet again imposing more legislation on the United Kingdom.
May I draw the right hon. Gentleman's attention to early-day motion 670 and ask for a debate on it?
[That this House draws attention to the editorial, Vilest M.P. in Britain, in the newspaper Today of 5th April, referring to the honourable Member for Dover; notes its expression of grave concern at the growth of violence against women; and urges all honourable Members to set an example of courtesy and restraint, whether towards reporters, photographers or Spanish police.]

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Then the hon. Member for Dover (Mr. Shaw), referred to in the motion, will be able to explain how he falsely alleged that pickets at Dover—National Union of Seamen members sacked by P and O—were engaging in brutality and the double standard of the fact that the hon. Gentleman is accused by Today of beating up a woman photographer. That sort of double standard should be the subject of debate. At the same time, the hon. Member for Mid-Staffordshire (Mr. Heddle), who has been engaging in fisticuffs with the Spanish police, can explain his position as a representative of the law and order party. Can the Leader of the House, in the same debate, explain why there is this extensive thuggery in the parliamentary Conservative party and has it anything to do with lager drinking on the quiet?
Mr. Wakeham: If we were to have this debate I am glad that I would not have to be in the Chair, Mr. Speaker. There seem to be rather a lot of subjects and I would not want to have to keep that sort of debate in order.
I confirm that the motions on Tuesday night on EC documents will follow the Standing Orders of the House. These matters have been agreed through the usual channels and, assuming there are enough speakers for the Opposition Day debate and that does not end until 10 o'clock, there will be one and a half hours for each of those two debates.
With regard to early-day motion 670, I cannot arrange a debate on that. Anyone who wishes to complain of assault can go to the police or deal with the matter in other ways. If I had to arrange a debate every time that occured or every time the hon. Gentleman made some wild allegations about my hon. Friends, we would never get down to all the important matters such as dealing with the levy scheme.
Mr. Harry Ewing: Unfortunately the Leader of the House does not appear to be aware of the seriousness of Sir Leon Brittan's allegations in the television programme. If the Leader of the House is saying that what Sir Leon Brittan said in that programme is acceptable to the Government, he is saying that the Government knew that the press secretary and the private secretary leaked the Law Officer's letter. If that is accepted by the Leader of the House, it is a staggering new development and gives rise to a serious situation.
Against that background will the right hon. Gentleman come to the House next week and explain why my hon. Friend the Member for Linlithgow (Mr. Dalyell) can be named and suspended from the proceedings of the House for five days on a motion by the Leader of the House for what is now seen to be the truth? In what circumstances can the suspension be removed, and if there are no provisions for removing it can the matter be referred to the Select Committee on Procedure?
Mr. Wakeham: I think that we are making progress when the charming hon. Gentleman, whom the whole House respects, can talk so much rubbish in such a short time. We clearly recognise that it is not a question of the Opposition fox having been shot, because there was no fox for them to shoot in the first place. The allegations and problems that arose over what is known as the Westland affair were fully debated at the time. We had debates in the House and Select Committee reports, and nothing new has
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emerged in recent times to require any further discussion or debate about the matter. Obviously, the hon. Gentleman and his hon. Friends are disappointed that that should be the case. That is why the Opposition put up the charming hon. Member for Falkirk, East (Mr. Ewing) to try to make something out of the mess in which they find themselves.
Mr. Keith Vaz: Could we have a statement or debate on the operation of regulations made under section 1 of the Road Traffic Regulation Act 1984? After a four-year campaign by shopkeepers and residents in the East Park road area of my constituency, the city council established some laybys but, because of the provisions of section 1 of the Act, nobody can park in them until the double yellow lines have been removed. Under the terms of the Act it will take seven months to remove those lines. Will the Leader of the House have a word with the Secretary of State for Transport to see whether we can amend the regulations to end this absurd scenario?
Mr. Wakeham: I do not entirely accept what the hon. Gentleman says, but I certainly accede to his request to raise the matter with my right hon. Friend the Secretary of State for Transport, and I shall write to him.
Mr. Richard Caborn: Will the Leader of the House arrange for the Prime Minister to come to the Dispatch Box next week to make a statement about the Namibia crisis and the implementation of United Nations resolution 435? The Prime Minister should do that because she misled the House on no fewer than three occasions on 4 April. She told the House:
"There is no provision in the United Nations plan for SWAPO to have bases in Namibia."—[Official Report, 4 April 1989; Vol. 150, c. 15.]
That would be in contravention of protocol SI 13120 of 26 February 1979.
Secondly, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) said, the statement by the secretary general to the Security Council is not in the Library and is not likely to be put there because it is a confidential document. The implication about SWAPO and the impression given to the outside world by the House was based on that report which we cannot see, although we were told at the time that we would have sight of the document.
The third matter is about SWAPO being a signatory to the Geneva protocol. That is mentioned in column 15 of the Official Report of 4 April 1989. That is not the case. SWAPO is not a signatory to that and the letter from the leader of SWAPO to the secretary general did not accept the protocol, which had four signatories. Misleading statements were given to the House indicating a totally biased approach against SWAPO. This is a serious matter, because we are talking not just about the independence of Namibia but about matters that affect the whole of southern Africa. As I have said, the Prime Minister misled the House on three occasions and she should now come to the House and make a statement.
Mr. Wakeham: I do not accept that at all. We have discussed whether the documents were in the Library and I recognise that there was some misunderstanding. The first requirement is for urgent action to restore the ceasefire under the authority of the United Nations. We are active in promoting that. Secondly, it is important for

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all parties to hold to the terms of the United Nations plan for the independence of Namibia and to the other international undertakings, notably the Geneva protocol. It has been suggested that there was a provision for SWAPO bases in the country. That assertion is based on proposals made by the then secretary general in February 1979. Those were overtaken by a subsequent agreement in 1982 by the parties involved to monitor bases in Angola and Zambia. That is why there is no provision in the secretary general's report of 23 January, which sets out his proposals for the role of the United Nations transition assistance group, for any SWAPO bases inside Namibia.

Points of Order
5.7 pm
Mr. Max Madden: On a point of order, Mr. Speaker. May I raise with you the procedures that were observed today during Prime Minister's Question Time? Some of us were rather puzzled about why question No. 4 was linked to question No. 8. It is unprecedented for questions to be linked at Prime Minister's Question Time, and the linking today prevented hon. Members from asking questions Nos. 5, 6 and 7. Today as always well over 100 hon. Members put down a standard question. Why should what is traditionally called the "closed question" be given priority? If this is the name of the new game, you are likely to be faced, Mr. Speaker, with hon. Members putting down questions in that way in the hope that they will be linked and will therefore obtain priority. Will you look urgently at this matter and advise the House, because if an unfortunate precedent has been set today it should be removed as quickly as possible.
Mr. Speaker: I thank the hon. Gentleman for his point of order. I share his concern about this matter and have made my views known.
Mr. Bob Cryer: Further to that point of order, Mr. Speaker. Could you make a statement saying quite clearly, not that you have views about the matter but that you will not accept linking of questions to the Prime Minister? You will see that later in the Order Paper there is another question identical in type and form to questions Nos. 4 and 8. Quite clearly conspiracies could develop to flood the Order Paper so that one party could dominate the Order Paper to the exclusion of other parties. It would simplify matters if it was understood that there would be no linking at all.
Mr. Speaker: The linking of questions is a matter for Ministers and not for the Chair. As I have said, I share the concern expressed about this matter for the very reasons that hon. Members have mentioned.
Several Hon. Members rose—
Mr. Speaker: Order. I cannot say any more about the matter. I hope that it will not happen again.
Mr. Alan Williams: Further to that point of order, Mr. Speaker. I clearly recollect one of your predecessors intervening when questions near the top of the Order Paper were linked with later ones. That was about 10 years ago. The Speaker of the day intervened and stopped that practice. I note and I am grateful for the fact
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that you have made your views known, Mr. Speaker. May we have some assurance that your representations will be as effective as those of your predecessor?
Mr. Speaker: The right hon. Gentleman's knowledge of the precedents of this matter is rather greater than that of those who advise me. I will certainly take into account what he has said.
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): Further to that point of order, Mr. Speaker. I have no strong views about these matters and I will seek to do whatever is in the best interests of the House. In his enthusiasm to show his great knowledge of this matter, the right hon. Member for Swansea, West (Mr. Williams) did not perhaps consider the Order Paper or the problem very carefully. If he does, he will see that whether what I did was generally acceptable or not, is one matter. However, there were three questions between questions 4 and 8. Two of them were reached and those hon. Members who asked them have no particular grounds for grievance. The other question was tabled by my hon. Friend the Member for Ealing, North (Mr. Greenway) who, in spite of his question not being reached, seemed to manage quite well.
Mr. Frank Dobson: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. We have a very busy day ahead of us. I have already made my views on this matter clear and the Leader of the House has accepted what I have said.
Mr. Nigel Spearing: On a point of order, Mr. Speaker.
Mr. Dobson: Further to the point of order, Mr. Speaker. It is my understanding that under the conventions of this House it is accepted that, roughly speaking, Ministers can decide whether to link questions. However, there is a convention over and above that which states that the linking should apply only to questions which are likely to be reached. Many hon. Members, probably from both sides of the House, are very dubious about a development in which a question which was on the borderline of not being reached can be linked. Having been linked, other questions tabled by Members who came higher in the ballot were not reached. The House would want a general view and a ruling from you, Mr. Speaker, if Ministers are to believe that they can link one question with one which may be so far down the list that it receives a leg up and is answered when it would not otherwise be answered.
Mr. Doug Hoyle: Further to the point of order, Mr. Speaker. I want to correct the Leader of the House. Question 6 to the Prime Minister stood in my name and that certainly was not reached. Question S was reached, but questions 6 and 7 were not. Question 8 had precedence. That is what the argument is about.
Mr. Speaker: I agree.
Mr. Spearing: On a point of order, Mr. Speaker. You will know that when tabling questions, particularly about matters which are regarded as historic, a point is reached when it is questionable whether matters are new in relation to the events in question. My point of order is relevant to

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the courteous exchange between my hon. Friend the Member for Falkirk, East (Mr. Ewing) and the Leader of the House.
The Leader of the House said that nothing new had arisen from the statement made by Sir Leon Brittan. I wonder whether you will allow the Leader of the House, through you, Mr. Speaker, on this point of order, to tell us where in previous exchanges in the House or in any Select Committee report the two civil servants named by Sir Leon Brittan are named as being responsible for the leak. Unless and until such a demonstration is made in this House now or in future, the assertion of the Leader of the House must be found wanting and questions can be tabled which otherwise would not be raised.
Mr. Speaker: It is a great pity that the hon. Gentleman was not here—at least I did not see him here—during business questions, because he could have put that question to the Leader of the House then.
Mr. Tony Marlow: Further to that point of order, Mr. Speaker. A lot of hon. Members would take a different point of view and would be very grateful if you could protect the House from the turgid and continuous regurgitation of this boring and bogus historical issue which may be of rotting political interest to a small out of touch portion of the chattering classes, but the vast majority of the country could not give a tuppeny whatever about it.
Mr. Spearing: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. We have a very long day ahead of us. If the hon. Member for Newham, South (Mr. Spearing) has a legitimate point of order, I will have to deal with it.
Mr. Spearing: I invite you, Mr. Speaker, on this very important matter, to ask whether the Leader of the House would be willing to demonstrate where these matters were made explicit—namely, that the two civil servants concerned were named in official documents and therefore there is nothing new. Unless that is done, the House may doubt the words used by the Leader of the House in reply to my hon. Friend the Member for Falkirk, East (Mr. Ewing).
Mr. Robert Parry: On a point of order, Mr. Speaker. Can you explain why, in the statement on the abolition of the dock labour scheme, as the only Liverpool Member in the House who has Liverpool docklands in his area, I was not called?
Mr. Speaker: I can easily explain that. With the greatest good will in the world to all hon. Members, it would have been completely impossible for me to call every hon. Member who had an interest in the matter during the
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statement. It is a question of judgment on the part of the Chair to try to have every part of the country represented. I am extremely sorry for the hon. Gentleman. I called him during business questions and I thought that he might have raised his point then.
Mr. Harry Ewing: Further to that point of order, Mr. Speaker. As you know, I am a great student of procedure in this House. I have sat here for endless hours without being the slightest bit interested in the debate—just watching you very carefully to see how you run the business. My interest in procedure has been heightened with my appointment as chairman of the Scottish convention on the constitution issue. I thought about asking to try your wig on, Mr. Speaker, but I had better not.
I have noticed in recent weeks that there is a new practice of the Chair calling Conservative Back Benchers after the Opposition Front Bench spokesman has questioned the relevant Minister—today it was the Chancellor of the Exchequer. For my benefit, can you explain what procedural advantage is gained from that?
Mr. Speaker: That is a matter of judgment for the occupant of the Chair. One day perhaps the hon. Gentleman may have this very difficult job.

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I will put together the eight motions relating to statutory instruments.
Ordered,
That the Community Service Orders Rules 1989 (S.I., 1989, No. 191), be referred to a Standing Committee on Statutory Instruments, &c.
That the Air Quality Standards Regulations 1989 (S.I., 1989, No. 317), be referred to a Standing Committee on Statutory Instruments &c.
That the Health and Safety (Emissions into the Atmosphere) (Amendment) Regulations 1989 (S.I., 1989, No. 319), be referred to a Standing Committee on Statutory Instruments, &c.
That the Control of Industrial Air Pollution (Registration of Works) Regulations 1989 (S.I., 1989, No. 318), be referred to a Standing Committee on Statutory Instruments, &c.
That the Criminal Legal Aid (Scotland) (Fees) Amendment Regulations 1989 (S.I., 1989, No. 388), be referred to a Standing Committee on Statutory Instruments, &c.
That the Legal Aid (Scotland) (Fees in Criminal Proceedings) Amendment Regulations 1989 (S.I., 1989, No. 390), be referred to a Standing Committee on Statutory Instruments, &c.
That the Confirmation to Small Estates (Scotland) Order 1989 (S.I., 1989, No. 289), be referred to a Standing Committee on Statutory Instruments, &c.
That the Gaming Act (Variation of Fees) (Scotland) Order 1989 (S.I., 1989, No. 362), be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Gerald Howarth.]

Orders of the Day
  Electricity Bill
  As amended (in the Standing Committee), further considered.
  Electricity Bill
    New clause 7

      ENERGY CONSERVATION
      '. The Director shall have a duty to promote the efficiency and conservation of energy and in carrying out that duty shall in particular—

      (a) ensure that public electricity suppliers take such active steps as, in his opinion, are reasonable to maximise energy efficiency and conservation; and

      (b) set annual targets for improvement in energy efficiency for public electricity suppliers which he shall publish and on the attainment of which he shall report to the Secretary of State'.—[Mr. Blair.]

      Brought up, and read the First time.
      5.17 pm
      Mr. Tony Blair: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss the following: New clause 12—The Deputy Director General of Electricity Supply for Energy Conservation—
      '. —(1) The Secretary of State shall appoint an officer to be known as the Deputy Director General of Electricity Supply for Energy Conservation (in this Act referred to as the Deputy Director for Conservation) the purpose of carrying out functions relating to energy conservation and efficiency.
      (2) The Deputy Director for Conservation shall have a duty to exercise the functions assigned to him by this Part in the manner which he considers is best calculated to secure—

      (a) that all functions relating to the supply, generation and transmission of electricity are carried out in a manner that requires the most efficient use of electricity;

      (b) that all functions relating to the supply, generation and transmission of electricity are carried out in a manner that requires the conservation of energy;

      (c) that no new plant is developed unless it is proved to the satisfaction of the Deputy Director for Conservation that the required capacity cannot be met by additional measures of efficiency or conservation.

      (3) An appointment of a person to hold office as the Deputy Director for Conservation shall be for a term not exceeding five years; but previous appointment to that office shall not affect eligibility for re-appointment.
      (4) The Secretary of State may remove any person from office as Deputy Director for Conservation on the grounds of incapacity or misbehaviour.
      (5) Subject to sub-sections (3) and (4) above, the Deputy Director for Conservation shall hold and vacate office as such in accordance with the terms of his appointment.
      (6) The provisions of Schedule 1 to this Act relating to the director shall have effect with respect to the Deputy Director for Conservation.'
      New clause 14—Environmental Duties—
      The Secretary of State and the Director shall each have a duty to exercise the functions assigned to him in this part in a manner which is best calculated to preserve, protect and improve the environment and to this effect shall place on all licence holders a duty:

      (i) to achieve target improvements, which shall be set annually, in the efficient use of energy;

      (ii) to achieve target reductions, which shall be set annually, in pollution.

      Amendment No. 117, in clause 7 page 6, line 17, at end, insert—
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      '(c) such conditions as the Director may determine which enable the holder of a licence to conform to pollution legislation through:—

      (i) energy efficiency measures;

      (ii) the expansion of alternative renewable generating sources;

      (iii) a system determined by the Director which allows one licence holder to offset the reduction requirements of another licence holder.'.

      Amendment No. 124, in clause 8 page 7, line 4, alter 'supplier', insert '(a)'.
      Amendment No. 126., in clause 8 page 7, line 6, at end add—
      '(b) to promote energy conservation in the supply and use of electricity to his consumers.
      Amendment No 128, in clause 8 page 7, line 11, after 'competition', insert 'and energy conservation.'.
      In connection with this grouping, I am prepared to allow reference to new clause 17 which is an amended version of former clause 13. I have not selected it for a separate division.
      Mr. Blair: The purpose of new clause 7 is to impose on the Director General of Electricity Supply a duty to "promote the efficiency and conservation of energy and in carrying out that duty … to ensure that public electricity suppliers take such active steps as, in his opinion, are reasonable to maximise energy efficiency and conservation and set annual targets for improvement in energy efficiency."
      New clause 14 supplements that by imposing a duty on the director general and the Secretary of State to set targets for improvements for the emission of pollutants.
      We will debate energy conservation and more environmentally beneficial ways of generating electricity under this group of amendments. Later we will combine heat and power and discuss other matters relating to the environment. This is effectively "environment day".
      I want to begin by referring to an intriguing press release from the Press Association the other day. It revealed that next week the Secretary of State will have talks with Soviet Ministers about energy use and the need to safeguard the environment. He will do that during his five-day trip as head of a delegation of top business men. I found it rather intriguing and not a little bizarre that he should go abroad next week to promote environmental concerns in the Soviet Union—matters over which he has no responsibility—while he does not take the opportunity to promote environmental concerns this week during the Electricity Bill debates, a matter for which he is directly responsible. It occurred to me that perhaps he was not acting so much in his capacity as the present Secretary of State for Energy, but in the capacity of a future head of the Department of Trade and Industry—a position he desires to occupy in future. Perhaps we will find out about that later.
      The Bill is the most important single measure touching on the environment that we shall debate this Session, yet virtually nothing in it provides even the mildest encouragement to energy conservation, which is the biggest contribution to meeting concern about the environment that we can make. The new clause sets the Government a fundamental test of their sincerity. Is green just the colour of the Prime Minister's rhetoric—a passing flag of convenience to protect her in dangerous political waters—or is she prepared to match words with action and to stand up to the industry's Nested interests? So far, from the evidence in the Bill, the answer is a resounding no.
      Every amendment promoting vigorous action to conserve energy—they numbered about 30 in Committee

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      —has been defeated. Instead, we have a derisory and pathetic response of such inadequacy that it casts doubt upon the commitment of those who make it. We debate energy conservation against the background of a Select Committee report on privatisation that wanted the regulator to require public electricity suppliers to come forward with energy conservation schemes. We debate it against the background also of our European obligations to promote energy conservation. However, clause 3, which lists the director general's primary duties, does not include energy conservation or efficiency. They are only mentioned as a secondary duty, subject to the primary duties, in subsection (3). The Bill contains nothing specific.
      If one examines the licences that will govern both the public electricity suppliers and the generators, one finds an alarming state of affairs. All that is said in specific terms about energy efficiency in relation to the area boards that will supply electricity appears in condition 18 on page 83 of the draft licence. Licensees—the area boards—will be obliged to prepare a statement of general information about electricity efficiency
      "and make a copy of such statement available for inspection by members of the public at each of the relevant premises during normal working hours."
      The notion that that is an adequate contribution to energy efficiency is laughable. However, we find that in the terms of the licence for those generating electricity—the Secretary of State or his hon. Friend the Minister will advise me if I am wrong—there is not one single specific duty in relation to energy conservation. It is scarcely any wonder that the Bill's existing provisions have provoked the ridicule of every serious environmental lobby group.
      The one argument that is not available to the Government is that energy conservation does not matter. It is not disputed that energy conservation is important. The question is how best to promote it. The Government fail in terms not only of the test that we set them but of the test that they set themselves. That is of a piece in the policy of the Government, who cut the budget of the Energy Efficiency Office, ceased to allow home insulation grants, and scrapped industrial energy schemes. Soon, all that will be left is a massive television advertising campaign—the usual substitution of style for substance that has become the Government's hallmark.
      It is vital that action is taken in respect of the greenhouse effect, for example, which may be small in its terms of global impact but is still of importance in relation to the electricity industry's emissions. Also, acid rain has been established as an environmental problem. What is unbelievably depressing about the Government's response is that they see in the evidence about greenhouse gases or acid rain, not an opportunity to promote environmental concern but a chance to make the case for nuclear power.
      Those environmental hazards first came dramatically to public notice last year, although many people had known about them for a long time. The Prime Minister, in an interview in The Times, commented:
      "Had we gone the way of France and got 60 per cent. of our electricity from nuclear power, we should not have environmental problems."
      That statement is about as bold as it is possible to imagine.
      I do not know whether the Secretary of State will give the
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      House the benefit of his views on that remark, but I can guess his views on the statement made subsequently by the Secretary of State for the Environment, who commented:
      "There is absolutely no doubt that if we want to arrest the greenhouse effect we should concentrate, like the French, on a massive increase in nuclear generating capacity."
      It need only be said that not only is such utterly impracticable—as to swap from coal to nuclear would mean building nuclear power stations at a rate that not even Lord Marshall foresees—but radioactive waste is itself a major environmental problem and one for which we have no easy answer at present. When people learned from television that nuclear reactors must be left for 100 years before final decommissioning takes place, it provided them with a considerable education in the environmental implications of nuclear power.
      Even on the most optimistic forecasts, the demand for energy conservation will rise—at least in the short term. We are talking not about reducing that demand but rather how to reduce or contain an increase. That re-emphasises points that we made in Committee about the desirability of ensuring that before power stations of whatever type are built, it should first be ascertained whether it will not be more cost-effective—quite apart from environmental considerations—to put more money into energy conservation and less into new build. Under the proposed new clause, that aspect is one that the director general could consider. That is done in the United States and in Norway with considerable success, and it is difficult to understand why such planning should not be adopted in this country.
      The amendment does not stop there. It would ensure that we promote not only energy conservation but environmentally clean technology. Later, we shall debate the subject of combined heat and power. At this point, I wish to raise a specific point concerning the future of the fluidised bed combustion plant at Grimethorpe, which is a subject dear to the hearts of many of my hon. Friends.
      I understand from the Financial Times that a director of British Coal who appeared before the Energy Select Committee yesterday morning said that that project provides an opportunity to burn coal in an environmentally beneficial way, but that it is at risk because of the Government's refusal to come up with what is, by comparison to the sums put into the nuclear power industry, a small amount of money. He said that £11 million is still wanted, but believes that the Government will not make that commitment. In debating the new clause, it is entirely appropriate to ask the Government to make that commitment, and to ask what are their intentions in respect of a project that has widespread support and shows that the industry is prepared to take seriously its environmental responsibilities.
      Earlier this week, four environmental groups—all of which have a long-standing commitment in the environmental field and are well respected—jointly urged support from all political parties for the amendments and new clauses that we propose. They mentioned many ways in which energy could be used more efficiently and to reduce environmental difficulties. Those proposals are at least worth examining. History has taught us that there is no possibility of encouraging a greater measure of concern for the environment unless one is prepared to interfere with the vested interests that wish to carry on burning energy in the least efficient way, which does not put care for the environment at the top of the agenda. If we are

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      serious about promoting environmental concern, it must mean intervening in the market place to do so. That is what the new clause would do.
      Without obligations on the electricity supply industry and without legislative duties—in other words, without interference in the market place—the degree of care for the environment that we desire is simply highly unlikely to happen. If the House takes the environment seriously, that interference should not happen at the whim of industry but by the will of the people. If the Secretary of State was prepared to set aside market forces to protect the nuclear industry yesterday, why does he not set them aside today —this time for the good of the environment and the country as a whole?
      5.30 pm
      Mr. A. J. Beith: My hon. Friend the Member for Gordon (Mr. Bruce) may seek to catch your eye later, Mr. Deputy Speaker, to discuss some clauses dealing with the conservation aspects of the amendments.
      I shall refer to new clause 17, as Mr. Speaker said I could, because another version of the new clause was selected with this group yesterday. It is about rural areas. People in rural areas have a particular reason to be concerned about the conservation and energy efficiency aspects of the Bill. It is in rural areas that green field sites are sought for the new power stations which would not be needed if proper energy efficiency and conservation were applied. The race to find, buy and use green field sites could be halted if we had proper conservation and an energy efficiency-based policy were followed. Therefore, one of the first interests of rural areas must be that part of the new clauses.
      Several other aspects must also be considered. One is the duty to supply, on which I dwelt yesterday. The weakness of the duty to supply aspects is only one of the problems that the Bill presents for rural areas. That is why my hon. Friends sought to incorporate into the Bill two deputy directors of supply, one to deal with conservation and one to deal with the particular problems of rural areas.
      There are a series of such problems. One involves the compulsory purchase powers in the Bill. For example, the National Farmers Union remains deeply concerned that the private electricity companies will have compulsory purchase powers which have previously belonged only to a Government body—a nationalised industry—and will therefore be able to take from agricultural use land which is of agricultural and environmental importance in the same way that a public body was able to do. Draconian powers are to be in the hands of private companies. That is another matter in which a deputy director general concerned with rural affairs would have a role to play.
      The Bill's most alarming feature for rural areas is that the electricity supply companies could choose to impose a higher tariff on rural customers than on urban customers. That provision would allow a private company a power which no public company would surely ever have dared to use. That is why it has not been an issue in the history of nationalised electricity.
      Within the North of Scotland Hydro-Electric Board area, the common tariff—the right of every customer to pay the same tariff, regardless of where in the board's area he or she lives—has been enshrined in legislation and will continue to be so enshrined in the area of the north of
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      Scotland electricity supply company. But in the rest of Scotland and in the whole of England and Wales, it will be open to the new electricity supply companies to choose to charge their rural customers more than their urban customers. It is common for commercial organisations to say, "It is costing us a lot of money to deliver to little villages and to go to the heads of valleys and supply goods. Therefore, we will impose a surcharge and charge them at a higher rate." That cannot be an improvement for such a basic commodity as electricity, which has hitherto—certainly since the war—been supplied by public service bodies.
      The chairmen-designate of the new companies have given indications that they might not choose to use that power for the first five years after privatization—but five years only, and not beyond that time. The very way in which they have given such Indications suggests that they will seek to use that power. There was a trial run of the problem in the Isles of Scilly. From the consumers' point of view the outcome was rather satisfactory. At the end of the day, primarily because of EEC involvement in the provision of a new electricity service on the Isles of Scilly, it was determined that a differential tariff could not be required of consumers there. They have the guarantee that they will pay the same as consumers in the rest of their board area. We have the EEC to thank for that, not any provision in existing legislation or in the Bill.
      Hon. Members should think of what the companies can do now. The company supplying north Wales could decide to charge Anglesey at a higher rate than the rest of its consumers. North Yorkshire consumers could be charged at a higher rate than the rest of the Yorkshire consumers. The company in the north-east could decide to charge Northumberland at a higher rate than Tyneside. The appropriate board could charge rural Devon at a higher rate than the city of Plymouth. Such practices could be tempting if companies want to load higher charges on rural consumers who have fewer alternatives. Those consumers will not have access to gas as an alternative fuel for cooking, for example, and therefore will not be able to offset any higher costs by turning to alternative fuel.
      These are grave prospects for abuse of a monopoly at the expense of rural consumers, in the absence of any protection provision. They were not seriously considered by the Government when the legislation was framed. That is why we sought in Committee to build in a right or guarantee that there should be a common tariff and that there should be no discrimination against any geographical area. The Government failed to accept that. We said that there should at least be someone in the controlling mechanism—a deputy director, for example—with a specific responsibility to prevent boards discriminating against their customers on the ground that they live in a rural area. I fear that that will happen unless some such provision is incorporated in the Bill. That is why we will continue to press in the House and through our friends in another place that rural areas should be much better safeguarded than they are at present.
      Mr. Peter Hardy: (Wentworth) Unfortunately and sadly, I must make an extremely critical speech about Her Majesty's Government's record in energy conservation and the environment. Last night, the Secretary of State said that the Government's approach was one of diversity to maintain security of supply. If the Government were keen to enhance the security of supply, they would not

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      have such an appalling record in energy efficiency and energy conservation. When I made that point last night, the Minister looked shocked. He should not be shocked. He should be aware that Britain's record is deplorably below those of other advanced European industrial countries. That is sad. We would not have needed a nuclear ring fence. We would not have had nuclear power stations if the Government had wanted to avoid the massive capital costs of such installations. It would have been cheaper to save that energy through proper energy efficiency.
      I am sure that the Minister has seen the claim by conservation bodies that we could halve the present use of electricity by using new kinds of light bulbs, save three quarters of the amount of electricity consumed by freezers and refrigerators if modern technology were applied, and save two thirds of the electricity consumed by washing machines, not by having dirtier clothes, but by having modern, technologically advanced energy-saving electric washers. We could certainly reduce the energy required to warm our homes by at least 20 per cent. if we reached the standards which are the average in western Europe, rather than lagging so far behind. We have been in that position for a long time and the Government's response to the case for energy conservation has been to adopt the policy that, if the price is high enough, the brutal effect will be to compel people to insulate, conserve and act with energy efficiency in mind.
      A little while ago, I was advised by some of the groups that do splendid work in seeking to advance those most in need in society of the comparative position of a four-bedroomed detached house occupied by people in comfortable circumstances who invested in conservation, insulation and energy efficiency, who had the maximum possible insulation and the most efficient and effective forms of heating. They could maintain their four-bedroomed detached home at a comfortable heating level for less than the cost incurred by many hundreds of thousands of elderly people living in little, old, drafty houses and having to spend a fortune on electricity for unsuitable appliances. From an economic as well as a social standpoint, the case for a much higher priority for energy conservation should have been adopted long ago.
      I said that I would be critical of the Government and I hope that the Government will accept that their record on conservation and efficiency deserves condemnation. An even greater criticism should fall on the Government if the work of such people as my hon. Friends the Members for Pontefract and Castleford (Mr. Lofthouse) and for Barnsley, East (Mr. Patchett), in whose constituency lies the Grimethorpe research centre, is ignored and the centre is allowed to founder simply because the Government are not prepared to support it. The Government should understand that Britain's record in research and development is deteriorating and that this is one area in which international advances and economic benefit could accrue. I hope that the comments already made about Grimethorpe will lead to a more favourable decision, especially if the Minister takes note of the work of the Select Committee on Energy.
      I may be more critical of the Government than ever in regard to the environment. The Minister heard me say in Committee—and it is worth repeating—that the words of
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      schedule 9 in regard to the "preservation of amenity" sound attractive. They were attractive, forward-looking words of high quality prose and literary merit in 1957.
      The Secretary of State for Energy (Mr. Cecil Parkinson): I am not used to hearing praise from the hon. Gentleman.
      Mr. Hardy: I am delighted that the Secretary of State is taking credit for the words of 1957. Unfortunately, whereas those words were commendable in 1957, the record of Governments in the 32 years that have elapsed since suggest that we need a rather different approach. A mere reliance on words that have already been frequently ignored and which receive a deteriorating priority is not acceptable. The Government have included the words in a series of pieces of legislation far too frequently, but having used the words, far too frequently no relevant action has followed. I am reminded of the Government's approach in a series of ways. As the Secretary of State knows, I could continue at length in giving illustrations, but I shall illustrate my point by the examples of one current event and of another that took place a little while ago.
      On 16 January 1989, as the Secretary of State knows —I am sorry if some of my hon. Friends have heard this before, but I do not apologise if Conservative Members have heard it before—at the centenary of the Royal Society for the Protection of Birds, the Prime Minister, dressed in green, made a splendid speech. In terms of literary quality, her words were as good as those in schedule 9. The Prime Minister advised us to protect our natural heritage and she expressed her disapproval of the fact that 120,000 miles of hedgerow had been destroyed in the past four decades. I was delighted to hear her speech. That afternoon, I presented the Hedgerows Bill and I thought that the Prime Minister's words would allow my Bill to succeed, but it failed because the Government blocked it. I wrote to the Prime Minister because she was supposed to have been converted to the cause of greenery and the environment. I shall not bore the House by reading out her letter, but I was somewhat annoyed when I read that she believed that other matters should be considered as well as conservation.
      5.45 pm
      The second incident is, perhaps more venal. My hon. Friend the Member for South Shields (Dr. Clark) was drawn in a high place in the ballot for private Members' Bills. He tabled a Bill in 1985 of considerable environmental relevance—the Wildlife and Countryside (Amendment) Bill, which had six particular points in it. The Government disfigured the Bill by leaving only one of the points in substance when the Bill went to the other place. I mention that because when the Bill was considered in the other place, the five points that the House had removed from the Bill as a result of Government pressure were restored. The Government were then left in a bit of a dilemma. They had to decide what to do about the five Lords amendments. Grudgingly, belatedly and at the last minute, following the most concentrated telephone lobbying the House of Commons has ever experienced, the Government decided the following day that they would not oppose those Lords amendments. What was nasty was that later that day, the appropriate Department issued a press statement claiming the credit for my hon. Friend's Bill and describing it as a Government measure.

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      No doubt the Government advance that Bill as evidence of the fact that from time to time they have paid attention to the words included in schedule 9, but those words, lifted from the Electricity Act 1957, have been far too frequently ignored. They have been too widely disregarded by this Administration during the past decade for us to have any trust or faith that the words in schedule 9 will receive a response. That is why environmental organisations throughout the country are deeply worried about the Bill. They believe that when the Government finally complete the privatisation of the industry —and the transactions for the water industry give us no cause for relief of that anxiety—perhaps substantially into the ownership of those who have no interest in these islands, the environmental consequences may be tragic. That is why I hope that the amendments will be accepted. If they are not accepted here, I hope that they—or similar amendments—will be passed in the other place. I hope that when the Bill returns to this House, suitably amended, the House will ensure that it provides better arrangements and safeguards to assist the causes of energy conservation and the environment.
      Mr. Alan W. Williams: Since last September, we have become familiar with the Prime Minister's conversion to green, environmental issues and to beliefs that we did not realise she had ever had over the previous 10 years. The privatisation of the electricity industry was an opportunity for her to put some of those sentiments into legislation, because in dealing with the electricity industry, we are dealing with Britain's largest polluter. In terms of air pollution, it has no rival. It is responsible for about half our total air pollution, 73 per cent. of sulphur dioxide emissions, 35 per cent. of nitrogen oxide emissions and 40 per cent. of carbon dioxide emissions.
      Surely the Bill could have given the Government the opportunity to legislate to improve their environmental record? However, as my hon. Friend the Member for Sedgefield (Mr. Blair) said, there is nothing in the Bill on environmental protection, conservation, energy efficiency or cutting pollution. There is some access to information via leaflets that may be distributed, but we already have that because information on insulation comes with our electricity bills. If ever there was an opportunity to try to do something about conservation and pollution, the Bill was it.
      In the past 20 years, conservation has had far too little attention paid to it by both this Government and their predecessors. However, conservation has a critical role in energy policy. It can contribute as much as oil, gas or coal and certainly far more than nuclear power to our energy needs. In that sense, it is properly described as potentially the "fifth fuel".
      Over the next 20 or 30 years planning is vital because if we adopt strict policies on energy conservation it will be possible to double our living standards without any growth in energy demand.
      Despite the Government's green claims, their record speaks otherwise. In the past few years the budget of the Energy Efficiency Office has been cut from £25 million to £12 million, giving the lie to the Prime Minister's green claims. In new clause 7 on energy conservation, we are asking the regulator to take measures to instruct the
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      distribution companies to improve energy efficiency. We should like an annual energy audit and annual records kept to show how efficiency is being improved.
      In Committee, we debated at length the idea of least-cost planning, which has been adopted in the United States. Instead of building more and more new power stations, it would be better to invest that money in home and factory insulation, in combined heat and power or simply in demand management to iron out the peaks in the demand for electricity in the evening and during the day. If we did so, we would not need such capacity to meet the demand.
      Least-cost planning is very much in the consumers' interest. It is designed for consumers because ultimately it means that the electricity produced is cheaper. It aims for the lowest cost of electricity. Rather than consumers paying for the four PWRs or for new power stations, they would be paying for insulation, which is much more efficient. Such measures could be adopted in this country and new clause 7 would help the regulator to acquire those powers.
      My hon. Friend the Member for Wentworth (Mr. Hardy) talked about energy efficiency and appliances, such as washing machines, refrigerators and television sets. He also mentioned light bulbs. It is possible to produce such things with between two and four times their present efficiency. In that context, one danger of the Bill is that the research work carried out by the CEGB may be cut. Therefore, in new clause 7 we are asking that the regulator be given powers so that conservation and energy efficiency become part of the role of the privatised industry.
      My hon. Friend the Member for Wentworth also said that we have a sort of conservation policy at the moment. It is conservation by price. It means that in the winter pensioners, who often live in draughty houses, cannot afford to switch on two bars of their electric fires. That social problem applies especially to the poor, the elderly and families. It is a cruel kind of conservation.
      Since 1973 energy efficiency has improved in the advanced countries by 20 per cent. I hasten to add that Britain is pretty well at the bottom of that league. Far more is possible, and our new clause asks that there should be action.
      New clause 14 refers to pollution and environmental protection. Opposition Members acknowledge that coal is dirty. We realise that sulphur and nitrogen oxides and carbon dioxide are all by-products of coal combustion. However, they need to be and can be tackled. Sulphur dioxide and acid rain pose a serious problem. Acid rain is killing our trees and affecting water supplies and the tributaries of rivers in upland areas. The drinking water in my constituency has a high aluminium level, often in excess of the EEC limit, simply because of the problem of acid rain.
      The Government's record on acid rain is appalling. My hon. Friend the Member for Rother Valley (Mr. Barron) was in Japan a few weeks ago and visited a power station that was built in 1974 and which had flue gas desulphurisation installed then. That was about 20 years ago but not one of our power stations has such FGD equipment. The Government did not recognise acid rain as a problem until 1986 and it was only then that they started to take some action. Under the present programme, none of our power stations will be cleaned up until 1997. We are dragging our feet. For years the Government refused to join the "30 per cent. club", and a 30 per cent. reduction

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      by 1997 is now completely out of the question. The Government have agreed to a European Community directive to cut sulphur oxide by 60 per cent. by the year 2003, but that is now impossible under the Government's present policies. Nothing in the Bill will help to achieve those targets.
      We believe that part of the regulator's role should be to monitor the amount of sulphur oxide, nitrogen oxide and carbon dioxide that is emitted year by year. The regulator should set targets for reduction in line with those of the EEC directives.
      Clean combustion technology and the work of Grimethorpe was commented on earlier. It is appalling that the Government are placing such important long-term research in jeopardy. Grimethorpe is the power station of the 1990s. It is the way to produce electricity in the next century, yet under this Government that programme is threatened. I hope that we shall receive some assurance today from the Secretary of State that the money that is needed will be found. It is a small amount —£11 million—which is pathetic when compared to the money that has been given to the fast breeder reactor programmes and to nuclear power in general over the years.
      There can be no doubt about the greenhouse effect being the most intractable environmental problem. I read in the New Scientist last week that the amount of carbon dioxide in the atmosphere has now passed the 350 parts per million barrier. In was 290 ppm, but it is now 350 ppm. It has increased by 20 per cent. during the past century and it is increasing at the rate of an extra 1 per cent. per year. That could lead to global warming and to the climatic effects that we have all heard about. Exactly what may be implied there is not very clear, but it would be prudent to take action now on the greenhouse effect.
      At last year's United Nations conference in Toronto on the global climate, Britain agreed with other countries to cut carbon dioxide emissions by 20 per cent. over the next 15 years, but we saw in Committee that the Central Electricity Generating Board projects an increase of generation of 25 per cent. over the same period and of 60 per cent. over the next 50 years. So our assurances and our promises to that conference were not worth the paper that they were written on.
      The only way to cut those CO2 emissions is by conservation. Nuclear power stations are almost irrelevant. Conservation is the answer, and that is where the two Opposition new clauses tie together.
      I end by quoting something said by my hon. Friend the Member for Sedgefield—it deserves to be a "quote of the week". In a recent article he said that in the 1970s conservation was about saving money; now it is about saving the environment.
      6 pm
      Dr. Kim Howells: It has been a joy to watch the greening of the Government over the past 12 months. I remember that in July 1984 the Government's delegate to an international acid rain conference in Munich, the right hon. Member for Bristol, West (Mr. Waldegrave), did not even bother to turn up to present the United Kingdom's case and had one of his civil servants read out Britain's excuse for not joining the "30 per cent.
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      club", despite the fact that the Government were well aware of the outrage felt at the time by Scandinavian countries at having to suffer the noxious and destructive effects of United Kingdom sulphur emissions. At the time, Britain's most notorious trained scientist, the Prime Minister, had decided that the evidence on acid rain was inconclusive and had forbidden right hon. and hon. Conservative Members to support any shade of green—although rumours abounded that a few were secretly wearing green underpants as a gesture of concern for the environment. They are now retrofitting green garments at a far faster rate than they are retrofitting flue gas desulphurisation equipment in the nation's power stations.
      Nevertheless, I welcome the plan to retrofit 6,000 MW of coal-fired capacity over the next eight years. I also welcome the plan to install low nitrous oxide burners at the CEGB's 12 largest power stations over the same period. But I do not welcome the Government's continuing refusal to sign the Helsinki protocol to undertake the reduction of sulphur dioxide emissions or their trans-boundary fluxes by 30 per cent. from 1980 levels by 1993.
      The Government's new air quality standards for nitrous oxides and sulphur dioxides comply with EC directives and are most welcome but, as my hon. Friend the Member for Carmarthen (Mr. Williams) has already said, the directed levels are unlikely to be reached by the dates set.
      Retrofitting is one answer, but it has limited application and it is very expensive. What is needed is a general transformation in our attitudes towards the fuelling and production of electricity in this country, one which posits an altogether more imaginative and environmentally sensitive approach than is encapsulated in the present Bill. I am not trying to defend the status quo. The attitudes towards energy production of virtually all the interested parties over the past decade have been partisan, unimaginative and generally governed by a notion that energy conservation and efficiency, and environmentalism as a whole, meant job losses, additional expense and consequent political unpopularity.
      The Bill strengthens rather than weakens that notion, and I commend new clause 14 as a measure which may encourage a different attitude towards the fuelling and production of electricity. The development and application of the kinds of energy technology already mentioned by my right hon. and hon. Friends might be encouraged—for example, the various renewable sources of energy, the greater efficiency of existing technologies, and moves towards the proper uses of materials with which we can make better use of our energy.
      If we adopt this new attitude we shall see that environmentalism and efficiency will mean more jobs, not fewer. They may be different jobs, and that is a problem that the trade union movement must take on board, no question about it. If we support those new clauses we shall be doing a very constructive thing in that we shall not merely force the Government to act upon some of their protestations about being a green party, a party that cares about the environment; we shall encourage all levels of society to adopt a much more imaginative and realistic approach to the great problems of fuel production, electricity generation and the protection of the environment.
      Mr. Malcolm Bruce: I have tabled an amendment calling for a deputy director of conservation.

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      It is my view and that of my colleagues that that issue ought to be at the heart of the debate about the Bill. It is very unfortunate that we have been diverted into a debate about nuclear power which, although interesting, has allowed the Government to avoid confronting the fundamental issue of how we can use energy much more efficiently.
      Our record of energy efficiency is extremely poor compared with that of our competitors. It is difficult to understand why, given the number of times that Ministers have come to the Dispatch Box and claimed that they are in favour of conservation, we have fallen so far short of the objectives declared by the Government to be both achievable and desirable and to which they are committed. It is something that we really ought to take on board.
      For example, in 1986 the Prime Minister opened the Milton Keynes energy week. She said that Britain's total fuel bill was £35 billion, which could be reduced by £7 billion. The Secretary of State for Energy tells us that the energy bill is £39 billion and could be reduced by £8 billion. In other words, nothing has changed except the figures, which have, in both cases, gone up. We have failed to achieve any significant move towards the reduction in energy use that the Government say they want to achieve and which they believe can be achieved.
      I suspect that the reason is that the Government believe that it is not their responsibility, that the market will solve the problem and that it is up to everyone except the Government to take appropriate action. Given that this is one area where the Government and my colleagues and I share common ground, the Bill should have been seen as an opportunity. The common ground that we share is a complete dissatisfaction with the way in which the industry has been run over the past 10 or 15 years. It has been centralised and inefficient. It has over-invested. It has been generation-biased in the extreme; its response to forecasts of rising demand has been the desire to build more power stations instead of asking how it can ensure that the demand can be met with the existing capacity, because the technology exists to do that.
      The irony—I may be giving the Minister the lead to his reply—is that it is cost-effective to invest less money to achieve greater profitability. It is true—I have some common ground with the Government on this—that the industry in the public sector has manifestly failed to grasp that issue, but I part company with the Government in that I believe that they can and should do a great deal more, and that the Director General of Electricity Supply should have been—and would be, if our amendments were carried—charged with a specific responsibility to promote energy conservation.
      Significant benefits will flow from energy conservation. The first benefit is environmental. According to the Rocky Mountain Institute, investment in energy efficiency and conservation is seven times more effective than nuclear power in abating global warming. I do not believe that the Government will get very much mileage from suggesting that their nuclear programme is a contribution to dealing with the greenhouse effect. It is irrelevant. The programme, as promoted in the current state of the electricity supply industry and as endorsed by the Government as their future direction, will, in fact, lead to a 20 per cent. increase in carbon dioxide emissions from the United Kingdom by the end of the century.
      It has already been stated that the original reasons for introducing energy conservation were financial and were
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      connected with the oil crisis of the 1970s. At the risk of boring the House, I would point out that I wrote a pamphlet in 1979 in which I stated the environmental benefits and urged action to be taken. I regret to say that nothing has changed. My pamphlet is just as relevant today. The problems are even more severe, and no action has been taken to confront the issue.
      Mr. Rhodri Morgan: It has been recycled.
      Mr. Bruce: It has not even been recycled. It has been shelved.
      The second benefit from energy conservation is economic. It would lead to a cheaper unit cost of energy. That would be beneficial to industry and to our ability to compete in world markets. I hope that the Government would regard that as desirable, because at present we are not competing very successfully as a trading nation. That is possibly because we use energy substantially more inefficiently than our major competitors, Japan and West Germany. The Japanese use half as much energy per capita as we do and the primary energy consumption ratio to GDP in West Germany is half that of the United Kingdom. Therefore, effectively, it is twice as good as we are at using energy efficiently, which possibly explains why it is twice as good as we are at securing shares in world markets.
      That benefit also has a social relevance as it helps to deal with the problem of fuel poverty. I worked for a number of years for a Norwegian-based oil and gas industry publishing company, and travelled to Norway fairly regularly during that time. I found it extraordinary that the issues of fuel poverty and condensation which are so alive in this country are almost unknown in Scandinavia. That is, first, because the Scandinavians have learnt that they live in a climate that requires a particular standard of building. They build to meet the climatic conditions and, therefore, they have houses that are fundamentally efficient and warm and do not suffer from condensation. Secondly, they ensure that their energy is relatively competitive. They have, of course, for a long time had the advantage of hydro-power, which has obviously been an additional helpful factor.
      Perhaps the even more extraordinary situation is that investment in energy conservation would actually make money. The science policy research unit has estimated that every pound spent on conservation—this is not an airy-fairy proposition, but is based on spending money on existing conservation methods, which are specific and known—would save 38 kW, would cut carbon dioxide discharges by 42g and would save customers £1·90 each. Will the Secretary of State tell us what other investment in the United Kingdom could give a 90 per cent. rate of return? He must address himself to why we do not manage to achieve the target savings for which he has said that we should be aiming.
      6.15 pm
      The Association for the Conservation of Energy has recently carried out an analysis of some fairly simple measures that would produce significant benefits. It has assessed that simply by ensuring that lights, old fridges and freezers are replaced with the state of the art, best available technology, demand for electricity would be cut by 12 per cent. That means that it would cut the demand for electricity by the equivalent of four and a half Hinkley Cs.

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      That reinforces the point that I have often made—that, if the electricity supply industry had any imagination, it would recognise that instead of spending money on wasteful public inquiries and the building of unnecessary power stations, it should spend that money on conservation, and thereby improve the profitability of the industry as well as reducing the cost to its consumers. That should be at the heart of the post-privatisation regulatory system.
      In anticipation of the Minister's response—although I hope that I am wrong—I must say that it is not good enough to say that the figures I have quoted are so dramatic that once the industry is privatised the problem will solve itself. All the evidence from other countries shows that there must be a specific Government momentum behind the problem in order to solve it.
      I know that the Minister is not enthusiastic about all its aspects, but the regime that has operated for a number of years in the state of California for promoting conservation and alternative energy required legislation, funding and tax benefits to ensure that it was stimulated. Once there was that framework, people were prepared to make investments because they were required to do so. They were astonished to find that under the regulation system that this Government so often denounce they were able to make greater profits than they would if they had pursued their desires in a free market, which was their initial wish.
      The other sources of benefit are closer to home. The Select Committee on the Environment, when considering especially the problems of air pollution, stated:
      "However, if the world wants light, heat and energy in constant and increasing supply, the choice might resolve itself between a source which is deliberately and constantly poisoning the atmosphere and one whose misadventure would have catastrophic global results"—
      that is obviously between fossil fuels and nuclear power—
      "but an alternative would be energy conservation and reduction in demand".
      Energy conservation and improved energy efficiency is the absolute key to dealing substantially and significantly with the problems facing the energy industry of high costs and great environmental concern.
      The proposals put forward by a variety of organisations have all reinforced that message. What should concern the Government now is how they will retain credibility as a Government who are putting forward the privatisation of electricity as an environmentally and economically beneficial measure, when all the indications are that without substantial action by the director general prices will rise, our competitive relationship with other countries will continue to deteriorate and the output of carbon dioxide and the aggravation of the greenhouse effect will continue to escalate between now and the end of the century.
      I am led to believe that the Prime Minister is specifically concerned about the greenhouse effect and that that is her major environmental concern. Unlike many sceptics and cynics I welcome her conversion and believe it to be sincere. I believe that she has come to terms with the problems. [HON. MEMBERS: "No."] Oh yes. But I do not believe that she has appreciated that a commitment to deal with the greenhouse effect and the associated environmental problems is, unfortunately, incompatible with Thatcherism. When the Prime Minister discovers her dilemma I suspect that she may suffer a severe attack of
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      schizophrenia. The one great thing about schizophrenia is that it reduces the patient to immobility and a little immobility on the part of the Prime Minister would, I suspect, be attractive to the majority of the country.
      The market will not succeed in dealing with the environmental and economic problems of high energy costs and inefficiency energy use—that must be the duty of the regulator. The Director General of Electricity Supply —the regulator—may be correct in believing that the effective operation of the market may help to achieve a solution to the problems. He may consider that more information should be made available to people to enable them to make rational decisions which will be of economic benefit to them. If that is so, I wonder how the Government justify the reductions, and the forecasts of further reductions, in the budget of the Energy Efficiency Office. Its budget is small in any case and I believe that its role must be encouraged and intensified if we are to ensure that rational decisions are made by individuals and by companies in the private sector to take advantage of the economic benefits of investment in energy conservation. Surely the Government should do their best to make that happen.
      It is not good enough to believe that market factors will determine the solutions to the problems. We need direct regulations. The hon. Member for Carmarthen (Mr. Williams) has already mentioned "least-cost" planning. The Minister will know that that terminology has been imported from the United States where it is used as part of the criteria to assess operators' plans. When an application is made to build a new power station, the question asked is whether that represents the least-cost method of meeting the required capacity that the operator wishes to provide. Almost inevitably the answer is no. Using the same or a smaller amount of money to invest in energy conservation measures always proves to be more cost effective within existing technology. In other words, every pound or dollar invested in energy conservation will yield substantially more saved units of electricity than that same pound spent on investing on new generating capacity. It is a radical concept, but it works. The Minister should tell the House why he has not adopted that method here and why he does not believe that it is a good way of ensuring that conservation becomes central to our thinking.
      Earlier, I noted that the Secretary of State nodded in agreement when I expressed my dissatisfaction with the way in which CEGB has worked as a result of its centralist mechanisms. However, the right hon. Gentleman has not said—even if he believes it to be true—how the proposed privatisation will substantially change the bias towards generation. The newly privatised industry will still say that demand is rising and that, therefore, new and bigger power stations should be built. I do not believe that we need any more capacity; what we need is more variety. We need greater flexibility and smaller-scale generation. That opens up all the market opportunities about which the Secretary of State and the Minister are so enthusiastic. If we followed that course there would be a great deal more enthusiasm for a privatised electricity supply industry.
      Given that privatisation will take place and that the Director General of Electricity Supply will be appointed, I hope that he will have the power to pursue developments that will lead to greater flexibility. The new clause would help to achieve that aim. Without the new clause and the associated amendments I am not convinced that the Bill will ensure that the critical issues, which should be at the

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      heart of the legislation, are properly addressed. Even at this late stage I urge the Minister to consider the need to amend the Bill to put conservation at the heart of it. If he does that he will put on the statute book a Bill which, however controversial it is in other ways, will advance the electricity efficiency of this country by a marked degree and which will benefit every individual and company throughout the land.
      Mr. Geoffrey Lofthouse: The House will be aware that in June 1988 the Select Committee on Energy produced a report arising from the White Paper and the subsequent Bill to privatise the electricity supply industry. I appreciate that there is not much evidence to suggest that the Government take a great deal of notice of the Select Committee reports, but I believe that we should be able to rely on the Government's observations on that report. If that is so, the Secretary of State should have accepted the new clause today.
      No doubt the Secretary of State will recollect what the Government said about energy efficiency in paragraph 39 of the third special report on the report from the Select Committee:
      "The efficiency with which the electricity industry uses fuel will significantly affect its costs, and hence its ability to compete successfully. The increase in competition which is central to the Government's proposals will provide a major incentive to the electricity companies to use fuel efficiently. The Government believes that pressure to find ways of increasing fuel efficiency to obtain competitive advantage will be an effective pressure for improving efficiency of fuel use in the industry. There will also be a general duty on the Secretaries of State and the Director to promote efficiency on the part of licence holders."
      If that does not mean what new clauses 7 and 14 mean, I do not know what does. If the Government were genuine in their response to the Select Committee, what are we doing here today? The new clauses should be unnecessary as their provisions should already be a part of the Government's programme.
      We have heard much about the greenhouse effect. At present the Select Committee on Energy is taking evidence about that. I wish that its report was available now, as it would provide a great deal of ammunition for this debate. The House will agree, however, that, unless such information is leaked, we must await the publication of that report.
      Research and development have an important part to play in energy efficiency and the greenhouse effect. In paragraph 54 of the third special report, the Government, in response to the original report from the Select Committee, state:
      "The Government accepts that its role in assessing long term energy R & D is an important issue. The nature of the programme overall will be determined by the inter-action of the industry's R & D programme with the Government's existing policy on R & D as set out in the 'Annual Review of Government Funded Research and Development'. The electricity industry has been asked to submit proposals for the organisation and implementation of research after privatisation and expects to receive these in the near future. When these have been reviewed it will be in a position to consider the appropriate role for the Government."
      The Secretary of State may be in a position to tell us whether they have received that information. If so, what are the Government's views on it and what action will they take?
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      6.30 pm
      We have recently heard much about the intentions of the Government and the Prime Minister to control the greenhouse effect. I wonder how serious those intentions are. The Secretary of State did not respond last evening to a question that I put to him about the Grimethorpe complex. He has had time to consider the question. The evidence given by Mr. Edwards of British Coal was that the Grimethorpe complex was under threat because the Government were not willing to provide £11 million for it to continue. If that is the case, how serious are the Government about efficiency and about research and development to protect the environment? Mr. Edwards told the Select Committee that if that scheme failed, very little other research and development would take place on the technology for sulphurised beds. [Interruption.] The Secretary of State is talking to his colleague. I hope that he is listening to what I am saying because it is very important.
      The Government's case is that nuclear energy is much cleaner. They have also said time and again that they believe that coal has a great part to play in the future of British energy. If they are serious about that, why will they not put money into research and development? If they are not serious about it, they should say so. If they do not want to put money into R and D, that may be why they are not keen to support the new clauses.
      I hope that the Secretary of State will attempt to convince people that the Government are serious about protecting the environment and about coal having a part to play in the future of British energy. Will the Secretary of State give us an assurance that the Grimethorpe complex will be funded and that research will continue there?
      Mr. Malcolm Moss: Energy efficiency makes economic and environmental sense. I do not think that proposition is opposed by Members on either side of the House. But all energy sources have an environmental impact. Burning fossil fuels contributes not only to acid rain but to the greenhouse effect. Nuclear energy produces radioactive waste which needs to be disposed of safely. The solution is not to transfer to renewables because to produce energy from wind farms we would need thousands of acres, and tidal barrages have detrimental environmental effects of their own.
      The question is: how best can we achieve energy savings? Should we do it via the amendments under discussion, with their emphasis on a more direct and hands-on procedure, with more direction and regulation by the director general? It is ironic that at a time when the Government are seeking to remove themselves from day-to-day involvement in the running of the electricity supply industry we should be discussing amendments which would give future Governments the potential to get their hands back on the industry. Or should we achieve energy savings through the operation of a free market within the framework set out in the Bill for the privatisation of the electricity supply industry?
      Whichever way we go, there are things that the Government can and should do. They have some influence, although sometimes one doubts it, with local authorities. I understand that the Audit Commission is to re-examine how local authorities in England and Wales manage energy in their own properties. The new initiative

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      follows an earlier study completed in 1985 which established that at least £130 million could be knocked off fuel bills. However, an initial survey of progress undertaken last year suggested that only a tiny proportion of the anticipated savings is being achieved. The survey found that only about 13 per cent. of the investment opportunities have yet been taken up on the energy management side.
      The Government should also consider their own buildings. Of all public sector buildings, 50 per cent. or more are occupied by Government Departments. When the Back-Bench committee on energy invited a consultant from an energy management firm to talk to it, he pointed out that whenever his firm was called in on a consultancy basis to examine Government buildings and spoke to the Property Services Agency, it got short shrift and got absolutely nowhere. The Government have a direct responsibility to make sure that the doors are open to proper consultancy so that savings may be achieved.
      What is happening in industry? To hear the CBI talk, one would think that putting up prices this year would have a serious effect on the performance of industry. A survey last year, I think, by March Consultants in the north-west region showed that savings of 30 per cent. or more could be achieved by business and commerce. Yet very little was done. Even when showed the possibilities of energy saving, efficiency and conservation, few firms bothered to invest the money necessary or to employ within their structure people who could deal directly with the problem.
      Where will energy efficiency fit within the newly privatised electricity supply industry? Surprisingly, some interesting information has come to light recently. Only the other week Mr. Malpas, the chairman-designate of PowerGen, spoke to a meeting of the Fellowship of Engineers. He said that most national energy policies focused too much on how energy was generated and far too little on the concern for its use. When challenged as to how that view fitted in with making profits in a privatised electricity supply sector, he said that PowerGen was considering taking a leaf out of the books of many American power companies and positively assisting the introduction of incentive schemes to promote the installation of energy-saving measures.
      If we turn to the American position, evidence was given at the Hinkley inquiry by a representative of an American company, the Bonneville Power Administration, which supplies electricity to five states in north-west America. The company indicated that it was spending some $700 million to help its consumers to reduce energy wastage. It said that within five years cumulative savings had already reached 220 MW, which is equivalent to a small coal-fired station, and predicted that by 2010 the programme would have saved 2,750 MW of electricity. When challenged, its spokesman said:
      "We are in business. You don't spend $700 million on a passionate enthusiasm. You do it as a good business investment."
      PowerGen is to be a privatised company under the Bill. The Bonneville Power Administration is not a public company; it is not state-owned but is a private company. These two examples indicate how in future the privatized
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      electricity supply industry in this country could make a positive contribution to energy conservation and efficiency.
      Mr. Malcolm Bruce: Is it not a fact that the Bonneville Power Administration was set up originally as a state corporation? Were it not for the requirements of the Public Utility Commissioners, who refused permission for the building of power stations, it would not have embarked on that course. What the hon. Gentleman says is right; having embarked on it, it found that it was profitable.
      Mr. Moss: I am grateful to the hon. Gentleman for making those points. Whatever the incentive for looking into energy efficiency, the proof of the pudding is that it has been achieved and it is possible for that to happen here as well.
      The Government's budget for the Energy Efficiency Office has been challenged by Opposition Members. It is not just the size of the budget that is important; the effectiveness of the spending is paramount. We should consider energy efficiency as our fifth fuel, which has significant environmental advantages. The new structure of the electricity supply industry will encourage that in three main ways.
      First, one of the director general's main regulatory responsibilities is to promote energy efficiency. Secondly, the area boards, in competition with British Gas, will have a direct interest in keeping down their customers' bills. They will also, in competition with British Gas, encourage people to switch to electricity which, for heating, will be far more cost-effective if the householder is, at the same time, encouraged to take energy efficiency measures. In discussions which I have had with them, area board chairmen see this as a positive contribution which will also help overall market penetration. Thirdly, competition in electricity generation will ensure efficiency in the use of fuels.
      These amendments are irrelevant. Adequate energy efficiency measures are already well taken care of in the Bill.
      Mr. Elliot Morley: Unlike the hon. Member for Gordon (Mr. Bruce), I am not convinced of the Prime Minister's commitment to green issues. For the Prime Minister, green issues seem to go along with the green outfits that she takes out of her wardrobe and wears on a number of public occasions. I have been to meetings where the Prime Minister has made a speech that is fine in terms of conservation and ecological issues. Unfortunately, when I come to the House, I find, along with many other colleagues, that some of the issues which she so warmly supported at public meetings are voted down by the Government or not given the Government support that they should receive. That directly contradicts the policies that she sets outside the House.
      The Bill is one example of that. The conservatioin of energy must be crucial to any country, not only in reducing the greenhouse effect—a major need which has been identified by the Prime Minister—but in cutting costs, both for domestic and industrial users.
      We all know of the damage caused to the environment by acid rain and the greenhouse effect, but, in a modern technological society, we also accept that we must have power. The CEGB forecasts that there may be a 25 per cent. increase in demand in energy in the coming years.

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      Rather than simply ploughing ahead to meet that demand with more power stations—whether nuclear or coal—we should try to absorb that demand by greater energy efficiency.
      In contrast to the argument put forward by some Government Members, nuclear power is not the answer to meet the increase in demand. It has advantages, but it also creates a different sort of pollution—in particlar, radioactivity. High environmental costs are also involved in dismantling the nuclear power stations and handling the waste that they produce. Therefore, nuclear power stations will not cut down pollution.
      The union that I represent has members in both heavy industry, including steel, and rural areas. The steel industry has made great strides towards reducing its energy consumption, which has helped to return steel to profitability. However, not all companies have taken the same progressive line and invested in energy use. Of course, it could be argued that it is in the steel industry's interests because it makes savings by reduced power bills. Nevertheless, many industries which are not under the same kind of pressure to save money could pass on the savings in energy costs to their customers. The new clause would give the director general a role in encouraging the necessary energy conservation.
      Another concern of mine, which has been echoed in the Bill, is the differential rates in rural areas. If new power companies are allowed to charge differential rates rather than concentrate on efficiency and energy saving, they will take that option. Therefore, housing estates built in rural areas to meet housing demand could face extra charges and industries set up in rural areas to provide jobs could also face a penalty.
      6.45 pm
      The Secretary of State will be aware that environmental organisations strongly support this batch of amendments. They call not only for energy efficiency and conservation programmes—which, if all the various conservation schemes were implemented, could cut the peak demand by 70 per cent. —but for target-led reductions in the pollutants of the electricity generating industry, particularly carbon dioxide and sulphurs.
      Apart from the obvious industry energy conservation, the director could encourage energy conservation in domestic use—including the installation of low energy light bulbs. In my house we have installed such bulbs in areas where they are used a great deal, such as the porch and downstairs. They are bulky, but they can be hidden by choosing the right shade and they provide considerable cost savings because they last longer than average light bulbs. However, many people are unaware of the benefits of these light bulbs. If more houses switched to them it would considerably reduce the power generated. At present, one fifth of all power is used for domestic lighting.
      Energy conservation could also be encouraged in fridges, washing machines and televisions, the modern variations of which use less energy than their older counterparts. However, the benefits of those machines are not driven home to the consumer.
      Home insulation is another important method of energy conservation. Danish standards are far superior to ours. I understand from a conservation organisation that, if we adopted Danish methods, we could reduce the CO2 output by 510,000 tonnes every year—a significant reduction and a benefit to house quality standards.
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      There is no reason why the director should not have a far more interventionist role in advising house builders on the quality and insulation standards that they should use. There would be long-term benefits for us all—not least the people who buy the homes.
      Research has been covered by other speakers so I shall not spend too long on it. However, as coal is our major power source—I believe that it will remain so for the foreseeable future, until there is more research into alternatives—I am disappointed that the Government have not shown greater commitment to the fluidised bed method of burning coal which is more efficient and cuts down on pollution. Another option involves biomass generators, which could be fuelled on fast-growing crops of willow, and could form part of an overall policy to reduce cereal crops and use EC funds to encourage farmers to grow biomass to fuel power stations.
      More research and development is needed in district heat and power stations—perhaps domestic refuse could be burnt, which would not only generate power but would generate heat to towns and cities while reducing waste. I see nothing in the Bill to give the director and the power companies the sort of duty that the new clause proposes. The Government should welcome it in the spirit in which is is moved.
      More consideration should be given to the design and environmental impact of power stations. It is only fair to give some credit to the CEGB which, when it put forward plans for the new Burton power station—not far from my constituency—devoted a large part of its planning application to an environmental impact study, designs for using the cooling pools, landscaping and the layout of the power stations. We all need power stations but they can be ugly and a great deal more can be done to make them blend into the environment and to use the considerable areas of land that accompany them in a positive way, encouraging and conserving nature.
      The new clauses are progressive. The Government say that they are committed to a policy of environmental support; the new clauses will not only protect our environment and set targets to conserve energy conservation and reduce pollution, but could have long-term benefits for the competitiveness of our industry by encouraging it to take measures that will reduce its energy costs to the benefit of the community.
      Mr. David Tredinnick: The headline on page 2 of The Times today says:
      "20,000 people a month joining green groups"
      The crucial proposal in new clause 7 is the requirement to impose a duty on the Director General of Electricity Supply; in new clause 12 to require the appointment of a deputy director general of electricity supply for energy conservation; and in new clause 13, to require a deputy director general of electricity supply for rural areas.
      Hon. Members have three questions to consider before reaching a decision on the new clauses. The first is whether the existing provisions are adequate; secondly, whether adequate provision has been made, or is likely to be made in other legislation; and, thirdly, whether the Government's record makes the new clauses necessary. I am talking not just about the Government's recent record, but about their earlier record. I propose to address each of those questions in reverse order.
      I consulted the Library about the measures that Conservative Governments have introduced in the House

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      since the 1950s. In that time they have introduced at least 10 Bills affecting the environment. For the benefit of the House I shall list them quickly. There is the Rural Water Supplies and Sewerage Act 1955, which was amended in 1961 and 1973; the Clean Air Act 1956; the Litter Act 1958; the Noise Abatement Act 1960; the Rivers (Prevention of Pollution) Act 1961; the Clean Rivers (Estuaries and Tidal Waters) Act 1960; the Prevention of Oil Pollution Act 1971; the Radioactive Substances Act 1960; the Water Act 1973 and the Control of Pollution Act 1974, which I must admit was started by a Conservative Administration but was finally enacted under a Labour Administration. That does not sound like the record of a Government who have been negligent in environmental matters since the day that I was born in 1950. It is a rather good record.
      Mr. Keith Mans: Does my hon. Friend agree that, apart from the Control of Pollution Act 1974, which began its life under a Conservative Government, no other Acts of environmental significance were enacted by the Labour Government between 1974 and 1979?
      Mr. Tredinnick: My wise hon. Friend is correct. The Opposition must take that record into consideration. How quiet they are now.
      There are more recent measures to consider. There is the Wildlife and Countryside Act 1981. That is a great favourite of the hon. Member for Wentworth (Mr. Hardy), who I see has just come back into the Chamber. Her Majesty's inspectorate of pollution was set up by the Conservative Government in 1987 to improve the mechanism for the control of all types of pollution.
      One of the great destroyers of natural beauty, flora, fauna, and geological or physiological features is acid rain.
      Mr. Morley: At a recent meeting I and my hon. Friend the Member for Wentworth (Mr. Hardy) heard the Prime Minister give a good speech on the need to protect hedgerows. My hon. Friend is the sponsor of a Bill which, for the first time, gives legal protection to hedgerows. Despite the Prime Minister's public commitment to that, the Government blocked that Bill.
      Mr. Deputy Speaker (Sir Paul Dean): Order. This is a wide debate, but to include hedgerows is really stretching it too far.
      Mr. Tredinnick: I shall try not to get too close to hedgerows, or hedgehogs.
      There are several critical issues relating to pollution which I want to consider and see what has been done about them. The first is acid rain and the problems of sulphur dioxide and nitrous oxide. Opposition Members say that the Government have been negligent in dealing with the problem of acid rain, but in 1984 the Government set a target of 30 per cent. reduction in total SO2 emissions by the end of the 1990s. As the Opposition have said, the Government's commitment in terms of real money was £600 million. That is hardly being negligent. In 1987 a programme was announced to reduce NOX emissions by 30 per cent. by the end of 1990. Again, substantial investment in low NO2 burners is being made to ensure that that target is met. That is hardly being negligent. I shall give way to the hon. Member for Wentworth, who is trying to intervene.
      Mr. Hardy: I am grateful to the hon. Gentleman for giving way. I always try to give way to hon. Members with something to say and I would have given way to the hon. Gentleman in past debates if he had sought to intervene, but I shall not go into detail on that.
      The hon. Gentleman has referred to a number of pieces of legislation. For example, he referred to the Wildlife and Countryside Act 1981 and claimed credit for the Government for that. However, that Act was Britain's response to the Berne convention for which members of the Socialist group of the Council of Europe, in which I was involved, were responsible. It also consolidated a number of other Acts of Parliament, two of which I had contributed myself, and it embodied, as a result of considerable effort on the part of Labour Members of the Standing Committee which considered that Bill, many amendments which were strengthened by initiatives taken in the other place. I could go on at great length, but the Government had little to do with many of the Bills for which it is suggested they should take credit.
      Mr. Tredinnick: I am aware that the hon. Gentleman could go on—I would not question that—but I would question what he has just said. The inescapable fact is that it was this Government who produced the Bill and saw it enacted.
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      Secondly, there is unleaded fuel. Lead absorbed into body tissue can cause damage to the brain and other organs. It is quite remarkable and quite outstanding that this Government have taken the lead in Europe in setting targets for the introduction of lead-free petrol throughout the Community. My right hon. Friend the Chancellor of the Exchequer has again stretched the differential between the price of ordinary petrol and the price of lead-free petrol. What a wonderful thing that is. The Government have certainly engendered tremendous support in my constituency by adopting that policy. The promotion of lead-free petrol illustrates again a laudable commitment of which we must take note.
      Mr. James Wallace: Perhaps the hon. Gentleman can help me and other hon. Members in our efforts to work out the relevance of his comments to electricity. Is he about to suggest that one way of getting round the problem of lead in petrol would be to have electric battery-operated cars?
      Mr. Tredinnick: I wondered whether I should give way to the hon. Gentleman; now I know that I made a mistake in doing so. I am illustrating what the Government have done, and posing the question whether we should consider these amendments as desirable additional measures. If the hon. Gentleman had been listening, he would have understood that.
      My right hon. Friend the Prime Minister has moved the frontiers beyond Europe, where we have taken the lead in lead-free petrol, to the rest of the world in what she and the Government have done concerning the ozone layer and the greenhouse effect. It is a fantastic tribute to my right hon. Friend that she seized the initiative in getting 200 world leaders to London to thrash out the crucial issues concerning this very worrying atmospheric problem that affect the world. We saw six concrete achievements resulting from that conference. There was agreement on CFC controls; 20 more countries agreed to the Montreal

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      protocol, and there was a commitment from 14 countries, including China and India, to consider signing it; the countries of the EEC agreed to a total ban—and what an achievement that was. Of course, we are also promoting the substitute gases that are so necessary to replace CFCs.
      Mr. Mans: Does my hon. Friend agree that people who live in greenhouses should not burn coal?
      Mr. Tredinnick: My hon. Friend is obviously thinking of the hon. Member for Wentworth.
      I want to deal now with my last point. It concerns an item that the Government have addressed recently—research funding. When one looks at the record, contrary to what the Opposition claim, one finds that the Natural Environment Research Council has received a cash boost of £71 million over the period 1989–90 to 1991–92; that the British Antarctic Survey, which, of course, was responsible for the discovery of the hole in the ozone layer, is to receive £23 million over the same period; and that the public expenditure plans that were announced in November include an extra £2·6 million for the research programme of the Department of the Environment. That is hardly a poor record.
      There is one other aspect that must be considered—the leadership of the parties, and who is doing most in environmental control. My right hon. Friend the Prime Minister is a scientist. I do not see many scientists on the Opposition Benches. There is quite a contrast between the way that my right hon. Friend tackles environmental issues and the way that the Leader of the Opposition tackles them. I am indebted to a Mr. Malcolm Grimston, of Trevelyan road, Tooting, who wrote saying:
      "After the ozone layer conference Mr. Kinnock was on the radio. After giving grudging praise to the Prime Minister he went on about how deforestation in Brazil was causing extra carbon dioxide and methane to be released, and this was also damaging the ozone layer. This is rubbish. Carbon dioxide and methane don't attack ozone, though they do add to the far more serious greenhouse effect."
      That is a pretty fair illustration of the lack of knowledge of environmental issues at the very top in the Labour party.
      The Government's record, long-term and short-term, is good. Besides this Bill, they have acted in a whole range of areas to improve the environment, and, of course, we have better leadership.
      Let me refer to the 20,000 people a month who are joining green movements. It seems to me fairly clear that for anybody thinking of joining a green movement the right way of spending money is to join the organisation that is most likely to effect change, and that is the Conservative party. The first priority should be to join the Conservative party, and the second priority should be to join the Tory green initiative, which has been set up specifically to channel the tremendous concern on this side of the House.
      Mr. Sydney Bidwell: I wonder how many copies of this Tory Central Office brief there are to spare. I should like to have one—perhaps, after the hon. Member has finished, the one that he is using.
      Mr. Tredinnick: The hon. Gentleman chivalrously question my notes. I can assure him that I wrote them myself. However, if he would like a photocopy after the proceedings, perhaps he would like to meet me behind the Chair.
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      I have been asking myself whether the wording of schedule 9 is strong enough. I know that this is what exercises the minds of many Opposition Members—whether phrases such as "having regard" and "taking into account" are strong enough to ensure that the director general will put into effect the intentions of my right hon. Friend the Secretary of State. At the 19th sitting of the Standing Committee, I raised the issue of the conservation of energy, as against the creation of energy sources. Some Opposition Members may find common ground with me when I say that it is essential that we keep very much in the forefront of our minds the possibility of cutting energy consumption. I cite in particular the dramatic numbers of people who are now interested in environmental issues. I say to my right hon. Friend that we really must keep at the forefront of our minds the possibility of cutting energy consumption.
      Let me illustrate the point by drawing attention to a survey that was carried out in the north-west of England late last year. It was found that a 20 per cent. cut in energy consumption could be achieved at a cost of £1 billion. The cost of Sizewell B is £1·646 billion, and the cost of Hinkley Point £1·47 billion. I am not suggesting that these stations should not be built, but I am suggesting that there is a trade-off here that we should consider very seriously. I know that my right hon. Friend is considering it very seriously; what I hope to do is to reinforce his thoughts.
      I come, finally, to the issue of how the alternative energies that are now coming forward—wind, wave and even plants as energy sources—fit into the scheme of this Bill.
      Mr. Morgan: Sit down.
      Mr. Tredinnick: The hon. Member for Cardiff, West (Mr. Morgan), who has spoken so often in Committee, is obviously anxious to get up again. I have not had the advantage of speaking as often as he has, so I should be grateful if he would bear with me while I finish my speech.
      I have received letters from organisations such as the Wind Energy Group—which is a British Aerospace and Taylor Woodrow company—stressing how the Wind Energy Group's MS3 can now generate electricity at a cost competitive with that of nuclear power. The director, Dr. Peter Musgrove, informs me:
      "Given a fair price for electricity from wind turbines it is quite realistic to forecast the installation of up to 500 MW annually throughout the 1990s so that wind energy could supply several per cent. of our electricity needs by the year 2000."
      He says that his concern is that the legislation now being drafted will mean that wind energy is treated unfairly in the context of nuclear energy. That is something that we have to guard against. We have diversity and we welcome it, and I am very anxious that the alternative sources of energy should be given a fair crack of the whip.
      The Government have a fine record, in both the long term and the short term, but I ask the Minister to ensure that the Director General of Electricity Supply takes into account the environment, energy conservation and alternative sources of power.
      Mr. Frank Haynes: I now know why the Government Whip would not let the hon. Member for Bosworth (Mr. Tredinnick) speak in Committee. We would still have been on the first amendment if he had

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      allowed him to get up. He does talk a load of rubbish, he really does. In Committee, I accused him of being sensible, but I will withdraw that now.
      It is really a great pleasure—
      Mr. Tredinnick rose—
      Mr. Haynes: No, I will not give way; the hon. Member has only just sat down.
      It is really a great pleasure to have the Secretary of State in attendance during this very important debate. This is a very important issue and my hon. Friend the Member for Sedgefield (Mr. Blair) did a first-class job in moving the new clause. He made it clear to the Government what should be happening when this privatisation takes place on the question of conservation and efficiency in the electricity industry. I congratulate my hon. Friend on his speech.
      Hon. Members have talked about research in connection with the industry. That lot over there are guilty of cutting back on research, never mind what the hon. Member for Bosworth said about pouring in £70 million or so since 1979.
      By the way, it is about time the laddie went outside to have his nappy changed, because he is still wearing nappies judging by the way he has been talking this afternoon.
      Mr. Tredinnick rose—
      Mr. Haynes: No, I am not going to give way. Stay down.
      Since this Government have been in office they have done nothing but cut back here, there and everywhere, on research among other things. I remember one of my hon. Friends standing up seven or eight years ago and saying that the Aston university had lost 1,100 places under this Administration. That is in one university, and we are talking about people being trained and educated for the job of research, not only in the electricity industry but in many other industries. So I do not know why the hon. Gentleman made the comment he did, because he is completely wrong. I am correct; the facts are in my favour and I have the information I need from the people on the Opposition Benches who have sussed it out.
      7.15 pm
      When it comes to conservation, I know what the Government are after. It is not a question of conservation for people who are buying in to this marvellous industry and lining their pockets with gold—including foreigners.
      The Secretary of State laughs. It is not a laughing matter; it is a serious matter. The Government will allow foreigners to pour in over our shores and buy shares in our electricity industry. This is how that lot go on. They are not bothered about the British; they are looking after the foreigners. That is why we have this argument down the road about Harrods. I am looking at this thing sensibly. The people of this nation are laughing at that lot the way they are carrying on. But they will not be in office much longer. We shall be moving across the Floor and we shall put it right; we shall put the electricity industry, as well as many other industries, right.
      I have been in the Secretary of State's constituency. I should have told him when I went, but I did not, and I apologise for that. I went to have a look at the palatial property in which he lives, and he really does live in a
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      palatial property. When I saw it I thought to myself that there were not many properties like that in my constituency, with all those poor old colliers that I worked with underground for 35 years. Some of them are living in hovels, and it is because of the policy decisions of the Conservative Government. We talk about energy conservation. The roofs are falling in and the Government have cut back on grants. We are wasting energy when the Government ought to be encouraging people to do something to their properties to conserve energy.
      The Conservatives talk about efficiency. We have never seen anything efficient coming from the Government Benches and it is about time we did. It is about time Government Members livened themselves up as far as efficiency is concerned.
      I have seen efficiency. I had 35 years of efficiency underground and I am proud of it. When I come into this place and find the Tory Government doing the things they are doing, I see no efficiency. But we will put that lot right; there is no doubt about that. They stand at those Benches and at the Dispatch Box bragging and boosting themselves up, but a lot of them will not come back to the House. We shall be on that side and we shall make all the decisions that have to be made.
      When the Government talk about efficiency they mean less and less manpower. That is how they look at efficiency —more people on the dole, more profit for the rich to pour into their pockets. We have had a bellyful, we have had enough, and we shall change the system at the first opportunity we get. We shall do it well, and that lot will be sorry for what they have done to the people of this nation in terms of electricity, the poll tax, the Health Service—I am reeling these off as the hon. Member for Bosworth reeled off the Bills. I am reeling off all the wicked things that the Government have been doing since 1979. The lad only came into the House in 1987. He is getting an education this afternoon, as he did in Committee, and there is more to come. Until that lot go we will educate them on what they should be doing in the interests of the people.
      We are talking about the Electricity Bill, which I hope will not become an Act, because I hope that the people outside the House will demonstrate quite clearly that they do not want what has been pushed down their throats, particularly on electricity, water and health.
      I hope that the Government and the Secretary of State have got the message. I am pleased that the Secretary of State is here to listen to me. He said that he enjoyed my speech yesterday. I hope that he has enjoyed this one. I do not make fancy speeches for people to read in future records. My speeches come from the heart because I represent the people of Ashfield and I shall continue to fight on their behalf.
      Mr. Wallace: It is always a pleasure to follow the hon. Member for Ashfield (Mr. Haynes). There is certainly no conservation of energy in the spirited way in which he delivers his contributions, and I am sure that the House commends him for that.
      Hon. Members have highlighted the great contribution that conservation of energy can make. Some examples have been given, not least by my hon. Friend for Gordon (Mr. Bruce) and by the hon. Member for Glanford and Scunthorpe (Mr. Morley) who highlighted the ways in which energy conservation can make a valuable contribution.

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      About eight or nine years ago somebody suggested that if all the money up to that time spent on Britain's nuclear industry had been spent on thatching roofs the amount of energy conserved would have been equivalent to the amount of energy generated by nuclear power. That example is by way of illustration rather than a prescription, but it underlines the great importance of energy conservation. It is important not only in terms of the stewardship of our resources but because of the benefits that it can bring.
      It has often struck me as quite telling that many elderly people and people on benefit who receive benefit through the post could well save much money by the simple operation of insulating their homes. Such a policy has a strong environmental base. My hon. Friend the Member for Gordon spoke about the importance of low-cost planning. A case can be made for that in economic terms, but it does not take into account the important environmental benefit.
      I had hoped that the Government would be sympathetic at least to the ideas put forward in the Bill even if they were not sympathetic to the amendments and new clauses 7 and 12. We should have been able to hope for some positive response. If amendments were technically deficient, the Government could have said that they would bring forward correct ones in another place. The hon. Member for Cambridgeshire, North-East (Mr. Moss) put his finger on the real point when he spoke about the Bonneville Power Administration. He accepted that that company had shown what could be done through investment and energy conservation. In an intervention, my hon. Friend the Member for Gordon said that that had not been done as a result of the company's own free will but that someone had had to prompt the company to do it. That is what is behind the new clauses.
      Energy conservation has not been practised in the past and the record shows that it will not happen in future. We need someone to give companies a prod, and we propose a deputy director general of electricity supply who will be able to do that. That will ensure that the electricity supply industry takes into account the great savings and the contribution that can be made by energy conservation.
      My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) spoke about new clause 17. We want to see a deputy director general of electricity supply with special responsibility for rural areas. I acknowledge that a common tariff will be charged throughout the area of the North of Scotland Hydro-Electric Board. That is welcome, especially in my constituency. Our new clause would add to the duties of our proposed deputy director a duty for boards to have regard to the social and economic requirements of the area served by the various supply boards. That requirement currently exists in the North of Scotland Hydro-Electric Board but it will disappear if the Bill becomes law.
      The disappearance of such a statutory duty is regrettable. The Government have sought to justify it by saying that there will be a common tariff, and that is fair enough. Secondly, they have said that there are now other bodies charged with responsibility for economic and social development. Too much cannot be done to try to promote the economic and social development of areas with special geographic problems such as the Highlands and Islands. Most places in the Highlands and Islands are now connected to the electricity supply. It is fair to acknowledge that that has been done with assistance from
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      the uneconomic rural development programme. However, some people are still not connected to the main electricity supply.
      One of my constituents comes regularly to see me. In 1985 he was given a tentative quote by the North of Scotland Hydro-Electric Board that it would cost £10,500 to connect him to the main supply. He was told that connection would have to take place at the end of the uneconomic rural development programme. More recently he sought an estimate and was told that the cost would be £60,000. I am talking about an elderly couple living in croft property in Orkney and the wife is an invalid. They have a generator but it cannot be operated for 24 hours a day and that means that they lose the benefits of refrigeration and night storage heating. It would be of great value to those people if their property could be connected to the mains supply. I agree that in some conservation areas planning permission is not likely to be given for overhead wires, and underground cables are much more costly. I do not know how anyone could reasonably expect an elderly pensioner couple to find £60,000 for vital supplies.
      I am told that under the crofting grants scheme the Department of Agriculture, Fisheries and Food in Scotland can offer a £600 grant and a loan of £600. Clearly, that is not enough. I have asked the Minister of State, Scottish Office to see whether there is any way in which assistance can be offered. I wrote to him some time ago, but he has not yet replied. I do not criticise him for that because I am sure that he realises the seriousness of the problem although I doubt whether he can find a way around it.
      New clause 17 seeks to ensure the possibility of every domestic household being connected to the main supply. That should be done at a cost that is within the means of the vast majority of people. While the tariff is common throughout the north of Scotland there are no guarantees for any other part of Scotland or for the rest of the United Kingdom. Will the Minister tell us what he understands by the word "tariff"? Does it mean the standing charge? Does it include charges for repair or a call-out charge? While one would not expect connection charges to be identical throughout an area there should be at least some common basis on which charges are calculated, such as happens at the moment for wayleave payments.
      The quality of the supply and especially the quality of the repair service are vital in remote rural areas and cannot be measured in terms of pounds and pence. Those things cannot be left on trust. We need a person with responsibility for looking after the provision of the electricity supply in rural areas. That would ensure that when the supply was cut, not least because of inclement weather, there would be someone to put pressure on the electricity supply industry to ensure a proper and adequate response. No one expects overnight miracles, but without additional prompting the quality of the electricity supply to rural areas could seriously diminish. That is why I commend the new clause to the House.
      Mr. Eric Illsley: I want to make one point about the Grimethorpe fluidised bed plant because that plant stands at the edge of my constituency. As several hon. Members have said, the funding for the continuation of that plant's experiments has been under threat for several months.

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      Only yesterday, British Coal gave evidence to the Select Committee on Energy that £12 million would be necessary to continue the experiments. As British Coal has attracted private investment from a foreign company in Finland called Ahlström, we should like a commitment from the Minister about future funding. I understand that the decision could be delayed until after September because of the public expenditure allocations. If the money is delayed until then, the plant will have to close. Already jobs have been lost at the plant in the sense that some key personnel have gone abroad to work on similar schemes. Those jobs were in and around my constituency. I want the Minister to consider British Coal's request for a sign that the funding will be forthcoming even if that means waiting for the cash until September.
      7.30 pm
      The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): I want to answer three specific points before I set out the Government's general position. We agree entirely with the Opposition about the very important subject of energy conservation and its relationship to the Bill.
      Having designated today as "environment day"—I am not sure whether that is official—the hon. Member for Sedgefield (Mr. Blair) said that we had cut the Energy Efficiency Office budget. He said that we would presumably be left with a massive generalised advertising campaign. The sneer with which he made that point—perhaps sneer is too strong a word; rather, his pained tone —showed that he thought that that would be a waste of money. I assure him that the cuts have taken place precisely because we cut the generalised advertising budget. We have replaced that large generalised budget, which we agree with the hon. Gentleman is not the best way to convey the message, with a much more cost-effective advisory programme targeted at specific major users. We think, and I suspect from the comments made by the hon. Member for Sedgefield that he would agree, that that is the best way to convey the message.
      The hon. Member for Berwick-upon-Tweed (Mr. Beith) has just popped out of the Chamber so perhaps his colleagues will pass my comments on to him. He raised the matter of common tariffs. The privatised public electricity supply companies, the present area boards, will maintain the present structure for five years after flotation if that takes place in 1990. Ultimately we cannot prevent companies from charging tariffs which relate to costs. However, powers will be given to the director general under the terms of the Bill to enable him to ensure that tariffs relate to costs and are not excessive or in any way an abuse of a company's power. That new protection for consumers will exist in the Bill.
      Mr. Wallace: The Minister said that there was no way in which the Government could enforce a particular stucture. However, I understand that they will enforce the common tariff structure for the North of Scotland Hydro-Electric Board. If it is possible to do it there, why is it impossible to do it in the rest of the country? Is the Minister backtracking from the commitments given about the north of Scotland?
      Mr. Spicer: I did not say that there was no way in which we could do it. I said that there is no way in which we would want to do it. Very special circumstances apply in the north of Scotland in terms of its geography and the way in which it is supplied with electricity—primarily through hydro. The Government felt that there were exceptional circumstances in the north of Scotland. Generally we would not wish to distort the market by insisting on common tariffs.
      In answer to the point raised by the hon. Member for Orkney and Shetland (Mr. Wallace) about his constituent, I can tell him that my hon. Friend the Minister of State, Scottish Office has taken that on board and has had a word with the hon. Gentleman. My hon. Friend will look into the matter. Under the terms of the Bill, if the hon. Member for Orkney and Shetland was distressed about a particular charge for connection imposed on a constituent, he could involve the director general in determining whether that charge was correct. In that respect, the Bill is an improvement for the consumer.
      It is easy to agree with almost every speech; turning lights on and generating heat involves processes which, with the exception of certain nuclear and renewable technologies, deplete the world stock of natural resources and, with no exceptions, have potential detrimental effects on the environment. The difficult part about this debate is to agree on what to do about it.
      The thrust of the amendments is to rely on measures aimed at conserving energy. The most illiberal of those proposals is contained, as is sadly often the case these days, in the amendments of the old Liberal party. Those proposals relate to giving the regulator powers of direction and intervention to ensure, for example, that no new plant is developed unless a deputy director for conservation is satisfied that it meets certain conservationist criteria. The Democrats have gone over the top with new clause 17 which the Chair has allowed us to refer to. That new clause has been popping on and off the Amendment Paper over the past 24 hours like a jack-in-the-box.
      New clause 17 proposes a rural supremo. Perhaps the Liberals can have a word with Mr. Gorbachev while he is in town. He is trying to withdraw his supremos from the countryside. The proposal for a deputy director for conservation and one for the countryside leads us to wonder why we do not have deputy directors for small houses, large houses, mothers or babies. We do not believe in that kind of interventionism. There is no way in which we can accept the new clause.
      The Labour amendment proposes that a director should set annual targets for energy efficiency. Before we rush down that path of central direction and control, we should ask ourselves what is the precise purpose of conservation. Two distinct objectives have been mentioned so far and each of them may require distinct policies.
      The first objective of conservation, as suggested by several hon. Members, is to make better use of scarce resources. The Government view on that is clearly different from that of the other political parties. Rather than use the instruments of central direction we shall provide the variety and the market conditions that will allow for advancing resource-efficient ways of producing power. In an excellent speech, my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) stressed that particular point.
      Mr. Blair: The Minister makes the extraordinary argument that he has some inhibition about central control, whereas he is setting up a panoply of regulation in the public interest that will interfere with the industry in many ways. Suppose that the interests of the market and of the environment conflict. Is the Minister prepared to interfere with the market to uphold the interests of the environment?
      Mr. Spicer: I shall be dealing with such matters soon. I am trying to distinguish between the different thrusts of our argument, and perhaps I should not have given way. I shall be stressing that when it comes to environmental questions, the Government have a panoply of arguments. For the moment, I am talking about making better use of resources. Quite often, the Labour party engages in generalised rhetoric without explaining what it has in mind. We believe that it is better to focus on what we are proposing to achieve in the area of conservation. That is one of the reasons why we introduced the non-fossil fuel obligation, which the Opposition have so derided.
      Nuclear power is certainly resource efficient, as are renewable sources of energy. It appears to have escaped the attention of the Opposition that last night we announced a special provision for renewables within the non-fossil fuel obligation. For the first time ever—and no one disputes this—the Bill gives the regulator the duty to promote efficiency. Above all, in the context of making better use of natural resources, the Bill radically restructures the industry, to allow energy-efficient producers to come on to the system. I have no doubt that that will happen, and the hon. Member for Gordon (Mr. Bruce) agreed that such producers will come on to the system as a consequence of our proposed restructuring.
      Plans for combined cycle gas-fired stations, for new technology coal-fired plants, and even for smaller nuclear power stations are, as a direct result of the Bill, appearing in their legions as proposals with genuine prospects of being implemented. My hon. Friend the Member for Cambridgeshire, North-East was also absolutely correct in that respect.
      Mr. Malcolm Bruce: The Minister is in danger of confusing himself. He said that he would move on to speak about environmental issues as distinct from those of conservation, and therefore does not accept that conservation is an environmental issue. Also, he proceeds to tell the House about the list of generating investment that is to come, as if it were an instrument of conservation. Conservation is about reducing demand, and therefore about reducing the requirment for additional investment in generating capacity.
      Mr. Spicer: The hon. Gentleman appears not to be listening as attentively as he normally does. He will see in Hansard tomorrow that I said that there are two functions of conservation. One deals with natural resources depletion, the other with the environment. We must be sure that we focus our policies in such a way that they will deal with both.
      For the moment I am discussing resource depletion. As my hon. Friend the Member for Cambridgeshire, North-East pointed out, even the successor companies to the CEGB are beginning to adapt to the spirit of the new age created by the Bill—judging by the recent pronouncements of Mr. Robert Malpas, chairman-designate of PowerGen.
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      The second objective of energy conservation is to meet the growing and legitimate concern for our environment, notably in respect of the effects of acid rain, SO2 emissions, and the warming effect caused by CO2. Our view, in contrast to that expressed by some hon. Members, is that we cannot rely solely on conservation measures to solve those problems. Demand for electricity is growing, and it is likely to continue increasing in all major industralised countries as consumers install new electrical processes and equipment. When the hon. Member for Gordon presents—as he did throughout the Committee stage—conservation as his major policy, he must acknowledge that major international organisations such as the International Energy Agency and the European Commission forecast continuing growth in electricity demand throughout the Community, even after taking account of prospective efficiency gains.
      7.45 pm
      A policy that wholly or largely relies on conservation —as does that of the hon. Member for Gordon from time to time, and, although I may be misinterpreting him, it is a policy which seems to be implicit at least in the Opposition's amendment—flies in the face of what is likely to occur in the next few years. Even allowing for conservation measures, demand is likely to grow. As we expect to be in government for the next 15 years, we cannot afford to theorise about those matters, and must be sure that the lights do not go out for old people and for the constituents we all represent. We must ensure that the growing demand for electricity is met while minimising the effects of that expansion on the environment. The key problems are how to achieve increased supply and not to rely exclusively on conservation to protect the environment. That is why the Government have introduced the tightest regulations ever to control SO2 emissions, for example, which will have to be reduced by 60 per cent. on 1980 levels by the year 2003.
      The other day, I heard it reported on radio that the hon. Member for Sedgefield proposed setting up reduced emission targets that would include one for CO2. As we do not yet have the technology for controlling CO2 emissions, I have to ask the hon. Gentleman whether that is a n implicit reversal of Labour's anti-nuclear policy.
      Mr. Blair: I was talking about conservation targets.
      Mr. Spicer: If the hon. Gentleman meant conservation, I refer him to my earlier remarks, when I said that we must allow for the fact that demand will increase, even allowing for conservation. Targets related to CO2 are a nonsense, and the hon. Gentleman probably knows it.
      It is right to search for clean coal technologies, and right hon. and hon. Members in all parts of the House are right to stress the need for it. That brings me to the future of Grimethorpe. We have spent £17 million of public money on Grimethorpe, and we are now trying to ensure that industry adopts the available technology, particularly that relating to the topping cycle. We place great emphasis on individual involvement, mainly because in that way we can ensure that when the technology is fully developed it will be used—as opposed to being just another piece of fancy research that does nothing more than pander to green rhetoric. We have a good chance of successfully finding such a combination of industrial involvement in the technology. I certainly spend much of my time ensuring that that involvement takes place.
      Mr. Kevin Barron: If by the end of the public expenditure round in September or October of this year, industry cannot fund Grimethorpe, will the Government fund it to make sure that the topping cycle —we are a world leader in that technology—is continued in the autumn of this year?
      Mr. Spicer: I cannot accept that. Even the hon. Member for Barnsley, Central (Mr. Illsley) accepted that the public expenditure round takes place in its own way. I cannot predict what submissions my Department might make to the Treasury or what the Treasury's response would be. I confirm that we are looking for industrial involvement in the project, for the good reason—not just the financial reason—that industrial involvement would mean that there would be a marketplace for the technology. It would not be sensible simply to pile in public money, in the absence of a genuine marketplace and take-up for the technology. Much public money has already been spent on Grimethorpe. If the hon. Gentleman thinks about it, he will understand that there has not been much take-up of the technologies.
      We want to be sure that the development that takes place at Grimethorpe is taken up by industry. Industrial involvement is clearly the best way forward for Grimethorpe. We are certainly doing our best to ensure that there is such involvement.
      There is a difference of approach between the Government and the Opposition parties on major matters of environmental controls and of conservation in particular.
      Mr. Lofthouse: The Minister has already been informed by myself and other hon. Members that Mr. Malcolm Edwards made it clear yesterday that, by September, if there is no money from the Government, the Grimethorpe plant will be doomed. If that is the case, there would be little research into that technology in this country. Emergency measures must be taken by the Government to save Grimethorpe between now and September. Mr. Malcolm Edwards made it clear that he could not foresee any private sector money, apart from what has already been accepted, going into the scheme.
      Mr. Spicer: I do not speak or answer for Mr. Malcolm Edwards. I answer for the Government. We are looking for industrial commitment to the technology, not because of funding but because we want the technology to be developed in such a way that it will be applied. That is a sensible way of going forward.
      Mr. Allen McKay: As far as I can recollect, there have been field studies into industrial technology and other high-tech matters. Are the Government prepared to test the fluidised bed on a field basis to prove its viability?
      Mr. Spicer: As the House already knows, there is considerable industrial involvement. We want to find more people to be involved, for the good reason that it will then be much more likely that the technology will be properly applied and used. We are not just spending money or keeping jobs in Grimethorpe. That is not the primary objective of even those hon. Members who represent constituents' interests. All hon. Members are concerned about developing a technology that will be applied to make the use of coal much more efficient, and particularly to affect carbon dioxide emission levels. One way in which
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      we can ensure that the technology is applied is to get the participation of those who believe in the application of the technology. That will be good for its further use in the way that we have argued it should be used.
      The Labour party and the Liberals would engage in rhetoric and bureaucracy, and that is demonstrated by their amendments. The Government are engaged in providing the market conditions and the associated regulations which will protect the environment and make the best use of scarce resources. For that reason, I ask my right hon. and hon. Friends to vote against the amendments should they be pressed to a vote.
      Mr. Morgan: Hon. Members should be conscious of the importance that energy and the environment may have in politics. We are conscious of the visit by President Gorbachev, glasnost, and East-West relations. The Secretary of State is to visit the USSR next week. We must remember also that Mr. Gorbachev and glasnost would never have been successful but for the catastrophic Chernobyl accident. The attempt by the old Russian system to close the matter and say, "We must not tell the public about it," set the glasnost ball rolling in the Soviet Union. That is why we, in turn, place great emphasis on the conservation of energy and on conservation being written into the Bill in a much more powerful way than the Government have so far agreed to do. Why have the Government kept the Bill so weak and toned it down?
      The Minister spoke at length, trying to break down energy conservation into its component parts and persuade people to make better industrial use of electricity in particularly and energy in general. He mentioned the problems that have arisen and the use of new technology in generation and utilising the waste heat that inevitably comes from generation. In his view, pollution has presented some sort of challenge. He said that, somehow, we are failing to take account of the impact of the coal industry on the pollution load in the atmosphere. The Government have suddenly deemed that they should grab the great issue of the greenhouse effect arising from carbon dioxide. That problem has arisen in the past two or three years. There is no point in jobbing backwards. Scientists are not examining it.
      If the cause and effect that some scientists believe to exist in the connection between fossil fuel electricity generation and global warming is firmly proved over the next three or four years, obviously it will be a matter for policy adjustments when scientists have a clear message to tell us. In the meantime, it is not possible to find a serious scientist who is willing to commit himself or herself to the view that it is right now to change technologies from fossil fuel to nuclear fuel or other renewables. They will say that it makes sense to opt for conservation. The greenhouse effect argument that the Government have been trying to promote and use as a justification for the non-fossil fuel levy and for the protective right fence that they are putting around the nuclear industry but not around the coal industry was used by scientists to promote the need to write in conservation measures, as most American states have done and as the European Community is trying to do, but as this Government, given their big opportunity, are funking.
      Let us work out why. The answer is simple. We have read about the great argument—we have heard it on serious television current affairs programmes on Sundays —between the Secretary of State for the Environment and

      403
      the Secretary of State for Energy. The Secretary of State for the Environment wants Britain to go all nuclear as quickly as possible. The Secretary of State for Energy had to put him right and insist, but in more elegant language, "Stay off my turf." He believes that we cannot afford to commit ourselves to a big programme of nuclear power and hope to float the industry.
      The Secretary of State for the Environment says that he is an all-nuclear man, whereas the Secretary of State for Energy has a job to do—to sell the industry to the private sector. He is perfectly well aware from the advice that he is receiving from the merchant banks that one simply cannot do that and commit oneself to major changes in technology or to a building programme which he knows that the British power engineering industry cannot meet. He knows that if there were to be a big shift to nuclear power, there would he no chance of privatising the industry.
      One cannot say that the industry is now due for a sea change in technology and for a major shift to some new and, in British terms, unproven method of generating power and yet hope to sell the industry. That would be an argument for keeping the industry in the public sector. There are many other arguments for that, but that is the argument that the merchant banks would use if the Secretary of State for the Environment were successful in persuading the Secretary of State for Energy that he had to shift to a major programme of nuclear power.
      8 pm
      The Department of Energy says that it wants to keep things simple and not tell anyone in the City who might be advising the buyers that they might need to think about huge write-offs of existing plant. The Department of Energy says that the industry should be kept as it is so that it can produce profits every year and that if there were to be tighter regulations, they should be introduced on a cumulative basis, a few per cent. a year, with which the industry could cope as if it were a conventional company.
      The Secretary of State for the Environment goes for the big bang and the shifting of everything into nuclear power. We believe that we should adapt the existing technology and convert to smaller power stations, from which we could obtain far higher efficiency ratings. We are well aware that it is possible to improve the peak performance of power stations from the present 37 per cent. fuel efficiency to 75 per cent., with the use of the combined cycle, combined heat and power technology or both at the same time.
      The other points that the Opposition have raised have been in relation to the Government's attitude to the Energy Efficiency Office and other allied activities. There has been an enormous deterioration in the availability of advice to industry and consumers because of the change from the community regulations to the employment training regulations in respect of schemes that can provide energy advice or energy saving devices in houses, such as draught strips and insulation. Grants have also been abolished.
      I shall give an example from Cardiff. About six months ago, 230 people were engaged in energy advice under the community programme. In spite of the changes announced by the Department of Employment to try to save some of the schemes, only 40 people are now engaged in that scheme. The energy advice centre has been scrapped completely because it proved to be wholly
      404
      impossible to make it compatible with the employment training regulations. That is a major loss to energy efficiency and conservation and it is a matter with which the Government have proved themselves inadequate to cope.
      The Government's actions since the new year do not give us any confidence in the future of energy conservation. That is why we believe that it is essential to write into the Bill far stricter provisions than the Government have in mind. We know that the only people who are stopping the Government are the merchant bankers in the City who say that stricter provisions would over-complicate the issue and might stop the industry being sold off successfully. The merchant banks believe that if the Government want a successful sale, they should keep matters plain and simple and ensure that the industry can see the profits coming. The merchant banks believe that the Government should not tell people what there is to worry about in the energy future of the world.
      We are glad that Mr. Malpas, the chief executive of PowerGen, has done his best to bring to the notice of the investing public, the general public and, most importantly, to the Government, just how important energy conservation is, whether the future of the electricity industry is in the public or private sector. Before any Conservative Back Benchers get the idea that conservation of the environment can be left safely to the private sector, I must point out that Opposition Members do not want to see the corner-cutting ethics and mentality of the Esso oil company, which caused the Prince William sound disaster of the Exxon Valdez in the past couple of weeks, running the electricity industry in this country.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 191, Noes 254.

      Division No. 142]

      [8.4 pm

      AYES

      Abbott, Ms Diane

      Cohen, Harry

      Adams, Allen (Paisley N)

      Coleman, Donald

      Allen, Graham

      Cook, Robin (Livingston)

      Anderson, Donald

      Corbyn, Jeremy

      Archer, Rt Hon Peter

      Cousins, Jim

      Armstrong, Hilary

      Cox, Tom

      Ashley, Rt Hon Jack

      Crowther, Stan

      Ashton, Joe

      Cryer, Bob

      Banks, Tony (Newham NW)

      Cummings, John

      Barnes, Harry (Derbyshire NE)

      Cunliffe, Lawrence

      Barnes, Mrs Rosie (Greenwich)

      Dalyell, Tam

      Barron, Kevin

      Davies, Rt Hon Denzil (Llanelli)

      Battle, John

      Davies, Ron (Caerphilly)

      Beckett, Margaret

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

      Beith, A. J.

      Dewar, Donald

      Bell, Stuart

      Dixon, Don

      Bennett, A. F. (D'nt'n & R'dish)

      Dobson, Frank

      Bermingham, Gerald

      Doran, Frank

      Bidwell, Sydney

      Duffy, A. E. P.

      Blair, Tony

      Dunnachie, Jimmy

      Bradley, Keith

      Dunwoody, Hon Mrs Gwyneth

      Brown, Gordon (D'mline E)

      Eadie, Alexander

      Brown, Nicholas (Newcastle E)

      Eastham, Ken

      Brown, Ron (Edinburgh Leith)

      Evans, John (St Helens N)

      Bruce, Malcolm (Gordon)

      Ewing, Harry (Falkirk E)

      Buckley, George J.

      Ewing, Mrs Margaret (Moray)

      Caborn, Richard

      Fatchett, Derek

      Campbell, Menzies (Fife NE)

      Faulds, Andrew

      Campbell, Ron (Blyth Valley)

      Fearn, Ronald

      Campbell-Savours, D. N.

      Field, Frank (Birkenhead)

      Carlile, Alex (Mont'g)

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

      Clarke, Tom (Monklands W)

      Fisher, Mark

      Clay, Bob

      Flannery, Martin

      Clelland, David

      Flynn, Paul

      Clwyd, Mrs Ann

      Foot, Rt Hon Michael

      405

      Foster, Derek

      Mitchell, Austin (G't Grimsby)

      Foulkes, George

      Molyneaux, Rt Hon James

      Fraser, John

      Moonie, Dr Lewis

      Fyfe, Maria

      Morgan, Rhodri

      Galbraith, Sam

      Morley, Elliott

      Garrett, John (Norwich South)

      Morris, Rt Hon A. (W'shawe)

      Garrett, Ted (Wallsend)

      Morris, Rt Hon J. (Aberavon)

      George, Bruce

      Mullin, Chris

      Gilbert, Rt Hon Dr John

      Murphy, Paul

      Golding, Mrs Llin

      O'Brien, William

      Gould, Bryan

      Orme, Rt Hon Stanley

      Graham, Thomas

      Parry, Robert

      Griffiths, Nigel (Edinburgh S)

      Patchett, Terry

      Griffiths, Win (Bridgend)

      Pendry, Tom

      Grocott, Bruce

      Pike, Peter L.

      Hardy, Peter

      Prescott, John

      Harman, Ms Harriet

      Primarolo, Dawn

      Haynes, Frank

      Quin, Ms Joyce

      Henderson, Doug

      Radice, Giles

      Hinchliffe, David

      Randall, Stuart

      Hogg, N. (C'nauld & Kilsyth)

      Redmond, Martin

      Home Robertson, John

      Rees, Rt Hon Merlyn

      Hood, Jimmy

      Reid, Dr John

      Howarth, George (Knowsley N)

      Robertson, George

      Howell, Rt Hon D. (S'heath)

      Robinson, Geoffrey

      Howells, Geraint

      Rogers, Allan

      Howells, Dr. Kim (Pontypridd)

      Rooker, Jeff

      Hoyle, Doug

      Ross, Ernie (Dundee W)

      Hughes, John (Coventry NE)

      Ruddock, Joan

      Hughes, Robert (Aberdeen N)

      Sheerman, Barry

      Hughes, Sean (Knowsley S)

      Sheldon, Rt Hon Robert

      Hughes, Simon (Southwark)

      Shore, Rt Hon Peter

      Illsley, Eric

      Skinner, Dennis

      Ingram, Adam

      Smith, Andrew (Oxford E)

      Janner, Greville

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

      Johnston, Sir Russell

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

      Jones, Martyn (Clwyd S W)

      Snape, Peter

      Kennedy, Charles

      Soley, Clive

      Lambie, David

      Spearing, Nigel

      Leighton, Ron

      Steel, Rt Hon David

      Lewis, Terry

      Steinberg, Gerry

      Litherland, Robert

      Stott, Roger

      Livsey, Richard

      Strang, Gavin

      Lloyd, Tony (Stretford)

      Taylor, Mrs Ann (Dewsbury)

      Lofthouse, Geoffrey

      Taylor, Matthew (Truro)

      McAllion, John

      Thompson, Jack (Wansbeck)

      McAvoy, Thomas

      Turner, Dennis

      Macdonald, Calum A.

      Vaz, Keith

      McFall, John

      Wall, Pat

      McKelvey, William

      Wallace, James

      McLeish, Henry

      Wardell, Gareth (Gower)

      McWilliam, John

      Wareing, Robert N.

      Madden, Max

      Welsh, Andrew (Angus E)

      Mahon, Mrs Alice

      Welsh, Michael (Doncaster N)

      Marek, Dr John

      Williams, Rt Hon Alan

      Marshall, David (Shettleston)

      Williams, Alan W. (Carm'then)

      Marshall, Jim (Leicester S)

      Winnick, David

      Martlew, Eric

      Worthington, Tony

      Maxton, John

      Young, David (Bolton SE)

      Meacher, Michael

      Meale, Alan

      Tellers for the Ayes:

      Michie, Bill (Sheffield Heeley)

      Mr. Allen McKay and Mr. Ray Powell.

      Michie, Mrs Ray (Arg'l & Bute)

      NOES

      Adley, Robert

      Benyon, W.

      Aitken, Jonathan

      Bevan, David Gilroy

      Allason, Rupert

      Biffen, Rt Hon John

      Amess, David

      Blackburn, Dr John G.

      Amos, Alan

      Blaker, Rt Hon Sir Peter

      Arnold, Jacques (Gravesham)

      Body, Sir Richard

      Ashby, David

      Boscawen, Hon Robert

      Aspinwall, Jack

      Boswell, Tim

      Atkinson, David

      Bottomley, Peter

      Baker, Nicholas (Dorset N)

      Bottomley, Mrs Virginia

      Baldry, Tony

      Bowden, A (Brighton K'pto'n)

      Banks, Robert (Harrogate)

      Bowden, Gerald (Dulwich)

      Batiste, Spencer

      Braine, Rt Hon Sir Bernard

      Bellingham, Henry

      Brandon-Bravo, Martin

      Bendall, Vivian

      Brazier, Julian

      406

      Bright, Graham

      Hunter, Andrew

      Brooke, Rt Hon Peter

      Irvine, Michael

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

      Jack, Michael

      Browne, John (Winchester)

      King, Roger (B'ham N'thfield)

      Bruce, Ian (Dorset South)

      Kirkhope, Timothy

      Budgen, Nicholas

      Knapman, Roger

      Burns, Simon

      Knight, Greg (Derby North)

      Burt, Alistair

      Knight, Dame Jill (Edgbaston)

      Butcher, John

      Knowles, Michael

      Butterfill, John

      Lamont, Rt Hon Norman

      Carlisle, John, (Luton N)

      Lang, Ian

      Carlisle, Kenneth (Lincoln)

      Latham, Michael

      Carrington, Matthew

      Lawrence, Ivan

      Carttiss, Michael

      Lee, John (Pendle)

      Cash, William

      Lennox-Boyd, Hon Mark

      Channon, Rt Hon Paul

      Lester, Jim (Broxtowe)

      Chapman, Sydney

      Lilley, Peter

      Churchill, Mr

      Lloyd, Sir Ian (Havant)

      Clark, Dr Michael (Rochford)

      Lloyd, Peter (Fareham)

      Clark, Sir W. (Croydon S)

      Lord, Michael

      Conway, Derek

      Luce, Rt Hon Richard

      Coombs, Anthony (Wyre F'rest)

      Macfarlane, Sir Neil

      Coombs, Simon (Swindon)

      MacKay, Andrew (E Berkshire)

      Cope, Rt Hon John

      Maclean, David

      Cormack, Patrick

      McNair-Wilson, Sir Michael

      Couchman, James

      Malins, Humfrey

      Cran, James

      Mans, Keith

      Critchley, Julian

      Maples, John

      Curry, David

      Marshall, John (Hendon S)

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

      Marshall, Michael (Arundel)

      Davis, David (Boothferry)

      Martin, David (Portsmouth S)

      Day, Stephen

      Mates, Michael

      Devlin, Tim

      Maude, Hon Francis

      Dicks, Terry

      Maxwell-Hyslop, Robin

      Dorrell, Stephen

      Mayhew, Rt Hon Sir Patrick

      Douglas-Hamilton, Lord James

      Mellor, David

      Dover, Den

      Meyer, Sir Anthony

      Durant, Tony

      Miller, Sir Hal

      Dykes, Hugh

      Mills, Iain

      Emery, Sir Peter

      Mitchell, Andrew (Gedling)

      Evennett, David

      Mitchell, Sir David

      Fallon, Michael

      Moate, Roger

      Favell, Tony

      Montgomery, Sir Fergus

      Fenner, Dame Peggy

      Morrison, Sir Charles

      Fookes, Dame Janet

      Morrison, Rt Hon P (Chester)

      Forman, Nigel

      Moss, Malcolm

      Forsyth, Michael (Stirling)

      Mudd, David

      Forth, Eric

      Neale, Gerrard

      Fowler, Rt Hon Norman

      Needham, Richard

      Fox, Sir Marcus

      Nelson, Anthony

      Franks, Cecil

      Neubert, Michael

      Freeman, Roger

      Nicholls, Patrick

      French, Douglas

      Nicholson, David (Taunton)

      Fry, Peter

      Nicholson, Emma (Devon West)

      Gale, Roger

      Norris, Steve

      Gardiner, George

      Onslow, Rt Hon Cranley

      Garel-Jones, Tristan

      Oppenheim, Phillip

      Gill, Christopher

      Page, Richard

      Glyn, Dr Alan

      Paice, James

      Goodhart, Sir Philip

      Patnick, Irvine

      Goodlad, Alastair

      Patten, Chris (Bath)

      Goodson-Wickes, Dr Charles

      Pattie, Rt Hon Sir Geoffrey

      Gow, Ian

      Pawsey, James

      Greenway, Harry (Ealing N)

      Peacock, Mrs Elizabeth

      Greenway, John (Ryedale)

      Porter, Barry (Wirral S)

      Gregory, Conal

      Porter, David (Waveney)

      Griffiths, Peter (Portsmouth N)

      Powell, William (Corby)

      Grist, Ian

      Price, Sir David

      Gummer, Rt Hon John Selwyn

      Raison, Rt Hon Timothy

      Hague, William

      Rathbone, Tim

      Hamilton, Hon Archie (Epsom)

      Redwood, John

      Hamilton, Neil (Tatton)

      Renton, Tim

      Hampson, Dr Keith

      Rhodes James, Robert

      Hanley, Jeremy

      Riddick, Graham

      Harris, David

      Ridsdale, Sir Julian

      Hind, Kenneth

      Rifkind, Rt Hon Malcolm

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

      Roe, Mrs Marion

      Howarth, G. (Cannock & B'wd)

      Rowe, Andrew

      Hughes, Robert G. (Harrow W)

      Rumbold, Mrs Angela

      Hunt, David (Wirral W)

      Ryder, Richard

      407

      Sackville, Hon Tom

      Thompson, Patrick (Norwich N)

      Sainsbury, Hon Tim

      Thornton, Malcolm

      Sayeed, Jonathan

      Thurnham, Peter

      Scott, Nicholas

      Townend, John (Bridlington)

      Shaw, David (Dover)

      Tracey, Richard

      Shaw, Sir Giles (Pudsey)

      Tredinnick, David

      Shaw, Sir Michael (Scarb')

      Trippier, David

      Shelton, Sir William

      Trotter, Neville

      Shephard, Mrs G. (Norfolk SW)

      Twinn, Dr Ian

      Shepherd, Colin (Hereford)

      Vaughan, Sir Gerard

      Shersby, Michael

      Viggers, Peter

      Sims, Roger

      Waddington, Rt Hon David

      Skeet, Sir Trevor

      Waller, Gary

      Smith, Sir Dudley (Warwick)

      Ward, John

      Smith, Tim (Beaconsfield)

      Wardle, Charles (Bexhill)

      Soames, Hon Nicholas

      Warren, Kenneth

      Speed, Keith

      Watts, John

      Speller, Tony

      Wells, Bowen

      Spicer, Sir Jim (Dorset W)

      Wheeler, John

      Spicer, Michael (S Worcs)

      Whitney, Ray

      Squire, Robin

      Widdecombe, Ann

      Stanbrook, Ivor

      Wilshire, David

      Stanley, Rt Hon Sir John

      Winterton, Mrs Ann

      Stern, Michael

      Winterton, Nicholas

      Stevens, Lewis

      Wolfson, Mark

      Stewart, Allan (Eastwood)

      Wood, Timothy

      Stewart, Andy (Sherwood)

      Woodcock, Mike

      Stradling Thomas, Sir John

      Yeo, Tim

      Sumberg, David

      Young, Sir George (Acton)

      Summerson, Hugo

      Taylor, Ian (Esher)

      Tellers for the Noes:

      Taylor, John M (Solihull)

      Mr. David Heathcoat-Amory and Mr. David Lightbown.

      Taylor, Teddy (S'end E)

      Temple-Morris, Peter

      Thompson, D. (Calder Valley)

      Question accordingly negatived.

    New clause 11

      ACCESS TO INFORMATION
      '(1) The Director General shall require that consumer committees, customers and members of the public have full access to any information regarding their health and safety resulting from any activities connected with the supply, generation or transmission of electricity.
      (2) Nothing in this Act concerning the protection of information or persons shall prevent disclosure of any information required under (1) above.'.—[Mr. Malcolm Bruce.]
      Brought up, and read the First time.
      Mr. Malcolm Bruce: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 2 and 28.
      8.15 pm
      Mr. Bruce: The purpose of the new clause is to ensure that information on safety is made available to consumer committees and to the public. That is not specifically allowed for in the Bill as it stands. The record of the electricity supply industry in the recent past suggests that such a measure is necessary. The Minister and hon. Members who served on the Committee with me know that I feel strongly about the conduct of the industry especially in relation to nuclear power. I believe that having the requirement that such information be made available to consumer committees and to the public would be beneficial to the image and to the esteem in which the industry is held by the public. The lack of such a provision has been extremely damaging in that respect.
      The problem with the Bill as drafted is that the specific restriction on the publishing of information is likely to
      408
      work against the public interest and lead to the information being withheld or suppressed until long after it has any relevance or could in any way be helpful.
      It might be helpful to the House if I quote three or four examples of the sort of information that I feel should be available. One problem that has been actively debated in recent years, especially since the Three Mile Island and Chernobyl accidents, is exactly what emergency procedures there should be for a nuclear accident at a British nuclear installation. At the moment there is a lack of public awareness about exactly what would happen in the event of a significant nuclear accident. Do people actually know what to do? Do the operators of nuclear power stations know that action they should take? At what point should they alert people round about? When should they shut down and evacuate the area? What should people in the area be told to do in the event of a significant leak of radiation that would require action?
      There is no doubt that if there were such a leak without people being properly informed, the instinct would be to run, to panic and to evacuate the area; yet there is evidence to suggest that that is the wrong thing to do, depending on how serious the accident is. When the plume of radiation is being discharged, that is not the time to be out in the open and, although there is a danger wherever one is, it may be safer to stay indoors than to go out into the open. People need to know when they should stay and when they should move.
      There are practical considerations too. Nuclear power stations, in particular, tend to be in rather remote areas where the roads are not designed to allow a lot of people to move quickly at one time; the congestion could aggravate the seriousness of the incident. There is no agreed procedure as to whether or not and when, if and how, stable iodine tablets should be issued; people do not even know where they could get them or whether to take them.
      This is in sharp contrast with the situation in the United States perhaps because, regrettably, that country has experienced a major accident. In the United States the telephone books in the area of a nuclear installation contain clear descriptions of what people should do in the event of a nuclear accident. We should, in any case, have that sort of agreement here. It should be published and available now, but it should certainly be done once the industry moves into the private sector, and the Bill should require it to be done.
      The Prime Minister and other Ministers have suggested in replies to hon. Members that the whole thing is under control, that they have discussed this with all the relevant authorities and that the latter know what to do. That does not appear to be the view of the County Emergency Planning Officers Society whose members remain concerned about a number of shortfalls in the agreement. A working party has produced a number of reports yet still has outstanding concerns as to what can and should be done. So nobody is in a position either to say that the relevant authorities have a nationally agreed scheme and a standard of what should happen. Nor does anyone know how to publicise this or ensure that the public know what to do and what not to do in the event of a major disaster.
      I make no apology for the fact that my examples are drawn mostly from nuclear accidents, but what I am saying applies to other kinds of generating station. The same procedures should apply. There should be a clear understanding of exactly what happens and how the public

      409
      will be informed. It is quite proper that the consumer committees set up under the Bill should be an integral part of the process of ensuring dissemination of accurate information.
      A problem has emerged, for example, in relation to overhead power lines. I am not competent to say whether the anxieties that have been expressed about safety risks from living close to overhead power lines are valid, but I think that consumer committees should be empowered to get the relevant information, publicise it and make recommendations about appropriate action. I have had a representation from a doctor in my constituency who says that he has had complaints from patients living in the area of overhead power lines. Although he has no statistical proof, he feels that there is some correlation, although it may be more psychological than real. That is the kind of information that needs to be examined and circulated.
      Workers in the industry have suffered from overdoses of radiation. They are entitled to know exactly what the situation is. In 1986 British Nuclear Fuels said that 631 of its employees had received a dose of radiation in excess of the approved safety level. Although figures are not available for the Atomic Energy Authority and the Central Electricity Generating Board, there seems to be some suggestion that some of their employees have been affected. This is aggravated by the National Radiation Protection Board's view that the recommended safety limit be reduced to one third. If that were applied, the numbers exposed to unsafe radiation levels in the industry would rise substantially. That kind of information ought to be available and properly circulated, and people working in the industry should have the right of access to it.
      Our most recent experience is the Chernobyl disaster. What happened then is indicative of our country's lack of preparedness in the event of a major accident, not just in the United Kingdom but across the Channel in France or Belgium. Those countries are much closer to us than Kiev, so the intensity of radiation to which we could be exposed and the speed at which it arrived would require much more urgent and coherent reaction than the Chernobyl cloud required. Yet the reaction to Chernobyl was confused and contradictory and did anything but inspire public confidence in our procedures.
      Perhaps I could refer the House to a letter in The Independent of 10 August 1988 from a senior registrar in community medicine and a lecturer in community medicine, writing from London NW3. They conducted their own survey of district medical officers to ask how they viewed the response at the time of Chernobyl. The writers had a response rate of 89 per cent., which in itself indicated a high level of concern. Fifty-two per cent. of those responding said that they had tried to get information about local radiation levels but had had little success. The general view was that what information was available was in a form that was unusable, unintelligible and contradictory. It was said that the blind were leading the blind and that the advice which arrived was too little and too late. Two years after the incident, the letter writers' view was that nothing had fundamentally changed.
      We need to know how we would respond if—I hope it does not happen—we had an accident close to our shores or within the United Kingdom where it would appear that
      410
      we have no mechanism for ensuring that safety information is properly conveyed to the public, information to which they can have access as of right.
      Lack of information leads to a proliferation of rumour and suspicion, which, in return, may lead to an exaggeration of the problem. If, for example, there is a minor radiation leak in a nuclear power station, there is no mechanism for ensuring that the information is made available to the relevant people; yet in the locality people will hear about it and will assume that it is much worse than it is because, they will argue, why should people cover up if it is only a minor incident? I am sure that the Minister will accept that it would be much better to state clearly the nature of the incident; then the consumer committees, because they would gain a degree of understanding, could put the matter in its proper perspective.
      Having been a very strong critic of the conduct of the nuclear industry, I think that there has been an improvement—although it is not perfect by any means —in recent years. The difficulty is that the industry has spent so many years misleading the public and suppressing information that there is a fundamental inability to take anything that the industry says at face value. People are extremely suspicious.
      Perhaps the most dramatic example of suppression of information that the public had a right to know is that of the Windscale fire. It happened a long time ago and we are fortunate that, although it was a serious incident—the most serious in the United Kingdom—we have not had an incident on that scale since. I believe that what happened there is indicative of how serious the suppression problem is. I shall not go into the political domain about the fact that the Prime Minister of the day basically suppressed the information because it was thought to be unwise, undesirable and politically embarrassing to reveal it. My concern is that the National Radiological Protection Board estimated that the Windscale fire led to 260 cases of thyroid cancers, 13 of them fatal.
      Another estimate has suggested that there could have been up to 1,000 fatal cancers linked to that fire. That is serious information. What happened was that there was a fire and a discharge of radiation, and information on the matter was suppressed. People in the area were not told and therefore were not able to take any precautions. They were exposed to excessive levels of radiation and as a result 1,000 people died of cancer during the years that followed. Clearly, if they had had the right of access to that information, some of those deaths would have been avoided because precautions could have been taken at the time.
      8.30 pm
      The right to know is a fundamental right, as is the right to take relevant action to protect one's own life. The new clause would ensure that the consumer committees and the public generally had a right to obtain information relating directly to their health requirements. I believe, therefore, that the new clause would be welcomed.
      The Minister should accept the new clause because at the end of the day it will be beneficial to the industry. The industry's record of suppressing information and releasing bits and pieces of information late and in a form that does not increase knowledge, adds to public concern and anxiety and has probably damaged the industry's public image almost irreparably. There is no doubt that, if that action were taken, a start could be made towards ensuring

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      that there was greater confidence between the public and the consumer committees and the industry. The public would have the right to information about what was happening in the electricity supply industry that would have implications for their safety and that of those working in the industry.
      I hope that the House will accept the new clause.
      Mr. Hardy: I shall not take as long as the hon. Member for Gordon (Mr. Bruce), but I urge the Minister to look favourably on the new clause. I accept that it may have one defect that is perhaps regrettable, which is that it does not refer directly to those who are employed in the industry. However, one assumes that the Democrats were including those people in the reference to members of the public. I believe that the intention of the new clause is one that we should support and, if it comes to a vote, I shall be in the Lobby with the hon. Member for Gordon.
      The Minister should recognise that education goes hand in hand with safety. We see far too much of the furtive commitment to secrecy from the present Administration. I shall cite an example. Probably the only open Department of State nowadays is the Department of Transport. It has recognised that it is necessary to put warning notices up on our highways. I accept that under this Administration warning notices proliferate much more than they have ever before. However, if the Department of Transport feels that it is necessary to warn people of approaching road hazards, surely the Department of Energy should insist that a similar approach is adopted for generation. I am not talking only of nuclear generation. I accept, too, that the hon. Member for Gordon was not restricting his remarks to that sector.
      The Government must recognise that people demand more information. About two days after the Chernobyl incident I recall a member of the present Cabinet saying to me, "Is it not disgraceful that the Russians are not saying anything about this event that is reported to have happened in the Soviet Union?" I said, "I don't know anything about it, but, if they don't say anything about it, it would, indeed, be disgraceful and disreputable." After the first few days the Russians were quite severely criticised for an excessive reticence, which may have been due to an excessive bureaucracy. However, the fact remains that after that period of discretion, reticence, or whatever one likes to call it, they were a great deal more open and informative in telling the world about the details of that dreadful accident that some Western countries have been in regard to incidents or accidents in their plants, which, fortunately, have not been on the same scale as Chernobyl. However, that perhaps is a matter of fortune rather than of skilled administration.
      We have been too furtive. In the past decade we have seen example after example of the use of public resources for unnecessary secrecy. I learned the other day that there are techniques and staff in the public service in various Government Departments devoted to detecting photocopies of pieces of paper. That causes one to wonder sometimes about the Minister's hesitation in incurring expenditure on matters which are perhaps far more in the public good.
      I believe that the new clause is a good one. I hope that the Minister will respond positively to it, because with new clause 11 have been selected Government amendments Nos. 2 and 28. The Minister will recall that, in Committee, he appeared to be slightly persuaded when I moved
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      amendments on safety. I hope that in the weeks since those debates, he has recognised that he appeared to be moving towards a sympathy with safety. If he has, perhaps when the House approves Government amendments Nos. 2 and 28, he will allow new clause 11 to go through as well.
      Mr. Morgan: A key factor in Government amendments Nos. 2 and 28—I quote amendment No. 28 as an example—is
      "protecting the public from dangers arising from the generation, transmission or supply of electricity".
      We understand that that is to cover also the dangers that arise from the disposal of the waste products on the nuclear side of the industry and those arising from generation.
      Mr. Hardy: My hon. Friend is right to make that assumption. Perhaps the Minister will make that point clear when he replies.
      I can see nothing wrong with the new clause except, as I have said, that it would have been useful if it had included specific reference to the people employed in the industry rather than simply assuming that they would be covered by the reference to members of the public.
      I am not too worried about the reference to those who will serve on the committees, largely because I am suspicious of the sort of people who nowadays are appointed to quangos. They are more likely to embarrass or injure themselves than us. I am, however, concerned about the public good.
      I had no intention of referring to those who live underneath transmission lines but, when I saw a scare story reported in a newspaper some time ago, I recall that I asked our local medical officer of health if it would be possible to carry out a survey. The statistical base would need to be a great deal larger than would have been possible in my local locality and therefore, as far as I know, no study has been undertaken.
      Now that the matter has been mentioned in the House, the Minister had better be prepared to respond fully. If he cannot do so tonight, I have no doubt that the matter will be raised in another place. There is a possibility that more scare stories may develop and, if reassurance is justified, it would be as well for that reassurance to be offered. If it is not justified, perhaps a little more information should be given.
      I recall the considerable strain and anger that existed, and may still exist, in Belgium, Luxembourg and the Saarland as a result of the anxieties of the people living quite close the French border, about French secrecy. We do not have any national or territorial boundaries with other countries, so we must contain our anxieties and strain within our island. I believe that the arguments advanced by the hon. Member for Gordon are justified and those who live in the proximity of a power station —it need not be nuclear—are anxious.
      There is no reason why the Government should be furtive or secretive or seek to deny information. Information should be available if only because of the 1957 episode. Never again should people be denied information that is of direct relevance to their health and their other interests. For that reason I am happy to support the new clause. I only wish that it covered the employees of the nuclear industry.
      Mr. Alexander Eadie: I had not intended to contribute to the debate, but the hon. Member for Gordon (Mr. Bruce) made a fair point when he moved the new clause.
      We have already been told that the Government are unlikely to respond to any attempts to amend the Bill, but the hon. Member for Gordon raised the important issue of safety. We must all be safety-conscious, as that is the only way in which to deal with problems. Any laxity in safety means that we are put in peril. The Government must reflect on the experience of previous legislation. It is not good enough for something permissive to be written into legislation. If the argument advanced is right and proper, any obligations should be mandatory. In that way there is no argument. I hope that the Minister will not fall back on the excuse of previous Governments and decide that what is written into the Bill should be permissive.
      The only weakness in the new clause—this is not meant as a criticism—is that the employees of the industry are not included. They are not just employees, but members of the public. Their knowledge would help to achieve the aims set out in the new clause.
      The new clause is important because of the defensive history of the thermal nuclear power industry. It has spent a lot of time and effort to promote the idea that everything is all right and that there is no danger. It has claimed that, technologically, everything is perfect. The possibilities of an accident have been worked out statistically, but, as the hon. Member for Gordon has said, Three Mile Island and Chernobyl have put paid to those efforts. Human weakness can always occur.
      We are still suffering the effects of Chernobyl in Scotland. During last night's debate a Conservative Member made an absurd intervention during my speech and spoke about radiation from coal. I have never heard of any coal mine being responsible for radiation for year after year. I was in Norway at the time of the Chernobyl incident and when I was told that its reindeer herd had had to be slaughtered I was extremely sad.
      The hon. Member for Gordon is right to say that the nuclear power industry has always been extremely defensive. I know of people who earn their livelihoods from statistics. If a construction is undertaken, people can calculate with amazing accuracy how many people are likely to be killed at the building site if the construction continues for a couple of years. As a consequence of our North sea oil explorations, people are now able to calculate, statistically, how many people are likely to be killed as a result of that exploration. As legislators we do not appreciate that when we approve some legislation it means that, inevitably, people will be killed as a consequence.
      I am all in favour of technology and I am not against nuclear power in the sense that it represents new technology. It is against my background to be against new technology because I have always said, "If new technology can do the job, why should men's backs be broken?" The silliest thing that I ever heard in my life was the claim that hard work never killed anyone. I live in a small mining village and in the cemetery I could point out those individuals who died as a consequence of hard work. When people say that hard work never killed anyone, it generally means that they have never done any hard work in their lives.
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      8.45 pm
      Forty years ago I was employed in the rail industry for a short time. About a month ago I had the great privilege of driving a diesel train—I had only driven steam trains. The first thing I asked was where the dead man's brake was, but, although we have such brakes, accidents still happen. Human error still occurs. Such error can arise in the nuclear power industry and it is not valid to argue that everything is perfect and every effort has been made to make things safe—experience tells us otherwise. Many people in many industries spend a great deal of time trying to make those industries as technologically safe as possible, but the human factor must always be taken into account.
      I am anything but impressed by thermal nuclear power, as I believe that it carries built-in hazards. However, the new clause could help the nuclear power industry. We should reveal all and we should tell people what has happened. We should make them even more safety-conscious and, above all, those who work in the industry should be taken into the confidence of those who run it. Those employees will not brook any people who are anti their industry. They want to make it work and they believe in it.
      I hope that the Minister will not use the old argument about making such things permissive. If we really agree with the hon. Member for Gordon, the legislation should be mandatory and not permissive.
      Mr. Dennis Skinner: I agree with my hon. Friend the Member for Midlothian (Mr. Eadie) about permissiveness as opposed to something that is mandatory. I was reminded of what was said today by the Leader of the House. He used a time-honoured phrase about the Prime Minister making herself available to Gorbachev. Is that what my hon. Friend means by permissiveness? I have a picture in my mind, but I had better not take that matter any further.
      I am absolutely certain that the provisions of the Bill must be mandatory if it is to mean anything in terms of giving power and rights to consumers. Our experience of permissive local government legislation in particular has made us aware of the pitfalls. My hon. Friend has hit the nail on the head.
      I am pleased that my hon. Friend mentioned the effects of Chernobyl and the way in which they are still being felt in Scotland, let alone in Wales and other parts of Great Britain. I remember that incident clearly. Two or three days after it we heard that the radioactive cloud was making its way up the Thames estuary—there was a report on the "Today" programme about it. That morning there was a large demonstration outside the Department of Energy. The leading wet, now the so-called Secretary of State for Wales, was in charge of energy at that time. The Friends of the Earth were drawing attention to the fact that he had said that nuclear power was the safest form of energy known to man. People were scared. It is the only time that I can recall men and women, young and old, coming towards us, snatching the leaflets out of our hands so that they would know what effects Chernobyl might have.
      Once that radioactive cloud went up into the sky it belonged not to Russia or to America but to mother nature, and it went the way that the wind blew. People were scared stiff about the consequences. I remember one woman standing about five yards away, who had her hand

      415
      out waiting to grab a leaflet. I said to her, "It is all right; the cloud is moving away; it is behind you. If you keep moving the other way you can race it if you get as far as Reading." Off she went, scared stiff. That is what nuclear power means to people when there is a disaster like Chernobyl.
      Considering the matter from that point of view, I wonder what powers the director general will have. If there were explosions, could he do anything to protect consumers and their rights? Let us suppose that the director general had to deal with something less important. Let us suppose that he was confronted by four Tory Members of Parliament who told him that they had heard on the grapevine that the new organisation running nuclear power—the new "opoly", or whatever it is called —had decided to dump low-level nuclear waste in their constituencies. Let us suppose that those four Members included a Cabinet Minister, perhaps the Leader of the House, and a junior Minister at the Home Office because they were to have low-level nuclear waste dumped in their areas.
      Accountability is to be taken from the public sector and handed over to the private sector with a bit of a director general in charge who is to protect the rights of consumers. What would happen if the Leader of the House was complaining about the dumping of low-level waste in his constituency because he had had 5,000 letters from people taking a NIMBY attitude, people whom we might loosely call clones of the Secretary of State for the Environment. Under market force operations, what powers would the director general have in those circumstances? As we all know, similar proposals were made some time ago. Because we were coming up to a general election, and because there was an umbilical cord between the Secretary of State and the Leader of the House and other Tory Members, they managed to get rid of those dumping grounds.
      The same process will be repeated over and over again, especially as power stations are to be decommissioned. The companies will have to find somewhere to put the muck. The director general will be a Tory; there is no doubt about that. The Prime Minister will ask, is he or she one of us? Whatever the Secretary of State says, the director general will go along with it because he will be in the Prime Minister's pocket. So the director general—good Tory that he will be—will say, "I will tell you what we will do; we will make sure that the waste is dumped in Labour areas." Perhaps it will be dumped in Liberal areas, or it could go into the areas represented by the new-fangled party, the party that dare not speak its name, the one that changes its name every five months.
      So the director general will say that the waste may be dumped in old mines, perhaps in Derbyshire, Yorkshire or south Wales. He will suggest that the rubbish should be put in those areas. That is what I can see happening. That is why it is essential that there are mandatory powers.
      Mr. Hardy: Has not my hon. Friend noticied over the last two or three years that there has been remarkable uniformity and solidarity on the Government Benches? Does not he suspect that the Government Chief Whip has been using that as a threat to maintain discipline in Government ranks?
      Mr. Skinner: The Government have used some new-fangled ideas and some old-fangled bullying since the
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      Prime Minister came to power. They have shop stewards on the door when we are voting. They may call them Whips, but they are really shop stewards. They hustle the Government Back Benchers in. Every so often they say, "If you behave yourself, we will give you a bisque." That is French for being absent without leave. It is a night off to do research or whatever they have to do in the course of those odd hours.
      Mr. Gerald Howarth: Clearly the hon. Gentleman is not a croquet player; otherwise, he would know that a bisque is a free go for an inferior player.
      Mr. Skinner: Well, I never. Here am I, in this mirror image of the Eton debating society, and I have got the bisque wrong. Oh, what a disaster. Do I feel so small, so belittled that I do not know the croquet term "bisque"? I will tell hon. Members what I do know. I know that the Tories will trot through the Lobby behind him when the Minister decides to force a vote on the issue. They will be hustled in by the Tory shop stewards on the door. They will go through the hoop, or the French equivalent of the hoop—I have no doubt that there is a croquet term for that as well.
      One of the most alarming things about all this is that the consumer has seen what can happen when parts of the public sector are privatised or when there is loose control by the Tory Government of the public sector. It means that less money is spent on safety and security. We have seen it at the airports; we have seen what it has meant for human life. There will be less public control. The entrepreneurs and those who operate the market forces will be in charge of nuclear power. The state will not be able to exert its influence. Even though we are talking about a small point we need a mandatory provision that gives proper rights to consumers.
      Those are my few observations on the matter. I believe that the Bill will be looked upon in future as a disaster. People will reflect upon it and say. "What were the Government playing at? Why was a public utility responsible for nuclear power left to the whims of those who are in it to make money hand over fist and to line the pockets of the friends of the Tory party?" It would be a small price to pay if the Government were to accept the amendments and make sure that the Bill includes a mandatory provision.
      Mr. Michael Spicer: Like other hon. Members, the Government attach great importance to maintaining the industry's high safety standards. That is why we undertook in Committee to examine safety questions carefully and to come forward, if necessary, with further safeguards. That is what lies behind Government amendments Nos. 2 and 28 to which only brief reference has been made by Opposition Members, including the hon. Member for Wentworth (Mr. Hardy). Opposition Members were rather churlish. We spent much time in Committee considering safety matters. As a result of those deliberations the Government have proposed amendments. They are the product of good work in Committee. I would have thought that Opposition Members would at least have made a passing reference to them.
      I shall first refer to the two questions raised by the hon. Members for Gordon (Mr. Bruce), for Bolsover (Mr. Skinner), for Wentworth (Mr. Hardy) and for Cardiff, West (Mr. Morgan). The hon. Member for Bolsworthy, or

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      rather for Bolsover—Bolsworthy may be the right expression since we have been talking about croquet—mentioned mother nature and rightly said that nuclear incidents are international. The Government have signed an international convention on the notification of nuclear incidents under the aegis of the International Atomic Energy Agency and will ask Parliament to ratify that in the Atomic Energy Bill that the Leader of the House announced that we would debate next Thursday. On the basis of what Opposition Members have said tonight, I hope that they will vote in favour of the Atomic Energy Bill, of which a major part is the ratification of that convention. I hope that that partly explains what the Government have done, in answer to the important point raised by the hon. Member for Bolsover.
      The hon. Member for Rother Valley (Mr. Barron) looks worried. Perhaps he has not yet geared up to dealing with the Bill. Perhaps I have just given him his first warning of it.
      9 pm
      Mr. Barron: I am geared up. What surprises me about the Atomic Energy Bill is that the Minister assumes that we shall not vote against it.
      Mr. Spicer: I said that I assumed on the basis of the arguments and very good points which have been made by Opposition Members tonight, that because the Bill will meet those reasonable worries, the hon. Member for Rother Valley would vote in favour of it.
      In answer to the hon. Member for Cardiff, West, the responsibility for the safety of nuclear waste and nuclear power stations generally is a matter for the operators of the stations, acting under the regulations, guidelines and monitoring of the nuclear installations inspectorate and Her Majesty's inspectorate of pollution. That is how safety regulations apply in this country.
      Mr. Hardy: The Minister mentioned that I had referred to Government amendments Nos. 2 and 28. He will also recall that I expressed slight criticism of new clause 11 because it did not refer to employees of the industry. The same point could be made about Government amendments Nos. 2 and 28 because they refer to the public. The Minister will recall that when I took part in this debate in Committee, I made reference to employees in the industry. Will he assure the House that the new clauses will refer to employees of the industry as well as to members of the general public?
      Mr. Spicer: I am checking the precise answer to that question but I am pretty certain that I can give that assurance to the hon. Gentleman. I want to be absolutely clear and I am just awaiting confirmation of that.
      In our view, new clause 11 is not the sensible way to approach this extremely important—we are all agreed on this—issue of safety. By implication, it gives the primary responsibility for the safety of the general public to the director. In the Bill, it is implicit that the responsibility for safety is covered by the electricity supply regulations, the Health and Safety at Work etc. Act 1974 and other Acts and secondary legislation which deal with specific aspects of safety. Those include the Factories Act 1961 and the Control of Industrial Major Accident Hazards Regulations 1985. Within the broad panoply of these
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      health and safety regulations it is right that the director and the Secretary of State should take safety into account as a major factor when the economic regime and regulation is set. That is the key issue and that is why amendment No. 2 specifically requires that the duties and functions of both the Secretary of State and the director should be exercised in the manner best calculated to protect the public from dangers arising from the generation, transmission and supply of electricity. The need to comply with that duty will clearly be a factor in the director's use of information powers under clause 44. That partly answers the question of the hon. Member for Wentworth.
      Mr. Eadie: I talked about permissive and mandatory legislation. Am I to assume that the Minister is telling us that the director of information will have discretionary powers. The thrust of our argument is that the public, and employees of the industry, are entitled to know where they stand. Is not the Minister contradicting that if he says that the director is to have certain discretionary powers?
      Mr. Spicer: All I have said is that the health and safety regime is laid down by a mass of parliamentary legislation and that we must ensure that our amendments achieve what they are intended to achieve; that nothing that the director—who is concerned primarily with economic and not safety regulations—does when applying his economic regulation duties, conflicts with the safety and health regime which exists by statute. In the Bill we must make it absolutely clear that, when assessing the duties of the director, they do not conflict with existing legislation which is outside the Bill.
      Mr. Morgan rose—
      Mr. Spicer: Before I give way I must not forget to tell the hon. Member for Wentworth that clause 3 (3) and the health and safety at work regulations cover employees.
      Mr. Morgan: I wonder whether the Minister has seriously considered the practicalities of what he is saying—that the director will be mostly concerned with the economic and not safety regulations, and that the two interests should not conflict. What about when they do? Last night the Secretary of State mentioned the possibility of renegotiating the BNFL contract on reprocessing with National Power. One way to do that would be so that BNFL did not reprocess some of the fuel from the AGRs but, instead, left it for storage. National Power would say that it would save money by doing that. Would the director have the right to say that he did not consider that safe?
      Mr. Spicer: The Government amendments emphasise that the director will have to bear in mind public safety at all times when making his decisions. These amendments will have additional effects. When clause 3 was first discussed in Committee, it was suggested that the duties of the director and the Secretary of State were deficient because they did not refer specifically to safety. However, that concern is met by amendment No. 2 which underlines the duties of the Secretary of State and the director to consider safety at all times.
      At present, the general framework for safety in the electricity industry is set by the electricity supply regulations. The Government were responsible for instituting the first full-scale revision of those regulations

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      for 50 years, culminating in the issue of new, regulations last year. Those regulations established a general framework of standards. The key point in answer to the hon. Member for Gordon is that only those with expert knowledge of a particular site or installation and with responsibility for its operation can determine the precise safety measures required under the general regulation. That is established practice in Britain for dealing with safety. That is why the first responsibility must and does rest with the industry.
      Those responsibilities are laid down in an array of primary and secondary legislation and that is further supported by the common law on matters such as the duty of care under the law of negligence. None of that will change with the passage of the Bill. That is the answer to the point made by the hon. Member for Midlothian (Mr. Eadie). Licence holders and those operating under exemptions will have to act in accordance with the same regime that has resulted in the current high standards of safety in the industry.
      The Bill provides for the continuation of the existing electricity supply regulations and clause 27 enables the regulations to be added to or revised as necessary.
      In Committee there seemed to be some doubt about the precise purpose of clause 27. Amendment No. 28 is designed to put its purpose beyond doubt. It makes it explicit that regulations made under the clause can include those concerned directly with safety aspects of the industry's operations and, in particular, the protection of the public.
      I hope that, having explained the philosophy of not only the electricity industry but other industries with which I have been concerned—for example, the aviation industry, where the primary duty is placed upon the operator within the standards laid down—we have made it clear that nothing done under the Bill, in particular under the terms laid down for the duties of the regulator, conflict with the standards, regulations and legislation laid down to protect safety, which all agree is paramount. I hope that, on the basis of that explanation, the hon. Member for Gordon will feel able to withdraw his new clause.
      Mr. Malcolm Bruce: The Minister has dealt with the Government amendments rather than with my new clause. I accept that amendments Nos. 2 and 28 improve the Bill and that they are a response to our debates in Committee. But they do not relate to the points that I and other hon. Members have raised tonight. The Minister has essentially debated the quality of safety inspection and enforcement under the licences proposed by the Bill, whereas we are talking about the public's right to have information about safety and the directors' responsibility to ensure access to that information when it is needed.
      I intended my new clause to include employees within the industry because they have a particular right to information. The new clause can include them, but it might have been better if it had specifically done so.
      The hon. Member for Midlothian (Mr. Eadie) referred to reindeer in Scandinavia suffering from the fallout from Chernobyl. That is the sort of information that is important. Reindeer's metabolism enables them to operate efficiently in the Arctic tundra, but it also makes them especially vulnerable to radiation. They convert food quickly so that the build-up of radiation in their natural food, the tundra moss, affects them much more intensely than other animals. That is the kind of information to
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      which the public are entitled and it was the kind of information that was not available in any clear or consistent form at the time of the Chernobyl disaster.
      Many hon. Members will recall the confusing information that came from the Government at that time. The Scottish Office said that milk was not safe to drink, then that it was safe and then that it was not safe. That did not inspire public confidence and did not provide the important and relevant information.
      However, the essential point is that the Minister is saying that the director should not impinge on safety; that the new regime will ensure that there is a specific responsibility to have due regard to safety. We say that the public and those working in the industry should have the director's support to get access to information that they need to enable them to make decisions. The Minister is effectively arguing that the public have to trust the experts who are entrusted with safety and have no right to know what the experts are talking about. In other words, they have no right to explanations in the kind of language that people can understand which show exactly what is expected of them, the action open to them and to whom they can turn to obtain the relevant explanation of expert information.
      9.15 pm
      Helpful as they are, the Government's amendments are not relevant to my new clause, without which the Bill will be substantially weakened because consumer committees and the public do not have the right of access to essential information. All the anxieties and reservations that many of us have had about the industry during the past 20 years are passing unanswered into the private sector. If we could not get the information that we needed when the industry was in the public sector, accountable through Ministers to the House, what chance have we of getting it through a private commercial organisation from which the director has no power to demand such information on behalf of the consumer committees or the public? The answer is that we have no chance of doing so. I intend to force my new clause to a Division and I hope that right hon. and hon. Members will support it.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 77, Noes 197.

      Divison No. 143]

      [9.15 pm

      AYES

      Abbott, Ms Diane

      Ewing, Mrs Margaret (Moray)

      Banks, Tony (Newham NW)

      Fearn, Ronald

      Barnes, Harry (Derbyshire NE)

      Foster, Derek

      Barron, Kevin

      Foulkes, George

      Beith, A. J.

      Galbraith, Sam

      Bennett, A. F. (D'nt'n & R'dish)

      Garrett, John (Norwich South)

      Bermingham, Gerald

      Golding, Mrs Llin

      Blair, Tony

      Hardy, Peter

      Bruce, Malcolm (Gordon)

      Haynes, Frank

      Buckley, George J.

      Hogg, N. (C'nauld & Kilsyth)

      Campbell, Menzies (Fife NE)

      Home Robertson, John

      Carlile, Alex (Mont'g)

      Hood, Jimmy

      Cohen, Harry

      Howells, Geraint

      Cox, Tom

      Hoyle, Doug

      Cryer, Bob

      Hughes, John (Coventry NE)

      Dalyell, Tam

      Hughes, Robert (Aberdeen N)

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

      Hughes, Simon (Southwark)

      Dewar, Donald

      Illsley, Eric

      Dixon, Don

      Johnston, Sir Russell

      Doran, Frank

      Kennedy, Charles

      Dunnachie, Jimmy

      Lloyd, Tony (Stretford)

      Eadie, Alexander

      McAllion, John

      Eastham, Ken

      McAvoy, Thomas

      Evans, John (St Helens N)

      Macdonald, Calum A.

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      McKay, Allen (Barnsley West)

      Skinner, Dennis

      McLeish, Henry

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

      Mahon, Mrs Alice

      Spearing, Nigel

      Maxton, John

      Stott, Roger

      Meale, Alan

      Strang, Gavin

      Michle, Mrs Ray (Arg'l & Bute)

      Taylor, Mrs Ann (Dewsbury)

      Molyneaux, Rt Hon James

      Taylor, Matthew (Truro)

      Moonie, Dr Lewis

      Wall, Pat

      Morgan, Rhodri

      Wareing, Robert N.

      Morley, Elliott

      Welsh, Andrew (Angus E)

      Morris, Rt Hon A. (W'shawe)

      Williams, Alan W. (Carm'then)

      Patchett, Terry

      Winnick, David

      Pike, Peter L.

      Powell, Ray (Ogmore)

      Tellers for the Ayes:

      Radice, Giles

      Mr. James Wallace and Mr. Richard Livsey.

      Robertson, George

      Robinson, Geoffrey

      NOES

      Adley, Robert

      Freeman, Roger

      Aitken, Jonathan

      Fry, Peter

      Amess, David

      Gale, Roger

      Amos, Alan

      Gardiner, George

      Arnold, Jacques (Gravesham)

      Garel-Jones, Tristan

      Ashby, David

      Gill, Christopher

      Atkinson, David

      Goodhart, Sir Philip

      Baker, Nicholas (Dorset N)

      Goodlad, Alastair

      Baldry, Tony

      Goodson-Wickes, Dr Charles

      Banks, Robert (Harrogate)

      Gow, Ian

      Batiste, Spencer

      Greenway, Harry (Ealing N)

      Benyon, W.

      Greenway, John (Ryedale)

      Bevan, David Gilroy

      Gregory, Conal

      Biffen, Rt Hon John

      Griffiths, Peter (Portsmouth N)

      Blackburn, Dr John G.

      Grist, Ian

      Blaker, Rt Hon Sir Peter

      Gummer, Rt Hon John Selwyn

      Body, Sir Richard

      Hague, William

      Boscawen, Hon Robert

      Hamilton, Hon Archie (Epsom)

      Boswell, Tim

      Hamilton, Neil (Tatton)

      Bottomley, Peter

      Hampson, Dr Keith

      Bottomley, Mrs Virginia

      Hanley, Jeremy

      Bowden, Gerald (Dulwich)

      Harris, David

      Braine, Rt Hon Sir Bernard

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

      Brazier, Julian

      Howarth, G. (Cannock & B'wd)

      Bright, Graham

      Hughes, Robert G. (Harrow W)

      Brooke, Rt Hon Peter

      Hunt, David (Wirral W)

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

      Hunter, Andrew

      Browne, John (Winchester)

      Irvine, Michael

      Buck, Sir Antony

      Jack, Michael

      Burns, Simon

      King, Roger (B'ham N'thfield)

      Burt, Alistair

      Kirkhope, Timothy

      Butterfill, John

      Knapman, Roger

      Carlisle, John, (Luton N)

      Knight, Greg (Derby North)

      Carlisle, Kenneth (Lincoln)

      Knowles, Michael

      Carrington, Matthew

      Lamont, Rt Hon Norman

      Carttiss, Michael

      Lang, Ian

      Cash, William

      Latham, Michael

      Conway, Derek

      Lawrence, Ivan

      Coombs, Anthony (Wyre F'rest)

      Lee, John (Pendle)

      Coombs, Simon (Swindon)

      Lightbown, David

      Cope, Rt Hon John

      Lilley, Peter

      Cormack, Patrick

      Lloyd, Sir Ian (Havant)

      Cran, James

      Lloyd, Peter (Fareham)

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

      Lord, Michael

      Davis, David (Boothferry)

      Lyell, Sir Nicholas

      Day, Stephen

      Macfarlane, Sir Neil

      Dorrell, Stephen

      MacKay, Andrew (E Berkshire)

      Douglas-Hamilton, Lord James

      Maclean, David

      Dover, Den

      McNair-Wilson, P. (New Forest)

      Durant, Tony

      Malins, Humfrey

      Dykes, Hugh

      Mans, Keith

      Evennett, David

      Maples, John

      Fallon, Michael

      Marshall, Michael (Arundel)

      Favell, Tony

      Martin, David (Portsmouth S)

      Fenner, Dame Peggy

      Maude, Hon Francis

      Fishburn, John Dudley

      Maxwell-Hyslop, Robin

      Fookes, Dame Janet

      Meyer, Sir Anthony

      Forman, Nigel

      Miller, Sir Hal

      Forsyth, Michael (Stirling)

      Mills, Iain

      Fox, Sir Marcus

      Mitchell, Andrew (Gedling)

      Franks, Cecil

      Mitchell, Sir David

      422

      Morrison, Sir Charles

      Soames, Hon Nicholas

      Morrison, Rt Hon P (Chester)

      Speller, Tony

      Moss, Malcolm

      Spicer, Sir Jim (Dorset W)

      Mudd, David

      Spicer, Michael (S Worcs)

      Neale, Gerrard

      Squire, Robin

      Needham, Richard

      Stanley, Rt Hon Sir John

      Nelson, Anthony

      Stern, Michael

      Neubert, Michael

      Stevens, Lewis

      Nicholls, Patrick

      Stewart, Allan (Eastwood)

      Nicholson, David (Taunton)

      Stradling Thomas, Sir John

      Norris, Steve

      Sumberg, David

      Onslow, Rt Hon Cranley

      Summerson, Hugo

      Oppenheim, Phillip

      Taylor, Ian (Esher)

      Page, Richard

      Taylor, John M (Solihull)

      Paice, James

      Taylor, Teddy (S'end E)

      Patnick, Irvine

      Temple-Morris, Peter

      Patten, Chris (Bath)

      Thompson, D. (Calder Valley)

      Pattie, Rt Hon Sir Geoffrey

      Thompson, Patrick (Norwich N)

      Peacock, Mrs Elizabeth

      Thurnham, Peter

      Porter, David (Waveney)

      Tracey, Richard

      Powell, William (Corby)

      Tredinnick, David

      Rathbone, Tim

      Trippier, David

      Redwood, John

      Trotter, Neville

      Riddick, Graham

      Twinn, Dr Ian

      Ridsdale, Sir Julian

      Waddington, Rt Hon David

      Rifkind, Rt Hon Malcolm

      Waller, Gary

      Roe, Mrs Marion

      Ward, John

      Rost, Peter

      Wardle, Charles (Bexhill)

      Rumbold, Mrs Angela

      Warren, Kenneth

      Ryder, Richard

      Watts, John

      Sackville, Hon Tom

      Wheeler, John

      Sainsbury, Hon Tim

      Widdecombe, Ann

      Shaw, David (Dover)

      Wilkinson, John

      Shaw, Sir Giles (Pudsey)

      Wilshire, David

      Shaw, Sir Michael (Scarb')

      Wood, Timothy

      Shelton, Sir William

      Shepherd, Colin (Hereford)

      Tellers for the Noes:

      Shersby, Michael

      Mr. Sydney Chapman and Mr. David Heathcoat-Amory.

      Sims, Roger

      Smith, Tim (Beaconsfield)

      Question accordingly negatived.

    Clause 2

      CONSUMERS' COMMITTEES
      Mr. Barron: I beg to move amendment No. 121, in page 2, line 23, after "shall", insert
      "seek to ensure that the committee is representative of local consumer interests and geographical areas and shall".
      Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to take amendment No. 114, in page 2, line 25, at end insert
      "The Scottish Committees shall include a representative of each island and regional authority.".
      Mr. Barron: We had quite a lengthy debate in Committee on this matter, and this is a further attempt to ensure that the members of the consumer committees are really representative of the interests of local consumers. During the debate in Committee, the Minister showed a lack of understanding of exactly what concerns people who represent the interests of consumers. I quoted to him a brief that had been given, as I understand it, to all hon. Members by the Consumers Association, a respected body which has worked for many years promoting the interests and rights of consumers. It commented directly on the wording and on the likely operation of the clause:
      "We do not agree with the 'desirability of appointing a person who has experience of, and has shown capacity in, matters relevant to the provision of electrical services"'
      that is the wording that we, too, should like to change with this amendment—

      423
      "Part 1 Clause 2 Subsection 4. This is a recipe for ensuring that the committees are 'captured' by the industries they are meant to be supervising."
      Opposition Members, having been through the Bill in Committee, have little confidence that the vested interests of the electricity supply industry will be removed by clause 2 if it is left unamended.
      Indeed, in Committee the Minister said:
      "we see the committees not like such bodies in the past, which have stood on the touchline of the regulatory process, but as an integrated part of that process with well-defined roles." —[Official Report, Standing Committee E, 12 January 1989; c. 122.]
      9.30 pm
      We believe that, in a general sense, the committees may be far too integrated if their members do not directly represent consumer interests. Consumer interests are not necessarily the interests of the electricity supply industry. We are anxious, therefore, that the committees should not be dominated by the industry's needs or the regulator's demands. Regulations and consumer advocacy are not the same and we must ensure that the committees are vigorously independent. We tried throughout to get financial independence for these committees so that they would have their own offices in the different areas. On each occasion we failed and were not backed by the Minister. So we return to say to him that we are unhappy with the make-up of the consumer committees. What he asks for in the clause is not necessarily in the interest of the consumer.
      We hope that the Minister has taken the opportunity in the few short weeks since we left clause 2 in Committee to look in greater detail at the issue. I look forward to hearing what he has to say. This looks a bit wider than the earlier debate and we hope that the Bill will be amended so that it, too, will be a bit wider than what we have in front of us.
      Mr. Wallace: Amendment No. 114 is in my name and the names of my hon. Friends. In many respects, albeit in a Scottish context, it seeks to do much the same as the amendment moved by the hon. Member for Rother Valley (Mr. Barron).
      The composition of the proposed committees requires the director to have regard to people who have experience of the provision of electricity supply services. This seems to be a very odd requirement considering that the committees, one assumes, are to represent the interests of consumers. While some passing knowledge is obviously required, many consumers do not have the first idea how their electricity supply gets to them but have far more than a passing interest in having a regular, secure supply. These are the people whose interests the consumers' committees should be protecting.
      If one looks at the responsibility and functions of consumers' committees, one finds, in clause 47, that they have, among other responsibilities, a duty to keep under review matters affecting the interests of consumers of electricity supplied to premises in the committee's areas. My constituency is in the North of Scotland Hydro-Electric Board area. It is a vast area and my constituency is itself quite vast, with particular problems that apply to islands areas. For a start, Shetland is not connected to the national grid. Its main electricity supply comes from a diesel-generated power station in Lerwick. It has in places such as Fair Isle a unique form of supply which is dependent on wind power—and all credit to the
      424
      hydro-electric board that it has set this up. But there are very particular problems relating to an area with particular needs.
      Our reasonable request is that people from each geographical area— we have defined that in terms of local authority areas, because that is a neat way of doing it—should be on the consumers' committees. It is only people from specific areas who have first-hand experience of circumstances and conditions in different parts of the country and who know what the needs of these areas are.
      These are very modest proposals and if the Government accepted the amendments it would show that they are genuinely interested in the rights and interests of the consumers. I do not see that there is anything fundamental at stake with regard to the overall strategy of the Bill. By conceding the amendments they would prove that they have the interests of consumers at heart and I hope that the Minister will give us a positive response.
      Mr. Hardy: I shall be brief. I want to say a word or two in criticism of the "one of us" syndrome which is far too prevalent today in British political life. I am not at all happy about many of the appointments made by the Government. I recall not very long ago pursuing a regional aid case in my constituency. It was referred to the Department of Trade and Industry's advisory committee which found against my constituency proposal. Then I discovered that a significant proportion of the people involved had no connection with my region. I had to advise some constituents in fair rent cases not to appeal because I discovered that a rent tribunal was excessively representative of families of estate agents and solicitors, most of whom may well have been politically sensitive and acceptable to Treasury Ministers.
      We have seen the proliferation of Government sympathisers in the health authorities and a tremendous decline in the number of appointments of people who do not share the ideology that is currently fashionable in the Government. I am not restricting my criticism to matters that affect only Opposition Members because some matters would not be acceptable to those who control the destiny of this nation.
      We need to have an assurance from Ministers that the principal qualifications of those required to serve on consumer committees is not just the knowledge of what one does with an electric light switch, possession of a Conservative party card and adherence to the currently popular fashion in the Conservative party. I hope that the interests of the consumer will be well served and that they will receive priority over the interests of the political party in power.
      Mr. Haynes: I remember the debate in Committee on this matter and on that occasion we were not at all satisfied. That is why we have come back to the issue. We are looking for satisfaction in this debate. The Government brag that the Bill is in the interests of the consumer. If that is the case, why does not the Minister cough up? We are asking him straightforwardly for proper representation for the consumer on these bodies. [Interruption.] I wish that he would not speak to his Parliamentary Private Secretary while I am trying to make an important point. If the Minister's ears were a bit larger, he might hear what was being said.
      We are looking for fairness for the consumer. We do not want the committees loaded with Tories. We want

      425
      fairness across the board. The Minister must not load the committees with Tory mouthpieces, but that will happen if we are not careful. I hope that he takes on board what is being said and especially what I am saying. I shall probably have more to say later during the evening or the morning, but I want the Minister to understand quite clearly that I am speaking on behalf of the people that I represent. They want a fair crack of the whip for the consumer. I hope that the Minister will come across and give us what we are looking for because he did not do that upstairs.
      Mr. John Maxton: It is necessary to say a word or two about the Scottish consultative committees and the consumer committees that will be established by the Bill. As the hon. Member for Orkney and Shetland (Mr. Wallace) has said, there is a marginally different situation in the North of Scotland Hydro-Electric Board. That board and the new company will have a geographical area that is larger in terms of length but not in terms of population than from the north of England to Land's End. It will extend from Campbeltown in the south, which is almost, but not quite, the most southerly point in Scotland—some people might say that it is almost in Northern Ireland—right up to the most northerly house connected to the electricity supply in Unst, in Shetland.
      That is an enormous geographical spread and places on the Government a responsibility, which so far they have not met, to ensure that that geographical distance is properly represented on the committee. The two amendments make some effort to achieve that. Any committee will have a difficult job to do better than the present North of Scotland Consultative Council, which I believe is the best of the councils at advising us about the needs of its area. The briefings from that council have been first-class.
      The new consumers' committees must properly represent an area's consumers. The committee members should not be appointed as a result of their political interests or because of any connections with the electricity supply industry. In Scotland we have the advantage because the Government are rapidly running out of Tories to put on those committees in Scotland. The Government are trying desperately, but there are not many Tories left there and the few that are left are easily recognisable. We have no great problem in saying that such and such is a political appointment because that person is a Tory. In fact, there is a joke about the man in a paper hat who is the only Tory left in Scotland.
      The consumers' committees in Scotland must represent the consumers. I would prefer it if there were legal constraints on the consumers' committees under the director to ensure that local committees are appointed in each of the areas covered by the North of Scotland Hydro-Electric Board to ensure local representation.
      Even if the committees have proper representation, the committee members will have problems meeting regularly. It will be extremely difficult for anyone appointed to the committees to travel from Campbeltown to Perth or Inverness or from Unst to Inverness. The Minister must assure us that there will be no political appointments to the committees and that people will not be appointed because they have connections with the electricity supply industry. The committee members should be genuine consumers
      426
      who know more about an area and its problems than about electricity supply. I hope that the Minister will respond to my points.
      Mr. Michael Spicer: Clause 2 provides for consumers' committees to be attached to each public electricity supplier in the United Kingdom. That will ensure that the regional dimension, as set out in the amendments is achieved. In response to the hon. Members for Orkney and Shetland (Mr. Wallace) and for Glasgow, Cathcart (Mr. Maxton), I can state that that includes the north of Scotland dimension which will have its own consumers' committee.
      We are not in favour of providing for special pre-defined interest groups, regional or otherwise. In future, we want to see the appointment of people who, if possible, know something about the electricity industry, and that is defined in clause 2(4). That answers points raised by the hon. Members for Cathcart, for Ashfield (Mr. Haynes) and for Wentworth (Mr. Hardy). The members of the committee will be appointed by the director.
      I cannot promise that there will be no Conservatives on the committees. There are so many Conservatives these days and there will be more and more in Scotland. The director will have a very large catchment area to choose from and I am sure that there will be many Conservatives on those committees. However, I assure the House that the appointments will be made by the independent director and not by the Government. That is a major new feature of the Bill and I am happy to give that assurance. We have placed the whole process more at arm's length from the Government. [Interruption.] I can see that many Opposition Members would like to intervene. Let us have a little fun; I will give way to the hon. Member for Ashfield.
      Mr. Haynes: I resent that remark. The Minister is trying to be funny. He will regret that. I warn the Minister now: he should not be clever.
      I want to know whether the Minister or the Department will have any influence on the director, as to who serves on the committees. If one looks at other such bodies, one finds that the Government always have their grubby hands on appointments.
      9.45 pm
      Mr. Spicer: I happily give the hon. Gentleman a precise answer to his fair question. Committee chairmen will be appointed with the consent of the Secretary of State, but committee members will be appointed by the directors. The general membership of the committees will be independently appointed. I am pleased to give the House that assurance. The hon. Members for Wentworth and for Cathcart made an important point that the Government completely concede, which is that appointments to the committees should be made more independent and further removed from the Government. We agree completely, and that is why we are changing the Bill.
      Mr. Wallace: The Minister responded to the points made by myself and the hon. Member for Glasgow, Cathcart (Mr. Maxton) by saying that at least the North of Scotland board will have a committee attached to it. Will he confirm that as the Bill stands, the membership of the committee, comprising between 10 and 20 persons, could all come from Glasgow—outwith the area served by

      427
      the board? Far from different parts of a vast area being represented, it is theoretically possible that not one geographical area under the board's control will be represented.
      Mr. Spicer: No doubt that is theoretically possible. We are saying not that we want specialist groups predetermined, but that the sort of people who will represent consumer interests should be a matter for the director within the terms of the Bill. If there is such a difference between the characteristics of areas as the hon. Gentleman suggests, it would make sense, in providing proper consumer representation, to take geographical interests into account. However, we do not want to make that a statutory obligation. Somebody must appoint the members of the committee.
      Mr. Wallace: The Minister means that the Government wish to abdicate responsibility.
      Mr. Spicer: That is the way that the hon. Gentleman chooses to put it, but I suggest that he has a word with the hon. Members for Wentworth and for Cathcart. Although they represent different parties, they made a strong point. In response, I gave an assurance that there will not be political involvement in appointments, but that they will be the responsibility of the independent director. I believe that that meets the general view of the House that such an arrangement is a good thing.
      The reason why, in future, consumers' committees will be an integral part of the regulatory process is clear, and it is one about which we feel strongly. I say in response to the hon. Member for Rother Valley (Mr. Barron) that one of the radical reforms introduced in the Bill is that there will no longer be merely lobbying organisations shouting their views from outside the industry—on a previous occasion, I used the phrase "from the touchline"—which is largely how the existing consumer committees operate. Under the new arrangements, they will be part of the regulatory body.
      In that way, we are enormously strengthening the effectiveness of consumer representatives' involvement in the industry's development. I remind the House that the Electricity Consumers Council thoroughly approves of that new arrangement. It is a radical and great improvement in the involvement of consumer representatives in the affairs of a large industry. I hope that the House welcomes the new structure and accepts the points that I have made. Therefore, I hope that the amendment is withdrawn.
      Mr. Barron: The amendment cannot and will not be withdrawn. The Minister continues to fall into the trap that he fell into in Committee. He regards regulation and consumerism as the same thing. That is not the case. I have put not only my arguments but those of consumer organisations which, for many decades, have attempted to represent consumers' interests. They say that the proposed structure of the consumers' committees is not necessarily right. It was said in Committee—I will not say that the Minister said it—that anybody who receives electricity is an electricity consumer. I argued that the chairman of an electricity board receives electricity and is an electricity consumer. But his idea of electricity and the consumption of electricity is different from that of his neighbour up the
      428
      road who also receives electricity, uses it as a domestic consumer, and pays a quarterly bill. He has a different outlook on the electricity industry.
      Mr. Michael Spicer: Will the hon. Gentleman confirm that he at least accepts that the Electricity Consumers Council has thoroughly approved the new arrangements?
      Mr. Barron: Independent consumer bodies are not in a position to be the turkeys who vote for Christmas. Opposition Members would sooner listen to the people who, week in and week out, month in and month out, and year in and year out, have represented people who wanted help and have found the electricity supply industry lacking. We will debate that matter when we talk about fuel poverty. Those people have encountered the problems of consumers within the electricity supply industry. Opposition Members are not happy with the situation.
      Once again, as he did in Committee, the Minister has dismissed the issue and said that those who are involved in regulation are therefore involved in the interests of consumers. I am pleased that the hon. Member for Bosworth (Mr. Tredinnick) is present. After he made his 20-minute speech, I said that I would refer to him later. Because of his presence on this occasion, I will put the amendment to the vote to see whether hon. Members are in favour of consumers' rights.
      Question put, That the amendment be made:
      The House divided: Ayes 71, Noes 174.

      Division No. 144]

      [9.52 pm

      AYES

      Banks, Tony (Newham NW)

      Hughes, John (Coventry NE)

      Barnes, Harry (Derbyshire NE)

      Illsley, Eric

      Barron, Kevin

      Johnston, Sir Russell

      Beith, A. J.

      Jones, Ieuan (Ynys Môn)

      Bennett, A. F. (D'nt'n & R'dish)

      Kennedy, Charles

      Bermingham, Gerald

      Livsey, Richard

      Blair, Tony

      Lloyd, Tony (Stretford)

      Bruce, Malcolm (Gordon)

      McAllion, John

      Buckley, George J.

      McAvoy, Thomas

      Campbell, Menzies (Fife NE)

      Macdonald, Calum A.

      Carlile, Alex (Mont'g)

      McFall, John

      Cohen, Harry

      McLeish, Henry

      Cox, Tom

      Maxton, John

      Cryer, Bob

      Meale, Alan

      Dalyell, Tam

      Mitchell, Austin (G't Grimsby)

      Dewar, Donald

      Molyneaux, Rt Hon James

      Dixon, Don

      Morgan, Rhodri

      Doran, Frank

      Morris, Rt Hon A. (W'shawe)

      Dunnachie, Jimmy

      Pike, Peter L.

      Eadie, Alexander

      Powell, Ray (Ogmore)

      Evans, John (St Helens N)

      Prescott, John

      Ewing, Mrs Margaret (Moray)

      Radice, Giles

      Fearn, Ronald

      Richardson, Jo

      Foster, Derek

      Robertson, George

      Foulkes, George

      Skinner, Dennis

      Fyfe, Maria

      Smith, Andrew (Oxford E)

      Galbraith, Sam

      Soley, Clive

      Garrett, John (Norwich South)

      Spearing, Nigel

      Golding, Mrs Llin

      Taylor, Matthew (Truro)

      Griffiths, Nigel (Edinburgh S)

      Wallace, James

      Hardy, Peter

      Welsh, Andrew (Angus E)

      Haynes, Frank

      Welsh, Michael (Doncaster N)

      Hogg, N. (C'nauld & Kilsyth)

      Williams, Alan W. (Carm'then)

      Home Robertson, John

      Hood, Jimmy

      Tellers for the Ayes:

      Howells, Geraint

      Mr. Robert N. Wareing and Mr. Allen McKay.

      Howells, Dr. Kim (Pontypridd)

      Hoyle, Doug

      NOES

      Adley, Robert

      Amos, Alan

      Aitken, Jonathan

      Arnold, Jacques (Gravesham)

      Amess, David

      Ashby, David

      429

      Atkinson, David

      Lamont, Rt Hon Norman

      Baker, Nicholas (Dorset N)

      Lang, Ian

      Baldry, Tony

      Lawrence, Ivan

      Batiste, Spencer

      Lee, John (Pendle)

      Benyon, W.

      Lester, Jim (Broxtowe)

      Blackburn, Dr John G.

      Lilley, Peter

      Blaker, Rt Hon Sir Peter

      Lloyd, Peter (Fareham)

      Boswell, Tim

      Lord, Michael

      Bottomley, Peter

      Lyell, Sir Nicholas

      Bottomley, Mrs Virginia

      Macfarlane, Sir Neil

      Bowden, Gerald (Dulwich)

      Maclean, David

      Braine, Rt Hon Sir Bernard

      Malins, Humfrey

      Brazier, Julian

      Mans, Keith

      Bright, Graham

      Maples, John

      Brooke, Rt Hon Peter

      Martin, David (Portsmouth S)

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

      Maude, Hon Francis

      Browne, John (Winchester)

      Maxwell-Hyslop, Robin

      Buck, Sir Antony

      Meyer, Sir Anthony

      Burns, Simon

      Miller, Sir Hal

      Burt, Alistair

      Mitchell, Andrew (Gedling)

      Butterfill, John

      Mitchell, Sir David

      Carlisle, Kenneth (Lincoln)

      Morris, M (N'hampton S)

      Carrington, Matthew

      Morrison, Sir Charles

      Carttiss, Michael

      Morrison, Rt Hon P (Chester)

      Cash, William

      Moss, Malcolm

      Chapman, Sydney

      Mudd, David

      Chope, Christopher

      Neale, Gerrard

      Conway, Derek

      Needham, Richard

      Coombs, Anthony (Wyre F'rest)

      Neubert, Michael

      Coombs, Simon (Swindon)

      Nicholls, Patrick

      Cope, Rt Hon John

      Nicholson, David (Taunton)

      Cran, James

      Norris, Steve

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

      Onslow, Rt Hon Cranley

      Davis, David (Boothferry)

      Oppenheim, Phillip

      Day, Stephen

      Paice, James

      Dorrell, Stephen

      Patnick, Irvine

      Douglas-Hamilton, Lord James

      Patten, Chris (Bath)

      Dover, Den

      Pattie, Rt Hon Sir Geoffrey

      Durant, Tony

      Peacock, Mrs Elizabeth

      Dykes, Hugh

      Porter, David (Waveney)

      Fallon, Michael

      Rathbone, Tim

      Favell, Tony

      Redwood, John

      Fenner, Dame Peggy

      Riddick, Graham

      Fishburn, John Dudley

      Ridsdale, Sir Julian

      Fookes, Dame Janet

      Rifkind, Rt Hon Malcolm

      Forman, Nigel

      Roe, Mrs Marion

      Forsyth, Michael (Stirling)

      Rost, Peter

      Fox, Sir Marcus

      Rumbold, Mrs Angela

      Franks, Cecil

      Ryder, Richard

      Freeman, Roger

      Sainsbury, Hon Tim

      Gale, Roger

      Shaw, David (Dover)

      Garel-Jones, Tristan

      Shaw, Sir Giles (Pudsey)

      Gill, Christopher

      Shaw, Sir Michael (Scarb')

      Goodhart, Sir Philip

      Shelton, Sir William

      Goodlad, Alastair

      Shepherd, Colin (Hereford)

      Goodson-Wickes, Dr Charles

      Shersby, Michael

      Gow, Ian

      Smith, Tim (Beaconsfield)

      Greenway, John (Ryedale)

      Soames, Hon Nicholas

      Gregory, Conal

      Speller, Tony

      Griffiths, Peter (Portsmouth N)

      Spicer, Sir Jim (Dorset W)

      Grist, Ian

      Spicer, Michael (S Worcs)

      Gummer, Rt Hon John Selwyn

      Squire, Robin

      Hague, William

      Stern, Michael

      Hamilton, Hon Archie (Epsom)

      Stevens, Lewis

      Hamilton, Neil (Tatton)

      Stewart, Allan (Eastwood)

      Hanley, Jeremy

      Stradling Thomas, Sir John

      Harris, David

      Summerson, Hugo

      Heathcoat-Amory, David

      Taylor, Ian (Esher)

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

      Taylor, John M (Solihull)

      Howarth, G. (Cannock & B'wd)

      Taylor, Teddy (S'end E)

      Hughes, Robert G. (Harrow W)

      Temple-Morris, Peter

      Hunt, David (Wirral W)

      Thompson, D. (Calder Valley)

      Hunter, Andrew

      Thompson, Patrick (Norwich N)

      Irvine, Michael

      Thurnham, Peter

      Jack, Michael

      Tredinnick, David

      King, Roger (B'ham N'thfield)

      Trippier, David

      Kirkhope, Timothy

      Trotter, Neville

      Knapman, Roger

      Twinn, Dr Ian

      Knight, Greg (Derby North)

      Waddington, Rt Hon David

      Knowles, Michael

      Waller, Gary

      430

      Wardle, Charles (Bexhill)

      Wilshire, David

      Warren, Kenneth

      Wood, Timothy

      Watts, John

      Wells, Bowen

      Tellers for the Noes:

      Widdecombe, Ann

      Mr. David Lightbown and Mr. Tom Sackville.

      Wilkinson, John

      Question accordingly negatived.
      It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.
      Ordered,
      That, at this day's sitting, the Electricity Bill may be proceeded with, though opposed, until any hour.—[Mr. John M. Taylor.]
      As amended (in the Standing Committee), again considered.

    Clause 3

      GENERAL DUTIES OF SECRETARY OF STATE AND DIRECTOR
      Mr. Illsley: I beg to move amendment No. 134, in page 2, line 40, leave out
      'able to finance the carrying on'
      and insert
      'financially and technically competent of undertaking'.
      Madam Deputy Speaker: With this it will be convenient to consider the following: Amendment No. 135, in page 2, line 43, after '(2)', insert '(3 and 4)'.
      Government amendments Nos. 79 and 80, and the following amendments:
      No. 131, in page 3, line 10, leave out 'thereby'.
      No. 132, in page 3, line 12, leave out 'to such premises'.
      No. 133, in page 3, line 24, after 'efficient', insert 'and
      economic'.
      No. 104, in page 3, line 28, leave out subsection (4) and insert—
      '(4) In carrying out all their duties the Secretary of State and the Director General shall take into account, in particular, the needs of the low paid, those who are disabled and of pensionable age.'.
      No. 146, in page 3, line 30, at end add—
      'and in respect of subsection (3)(a)(ii) above, those who are medically dependent on electricity supply, and in respect of subsection (3)(a)(i) above, those on lower incomes.'.
      Mr. Illsley: Amendments Nos. 134 and 135 have been tabled in the name of my hon. Friend the Member for Sedgefield (Mr. Blair) and others. Amendment No. 134 relates to the duties laid upon the director in relation to licence holders. Among those duties, the director must ensure that a licence holder is able to finance the carrying on of the activities for which he is licensed. Our amendment seeks to introduce a requirement for technical competence as well as financial ability.
      In view of recent events in the latter part of 1988 when a business man purchased a power station in South Wales, perhaps the clause itself could do with further strengthening when it comes to the character of the people who want to buy such stations and involve themselves in the industry. In an industry such as electricity generation, distribution and supply, there is an obvious need for the very highest standards of technical competence, not only on the part of the scientists and operatives employed in the industry but on the part of those who will be directly involved in making the financial, investment and planning decisions on behalf of the industry.

      431
      A phrase which was bandied about in Committee talked of the responsibility of "keeping the lights on", but there is a little more at stake than that. We have hospitals, schools, offices, factories, foundries, warehouses, mines and any form of building which houses an industry or an enterprise: all rely on a secure supply of electricity. It would be an act of the utmost criminal folly if the supply of electricity to any of these or the supply of electricity in general, together with the future planning and investment requirements of the supply industry, were to be jeopardised by the poor performance of the director in deciding on the financial or technical competence of those who were allowed to invest or take part in the industry.
      Yet, as the Bill stands, anyone who can afford to set up in the industry can apply for a licence to do so. There are clauses, particularly clause 7, which impose conditions, but those conditions will be formulated by the director in conjunction with the Secretary of State. It is quite unthinkable that anyone without technical competence would attempt even to consider setting up in the industry, but towards the end of last year it appears that someone actually did so. A Mr. Casfikis purchased a power station in south Wales with the intention of running it. When further investigations were made into the purchase it was found that the gentleman was a man of straw.
      If there are profits to be made from the industry, however, the profitable companies will be bought out by others. There will be mergers and takeovers. We have seen this week what can happen when a company decides that it will buy out another company. A major finance house carries out an inquiry into the bona fides of a particular company and a firm of City lawyers advises on the legal aspects. If it is anything like what happened with the House of Fraser, all hell breaks loose. If anything illustrates the dangers of clause 3 as it stands, with the director making the decisions on financial and technical competence, it is the fiasco of the sale of the House of Fraser.
      In that case the investigations were undertaken by a City firm of financiers. What chance has the Director General of Electricity Supply in trying to judge the financial and technical competence of a company that wishes to come into the electricity supply industry when the City of London cannot do it? Obviously, in those circumstances a large responsibility is being placed on the shoulders of the director general.
      In the private sector, the industry will be subject to takeovers and mergers. They will involve major companies without the slightest interest in electricity, let alone in the security or obligation of supply. The larger companies will consider a generating company as simply another part of their portfolios.
      We can expect, too, takeovers from abroad. We can well understand, because of its financial situation, that Electricité de France would very much like to invest in our power companies. Obviously, it will be looking long and hard at what happens after privatisation. There will be indications of overseas takeovers by companies that this country finds, perhaps, offensive or unwanted. What remedy will there be? Those takeovers will take place. There will be nothing to stop them, other than such bodies as the Monopolies and Mergers Commission and the Office of Fair Trading. However, if those takeovers comply with the regulations, there will be nothing to stop them. I shall cite two examples of such takeovers in the
      432
      past year in my area. There was the takeover of Rowntree by Nestlé and, in my constituency, the takeover of the Redfearn glass firm by a Swedish company.
      The electricity supply industry has 12 area boards and each area board covers a considerable area with a considerable number of consumers. Once those boards begin to be swallowed up by larger companies, obviously there will be a much smaller industry and there will be a move back towards the monopoly.
      The structure, as it has been outlined in the White Paper and the Bill, might be put at jeopardy because of takeovers and mergers. Set out in the Bill is a horizontal structure with the separation of generation, distribution and supply. However, in future what will there be to stop the larger companies buying into other aspects of the industry—the supply and distribution sectors—or the suppliers coming back into generation to tie up the loose ends and moving us back into a system of vertical integration?
      The area boards or the public electricity suppliers, as they will be known, will have power to have their own generation capabilities. We will therefore start from a small amount of vertical integration which could be increased by mergers of the area boards. We could also see —perish the thought—British Coal, if it is privatised, being bought by the electricity companies. We could see major consumers of electricity being purchased, which will again bring into question coal imports.
      What prospects are there for the area boards? They will either be strong enough, or have the financial muscle, to stand alone after privatisation, or, if they have a large industrial customer base, they will stand threatened by the introduction of independent investors who will take away those large industrial customers and leave them at the mercy of the predators, the larger companies within the industry.
      If, as we are led to believe, there are upwards of 20 companies ready and waiting to come into the industry, that threat is already there. We have yet to have names put to the 20 companies that have been talked about during the past three months. However, we will obviously take the Minister at his word and believe that the threat from those companies exists.
      I shall cite two examples. There is the Yorkshire electricity board, which is my board, and the north eastern board, both of which have a large base of industrial consumers. If we compare those boards with the south eastern electricity board, the reverse is true. That board has a large domestic consumer base and obviously the new boards in the south-east will set off as being more attractive to investors. They will start off with a financial advantage because they will have locked-in customers—the domestic consumer, unlike the industrial consumer, cannot opt out and look to the private generator.
      It is important to consider that 49·5 per cent. of the north-eastern board's customers are industrial and that industrial customers account for 52 per cent. of the Yorkshire electricity board's market. The one customer common to both those boards is the coal industry, which is a major consumer of electricity.
      10.15 pm
      With the introduction of coal and oil imports after privatisation, both aimed at taking away British Coal's share of the market, there will be a further knock-on effect in our areas. The area boards will lose their custom as we face further colliery closures.

      433
      The Government should reconsider clause 3, especially the duties of the director regarding the financial and technical competence of entrants into the industry. They should tighten the Bill to enable companies or area boards, such as Yorkshire and north-eastern, to fend off the takeover bids with which they are bound to be faced after privatisation.
      Dr. Kim Howells: It is important to draw attention to the implications of those parts of the Bill that test the probability that licence holders will seek to secure their hold on particular parts of the market by expanding their operations, as my hon. Friend the Member for Barnsley, Central (Mr. Illsley) has said, beyond the straightforward business of marketing and selling electricity. We are talking about area boards—licence holders—six of which have annual turnovers of more than £1 billion. Even the smallest, the south Wales board, has an annual turnover of £500,000.
      The diversification of the boards is mainly discussed in terms of electricity generation, but I am sure that the Minister is well aware that several boards have been hyperactive in putting together generating projects and, in some cases, joint ventures for power production.
      I echo the concern expressed by my hon. Friend. Is the Minister aware that there is a great deal of talk about generating boards buying back into their supplying companies in the future? It has even been suggested that they might buy coal mines as well as other sources of fuel. What implications will that have in terms of the creation of new, future monopolies?
      Mr. Michael Spicer: The hon. Member for Barnsley, Central (Mr. Illsey) has focused on amendment No. 134. I understand the purpose of his introductory remarks, and I listened with great care to what he said.
      We believe that the present wording of the Bill is more embracing than amendment No. 134. The present wording enables the director to do what he wants to do—to check the financial credentials of a potential new entrant and to bear in mind that entrant's future viability when considering such matters as pricing formula and his other duties. The present wording meets the concerns expressed by the hon. Gentleman, especially in relation to clause 3(1)(b), and offers other advantages.
      The hon. Member for Pontypridd (Dr. Howells) was concerned about anti-competitive practices. So would we be, if there were the kind of anti-competitive practices that he has in mind. The normal anti-competitive rules and laws will apply. The Bill makes specific provision for the operation of the Monopolies and Mergers Commission and deals with the interrelationship between the powers of the director general to protect competition and the more general powers of the MMC.
      While we would not want to restrict any reasonable diversification or development by any company, we agree that there should be consideration of anti-competitive practices. We think that the current institutions and laws for protecting the industry from the predatory behaviour that the hon. Gentleman has in mind are adequate.
      On the basis of that explanation, I hope that the hon. Member for Barnsley, Central will withdraw his amendment. Certainly we would not accept any of the amendments, and particularly those which, contrary to
      434
      what the hon. Member for Pontypridd was concerned about, are aimed at restricting competition and competitive pressures.
      Mr. Illsley: In view of the speech of my hon. Friend the Member for Pontypridd (Dr. Howells) and the points that I made in my contribution, we still feel that the Bill needs strengthening, particularly as regards financial mergers and takeovers. As the Minister is not willing to accept amendments on the point, we will divide the House.
      Question put, That the amendment be made:—
      The House divided: Ayes 60, Noes 160.

      Division No. 145]

      [10.21 pm

      AYES

      Banks, Tony (Newham NW)

      Hoyle, Doug

      Barnes, Harry (Derbyshire NE)

      Hughes, John (Coventry NE)

      Barron, Kevin

      Illsley, Eric

      Beith, A. J.

      Kennedy, Charles

      Bennett, A. F. (D'nt'n & R'dish)

      Lambie, David

      Bermingham, Gerald

      Livsey, Richard

      Blair, Tony

      McAllion, John

      Bruce, Malcolm (Gordon)

      McAvoy, Thomas

      Buckley, George J.

      McFall, John

      Campbell, Menzies (Fife NE)

      Maxton, John

      Cohen, Harry

      Meale, Alan

      Cox, Tom

      Mitchell, Austin (G't Grimsby)

      Crowther, Stan

      Molyneaux, Rt Hon James

      Cryer, Bob

      Morgan, Rhodri

      Dalyell, Tam

      Pike, Peter L.

      Dewar, Donald

      Powell, Ray (Ogmore)

      Dixon, Don

      Radice, Giles

      Doran, Frank

      Robertson, George

      Dunnachie, Jimmy

      Ruddock, Joan

      Eadie, Alexander

      Skinner, Dennis

      Ewing, Harry (Falkirk E)

      Soley, Clive

      Ewing, Mrs Margaret (Moray)

      Spearing, Nigel

      Foster, Derek

      Taylor, Matthew (Truro)

      Foulkes, George

      Wallace, James

      Fyfe, Maria

      Wareing, Robert N.

      Garrett, John (Norwich South)

      Welsh, Andrew (Angus E)

      Hardy, Peter

      Welsh, Michael (Doncaster N)

      Haynes, Frank

      Williams, Alan W. (Carm'then)

      Hogg, N. (C'nauld & Kilsyth)

      Home Robertson, John

      Tellers for the Ayes:

      Hood, Jimmy

      Mr. Nigel Griffiths and Mr. Allen McKay.

      Howells, Dr. Kim (Pontypridd)

      NOES

      Adley, Robert

      Cash, William

      Alison, Rt Hon Michael

      Chapman, Sydney

      Amess, David

      Chope, Christopher

      Amos, Alan

      Conway, Derek

      Arnold, Jacques (Gravesham)

      Coombs, Anthony (Wyre F'rest)

      Ashby, David

      Coombs, Simon (Swindon)

      Atkinson, David

      Cran, James

      Baker, Nicholas (Dorset N)

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

      Baldry, Tony

      Davis, David (Boothferry)

      Batiste, Spencer

      Day, Stephen

      Blackburn, Dr John G.

      Dorrell, Stephen

      Blaker, Rt Hon Sir Peter

      Douglas-Hamilton, Lord James

      Boswell, Tim

      Dover, Den

      Bottomley, Peter

      Durant, Tony

      Bottomley, Mrs Virginia

      Dykes, Hugh

      Braine, Rt Hon Sir Bernard

      Fallon, Michael

      Brazier, Julian

      Favell, Tony

      Bright, Graham

      Fenner, Dame Peggy

      Brooke, Rt Hon Peter

      Fishburn, John Dudley

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

      Forman, Nigel

      Browne, John (Winchester)

      Forsyth, Michael (Stirling)

      Buck, Sir Antony

      Fox, Sir Marcus

      Burns, Simon

      Franks, Cecil

      Burt, Alistair

      Freeman, Roger

      Butterfill, John

      Gale, Roger

      Carlisle, John, (Luton N)

      Garel-Jones, Tristan

      Carlisle, Kenneth (Lincoln)

      Gill, Christopher

      Carrington, Matthew

      Goodlad, Alastair

      Carttiss, Michael

      Goodson-Wickes, Dr Charles

      435

      Greenway, John (Ryedale)

      Lloyd, Peter (Fareham)

      Gregory, Conal

      Lord, Michael

      Griffiths, Peter (Portsmouth N)

      Lyell, Sir Nicholas

      Grist, Ian

      Macfarlane, Sir Neil

      Gummer, Rt Hon John Selwyn

      Maclean, David

      Hague, William

      Malins, Humfrey

      Hamilton, Hon Archie (Epsom)

      Mans, Keith

      Hamilton, Neil (Tatton)

      Maples, John

      Hanley, Jeremy

      Martin, David (Portsmouth S)

      Harris, David

      Maude, Hon Francis

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

      Maxwell-Hyslop, Robin

      Howarth, G. (Cannock & B'wd)

      Meyer, Sir Anthony

      Hughes, Robert G. (Harrow W)

      Miller, Sir Hal

      Hunt, David (Wirral W)

      Mills, Iain

      Irvine, Michael

      Mitchell, Andrew (Gedling)

      Jack, Michael

      Mitchell, Sir David

      King, Roger (B'ham N'thfield)

      Morris, M (N'hampton S)

      Kirkhope, Timothy

      Morrison, Sir Charles

      Knapman, Roger

      Morrison, Rt Hon P (Chester)

      Knight. Greg (Derby North)

      Neale, Gerrard

      Knowles, Michael

      Needham, Richard

      Lamont, Rt Hon Norman

      Neubert, Michael

      Lang, Ian

      Nicholls, Patrick

      Lawrence, Ivan

      Nicholson, David (Taunton)

      Lee, John (Pendle)

      Norris, Steve

      Lester, Jim (Broxtowe)

      Paice, James

      Lilley, Peter

      Patnick, Irvine

      436

      Patten, Chris (Bath)

      Stradling Thomas, Sir John

      Pattie, Rt Hon Sir Geoffrey

      Summerson, Hugo

      Peacock, Mrs Elizabeth

      Taylor, Ian (Esher)

      Porter, David (Waveney)

      Taylor, John M (Solihull)

      Rathbone, Tim

      Taylor, Teddy (S'end E)

      Redwood, John

      Thompson, D. (Calder Valley)

      Rifkind, Rt Hon Malcolm

      Thompson, Patrick (Norwich N)

      Roe, Mrs Marion

      Thurnham, Peter

      Rost, Peter

      Tredinnick, David

      Ryder, Richard

      Trippier, David

      Sackville, Hon Tom

      Trotter, Neville

      Sainsbury, Hon Tim

      Twinn, Dr Ian

      Shaw, David (Dover)

      Waddington, Rt Hon David

      Shaw, Sir Giles (Pudsey)

      Waller, Gary

      Shaw, Sir Michael (Scarb')

      Wardle, Charles (Bexhill)

      Shelton, Sir William

      Warren, Kenneth

      Shepherd, Colin (Hereford)

      Watts, John

      Shersby, Michael

      Wells, Bowen

      Smith, Tim (Beaconsfield)

      Widdecombe, Ann

      Soames, Hon Nicholas

      Wilkinson, John

      Speller, Tony

      Wilshire, David

      Spicer, Sir Jim (Dorset W)

      Wood, Timothy

      Spicer, Michael (S Worcs)

      Squire, Robin

      Tellers for the Noes:

      Stevens, Lewis

      Mr. David Lightbown and Mr. David Heathcoat-Amory.

      Stewart, Allan (Eastwood)

      Question accordingly negatived.
      Amendments made: No. 79, in page 3, line 4, after 'charged', insert 'to tariff customers'.
      No. 80, in page 3, line 5, leave out 'by them'.
      No. 2, in page 3, line 24, after 'them', insert—
      '(bb) to protect the public from dangers arising from the generation, transmission or supply of electricity;'. —[Mr. Michael Spicer.]
      Mr. Barron: I beg to move amendment No. 136, in page 3, line 27, at end insert —
      '(d) to promote the efficient and economic use of heat co-generated with electricity in combined heat and power plants or stations.'.
      Madam Deputy Speaker: With this it will be convenient to take the following amendments: No. 1, in clause 30, page 24, line 43, at end add —
      '(4A) That electricity generated in a combined heat and power plant shall be treated for the purposes of subsection (4)(a) above as generated by a non-fossil fuel generating station for the proportion of the electricity produced that is equivalent to the measured quantity of heat distributed at a temperature greater than 60°C or more from the power station.'.
      No. 149, in clause 30, page 25, line 17, at end add
      '; and electricity generated in a combined heat and power plant shall be deemed to be generated by non-fossil fuel'.
      Mr. Barron: Clause 3 relates to the general duties of the Secretary of State and the Director General of Electricity Supply after privatisation. That is a crucial matter which we debated with great interest in Committee and should like to discuss again on Report.
      The amendment seeks to give the Secretary of State and the director the duty
      "to promote the efficient and economic use of heat co-generated with electricity in combined heat and power plants or stations."
      It does not say exactly what type of plant that should be, and I do not want to go into that in great detail. However, I ought to give the reasons for the amendment.
      Like many others, we believe that combined heat and power has not been treated properly. That form of co-generation has been in use in this country for a very long time, and we believe that there is a case for treating it effectively under the new regimes that are to take over from the Central Electricity Generating Board. Most people have no doubt that combined heat and power can make an important contribution. Indeed, larger schemes could make a dramatic contribution to the reduction of greenhouse gases—an issue which the Cabinet, and in particular the Prime Minister, has brought up. Over the last few months the Government have been saying that they are deeply concerned about the situation. The larger CHP schemes in this country could reduce emissions by at least 3 per cent.—and in some cases are doing so.
      The Government tell us about the plans that are in the pipeline for smaller generators throughout the country after privatisation of the electricity supply industry. Experts predict that small-scale combined heat and power schemes, together with the larger ones, could cut greenhouse gas emission by up to 10 per cent. It is recognised that the wider use of waste heat for electricity generation would also result in savings for industry and for national and local government.
      Let me mention briefly one or two of the current schemes which demonstrate the way in which many areas benefit, not just in the generation of electricity. The wider application of combined heat and power schemes in urban areas would stimulate urban regeneration, particularly in
      438
      inner cities. For a number of years—certainly since the last general election—this has been a major theme of the Prime Minister. She has said that she will take effective action in the inner cities. We do not see much effective action being taken by the Government on CHP, despite the fact that such action could make an important contribution to urban regeneration. If the Government were to accept amendment No. 136, they would be going some way towards finding ways of doing that.
      Two papers were published recently by the Government. I understand that one of them shows that up to 4,000 sites in this country could benefit from combined heat and power. The other, which I think was produced by the Energy Efficiency Office, says that up to 1,500 major industries could be using combined heat and power. Perhaps the Minister will mention that in his intervention. So this is not a small matter; the system could be applied widely and quite flexibly.
      Our amendments, particularly No. 136, would enable the opportunities to be grasped. They would put combined heat and power on at least an equal footing with the generating options that are being promoted in the Bill. I do not intend to return to yesterday's debate, but I remind the House that the Government are making sure that we will have nuclear generation for a considerable time. The same could be done for combined heat and power.
      There is an amendment in the name of the hon. Member for Erewash (Mr. Rost) about giving some form of protection that was offered by the Secretary of State yesterday. The Secretary of State talked about a new tranche of capacity in non-fossil fuels being reserved exclusively for renewables. We shall see what the Secretary of State does about an amendment that could result in a combined heat and power tranche. If he undertook to consider that proposal, he would probably have the support of the whole House.
      Successful combined heat and power schemes are being organised despite, rather than with, the assistance of the Government, mostly in areas controlled by Labour authorities. For example, Labour-controlled Waltham Forest council has won a major award from British Gas for its pioneering scheme which, among other things, is helping to keep the elderly of that Greater London area warm.
      In Sheffield, the Labour-controlled city council has created the first European-based joint venture to develop a combined heat and power scheme, and in the first stage of that scheme local tenants are receiving heat from an incinerator burning domestic waste. It will be a privilege for me tomorrow to visit the area and observe that scheme.
      The Labour city council of Leicester is actively supporting a joint venture with the private sector to introduce a major combined heat and power scheme. Newcastle, another Labour-controlled area, is continuing to work with the local business community and the electricity industry to create a combined scheme for the area.
      In south London, the Labour councils of Greenwich, Southwark and Lewisham are working with a few private sector companies to initiate a combined heat and power scheme based on energy from waste. The hon. Member for Erewash and others will be aware of the amount of heat that is wasted in power stations. Let us harness that energy and send it out into the community to heat hospitals and domestic dwellings and thereby contribute to the nation's energy resources.

      439
      In a BBC television interview on 15 January, the Secretary of State said that he supported the idea of combined heat and power schemes, and he claimed that CHP would be encouraged by, and CHP technology would gain from, privatisation. There is no evidence of the Government turning those fine words into deeds.
      On Second Reading, I referred to the way in which the Energy Act 1983 had failed to provide openings for new and diverse forms of energy generation. The CEGB and other generating companies have made it impossible for those interested in combined heat and power schemes to get into the market and sell electricity. Nothing has been said by the Government in these debates to encourage those who are trying to promote combined heat and power schemes that this legislation will prove more helpful to them than the 1983 Act. The Government should accept the amendment and show their willingness to move forward on combined heat and power in. the interests of the environment and the economy. There are many benefits to be had from combined heat and power.
      Earlier in the debate the Grimethorpe fluidised bed project in south Yorkshire was mentioned. That is a way of enabling small generators to use coal cleanly and it avoids much of the air pollution that arises from the burning of fossil fuels, especially coal. I thought that the Minister would say that the Government would fill the gap that British Coal has encountered with that project. That project on fluidised bed combustion leads the world, and if we do not make sure that the final phase, the topping phase, is funded other countries will take the lead.
      10.45 pm
      Just before the Easter recess I was in Japan where fluidised bed combustion is being developed. We must not let our project fall at the end of the year. When it is commercialised in perhaps one or two years it could well fit into combined heat and power schemes. If we let the project lapse. I have no doubt that in 10 to 15 years the Government will buy Japanese technology on fluidised bed combustion, just as we are currently buying Japanese technology on flue gas desulphurisation, a technology which has been working in Japan for over a decade in coal-fired power stations. This year we have had to buy it for our big coal burners and have had to start a programme using Japanese technology.
      The Opposition are in favour of developing British technology. The Minister spoke about the Grimethorpe fluidised bed project and said that he would probably be able to make a statement about it, but wanted more commitment from industry. That is like approaching a potential car buyer and saying to him, "I want you to invest in a new car. However, we have not quite finished the engine technology and we don't know exactly how it will work." No car salesman, not even the Arthur Daleys among Conservative Members, would try to sell such cars on the high streets of Britain.
      We need to prove the technology that will fit in well with combined heat and power and Britain's technologists must be allowed to continue their development. The project needs about £11 million, but it has not been offered that in the debate. That money is required over three years and it is a mere pittance compared to the amount that the Bill is writing off in the nuclear industry. Not hundreds of millions but thousands of millions of pounds of taxpayers' money will be set against the excessive costs of the nuclear industry in the years ahead.
      440
      Month in and month out we have had to fight and argue with the Government in an attempt to get a commitment from them to follow private money into Grimethorpe to make sure that the technology is proved and that we are world leaders in the clean combustion of coal. Amendment No. 136 would commit the Secretary of State and the Director General of Electricity Supply to take seriously combined heat and power and all its benefits. I hope that the Government will say that they are at least prepared to look further at the matter. If they do not give that commitment, we may consider testing the amendment in a Division.
      Mr. Peter Rost: I should like to speak to amendment No. 1. In 1973 I made my first speech in the House on energy efficiency and at that time hardly anybody had heard of combined heat and power. Over the past 15 years I have continued the campaign. As a result, I have an interest to declare because I have recently become a consultant to Associated Heat Services plc, the major company involved in the management of combined heat and power systems.
      The arguments developed over many years in favour of energy efficiency were intended primarily to conserve a finite resource, to use it and to produce it less wastefully. The argument now has additional force for environmental reasons. If the Government are right in the assumption that they have expressed again this evening that world and United Kingdom electricity demand is going to grow, there is little hope for the planet. If the greenhouse effect is shown to be caused by global warming as a result of burning fossil fuels, there is little hope for the planet if we continue to produce our electricity in the present wasteful way.
      At the moment, we throw away two thirds of the fuel that we put into a power station by cooling water. That creates two or three times as much carbon dioxide—greenhouse gases—than is necessary. We could convert the cooling water into useful energy.
      I maintain that amendment No. 1 is modest. I suggest that electricity produced combined with hot water should be classed as a non-fossil fuel, but only that proportion of electricity which displaces fossil fuel which would otherwise have to be burnt if the hot water from the combined heat and power plant was not being distributed and used for space heating. As a combined heat and power plant produces a thermal efficiency of about 70 per cent. —or twice as much as an electricity-only plant—and as nearly half the fuel is converted into useful hot water, that must displace other fossil fuel which would otherwise have to be burnt to provide space heating. We are really burning twice as much fossil fuel in this country than is necessary and we are doing twice over—once in our power stations and throwing it all away and then again to provide space heating.
      When electricity is produced in a CHP plant, fossil fuel is saved. The proportion of saved fossil fuel which is sold as useful heat for heating water should be entitled to be categorised within the non-fossil fuel band in the Bill.
      I have no doubt that my hon. Friend the Minister will give this amendment serious consideration because this is such a modest proposal. From our electricity production, we throw away about 60 million tonnes of coal-equivalent and we must bear in mind that that produces a considerable amount of CO2-type greenhouse gas. We

      441
      burn the same quantity of fossil fuel all over again to provide our space heating. Therefore, CHP can make an important contribution to reducing CO2.
      Yesterday in this debate my right hon. Friend the Secretary of State conceded that there will be a special slot for renewable energy categorised as non-fossil fuel. Why did he do that? He justified it on the grounds that we need diversity and security of energy supply and also because we want to do something to alleviate the environment threat.
      The arguments in favour of this amendment are the same as those espoused by my right hon. Friend the Secretary of State. By using hot water from electricity production instead of throwing it away, we create more diversity, more energy efficiency and we reduce the greenhouse effect.
      In recent years there has been increasing pressure from the EC, which will undoubtedly lead to a firm directive that we use energy more efficiently, less wastefully, and environmentally more acceptably. Combined heat and power is one of the EC's strongest recommendations. It is important that it is made to Britain, because we are bottom of the European league. Millions of citizens elsewhere in Europe already benefit from cheap heating in their buildings, which comes from power stations combined with electricity production. We have a lot to do to catch up.
      Government studies over recent years identified and confirmed the enormous potential for CHP in the United Kingdom. I strongly support the remarks of the hon. Member for Rother Valley (Mr. Barron), but I believe that if the Government cannot go as far as the Opposition amendment goes they should at least seriously consider my modest proposal.
      Combined heat and power is the only technology that can reduce fossil fuel burn and at the same time provide new electrical generating capacity—which are both urgent priorities for the future. I challenge my hon. Friend the Minister and other right hon. and hon. Members to name any other energy technology that can do the same. Combined heat and power is the only technology also to offer the biggest potential for greater energy efficiency. The Combined Heat and Power Association, which supports my amendment and helped me to present it, has for many years argued that the benefits of CHP are far wider than those that I described. They include urban renewal, better housing, better health, and the reduction of fuel poverty.
      The Select Committee on Energy is currently conducting an inquiry into the greenhouse effect. The evidence already received from many authoritative sources confirms that combined heat and power will reduce greenhouse gases to a greater extent, and more economically, than any alternative. There are several ways of reducing CO2, including the use of nuclear and renewable fuels and energy conservation. However, they all involve a higher economic penalty than CHP, which is the least-cost option for reducing CO2 in the atmosphere.
      If or when a consensus is reached by scientists internationally—which they have made a move towards reaching at Toronto—that, if we want to save life on earth, we are obliged to reduce fossil fuel burn, or at least greenhouse gases, then the Government will be able to congratulate themselves if, tonight, they supported my amendment. By doing so, they will be recognising that
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      there are very long lead times in making changes to our energy patterns and in developing from the present inefficient method of electricity production to the more efficient system of combined heat and power.
      Rather than defer action now and be forced to take crash measures to meet international standards—which will prove far more costly—the Government should consider more seriously at this stage what will undoubtedly need to be done in future years. My hon. Friend the Minister will undoubtedly acknowledge that combined heat and power is already economic. He may ask why it should need an extra stimulus. Industrial coal generation is taking off in this country—it needs to, as we are bottom of that league also—because of electricity privatisation. For the first time, it is offering a level playing field.
      11 pm
      Large scale city combined heat and power has more self-financing problems. Its rates of return are much more marginal. Schemes in Sheffield, Leicester and Newcastle will have difficulty in making more than a marginal commercial rate of return because of the large up-front capital investment required to lay the infrastructure for hot water mains pipes. When we have them, we will have cheap heat for ever more, but the up-front capital investment is large. That is why there is an argument for this modest incentive.
      The Government's case for supporting the nuclear industry and renewals is justified for reasons of diversity, security, the environment, and energy efficiency. But they will be costly. If combined heat and power can be given the modest incentive suggested by the amendment, we will achieve the same objectives, but without the same economic penalty. The marginal increase in the cost of electricity that would result from this amendment will help to provide the necessary capital for developing heat nodes in our cities.
      The case for the special slot is overwhelming. For once, the Government could be seen to lead the European Community in providing an incentive, even if we are at the bottom of the league in the development of combined heat and power. By giving that incentive, the Government will also encourage the new technologies that the hon. Member for Rother Valley mentioned. The clean burn coal technologies for the fluidised bed which is adopted by combined heat and power will be helped by the amendment. The major encouragement which that would give to greater energy efficiency and the help that it would provide for a more effective and economic contribution to reducing the greenhouse gases for future generations is overwhelming. I hope that my hon. Friend will respond constructively by accepting the amendment, or at least by saying that he will give the matter further consideration.
      Mr. Hardy: The hon. Member for Erewash (Mr. Rost) is right to remind the House of his long commitment to the concept of combined heat and power. My commitment to it may not be as long-standing as his, but I recall addressing the annual conference of the Combined Heat and Power Association almost a decade ago. The arguments that were advanced by the hon. Gentleman—he has been advancing them for a long time—were advanced then.
      The cause of combined heat and power should by now be more firmly established. Had it not been for the

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      Government's dogmatic approach in the 1980s, we would have seen a greater achievement and greater potential for international advance and international trading opportunities than we do now. One wishes the project well, but it is a great pity that the Government had to put dogma before achievement in the early 1980s. I can evisage enormous advantages from combined heat and power associated with fluidised bed combustion.
      I am pleased that the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food is present, because it will allow me to trespass for one moment on the environmental effects which may follow the development of combined heat and power.
      The Agriculture Minister will know that there are anxieties about the scale of fish farming around our coasts. It is appropriate for the use of combined heat and power to produce hot water, but not merely for warmth and comfort. Many people in our towns and cities desperately need warmth and comfort. We might be able to use some of that hot water to promote inland fish farming. That might save the Ministry of Agriculture, Fisheries and Food from the almost illegal action in which it is involved by allowing or encouraging the importation of manila clams, the farming of which is becoming a serious risk to our coasts and estuarial areas. I hope that the Parliamentary Secretary will save my having to raise that matter in the House on another occasion by examining that grave problem this evening. Combined heat and power has benefits that may go far wider than mere energy or direct environmental interests.
      I am grateful to the hon. Gentleman for tabling the amendment, and I hope that if the Government force us into the Lobbies in support of this just and wise cause, some Conservative Members will join the hon. Member for Erewash, who deserves the tribute of the House.
      Mr. Malcolm Bruce: I shall speak briefly because I am a signatory to the amendment. I believe that the hon. Member for Erewash (Mr. Rost) has come up with a simple, straightforward and rather ingenious amendment. It simply asks that the net benefit that combined heat and power can achieve should be credited to the non-fossil fuel quota. That seems to be an eminently reasonable proposition. It will probably be required anyway because it is doubtful whether the industry will otherwise be able to achieve a quota of the order that the Government seem to be describing.
      The amendment would have definite environmental and efficiency benefits and could lead to the encouragement of combined heat and power which, as the hon. Member for Erewash has rightly pointed out, has considerable potential in the United Kingdom—much of it untapped. His own tireless fight for this cause over many years is appreciated by the House. He has done a service tonight by tabling a useful, constructive and ingenious amendment. I hope that if the Government cannot accept it, they will consider it. It will be of considerable benefit to all if they do so.
      Mr. Michael Spicer: It is getting late, so the House will want me to be brief.
      I fully agree with my hon. Friend the Member for Erewash (Mr. Rost) and other hon. Members who have made the point that combined heat and power is an important potential source of energy. I also associate myself with what my hon. Friend said about the potential
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      beneficial environmental effects. The hon. Member for Gordon (Mr. Bruce) is right to congratulate my lion. Friend on all that he has done over the years to keep this technology in the forefront of people's minds.
      I do not fully share my hon. Friend's anxieties about the future. Existing private generation now amounts to 3 GW of electricity and 2 GW of that is represented by combined heat and power plant, which is a substantial figure. I know that my hon. Friend has already made the point that that is industrial plant, and I shall deal with that in a moment. However, if we are looking to the immediate future, there is ample evidence that the very existence of the Bill is already bringing forward much new, independent generation. We know of about 7 GW of new capacity potentially in the pipeline. Of that, about 1·1 GW is of combined heat and power, such as the Leicester energy scheme and the British Sugar scheme at Brigg.
      Industry is, therefore, proposing to increase its investment in combined heat and power by more than 50 per cent. and that is just a beginning. We do not think that there is a need, with respect to industry, to subsidise and artificially support combined heat and power. It is not part of this Government's plans to subsidise schemes which are clearly profitable to private industry and which make sound economic sense.
      Mr. Rost: If the amendment were accepted, there would be no question of the industrial side being subsidised because industrial combined heat and power produces electricity and processed heat for industry's own purposes. It does not sell it.
      Mr. Spicer: I appreciate that my hon. Friend is especially concerned about the domestic side of this technology. Government policy in general and the Bill in several specific ways about which I shall briefly remind t he House are addressing the more general problem to which my hon. Friend is referring. We have spent, for example, £750,000 on studies in Leicester, Belfast and Edinburgh, where there are city schemes. We are determined that the rating handicap under which this particular aspect of the industry has suffered should be altered so it is put on to an equal basis.
      The Bill will not only give those wishing to engage in this form of technology free access to the system, but there will now be a duty on public electricity supply companies to buy from the most economic source. Therefore, if CHP is the most economic source, that duty will take effect. Perhaps most importantly in the context that my hon. Friend the Member for Erewash was discussing under clause 9(3) CHP operators will have statutory undertaker powers comparable to those enjoyed by the present utilities. For city schemes that is a major step forward.
      In making this necessarily brief reply to my hon. Friend —given the time of night—and although I recognise entirely that this is an enormous subject, in which he is well versed, I must advise him that as a result of our privatisation proposals the prospects for private investment in CHP are looking very healthy. We are providing fair market conditions in which CHP schemes can compete freely with other forms of generation and heat supply. Their future will depend not on further public funding of subsidy but on their ability to operate competitively. Given its thermal efficiency, which my hon. Friend mentioned, and its versatility, CHP is well placed to do just that. In the light of that explanation, I hope that my hon.

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      Friend the Member for Erewash and other hon. Members will feel able to withdraw their amendments, well intended though they are.
      Mr. Morgan: I am sorry to have to say that all that the Minister of State has done in his brief reply is to show how very much less he knows about CHP than does his hon. Friend the Member for Erewash (Mr. Rost).
      I shall go through what the Minister said about the glowing future that he envisages for CHP after privatisation. He said that 7 GW of new capacity is being promised or discussed with the Department and that 1·1 GW of that is CHP. That may well be true, but as far as we are aware—I shall be interested to know the views of the hon. Member for Erewash on this—the whole of that 1·1 GW falls into two categories. The first is industrial, which is sometimes known as micro-CHP, where the heat grid, led off from the power station, is on land that is within the control of the generator, Slough Estates or Tunnel Refineries. CHP programmes have also been started by Labour local authorities for the specific purpose of carrying out an experiment, which public authorities such as a local authority can do and have done in places such as Leicester, Sheffield and Newcastle. Other schemes have already been referred to by my hon. Friend the Member for Rother Valley (Mr. Barron). However, we are not aware of any breakthrough of the kind that the hon. Member for Erewash and my hon. Friends have been calling for, such as some kind of boost in policy terms —not a subsidy—that would establish the principle of how CHP should work in the new set-up, outside the property of the generator.
      The Minister is right—all hon. Members know that converting one's generators to the CHP mode can be economic in places such as leisure centres with a swimming pool where one wants summer heat, in hospitals or old people's homes where summer heat is needed because of the demands of the elderly and so on, and in premises where there have to be standby generators, such as large telephone exchanges or hospitals. That is micro-CHP and we have already conceded that that is taking off. We know that that will produce a large saving on fossil fuel and that it will contribute to reduced energy costs and to a reduction in the greenhouse gas pollution load.
      But that is not the point. The point is that the Bill as presently structured is biased against CHP [Interruption.] It is not a question of a subsidy. Without the amendments that the hon. Member for Erewash and we have been proposing, the Bill will be biased against CHP for the simple reason that the duty laid on the Secretary of State and the director is to see that electricity —and only electricity—is generated in the most efficient and economic manner. In the CHP mode of generating electricity, one takes the steam off the turbines at a high temperature. That is not the optimum way of generating electricity because one would be virtually excluded under the Bill from operating an electricity power station in the CHP mode. One would not be generating electricity, taken on its own, in the most economic manner because one would be taking the hot water off before it had gone through the turbines to the maximum possible degree for keeping electricity prices down to the minimum.
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      11.15 pm
      The point about our amendment, and that of the hon. Member for Erewash, is that it would permit the optimisation of two things at once—the taking off of the heat and the generation of the electricity. If anyone thinks that that is a minor point, he should look at the Government's own document on this subject, Energy Paper 20, in which it is illustrated. It is the Government's own calculation, which no one has contested, that if one supplies heat by generating electricity afresh to heat a room, and this is taken to be one unit of heat provided by electricity, one can do it at less than half that price if one does it by gas; but if one does it by CHP, by the offtake of the hot water, the cost goes down to one seventh of that of heating the room by freshly generated electricity.
      That is the kind of point that we need to drill into the Minister tonight. The Bill is biased against CHP. An amendment of this sort is needed if we are to have CHP on a level playing field basis. If the Government want us to take them seriously, if they want us to believe that they are interested in fuel efficiency and in the greenhouse effect, and not just in making speeches at conferences or, as the Secretary of State will do next week, lecturing the Soviet Union on "British is best" in energy technology, they must think very seriously about the Bill and amend it so that it really gives a chance to "British is best" technology, which is there, waiting to be implemented if only there is a level playing field.
      We know that we are behind in the application of CHP on other than a micro basis. We know that micro-CHP is taking off in the way that I have described. What we are not satisfied about is that large-scale CHP can take off unless the Government take a serious look at the legislation and at the amendments suggested.
      On the grapevine we are told that, provided the Government persuade us and the hon. Member for Erewash not to press this to a vote, the Central Policy Unit, the 10 Downing street think tank, will recommend to the Department that it should support these amendments or something similar. I know that I should not be saying too much this week about 10 Downing street and leaks that have emanated from the staff there, but on the assumption that the information that we have had on the grapevine is even better than that of Sir Leon Brittan, now that he has emigrated temporarily to Europe, we will not press this to the vote. We shall expect to see some action from the Minister of State, taking, if not our advice, at least the advice from 10 Downing street, which is a far more important source
      Mr. Rost rose—
      Mr. Morgan: I give way to the hon. Gentleman.
      Mr. Rost: I am sorry, I thought that the hon. Member had sat down.
      Mr. Morgan: I am sorry. Was the hon. Member asking me to give way?
      Mr. Rost: No.
      Mr. Morgan: I am sorry. I do not really want to repeat my last line. I was just going to say that 10 Downing street will, I am sure, tell the Minister to do the right thing.
      Mr. Rost rose—
      Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman has addressed the House once. He cannot speak again.
      Amendment negatived.
      Mr. Deputy Speaker: We now turn to amendment No. —
      Mr. Rost: On a point of order, Mr. Deputy Speaker. I tabled an amendment and I have not yet withdrawn it. I ask you to—
      Mr. Deputy Speaker: Order. The hon. Gentleman's amendment No. 1 was chosen for debate in a group of amendments selected by Mr. Speaker, the lead amendment of which was No. 136 which I have just put to the House and which the House has negatived.

    Clause 4

      PROHIBITION ON UNLICENSED SUPPLY ETC.
      Mr. Michael Spicer: I beg to move amendment No. 3, in page 4, line 14, leave out
      'of high voltage lines and electrical plant'
      and insert
      'which consists (wholly or mainly) of high voltage lines and electrical plant and is'.
      Mr. Deputy Speaker: With this it will be convenient to consider the following amendments:
      No. 137, in page 4, line 15, after 'for', insert
      'the pumped-storage of electricity or'.
      Government amendment No. 4.
      No. 127, in clause 8, page 7, line 10, after 'transmission', insert
      'and generation by pumped storage.'.
      Government amendments Nos. 8, 51, 52, 64 and 67.
      Mr. Spicer: The Government consider that the amendments are technical or drafting, with the exception of amendments Nos. 51 and 52, which meet one of the matters discussed in Committee. I believe that the hon. Member for Barnsley, Central (Mr. Illsley) raised in Committee the fact that the director general would be under a duty, if these amendments were brought forward, to publish information on performance standards at least once a year. We said that we would look at that matter and we have tabled the amendments in response to that debate.
      We cannot accept Opposition amendments Nos. 137 and 127 because we do not see their point. The amendments aim to define pump storage as part of transmission. Transmission and generation, which pump storage is, are different things. Although, of course, pump storage is concerned with system stability, it is not the same as transmission. There is nothing to stop the transmission companies using pump storage in any way they wish, nor, indeed, to stop other pump storage stations coming forward, if they are economic, and are to be treated as generating companies. We may hear some concern to which I have not alluded, but we do not want to confuse, as do the Opposition amendments, transmission with generation. We would oppose amendments Nos. 127 and 137 if they were pressed, although I cannot see why they would be.
      Mr. Morgan: I simply wish clearly to establish whether the National Grid Company will have a transmission licence. If not, how will it operate Dinorwig?
      Mr. Spicer: Dinorwig will operate on the basis of generation licences. The National Grid Company will call up Dinorwig in precisely the same way as it calls up any other station. Therefore, there is no problem. It is part of its operations, but there is no problem about the licensing of future companies.
      Amendment agreed to.

    Clause 5
      EXEMPTIONS FROM SECTION 4
      Amendment made: No. 4, in page 4, line 21, leave out 'so specified' and insert 'specified in the order'. —[Mr. Michael Spicer.]
    Clause 6

      LICENCES AUTHORISING SUPPLY ETC.
      Mr. Giles Radice: I beg to move amendment No. 138, in page 5, line 3, at beginning insert 'Subject to sub-section 11 below,'.
      Mr. Deputy Speaker: With this it will be convenient to Lake the following amendments: No. 139, in page 6, line 8, at end add—
      (11) no licence to supply electricity shall be extended by virtue of subsection 2(b) above, to cover an area without consultation with the consumers' committee for that area.'.
      No. 165, in clause 7, page 6, line 17, at end insert—
      '(c) conditions requiring any contract between a public
      electricity supplier and a person authorised to generate electricity which is of more than ten years duration to be referred to the Director prior to the contract being agreed.'.
      No. 175, in clause 9, page 7, line 36, at end insert—
      '(2A) A licence under section 6(1) above shall provide that Schedule 3 to this Act shall not have effect in relation to a license holder if—

      (a) the owner of the land affected by a compulsory purchase order or the person whose livelihood would be affected by such an order objects on the grounds that his livelihood would be affected;

      (b) a member of the public objects on the grounds that the natural environment or wildlife would be damaged.

      (2B) Where objections are lodged under (2A) above the licence holder may appeal to the Director General, who shall take into consideration the measures taken by the licence holder to expand capacity by means other than the building or expansion of plant.'.
      No. 176, in page 8, line 18 at end insert—
      '(6) Nothing in this section or in the schedules mentioned in this section relating to compulsory purchase shall affect the holding or outcome of a planning inquiry into an application to contruct or expand buildings or installations for the purpose of the generation, transmission or supply of electricity.'.
      No. 179, in schedule 3, page 72, line 5 at end insert—
      '(2A) Such consent may be given:

      (a) in an emergency, or where the powers are to be used to comply with a notice given under Section 15 of this Act, only after reasonable notice has been given to the owner and occupier of any land;

      (b) in all other circumstances, only after the consent of the owner and occupier of the land has been obtained, which consent shall not be unreasonably withheld.

      (3) Any question whether such consent is or is not unreasonably withheld shall be referred to and determined by the Secretary of State.'
      No. 129, in clause 10, page 8, line 21 after second 'licence', insert
      'and the consumers committee appropriate to that area.'.
      No. 140, in clause 11, page 9, line 10 at end add—
      (c) notwithstanding subsection (i) above the Director must refer to the Monopolies and Mergers commission any modification he proposes to the conditions of a licence, where the holder of one licence under Clause 6(1)(c) above is proposing to acquire another licence holder under that section.'.
      No. 141, in page 9, line 10 at end insert—
      (d) notwithstanding subsection (i) above the Director must refer to the Monopolies and Mergers commission any modification he proposes to the conditions of a licence, where the holder of a licence is proposed to be acquired by another person.'.
      No. 143, in page 9, line 23 at end add—
      'any observations of the consumers' committee for that area on the reference with regard to subsections (1) and (2) above.'.
      No. 142, in page 10, line 3 at end add—
      '(c) any observations of the consumers' committee for that area on the reference with regard to subsections (1) (2) and (3) above.'.
      Mr. Radice: The amendments concern the licensing arrangements and contracts which I believe go to the heart of the Bill. The Secretary of State has said that electricity privatisation, unlike other privatisations, creates and enhances competition and produces what is called downward pressure on prices. The problem, of course, for the Secretary of State is that he must create the conditions in which he can successfully sell the industry to private investors and ensure certainty of supply. In the end what the Government have come up with is what is being called the big fix arrangement—[Interruption.] The Secretary of State appears surprised at the phrase "big fix". I should have thought that he had become very familiar with it, as he invented it.
      The big fix regime is a licensing system in which—I quote not from a Labour party document but from a very good publication—
      "the interests of the privatised companies are balanced out and protected as far as possible; where new entrants will, initially at least, find it difficult to enter the market, and where prices are very strongly regulated."
      In Committee we had one of the fiercest, the most heated and, I believe, the most revealing debates over licensing and the issue of contracts. My hon. Friend the Member for Sedgefield (Mr. Blair) made one of his most able speeches and demonstrated that the licensing and contract proposals were extremely complicated. One hon. Member had to ask for a blackboard to try to assist other hon. Members to understand the proposals. The Minister also had trouble understanding them.
      Mr. Cryer: My hon. Friend says that the Minister also had some trouble. Is he aware that the Minister is not listening to his argument, but is busy consulting the advisers in a great conference in the corner of the Chamber? Presumably he is trying to get some information to answer the debate, but surely it would be better if he listened to my hon. Friend.
      Mr. Radice: The Minister had such problems throughout the Committee, that he was almost always consulting non-existent advisers while Opposition Members were speaking—that is par for the course.
      The licensing arrangements and contracts were specifically designed in the case of electricity supply to rule out competition at the initial stage and to introduce, at best, a limited form of competition only in the future.
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      My hon. Friend the Member for Sedgefield also forced the Government to reveal the existence of the "contract working party", which has been established to arrange the big fix. In the so-called initial contracts for existing capacity, which could last for up to 10 years, the big fix ensures that there is no significant competition because the yardsticks do not apply.
      In Committee the Government admitted that, in respect of contracts for future capacity, those contracts will be allowed to have take-or-pay clauses. It is unlikely that companies will enter the industry unless such clauses exist. If it is correct that the yardsticks will not apply in the contracts for existing capacity and that contracts for future capacity will contain take-or-pay clauses, it is extremely hard for the Government then to argue that those contracts will promote meaningful competition in the day-to-day operations of the industry.
      Our amendment is designed to make the best of a bad job. It would ensure that all long-term contracts come under the specific supervision of the director general. Under our amendment he would be able to call in all long-term contracts prior to their agreement.
      The amendment is sensible and constructive and a Government who were serious about competition would accept it. I suspect that, despite all the claims by the Secretary of State and the Minister about competition, the Government are more interested in ensuring the successful sale of a public industry. If they reject the amendment it will confirm our case, made so ably by my hon. Friends in Committee, that the Government believe not in competition or in helping the consumer, but only in privatisation, irrespective of the merits of the case.
      Mr. Beith: I wish to speak to amendments Nos. 175 and 176, although, at this time of night, it would be more honest to say that it has fallen to me to speak to amendments Nos. 175 and 176.
      Amendment No. 175 relates to the compulsory purchase powers in the Bill. They have caused a great deal of anxiety to many people, some of whom have, in the past, voted for the Conservative party. They are a little puzzled about why the party which they have long supported has granted such draconian—they would consider them Socialist—compulsory purchase powers to private companies. The amendment would change the procedure so that, in certain circumstances, it would be the director general's duty, if appealed to, to decide the matter and to take into consideration the alternatives that were available to the company concerned to expand capacity in some other way instead of building the proposed plant or expanding an existing one.
      11.30 pm
      Two sets of circumstances are envisaged. The first involves the owner of land affected by compulsory purchase whose livelihood would be affected. I quote the National Farmers Union:
      "The NFU is opposed in principle to the granting of compulsory purchase powers to private companies. We believe that where PLCs need to acquire rights in land, or land itself, they should pay the open-market rate for those interests. That should include any development value …At the very least, the PLCs should have to seek the consent of the owners and occupiers of the land which they wish to acquire."
      The NFU is concerned about occupiers whose livelihood will be at stake if land is taken away. It may be the crucial acreage without which a farm ceases to be viable. If that acreage is to be taken away because an

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      electricity supply company insists on building a power station when other alternatives are open to it, it is surely right that those alternatives should be examined. A power station project should not be presented at a compulsory purchase inquiry as inevitable and necessary, and as something which by its nature justifies the exercise of compulsory purchase powers. The director general will have the means, the experience and the qualifications to assess whether it might be open to the company to expand its capacity in another way.
      The same procedure is envisaged in the amendment where there are public objections on the ground that the natural environment or wildlife would be damaged. Again, one can imagine a compulsory purchase inquiry where the objectors come along to point out that some unique wildlife habitat or noteworthy and well-appreciated environmental feature will be destroyed, but the supply company says, "We have to have this power station. It must he built. We have no alternative." In those circumstances, it is surely reasonable that instead of the inspector dealing with the matter at a compulsory purchase inquiry the director general, who will be qualified in those matters, should be able to consider whether the company could not carry out the expansion it required by some means other than the building of the plant in that particular place.
      Amendment No. 176 also seeks to secure the rights available to objectors at planning inquiries in cases where compulsory purchase is involved.
      The burden of both amendments is to protect the environment, wildlife and those whose livelihood may be affected by the exercise of draconian compulsory purchase powers by private companies which may not have sufficient regard to the alternatives open to them.
      Mr. Michael Spicer: It falls to me to have to answer the hon. Member for Berwick-upon-Tweed (Mr. Beith) and, of course, the hon. Member for Durham, North (Mr. Radice). I shall deal first with the rather technical amendments referred to by the hon. Member for Berwick-upon-Tweed. We do not believe that those amendments are necessary, although we understand the hon. Gentleman's concern.
      On amendment No. 176, where a proposed project requires the Secretary of State's consent under clauses 33 and 34, and is subject to public inquiry, the practice is for any related applications for compulsory purchase orders —the hon. Gentleman's worry—to be considered together with the planning application. In fact, the inspector will generally be asked to advise the Secretary of State on both matters. So there is no question of an application for a compulsory purchase order being allowed to affect the holding or the outcome of the inquiry.
      We also think that amendment No. 175 is unnecessary because the compulsory purchase provisions of schedule 3 would apply only where the licensee wished to purchase land for licence-related activities, that is, activities directly related to the generation, transmission or supply of electricity. Under the Acquisition of Land Act 1981 a public inquiry has to be held if the owner-occupier of the land objects. The hon. Gentleman has fairly raised these matters, but they are covered under present legislation.
      Mr. Beith: Is the Minister satisfied that, at such an inquiry, it would be open to the objector to argue that other options are available to the company, rather than building that particular plant in that place?
      Mr. Spicer: The objector has rights to make whatever cases he wishes, and at the inquiry it will be up to the inspector to determine the terms of reference and the conditions. The objector's rights will be accommodated within the normal terms of an inquiry. Therefore, there is no problem for the hon. Member for Berwick-upon-Tweed to be concerned about.
      I imagine that the hon. Member for Durham, North was speaking to amendment No. 165, which we do not want to accept because contractual procedures are fundamental to the new structure that we are introducing in the Bill. Contracts should be freely entered into with the least possible interference. The regulator will have powers over the price formula, but we do not wish to interfere with contractual arrangements after they have been set up.
      Amendment negatived.

    Clause 7
    Amendments made: No. 5, in page 6, line 21 leave out from 'by' to 'and' in line 23 and insert 'other persons for such purposes as may be specified in the conditions'.
    No. 6, in page 6, leave out lines 26 to 28.
    No 7, in page 6, line 38, leave out
    'by the Director such questions arising'
    and insert
    'or approval by the Director such questions arising or things falling to be done'.—[Mr. Michael Spicer.]

    Schedule 3

      COMPULSORY ACQUISITION OF LAND ETC. BY LICENCE HOLDERS
      The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move amendment No. 98, in page 72, line 15, leave out 'five years from' and insert
      'the period of five years beginning with'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 92, 81 to 84, 93, 9 to 11, 94 to 96, 85, 86, 89, 29 and 30.
      Mr. Lang: The amendments in this group are all minor, technical or intended to clarify—with the single exception of amendment No. 92, about which I shall say a few words.
      Schedule 3 sets out the procedure by which one licensee may compulsorily purchase land belonging to another licensee. The procedure would, in particular, be available when an independent generator wishes to purchase redundant land, for example a disused power station site, belonging to National Power or PowerGen. The procedure would involve both the Director General of Electricity Supply and the Secretary of State. The director is required to refuse his consent to a CPO application if it appears to him that
      (a) the land would be used for the purposes of an installation necessary for the carrying out of the activities which the existing owner is authorised by his licence to carry on; (b) the use will commence, or any necessary planning permission or consent will be applied for, within five years.
      The compulsory purchase order then has to be confirmed by the Secretary of State.
      Amendment No. 92 enables the Secretary of State, by order, to vary the five-year period that the director general

      453
      has to take into account. It introduces an element of flexibility and calms the anxieties expressed in Committee and I commend the amendment to the House.
      Mr. Morgan: Will the Minister give us further assurances on this point. He referred to the problems that could arise when a would-be private independent generator wants to take over "redundant land"—that was his expression. Redundant plant, or land that is no longer required, is one thing, and we understand that it would be particularly attractive for a private generator to acquire access to such land. That sounds an innocent and fair procedure—on the surface. However, something else is lurking beneath the surface. In the redundant power station, or major switching station, site is the belly of the transmission system.
      The new would-be private generator will receive two advantages if the director general chooses to favour him with the benefit of the Secretary of State's advice. He not only gets a site—that is the innocent part of it—he gets a site which has been planned for the integrated system, from which we in Britain benefit, which has all the grid lines running straight out of it.
      Therefore, the private generator has the advantage of a site with a windfall of gains which removes the need to invest in a transmission network. To do that without specifying in the Bill that compensation will be paid to those who have invested in the power lines from that location, whether it is a major switching station or a power station, would be an abortion; an improper procedure contrary to the rights of the people who have invested a large amount of money. We need some assurance from the Minister on that.
      Mr. Lang: I understand the anxieties of the hon. Member for Cardiff, West (Mr. Morgan). They are probably exaggerated and I shall seek to reassure him.
      First, we are talking often about land which has not been developed in any way at all but which has been acquired with a view to possible development for a power station. In other cases we may be talking about redundant power station sites, possibly in an urban area, which might have value, not necessarily for electricity.
      Mr. Morgan: The hon. Gentleman is getting to the nub of the argument. It is precisely those sites that are the most attractive to the new technology. We could quote examples from almost every large city in Britain. The technology in electricity generation has caused the siting requirements to come full circle. Power stations 30 or 40 years ago were 50 MW, 100 MW or 150 MW on average, all in large cities. Then with the explosion of turbine generator size they went straight up to 500 MW, 600 MW, and finally 660 MW, as one sees in giant stations such as Drax. They all had to be moved 30 or 40 miles from the cities to sources of cooling water such as the large rivers of the Trent, the Ouse or the Ayr.
      Now, according to John Baker, the chief executive designate of National Power and PowerGen, the technology has come back to the 200 MW or even 150 MW power stations, which can produce electricity just as cheaply. Therefore, those redundant downtown power station sites are needed once again. Those are the attractive sites because the technology means that the plants can be small. This is where the fight will come.
      454
      The old power stations of the municipal era in the 1920s and 1930s were located precisely where everybody who is after the jam which will be made available on privatisation will want to go. This is an extremely hot potato in the technological, profitable and competitive future of the industry. Any suggestion that that can be slipped through as a technicality is a complete misconstruction of where the investment will take place.
      Mr. Cryer rose—
      Mr. Deputy Speaker: Order. The hon. Member for Cardiff, West (Mr. Morgan) was intervening in the Minister's speech. We cannot have an intervention on an intervention.
      Mr. Lang: I shall give way to the hon. Member for Bradford, South (Mr. Cryer).
      Mr. Cryer: If my hon. Friend the Member for Cardiff, West (Mr. Morgan) is making a valid point, as I think he is, is it not also true that the very sites that he is talking about are ideal for combined heat and power schemes operating in inner-city areas? Would it not be important to keep such sites as an alternative?
      Mr. Lang: That may be so, but the point of the amendment is simply to vary the five-year period by replacing the words "five years from" with the words
      "the period of five years beginning with".
      In devising the procedures in schedule 3 the Government have sought to establish a balance between, on the one hand, the good competition reasons for enabling independent generators to gain access to redundant power station sites and, on the other, the rights of the incumbent owner.
      The Government believe that the schedule gets the balance right, but that the amendment would provide a reserve power that would enable the Government to reduce the five-year period in paragraph 2(2)(b) of schedule 3, if that should appear desirable on competition grounds, in order to facilitate access for independent generators to surplus land held by other licensees. It is a desirable element of flexibility and the balance is right.
      Mr. Morgan: The question is whether the balance is right. Even the CEGB, before the cap-badging and the theoretical split took place on 1 January, was anxious about the future of gas turbine stations which it wanted to locate on many of its old redundant power station sites such as Colchester avenue in Cardiff. It thought that these were the right places for its booster stations, even with the old-fashioned technology, and with none of the impact of the splitting of the two power stations, or the additional encouragement for private generation. The board still wanted those sites to be reserved for gas turbines. What compensation will there be for the loss of that ability to put gas turbine stations in to act as local boosters at times of peak demand?
      11.45 pm
      Then there is the point that my hon. Friend the Member for Bradford, South (Mr. Cryer) made about CHP. Obviously, one cannot have CHP, on sites like Ratcliffe-on-Soar or Drax, a long way from stations. The middle of Slough or Cardiff or Bradford, where power stations that were built in the 1930s were knocked down in the 1960s, is where one finds the really attractive locations for water grids to go with electricity grids. Almost

      455
      invariably the switching stations are still there, conferring enormous benefit on the land. In addition, there are the housing and industrial estates that are to be supplied from the hot water grid. Whoever controls this land controls the industry.
      We have heard the Minister of State boast about the 7 GW from potential private investors. He seemed to be waving some sort of macho symbol before the House, to indicate the great success of private generation, forgetting that half the time it was Labour-controlled city councils that were putting together the consortia which were going to have the more constructive and innovative schemes in areas like Leicester, Sheffield and Newcastle.
      But they all need these sites. The whole point about this legislation is that we must be sure that the Minister, in his search to come good on the 7 GW of private power about which he has been talking—some of it might be described as Socialist private power, emanating from the innovative ambitions of Labour-controlled city councils, which, half the time, half of the rest of Ministers are trying to close down—realises that these sites are absolutely critical. Without the right site one does not have the potential for a profitable scheme.
      I am concerned that private generators may, by back-door methods, gain preferential access to the Minister, who has been putting himself on the line by saying, "I am going to get private power in." When I say "private generators" I mean really private generators with just banks behind them, and not generators controlled by Labour local authorities—or even Conservative local authorities or hung councils—or British Coal, or other public-sector bodies. Private generators will want those sites, and they will get preferential access, because otherwise they will not go ahead, and if they do not go ahead the Secretary of State will not have much of a speech for the next Tory party conference.
      Mr. Cryer: I can tell from the look on your face, Mr. Deputy Speaker, that you are looking forward to my comments. No doubt you will be disappointed to learn they will be fairly brief.
      Mr. Haynes: And in order.
      Mr Cryer: And, of course, in order.
      I, too, am concerned about the points that my hon. Friend the Member for Cardiff, West (Mr. Morgan) has made. In the early 1980s I was closely involved in questioning the CEGB about the closure of a number of power stations on these sites. I recall, for instance, the one near the centre of Huddersfield and, many years earlier, the one at Canal road, Bradford—a plum site which has been sold for retail development.
      These are plum sites in every sense because they are near city centres. If the private sector, so beloved of the present collection of incompetents in the Government, acquires them for private generation, they will confer an enormous advantage, particularly if the private generators decide to opt out of generation and sell the sites for retail or industrial development.
      I have always felt that city-centre sites should have been retained by the CEGB for electricity generation. I gave the reasons in that unfortunate—unfortunate, as it turned out —intervention in an intervention about combined heat and power. If the waste heat from electricity generation is to be used for heating domestic or industrial units, the
      456
      generating will have to be done near those units. The sites about which we are talking are situated largely in inner-city areas.
      I thought that the CEGB pursued a mistaken policy in concentrating on large power stations, with consequent extended transmission lines, and closing down relatively recently constructed—in some cases in the 1960s—power stations near city centre sites. My view was that the CEGB was creating a power gap to justify the construction of nuclear power stations—because that was surplus generating capacity and was not a basic component—when the small stations were adequate in total to meet the generation demand.
      I hope that the Minister will give more concrete assurances that this is not an opportunity for the private enterprise cronies of Conservative Members to come into the industry and have direct access to city-centre sites, which are the most valuable, whether for generation or For making a fast buck, enabling them to get their hands on real estate which at present is publicly owned.
      Mr. Lang: I can give the hon. Member for Bradford, South (Mr. Cryer) the assurance he seeks. He is reading more into the amendment than it provides. We debated this matter in Committee. I am proposing a minor modification to the provision that already exists in the schedule to enable the five-year period to be varied and thereby introduce a desirable degree of flexibility. We are talking about a situation in which the Secretary of State and the director general are involved and have a role to play. We are talking in the context of a compulsory purchase order. This is a desirable modification of the provision as drafted.
      The hon. Member for Cardiff, West (Mr. Morgan) raised the question of compensation. There are already compensation procedures in schedule 3. The standard situation when a compulsory purchase takes place is that compensation must be paid on the basis of market value without taking account of development value. That would apply here also.
      I emphasise that under a Bill as drafted National Power or PowerGen will be able to forestall an attempt by another licensee to raise a compulsory purchase order against their redundant land by showing that they intended to use that land or expecting to apply for planning permission within five years. In our view, while that is a fair measure of protection for those companies, it is right that the Government should have the reserve power to vary the five-year period. That is what the amendment does, and I commend it to the House.
      Mr. Morgan rose—
      Mr. Deputy Speaker: Order. The hon. Gentleman has a right to speak only once at this stage of the Bill.
      Amendment agreed to.
      Amendments made: No. 92, in page 72, line 16, at end insert—
      '(2A) The Secretary of State may by order provide that sub-paragraph (2) above shall have effect as if for the period mentioned in paragraph (b) there were substituted such other period as may be specified in the order.'.
      No. 8, in line 46, after first 'of', insert
      ', and paragraph 3 of Schedule 3 to,'.
      No. 81, in page 74, line 37, after '1 5.', insert
      '—(1) Subject to sub-paragraph (2) below,'.
      No. 82, in line 41, at end insert—

      457
      '(2) Paragraph 10 of the first Schedule to that Act (statutory undertakers' land excluded from compulsory purchase) shall not apply where the land or rights in question belong to another licence holder.'. —[Mr. Michael Spicer.]

    Schedule 4

      OTHER POWERS ETC. OF LICENCE HOLDERS
      Amendments made: No. 83, in page 78, line 46, after in,', insert 'on,'.
      No. 84, in page 79, line 11, leave out 'in' and insert 'on or over'.
      No. 93, in page 82, line 48, at end insert—
      'Provisions supplementary to paragraph 5
      5A.—(1) Where a wayleave is granted to a licence holder under paragraph 5 above—

      (a) the occupier of the land; and

      (b) where the occupier is not also the owner of the land, the owner,

      may recover from the licence holder compensation in respect of the grant.
      (2) Where in the exercise of any right conferred by such a wayleave any damage is caused to land or to moveables, any person interested in the land or moveables may recover from the licence holder compensation in respect of that damage; and where in consequence of the exercise of such a right a person is disturbed in his enjoyment of any land or moveables he may recover from the licence holder compensation in respect of that disturbance.
      (3) Compensation under this paragraph may be recovered as a lump sum or by periodical payments or partly in one way and partly in the other.
      (4) Any question of disputed compensation under this paragraph shall be determined by the Tribunal; and sections 2 and 4 of the Land Compensation Act 1961 or sections 9 and 1 of the Land Compensation (Scotland) Act 1963 shall apply to any such determination.'.
      No. 9, in page 83, line 39, at end insert
      'or such longer period as the Secretary of State may specify'.
      No. 10, in page 83, line 47, at end insert
      'or such longer period as the Secretary of State may specify'.
      No. 11, in page 84, line 30, after 'heard', insert
      'by a person appointed by him'.
      No. 94, in page 85, leave out lines 44 to 48.
      No. 95,page 86,line 2, at end insert—
      "moveables" means chattels in relation to England and Wales and corporeal moveables in relation to Scotland;'.
      No. 96, in page 86, line 21, at end insert—
      '"the Tribunal" means the Lands Tribunal in relation to England and Wales and the Lands Tribunal for Scotland in relation to Scotland.'. —[Mr. Michael Spicer.]

    Schedule 5

      WATER RIGHTS FOR HYDRO-ELECTRIC GENERATING STATIONS IN SCOTLAND
      Amendments made: No. 85, in page 87, line 3, after first 'of, insert 'riparian owners and other'.
      No. 86, in page 87, line 43, after 'taken', insert
      ',or into which water is to be discharged'.
      No. 89, in page 87, line 45, leave out from 'from' to 'and' and insert
      'or into which water is to be so taken or discharged'.—Mr. Michael Spicer.]

    Clause 15

      DUTY TO SUPPLY ON REQUEST
      Amendments made: No 12, in page 13, line 30, after third 'the', insert 'other person's'.
      No. 13, in line 41, leave out from 'below' to end of line 43 and insert—
      '(e) specify any other terms which that person will be required to accept under section (Additional terms of supply) below; and
      (f) state the effect of section 21 below.'.
      No. 14, in line 44, after 'to' insert
      '19, (Additional terms of supply), 20 and'.;[Mr. Michael Spicer.]

    Clause 16

      EXCEPTIONS FROM DUTY TO SUPPLY
      Amendment made: No. 15, in page 14, line 13, at end insert
      'and in this Part "private electricity supplier" means a person, other than a public electricity supplier, who is authorised by a licence or exemption to supply electricity'. —[Mr. Michael Spicer.]

    Clause 19

      POWER TO REQUIRE SECURITY
      Amendment made: No. 16, in page 16, line 16, at end insert
      'and any notice under paragraph (a) above shall state the effect of section 21 below.' —[Mr. Michael Spicer.]
      Mr. Kenneth Carlisle: I beg to move, That further consideration of the Bill be now adjourned.
      Mr. Haynes: On a point of order, Mr. Deputy Speaker. There has been a welshing on an agreement about today's business, and I am totally disgusted with Conservative Members. [Interruption.] We had agreed to go to amendment No. 111 and we are not there yet. I know what the problem is. The Government cannot keep their troops here. We made agreements in Committee upstairs and we stuck to them. There has been no guillotine on the Bill, and now Government Members are welshing on an agreement at this stage of the measure. We should continue our debates up to amendment No. 111, yet now a Government Whip has moved, That further consideration of the Bill be now adjourned. It is shocking.
      Mr. Wallace: Further to that point of order, Mr. Deputy Speaker. It is fair to say that, as far as I am aware, the agreement has been honoured.
      Mr. Michael Spicer: Further to that point of order, Mr. Deputy Speaker. That is exactly how we see it. It is outrageous for the hon. Member for Ashfield (Mr. Haynes) to raise a point of order on this matter. We have abided by the agreement. The hon. Gentleman may be under some misapprehension. The Democrats also saw the agreement in that way and the hon. Member for Orkney and Shetland (Mr. Wallace) made that clear. We were willing to go further to meet the hon. Member for Ashfield but the Democrats were not prepared to do so. That is why we decided to honour the agreement that we had with the Democrats.
      Mr. Deputy Speaker: The Chair is not aware of or party to any agreement.
      Question put:—
      The House divided: Ayes 113, Noes 25.

      Division No. 146]

      [11.53 pm

      AYES

      Alison, Rt Hon Michael

      Amos, Alan

      Amess, David

      Arnold, Jacques (Gravesham)

      459

      Ashby, David

      Knowles, Michael

      Atkinson, David

      Lamont, Rt Hon Norman

      Baldry, Tony

      Lang, Ian

      Beith, A. J.

      Lawrence, Ivan

      Blaker, Rt Hon Sir Peter

      Lilley, Peter

      Boswell, Tim

      Lloyd, Peter (Fareham)

      Bottomley, Peter

      Lord, Michael

      Bottomley, Mrs Virginia

      Lyell, Sir Nicholas

      Bright, Graham

      Mans, Keith

      Brooke, Rt Hon Peter

      Martin, David (Portsmouth S)

      Browne, John (Winchester)

      Maude, Hon Francis

      Burns, Simon

      Maxwell-Hyslop, Robin

      Burt, Alistair

      Miller, Sir Hal

      Butterfill, John

      Mills, Iain

      Campbell, Menzies (Fife NE)

      Mitchell, Andrew (Gedling)

      Carlisle, John, (Luton N)

      Mitchell, Sir David

      Carlisle, Kenneth (Lincoln)

      Nicholls, Patrick

      Carrington, Matthew

      Nicholson, David (Taunton)

      Cash, William

      Norris, Steve

      Chapman, Sydney

      Paice, James

      Chope, Christopher

      Parkinson, Rt Hon Cecil

      Conway, Derek

      Peacock, Mrs Elizabeth

      Coombs, Anthony (Wyre F'rest)

      Porter, David (Waveney)

      Cran, James

      Redwood, John

      Davies, Q. (Stamfd & Spald'g)

      Ryder, Richard

      Davis, David (Boothferry)

      Sackville, Hon Tom

      Day, Stephen

      Sainsbury, Hon Tim

      Dorrell, Stephen

      Shaw, David (Dover)

      Dover, Den

      Shaw, Sir Michael (Scarb')

      Durant, Tony

      Shepherd, Colin (Hereford)

      Fenner, Dame Peggy

      Smith, Tim (Beaconsfield)

      Forman, Nigel

      Speller, Tony

      Freeman, Roger

      Spicer, Michael (S Worcs)

      Gale, Roger

      Stevens, Lewis

      Garel-Jones, Tristan

      Stradling Thomas, Sir John

      Gill, Christopher

      Summerson, Hugo

      Goodlad, Alastair

      Taylor, Ian (Esher)

      Greenway, John (Ryedale)

      Taylor, John M (Solihull)

      Gregory, Conal

      Taylor, Teddy (S'end E)

      Griffiths, Peter (Portsmouth N)

      Thompson, D. (Calder Valley)

      Hague, William

      Thompson, Patrick (Norwich N)

      Hamilton, Hon Archie (Epsom)

      Trotter, Neville

      Hamilton, Neil (Tatton)

      Twinn, Dr Ian

      Hanley, Jeremy

      Waddington, Rt Hon David

      Heathcoat-Amory, David

      Wakeham, Rt Hon John

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

      Wallace, James

      Howarth, G. (Cannock & B'wd)

      Waller, Gary

      Hughes, Robert G. (Harrow W)

      Wardle, Charles (Bexhill)

      Hughes, Simon (Southwark)

      Watts, John

      Hunt, David (Wirral W)

      Widdecombe, Ann

      Irvine, Michael

      Wood, Timothy

      Kennedy, Charles

      King, Roger (B'ham N'thfield)

      Tellers for the Ayes:

      Kirkhope, Timothy

      Mr. David Lightbown and Mr. Michael Fallon.

      Knapman, Roger

      Knight, Greg (Derby North)

      NOES

      Barron, Kevin

      McFall, John

      Blair, Tony

      McKay, Allen (Barnsley West)

      Cook, Robin (Livingston)

      Meale, Alan

      Dixon, Don

      Morgan, Rhodri

      Doran, Frank

      Powell, Ray (Ogmore)

      Ewing, Mrs Margaret (Moray)

      Ruddock, Joan

      Foster, Derek

      Skinner, Dennis

      Garrett, John (Norwich South)

      Spearing, Nigel

      Hardy, Peter

      Wareing, Robert N.

      Haynes, Frank

      Williams, Alan W. (Carm'then)

      Home Robertson, John

      Hood, Jimmy

      Tellers for the Noes:

      Howells, Dr. Kim (Pontypridd)

      Mr. Harry Barnes and Mr. Bob Cryer.

      Hughes, John (Coventry NE)

      Illsley, Eric

      Question accordingly agreed to.
      Bill, as amended (in the Standing Committee), to be further considered on Monday 10 April.

    EUROPEAN COMMUNITY DOCUMENTS
    Motion made, and Question put forthwith pursuant to
    Standing Order No. 102 (Standing Committees on European Community documents).

    EUROPEAN COMMUNITY DOCUMENTS

      SINGLE MEMBER PRIVATE LIMITED COMPANIES
      That this House takes note of European Community Document No. 6705/88 and the Supplementary Explanatory memorandum submitted by the Department of Trade and Industry on 10th March 1989 on single member private limited companies; and endorses the Government's view that if the collective decision of the European Community is that this proposal is to go forward, it should provide for only the minimum of regulation consistent with enabling such companies to be established and safeguarding the interests of those dealing with them.—[Mr. Alan Howarth.]
      Question agreed to.

    CONTROL OF POLLUTION (AMENDMENT) BILL [Money]
    Queens recommendation having been signified—
    Resolved,
    That, for the purposes of any Act resulting from the Control of Pollution (Amendment) Bill, it is expedient to authorise the payment out of money provided by Parliament of—

    (a) any administrative expenses incurred by the Secretary of State in consequence of that Act; and

    (b) any increase attributable to that Act in the sums payable out of money so provided under any other Act.— [Mr. Alan Howarth.]

    LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) BILL [Lords]
    Order for Second Reading read.
    To be read a Second time on Monday 10 April.

  PETITIONS

    Football Membership Scheme
    12.9 am
    Mr. John Garrett: I beg leave to present a petition, the preamble of which states:
    To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The humble petition of supporters of Norwich City football club showeth that the undersigned signatories express their condemnation of proposed legislation to force football supporters to carry identification cards.
    We believe that a system of identity cards will have little impact on the problem of football related violence, will hinder football's attempts to attract a new generation of supporters and will lead to the eventual demise of the game as a spectator sport.
    Wherefore your petitioners pray that your Honourable House urge that the Government bring forward proposals which have the support of genuine football supporters. And your petitioners, as in duty bound, will ever pray, etc.
    Attached to that preamble are 10,916 signatures.
    To lie upon the Table.

  Planning Decisions (Claygate)
  12.10 am
  Mr. Ian Taylor: I beg to ask leave to present a petition on behalf of 750 of my constituents. The signatures were collected over a few days after Easter, mainly from residents of the village of Claygate who are

  461
  concerned about the damage that planning decisions are causing to the character of their area. The problem concerns many of my constituents. The petition states
  That the Council of the Borough of Elmbridge is at present unable to carry out the earnestly held wishes of the said residents that their environment be preserved from the demolition of certain residential properties of historic importance to them, and from the consequent loss of established trees and open spaces surrounding and between such properties, even when the Council is in agreement with the wishes of your petitioners. Wherefore your Petitioners pray that your Honourable House will enable them to continue in peace to enjoy the remaining buildings and open spaces, each in his own hamlet, village or town, by-supporting the Private Member's Bill of the Hon. Member for Harrow, East … "Planning Permission(Demolition of Houses) Bill". This Bill would solve these problems.
  |I trust that the House will take due note of the views of the petitioners in this important matter.
  To lie upon the Table.

  Tonsillectomies (North Devon)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Alan Howarth.]
  12.12 am
  Mr. Tony Speller: In raising the subject of delays in tonsillectomy operations in north Devon I am talking of a drama which has no villains in the cast, although some members of it may regard their opponents as villainous.
  Although there are no villains, there are victims, and they are children. They are children who need tonsillectomies, and they are children of my north Devon constituents who look for help to the North Devon health authority and, in particular, to our ear, nose and throat specialist, Mr. John Riddington Young. The problem, expressed simply, is that, although Mr. Riddington Young works within the National Health Service and within the North Devon health authority, for several years there has been a stalemate over the use of facilities in our excellent North Devon general hospital, where no tonsillectomies are being performed.
  The stage is the hospital and the cast are the highly qualified, well-respected members of the health authority, the consultants, and all the medical and administrative staff within the authority. In essence, the problem is simply that, because of his fears for the safety of youngsters in their post-operative period, the ENT specialist refuses to use the post-operative facilities which the health authority wishes him to use.
  Should the young patient be placed in the paediatric ward or in a surgical ward? On one side of the argument is the health authority, which considers that a paediatric ward is the right place for a youngster to recover. On the other side is the argument of the ear, nose and throat specialist, who will only accept placement of his patients in a surgical ward. He wants a physically separate ward or area in which patients may recover, free from fear of cross-contamination. Those are sensible and logical, but argumentative positions. I truthfully have no idea who is in the right.
  Now an element of farce appears. The consultant will not operate under the conditions laid down by the health authority. Recently, the Government have provided £75,000 towards cutting the queues of people on waiting lists. I was grateful for that until I found out that, because the consultant will not operate until the health authority accepts his conditions for the children, the health authority, disagreeing with its consultant, is sending 40 children for tonsillectomies at Nuffield hospital in Plymouth. So out of our £75,000 of extra funds, £49,000 will be spent on sending our youngsters 50 or 60 miles to Plymouth for their operations. It seems ludicrous. We have the surgeon and we have the beds, but because the beds are in the wrong ward—or seem to be—we send our youngsters across the county and pay for the privilege of not using our own facilities. We have an outstanding surgeon and a super hospital and they are part of a good local health authority, but no operations are carried out. That waste of abilities and facilities must cause my right hon. and learned Friend the Secretary of State to reach with a shudder for his White Paper.
  The problem goes back to 1984. I was first involved when one parent, who was a qualified nurse, complained about the lack of access to her child in the post-operative

  463
  period after a tonsillectomy and was in great dispute with Mr. Riddington Young. Time passed, and during 1987 there were rumblings of discontent over the growing list of young people needing tonsillectomies, but having either to go to Exeter—where, I believe, the post-operative system used is that preferred by Mr. Riddington Young—or to go private.
  Constituents sought my help and I, in turn, contacted the community health council and the North Devon health authority. As nothing seemed able to break the stalemate, I sought help from the previous Under-Secretary of State, my hon. Friend the Member for Derbyshire, South (Mrs. Currie), but the stalemate continued. We are now into our fourth year of no tonsillectomies, although beds and a consultant are available. We reached the stage that the stalemate always seemed to be on the point of compromise, but whenever the usual channels were used they silted up so it was necessary to find a way over or round them. The purpose of this debate is to ask my hon. Friend the Under-Secretary to use the national part of our National Health Service to effect or even impose a solution.
  I want to make two further points. Mr. John Riddington Young has the reputation of being an outstanding ear, nose and throat specialist. His patients appreciate his work and many constituents have written to me in his support. He is from Yorkshire and has many of the talents of that great county and it may be that he also has some of the stubbornness for which it is also renowned. Compromise seems alien to him, as he believes that any compromise may damage his patients. Who can complain about a medical officer who cares more for his patients than for the bureaucracy? I have no specific complaint about the consultant.
  Secondly, my North Devon health authority is excellent. In 10 years in the House, I could count on the fingers of one hand the number of complaints about the authority. I listen to colleagues in Question Time and debates complaining about their local health authorities, but I do not have that problem. My constituents like the health authority and they like its consultants. None the less, there are no operations and that is ludicrous. I have used the word "silly" in the past and been criticised for it, but it must be silly that the taxpayers' money is not being used to help the children who need help.
  The North Devon health authority claims to be following Government guidelines in making the best use of the beds. Perhaps following the problems of Cleveland, it is unwilling to put young children in an adult ward overnight. The crux of the problem is that the consultant specialist says, "I will operate only if children are placed in a surgical adult ward overnight." However, he would prefer a separated ward and I understand his argument on that. The health authority says, "We have good paediatric staff, with excellent nurses with excellent qualifications, and the paediatric ward is where children should go." Both arguments carry complete conviction to the layman but taken together the two arguments mean that none of the children in my constituency are getting their tonsillectomies, which must be nonsense under any circumstances.
  Therefore, I can see both points of view in the play. I do not use the word "play" humorously because this is a play. Although we are talking about operating theatres, the issue is theatre with a play that has a cast of excellent characters who are highly qualified people. They are people of whom I have no personal criticism because they
  464
  are specialists in their own procedures. However, they are none the less at loggerheads and we have reached the stage where only my hon. Friend the Minister can assist us in making a breakthrough.
  My fear is that if we do not resolve the problem soon my area, covered by the North Devon health authority, will lose its ENT operating capacity. Unusually, it is a single consultant facility. Children need to be near their parents, especially when they are in hospital and although Exeter is an excellent hospital it is 50 miles away and for a low-income constituency such as mine that is 50 expensive miles. That is my problem; the children should be near their parents; the parents live in the Barnstaple and the Ilfracombe area, which makes that the logical place for operations.
  I turn finally to the White Paper of my right hon. and learned Friend the Secretary of State for Health. It is not to the taste of many medical people and nor are some of my hon. Friends deeply enamoured by it. I believe in local health care and respect Mr. Riddington Young, the consultant, but equally I know well and have full confidence in councillor Mrs. Ro Day the chairman of the authority.
  It may be that our regional health authority in far-away Bristol—we in the west country think of Bristol as south midlands, not south west—should have done something earlier. Perhaps the local consultants, individually or collectively, should have brought pressure to bear. But whatever the reason, only the children are suffering. No one else has lost a thing—not a penny, not a pound. No one has lost a night's sleep except for the parents—and the children have suffered. The community is sick and tired of what seems to us to be a dispute that should have been resolved long ago.
  Therefore, I ask my hon. Friend the Minister to bring; down the curtain on this too long running farce. The cast is excellent but it must get its act together because beyond the size and the scope of what is a petty dispute to the outside world is the whole question of our National Health Service. Some of my constituents were sent to Exeter last year for treatment for cancer and it is well known nationally that a number were badly damaged by an overdose. For what it is worth, constituents come to me and say, "We were promised help but we have not got it. There is some form of delay. There is a problem over legal aid."
  While I am a supporter of the NHS—my family and myself are users of our National Health Service—none of us, ordinary laymen, doctors, nurses or consultants, can say that the Health Service is beyond criticism. It is too important for that. That is why I ask my good friend the hon. Member for Kettering (Mr. Freeman) to see what he can do to break this deadlock. We love and are proud of our Health Service, but sometimes it does not work and that is why, late at night like this, I must keep some of us in the House awake to try to help those who need help.
  12.23 am
  The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): I congratulate my hon. Friend the Member for Devon, North (Mr. Speller) on his success in winning this opportunity to debate a matter of some concern to his constituents. He is recognised for his unflagging interest in the welfare of the people of his constituency and I pay particular tribute to him.

  465
  These matters undeniably involve clinical judgment and it would not be right for me to pass judgment. However, I am concerned, as is my hon. Friend, about the consequences for the children.
  I, like perhaps many other hon. Members, had my tonsils out when I was 10 in my local, excellent National Health Service hospital. It was local, and I appreciate what my hon. Friend has said about the need for young children, in particular, to be close to their families and to avoid, if possible, extensive travel.
  Perhaps it would be appropriate for me to talk briefly about waiting lists, especially as they affect ear, nose and throat services.
  The Government have been concerned in the past two years to tackle the problem of waiting lists and times for people waiting for treatment under the National Health Service. To this end, my right hon. and learned Friend the Secretary of State has set aside considerable sums of money—£25 million in 1987–88, £30 million in the year just ended and £31 million in 1989–90—to enable health authorities to attack those areas and specialties where the number of people waiting, and the length of time they have to wait, is a problem. The money provided will enable more than 300,000 extra in-patients and day cases and over 200,000 extra out-patients to be treated by April 1990.
  Looking at the picture more broadly, an impressive 6·5 million in-patients in all specialties are now being treated each year in our hospitals. This represents an increase of nearly one quarter over the past 10 years.
  How does north Devon fit into this picture of expanding health care? Current expenditure has increased by over 30 per cent. in real terms since 1982–83. The proportion of frontline staff—doctors, nurses and other health professionals—has increased. Numbers of patients treated have risen correspondingly in the same period. The way in which statistics are collected has recently changed but between 1982 and 1986 in-patient cases rose by 26 per cent., out-patients by the same amount and day cases by 29 per cent.
  I mention all this because it is important to see how far we have come in a short time, and what great strides have been made in access to health services for the population as a whole and for north Devon in particular. We do not rest on our laurels, however. We drive on. Problems remain, as this debate testifies, and it would be foolish to suppose that we could ever elininate them all, even if they could be anticipated.
  There are various reasons for the build-up of waiting lists and times, where these occur at levels which begin to cause concern. They can often be resolved by changes in patient management, and by better informed referrals. In the south-west, general practitioners are sent information on waiting list numbers by specialty throughout the region on a quarterly basis. In other instances, it means specially targeted resources to help ease bottlenecks. Hence the existence of the waiting list fund.
  The South Western region has received substantial sums with which to tackle its waiting list problems—£1·65 million in 1987–88, £1·9 million in 1988–89, and £1·55 million for 1989–90. The regional health authority has made £60,000 available to North Devon in 1988–89, and allocated a further £76,000 for the coming year, out of
  466
  which, as my hon. Friend said, £49,000 is intended for a project in the ear, nose and throat specialty to tackle that particular problem. The project, which involves contracting with the Nuffield hospital, Plymouth, to take 40 patients and which will last from July to October, will aim to reduce the number of children awaiting removal of tonsils and adenoids. I would draw the attention of my hon. Friend to the fact that the operations on these children would have to be funded by the health authority from either the waiting list initiative or from the authority's allocation.
  If the children were not operated on in Plymouth, using the funds available under the waiting list initiative, and if they were looked after in hospital in north Devon, resources would be needed for those operations, so it would not be true to say that we are wasting £49,000 by applying this remedy to the problem.
  I wish to comment on one other point that my hon. Friend made. The national and regional policy is that children should be treated in designated children's wards by specially trained staff so as to safeguard both their physical and psychological well-being. I believe that that is an opinion that is generally held, although, I admit, not universally agreed.
  My hon. Friend will be aware of some of the background to the rise in the waiting list figures for ear, nose and throat operations in north Devon, about half of which are performed on children. Matters of clinical judgment were involved, which it is not appropriate to go into here, but about which I understand discussions have been taking place between the health authority and the consultant concerned, with independent expert advice. The health authority is optimistic that matters will soon be resolved. I understand that from 10 April Mr. Riddington Young has agreed to operate on children requiring the removal of tonsils and adenoids who are over the age of 10 years. That is recent and good news.
  The matter is clearly one for the North Devon health authority to deal with, in consultation with the regional health authority, who hold the consultant's contract of employment. On that point, we have always believed that the level where the contract is held is less important than the actual management of the contract. We would expect the regional and district health authorities to work together in the day-to-day management of consultants and for local managers to deal with problems that arise. As my hon. Friend said, the proposals in the recent White Paper will strengthen those arrangements.
  However, even after that recent and welcome news concerning the consultant involved, I appreciate that there may still be a problem to be resolved. I can tell my hon. Friend that I will ask Sir Vernon Seccombe, chairman of the South Western regional health authority, to report to me within one month from today on how the position has developed and on the extent to which it has been resolved. I can give my hon. Friend an assurance, which I hope he will convey to his constituents—especially to the parents of the children involved—that I place great importance on what he has said and that I will write to him at the end of one month.
  My hon. Friend raised the altogether separate subject of compensation payments for patients who received radiation overdoses at the Royal Devon and Exeter hospital last year. That matter is being handled by the legal advisers of Exeter health authority and the patients concerned or their executors. As my hon. Friend knows,

  467
  the health authority has, following an independent inquiry, accepted that it had failed in its duty and it has already paid out interim sums. It is working with its legal advisers to effect satisfactory final settlements as quickly as possible.
  Question put and agreed to.
  Adjourned accordingly at twenty-eight minutes to One o'clock.

HOME DEPARTMENT

  Mr. Albert Baker
  Mr. Livingstone
  To ask the Secretary of State for the Home Department if he will make a further statement on the case of Mr. Albert Baker of Her Majesty's prison, Long Lartin.

  Mr Douglas Hogg
  We are considering a number of petitions from Mr. Baker about his request for transfer to a prison in Northern Ireland and related matters, and we await the outcome of his application for leave to move for judicial review of the Government's decision last year not to transfer him to Northern Ireland. I understand that a hearing has been fixed for 15 May.

  Fatal Accidents (Police Vehicles)
  Mr. Fry
  To ask the Secretary of State for the Home Department how many fatal accidents during 1985, 1986, 1987 and 1988 involved motor vehicles driven by the police in the course of their duties.

  Mr. Douglas Hogg
  The available information in respect of fatal accidents involving police vehicles in 1987 is contained in the report of Her Majesty's chief inspector of constabulary for that year, a copy of which is in the Library.

  The information requested for earlier years is not recorded centrally and could be obtained only at disproportionate cost. Figures for 1988 are not yet available.

  Fire Service
  Mr. Win Griffiths
  To ask the Secretary of State for the Home Department if he has any plans to change the consultative structure of the fire service as laid down in the Fire Services Act 1947; and if he will make a statement.

  Mr. John Patten
  My right hon. Friend has no present plans to seek changes to the statutory basis of the Central Fire Brigades Advisory Council constituted under section 29 of the Fire Services Act 1947 or of the arrangements under section 17 of the Act, as amended by the Fire Services Act 1959, relating to disciplinary matters.

  Prison Wages
  Mr. Thurnham
  To ask the Secretary of State for the Home Department what is the annual wage bill for prisoners at the present time; what the net cost is after administration charges are taken into account; and if he will make a statement.

  Mr. Douglas Hogg
  Expenditure on the earnings of inmates in prison service establishments in England and Wales is forecast to be approximately £6·25 million in the 240
  financial year 1988–89. The cost of administering the earnings schemes is not separately identified in the operating costs of establisments. As my right hon. Friend explained in response to a question from my hon. Friend the Member for Wimbledon (Dr. Goodson-Wickes) on 8 March, at columns 541–42, the current earnings arrangements are to be reviewed.

  Immigration Control (Irish Republic)
  Mr. Nicholas Bennett
  To ask the Secretary of State for the Home Department what discussions he has had with the Irish Government concerning their immigration controls for visitors from non-European Community countries; and whether he will make a statement.

  Mr. Hurd
  I regularly attend meetings with the responsible Ministers of all the member states of the European Community, including the Irish Republic, at which matters relating to immigration control are discussed.

  Management Consultants
  Mr. Dobson
  To ask the Secretary of State for the Home Department what were the total fees paid out by his Department to management consultants in 1979–80 and each year to date; and what is the estimate for the current year.

  Mr. Douglas Hogg
  [holding answer 13 March 1989]: The 1988–89 estimate of payments by the Home Office to management consultants is £1,257,000. Equivalent estimates of payments made in the financial years from 1984–85 were as follows:

  £

  1984–85

  454,000

  1985–86

  367,000

  1986–87

  1,174,000

  1987–88

  784,000

  Information for the years prior to 1984–85 is not readily available, and could be obtained only at disproportionate cost.

  Privatisation
  Mr. Dobson
  To ask the Secretary of State for the Home Department what was the total sum paid out in fees to outside organisations in the furtherance of privatisation by his Department in 1979–80 and each year to date; and what is the estimate for 1989–90.

  Mr. Douglas Hogg
  [holding answer 13 March 1989]: Since 1979–80, the Home Office has made payments of approximately £72,000 to outside organisations in the furtherance of privatisation. No expenditure is planned for 1989–90.

  Self-mutilation
  Mr. Maclennan
  To ask the Secretary of State for the Home Department if he will publish in the Official Report a table showing the number of those in custody who have committed acts of self-mutilation, by age and sex, together with the names of the establishments in which they were held and the dates of the incidents, since 1979.
  241
  Mr. Douglas Hogg
  [holding answer 8 March 1989]: The number of inmates of each prison service establishment who are recorded as having inflicted non-fatal injury on themselves between 1979 and April 1988 is set out in the table. Information on the age of the inmates and the dates of the incidents is not available.

  Note on the table
  Figures for 1979 to 1983 are recorded by calendar year. Figures for 1985–86 to 1987–88 are recorded by financial year. Figures for 1984–85 include incidents recorded as having occurred between 1 January 1984 and 31 March 1985.

  Number of inmates Recorded as having Inflicted Non-fatal Injury on themselves

  1979

  1980

  1981

  1982

  1983

  Male Establishments

  Acklington

  1

  0

  0

  1

  2

  Albany

  2

  1

  1

  2

  0

  Aldington

  0

  3

  0

  0

  1

  Appleton Thorn

  1

  0

  —

  —

  —

  Ashford

  23

  28

  23

  19

  16

  Ashwell

  2

  1

  1

  0

  1

  Aylesbury

  4

  5

  6

  3

  7

  Bedford

  4

  0

  0

  0

  2

  Birmingham

  32

  29

  30

  44

  12

  Blantyre House

  3

  3

  5

  1

  2

  Blundeston

  5

  0

  3

  0

  2

  Bristol

  14

  4

  7

  8

  10

  Brixton

  8

  11

  13

  17

  20

  Brockhill

  2

  1

  1

  7

  3

  Buckley Hall

  1

  4

  4

  1

  2

  Camp Hill

  2

  3

  2

  —

  5

  Campsfield House

  0

  1

  1

  0

  0

  Canterbury

  19

  5

  5

  2

  1

  Cardiff

  25

  20

  8

  4

  29

  Castington

  0

  1

  2

  5

  0

  Channings Wood

  1

  0

  1

  1

  2

  Chelmsford

  —

  0

  5

  8

  8

  Coldingley

  1

  1

  1

  0

  2

  Dartmoor

  2

  1

  1

  3

  4

  Deerbolt

  7

  6

  13

  1

  0

  Dorchester

  3

  6

  1

  4

  4

  Dover

  14

  8

  1

  1

  10

  Durham

  9

  6

  8

  9

  11

  Eastwood Park

  2

  2

  1

  3

  1

  Erlestoke

  0

  0

  1

  3

  0

  Everthorpe

  4

  19

  18

  14

  4

  Exeter

  7

  5

  11

  11

  0

  Featherstone

  11

  6

  0

  6

  2

  Feltham

  7

  1

  65

  25

  27

  Finnamore Wood

  0

  0

  0

  0

  0

  Ford

  2

  0

  0

  1

  0

  Foston Hall

  0

  0

  0

  0

  1

  Frankland

  —

  —

  —

  0

  2

  Gartree

  4

  3

  1

  0

  2

  Gaynes Hall

  2

  0

  0

  0

  1

  Glen Parva

  5

  4

  33

  5

  4

  Gloucester

  4

  6

  2

  5

  1

  Grendon

  0

  6

  8

  8

  17

  Gringley

  1

  1

  1

  0

  0

  Guys Marsh

  0

  0

  1

  2

  0

  Haslar

  0

  1

  3

  1

  0

  Hatfield

  0

  1

  0

  1

  0

  Haverigg

  5

  1

  1

  5

  2

  Hewell Grange

  2

  1

  0

  1

  2

  Highpoint

  0

  2

  25

  20

  2

  Hindley

  10

  11

  45

  4

  2

  Hollesley Bay

  1

  1

  0

  0

  0

  Hull

  1

  0

  0

  0

  0

  Huntercombe

  0

  1

  8

  2

  2

  Kingston

  1

  0

  1

  1

  1

  Kirkham

  1

  2

  0

  0

  0

  Kirklevington

  1

  2

  1

  1

  0

  Lancaster

  2

  4

  4

  3

  3

  Latchmere House

  3

  3

  2

  1

  4

  Leeds

  10

  6

  9

  11

  8

  Leicester

  —

  4

  6

  2

  1

  Lewes

  15

  8

  9

  27

  13

  242

  1979

  1980

  1981

  1982

  1983

  Leyhill

  1

  0

  0

  1

  0

  Lincoln

  26

  19

  20

  15

  17

  Liverpool

  31

  10

  17

  12

  12

  Long Lartin

  3

  0

  5

  4

  5

  Lowdham Grange

  3

  2

  3

  1

  0

  Low Newton

  17

  12

  47

  31

  14

  Maidstone

  2

  3

  2

  0

  11

  Manchester

  75

  2

  107

  128

  169

  Medomsley

  0

  5

  1

  1

  3

  New Hall

  1

  4

  0

  2

  3

  Northallerton

  2

  3

  7

  3

  0

  Northeye

  0

  2

  1

  0

  1

  North Sea Camp

  1

  2

  3

  1

  2

  Norwich

  8

  14

  12

  13

  5

  Nottingham

  3

  5

  3

  5

  1

  Onley

  11

  4

  2

  0

  1

  Oxford

  20

  12

  1

  8

  11

  Parkhurst

  3

  1

  1

  4

  1

  Pentonville

  4

  9

  5

  8

  9

  Portland

  15

  2

  12

  9

  9

  Preston

  5

  8

  5

  5

  4

  Pucklechurch

  13

  24

  12

  13

  12

  Ranby

  1

  4

  —

  2

  2

  Reading

  86

  1

  7

  1

  1

  Risley

  7

  5

  2

  10

  8

  Rochester

  2

  1

  2

  1

  37

  Rudgate

  0

  0

  0

  0

  0

  Send

  0

  0

  0

  2

  1

  Shepton Mallet

  3

  1

  3

  5

  3

  Shrewsbury

  6

  6

  4

  —

  —

  Springhill

  0

  1

  0

  0

  0

  Stafford

  18

  7

  3

  2

  13

  Standford Hill

  2

  3

  0

  0

  0

  Stoke Heath

  9

  8

  11

  12

  17

  Sudbury

  1

  0

  1

  1

  2

  Swansea

  3

  12

  0

  2

  14

  Swinfern Hall

  1

  4

  2

  1

  1

  The Verne

  2

  0

  8

  1

  1

  Thorp Arch

  0

  4

  1

  1

  3

  USK (Prescod)

  1

  3

  4

  0

  4

  Wakefield

  3

  9

  12

  12

  5

  Wandsworth

  37

  35

  34

  22

  28

  Wellingborough

  24

  16

  14

  7

  11

  Werrington

  0

  2

  2

  2

  2

  Wetherby

  3

  3

  0

  5

  2

  Whatton

  0

  0

  1

  0

  0

  Winchester

  8

  8

  7

  12

  4

  Wormwood Scrubs

  —

  98

  26

  14

  3

  Wymott

  1

  2

  2

  2

  10

  Female Establishments

  Askham Grange

  171

  135

  77

  130

  112

  Brixton

  0

  0

  —

  —

  —

  Bullwood Hall

  136

  163

  87

  54

  38

  Cookham Wood

  5

  6

  2

  10

  10

  Drake Hall

  2

  4

  4

  0

  2

  Durham

  2

  3

  2

  5

  3

  East Sutton Park

  I

  1

  0

  0

  4

  Holloway

  87

  47

  58

  48

  71

  Low Newton

  0

  0

  0

  0

  0

  Moor Court

  0

  0

  0

  —

  —

  Pucklechurch

  18

  17

  9

  10

  9

  Risley

  10

  8

  11

  —

  1

  Styal

  33

  136

  95

  52

  42

  Number of inmates recorded as having inflicted non-fatal injury on themselves

  1984–85

  1985–86

  1986–87

  1987–88

  Male Establishments

  Acklington

  4

  0

  1

  1

  Albany

  1

  2

  0

  0

  Aldington

  3

  2

  0

  0

  Ashford

  34

  26

  44

  15

  Ashwell

  1

  0

  0

  1

  Aylesbury

  3

  3

  2

  3

  Bedford

  21

  13

  14

  14

  243

  1984–85

  1985–86

  1986–87

  1987–88

  Birmingham

  45

  6

  30

  15

  Blantyre House

  4

  0

  0

  0

  Blundeston

  1

  4

  0

  1

  Bristol

  3

  4

  4

  2

  Brixton

  32

  13

  19

  8

  Brockhill

  12

  9

  8

  5

  Buckley Hall

  1

  4

  2

  1

  Camp Hill

  9

  14

  8

  6

  Campsfield House

  0

  5

  2

  2

  Canterbury

  1

  0

  0

  13

  Cardiff

  51

  62

  50

  31

  Castington

  4

  4

  4

  2

  Channings Wood

  1

  4

  1

  1

  Chelmsford

  17

  19

  9

  69

  Coldingley

  3

  3

  5

  2

  Dartmoor

  0

  27

  4

  8

  Deerbolt

  16

  9

  36

  6

  Dorchester

  3

  3

  2

  0

  Dover

  3

  0

  2

  2

  Durham

  22

  13

  11

  11

  Eastwood Park

  2

  4

  2

  0

  Erlestoke

  4

  7

  0

  0

  Everthorpe

  5

  2

  2

  12

  Exeter

  5

  0

  2

  29

  Featherstone

  0

  0

  0

  0

  Feltham

  12

  15

  19

  23

  Finnamore Wood

  0

  0

  0

  0

  Ford

  1

  3

  0

  0

  Foston Hall

  3

  1

  1

  0

  Frankland

  5

  10

  3

  4

  Full Sutton

  —

  —

  —

  0

  Gartree

  1

  1

  2

  6

  Glen Parva

  51

  50

  65

  68

  Gloucester

  6

  3

  5

  1

  Grendon

  16

  20

  13

  14

  Gringley

  0

  0

  2

  0

  Guys Marsh

  4

  2

  2

  5

  Haslar

  0

  1

  0

  0

  Hatfield

  0

  1

  0

  0

  Haverigg

  2

  5

  3

  3

  Hewell Grange

  1

  10

  0

  0

  Highpoint

  1

  3

  4

  6

  Hindley

  14

  12

  40

  20

  Hollesley Bay

  1

  2

  8

  4

  Hull

  3

  6

  34

  39

  Huntercombe

  6

  1

  0

  6

  Kingston

  2

  3

  1

  1

  Kirkham

  0

  2

  0

  0

  Kirklevington

  0

  2

  0

  0

  Lancaster

  3

  2

  2

  3

  Latchmere House

  2

  0

  17

  0

  Leeds

  13

  13

  12

  5

  Leicester

  2

  3

  2

  5

  Lewes

  18

  17

  13

  9

  Leyhill

  0

  1

  1

  0

  Lincoln

  23

  26

  25

  44

  Lindholme

  —

  2

  5

  4

  Littlehey

  —

  —

  —

  13

  Liverpool

  6

  12

  35

  50

  Long Lartin

  2

  2

  2

  3

  Lowdham Grange

  0

  0

  1

  0

  Low Newton

  21

  20

  14

  16

  Maidstone

  13

  2

  0

  0

  Manchester

  89

  83

  101

  150

  Medomsley

  0

  2

  3

  —

  Morton Hall

  —

  0

  0

  0

  New Hall

  6

  3

  4

  —

  Northallerton

  6

  10

  9

  5

  Northeye

  4

  2

  0

  1

  North Sea Camp

  0

  2

  2

  0

  Norwich

  12

  10

  5

  38

  Nottingham

  5

  5

  5

  1

  Onley

  3

  19

  18

  18

  Oxford

  7

  11

  15

  11

  Parkhurst

  0

  0

  1

  6

  Pentonville

  25

  13

  5

  9

  Portland

  15

  9

  10

  5

  Preston

  3

  7

  4

  6

  244

  1984–85

  1985–86

  1986–87

  1987–88

  Pucklechurch

  22

  17

  11

  15

  Ranby

  6

  4

  4

  1

  Reading

  1

  1

  2

  2

  Risley

  4

  2

  5

  2

  Rochester

  41

  35

  26

  54

  Rudgate

  0

  0

  1

  1

  Send

  3

  3

  2

  1

  Shepton Mallet

  8

  2

  1

  1

  Shrewsbury

  2

  1

  5

  8

  Springhill

  0

  0

  0

  0

  Stafford

  11

  6

  6

  5

  Standford Hill

  1

  0

  0

  0

  Stocken

  —

  1

  7

  0

  Stoke Heath

  17

  24

  18

  13

  Sudbury

  0

  0

  0

  1

  Swansea

  18

  13

  18

  12

  Swinfern Hall

  1

  0

  3

  5

  The Verne

  0

  0

  1

  0

  Thorn Cross

  —

  0

  0

  3

  Thorp Arch

  0

  17

  1

  0

  USK (Prescoed)

  1

  4

  3

  7

  Wakefield

  5

  6

  4

  3

  Wandsworth

  18

  16

  9

  11

  Wayland

  —

  6

  5

  1

  Wellingborough

  14

  6

  17

  9

  Werrington

  1

  0

  2

  2

  Wetherby

  3

  2

  2

  4

  Whatton

  0

  0

  0

  0

  Winchester

  8

  7

  4

  7

  Wormwood Scrubs

  4

  18

  7

  30

  Wymott

  8

  3

  2

  5

  Female Establishments

  Askham Grange

  78

  64

  72

  65

  Bullwood Hall

  63

  34

  28

  35

  Cookham Wood

  21

  5

  11

  5

  Drake Hall

  5

  4

  1

  0

  Durham

  6

  9

  2

  4

  East Sutton Park

  2

  0

  0

  0

  Holloway

  82

  78

  63

  77

  Low Newton

  0

  0

  3

  1

  New Hall

  —

  —

  —

  19

  Pucklechurch

  19

  24

  18

  22

  Risley

  28

  5

  9

  1

  Styal

  157

  56

  32

  18

  Thames Tidal Flood Warning System
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department what discussions have taken place between his Department and the London residuary body in respect of the Thames tidal flood warning system; and what will be the arrangements after 30 April.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: I have been asked to reply.

  I refer the hon. Member to the answer I gave him earlier today.

NATIONAL FINANCE

  Economic Growth
  Mr. Wilshire
  To ask the Chancellor of the Exchequer when he next intends to forecast the rate of economic growth in 1989–90.

  Mr. Knapman
  To ask the Chancellor of the Exchequer when he next intends to forecast the rate of economic growth in 1989–90.

  Mr. Leigh
  To ask the Chancellor of the Exchequer if he will make a statement on the expected rate of growth this year of the United Kingdom economy.
  245
  Mr. Goodlad
  To ask the Chancellor of the Exchequer when he next intends to forecast the rate of economic growth in 1989–90.

  Mr. Major
  In my right hon. Friend's Autumn Statement.

  Dr. Michael Clark
  To ask the Chancellor of the Exchequer what has been the average annual rate of growth over the last seven years for which figures are available.

  Mr. Aspinwall
  To ask the Chancellor of the Exchequer what has been the average annual rate of growth over the last seven years for which figures are available.

  Mr. Burt
  To ask the Chancellor of the Exchequer what has been the average annual rate of growth over the last seven years for which figures are available.

  Mr. Roger King
  To ask the Chancellor of the Exchequer what has been the average annual rate of growth over the last seven years for which figures are available.

  Mr. Major
  In the seven years to 1988, the average annual rate of growth of GDP was 3·3 per cent. This was the steadiest seven-year period of growth averaging above 3 per cent. since the war.

  Indirect Taxes
  Mr. Ernie Ross
  To ask the Chancellor of the Exchequer if he will estimate the total amount of indirect taxes paid by a family on three quarters of average earnings.

  Mr. Norman Lamont
  It is estimated that in 1988–89, a married man on three quarters of average male earnings with two children will pay £25 per week in indirect taxes (excluding rates).

  Medical Insurance
  Mr. Nigel Griffiths
  To ask the Chancellor of the Exchequer how much his proposal for private medical insurance tax relief will cost in a full year.

  Mr. Norman Lamont
  About £40 million in 1990–91.

  Mr. Rooker
  To ask the Chancellor of the Exchequer how much his proposal for private medical insurance tax relief will cost in a full year.

  Mr. Steinberg
  To ask the Chancellor of the Exchequer how much his proposal for private medical insurance tax relief will cost in a full year.

  Mr. Snape
  To ask the Chancellor of the Exchequer how much his proposal for private medical insurance tax relief will cost in a full year.

  Mr. Norman Lamont
  About £40 million in 1990–91. In subsequent years the cost is likely to rise as more over-60s are encouraged by the relief to take out medical insurance.

  Asset Sales
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer how much of the Budget surplus is attributable to asset sales.
  246
  Mr. Lawson
  The PSDR in 1988–89 is expected to be £14 billion, or 3 per cent. of GDP. Even excluding privatisation proceeds, the PSDR would have been £7 billion, equivalent to 1½ per cent. of GDP, only the second net repayment on this basis in any year since the beginning of the 1950s—the earliest date for which comparable figures are available.

  Inflation
  Mr. Coleman
  To ask the Chancellor of the Exchequer what are the current inflation rates in(a) Britain and (b) other members of the Group of Seven.

  Mr. Corbett
  To ask the Chancellor of the Exchequer what are the current inflation rates in(a) Britain and (b) other members of the Group of Seven.

  Mr. Lilley
  The current 12-month inflation rates for the United Kingdom and the other members of the Group of Seven are given in the weekly OECD publication, "Current Economic Indicators", a copy of which is available in the House of Commons Library.

  Ms. Armstrong
  To ask the Chancellor of the Exchequer when he expects the inflation rate to fall below 5 per cent.

  41. Mr. Barron
  To ask the Chancellor of the Exchequer when he expects the inflation rate to fall below 5 per cent.

  113. Mr. Graham
  To ask the Chancellor of the Exchequer when he expects the inflation rate to fall below 5 per cent.

  Mr. Dunnachie
  To ask the Chancellor of the Exchequer when he expects the inflation rate to fall below 5 per cent.

  Mr. Lilley
  In the Financial Statement and Budget Report the annual rate of RPI inflation is forecast to moderate to 5½ per cent. by the final quarter of this year, and to fall further to 4½ per cent. by the second quarter of 1990.

  Mr. Darling
  To ask the Chancellor of the Exchequer if he will estimate what the impact of his Budget measures will be on the retail prices index.

  Mr. Cox
  To ask the Chancellor of the Exchequer if he will estimate what the impact of his Budget measures on the retail prices index will be.

  Mr. Beith
  To ask the Chancellor of the Exchequer if he will make a statement about the estimated effect of the Budget proposals on inflation.

  Mr. Doran
  To ask the Chancellor of the Exchequer if he will estimate what will be the impact of his Budget measures on the retail prices index.

  Mr. Ron Davies
  To ask the Chancellor of the Exchequer if he will estimate what the impact of his Budget measures on the retail prices index will be.

  Mr. Lilley
  Prudent monetary and fiscal policies will continue to bear down on inflation. The direct impact of the Budget proposals on the retail prices index will be negligible.
  247
  Mr. Boyes
  To ask the Chancellor of the Exchequer how many members of the European Economic Community have inflation rates lower than that in the United Kingdom.

  Mr. Caborn
  To ask the Chancellor of the Exchequer how many members of the European Economic Community have inflation rates lower than that in the United Kingdom.

  Mr. Lilley
  I refer the hon. Members to the reply that my right hon. Friend the Chancellor gave earlier today to the hon. Member for Hemsworth, South (Mr. Buckley).

  Mr. Ronnie Campbell
  To ask the Chancellor of the Exchequer if he will now revise the rate of inflation predicted in his Budget statement.

  Mr. Battle
  To ask the Chancellor of the Exchequer when he next intends to revise his Budget forecast for inflation for 1989–90.

  Mr. Cummings
  To ask the Chancellor of the Exchequer if he will now revise the rate of inflation predicted in his Budget statement.

  Mr. Cunliffe
  To ask the Chancellor of the Exchequer if he will now revise the rate of inflation predicted in his Budget statement.

  Mr. Adams
  To ask the Chancellor of the Exchequer if he will now revise the rate of inflation predicted in his Budget statement.

  Mr. Lilley
  It is much too soon to revise the forecast in the FSBR. My right hon. Friend will next update his published inflation forecast in the Autumn Statement.

  Mr. Bell
  To ask the Chancellor of the Exchequer what representations he has received in the light of his Budget statement of future forecasts for inflation.

  Mr. Lilley
  None.

  Mr. Cohen
  To ask the Chancellor of the Exchequer when he now expects to achieve his target for inflation of zero per cent.

  Mr. Tom Clarke
  To ask the Chancellor of the Exchequer when he expects to achieve his target for inflation of zero per cent.

  Mrs. Clwyd
  To ask the Chancellor of the Exchequer when he now expects to achieve his target for inflation of zero per cent.

  Mr. Callaghan
  To ask the Chancellor of the Exchequer when he now expects to achieve his target for inflation of zero per cent.

  Mr. Lilley
  The medium-term financial strategy set out in the Financial Statement and Budget Report on 14 March assumed the annual rate of inflation in the GDP deflator would be down to 2½ per cent. by 1992–93. The ultimate objective remains zero inflation.

  Mr. Ron Brown
  To ask the Chancellor of the Exchequer if he has received recent representations from the Confederation of British Industry about inflation; and if he will make a statement.

  Mr. Lilley
  No. But my right hon. Friend receives copies of CBI publications. In his Budget speech the 248
  Chancellor noted that inflation was expected to fall to 5½ per cent. by the end of this year, and to 4½ per cent. in the second quarter of 1990.

  Mr. Richard Shepherd
  To ask the Chancellor of the Exchequer if he will make a statement on the rates of inflation for the United Kingdom from 1986 to 1989 and on the Organisation for Economic Co-operation and Development average for 1986 to 1989.

  Mr. Lilley
  The OECD "Economic Outlook" published in December 1988 gives the average rates of inflation in the OECD countries for the years in question with estimates and forecasts for 1988 and 1989. The Financial Statement and Budget Report contains a forecast for the United Kingdom inflation rate in the year to 1989 fourth quarter. United Kingdom inflation rates for earlier years can be calculated from figures contained in the monthly Department of Employment publication,Employment Gazette.

  Budget (Representations)
  Mr. Sumberg
  To ask the Chancellor of the Exchequer what representations he has received from industrial organisations in connection with his recent Budget statement.

  Mr. Major
  The proposals in my right hon. Friend's Budget have been widely welcomed.

  Mr. Watts
  To ask the Chancellor of the Exchequer what representations he has received on his Budget.

  Mr. Quentin Davies
  To ask the Chancellor of the Exchequer what representations he has received on his Budget.

  Mr. Marlow
  To ask the Chancellor of the Exchequer what representations he has received on his Budget.

  Mr. David Martin
  To ask the Chancellor of the Exchequer what representations he has received on his Budget.

  Mr. Cash
  To ask the Chancellor of the Exchequer what representations he has received on his Budget.

  Mr. Norman Lamont
  The proposals in my right hon. Friend's Budget have been widely welcomed.

  Low Pay
  Mr. Kirkwood
  To ask the Chancellor of the Exchequer what plans he has to further reduce the tax burden on the low paid.

  Mr. Norman Lamont
  My right hon. Friend outlined in his Budget statement on 14 March his proposals to increase the main allowances in line with statutory provisions and to reform the system of employees' national insurance contributions. When it is prudent and sensible to do so we intend to reduce the basic rate of income tax further to a target of 20p in the pound.

  Mr. Nicholas Baker
  To ask the Chancellor of the Exchequer what will be the effect of his Budget proposals upon those on lower incomes.

  Mr. Norman Lamont
  Those on lower incomes will benefit from the reduction and reform of national
  249
  insurance contributions, the abolition of the pensioners' earnings rule and the extension of the over-80s age allowance to those aged 75 and over.

  Balance of Payments
  Mr. George Howarth
  To ask the Chancellor of the Exchequer which countries in the European Economic Community have a larger balance of payments deficit as a percentage of gross domestic product than the United Kingdom.

  Mr. Robert Hughes
  To ask the Chancellor of the Exchequer which countries in the EEC have a larger balance of payments deficit as a percentage of gross domestic product than the United Kingdom.

  Mr. Hoyle
  To ask the Chancellor of the Exchequer which countries in the EEC have a larger balance of payments deficit as a percentage of gross domestic product than the United Kingdom.

  Mr. Major
  On the basis of published figures, none.

  Mr. Frank Field
  To ask the Chancellor of the Exchequer if he will estimate when the balance of payments will return to surplus.

  Mr. Flynn
  To ask the Chancellor of the Exchequer if he will estimate when the balance of payments will return to surplus.

  Mr. Fisher
  To ask the Chancellor of the Exchequer if he will estimate when the balance of payments will return to surplus.

  Mr. Flannery
  To ask the Chancellor of the Exchequer if he will estimate when the balance of payments will return to surplus.

  Mr. Major
  The Financial Statement and Budget Report for 1989–90 published on 14 March provided forecasts of the balance of payments for 1989 and the first half of 1990. The balance of payments on current account is expected to remain in deficit over this period. Forecasts for later years are not published.

  Ms. Harman
  To ask the Chancellor of the Exchequer if he will make a statement on the current balance of payments deficit.

  Mr. Win Griffiths
  To ask the Chancellor of the Exchequer if he will make a statement on the current balance of payments deficit.

  Mr. Grocott
  To ask the Chancellor of the Exchequer if he will make a statement on the current balance of payments deficit.

  Ms. Gordon
  To ask the Chancellor of the Exchequer if he will make a statement on the current balance of payments deficit.

  Mr. Major
  I refer the hon. Members to the recently published Financial Statement and Budget Report.

  Mr. Galloway
  To ask the Chancellor of the Exchequer when he expects the balance of payments deficit will begin to fall as a percentage of gross domestic product.

  Mr. Foulkes
  To ask the Chancellor of the Exchequer when he expects the balance of payments deficit will begin to fall as a percentage of gross domestic product.
  250
  Mr. Major
  I refer the hon. Members to the reply that my right hon. Friend the Chancellor of the Exchequer gave earlier today to the hon. Member for Norwich, South (Mr. Garrett).

  Share Ownership
  Mr. Knowles
  To ask the Chancellor of the Exchequer what is his latest estimate of the extent of share ownership in Britain.

  Mr. Squire
  To ask the Chancellor of the Exchequer what is his latest estimate of the extent of share ownership in Britain.

  Mr. Norman Lamont
  The joint Treasury and stock exchange survey carried out in January and February 1989 estimated that approximately 9 million people own shares, 20 per cent. of the adult population. This represents a threefold increase since 1979.

  Savings
  Mr. Hanley
  To ask the Chancellor of the Exchequer what representations he has received about the level of savings in the British economy.

  Mrs. Gorman
  To ask the Chancellor of the Exchequer what representations he has received about the level of savings in the British economy.

  Mr. Carrington
  To ask the Chancellor of the Exchequer what representations he has received about the level of savings in the British economy.

  Mr. Jack
  To ask the Chancellor of the Exchequer what representations he has received about the level of savings in the British economy.

  Mr. Lilley
  My right hon. Friend has received a number of representations about savings.

  Earnings
  Mr. Evennett
  To ask the Chancellor of the Exchequer what has been the percentage increase in the real take-home pay of a married man, with two children, on average male earnings from 1978–79 to 1988–89.

  Mr. David Nicholson
  To ask the Chancellor of the Exchequer what has been the percentage increase in the real take-home pay of a married man, with two children, on average male earnings from 1978–79 to 1988–89.

  Mr. David Shaw
  To ask the Chancellor of the Exchequer what has been the percentage increase in the real take-home pay of a married man with two children on average male earnings from 1978–79 to 1988–89.

  Mr. Mans
  To ask the Chancellor of the Exchequer what has been the percentage increase in the real take-home pay of a married man with two children on average male earnings from 1978–79 to 1988–89.

  Mr. Norman Lamont
  Real take-home pay for a married man with two children on average male earnings is 29 per cent. higher in 1988–89 than in 1978–79.

  Mr. Janman
  To ask the Chancellor of the Exchequer what has been the percentage increase in the real take-home pay of a married man, with two children, on half average male earnings from 1978–79 to 1988–89.
  251
  Mr. Norman Lamont
  I refer my hon. Friend to my reply to my hon. Friend the Member for Lancashire, West (Mr. Hind) on 22 March at column 585.

  Government Expenditure
  Mr. Baldry
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure, excluding privatisation proceeds, as a percentage of gross domestic product since 1982–83.

  Mr. Hayes
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure, excluding privatisation proceeds, as a percentage of gross domestic product since 1982–83.

  Mr. Hague
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure, excluding privatisation proceeds, as a percentage of gross domestic product since 1982–83.

  Mr. Major
  The Financial Statement and Budget Report gave a figure of 39½ per cent. for the ratio of general Government expenditure (excluding privatisation proceeds) to gross domestic product in 1988–89. The corresponding figure for 1982–83 was 46¾ per cent.

  Independent Taxation
  Mr. Butterfill
  To ask the Chancellor of the Exchequer what representations he has received about the introduction of independent taxation for husband and wife in April 1990.

  Mr. Andy Stewart
  To ask the Chancellor of the Exchequer what representations he has received about the introduction of independent taxation for husband and wife in April 1990.

  Mr. Rowe
  To ask the Chancellor of the Exchequer what representations he has received about the introduction of independent taxation for a husband and wife in April 1990.

  Mr. Thurnham
  To ask the Chancellor of the Exchequer what representations he has received about the introduction of independent taxation for husband and wife in April 1990.

  Mr. Norman Lamont
  My right hon. Friend has received a number of letters on this subject.

  Productivity
  Mr. Wood
  To ask the Chancellor of the Exchequer what has been the percentage increase in British manufacturing productivity since 1979.

  Mr. William Powell
  To ask the Chancellor of the Exchequer what has been the percentage increase in British manufacturing productivity since 1979.

  Dr. Twinn
  To ask the Chancellor of the Exchequer what has been the percentage increase in British manufacturing productivity since 1979.

  Mr. Stevens
  To ask the Chancellor of the Exchequer what has been the percentage increase in British manufacturing productivity since 1979.

  Mr. Major
  Output per head in United Kingdom manufacturing industry in the three months up to January 1989 was 48.8 per cent. higher than its average level in 1979, an average annual growth rate of 4·3 per cent.
  252
  Mr. John Marshall
  To ask the Chancellor of the Exchequer if he will make a statement about the trends in productivity in British industry.

  Mr. Major
  Output per head in the manufacturing sector in the three months up to January 1989 was 55 per cent. higher than its average level in 1980. This is equivalent to an annual average growth rate of 5·3 per cent. significantly higher than the 1·6 per cent. growth achieved in the 1970s and 3 per cent. a year in the 1960s. Since 1980, United Kingdom manufacturing productivity growth has been higher than in any other major industrialised country.

  Imports
  Mr. Martyn Jones
  To ask the Chancellor of the Exchequer what is his latest estimate of the value of imports in the current financial year.

  Mr. Illsley
  To ask the Chancellor of the Exchequer what is his latest estimate of the value of imports in the current financial year.

  164. Mr. Lambie
  To ask the Chancellor of the Exchequer what is his latest estimate of the value of imports in the current financial year.

  Mr. Major
  Estimates for the value of imports for the whole of the financial year 1988–89 have yet to be published. The Financial Statement and Budget Report does not provide a forecast of the value of imports.

  Income Tax
  Mr. Hardy
  To ask the Chancellor of the Exchequer what is his estimate of the number of people who will pay income tax in 1989–90.

  Mr. Norman Lamont
  It is estimated that about 21·3 million single people and married couples (24·9 million individuals) will be liable to income tax in 1989–90. These estimates are based on a projection of the 1986–87 survey of personal incomes and are provisional.

  Manufactured Goods
  Mr. Norman Hogg
  To ask the Chancellor of the Exchequer, what is his latest estimate of the balance of trade payments with respect to manufactured goods for the current financial year.

  Mr. Henderson
  To ask the Chancellor of the Exchequer what is his latest estimate of the balance of trade payments with respect to manufactured goods for the current financial year.

  Mr. Hinchliffe
  To ask the Chancellor of the Exchequer what is his latest estimate of the balance of trade payments with respect to manufactured goods for the current financial year.

  Mr. Home Robertson
  To ask the Chancellor of the Exchequer what is his latest estimate of the balance of trade payments with respect to manufactured goods for the current financial year.

  Mr. Major
  Estimates for the balance of trade in manufactured goods for the whole of the financial year 1988–89 have yet to be published. The Financial Statement and Budget Report provides a forecast only for calendar year 1989.

  Interest Rates
  Mr. Jack Thompson
  To ask the Chancellor of the Exchequer what are interest rates in(a) Britain and (b) United States of America.

  Mr. Stott
  To ask the Chancellor of the Exchequer what are the interest rates in(a) Britain and (b) Japan.

  Ms. Walley
  To ask the Chancellor of the Exchequer, what are the interest rates in(a) Britain and (b) Japan.

  Mr. Vaz
  To ask the Chancellor of the Exchequer what are the interest rates in(a) Britain and (b) Japan.

  Mrs. Fyfe
  To ask the Chancellor of the Exchequer what are interest rates in(a) Britain and (b) the United States of America.

  Mr. Lilley
  I refer the hon. Members to the reply that I gave earlier today to the hon. Member for Wolverhampton, South-East (Mr. Turner).

  Mr. Robertson
  To ask the Chancellor of the Exchequer if he will make a statement on interest rates.

  Mr. Rogers
  To ask the Chancellor of the Exchequer if he will make a statement on interest rates.

  Mr. McLeish
  To ask the Chancellor of the Exchequer if he will make a statement on interest rates.

  Mr. Roy Hughes
  To ask the Chancellor of the Exchequer if he will make a statement on interest rates.

  Mr. Lilley
  Bank base rates are 13 per cent.

  Mr. Wilson
  To ask the Chancellor of the Exchequer what are the interest rates in(a) Britain and (b) Germany.

  Mr. Gareth Wardell
  To ask the Chancellor of the Exchequer what are the interest rates in(a) Britain and (b) Germany.

  Mr. Lilley
  Three month interbank rates on 4 April were 13 per cent. in the United Kingdom and 6·5 per cent. in Germany.

  Mr. Latham
  To ask the Chancellor of the Exchequer if he will make a statement on the level of interest rates since the Budget.

  Mr. Lilley
  Bank base rates have remained at 13 per cent. since the Budget.

  New Businesses
  Mr. Lord
  To ask the Chancellor of the Exchequer what are the latest figures for the weekly rate of net business start-ups in 1988.

  Mr. Charles Wardle
  To ask the Chancellor of the Exchequer what are the latest figures for the weekly rate of net business start-ups in 1988.

  Dame Pegger Fenner
  To ask the Chancellor of the Exchequer what are the latest figures for the weekly rate of net business start-ups in 1988.

  Mr. Major
  In 1987, the latest year for which figures have been published by the Department of Employment,254
  the net increase in the number of businesses registered for VAT was 45,000, an average of approaching 900 a week. Indications are that the rate of increase in 1988 is even faster. The number of VAT registrations and de-registrations processed by Customs and Excise during 1988 indicate a net increase of over 1,200 a week. Department of Employment figures for 1988 will be available in the summer.

  Taxation
  Mr. Leighton
  To ask the Chancellor of the Exchequer what proportion of their income people on three quarters of average earnings were paying in total taxation(a) in 1978–79 and (b) in 1988–89.

  Mr. Loyden
  To ask the Chancellor of the Exchequer what proportion of their income people on three quarters of average earnings were paying in total taxation(a) in 1978–79 and (b) in 1988–89.

  Mr. Livingstone
  To ask the Chancellor of the Exchequer what proportion of their income people on three quarters of average earnings were paying in total taxation(a) in 1978–79 and (b) in 1988–89.

  Mr. Leadbitter
  To ask the Chancellor of the Exchequer what proportion of their income people on three quarters of average earnings were paying in total taxation in(a) 1978–79 and (b) 1988–89.

  Mr. Norman Lamont
  A single person on three quarters of average earnings is estimated to have paid 40·4 per cent. of their income in income tax, national insurance contributions and indirect taxes (excluding local authority rates) in 1978–79 and 40 per cent. in 1988–89. The figure is forecast to fall to 39·2 per cent. in 1989–90.

  Mr. McAvoy
  To ask the Chancellor of the Exchequer what proportion of their income the average earner was paying in direct and indirect taxes in(a) 1978–79 and (b) 1988–89.

  Mr. McAllion
  To ask the Chancellor of the Exchequer what proportion of their income the average earner was paying in direct and indirect taxes in(a) 1978–79 and (b) 1988–89.

  Mr. McCartney
  To ask the Chancellor of the Exchequer what proportion of his income was the average earner paying in direct and indirect taxes in(a) 1978–79 and (b) 1988–89.

  Mr. Norman Lamont
  A single person on average male earnings is estimated to have paid 42·3 per cent. of their income in income tax, national insurance contributions and indirect taxes (excluding local authority rates) in 1978–79 and 41·3 per cent. in 1988–89. The figure is forecast to fall to 40·6 per cent. in 1989–90.

  Mr. Ashby
  To ask the Chancellor of the Exchequer if he will list all the taxes which have been abolished since 1979.

  Mr. Franks
  To ask the Chancellor of the Exchquer if he will list all the taxes which have been abolished since 1979.

  Sir David Price
  To ask the Chancellor of the Exchequer if he will list all the taxes which have been abolished since 1979.
  255
  Mr. Boswell
  To ask the Chancellor of the Exchequer if he will list all the taxes which have been abolished since 1979.

  Mr. Norman Lamont
  The main taxes abolished since 1979 are:

  investment income surcharge in 1984;

  national insurance surcharge in 1984;

  development land tax in 1985;

  capital transfer tax on lifetime gifts in 1986;

  capital duty and unit trust instrument duty in 1988.

  In addition, a number of minor duties have been abolished.

  Mr. David Marshall
  To ask the Chancellor of the Exchequer if he will estimate how much the top 1 per cent. of tax units paid in tax in 1988–89 and how much would this group have paid had the 1987–88 tax levels remained unchanged except for indexing.

  Mrs. Mahon
  To ask the Chancellor of the Exchequer if he will estimate how much the top 1 per cent. of tax units paid in tax in 1988–89; and how much this group would have paid had the 1987–88 tax levels remained unchanged except for indexing.

  Mr. Madden
  To ask the Chancellor of the Exchequer if he will estimate how much the top 1 per cent. of tax units paid in tax in 1988–89, and how much would this group have paid had the 1987–88 tax levels remained unchanged except for indexing.

  Mr. Michael J. Martin
  To ask the Chancellor of the Exchequer if he will estimate how much the top 1 per cent. of tax units paid in tax in 1988–89 and how much would this group have paid had the 1987–88 tax levels remained unchanged except for indexing.

  Mr. Norman Lamont
  In 1988–89 the income tax liability of the top 1 per cent. of tax units liable to tax is estimated to be £6 billion. If the 1988 Budget had merely indexed tax thresholds and allowances and assuming the same levels of income as above, their liability would have been £8·1 billion.

  These estimates are based on a projection of the 1986–87 survey of personal incomes and are provisional.

  Gross Domestic Product
  Mr. John Browne
  To ask the Chancellor of the Exchequer what was the increase in the output measure of gross domestic product in the year to the fourth quarter of 1988.

  Sir Michael McNair-Wilson
  To ask the Chancellor of the Exchequer what was the increase in the output measure of gross domestic product in the year to the fourth quarter of 1988.

  Mr. Major
  The output measure of gross domestic product is estimated to have increased by 3 per cent. between the fourth quarter of 1987 and the fourth quarter of 1988.

  Tax Relief
  Mr. Michael
  To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer of tax relief in relation to(a) enterprise zones, (b) business expansion schemes and (c) personal equity plans.
  256
  Dr. Moonie
  To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer of tax relief in relation to(a) enterprise zones, (b) business expansion schemes and (c) personal equity plans.

  Mr. Martlew
  To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer of tax relief in relation to(a) enterprise zones, (b) business expansion schemes and (c) personal equity plans.

  Mr. Norman Lamont
  I refer the hon. Members to the reply that I gave earlier today to the hon. Member for Cardiff, West (Mr. Morgan).

  Mortgage Payments
  Mr. Simon Hughes
  To ask the Chancellor of the Exchequer by how much the average monthly mortgage repayment increased between March 1988 and March 1989.

  Mr. Norman Lamont
  It is not possible to make a direct comparison because of the variety of mortgages, some of which involve payments of interest and endowment premiums and others include repayments of capital as well as interest. But the additional interest payable on the average sized mortgage of £22,000 is about £50 per month. The increase is less in those cases where the repayment period has been extended or part of the interest has been deferred.

  Profit-related Pay
  Mr. Allan Roberts
  To ask the Chancellor of the Exchequer what percentage of the work force is currently participating in profit-related pay schemes as defined by the Inland Revenue.

  Mr. Radice
  To ask the Chancellor of the Exchequer what percentage of the work force is currently participating in profit-related pay schemes as defined by the Inland Revenue.

  Mr. Norman Lamont
  I refer the hon. Member to the reply that I gave earlier today to the hon. Member for Motherwell, North (Dr. Reid).

  Public Sector Debt
  Mr. Andrew Mitchell
  To ask the Chancellor of the Exchequer what representations he has received about the level of the public sector debt repayment.

  Mr. Brandvon-Bravo
  To ask the Chancellor of the Exchequer what representations he has received about the level of the public sector debt repayment.

  Mr. David Davies
  To ask the Chancellor of the Exchequer what representations he has received about the level of the public sector debt repayment.

  Mr. Lilley
  The Treasury has received a number of representations welcoming the improvement in public sector finances, which is expected to result in 1988–89 in the largest budget surplus since figures has been kept on a comparable basis.

  Low-cost Housing
  Mr. Gill
  To ask the Chancellor of the Exchequer what advice he has given to landowners regarding capital
  257
  gains tax liability in respect of land made available at below market prices for the purpose of enabling the provision of low-cost housing.

  Mr. Norman Lamont
  I refer my hon. Friend to my right hon. Friend's Budget Statement.

  Charitable Donations
  Mr. Riddick
  To ask the Chancellor of the Exchequer what has been the change in charitable giving since 1979.

  Mr. Conway
  To ask the Chancellor of the Exchequer what has been the change in charitable giving since 1979.

  Mr. David Porter
  To ask the Chancellor of the Exchequer what has been the change in charitable giving since 1979.

  Mr. Norman Lamont
  I refer my hon. Friends to the reply given by my hon. Friend the Economic Secretary on 16 March to my hon. Friend the Member for Beaconsfield (Mr. Smith),Official Report, columns 300–1, which included a number of changes introduced by the Government to encourage charitable giving.

  Some measure of the success of these changes is shown in the increases in gifts to charity. For covenanted giving, the estimated growth in real terms between 1978–79 and 1987–88 is 140 per cent. The real increase in bequests to charities over the same period is 150 per cent.

  Retail Prices Index
  Mr. Eastham
  To ask the Chancellor of the Exchequer if he will estimate the impact of the public sector price rises announced for April on the retail prices index.

  Mr. Douglas
  To ask the Chancellor of the Exchequer if he will estimate the impact of the public sector price rises announced for April on the retail prices index.

  Mr. Duffy
  To ask the Chancellor of the Exchequer if he will estimate the impact of the public sector price rises announced for April on the retail prices index.

  Mr. Fatchett
  To ask the Chancellor of the Exchequer if he will estimate the impact of the public sector price rises announced for April on the retail prices index.

  Mr. Lilley
  The electricity board and the water authorities have already announced price increases to take effect this month. It is estimated that these changes, once they have fully worked through to consumers' bills, will raise the RPI by less than ¼ per cent.

  Mr. French
  To ask the Chancellor of the Exchequer if he will give the average annual increase in the retail prices index for the period 1974 to 1979 and for the most recent five-year period for which figures are available.

  Mr. Lilley
  The retail price index rose on average 15·5 per cent. a year in the five years to 1979, over three times higher than its average annual growth of 5·1 per cent. over the five years to February 1989.

  Manufacturing Investment
  Mr. Paice
  To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of British manufacturing industry.

  Mr. Soames
  To ask the Chancellor of the Exchequer what is his latest information on the investment intentions of British manufacturing industry.

  Mr. Major
  I refer my hon. Friends to the reply that I gave earlier today to my hon. Friend the Member for Hereford (Mr. Shepherd).

  Sports Clubs (VAT)
  Mr. Holt
  To ask the Chancellor of the Exchequer what estimate he has of the number of amateur sports clubs which pay value added tax on collections to provide refreshments; whether he has any proposals to abolish this requirement; and what information he has as to whether this requirement obtains in other EEC countries.

  Mr. Lilley
  The VAT treatment of sports clubs' collections is determined by European Community VAT law, which defines what constitutes a taxable supply. If no conditions are attached to the collections, they are outside the scope of VAT. However, where they amount to a general charge for facilities, such as the provision of refreshments, VAT does apply. Whether or not these provisions are likely to change depends on developments in the Council, which is considering possible amendments to the law in this area. I regret that detailed information about the treatment of sports clubs' collections in other member states is not available.

  Personal Equity Plans
  Mr. Sheerman
  To ask the Chancellor of the Exchequer what was his original forecast for the take-up of PEP schemes; and what is his latest estimate of the number of existing schemes.

  Ms. Ruddock
  To ask the Chancellor of the Exchequer what was his original forecast for the take-up of personal equity plan schemes; and what is his latest estimate of the number of existing schemes.

  Mr. Norman Lamont
  When personal equity plans were announced in the 1986 Budget it was recognised that take-up would be heavily influenced by external factors. The estimated cost of the scheme assumed that take-up could reach 500,000 in the first year. Latest information suggests that more than 400,000 plans have been taken out to date.

  Ms. Short
  To ask the Chancellor of the Exchequer what percentage of those investing with personal equity plan schemes are higher rate taxpayers.

  Mr. Norman Lamont
  I regret that the information is not available.

  Pensioners (Income)
  Mr. Moss
  To ask the Chancellor of the Exchequer what has been the change in the post-tax income of pensioners since 1979.

  Mr. Nelson
  To ask the Chancellor of the Exchequer what has been the change in the post-tax income of pensioners since 1979.
  259
  Mr. Norman Lamont
  I refer my hon. Friend to the reply that my right hon. Friend the Chief Secretary gave earlier today to my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet).

  Group of Seven
  Mr. Tim Smith
  To ask the Chancellor of the Exchequer when he last met his counterparts in the Group of Seven; and what was discussed.

  Mr. Brazier
  To ask the Chancellor of the Exchequer when he last met his counterparts in the Group of Seven; and what was discussed.

  Mr. Simon Coombs
  To ask the Chancellor of the Exchequer when he last met his counterparts in the Group of Seven; and what was discussed.

  Mr. Fishburn
  To ask the Chancellor of the Exchequer when he last met his counterparts in the Group of Seven; and what was discussed.

  Mr. Lilley
  My right hon. Friend the Chancellor of the Exchequer met his counterparts on 2 April at the meeting of the Group of Seven Finance Ministers in Washington. A statement was released.

  A wide range of topics were discussed, including progress and prospects for the world economy. Finance Ministers' commitment to close co-operation on exchange markets was reiterated. They committed themselves to resisting protectionist pressures wherever they arise. The recent proposals by several countries for further development of the debt strategy were also discussed, including ways by which the strategy could be strengthened by placing greater emphasis on voluntary debt and debt service reduction in agreement with commercial banks as a complement to new lending.

  Hospital Radio Equipment
  Mr. Amess
  To ask the Chancellor of the Exchequer what representations he has received since his Budget statement of zero-rating hospital radio equipment.

  Mr. Lilley
  One.

  Exchange Rates
  Mr. Cousins
  To ask the Chancellor of the Exchequer if he will make a statement on sterling exchange rate movements since the Budget.

  Mr. Lilley
  Following the Budget statement, sterling rose against the dollar and the Deutschmark.

  Privatisation
  Mrs. Maureen Hicks
  To ask the Chancellor of the Exchequer if he will list the major businesses which have been privatised since 1979.

  Mr. McLoughlin
  To ask the Chancellor of the Exchequer if he will list the major businesses which have been privatised since 1979.

  Mr. Hannam
  To ask the Chancellor of the Exchequer if he will list the major businesses which have been privatised since 1979.

  Mr. Gow
  To ask the Chancellor of the Exchequer if he will list the major businesses which have been privatised since 1979.
  260
  Mr. Norman Lamont
  Nineteen major businesses have been privatised since 1979. These are:

  British Aerospace (1981 and 1985)

  Cable and Wireless (1981, 1983 and 1985)

  National Freight Consortium (1982)

  Britoil (1982 and 1985)

  Amersham International (1982)

  Associated British Ports (1983 and 1984)

  Enterprise Oil (1984)

  Sealink (1984)

  Jaguar (1984)

  British Telecom (1984)

  British Shipbuilders warship yards (1984–85)

  British Gas (1986)

  National Bus Company (1986–88)

  British Airways (1987)

  Royal Ordnance (1987)

  Rolls-Royce (1987)

  BAA (1987)

  Rover Group (1988)

  British Steel (1988)

  Inland Revenue Staff
  Mr. Patnick
  To ask the Chancellor of the Exchequer when he expects the review into the viability of relocating Inland Revenue staff out of London to be completed; and if he will make a statement.

  Mr. Norman Lamont
  My right hon. Friend the Paymaster General announced on 9 February that most large Departments had reviews of location in hand. The Inland Revenue's review is well advanced, but its report has not yet been published, nor will decisions be taken on its recommendations, until full consultations have taken place with the staff and the departmental trade union side. As yet, no timetable has been set for such consultation, so I cannot tell my hon. Friend when an announcement will be made.

  IMF (Loan Conditions)
  Mr. Corbyn
  To ask the Chancellor of the Exchequer what action he is taking to prevent the International Monetary Fund imposing conditions on loans to indebted countries which may harm the poorest people in those countries.

  Mr. Lilley
  The purpose of programmes supported by the International Monetary Fund is to help stabilise economies and so create the right environment for sustained growth, thus reducing poverty. Some of the poorest groups may benefit immediately—for instance farmers, through the introduction of agricultural reforms giving them better prices for their crops. The fund is aware that there may be short-run adverse effects on other poor groups, and is ready to help design programmes in a way which minimises these, with help from the World Bank. But it cannot impose any given income distribution—this has to be for the countries concerned to decide.

  General Aviation and Manufacturers Association
  Mr. Colvin
  To ask the Chancellor of the Exchequer when he last met representatives of the General Aviation and Manufacturers Association; and what was discussed.

  Mr. Lilley
  My right hon. Friend has not met representatives of GAMTA. However, I met a deputation led by my hon. Friend which included representatives of GAMTA on 20 December 1988 when the duty charge on aviation gasoline (AVGAS) was discussed.

  European Monetary Systems
  Mr. Dykes
  To ask the Chancellor of the Exchequer if he is now in a position to decide the right moment for the United Kingdom to effect full membership of the European monetary system.

  Mr. Lilley
  No.

  Industrial Investment
  Mr. Strang
  To ask the Chancellor of the Exchequer what is his estimate of the level of industrial investment in the last year; and what change he expects in investment in the current year.

  Mr. Major
  Total business investment in 1988 was £49·8 billion at 1985 prices, its highest level ever, as a percentage of GDP. It was forecast in the Financial Statement and Budget Report to increase yet further, by 8 per cent. in 1989.

  Court of Auditors Report
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will raise at the next meeting of the Council of Finance Ministers the issues set out in the Court of Auditors report; and if he will make a statement.

  Mr. Peter Brooke
  I refer my hon. Friend to the reply that I gave my hon. Friend the Member for Mid-Kent (Mr Rowe) on 15 March at column 245.

  Disposable Income
  Mr. Tredinnick
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income between the third quarter of 1987 and the third quarter of 1988.

  Mr. Patrick McNair-Wilson
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income between the third quarter of 1987 and the third quarter of 1988.

  Mr. Neil Hamilton
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income between the third quarter of 1987 and the third quarter of 1988.
  262
  Mr. Norman Lamont
  Real personal disposable income rose by 5 per cent. between the third quarter of 1987 and the third quarter of 1988. Latest estimates show that in 1988 as a whole, real personal disposable income also rose 5 per cent.

  Company Returns
  Mr. Gerald Bowden
  To ask the Chancellor of the Exchequer what was the percentage increase in 1987 in the net real rate of return for non-North sea industrial and commercial companies.

  Mr. Patrick Thompson
  To ask the Chancellor of the Exchequer what was the percentage increase in 1987 in the net real rate of return for non-North sea industrial and commercial companies.

  Mr. Major
  The net real rate of return for non-North sea industrial and commercial companies rose a further 15 per cent. in 1987 to reach 10·2 per cent., its highest level for 18 years.

  Pensioners (Income)
  Mr. Barry Field
  To ask the Chancellor of the Exchequer what has been the change in the post-tax income of pensioners since 1979.

  Mr. Norman Lamont
  I refer my hon. Friend to the reply that my right hon. Friend the Chief Secretary gave earlier today to my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet).

  Employee Share Ownership
  Mr. Ian Taylor
  To ask the Chancellor of the Exchequer what are the latest figures he has for the growth in employee ownership among firms in the United Kingdom.

  Mr. Norman Lamont
  Nearly 1,600 all-employee share schemes have been approved, against 30 in 1979. More than 1¾ million employees have been given shares or options over shares under these schemes, with an initial market value in excess of £4 billion.

TRANSPORT

  Vehicle Excise Duty
  Mr. Rathbone
  To ask the Secretary of State for Transport what the value of vehicle excise duty in the current financial year will be.

  Mr. Peter Bottomley
  Revenue (in cash terms) from vehicle excise duty (VED) is estimated at £2,775 million for financial year 1988–89 and £2,889 million for 1989–90. Rates of VED for all vehicles are contained in leaflet VI49, "Rates of Vehicle Excise Duty", which is available in the House of Commons Library.

  Railway Accidents
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport if he will list the total number of fatal and non-fatal casualties for all railway accidents involving only railway employees in each year since 1959.

  Mr. Portillo
  This information is not available in the form requested. Details of the total number of railway employees killed or injured in accidents each year are given in the chief inspecting officer of railways' annual report, copies of which have been placed in the House of Commons Library. It is estimated from available data that the number of casualties sustained in accidents involving only railway employees is not significantly less than the overall total of staff casualties in all accidents.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport if he will list the date and place and the number of fatal and non-fatal casualties for all railway accidents involving non-railway employees in each year since 1959.

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

  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport what comparative information he has as to the number of accidents per million passenger train miles operated in the United Kingdom, other European Community countries, the United States of America and Japan; and if he will make a statement.

  Mr. Portillo
  In 1987, the significant accident rate per million train miles in the United Kingdom was 0·71. Directly comparable data for other countries is not readily available but inquiries are being made with the appropriate authorities. I will write to my hon. Friend when I have further details.

  British Rail (Capital Investment)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport if he will detail at constant 1988–89 prices the total capital investment in British Rail in each year since 1959; and if he will make a statement.

  Mr. Portillo
  British Rail has recently compiled the following table showing investment in the railway since 1948. The figures include investment in Freightliners, BRML and BREL, but exclude the laying of continuous welded track which British Rail does not now classify as investment.
  264

  £ million cash

  £ million 1988–89 prices

  1948

  40

  572

  1949

  44

  607

  1950

  43

  591

  1951

  41

  519

  1952

  38

  444

  1953

  56

  631

  1954

  63

  710

  1955

  68

  731

  1956

  90

  916

  1957

  120

  1,171

  1958

  134

  1,255

  1959

  154

  1,433

  1960

  147

  1,353

  1961

  130

  1,156

  1962

  94

  810

  1963

  73

  612

  1964

  83

  673

  1965

  92

  709

  1966

  81

  599

  1967

  65

  463

  1968

  58

  401

  1969

  39

  253

  1970

  48

  289

  1971

  59

  328

  1972

  73

  376

  1973

  81

  389

  1974

  103

  432

  1975

  157

  518

  1976

  176

  506

  1977

  193

  484

  1978

  208

  468

  1979

  248

  491

  1980

  304

  501

  1981

  277

  410

  1982

  243

  334

  1983

  252

  329

  11984

  280

  349

  1985–86

  399

  465

  1986–87

  399

  450

  1987–88

  526

  563

  1988–89

  —

  2596

  1 1984–85 was a 15-month financial period. The figure shown for 1984 is the 12-month internally reported result.

  2 Forecast outturn.

  Indicative figures for BR's plans for future investment (excluding investment in BREL, which is being sold, and in the proposed high speed link to the Channel tunnel) are:

  £ million

  1989–90

  740

  1990–91

  820

  1991–92

  880

  1992–93

  820

  In order to show the most consistent picture the figures in the table include some elements of "corporate" as well as "railway" investment. BR's standard definitions of these have changed over the years. The figures have been adjusted to current values by the most recent indices and include the latest available information. They show that there was a high level of investment during the modernisation programme of the late 1950s and early 1960s. BR's route mileage now is 45 per cent. less than it was in the peak investment year of 1959, but passenger mileage is currently at broadly the same levels as in 1959.

  Commissioners of Irish Lights
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport what is the total income and expenditure of the
  265
  Commissioners of Irish Lights for each year from 1985; how much of this sum in each year is spent on navigational aids in the Republic of Ireland; and how much of the income originates in the Republic.

  Mr. Portillo
  The annual expenditure of the Commissioners of Irish Lights (CIL) is as follows:

  IR £ million

  1985–86

  13·4

  1986–87

  13·7

  1987–88

  13·5

  1988–89

  116·4

  1 Estimated.

  The expenditure (which in 1988–89 included the purchase of a second-hand ship) is financed by advances from the General Lighthouse Fund (GLF).

  Under a financial agreement made with the Irish Government in 1985, 70 per cent. of CIL's total expenditure is deemed to be incurred in the Republic. The principal sources of income in the Republic are light dues and a contribution made by the Irish Government under the 1985 agreement. The income from these sources credited to the GLF is as follows:

  IR £ million

  Light dues earned in the Republic

  Financial contribution for year1

  1985–86

  1·49

  1·29

  1986–87

  1·90

  1·32

  1987–88

  2·20

  1·40

  1988–892

  2·60

  1·60

  1 Paid in following year.

  2 Estimated.

  In addition, CIL has miscellaneous rental and other income amounting to IR £171,000, IR £170,000, IR £192,000 and IR £193,000 (estimated) in the four years listed above. This income is not broken down on a geographical basis.

  Uxbridge (Property Sale)
  Mr. Shersby
  To ask the Secretary of State for Transport what representations he received from the district valuer, Harrow, on 28 February and 15 March concerning the external appearance and state of the gardens of the property known as Four Winds, Park road, Uxbridge; what consideration he is giving to the sale of this property in its existing condition; and if he will make a statement.

  Mr. Peter Bottomley
  The Department acquired "Four Winds" in 1984 following the serving of a blight notice.

  Difficulties with the last tenant led to the property being unoccupied from December 1988.

  The district valuer wrote to the Department on 27 February and enclosed with his letter an exchange of correspondence he had had with the owner of a neighbouring property about lack of maintenance to "Four Winds" and its garden. The district valuer stated that in order to ensure that the property and gardens were maintained and kept tidy it was necessary to have the property occupied.

  The district valuer reaffirmed his advice that the Department should not dispose of this property until completion of the road works.
  266
  He has now been instructed to find a tenant.

  Radioactive Material
  Mr. Malcolm Bruce
  To ask the Secretary of State for Transport whether radioactive material from Hinkley Point is transported via Combwich wharf; and what plans there are to do so in the future.

  Mr. Peter Bottomley
  No radioactive material is transported via Combwich wharf, neither are there any plans to do so.

  Oil Discharges
  Dr. Cunningham
  To ask the Secretary of State for Transport what investigations have been conducted by his Department into recent alleged discharges of oil from the ferry Pride of Walmer.

  Mr. Portillo
  All papers and photographs received by the Department have been passed to the litigation division of the Treasury Solicitor's Department. An inquiry officer of that Department is investigating the alleged incident and in due course will present his findings to the Treasury Solicitor, who will determine whether the evidence is sufficient to justify a prosecution.

  Microlight Aircraft
  Mr. Colin Shepherd
  To ask the Secretary of State for Transport if he has any proposals to change the law concerning the operation of the legislation and regulations currently in force concerning the safety, operation and construction both in respect of those flying microlight aircraft and those on the ground potentially affected by flying operations.

  Mr. Peter Bottomley
  Article 96 of the Air Navigation Order 1985 was recently amended to include a definition of microlight aeroplane. I understand from the Civil Aviation Authority that there are no other changes proposed at the moment specifically affecting microlight aeroplanes.

DEFENCE

  Overseas Sales
  Mr. Thurnham
  To ask the Secretary of State for Defence if he will make a statement about the level of sales overseas by the British defence industry.

  Mr. Sainsbury
  The level of British defence exports remains impressively high, thanks to the efforts of British industry assisted by the Defence Export Services Organisation. Overall figures for United Kingdom defence sales are given annually in the Supplement on the Defence Estimates.

ATTORNEY-GENERAL

  Civil Justice Review
  Mr. Favell
  To ask the Attorney-General, what are the Government's plans for the implementation of the civil justice review.

  The Attorney-General
  The Government have considered the report of the review body on civil justice, and
  267
  wish to record their gratitude to members of the advisory committee for their contribution to the work of the review over more than three years. In response to the report, the Government have decided to undertake a programme of improvements in the administration of civil justice in England and Wales. This is part of a general overhaul of the legal system, including reforms of child care law. The overall objective of these changes is to improve the service provided by lawyers and the courts to litigants in civil and family cases. The programme for civil justice will be phased over a period of up to five years, to take account of the need for primary and secondary legislation and further policy development, and of the capacity of the legal system to adapt to change in an effective and orderly way.

  Jurisdiction and allocation of cases

  A more appropriate distribution of business between the High Court and the county courts was identified by the civil justice review as the key to reducing delay and cost. The Government therefore intend, by means of primary legislation, to reserve the High Court for public law and other specialist cases, and for general cases of unusual importance, substance or complexity.

  A new system will be introduced to ensure that cases are handled and tried at the appropriate level. The upper financial limit of county court jurisdiction will be removed. Entry to the High Court and eligibility for High Court trial will be regulated. The criteria for allocation of cases will include financial limits applied to particular classes of business. These powers will be exercised to effect a major shift of lower level personal injury cases from the High Court to the county courts. Similar provision will be made in due course for debt cases. Housing possession cases currently dealt with in the High Court will be moved to the county court at a later stage, following discussion with interested parties.

  Increases in both the trial jurisdiction of registrars and the upper financial limit of the automatic small claims jurisdiction will complete the new pattern of case distribution, and will help to offset the additional workload for circuit judges resulting from the shift of cases out of the High Court. Development of continuous trial facilities at suitable centres will also help the county courts to absorb an increased volume of cases.

  Related procedural changes

  The new system of case allocation will be accompanied by a number of changes designed to eliminate unnecessary differences between High Court and county court procedure. Subject to certain exceptions, the same remedies will be available in both courts. An appropriate costs regime will be introduced for common cases and in the longer term, a common core of procedural rules will be developed to cover general High Court and county court business.

  Improvements in the handling of cases

  A number of procedural changes will be introduced as a means of speeding up and improving the handling of full trial cases in both the High Court and the county courts. The Government intend to give the courts a more active role in the management of case progress, in order to reduce delay before trial. A full system of court control will take some years to achieve, and in the meantime other steps are being taken to reduce pre-trial delay, especially in personal injury cases. The Government consider that the normal permitted period between issue and service of process should be reduced from 12 to four months, and that the
  268
  court should have power of its own motion to order a split trial, in which the issue of liability is tried in advance of the issue of damages. The object of this is to reduce delay, which may be caused by, for example, waiting far adequate diagnosis of a plaintiff's medical condition.

  Other bodies have a role in the reduction of pre-trial delay. One of the principal objectives of the Legal Aid Board is to improve the quality of service provided to users of the legal aid system, and this will include reducing the present level of delay in the handling of applications for civil legal aid. The Home Office will pursue with the police the proposal for early release of accident reports pertaining to civil proceedings. Similarly, revised guidelines will be issued by the Department of Health to health authorities, encouraging early release of medical reports.

  New arrangements to encourage openness between parties, including early exchange of witness statements, are expected to encourage settlement in appropriate cases and reduce the length of hearings in cases which go to trial. There will also be new arrangements for the conduct of civil trials, to reduce the need for the lengthy taking of oral evidence.

  Debt enforcement and issue of summonses

  Arrangements for handling debt enforcement in the county courts will be rationalised so that in the majority of straightforward cases, judgment debts will be payable direct to the creditor. At the same time, a central, computerised summons production centre will be set up to deal more efficiently with the bulk issue of summonses by large creditors.

  The division of responsibility for enforcement of judgment debts between county court bailiffs and High Court sheriffs will remain as at present, with the bailiffs' responsibility in county court cases defined by an upper financial limit of £5,000. All High Court judgments, of whatever value, will continue to go to the sheriffs. Various aspects of the system for managing bailiffs are currently being reviewed. Proposals for reform of the sheriff system are under consideration.

  Access to justice

  The increase in the small claims jurisdiction will be accompanied by procedural improvements, with a view to protecting unrepresented litigants and to encouraging individuals to participate more fully in the handling of small county court cases generally. These improvements include simplified court forms and printed information, and more guidance to unrepresented litigants from court staff.

  The Government is planning a number of changes to the handling of housing cases in the counyy courts, including reform of existing possession procedures so as to provide the court with fuller evidence on the basis of the claim and the circumstances of the defendant. Simplified procedures will be introduced to enable landlords to recover rent arrears quickly and cheaply, without recourse to the full possession procedure; and to provide easier access to the court system for tenants and others involved in disputes about matters such as repairs. The precise scope and form of these procedures will be determined after further consultation with court users and others with an interest in housing matters.
  269
  Administration order procedures will be reviewed with a view to ensuring that they are used more effectively as a means of dealing with multiple debts.

  Closer links between courts and advice agencies will be encouraged, and the Legal Aid Board will be asked to consider, in the context of its other responsibilities, whether agencies whose staff maintain a regular presence at courts, and which provide representation and other services to litigants, should be eligible for funding by the board in respect of such services. Wider availability of lay representation in smaller cases is among the matters put forward for consultation in the Government's recent Green Paper on the legal profession. The precise nature and scope of the service offered by the county courts to litigants in smaller cases will be reviewed when the results of this consultation process are known.

  Judicial studies

  The Government recognise the importance of enabling the judiciary to keep fully up to date with the new arrangements, particularly in relation to the proposed changes in procedure. The Judicial Studies Board will be invited to develop detailed plans to deal with this.

  Other matters

  There are a small number of outstanding matters to which further consideration is being given. The usefulness of the hearsay rule and the current machinery for rendering hearsay evidence admissible in civil proceedings will be examined in due course. The case for relaxing the current prohibition on contingency fees has already been opened for re-examination in a recently issued Green Paper. Finally, the Government intend to give effect to the recommendation for a judicial title for registrars.

  Law Changes
  Mr. Harry Greenway
  To ask the Attorney-General how many matters formerly covered by the civil law now come under the auspices of the criminal law and vice versa; which are the principal areas in which change has occurred; and if he will make a statement.

  The Attorney-General
  I will write to my hon. Friend.

PRIME MINISTER

  Gibraltar (Terrorists)
  Dr. Godman
  To ask the Prime Minister if she will place in the Library copies of her correspondence with the Spanish authorities following the deaths of the three suspected IRA terrorists in Gibraltar.

  Mr. Wakeham
  I have been asked to reply.

  My right hon Friend the Prime Minister has not corresponded with the Spanish authorities over the deaths of the IRA terrorists in Gibraltar.

  Environmental Conference
  Mr. Dalyell
  To ask the Prime Minister what response she sent to the invitation from the Dutch Government to participate in the environmental conference at The Hague during the week beginning 6 March.

  Mr. Wakeham
  I have been asked to reply.

  My right hon. Friend the Prime Minister told the Prime Minister of the Netherlands that Her Majesty's
  270
  Government would not be represented at the meeting in The Hague. As my right hon. Friend told the hon. Member for Cardiff, West (Mr. Morgan) on 23 February, we had a number of reservations about the proposed declaration.

  Road Building (London)
  Mr. Corbyn
  To ask the Prime Minister when Her Majesty's Government expect to make a statement on the future of road building in London.

  Mr. Wakeham
  I have been asked to reply.

  We are currently conducting the regular biennial review of the national trunk road programme, including the programme in London. We hope to make an announcement later.

  Finchley Central Station.
  Mr. Spearing
  To ask the Prime Minister when she next expects to make an official visit to Finchley central station.

  Mr. Wakeham
  I have been asked to reply.

  My right hon. Friend has at present no plans to do so.

  Economic Performance
  Mr. Fishburn
  To ask the Prime Minister what representations she has received regarding the performance of the economy.

  Mr. Wakeham
  I have been asked to reply.

  I refer my hon. Friend to the reply that I gave earlier today to my hon. Friend the Member for Eddisbury (Mr. Goodlad).

  Budget
  Mr. John Browne
  To ask the Prime Minister what representations she has received regarding the tax changes in the Budget.

  Sir Anthony Grant
  To ask the Prime Minister what representations she has received regarding the tax changes in the Budget.

  Mr. Cash
  To ask the Prime Minister what representations she has received regarding the tax changes in the Budget.

  Mr. Wakeham
  I have been asked to reply.

  The tax changes in the Budget have been widely welcomed.

  Fraud
  Mr. Teddy Taylor
  To ask the Prime Minister what proposals she will submit to the European Council meeting in Madrid about fraud; and if she will make a statement.

  Mr. Wakeham
  I have been asked to reply.

  I refer my hon. Friend to my right hon. Friend the Prime Minister's answer to his question of 2 March 1989 at columns 295–96.

  An important development since then has been the meeting of the Economic and Finance Council on 13 March at which the Commission promised new or revised proposals to combat fraud and mismanagement in a

  271
  number of areas, notably agricultural export refunds and intervention storage. Some of these proposals are expected to be tabled before the June meeting of the Economic and Finance Council at which action against fraud will once again be discussed. The Government's approach to the Madrid European Council will reflect the terms of this discussion.

  Margaret Marsh
  Mr. Nicholas Baker
  To ask the Prime Minister if she will pay an official visit to Margaret Marsh.

  Mr. Wakeham
  I have been asked to reply.

  My right hon. Friend has at present no plans to do so.

  Quangos
  Mr. McCrindle
  To ask the Prime Minister if she will list the number of quangos abolished for each year since 1979 to the present date.

  The Prime Minister
  The numbers abolished are as follows:

  Number

  1979–83

  608

  1983–84

  73

  1984–85

  75

  1985–86

  60

  1986–87

  81

  1987–88

  40

  Information relating to individual years 1979–83 is not available. Figures relate to 1 April each year. Information for 1988–89 will be published in December in "Public Bodies 1989".

  Armed Forces (Medical and Dental Officers)
  Mr. Leigh
  To ask the Prime Minister if she will make a statement about the pay of medical and dental officers in the armed forces.

  The Prime Minister
  The armed forces pay review body has submitted to me a supplementary report on the pay of medical and dental officers in the Armed Forces which recommends increases of between 4·7 per cent. and 8·3 per cent. with effect from 1 April 1989. For the majority the recommended increase is 8 per cent. These awards are derived from those to civilian doctors and dentists which I announced in the House on 16 February 1989 and the Government have decided to accept them in full.

  The report has been published as Cm 667 and copies are available in the Vote Office.

  Engagements
  Mr. Barry Field
  To ask the Prime Minister if she will list her official engagements for Thursday 6 April.

  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Thursday 6 April.

  Mr. Martin
  To ask the Prime Minister if she will list her official engagements for Thursday 6 April.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 6 April.

  Mr. Wakeham
  I have been asked to reply.
  272
  This morning my right hon. Friend the Prime Minister presided at a meeting of the Cabinet. In the course of the day she will be having meetings with President Gorbachev. This evening she will give a dinner for him.

SCOTLAND

  Beef Variable Premium
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland how many cattle herds in Scotland are defined as(a) specialist rearing herds and (b) finishing herds for the purposes of payment under the variable premium scheme.

  Mr. Michael Forsyth
  Cattle herds were not distinguished for the purposes of payment under the beef variable premium scheme, which ended on 2 April 1989.

  Set-aside Scheme
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report the total number of applications received for set-aside from farmers in each Scottish region to the latest available date, indicating the number of hectares involved in each region.

  Mr. Michael Forsyth
  I refer the hon. Member to the reply which I gave the hon. Member for Angus, East (Mr. Welsh) on 19 December 1988. The closing date For applications to enter the set-aside scheme in 1988 was 21 October.

  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report the total level of set-aside arrangements which have been reached to the latest available date, giving a break-down of hectares per Scottish region.

  Mr. Michael Forsyth
  The information requested, in respect of applications accepted by 31 March 1989, is set out in the table.

  Region

  Number of applications accepted by 31 March 1989

  Total set-aside area (hectares)

  Borders

  17

  867

  Central

  3

  181

  Dumfries and Galloway

  3

  42

  Fife

  17

  718

  Grampian

  222

  6,760

  Highland

  25

  1,143

  Lothian

  7

  351

  Orkney Islands Area

  —

  —

  Shetland Islands Area

  —

  —

  Strathclyde

  13

  268

  Tayside

  56

  1,733

  Western Isles Island Area

  —

  —

  All Scotland

  363

  12,063

  National Health Service Grading
  Dr. Godman
  To ask the Secretary of State for Scotland if he will publish in the Official Report the number of appeals currently lodged with each of the health boards concerning the clinical grading of National Health Service employees; how many of these appeals have been dealt with; and, of these, how many were upheld.
  273
  Mr. Michael Forsyth
  This information is not held centrally.

  Community Charge
  Dr. Godman
  To ask the Secretary of State for Scotland what is his latest assessment of the number of losers and gainers under the poll tax in(a) Inverclyde, (b) Strathclyde and (c) Scotland as a whole.

  Mr. Lang
  Our calculations show that the number of households in Scotland gaining and losing as a result of the introduction of the community charge is roughly equal. There is no reason to suppose that the situation in Inverclyde or Strathclyde would be any different.

  Mrs. Ray Michie
  To ask the Secretary of State for Scotland whether British citizens married to United States service men stationed in Scotland are exempt from payment of the community charge as members of visiting forces and their families.

  Mr. Lang
  No. The exemption for members of visiting forces does not extend to dependants who are citizens of the United Kingdom or who are ordinarily resident in the United Kingdom.

  Fish Farms
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland whether owners of fish farms are eligible for compensation from the Government for recent storm damage.

  Mr. Michael Forsyth
  Government have no general financial liability for storm damage. Details of the damage sustained in mid-January and early February, however, have been obtained from local authorities and others affected, including fish farmers. These are now being analysed and my right hon. and learned Friend will be making a statement shortly.

FOREIGN AND COMMONWEALTH AFFAIRS

  Egypt
  Mr. Neil Hamilton
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether Dr. Ashraf Marwan is an accredited diplomat representing the Arab republic of Egypt in the United Kingdom.

  Mr. Eggar
  According to our records, Doctor Ashraf Marwan is not, nor has ever been, an accredited diplomat representing the Arab republic of Egypt in the United Kingdom.

  Soviet Jewry
  The Rev. Martin Smyth
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to those Soviet Jews who are still unable to leave the Soviet Union or who are unable to teach, learn or practise their religion; and if he will list those individuals about whom his Department is aware.

  Mr. Waldegrave
  We are encouraged by the recent improvements in Soviet human rights, including the granting of exit visas to a number of refuseniks known to us. But while individual gestures are always welcome there 274
  are many other cases still to be resolved. We want to see, above all, the fundamental reforms needed to ensure that human rights abuses do not recur. The quantity of such visas should not be dependent on lobbying by Her Majesty's Government and non-governmental organisations nor on the intervention of Mr. Gorbachev or Mr. Shevardnadze, however welcome these interventions may be.

  Poland (Talks)
  Mr. Wilshire
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the conclusion of the round table talks in Poland.

  Mr. Waldegrave
  I think that we have all watched events in Poland with fascination in recent weeks.

  The round table itself deserves a place in history. We, and others in the West, now hope to see its proposals on political reform put into practice, to the benefit of the Polish people and the whole of Europe. We trust this will be done in such a way that there can be no question of a reversal.

  Forty-four years ago at Yalta, the three powers called for free and unfettered elections in Poland. Such elections were never held. Now, for the first time in post-war Poland, we have the prospect of elections in which an opposition has a real chance to participate. This is a remarkable step forward. There is still far to go before the hopes of Yalta can be realised. But let us hope that the forthcoming elections will prepare the way.

  Poland still has many problems to confront. The round table produced mainly generalities on economic policy. The Polish authorities and opposition will need to continue to work together to translate these generalities into practical policies. They need to agree an economic adjustment programme which can in due course secure the approval of the international community and financial institutions.

  There is a great will here for Poland to succeed. The Government are already spending considerably increased sums to help the Poles help themselves, for example, by providing more training and scholarships. We shall certainly be looking seriously and urgently at other practical, carefully targeted ways of helping the Poles fulfil the hopes for political and economic advance that the round table agreement has raised.

WALES

  Gynaecologists
  Mrs. Clwyd
  To ask the Secretary of State for Wales how many gynaecologists are employed in the National Health Service in Wales as a whole and by district; and how many are(a) men and (b) women in each district.

  Mr. Grist
  The information, which relates to consultants with a main specialty of obstetrics and gynaecology, is given in the table.

  Numbers of consultants in post as al 30 September 19871

  Health Authority

  Male

  Female

  Total

  Clwyd

  6

  —

  6

  East Dyfed

  10

  —

  10

  Gwent

  4

  1

  5

  Gwynedd

  7

  —

  7

  Mid Glamorgan

  6

  4

  10

  275

  Health Authority

  Male

  Female

  Total

  Pembrokeshire

  2

  —

  2

  Powys

  5

  —

  5

  South Glamorgan

  6

  2

  8

  West Glamorgan

  5

  1

  6

  Wales2

  39

  8

  47

  1 Provisional. Excludes locum staff.

  2 Consultants working for more than one authority are shown against each and therefore the Wales total may not be the sum of numbers in individual authorities.

ENERGY

  Electricity Prices
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Energy if he will make a statement about the expected price of electricity over the next five years.

  Mr. Michael Spicer
  The electricity industry is currently announcing its prices for 1989–90. After privatisation, the combination of competition in electricity generation and supply and the controls contained in the public electricity supply licences will put downward pressure on prices.

  Combined Heat and Power
  Mr. Rost
  To ask the Secretary of State for Energy if he will update the estimates provided in energy papers 20, 35 and 53, which calculated the reduction in fossil fuel burn that would result from the introduction of combined heat and power, assuming(a) the fuel for CHP plant will be coal, gas, or nuclear, and (b) a more competitive regime resulting from the privatisation of the electricity industry.

  Mr. Peter Morrison
  My Department has no plans to update the estimates made in energy papers 20, 35, 53.

  While CHP would reduce the overall primary energy requirement compared to separate production of heat and power the extent of implementation of CHP and the resultant fuel savings will depend on investment decisions of developers. The inherent thermal efficiency of CHP means that it should be well placed to take advantage of the more competitive arrangements resulting from our privatisation proposals.

  Reprocessing (Sellafield)
  Dr. Thomas
  To ask the Secretary of State for Energy, pursuant to his reply to the hon. Member for Meirionnydd Nant Conwy,Official Report, 8 March, column 546, if he will set out the policy reasons underlying his statement that it is not in the national interest to give timing and operational reasons of reprocessing campaigns at Sellafield.

  Mr. Michael Spicer
  I have nothing to add to my answer of 8 March 1989, at column 546.

  Dr. Thomas
  To ask the Secretary of State for Energy if, in light of the statement to Standing Committee E on the Electricity Bill, 7 March,Official Report, column 1480, by the hon. Member for Mid-Worcestershire (Mr. Forth) that every contract signed to reprocess foreign matter includes a requirement that all the waste products should be sent back to the country of origin, he will state when contracts signed before 1976 for reprocessing of spent
  276
  nuclear fuel at BNFL Sellafield, which did not originally include such a requirement, were renegotiated to include such a clause.

  Mr. Michael Spicer
  The pre-1976 contracts to which the hon. Member refers have not been renegotiated to include return of wastes clauses.

  Sellafield
  Dr. Thomas
  To ask the Secretary of State for Energy if Her Majesty's Government will give permission to the European Commission to give further details to Llwellyn Smith MEP, in reply to his question, number 881/88 of 2 August 1988, replied to on 21 February 1989 by Commissioner Cardoso E. Cunha on the specific issues of(a) the number of installations on the BNFL Sellafield site, (b) the number that handle only civil nuclear materials, (c) the number also contain simultaneously or sequentially military materials, and (d) the number of installations at BNFL Sellafield that have particular safeguard provisions under Commission regulation CR 3227/76 in force.

  Mr. Michael Spicer
  The particular safeguards provisions for facilities at BNFL Sellafield are currently under discussion and to date four have been brought into force. The additional information requested is confidential.

  Hinkley Point C
  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy (1) what representations he has received about the future use of Combwich wharf resulting from the construction of the proposed Hinkley Point C power station; and what response he has made;

  (2) what steps he is taking to ensure that the natural environment near Combwich wharf, Combwich, Somerset and the living conditions of local residents are not adversely affected increased activity resulting from the construction of Hinkley Point C.

  Mr. Michael Spicer
  The CEGB submitted the Central Electricity Generating Board Compulsory Purchase (Combwich) Order 1988 to my right hon. Friend for confirmation on 2 February 1989.

  Seventeen statutory objections to the order have been received from owners and occupiers affected by it, together with 68 other objections. A public local inquiry into the order has therefore been arranged.

  Mr. Michael Barnes QC has been appointed to hold the public local inquiry which will commence at 9.30 am on Tuesday 13 June 1989 at Cannington court, Church street, Cannington, Bridgewater, Somerset.

  Shell (Exploration Licence)
  Sir John Stanley
  To ask the Secretary of State for Energy where exploration licence EXL 083, granted by his Department to Shell in 1986, is available for public inspection; and whether he will place a copy in the Library.

  Mr. Peter Morrison
  Landward exploration licences (EXLs) are not made available for public inspection because they contain commercially confidential information. EXL 083 was issued pursuant to the Petroleum (Production) (Landward Areas) Regulations 1984, S.I.
  277
  1984 No. 1832, which sets out the model clauses to be incorporated in such a licence. Copies of these regulations are available in the Library of the House.

  Quangos
  Sir Neil Macfarlane
  To ask the Secretary of State for Energy if he will list the quasi-autonomous non-governmental organisations either(a) created or (b) closed, since 1979 for which he has departmental responsibility; and how many people he appoints to these bodies.

  Mr. Parkinson
  [holding answer 5 April 1989]: The following non-departmental public bodies were created:

  Oil and Pipelines Agency1

  Offshore Safety and Technology Board

  Renewable Energy Advisory Committee

  Offshore Industry Advisory Board

  and the following were abolished:

  Advisory Committee on Fixed Offshore Installations

  Energy Commission

  Offshore Safety Committee

  Advisory Council on Energy Conservation

  In addition the Office of Gas Supply, a non-ministerial department, was established under the Gas Act 1986. The Director General of Gas Supply was appointed under the terms of the Act.

  Information on appointments, excluding those relating to Ofgas, can be obtained from "Public Bodies 1988", a copy of which is in the Library of the House. Questions about the staffing of Ofgas are a matter for the Director General of Gas Supply.

  1 The Oil and Pipelines Agency took over responsibility for the property, rights and liabilities of the British National Oil Corporation on 1 December 1985.

EMPLOYMENT

  Claimant Advisers
  Ms. Short
  To ask the Secretary of State for Employment what advice his Department issues on the personal liability claimant advisers have if the advice they give to claimants about in-work benefits is incorrect and as a consequence the claimant loses money and is much worse off in work than was suggested to them; and if he will make a statement.

  Mr. Lee
  When giving advice on in-work benefits, claimant advisers are specifically instructed that any personal calculations provided should be clearly shown as estimates only and that entitlements can be assessed only when applications are properly made. The following disclaimer is included:"Entitlements can only be assessed when applications are properly made and processed. The calculations below are therefore estimates only. The Department will not accept liability for loss occasioned if reliance is placed upon them".

  Restart
  Ms. Short
  To ask the Secretary of State for Employment what happens to the newly, and any previously, completed RR6s that claimants have to fill in as part of their restart interview; and whether they can be passed on to other restart counsellors or claimant advisers, or other members of the employment service, such as fraud investigators.

  Mr. Lee
  Restart clients complete a restart interview form (RR6) every six months. The most recent form is kept 278
  with the client's records at the local office. Previous forms are usually destroyed. The RR6 may be passed on to other members of the employment service who are involved in follow-up reviews or concerned with entitlement to benefit.

  Claimants
  Ms. Short
  To ask the Secretary of State for Employment whether, after a claimant has filled in an availability questionnaire, either a UB671 or an RR6, they can(a) subsequently obtain a copy of their answers on request; and (b) change their answers to the questions before or when they are passed on to an adjudication officer.

  Mr. Lee
  Yes.

SOCIAL SECURITY

  Child Benefit
  Ms. Quin
  To ask the Secretary of State for Social Security what would have been the cost of increasing child benefit in line with earnings in each of the last two years.

  Mr. Nellist
  To ask the Secretary of State for Social Security what would have been the cost of increasing child benefit in line with earnings in each of the last two years.

  Mr. Parry
  To ask the Secretary of State for Social Security what would have been the cost of increasing child benefit in line with earnings in each of the last two years.

  Mr. Murphy
  To ask the Secretary of State for Social Security what would have been the cost of increasing child benefit in line with earnings in each of the last two years.

  Mr. Peter Lloyd
  After taking account of the uprating in April 1987, the additional cost (net of savings on other benefits) would have been about £70 million in 1987–88 and a further £260 million in 1988–89.

  Mr. Robin Cook
  To ask the Secretary of State for Social Security if he will place in the Library the papers relevant to his Department's re-estimation of the numbers eligible to receive family credit.

  Mr. Peter Lloyd
  We will do so shortly.

ENVIRONMENT

  Rents
  Mr. Chris Smith
  To ask the Secretary of State for the Environment what information he has as to the average level of registered rents being set for(a) a one-bedroom flat, (b) a two-bedroom flat, and (c) a three-bedroom flat or house, in (i) inner London and (ii) the borough of Islington, in December 1986, December 1987, and now.

  Mr. Trippier
  The available estimates for each of the last three years are given in the table. Monthly estimates are based on samples too small to give reliable figures.
  279

  Annual average registered rents in regulated properties £ per annum1 2

  1986

  1987

  1988

  Islington

  Inner London

  Islington

  Inner London

  Islington

  Inner London

  Flats with one habitable3 room

  897

  1,161

  1,420

  1,357

  845

  1,394

  Flats with two habitable rooms

  979

  1,174

  1,077

  1,283

  1,199

  1,444

  Houses or flats with three or more habitable rooms

  1,229

  1,360

  1,282

  1,454

  1,366

  1,612

  1 Rents for rooms let as part of a house or flat are not included.

  2 Under pre-1988 legislation rents were registered for two years at a time so 1987 figures are not strictly comparable with 1986.

  3 Excluding bathrooms, kitchens, WCs, hallways, attics used for storage and cellars.

  Rating Reform
  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will publish the guidance to be sent to general practitioners on community charge exemption processing for those who are severely mentally impaired.

  Mr. Gummer
  When the guidance to general practitioners has been finalised, a copy will be placed in the Library.

  Mr. Blunkett
  To ask the Secretary of State for the Environment what arrangements are being made to financially support local authorities for revenue forgone on individuals exempt from the community charge.

  Mr. Gummer
  The distribution of the needs grant will take into account the fact that authorities will raise no community charge income from exempt persons.

  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will list the rights of appeal available to residents of premises where a collective community charge is payable on the level of their contribution to the community charge.

  Mr. Gummer
  The level of the daily contribution is fixed by statute as the daily rate of the charging authority's personal community charge. There is no appeal against the level of the personal community charge and, therefore, similarly there is no appeal against the level of the statutory contribution. Information on the correct level of contributions will be available from the charging authority.

  Council House Sales
  Mr. Thurnham
  To ask the Secretary of State for the Environment how many houses purchased by council tenants under the right-to-buy scheme have since been resold to the local authority; and if he will make a statement.

  Mr. Trippier
  Information on the repurchase of ex-council houses sold under the right-to-buy scheme is not available.

  Dog Registration Scheme
  Mr. Shersby
  To ask the Secretary of State for the Environment if he will make an estimate of the annual cost of implementing a dog registration scheme on the basis proposed by the Royal Society for the Protection of Animals on the assumption that such costs are borne(a) by dog owners and (b) by the Exchequer.
  280
  Mrs. Virginia Bottomley
  No. The setting up of a national dog registration scheme would require elaborate bureaucratic machinery. The Government do not intend to introduce such a scheme and therefore no estimate has been made of the costs involved.

  Parish Councils
  Mr. Blunkett
  To ask the Secretary of State for the Environment if he will publish his best estimates of the total amount of business rate income lost to parish councils with(a) a population of more than 10,000 and (b) a population of less than 10,000 due to the introduction of the community charge in April 1990.

  Mr. Gummer
  [holding answer 23 March 1989]: I have made no such estimates of the effects of the national non-domestic rate on individual parish councils.

  House of Commons Cleaners
  Mr. Vaz
  To ask the Secretary of State for the Environment if the cleaners in the House of Commons use biodegradable cleaning products.

  Mr. Chope
  [holding answer 4 April 1989]: The cleaning products purchased by the parliamentary works office for use by the House of Commons staff are biodegradable. Some cleaning work is also undertaken by a contractor who is responsible for providing his own materials. I understand that the cleaning materials they use are also biodegradable.

  Sewage Treatment Works
  Mr. Ron Davies
  To ask the Secretary of State for the Environment if he will list those sewage treatment works in each English water authority which discharged effluent below the required standard for the most recent year for which full figures are available.

  Mr. Moynihan
  [holding answer 4 April 1989]: Copies of reports from water authorities, listing those sewage treatment works which failed to comply with their discharge consents in 1987, are available in the Library of the House. I expect shortly to publish results for 1988.

  Bathing Waters
  Mr. John Garrett
  To ask the Secretary of State for the Environment further to his answers to the hon. Member for Norwich, South on 20 March,Official Report, columns

  281
  421–22 and 21 March, Official Report columns 506–7, if he will list in the Official Report the number and location of beaches in 1988 in the EEC guide and mandatory levels for those standards in respect of cadmium, arsenic, pesticides, nitrogen, ammonia, phosphates and faecal streptococci in bathing waters which were the responsibility of the Anglian water authority, which are not listed in the summary of the 1988 "Survey of Bathing Waters" he has placed in the Library.

  Mr. Moynihan
  [holding answer 4 Apri11989]: The report placed in the Library contains all the information reported to the Department by the Anglian water authority in connection with the 1988 bathing water quality survey.

  London Residuary Body
  Mr. Tony Banks
  To ask the Secretary of State for the Environment who were the two London residuary body board members identified in the 1987–88 accounts to be in receipt of emoluments in the range £20,000 to £25,000; and how many days per week each of them worked.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: Mr. Jack Esling and Mr. Michael Roberts. Their remuneration as members of the London residuary body board during 1987–88 was based on time commitments of four and three days a week respectively.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment why the London residuary body decided to levy the sum of £297,000 in 1989–90 on the outer London boroughs; and if he will make a statement.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: The levy is required to meet the costs of pension payments to former magistrates courts' staff.

  £ per annum

  Number of days per week

  (from 1 April 1988)

  (from 1 October 1988)

  Mr. Alan Blakemore, CBE

  2

  13,608

  13,972

  Mr. Jack Esling

  2

  13,608

  13,972

  Mr. Jack Wolkind, CBE

  2

  13,608

  13,972

  Mr. Wallace Mackenzie, OBE

  2½

  17,010

  17,240

  Mr. Michael Roberts

  3

  20,412

  20,688

  Cllr. Sir Peter Bowness, CBE

  1

  6,804

  6,896

  Remuneration is subject to abatement, if applicable, in respect of public sector pension received.

  Information on the total remuneration paid to board members in 1988–89 will be contained in the LRB's annual report and accounts for that financial year, which will be laid before Parliament in the autumn.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment to whom the London residuary body's freehold interest in the Matthews yard residential properties and the shops at 27 and 29 Shorts gardens WC2 was sold; and what was the disposal price in each case and collectively.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: This is a matter for the London residuary body and the purchaser.
  282
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what properties have been disposed of by the London residuary body to the London docklands development corporation.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: None, but negotiations are in hand on a number of properties.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment what sum was received by the London residuary body for the sale of the freehold interest in 45–59 Albion street, Southwark, to Storechart Property Ltd.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: The disposal of 45–59 Albion street Southwark has yet to be completed.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment what matters remain to be resolved as between his Department and the London residuary body in respect of the Greater London Supplies.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: Discussions about the future of Greater London Supplies are continuing between the Department of the Environment, the Department of Education and Science, the London residuary body and the Inner London education authority.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment if he will give details of the days worked each week by the part-time appointees to the London residuary body; and what was the sum each received in the financial year 1988–89.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: The time commitments of part-time members of the London residuary body to LRB work and their salaries during 1988–89 were as follows:

  Mr. Tony Banks
  To ask the Secretary of State for the Environment to whom the London residuary body's freehold interest in Bush house was sold; and what was the disposal price.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: This is a matter for the London residuary body and the purchaser.

  Mr. Tony Banks
  To ask the Secretary of State for the Environment why the disposal decision of the London residuary body in respect of 100–124 Shaftesbury avenue to Gratex Ltd. was changed in favour of Carmellia Holdings Ltd; and what was the disposal price.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: In this case the name of the purchasing firm was changed in the course of the transaction. Information on the disposal price is a matter for the London residuary body and the purchaser.
  283
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what information he has regarding the sale of the London residuary body's freehold interest in Southwark bridge business centre to Mackenzie and Campbell House Ltd; and if he will make a statement.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: The London residuary body has yet to decide on the disposal of its interest.

  Thames Flood Warning
  Mr. Tony Banks
  To ask the Secretary of State for the Environment what arrangements he proposes will exist beyond 30 April in respect of the Thames tidal flood warning system.

  Mrs. Virginia Bottomley
  [holding answer 4 April 1989]: Recent meetings involving London boroughs, Government Departments and the London residuary body have concluded that it is for the boroughs using the powers available to them to consider the future of the tidal flood warning system.

  Unitary Plans
  Mr. Heddle
  To ask the Secretary of State for the Environment if he will publish in the Official Report the timetable for the submission of unitary plans to his Department.

  Mr. Howard
  Once a commencement order has been made following the issue of strategic guidance by the Secretary of State, an authority is required to prepare its unitary development plan. DOE circular 3/88 advises that authorities should publish their draft plans within two years of commencement. Those with a good up-to-date local plan base should achieve this stage within one year of commencement.

  Commencement orders were made for the west midlands and Merseyside in 1988. Commencement orders for London and the remaining metropolitan areas are likely to be issued by the summer.

AGRICULTURE, FISHERIES AND FOOD

  Cattle Herds
  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food how many cattle herds in England and Wales are defined as(a) specialist rearing herds and (b) finishing herds for the purposes of payment under the variable premium scheme.

  Mr. Donald Thompson
  Cattle herds were not distinguished for the purposes of payment under the beef variable premium scheme, which ended on 2 April 1989.

  Sheepmeat Regime
  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food when he anticipates completion of negotiations on the European Community sheepmeat regime; if he will make a statement on the current state of these negotiations; and what account he has taken of the importance attached by farmers to store sales.

  Mr. Donald Thompson
  Discussions on the EC Commission's proposals for changes to the sheepmeat 284
  regime have made little progress. Negotiations may well continue for some time. I am well aware of the desirability of ensuring that any changes to the regime are introduced with sufficient notice so that farmers can plan ahead, particularly when making purchases at store sales.

  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food if he will list in the Official Report the pound sterling equivalent of the per ewe payment allocated to farmers in each member state of the European Community under the sheepmeat regime as presently constituted.

  Mr. Donald Thompson
  The Commission regulation setting rates of ewe premium is due to be published shortly. I will write to the hon. Member when the details are available.

  Set-aside Schemes
  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food if he will list in the Official Report the current level of progress on set-aside schemes in each member state of the European Community, showing such progress as percentage of levels currently attained. in the United Kingdom.

  Mr. Ryder
  The United Kingdom was the first member state to implement the set-aside scheme, and others remain at various stages of implementation. No figures are yet available for Luxembourg and Denmark, who are still in the process of introducing schemes, and for Greece and Italy, who are still receiving applications for their schemes. The schemes in most other member states are also still open for applications, and the figures for uptake are therefore provisional. Portugal does not yet have to apply a scheme.

  The information available to date on uptake in other member states compared with set-aside in the United Kingdom of about 58,000 hectares is as follows:

  Hectares set-aside

  Percentage of United Kingdom hectares set- aside

  Belgium

  383

  0·7

  France

  2,409

  4·2

  Ireland

  1,918

  3·3

  Netherlands

  1,222

  2·1

  Spain

  6,202

  10·8

  Germany

  170,635

  296·2

  Cereal Substitutes
  Mrs. Margaret Ewing
  To ask the Minister of Agriculture, Fisheries and Food if he will list in the Official Report the level of imports into the United Kingdom of cereal substitutes in each of the past five years.

  Mr. Ryder
  The following table shows the total tonnage of materials on the European Community list of cereal substitutes imported into the United Kingdom in each of the most recent five years.

  Calendar year

  Imports of cereal substitutes (thousand tonnes)

  1984

  1,048

  1985

  1,038

  1986

  1,035

  285

  Calendar year

  Imports of cereal substitutes (thousand tonnes)

  1987

  1,091

  1988

  1,099

NORTHERN IRELAND

  Road Programmes
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland what were the individual costings of the following road programmes covered by the additional £8·7 million recently announced by the Parliamentary Under-Secretary of State for the Environment: both the M1 and M2 motorways, route A4 Dungannon to Enniskillen, route A2 near Carrickfergus, Bushmills and Ballykelly, route A37 between Coleraine and Limavady, route A20 Newtownards to Portaferry and Mountstewart, route A23 Belfast to Ballygowan, near Castlereagh, route A54 at Castleroe, near Coleraine, route A24 Belfast to Newcastle, near Seaforde and route A7 Carryduff to Saintfield, near Carryduff and Lisdoonan.

  Mr. Needham
  Individual costings of road maintenance works on the routes named are as follows:

  M1 and M2 motorways—£618,000 (M1 £568,000, M2 £50,000)

  Route A4—Dungannon to Enniskillen—£450,000

  Route A2—near Carrickfergus, Bushmills and Ballykelly£213,000

  Route A37—between Coleraine and Limavady—£86,000

  Route A20—Newtownards to Portaferry and Mountstewart —£76,000

  Route A23—Belfast to Ballygowan, near Castlereagh—£116,000

  Route A54—At Castleroe, near Coleraine—£28,000

  Route A24—Belfast to Newcastle, near Seaforde—£43,000

  Route A7—Carryduff to Saintfield, near Carryduff and Lisdoonan—£93,000

  The works are representative of maintenance works carried out throughout Northern Ireland.

  Medical Practices (Patients)
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland, pursuant to his written reply of 11 January to the right hon. Member for Strangford,Official Report, columns 693–94, how many persons are on the lists of each of the three medical practices based at Portaferry and Kircubbin.

  Mr. Needham
  Information about the number of patients on a general medical practitioner's list is treated as confidential and may not be disclosed without the permission of the doctor concerned.

  Griffiths Report
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland if he will publish his Department's reponse and observations on Sir Roy Griffiths' report "Care in the Community-Agenda for Action"; and what advice his Department is giving to health and social services boards as to how they should plan their services in the light of the findings in this report.

  Mr. Needham
  Sir Roy Griffiths was asked by the Secretary of State for Social Services to review the way in 286
  which public funds are used to support community care policy specifically in England and to advise on possible ways of improving the use of those funds to achieve a more effective delivery of community care. The issues raised by his report are being considered by the Government. The conclusions reached will be of interest throughout the United Kingdom, but differences in the arrangements for the management of community care in the various parts of the United Kingdom will have to be taken into account in framing proposals for action.

  Sexual Abuse (Children)
  Mr. Allen
  To ask the Secretary of State for Northern Ireland what Government-funded research into the sexual abuse of children(a) has taken place since 1979, (b) is currently taking place and (c) is under consideration, giving the cost of each project listed.

  Mr. Needham
  The Department of Health and Social Services has provided £46,250 to finance the Northern Ireland children's study. The study, undertaken by a research team from the department of child psychiatry at the Royal Belfast hospital for sick children and the department of community medicine and medical statistics at the Queen's university of Belfast, investigates the incidence and prevalence of child sexual abuse in Northern Ireland. The findings should be published later this year. Proposals for following up the study by further research into questions about the incidence of child sexual abuse in Northern Ireland are being considered.

  Housing
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland what were the sums tendered for the demolition of each block of flats in the Bogside, Londonderry; when the work began and finished; when the last contract let begins and finishes; what technical standards are required of contractors tendering; if the Housing Executive employed outside consultants and what consultancy fees have been paid or are pending in respect of each stage of the work.

  Mr. Needham
  [holding answer 22 March 1989]: This is a matter for the Northern Ireland Housing Executive and the chief executive has advised me that the tenders accepted for the demolition of the Rossville flats in Londonderry were as follows:

  £

  Block 1

  128,860

  Blocks 2 and 3

  297,800

  The demolition contract for block 1 commenced on 30 June 1986 and was completed on 10 April 1987. Work on the demolition of blocks 2 and 3 began on 6 February 1989 with an estimated completion period of 30 weeks. All tenderers are required to be on the Housing Executive's register of approved contractors and have specialist insurance.

  The executive employed a consultant who received a fee of £14,375 in respect of block 1. The fee to be paid for the demolition of blocks 2 and 3 is estimated at about £23,500.

  Access to Information
  Ms. Mowlam
  To ask the Secretary of State for Northern Ireland if he has any plans to extend to Northern
  287
  Ireland the change in the law introduced by (a) the Local Government (Access to Information) Act 1985, (b) the Access to Personal Files Act 1987, and (c) the Access to Medical Reports Act 1988.

  Mr. Ian Stewart
  [holding answer 4 April 1989]: Many of the functions carried out by local authorities in Great Britain are carried out by central Government in Northern Ireland. There are no plans at present to introduce legislation similar to the Local Government (Access to Information) Act 1985.

  A draft Northern Ireland Order in Council, which will contain provisions corresponding to the Access to Personal Files Act 1987 and the Access to Medical Reports Act 1988, is currently in preparation.

  Self-governing Hospitals
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland what guidance he is issuing to health and social services boards as to the identification of hospitals which may wish to apply for self-governing status; what information he has about any hospital in Northern Ireland being a candidate for this status; and if he will make a statement.

  Mr. Needham
  [holding answer 4 April 1989]: On 23 March 1989, I announced the publication of seven working papers which describe in greater detail how particular proposals outlined in the White Paper "Working for Patients" (Cm 555) will be implemented in Northern Ireland. Copies are available in the Library.

  Working paper 1 "Self Governing Hospitals in Northern Ireland" makes it clear that the Government regard all hospitals as potentially eligible for self-governing status, but it is likely to be particularly appropriate to major acute hospitals with over 250 beds and I would expect initial proposals to come from this type of hospital.

  Stolen Weapons
  Mr. Livingstone
  To ask the Secretary of State for Northern Ireland, pursuant to the answer to the hon. Member for Brent, East of 23 January,Official Report, column 395, if he will state the number of weapons stolen from police stations in Northern Ireland in each of the categories from 1970 to the present date.

  Mr. Ian Stewart
  [holding answer 4 April 1989]: As I indicated in the answer given to the hon. Member on 23 January 1989 at column 395, centralised records do not differentiate between the actual sources of theft.

  Mr. Peter Bell (Bombing)
  Mr. Livingstone
  To ask the Secretary of State for Northern Ireland if he will call for a report from the Chief Constable of the Royal Ulster Constabulary as to the stage which investigations have reached into the bombing of the home of Mr. Peter Bell, a civil servant working for his Department.

  Mr. Ian Stewart
  [holding answer 4 April 1989]: A bomb explosion occurred on 12 March 1976 between the homes of Mr. Bell and another civil servant. Although there was extensive damage to both houses no one was injured in the explosion. I understand that the police file in this case remains Open.

HEALTH

  Organ Donors
  Mr. Ashley
  To ask the Secretary of State for Health if he will request regional health authorities to include the words, "Are you an organ donor?" on all hospital admission forms.

  Mr. Freeman
  No. The working party chaired by Sir Raymond Hoffenberg examined this suggestion and considered that it would increase the anxiety of patients entering hospital. It would be unlikely to increase substantially the availability of organs because most potential donors are unconcious on admission to hospital.

  Prescriptions
  Mr. Nicholas Bennett
  To ask the Secretary of State for Health what estimate he has as to the total saving which has been made by the National Health Service since the limited list was introduced.

  Mr. Mellor
  In 1985–86 the selected list scheme saved £75 million on the drugs bill. It is difficult to make meaningful estimates for subsequent years but we have no reason to doubt that significant savings continue to be made.

  Cook-chill Food
  Mrs. Clwyd
  To ask the Secretary of State for Heallth when the revised guidelines on cook-chill will be published.

  Mr. Kenneth Clarke
  I refer the hon. Member to my reply of 24 February 1989 to the hon. Member for Stoke-on-Trent, North (Ms. Walley) at columns 824–25.

  Mrs. Clwyd
  To ask the Secretary of State for Health whether there will be stiffer regulations regarding temperature control of cook-chill food in the revised guidelines on cook-chill.

  Mr. Kenneth Clarke
  My Department's expert group and the relevant recent research have confirmed that the temperature controls specified in the 1980 guidelines are still appropriate and they are likely to form the basis of the guidance given in the revised guidelines when these are published.

  Mrs. Clwyd
  To ask the Secretary of State for Health what scientific advice has been taken by his Department in revising the guidelines on cook-chill.

  Mr. Kenneth Clarke
  My Department convened an expert group to review the guidelines on cook-chill catering systems and they provided the core of the scientific advice during the review.

  Mrs. Clwyd
  To ask the Secretary of State for Health whether he intends to introduce new statutory powers governing the preparation of cook-chill foods.

  Mr. Kenneth Clarke
  The preparation of cook-chill foods is subject to the requirement of the Food Act 1984 and the regulations made under that Act, in the same way as any other food business. Following extensive consultation, the Food Hygiene (General) Regulations 1970 are currently being reviewed.

  Mrs. Clwyd
  To ask the Secretary of State for Health what measures he intends to take and what proposals he
  289
  intends to include in the revised guidelines on cook-chill to ensure a high microbiological quality of food used in cook-chill.

  Mr. Kenneth Clarke
  During the review of the existing guidelines my Department's scientific expert group considered the recommended microbiological criteria and considered them to be satisfactory. They took the view that providing the 1980 guidelines were followed, they would provide food of sound microbiological quality. However, absence of listeria monocytogenes has been included in the recommended microbiological specification.

  Mrs. Clwyd
  To ask the Secretary of State for Health what measures he intends to take and what proposals he intends to include in the revised guidelines on cook-chill to ensure adequate hygiene education and training of cook-chill food handlers.

  Mr. Kenneth Clarke
  The production of cook-chill foods covered by the guidelines is subject to the requirements of the Food Act 1984 and the regulations made under that Act, as are all food businesses.

  Following extensive consultation the Food Act and its regulations are currently being reviewed and the present proposals include regulation-making powers for Government to require appropriate hygiene training for those involved in food handling.

  Mrs. Clwyd
  To ask the Secretary of State for Health how many studies, and at what cost, his Department has conducted into the microbiological quality of cook-chill foods.

  Mr. Kenneth Clarke
  I refer the hon. Member to the reply by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food on 9

  AIDS Cases (United Kingdom figures)

  HIV anti-body positive (England and Wales)

  Men

  Women

  Total1

  Men

  Women

  Total2

  Total

  2,031

  72

  2,103 (1,116)

  7,358

  557

  8,025

  Injecting drug users only

  31

  12

  43 (22)

  418

  219

  642

  Injecting drug users who are homosexual

  33

  —

  33 (15)

  72

  —

  72

  1 Deaths shown in brackets

  2 Includes small number where sex not specified

  Mr. Strang
  To ask the Secretary of State for Health whether he will make a statement on the funding of Mainliners.

  Mr. Mellor
  Mainliners, a voluntary organisation recently formed to help HIV positive drug users, has applied for a grant towards its administrative expenses to be incurred in 1989–90. The Department has notified Mainliners that, while we value the work that it is doing in this field, its current work is too local to fall within the scope of the general grant scheme that the Department operates under section 64 of the Health Services and Public Health Act 1968.

  Airline Food (Safety)
  Mrs. Clwyd
  To ask the Secretary of State for Health whether his Department has now received a copy of the report, "A Survey of Microbiological Quality of Airline 290
  February at columns 780–81 which provides details amongst others of research funded by the Ministry of Agriculture, Fisheries and Food which is of relevance to the microbiological quality of cook-chill foods.

  Mrs. Clwyd
  To ask the Secretary of State for Health where his Department intends to conduct any further research into the microbiological quality of cook-chill foods.

  Mr. Kenneth Clarke
  I see no need at this stage to conduct further research into the microbiological quality of conventional cook-chill foods other than that already sponsored by Government.

  Mrs. Clwyd
  To ask the Secretary of State for Health what measures he intends to take and what proposals he intends to include in the revised guidelines on cook-chill to prevent cross-contamination in the preparation of cook-chill foods.

  Mr. Kenneth Clarke
  The guidance on proper time and temperature control and the separation of cooked and uncooked food during the production process in the existing guidelines are intended to reduce the microbiological contamination to a minimum.

  I expect these points will be emphasised in the reviewed guidelines.

  Drug Abuse
  Mr. Strang
  To ask the Secretary of State for Health whether he will make a statement on the incidence of HIV amongst drug users.

  Mr. Mellor
  The following table shows the cumulative totals of AIDS cases and HIV anti-body positive reports at the end of February 1989.

  Foods", by the London boroughs of Hillingdon and Hounslow and Spelthorne borough council; and whether he will make a statement.

  Mr. Kenneth Clarke
  I have just received a copy of the report and I will give it due consideration.

  Project 2000
  Mr. Kirkwood
  To ask the Secretary of State for Health if, pursuant to his reply of 31 January,Official Report, column 189, he can give any estimate of when (a) the level of bursary for a nursing student enrolling on a course under the Project 2000 nursing education reforms will be announced, and (b) the arrangements for the longer term administration of such bursaries will be determined; and if he will make a statement on the progress towards the implementation of the Project 2000 reforms so far.

  Mr. Mellor
  We intend to make an announcement shortly on the level of bursaries for Project 2000 nursing students and the arrangements for administration. On
  291
  progress on Project 2000 generally, my right hon. and learned Friend announced on 3 April that approval had been given to the development of Project 2000 courses in the following districts/schools of nursing:

  East Suffolk and Great Yarmouth

  Crewe and Macclesfield

  Newcastle

  North East Essex

  Parkside

  North and South Bedfordshire

  North Manchester

  North West Surrey/South West Surrey/West Surrey and North East Hampshire

  Avon

  Sheffield

  North Staffordshire

  Portsmouth and Isle of Wight

  Winchester and Basingstoke

  Subject to detailed discussions about cost and manpower assumptions, and the receipt of educational approval from the English National Board for Nursing, Midwifery and Health Visiting, these courses should start in the autumn of this year or, in some cases, in early 1990.

HEALTH

  Community Care
  Mr. Robin Cook
  To ask the Secretary of State for Health what mechanisms his Department has established to oversee the transfer of residents of long-stay institutions to the community; and if they are working satisfactorily.

  Mr. Mellor
  It is for health authorities, in consultation with social services departments and other care agencies to determine arrangements for the transfer of residents of long-stay institutions to the community. The annual accountability review process is the principal mechanism by which health authorities' performance across the whole range of their activities is monitored by the Department. During the course of this year, we intend to get a clearer picture of the development of mental health services throughout the country. The objective is to provide us with a properly informed basis for considering whether there are any steps it would be right and proper for us to take to improve the care of mentally disordered people, including former long-stay patients now in the community.

  Mr. Robin Cook
  To ask the Secretary of State for Health (1) when he now expects to respond to the report by Sir Roy Griffiths on community care;

  (2) if he will make a statement on Her Majesty's Government's policy on community care.

  Mr. Mellor
  We remain committed to a policy of promoting the development of community services so that people can return to, or remain in, the community and live as independently as possible, wherever this is best for them. We are currently giving active consideration to the future organisation and management of community care following Sir Roy Griffiths' report and hope to be in a position to bring forward our own proposals in the near future.

  Residential Care
  Mr. Robin Cook
  To ask the Secretary of State for Health (1) how many mentally ill and mentally handicapped patients have been moved from hospital care into residential care in each of the last five years;
  292
  (2) what are his Department's estimates of the numbers of mentally ill and mentally handicapped people not receiving long-stay hospital care in each of the last five years.

  Mr. Freeman
  The numbers of discharges from mental illness and mental handicap hospitals and units in England directly into residential care are not available centrally.

  Many of the National Health Service patients discharged from mental illness and mental handicap hospitals and units after a stay of one year or more will transfer to residential care.

  The table shows the numbers of patients discharged to the community from National Health Service mental illness and mental handicap hospitals and units in England after a stay of one year or more, for the last five years for which information is currently available. The figures exclude deaths, and transfers to another hospital.

  Discharges from mental illness and mental handicap hospitals and units, England (1982 to 1986)

  Year

  Mental illness

  Mental handicap

  Total

  1982

  3,465

  1,229

  4,694

  1983

  3,563

  1,457

  5,020

  1984

  3,928

  1,919

  5,847

  1985

  3,441

  2,052

  5,493

  1986

  3,751

  2,528

  6,279

  Day Care
  Mr. Robin Cook
  To ask the Secretary of State for Health how many day care places for mentally ill and mentally handicapped people were available in each of the last five years.

  Mr. Freeman
  The table shows the number of day places allocated on the last full working day of each year at National Health Service day hospitals; the number of day care places at single specialty mental illness and mental handicap hospitals are excluded as the data were not centrally collected.

  The table also shows the number of day care places provided by local authority social services departments in each of the last five years for which figures are available.

  Number of day care places in England for people with a mental illness or mental handicap, 1983–87

  Number of places in NHS day hospitals for

  Number of places provided by local authority social services departments for

  Year

  Mental illness

  Mental handicap

  Mental illness1

  Mental handicap

  1983

  16,293

  1,142

  8,689

  46,558

  1984

  16,996

  1,195

  8,919

  47,464

  1985

  17,903

  1,519

  9,308

  48,824

  1986

  18,661

  1,528

  9,216

  50,374

  1987

  n/a

  n/a

  9,993

  51,732

  1 Including places made available to local authorities by voluntary or private organisations and estimates of places for mentally ill people in day centres for mixed client groups.

  Since 1987–88, data have been collected on available place-days at all National Health Service day care facilities for mentally ill and mentally handicapped patients. 1n 1987–88 there were 5·36 million place-days for mental illness day care and 1·02 million place-days for mental handicap day care. Most of these day care facilities are open five days a week.
  293
  Mr. Robin Cook
  To ask the Secretary of State for Health what has been the rate of provision of day care places for the elderly per 1,000 people aged 75 years and over in each of the last five years.

  Table 1

  Geriatric medicine: Day care attendances, 1982 to 1987–88 and available place days, 1987–88 only National Health Service hospitals in England

  1983

  1984

  1985

  1986

  1987–88

  Rates per thousand population 75 +

  Available place days

  n/a

  n/a

  n/a

  n/a

  713·5

  New patients

  24·2

  23·8

  25·2

  24·9

  23·4

  TOTAL ATTENDANCES

  552·4

  540·8

  525·1

  525·0

  498·0

  Table 2

  Number of day care places for the elderly per 1,000 people aged 75 or over provided by local authority social services departments in England: 1983–871

  Number of places per 1,000 population aged 75 or over

  As at 31 March

  1983

  13·3

  1984

  13·3

  1985

  13·4

  1986

  13·5

  1987

  13·4

  1 Including estimates of places for the elderly in day centres for mixed client groups and day care places in local authority residential accommodation.

  294
  Mr. Mellor
  The available information for(a) National Health Service hospitals and (b) local authority social service departments is given in the tables.

HOUSE OF COMMONS

  Research Assistants
  Mr. Allen
  To ask the Lord President of the Council, pursuant to his answer to the hon. Member for Nottingham, North,Official Report, 20 March, column 455, if he will arrange for the register signed by research assistants using the Library to be available for inspection by hon. and right hon. Members.

  Mr. Wakeham
  The register signed by research assistants using the Members' Library is kept permanently in the Oriel Room of the Library. It can be made available on request to any right hon. or hon. Member who wishes to inspect it.

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

Parliamentary Papers: Dispatch Arrangements
Lord Aldington Lord Aldington asked the Leader of the House:
Whether he will review the arrangements for the dispatch of the Minutes of Proceedings and the Official Report to Lords who live outside London.
The Lord Privy Seal (Lord Belstead): My Lords, the present arrangements are that noble Lords outside London receive Minutes and Hansard by first class post so that, for example, Monday's Hansard should arrive on Wednesday morning.
I am aware that my noble friend's papers have been arriving late at his home in Kent. It is clearly desirable and indeed necessary that all your Lordships receive parliamentary papers promptly. The proper body to look into this on behalf of the House is the Administration Sub-Committee of the Offices Committee. I shall certainly ask the noble Lord the Chairman of Committees to raise the matter with the Administration Sub-Committee if that is what my noble friend would like.
Lord Aldington: My Lords, may I thank my noble friend for his Answer? So far as I am allowed to do so, I say yes to the question which he has put to me. May I ask him whether he realises that I should not have put this Question down had I not become completely exasperated over the delays during the past 18 months? They have become worse and not better, despite the sympathetic treatment from the Clerk of Printed Papers, who could not have interested himself more, sympathetic noises from the Printed Paper Office and sympathetic noises from the area delivery manager of the Post Office in my district. After all that, matters became worse so I have had to appeal to my noble friend.
Lord Belstead: My Lords, I should like to recognise that my noble friend has taken all reasonable steps to try to resolve this matter informally before bringing it before the House. Indeed, if I may say so, he has shown the patience of Job. I wish to thank him for that. I should also like to thank my noble friend for recognising that both the Clerk of Printed Papers, and indeed the Post Office itself, particularly in his area, have been trying to get to the root of the problem.
My noble friend, with characteristic modesty, asked his Question in a general way about the House. I replied by saying that I should be ready to draw the matter to the attention of the Chairman of Committees, who is also Chairman of the Administration Sub-Committee. My noble friend has said yes to that. So it only remains to me to add one other point. The Post Office has now accepted the
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need for an absolutely thorough check of every stage of the delivery of his papers in order to identify the reason for the failures. That will be carried out over the next month and the result will be reported back to the House authorities. Of course I shall be in touch with my noble friend.

Veterinary Education
3.10 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
When they will respond to the Riley Report on Veterinary Education into the 21st Century.
Viscount Davidson: My Lords, the Riley Report was commissioned by the University Grants Committee. Decisions on the report will fall to the Universities Funding Council, which took over from the UGC on 1st April.
Lord Molloy: My Lords, I thank the noble Viscount for that reply, but I wish to ask whether he is aware that there is grave concern in the universities and the veterinary schools. Regarding costs I am sure we realise that 2 per cent. of the pay rises for teachers and doctors is equivalent to the entire amount of money spent on veterinary education and that the UFC itself spends more money on biologists who fail than on the veterinary surgeons who pass. That is not merely absurd; it is causing great chagrin and annoyance in the veterinary world among experienced vets and those who wish to encourage young people to take part in a great profession which can be so vital to our nation. I hope that the noble Viscount will take cognisance of these facts and help to rectify the problem.
Viscount Davidson: My Lords, I feel that that is slightly outside the scope of the original Question. However I shall certainly draw the noble Lord's comments to the attention of my right honourable friend.
Lord Campbell of Croy: My Lords, while the Government themselves are not due to respond to the Riley Report, will they not present their views to the UFC? Will not those views be against the disruption of centres of excellence and delays in important research at Glasgow and Cambridge?
Viscount Davidson: My Lords, I must emphasise that the purpose of the period of consultation was to allow all the relevant facts to be examined. I have no doubt whatever that the UFC will take into account all the views expressed, including those in your Lordships' House, before arriving at a decision.
Lord Cledwyn of Penrhos: My Lords, is the noble Viscount aware that the quinquennial review into the educational needs of the veterinary profession would normally be due to start this year? Can he confirm that the review will in fact start this year? Would it not be sensible to await the results of that review before proceeding to take account of the recommendations of the Riley Committee?
Viscount Davidson: My Lords, as I told your Lordships on 9th November last year in reply to a Question from the noble Lord, Lord Molloy, the Government will consider whether, and if so when, to mount a further assessment. I cannot tell the noble Lord exactly when that will be.
Lord Cledwyn of Penrhos: My Lords, I put a specific question to the noble Viscount about the quinquennial review. The last review reported in 1985, as I recall. The chairman of that review was the noble friend of the Minister, the noble Lord, Lord Stodart of Leaston. I believe that five years prior to that the noble Lord, Lord Swann, had presided over a quinquennial review. Such a review is therefore due now into the educational needs of this profession. Will the noble Viscount say whether a review is to be held?
Viscount Davidson: No, my Lords. I am not in a position to say that. However, I shall certainly write to the noble Lord when I have consulted my right honourable friend, and I shall place a copy of the letter in the Library.
Lady Saltoun of Abernethy: My Lords, has the noble Viscount read the front page of this morning's Glasgow Herald? Can he say whether the report on the Glasgow Veterinary School contained on the front page is true?
Viscount Davidson: My Lords, I have read the front page of the Glasgow Herald. I also read what my right honourable friend the Secretary of State for Scotland was reported to have said. I also saw the photograph of my right honourable friend with a cockatoo perched on his shoulder. The cockatoo was speaking into the ear of my right honourable friend. However, I am unable to divulge what the cockatoo was saying to my right honourable friend.
Lord John-Mackie: My Lords, we are getting a little tired of this passing of the buck to the UGC. Was there any prompting by the Government of the UGC to appoint the Riley Committee? That is a little suspicious, in my opinion.
Viscount Davidson: My Lords, I dare say it may be. But it was the UGC that appointed the Riley Committee. I am not aware of any prompting from the Government. However, the decisions on that committee will fall to the new UFC which was established under the Education Reform Act 1988. The Act limits Ministers' powers to intervene in matters relating to named institutions.
Lord Molloy: My Lords, I am sure the noble Viscount knows there is a desperate shortage of veterinary surgeons throughout the country and that the manpower review is an urgent matter. It concerns not merely the veterinary profession itself, but also farming, research and science in the veterinary field. All those areas are vital to our country. Is the Minister prepared to advise his right honourable friend that the manpower review should take those matters into consideration, and that actions should not follow too tardily on the words?
Viscount Davidson: My Lords, I am not in a position to advise my right honourable friend. However, I shall certainly tell him what the noble Lord has said.
Lord Campbell of Alloway: My Lords, does my noble friend the Minister appreciate that the noble Lady, Lady Saltoun of Abernethy, was not so much concerned with what the cockatoo said to the Minister but whether what the Minister said was true?
Viscount Davidson: My Lords, I note the point.

EC: Regional Policy
3.15 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
What provisions are being made concerning regional policy to meet the changes expected in 1992.
Lord Strathclyde: My Lords, major changes in the focus of the DTI's policies were made early last year. Regional policy now operates within a framework of measures designed to promote enterprise and business development throughout the country and to encourage firms to take full advantage of the opportunities of 1992. Our enterprise initiative is particularly relevant to the regions and our Europe Open for Business Campaign is aimed at encouraging all firms to take action now to ensure they benefit from the opportunities the single market will bring.
Lord Dormand of Easington: My Lords, if that is the case, is the Minister aware that under objective 2 of the new criteria for the EC structural fund, the regions of this country are said to be in greater industrial decline than in any other areas of the EC? In such circumstances, and because of those findings, will the Minister comment on two matters? First, will the Government include those areas, now specified under the arrangements I have just mentioned —incidentally, they involve 1.5 million people—which do not currently qualify for national assistance schemes? Secondly, will the Government adhere to their often repeated promise that this EC funding will be in addition to the funds obtained through regional assistance in this country?
Lord Strathclyde: My Lords, just before Easter the Commission announced the definitive list of areas which will benefit from the ERDF as declining industrial areas—objective 2. Nearly all our assisted areas will be eligible. In addition, a number of additional areas will qualify for the first time. There were, however, some disappointing omissions. We hope that in the future we shall be able to do something about that.
Lord Taylor of Gryfe: My Lords, does the Minister agree that in order to take advantage of the opportunities of 1992, no region should be disadvantaged against any other part of the United Kingdom?

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In those circumstances, will the Minister say something about the introduction of a uniform business rate as Scottish enterprises are paying five and six times the rates levied on industries in other parts of the country? Is that not a serious disadvantage, and does it not conflict with the Minister's profession of support for positive regional policies?
Lord Strathclyde: My Lords, if the Question on the Order Paper had anything to do with the business rate, I should have been delighted to reply to the question of the noble Lord. However, I am afraid the Question on the Order Paper is directly concerned with regional policy. Therefore, I shall decline.
Lord Williams of Elvel: My Lords, how does the noble Lord reconcile what he said about regional policy with the cut in real terms, announced in the recent public expenditure White Paper, of £30 million? Is that an adequate preparation for 1992?
Lord Strathclyde: My Lords, the changes announced last year were not designed specifically to reduce expenditure, but rather to make it more effective through being targeted on those areas where it would be most effectively used. I speak particularly of smaller firms. It is by such targeting that we shall see substantially greater growth in the future.
Lord Dormand of Easington: My Lords, I asked the Minister two rather narrow, specific questions. Will he be so good as to answer them now? They were certainly relevant to the Question on the Order Paper.
Lord Strathclyde: My Lords, I thought that I had answered the questions by saying that nearly all our assisted areas will be eligible, although, from our discussions with the Commission, some were not included in the ERDF areas. I thought that that covered the point which the noble Lord raised.

Immigration Act Detainees: Haslar
3.20 p.m.
Lord McNair Lord McNair asked Her Majesty's Government:
What representations they have received from agencies concerned with refugees about the proposal to use Gosport rather than Latchmere House for the detention of would-be immigrants and asylum-seekers.
The Earl of Arran: My Lords, a number of bodies concerned principally or partly with refugees have made representations about the proposal to hold people detained under the Immigration Act in Haslar, Gosport, instead of Latchmere House. The issue is under consideration. We hope to announce a decision shortly.
Lord McNair: My Lords, I thank the noble Earl for that Answer. Is he aware—I am sure that he is but I have to phrase it this way—of the excellent work being done by the Latchmere Project at
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Richmond, which I believe is based in the local citizens' advice bureau? Does he not think that to move this very vulnerable group of people from Richmond to Haslar, where it will be very much more difficult for their advisers, their relations and their compatriots to visit them, would be a very unfortunate way of easing the problem?
The Earl of Arran: My Lords, we are aware of the very good service provided by the Latchmere Project under the aegis of the Richmond citizens' advice bureau which, as the noble Lord has said, provides a valuable welfare service to the detainees. However, if the detainees are transferred we shall endeavour to make arrangements for an equivalent service in the new location. Accepting the other points which the noble Lord has raised, while Haslar is a less convenient location than Latchmere House, it is in many ways much better suited to the purpose. It offers a more relaxed environment, longer periods of association and improved opportunities for recreational and educational activities.
Lord Mishcon: My Lords, while it is extremely welcome to hear the noble Earl praise the Latchmere Project, is he aware that even in its present circumstances that project could do with considerably more financial assistance? In the light of the consideration being given to moving refugees from Latchmere House to Gosport, is he prepared to consider the possibility of further financial aid being granted if such a move takes place?
The Earl of Arran: My Lords, in reply to the noble Lord, I must say that I was not aware of the requirement for increased funding for Latchmere House. Since he has raised the question of increased funding I shall convey the point to my right honourable friend the Home Secretary.
Lord Bonham-Carter: My Lords, is the noble Earl aware that to move the centre to Gosport is to move it a very long way from the place where most of the immigrants arrive? Is he further aware that that would make it exceedingly difficult for them to be visited and for the very necessary services which are provided for them and which are widely used to be undertaken? Will the Minister say whether this is to be a temporary or a permanent move? Will he consider making arrangements so that in due course, if the move takes place, the centre can be moved back to a more convenient area nearer its present site?
The Earl of Arran: My Lords, since a decision has not finally been taken as to whether the move will take place, it is not possible for me to say whether such a move would be temporary or final. As regards the other points which the noble Lord has raised, the needs of detainees vary widely from an immediate need for warm clothing to practical help on family matters and, as he mentioned, specialist legal advice. We shall take those considerations very much into account in our planning when deciding whether the move should take place. If we decide to proceed we shall discuss arrangements for legal and welfare support with the relevant bodies, including the board of visitors at Haslar.
Lord McNair: My Lords, the noble Earl has made the facility at Haslar sound rather like a Butlin's holiday camp. Will he bear in mind that what a lot of the detainees want, rather than recreational facilities and so on, is to arrange a speedy exit from this country? Does he agree that the longer that takes the more it costs the taxpayer?
The Earl of Arran: My Lords, I shall bear the noble Lord's points in mind and report them to my right honourable friend the Home Secretary.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Brabazon of Tara will, with the leave of the House, repeat a Statement that is to be made in another place on the dock labour scheme.
It may be for the convenience of the House if I announce that the Report stage of the Companies Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the European Parliamentary Elections (Amendment) Regulations 1989 and the Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1989 will be taken.

Companies Bill [H.L.]
3.26 p.m.
Lord Strathclyde: My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Strathclyde.)
On Question, Motion agreed to.
Clause 80 [Charges requiring registration]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 139A:
Page 73, line 23, leave out ("Chapter") and insert ("Part").
The noble Lord said: My Lords, this amendment deletes an incorrect reference to "this Chapter" and replaces it with a reference to "this Part". There is no change to the application of the definition of the term "charge" in new Section 395(2). The amendment is necessary simply because there will be no separate chapters in the new Part XII and therefore the reference to "this Chapter" would be meaningless.
We have taken the opportunity of the changes to Part XII of the 1985 Act to combine the existing separate chapters for England and Wales and for Scotland. Many of the existing differences between the chapters for the different jurisdictions are no longer appropriate under the system which the Bill will introduce. Special provisions continue to be made for Scots law where appropriate in the new part, but they are not so numerous as to require separate chapters. We believe that there is considerable advantage in making the law on registration of charges for each jurisdiction as similar as possible.
I should like to take this opportunity to welcome the noble Lord, Lord Carter, who I understand is to take this part of the Bill on behalf of the Opposition. I am grateful that he has given notice of some of the questions which he will raise in the course of the debate. I beg to move.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble Lord both for his introduction to the amendment and his welcome of my noble friend Lord Carter to our Front Bench.
I note the noble Lord's point about the reconstruction of the part to make it more sensible and more logical in sequence. Is he implying that Clause 100, which is entitled "Floating charges (Scotland)", will now be included in Part IV?
Lord Strathclyde: No, my Lords. That will not be the case. I am not sure why, but it does not appear that that is something that needs to be changed at the moment.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 139B:
Page 75, leave out lines 14 to 16 and insert—
("(3) In this part "charge"—

(a) in England and Wales, includes a mortgage, and

(b) in Scotland means any form of security, including a heritable security;

but does not include a charge arising by operation of law.").
The noble Lord said: My Lords, the amendment clarifies the application of new Section 396(3) in Scotland. Although the existing Chapter II of Part XII of the 1985 Act uses the term "charge" to refer to any form of security, it has been drawn to our attention that the term ordinarily applies only to floating charges in Scotland. The amendment is designed therefore to avoid any doubt that might exist under the new part that the term "charge" includes not only heritable securities but also other forms of security. The clarification was not necessary in the 1985 Act, since Chapter II of Part XII contains no precise equivalent to new Section 396(3).
Lord Williams of Elvel: My Lords, perhaps the noble Lord will qualify a small point for me. Is there in any sense a separate registry for Scotland rather than for England and Wales, which includes Scottish terms such as heritable securities, whereas the registry for England and Wales does not; or are we talking about a registry for the whole of the United Kingdom which includes any security which, in Scotland, is deemed to be a heritable security?
Lord Strathclyde: My Lords, perhaps I may take this opportunity to answer that question. Subsection (3) is necessary for three reasons. First, it makes clear that the term "charge" includes, in England, a mortgage. Secondly, it makes clear that the term, in Scotland, includes not only a heritable security (which is the equivalent of a mortgage on land) but also any form of security. Thirdly, it excludes charges that arise by operation of law, for reasons explained in Committee. The subsection derives from Sections 396(4) and 410(4) of the 1985 Act. As drafted in the Bill at present, it leaves some slight doubt as to

1197
whether, in Scotland, fixed charges other than heritable securities are to be included in the term "charge". The amendment avoids that doubt.
Furthermore, as I have already said, security rather than charge is the indigenous term in Scotland. In England and Wales, security is often said to mean rights by way of security which are not a security in the strict sense. In the strict sense, security is used to mean a mortgage, an equitable charge, a charge by way of legal mortgage (in the case of land), a lien or a pledge.
The looser usage of the expression "security rights" is often used with reference to rights of reservation by the owner of the property, such as certain clauses reserving title to the seller in a contract for the sale of goods or a bank's retention clause over a customer's bank balance. To define charge as including any security in relation to England and Wales might therefore give rise to ambiguity as to whether certain contractual provisions, which are not at present registrable because they do not constitute a mortgage, lien, pledge or (in the strict sense) a charge, have thereby been made registrable. Of course, there is a separate registry for Scotland.
I am sorry that I have answered that question at some length, but it is relevant and I hope that the noble Lord will approve.
On Question, amendment agreed to.

Dock Labour Scheme
3.33 p.m.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Employment. The Statement is as follows:
"With permission, I should like to make a Statement about the future of the dock labour scheme.
"The scheme was first introduced just after the end of the Second World War under the Dock Workers (Regulation of Employment) Act of 1946. An amended scheme was brought into being in 1967 and remains in operation today. It now covers 40 main British ports responsible for handling some 70 per cent. of our national trade. A further 35 ports are outside the scheme because they were not significant for cargo handling in the immediate post-war years.
"The scheme is administered by the National Dock Labour Board and its 20 local boards which are made up of equal numbers of trade union and employer members. The boards have very wide powers to control employment in scheme ports, including the numbers employed and ultimate decisions on discipline.
"Only those who are on the registers of the boards are permitted to do dock work in scheme ports. An employer who, without approval of the board, uses non-registered dock workers commits
1198
a criminal offence. The nature of dock work itself and the exact areas where the scheme applies are subject to statutory definitions which have remained unchanged since the war.
"The original purpose of the scheme was to ensure greater regularity of employment for dock workers. Since then, however, there have been radical changes in cargo-handling technology, and dock work today, by its very nature, requires a permanent and skilled workforce. In ports where none of the scheme's restrictions apply, casual working, which was such a feature of dock work before the war, is very small. In big non-scheme ports like Felixstowe and Dover, it is effectively non-existent.
"Over the last 10 years, the number of dockers employed in non-scheme ports has risen by a third to around 4,000. During the same period, the number of registered dock workers has dropped by nearly two-thirds from 27,000 to 9,400 today.
"As the House will know, it is a major objective of the Government to remove barriers to employment, and in the last year we have published two White Papers in this area. As part of that continuing process, the Government have now reviewed the dock labour scheme and I am publishing today a White Paper which sets out our conclusions. In summary, we believe that the scheme suffers from a range of fundamental defects and that the time has now come to put the position right.
"The scheme provides a statutory monopoly in dock work. No one other than employers and workers registered by the dock labour boards can engage in dock work. Given the changes in the nature of dock work, this is not only unnecessary but also totally at variance with the practice in any other industry. It has created two classes of employees in the ports—registered dock workers and the majority of other workers. And it has certainly not secured good industrial relations in scheme ports.
"Management is unable to manage its own workforce effectively, and restrictive practices add to the costs of the ports. The public have to pay for the costs of the scheme, both as customers for goods that come through the ports and also as taxpayers. Since the early 1970s, the taxpayer has contributed over £420 million in today's prices in payments for voluntary severance, the only means of reducing any surpluses of registered dock workers. A further £350 million of public money has gone to help certain scheme ports survive.
"Just as important is the effect that the existence of the scheme has on prospective in vestment in scheme port areas. Companies are deterred from investing for fear that they will be caught by the scheme. The Government believe that, without this constraint, there would be more investment and more jobs in our ports and their surrounding areas.
"In short, the dock labour scheme today is a total anachronism. We rely on our ports for the bulk of our trade. We must ensure that they can prepare for the intensified competition that free

1199
movement of goods in the European Community after 1992 will bring.
"The scheme will not simply wither away of its own accord. For that to happen, our great historic ports as well as smaller ports all around the country would have to close permanently. That would involve abandoning major facilities with all their natural advantages of location and tidal waters, fixed assets and infrastructure, much of it provided at public expense over many years. Local business activity in port areas would suffer equivalent damage.
"The Government have concluded therefore that positive action is needed to free the scheme ports from their present artificial constraints. Our intention is to bring all port employers and dock workers into exactly the same position as other employers and workers.
"The only way in which this can be effectively achieved is through the abolition of the dock labour scheme. Its amendment or restriction would not remedy present defects and would merely create new problems. The Government therefore propose to introduce a Bill to repeal all the existing legislation connected with the scheme.
"The Bill will provide for the National Dock Labour Board to remain in being temporarily to transfer medical and training facilities as the industry requires, and then to wind up its affairs. The Government will assist financially, for example, by meeting redundancy payments due to board staff.
"The legislation will also make special provision for registered dock workers. The Government are introducing a new statutory compensation scheme for anyone made redundant during a transitional period after the scheme is abolished. This will provide for individual payments of up to £35,000 until early 1991 and up to £20,000 in the following 18 months. The costs of these payments will be shared equally between the Government and the individual employer concerned. In addition, as soon as the Bill is enacted, dock workers will acquire all the normal employment protection rights which are available to other workers, but from which they are currently excluded by virtue of the scheme.
"Mr. Speaker, the necessary Bill will be presented to the House tomorrow. As long as the scheme continues to operate, it will remain the biggest obstacle to a modern and efficient ports industry in this country. That is why the Government have decided that the time has now come to abolish the scheme."
My Lords, that concludes the Statement.
3.40 p.m.
Baroness Turner of Camden: My Lords, I am sure that the Minister will not be surprised to learn that we on this side of the House do not welcome the Statement; on the contrary. The Statement is very much in line with the Government's philosophy of deregulating everything and blaming union
1200
agreements and union involvement for what they describe as barriers to business.
As the Minister said, the dock labour scheme was introduced in 1947. It was intended to put an end to the appalling exploitation of dock workers that then existed and to break up the existing degrading system with its indignity of scrambling for a day's work at the dock gates, the selection of individuals on a blue-eyed boy basis and the complete absence and disregard of health and safety regulations. There is no reason whatsoever to believe that if there is no dock labour scheme the employers will not seize the opportunity to revert to casualisation. It is blatantly clear that workers in this kind of employment need protection. Indeed, until this Government took office, successive governments had always acknowledged that to be the case.
In the Statement the Minister says that the dock labour force has substantially diminished. That is quite true. He also says that there has not been a good record of labour relations in this industry, and that is not true. In fact the reduction of over 47,000 jobs in the registered labour force has taken place as a result of union involvement and participation. Despite the trauma that it caused, those redundancies were effected without industrial disruption. That was very largely due to the existence of the dock labour scheme and the participation of unions in it.
It is true that a permanent skilled workforce is required but the dock labour scheme of itself does not inhibit its existence. Indeed I understand that the industry itself already provides 3,500 training places. One must ask why the Government should want to act in this way with regard to an industry in which such training places are provided and in a situation in which it is essential—and this issue was raised in our debate yesterdayto— do everything possible to provide opportunities for the evolution of a skilled labour force.
Certainly the unions have been more than willing, so the Transport and General Workers' Union assures me, to participate in improving training and training opportunities. They have constantly pressed employers to do just that. The existence of the dock labour scheme has in no way inhibited training. If training has not taken place the blame lies squarely with the employers and certainly not with the unions.
Nor is there any evidence to show that if the dock labour scheme disappears there will be any greater investment. In the Statement reference is made to Felixstowe and Dover, but there is no evidence that the comparative success of Felixstowe, for example, is due to the absence of the dock labour scheme. It may very well have a great deal more to do with the geographical location of the port.
As regards the year 1992, most European countries already have some form of dock labour structure. In many cases it is a great deal more costly than the operation of the system in this country. Certainly the social policies of the European Community lay emphasis on a social dimenson and the need to involve unions. This of course is clearly what the Government do not want to do in this country.

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In my view the continuation of the dock labour scheme is essential for the efficient control of manpower in the industry and the maintenance of good standards of training, medical services, welfare and amenities. It has provided an avenue whereby problems associated with manpower could be resolved and it has made it possible to avoid industrial strife. As I said before, the proof lies in the severe reduction in the number of jobs which took place. It was a traumatic period but nevertheless those changes were brought about with the participation of the workforce and without industrial strife.
It seems that we are now to proceed along the path outlined by the Government and have new legislation introduced with incredible speed—in fact tomorrow; indeed, I cannot understand why it should be felt necessary to introduce a Bill on this matter tomorrow when Parliament already has such a heavy legislative programme. We should call this measure the Casual Labour Bill because in fact that is what we shall be debating. I rest my comments there.
3.45 p.m.
Lord Rochester: My Lords, from these Benches I should like to join in thanking the noble Lord, Lord Brabazon, for having repeated the Statement, which hardly comes as a surprise. We take a rather different view of this matter than do the Labour Opposition. As the Statement indicates, the dock labour scheme was designed to remedy the ill effects of old-style casual working and the chaotic conditions of employment that existed in the docks 40 years ago. However, in today's conditions it seems to us that the scheme has outlived its usefulness, as recent events in Grimsby and Aberdeen have clearly demonstrated.
In our view it is a monopolistic and restrictive practice and the minority who enjoy its privileges in regard to discipline, or the absence of it, and employment protection do so at the expense of others and to the detriment of the country's trade. Indeed, the chief beneficiaries of the scheme seem to be not so much our own non-scheme ports as places such as Rotterdam, Antwerp and other major continental ports.
Having said that, like the noble Baroness, Lady Turner, I am surprised that the Bill is to be introduced in another place so soon as tomorrow. Is it not the case that White Papers usually provide for a period in which interested parties can submit their views before final arrangements are made? However predictable the outcome of consultation may seem to be, should not such an opportunity have been given in this case? Indeed, is it not just possible that, faced with the Government's firm intention radically to alter working arrangements in ports covered by the scheme, the Transport and General Workers Union itself might have come up with proposals which would have had the effect of making certain modifications in the Government's detailed plans, thus enabling the transition to take place on a rather more generally acceptable basis and without undue disruption.
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Subject to those reservations, I am prepared on behalf of my noble friends to give this Statement a cautious welcome.
Lord Brabazon of Tara: My Lords, I am grateful for the reception that has been given to the Statement today. I should like to congratulate the noble Baroness, Lady Turner, on attempting to defend what, in the view of many noble Lords on this side of the House, must appear indefensible. I quite agree that when the scheme came into effect in 1947 there was good reason to have it and there was casualism in those days. But that was over 40 years ago and the industry has changed considerably. New technology has been introduced and there are many more expensive facilities operated by many fewer dockers at our ports.
Certainly the scheme has not preserved jobs. At its height there were 82,000 registered dock workers. That number is now down to 9,400. I submit that there is no reason to believe that casualism will return to the industry. There is no evidence of significant casual working in the non-scheme ports. I believe that the figure is approximately 6 per cent. in non-scheme ports, and that is in fact very similar to the figure for a number of other industries.
The noble Baroness referred to the good record of labour relations. I am afraid that that is just not true. There have certainly not been good industrial relations. Since 1967 over 4 million working days have been lost because of disputes in scheme ports. There have been 3,569 separate disputes in the scheme ports. Even today, the number of days lost in the scheme ports is three times the average for industry as a whole.
On training and other work which the National Dock Labour Board undertakes, one has to ask how Felixstowe, Dover and other non-scheme ports have been so successful at the expense of the scheme ports if they have done no training—which of course they have. However, the costs of the scheme far exceed the running costs of the board. The scheme maintains overmanning and work practices which involve paying workers with out-of-date skills for doing nothing. These damaging consequences may add as much as 20 per cent. to labour costs, according to the employers. Our proposals will maintain the NDLB in being until it has made alternative arrange for any of its training, medical and welfare services which meet the industry's needs. There is no reason now why port employers and others should not make adequate provision.
On investment in the scheme ports, companies are undoubtedly deterred from investing in the area or in the ports themselves for fear that they will be covered by the scheme. There are many examples that can be given. The scheme has brought development blight. The only way of escaping the scheme is to invest in work in no way related to dock work—for instance, housing instead of warehousing.
I am grateful to the noble Lord, Lord Rochester, for his general support for our measures. He asked in particular why we had not consulted on these proposals. The scheme was created by statute. The proper place to put proposals is before Parliament; and Parliament should decide after debate.

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I am afraid that the views of the Transport and General Workers Union are so clear-cut as to make consultation unnecessary. I can quote from Mr. John Connolly, the national secretary of the docks, waterways and fishing group of the Transport and General Workers Union, on a number of occasions. As recently as 24th February 1987, he said that the policy of the docks and waterways group has not changed, and that there will be opposition to the amendment or revision of the scheme and that opposition will take the form of a national dock strike. On Saturday 1st April he was quoted as saying in The Times that any move to abolish the scheme which effectively prevents the dismissal of registered dock workers would be met with a national strike. I am therefore afraid that there is no reason to consult on this issue. The views of all concerned are well known and it is therefore time that the Government acted.
Lord Boyd-Carpenter: My Lords, my noble friend will not be surprised to know that those of us who have been pressing for this change for some years are delighted to hear the Statement this afternoon and to know that the Government are acting, and acting with characteristic promptness, in introducing a Bill forthwith.
Is my noble friend also aware that the gloomy prognostications of the noble Baroness opposite are completely answered by the fact that none of the dreadful things that she predicts as a result of ending the dock labour scheme exist in the non-dock labour scheme ports which have been non-dock labour scheme ports for many years? It is therefore quite clear that the suggestion that she makes of disastrous consequences following are simply not borne out by the known facts at the other ports.
Is my noble friend also aware of the fact that there are only two causes for regret at this otherwise happy moment? One is that nothing can now be done to restore those ports—notably the Port of London—which were ruined by the dock labour scheme.
Noble Lords: Oh!
Lord Boyd-Carpenter: My Lords, secondly, it is enormously depressing to hear from the noble Baroness that Labour Party thinking on industrial matters has not moved for 40 years.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend for his support for the measure that we have announced this afternoon, which comes as no surprise. In the last 10 years the non-scheme ports' share of business has risen from 10 per cent. to 30 per cent. of trade. However, I would argue with my noble friend. The Port of London is now doing very much better and I hope it will continue to do better still as a result of the measures that we have announced this afternoon.
The objective of this exercise is to put the ports within the scheme into the same competitive position as the non-scheme ports and hope that they can catch up from where they have lost out over the years.
Lord McCarthy: My Lords, we shall not be surprised when we listen to the cheers and happy comments on the other side of the House. We shall not be surprised when we hear about the champagne suppers that the port employers will be having in every port in this country tonight.
What surprises me is the way that the Minister talked about the possibility of a national strike in docks. If there is a national strike in docks—and I can tell the Minister that we on this side of the House heartily hope that there will be nothing of the kind; nothing could be worse—then the Minister must take some of the responsibility. We are told that the Government have been thinking about this for years. We certainly know that noble Lords on the other side have been talking about it for years. In answer to a question a short while ago, the Prime Minister said that the Government had no immediate plans for the denationalisation, the deregulation, of the dock industry. Yet the national officer of the Transport and General Workers Union—who is out of the country at the moment—was told nothing about this. The Transport and General Workers Union had one and a half hours' notice that this Statement was being made. If that is not provocative, I do not know what is.
The Government now tell us that they are publishing a White Paper. They have not released the White Paper. I have attempted to obtain the White Paper from the Vote Office and I am told that it is embargoed. Why is it a White Paper? Why is it not a Green Paper? Why did the Government not investigate? I shall tell noble Lords why the Government did not investigate. It is because the last attack on the monopoly power of trade unions was investigated. The Government sent a request to the Monopolies and Mergers Commission that it investigate the monopolistic practices of the unions in the film and television industry. The verdict was not guilty. That is why they have not published that report. That is why there has been no investigation into this report. That is why the Government act as they do.
Lord Brabazon of Tara: My Lords, if I may, I shall quickly respond to the points made by the noble Lord, Lord McCarthy. I covered the point about why we had no Green Paper, and why we had no consultation, when I answered the questions of the noble Lord, Lord Rochester.
If there is to be a strike, so be it. We see no reason for strikes but we are prepared for them if that is the course that the dockers concerned decide lawfully to pursue. We believe individual dockers will come to understand that our proposals provide the basis for real security for most of them and substantial compensation for any who may lose their jobs following repeal.
They should also understand that the Government are now committed to repeal by the summer, through democratic parliamentary action, the laws that give the scheme force. The scheme's damaging restrictions, including their monopoly of dock work, would then cease immediately. I hope that dockers will recognise that strong productive ports, not the

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scheme, are the key to maintaining good employment conditions.
On the noble Lord's point about champagne suppers in the ports tonight, I have not heard of any and I have not yet been invited to any.
Lord Aldington: My Lords, as I have a past in this matter, is my noble friend aware that, perhaps rather surprisingly, I am wholly in agreement with the line that he has announced of action to be taken by the Government? As one who had the privilege of trying to make the old scheme work—at a time when the old scheme was necessary, and had the support of the then leader of the Transport and General Workers Union—I can testify to the difficulties and disadvantages, and to the effects from time to time on the Port of London and many other ports. As soon as conditions had become right, I was sure the time would come for the abandonment of this awkward and difficult scheme.
Is my noble friend aware—perhaps noble Lords forget these things—that the circumstances of 1972-73 when we were in difficulties with industrial relations were such that we had, by industrial agreement, to alter the very basis of the way in which that scheme was then working? It was possible to do so with the full agreement of the Transport and General Workers Union, even though some of the dock workers' section found it difficult to accept.
Will my noble friend perhaps think again about condemning the whole of the Transport and General Workers Union for obstinacy over this matter? Will he take it that in my experience the wider leadership of the Transport and General Workers Union—with members in Felixstowe and other non-scheme ports who were happy to be out of the scheme—would willingly listen to proposals by myself and by then government Ministers? In short, will my noble friend accept that I am delighted that a scheme based on entirely different conditions, not there today, which involved damaging casual labour, not there today, as my noble friend has said, will now be ended and all the ports will be put on level pegging?
4 p.m.
Lord Brabazon of Tara: My Lords, I am grateful for the remarks of my noble friend whose great experience goes back, of course, to the famous Aldington-Jones Agreement of 1972. I should emphasise that in referring to the Transport and General Workers Union I was quoting the national secretary of the docks, waterways and fishing group of the TGWU—the person who speaks for the scheme as such. Whether those views are held by all other members of the TGWU I do not know; I hope they are not.
Lord Campbell of Alloway: My Lords, I apologise for having jumped the gun in making one or two false starts. I have interested myself in this problem on more than one occasion in your Lordships' House. Will my noble friend accept that this Statement is very much welcomed by some of us on this side of the House, never mind what is said by Members from the Benches opposite who interest themselves in industrial relations? The Statement is a relief
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from the hangover of the days of Jack Dash when restrictive labour practices crippled the docks.
Will my noble friend agree that although the object of the scheme—the decasualisation of dock labour, as my noble friend has said—was necessary at the time, it is now totally otiose, totally irrelevant and insupportable? There is no question of provocation, as the noble Lord suggested from the Benches opposite. It is wholly insupportable. There is no need for consultation for something that has become manifestly out of date and irrelevant to its original purpose.
Will my noble friend agree that the attitude of the unions also compounds the situation? The Government are right to get on with it and to abolish a scheme that is rife with restrictive practices. The Benches opposite accept the Donovan Report as an objective assessment. Within the Donovan definition these restrictive labour practices, to which my noble friend has referred, unduly inhibit the efficient use of manpower. That is the Donovan definition. If that is right, it is time that the scheme went. Does my noble friend agree—I am sure he will—that the Government are much to be congratulated?
Lord Brabazon of Tara: My Lords, once more I am grateful to my noble friend who, I know, has taken an interest in this matter for very many years. He is right that the time has now come for it to be dealt with. It is no good pretending that there are no problems with the scheme at the moment. Every week we find another problem, be it fishing in Aberdeen, Grimsby or on the Clyde. There is never a time when there is not one issue or another boiling up.
Viscount St. Davids: My Lords, everybody knows that I have been an opponent of the clock labour Acts for a very long time. I was not always so. I strongly agree with the noble Baroness that these Acts were necessary at the time they were produced. The trouble is that times have changed. What is particularly noticeable is the difference in costs between a scheme port and a non-scheme port. I have many friends in the coastal and short transit trades. I have asked them again and again what is the cost difference between taking a ship into one or the other type of port. The figures that I have been given have varied. They have ranged on the lowest side from 7:3—in other words, double the price and more to take it into a scheme port—up to 10:1, which is totally prohibitive. Given such figures it becomes impossible for the scheme ports to continue. The only way they could go is down. Therefore I very much welcome the step that is being taken.
Lord Brabazon of Tara: My Lords, I am grateful to the noble Viscount for his reception of our proposals. I believe that when I repeated the Statement I said that employers estimate costs in scheme ports some 20 per cent. higher than they need be. I hope that when the scheme goes it will give the scheme ports the chance to get back on to a fair and competitive basis with the non-scheme ports.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that many Members on this side are concerned about the dock labour scheme? It may have defects; indeed some of us believe that the Government may be right. But we object to the lack of consultation with all the parties concerned. It is simply not good enough for the employers, the Government and perhaps others to say that the scheme is not working arid then bring forward legislation based simply on those statements. What we need surely—will the Minister say why this is not happening?—is a proper in-depth investigation of the scheme as it is presently operating to see whether there is a future for it or not. That is what is needed. I hope that the Government might, even at this stage, reconsider their position.
Lord Brabazon of Tara: My Lords, the noble Lord started with perhaps guarded support, as I thought, for the abolition of the scheme. When he has the opportunity of reading the White Paper that we have published he will see that there is every reason for the scheme to be abolished. As I have already said, the positions of those involved in the industry are clear and irreconcilable. The unions have stated repeatedly their attachment to the fundamentals of the scheme. They have regularly threatened national strikes in the event of any attempt to reduce the scheme's damaging restrictions. It is time, and it is the Government's duty, to take the necessary action through Parliament to abolish promptly the scheme and its statutes so that the disruption that any strikes may cause can be minimised.
Lord Campbell of Croy: My Lords, I congratulate the Government on their decision. The scheme is an anachronism and an incubus on those ports that have had to operate with it, putting them at a disadvantage in competition both at home and abroad. Will the Bill be introduced in time to resolve the worrying situation in Aberdeen where the fish and fish processing industries may have to move away or close down because of the combination of industrial action by the fish porters and the fact that Aberdeen is a scheme port and therefore the fishermen cannot land their own fish? This is an important dispute which involves the whole future of Aberdeen, and it is occurring at this moment.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend. We are well aware of the problem in Aberdeen. We have seen such problems in different ports throughout the country from time to time. It is notable that Aberdeen lost 20 per cent. of its business between 1977 and 1987 while Peterhead, outside the scheme, increased its business by 84 per cent. to twice the size of that of Aberdeen. I hope that the proposals we have announced today will enable Aberdeen once more to flourish in its rightful place as a fishing port.
Lord Cocks of Hartcliffe: My Lords, in view of what the Minister has said about the Transport and General Workers Union, does he mean that when in future the Government are contemplating changes of any kind only those whose views are not known will be consulted?
Lord Brabazon of Tara: My Lords, no, one must take each case on its merits. In my view the merits for action in this case are absolutely clear cut.
Lord Crickhowell: My Lords, is my noble friend aware that among those of us who have responsibility for the ports—I am a director of Associated British Ports—there will be a warm welcome for the announcement that he has made and firm support for the proposed measures. That is for the abolition of a scheme which is undoubtedly deterring investment in the ports, which is distorting competition not only between British ports but other ports and Continental ports and which is causing unjustified inequalities of treatment between different groups of people working in the same ports. May I express the hope that those who work in the non-scheme ports will take full account of the considerably enhanced opportunities that will now arise in those ports as a result of the Government's measures before they take any rash decisions about strike action?
Lord Brabazon of Tara: My Lords, I hope that my noble friend's advice will be heeded. He is right in saying that we wish to put our ports in a competitive position to deal with competition not only between non-scheme ports in this country but also with the near Continental ports. I hope that the measures that we have put forward today will allow our traditional scheme properly to compete once again.
Lord Callaghan of Cardiff: My Lords, with the condemnation of the scheme which has been expressed time after time from the Benches opposite, is it not appropriate that we should remember —and those of us who put the Bill through the House of Commons 40 years ago will remember—that it ended a system of corruption, nepotism, harsh brutality and arbitrary behaviour by port employers and introduced one which gave back self-respect to many docks families who I had the honour to represent for many years?
I agree with the noble Lord that the scheme may need changing as a result of changing circumstances. However, should not the Minister and those now responsible recall that the docker is probably the most independent-minded, lively and bloody-minded man you can get? Are the Government being wise and sensible in taking the word of the National Docks Officer that they do not want this scheme to end—and that is a natural and inevitable response—and saying, "For that reason we shall not consult. We shall not see what changes can be made"? Would it not be the path of wisdom for the Government to neglect what has been said by the National Docks Officer, who is not the only official in the Transport and General Workers' Union, and to consult the union as a whole?
One of the difficulties that the TGWU has always had is that on occasions dockers are bloody-minded, and rightly so. Considering their history, I have no quarrel with them over that. However, the union tries to ensure that it obtains a policy which is in the best interests of the dockers. I suggest to the Government in all sincerity that they would be

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wise to go back on the belief that they now know the answer and have no need to consult.
Has not the Minister pinned his belief on the fact that there will be little or no casual employment in the docks? The test will be whether that statement is true. Whether or not it is true, he should now consult the Transport and General Workers Union and at least put himself on the moral high ground if there is a strike. I fervently trust that the dockers will not strike and urge them not to do so; but if they do so at least he will have an excuse if he has tried to consult their views on the matter.
Lord Brabazon of Tara: My Lords, I accept what the noble Lord has said about the scheme as it existed 40 years ago, but times have changed. We do not see a return to casualism. There is little casualism in the non-scheme ports, which carry out 30 per cent. of our business. I gather that it is 6 per cent., which is roughly the same as in many other industries.
There is no tinkering which can be done to the scheme. It has been tinkered with over the years since 1946 but none of those tinkerings have resulted in anything better. The time has now come when registered dock workers in scheme ports should be put on the same basis under the same employment laws and have the same privileges as ordinar employees both in the non-scheme ports and in industry as a whole.
Lord Belstead: My Lords, I suggest that the House has had a good go around the course and that we should now return to the Companies Bill.

Companies Bill [H.L.]
4.15 p.m.
Consideration of amendments on Report resumed.
The Deputy Speaker (The Earl of Listowel): My Lords, before I call the next amendment I should point out to the House that if it is agreed to I cannot call Amendment No. 140.
Clause 81 [The companies' changes register]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 139C:
Page 76, line 6, leave out from ("seal") to end of line 7 and insert—
("(4A) The certificate shall be conclusive evidence that the specified particulars or other information were delivered to the registrar no later than the date stated in the certificate; and it shall be presumed unless the contrary is proved that they were not delivered earlier than that date.").
The noble Lord said: My Lords, the amendment fulfils a commitment made in Committee. It would produce a certificate that would be conclusive that particulars were delivered no later than the date shown. The certificate would not be conclusive that the particulars themselves were accurate or complete. It would fall to the chargee to ensure that they were. It would fall to prospective assignees to check the particulars for accuracy against the
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instrument if they wanted to be confident that the charge being offered to them was fully effective. But the certificate would provide all the protection to the chargee that he needs in respect of conclusivity as to the date of delivery. Moreover, the chargee would have the additional benefit of being able to show that he had delivered his particulars earlier if he has the evidence to do so.
The amendment tabled in the names of the noble Lord, Lord Lloyd of Kilgerran, and my noble friend Lord Mottistone would go a little further than the Government amendment but not much. It would provide a certificate that was conclusive of the facts stated; namely that specified particulars were delivered on the dates stated in the certificate. So while the Government amendment allows a challenge on the grounds that the particulars were delivered earlier, the other amendment does not. Therefore the difference of effect between the amendments is solely that that tabled by the noble Lords would not allow the chargee to prove that, in spite of the assertion of a registrar, his particulars were delivered on time and his charge is therefore valid.
I suspect, however, that in the light of the discussion in Committee on this subject, the intention of the amendment tabled by the noble Lords is somewhat different. They may wish to argue that the certificate should be conclusive not only of the date of the delivery but also that all other requirements of registration have been met. I dealt with this argument at some length in Committee. Rather than repeat what was said then, I believe that it is best to hear what is said in support of the other amendments. All that I say at this stage is that I believe that the Government's amendment is preferable to the other one for the reasons that I have given. It will afford the chargee the right to prove that he delivered his particulars on time. We believe that the chargee should have that right.
Lord Mottistone: My Lords, the amendment is grouped with my Amendment No. 140. It is the same as that tabled by the noble Lord, Lord Lloyd of Kilgerran, in Committee. The amendment which I then tabled was heard in conjunction with it. This general matter must be taken in the round as between the various answers.
I appreciate that the Minister has taken the steps which in Committee he said he would and has considered the matter and come back with an amendment. He has made some concession toward the viewpoint which was expressed in Committee. However—and I listened as carefully as I could to what my noble friend said—I do not believe that his amendment meets the point. It really does not go far enough. Therefore, I believe that my Amendment No. 140 is more on the right track.
Amendment No. 139C does not make any provision for the legal status of the certificate other than the date on which the charge was delivered. I suggest to my noble friend that it is important that it should make provision for the text of the certificate as well as for the date, and I do not understand, notwithstanding what my noble friend said, why he does not seek to do that.

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I believe that perhaps this could be thought of as part of a piecemeal alteration to the constructive notice, the duties of the registrar and the conclusiveness of the charge certificate. I should like to suggest—and I remind your Lordships that I am advised by the CBI on what I say and I believe that the Law Society has a similar view—that we do not take this matter to a conclusion at this stage but that the whole matter should be considered as part of a coherent whole when the Diamond Report is reviewed. In the meantime perhaps my noble friend will accept my amendment as being the best approach at present, with which I believe noble Lords opposite agree, although that may be asking too much of him, or give me an undertaking that he will consider the matter further in view of what I say now and what I suspect other noble Lords will say. Perhaps he will either come forward with another amendment or reconsider our amendment at the next stage of the Bill in this House or he will give a firm enough undertaking to assure us that the matter will be resolved in the right direction when the Bill goes to another place.
I am sorry to repeat myself. However, the main point is that I do not believe that my noble friend's answer showed sufficient understanding of the need for the comprehensive nature of this particular clause in relation to its subject and the fact that his amendment only does half and not the whole job. I hope that when my noble friend has heard what other noble Lords have said, he will come up with something which is encouraging.
Lord Carter: My Lords, in speaking to these two amendments perhaps I may first thank the Minister for his kind remarks about my involvement with the Bill. I am sure he will agree with me that there could be no happier or more enjoyable part of the Bill to deal with than Part IV dealing with the registration of company charges.
Lord Hacking: My Lords, or more complicated.
Lord Carter: My Lords, as the noble Lord said when he spoke to his amendment and the noble Lord opposite said, concern was expressed in Committee about the uncertainty. Everybody concerned with the Bill agrees that legal certainty must be paramount in the operation of the register of company charges. In Committee my noble friend Lord Mishcon pointed out that it is absolutely necessary to have the registrar's certificate as conclusive evidence. Anybody dealing with commerical law will appreciate that at once.
Perhaps I may deal with the point raised by the noble Lord, Lord Mottistone, about the particulars of the charge. One must have certainty of transactions in, for example, the assignment of charges or the issue of debentures secured by a charge and generally avoid liquidators and administrators having to challenge validity as against another charge on the ground that the date appearing on its face is a later date then the date of its creation. The Minister undertook to return on Report with an amendment which makes the certificate conclusive evidence that
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particulars were delivered no later than the date stated. Therefore, the argument seems to turn on the word "conclusive".
In the dictionary "conclusive" is defined as decisive and "conclusion" is to come or bring to an end; it is the final point. The amendment standing in the names of the noble Lords, Lord Lloyd of Kilgerran and Lord Mottistone, makes the certainty clear beyond any doubt. There is no presuming to the contrary or anything of that sort. Their amendment inserts the word "conclusive" full stop. That could not be clearer. When the Minister spoke to his amendment he said that he did not think that the amendment in the name of the other noble Lords went much further than the government amendment. However, it surely does. It is conclusive both as to the date and particulars of the charge. For that reason, on this side of the House, we support the amendment in the name of the two noble Lords.
Lord Lloyd of Kilgerran: My Lords, the Minister welcomed the noble Lord, Lord Carter, to the Front Bench to deal with these matters. It now falls upon me, as a matter of courtesy, to congratulate him on his maiden speech in a position in which the noble Lord, Lord Williams, and myself have found ourselves for such a long time, trying sometimes to move what is almost an immoveable object in relation to company law matters. I hope that the Minister will not misunderstand me but we have pressed a large number of amendments. We have had some success and I am sure that the presence of the noble Lord, Lord Carter, will increase our chances of success.
Perhaps I may remind your Lordships that we are now dealing with Clause 81 where it is laid down that:
"The registrar shall keep for each company a register, in such form as he thinks fit, of charges in the property of the company".
In Committee this was considered at great length on 14th February. As the noble Lord, Lord Mottistone, said, it was emphasised on behalf of the CBI and the Law Society how necessary it was to have certainty. Therefore, the amendment in my name and that of the noble Lord, Lord Mottistone, introduces that certainty by saying that one should omit from government Amendment No. 139C that something shall be presumed to be correct unless the contrary is proved, giving an air of uncertainty, and insert instead the word "conclusive". Once that has been done it is not a question of proving anything further. That is taken as conclusive.
The noble Lord said in Committee that he would take away the amendment and prepare another amendment, and in some respects this is a change in the original form in the Bill. However, perhaps the Minister will have regard to the views of so many noble Lords in this House and also those who advise them. The Minister says that, as he promised in Committee, he has gone a long way in his amendment but that the difference between his amendment and our Amendment No. 140 is not much. Can he not go just that "not much" further, particularly having regard to the views of the CBI and the Law Society which really know what they are talking about on this particular matter. They

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realise that certainty is very important in dealing with these questions relating to the register.
Lord Strathclyde: My Lords, I am grateful to my noble friend Lord Mottistone and the noble Lord, Lord Lloyd of Kilgerran, for explaining the intention behind their amendment, although I am sorry that neither accepted what I said in my opening remarks concerning my amendment. Without going into the matter at the same length as I did in Committee, I will explain to the House the reasons the Government do not believe that a certificate that is conclusive of all matters is desirable. I think this will answer the questions put by the noble Lord, Lord Carter.
The first point is that such a certificate would not be possible under the new system in Part IV of the Bill. Part IV allows for the possibility of errors and omissions in particulars delivered. There are therefore no comprehensive requirements in relation to the validity of a charge upon which the certificate could be conclusive.
There are, however, more important arguments of principle against a fully conclusive certificate. Where a certificate is issued in respect of incorrect particulars due to clerical oversight at Companies House, the chargee is nevertheless protected to the detriment of third parties who are misled when searching the register. The holder of a fully conclusive certificate has no incentive whatsoever to update the register to reflect any changes to the terms of the charge. This is the fundamental flaw of the present system. It results in a register that is frozen in time and is therefore unreliable. Moreover, both the Jenkins Company Law Committee in 1962 and Professor Diamond in his recent report have said that the duty of issuing a fully conclusive certificate places an unreasonable burden on the registrar. Both recommended that the certificate should be dispensed with.
The Government are not convinced by the argument that there is a need for a fully conclusive certificate in order to ensure the legal certainty and thereby marketability of charges. Those to whom a charge is being assigned need only check the particulars that have been delivered against the instrument of the charge. What the noble Lords are suggesting is that the registrar should continue to carry out this activity on behalf of the commercial world. Therefore, it is hardly surprising that the CBI should want this done. In summary, the fully conclusive certificate renders the register of charges incomplete and out of date.
4.30 p.m.
Lord Lloyd of Kilgerran: My Lords, I thank the noble Lord for giving way. He says that I am proposing an amendment which is concerned only with commercial matters. Is he just throwing aside the powerful views of the CBI and the Law Society in practical matters of a commercial nature?
Lord Strathclyde: No, my Lords; of course not. I should point out, however, that those most recent words were dealing with only one point. I have dealt at considerable length with a whole range of other points raised by the noble Lord. Although I said
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that ostensibly there is not much between the two amendments now before us there is a fundamental gap between what the Government propose and what my noble friend and the noble Lord, Lord Lloyd of Kilgerran, propose.
In summary, the fully conclusive certificate renders the register of charges incomplete and out of date. It imposes a task on the registrar that the commercial world should undertake and it is inequitable in that it protects chargees from their own failings while making innocent third parties suffer. I would ask noble Lords to consider these arguments carefully. I would also add that officials have discussed this matter with the Law Society, which expressed concern in its memorandum on the Bill. It appears that it is not suggesting that the certificate should be conclusive in all matters. Its concern is that it should not be possible to challenge the date of creation as stated on the charge instrument. This is a separate matter which we are considering. I believe that with the government amendment we are going as far as is right in order to meet the concerns of noble Lords.
Lord Williams of Elvel: My Lords, before the noble Lord sits down, perhaps I may be allowed to ask him three questions on the substance of what he has said. First, is it the case that the whole of Part IV would have to be altered, as he seemed to imply, if the certificate were made conclusive in the way that the amendment of the noble Lords, Lord Mottistone and Lord Lloyd of Kilgerran, propose? Secondly, is it just a question of clerical oversight—the word used by the Minister—if the register is wrong in some way and that this is a problem that damages the certificate? Thirdly, is it right to say that business will be prejudiced just because there is an unreasonable burden on the registrar? After all, the registrar is a publicly funded body which exists to help business. Is that what the noble Lord is really saying?
Lord Strathclyde: My Lords, I indicated not so much that Part IV would have to be rewritten but that if conclusivity was required of the certificate it would not be possible under the new system in Part IV. Therefore, the basic premise that the noble Lord makes is right in that it would have to be entirely rewritten. Secondly, on the aspect of clerical oversight, the point is that if there is a clerical oversight innocent third parties would be in trouble because the chargee would be protected under the terms of existing law. The certificate does not allow the register to be updated and therefore it is not just a matter of clerical oversight.
Lord Mottistone: My Lords, before my noble friend sits down, in view of the fact that if his amendment is accepted my amendment cannot be called perhaps I may make a concluding remark about my reading of it, having heard what my noble friend had to say. I do not think that the matter is resolved. I do not like my noble friend's amendment but my inclination is to let it ride with the firm intention of coming back to amend it at the next stage of the Bill, having taken into account all that has been said.
4.37 p.m.
On Question, Whether the said amendment (No. 139C) shall be agreed to?
Their Lordships divided: Contents,105; Not-Contents, 64.

DIVISION NO. 1

CONTENTS

Abinger, L.

Jenkin of Roding, L.

Airey of Abingdon, B.

Johnston of Rockport, L.

Aldenham, L.

Joseph, L.

Allenby of Megiddo, V.

Long, V.

Ampthill, L.

Lucas of Chilworth, L.

Arran, E.

McAlpine of Moffat, L.

Ashbourne, L.

Mackay of Clashfern, L.

Balfour, E.

Macleod of Borve, B.

Beaverbrook, L.

Marley, L.

Belhaven and Stenton, L.

Maude of Stratford-upon-Avon, L.

Beloff, L.

Belstead, L.

Melville, V.

Bessborough, E.

Mersey, V.

Birdwood, L.

Milverton, L.

Blatch, B.

Morris, L.

Boyd-Carpenter, L.

Munster, E.

Brabazon of Tara, L.

Murton of Lindisfarne, L.

Brougham and Vaux, L.

Nelson, E.

Caithness, E.

Norfolk, D.

Campbell of Alloway, L.

Norrie, L.

Campbell of Croy, L.

Nugent of Guildford, L.

Carnock, L.

O'Brien of Lothbury, L.

Cathcart, E.

Onslow, E.

Clitheroe, L.

Orkney, E.

Coleraine, L.

Oxfuird, V.

Constantine of Stanmore, L

Pennock, L.

Cottesloe, L.

Peyton of Yeovil, L.

Crickhowell, L.

Porritt, L.

Cullen of Ashbourne, L.

Reay, L.

Davidson, V. [Teller.]

Renton, L.

Denham, L. [Teller.]

Renwick, L.

Dundee, E.

Rodney, L.

Elles, B.

Saint Brides, L.

Elliot of Harwood, B.

St. Davids, V.

Erne, E.

St. John of Fawsley, L.

Faithfull, B.

Saltoun of Abernethy, Ly.

Fortescue, E.

Shannon, E.

Fraser of Carmyllie, L.

Sharples, B.

Fraser of Kilmorack, L.

Skelmersdale, L.

Gardner of Parkes, B.

Stockton, E.

Gibson-Watt, L.

Strathclyde, L.

Greenway, L.

Swansea, L.

Haig, E.

Teviot, L.

Hailsham of Saint Marylebone, L.

Thomas of Gwydir, L.

Thomas of Swynnerton, L.

Halsbury, E.

Trafford, L.

Havers, L.

Trefgarne, L.

Hemphill, L.

Trumpington, B.

Henley, L.

Ullswater, V.

Hesketh, L.

Vaux of Harrowden, L.

Hives, L.

Westbury, L.

Home of the Hirsel, L.

Wise, L.

Hooper, B.

Yarborough, E.

Hylton-Foster, B.

NOT-CONTENTS

Addington, L.

Chitnis, L.

Airedale, L.

Cledwyn of Penrhos, L.

Amherst, E.

Cocks of Hartcliffe, L.

Ardwick, L.

David, B.

Aylestone, L.

Diamond, L.

Blease, L.

Dormand of Easington, L

Bonham-Carter, L.

Elwyn-Jones, L.

Brain, L.

Ennals, L.

Briginshaw, L.

Ewart-Biggs, B.

Carmichael of Kelvingrove, L.

Ezra, L.

Falkland, V.

Carter, L.

Gallacher, L. [Teller.]

1216

Galpern, L.

Molloy, L.

Gladwyn, L.

Mottistone, L.

Graham of Edmonton, L. [Teller.]

Mulley, L.

Murray of Epping Forest, L.

Grantchester, L.

Ponsonby of Shulbrede, L.

Grey, E.

Rochester, L.

Hacking, L.

Seear, B.

Hampton, L.

Serota, B.

Harris of Greenwich, L.

Shackleton, L.

Hatch of Lusby, L.

Shepherd. L.

Hayter, L.

Stallard, L.

Hutchinson of Lullington, L.

Stedman, B.

Kirkhill, L.

Stoddart of Swindon, L.

Listowel, E.

Strabolgi, L.

Llewelyn-Davies of Hastoe, B.

Tordoff, L.

Turner of Camden, B.

Lloyd of Kilgerran, L.

Underhill, L.

Lockwood, B.

Wallace of Coslany, L.

Lovell-Davis, L.

Wedderburn of Charlton, L.

Macaulay of Bragar, L.

Williams of Elvel, L.

McNair, L.

Winchilsea and Nottingham, E.

Mishcon, L.

Resolved in the affirmative, and amendment agreed to accordingly.
4.46 p.m.
[Amendment No. 140 not moved.]
Lord Strathclyde Lord Strathclyde moved Amendment No. 140A:
Page 76, leave out lines 8 to 13 and insert—
("(5) A person shall for any purpose connected with a company's property be taken to have notice of any matter disclosed on the register if he ought for that purpose to have inspected the register; and a person who for value acquires a charge over a company's property ought to inspect the register immediately before the charge is acquired.
This is without prejudice to the operation of section 198 of the Law of Property Act 1925 as it applies by virtue of section 3(7) of the Land Charges Act 1972 (under which the registration under this Act of certain land charges is deemed to constitute actual notice for all purposes connected with the land affected).").
The noble Lord said: My Lords, when we discussed new Section 397(5) in Committee, I said that we intended to omit it on Report because of the more general provision that is now in Clause 101. Since then, however, we have come to the view that the same effect can be more clearly achieved by retaining and amending Section 397(5).
New Section 397(5) and Clause 101 amend the doctrine of notice as it applies to the register of charges and to all documents disclosed by the registrar and companies. There is a prevailing view that such disclosure amounts to notice to the whole world of the information disclosed. The two provisions in the Bill will narrow that, so that only those who ought reasonably to inspect the register or the documents are to be taken to have notice.
The reasons for retaining and amending new Section 397(5) is that it is important that there should be no doubt that a person who acquires security over a company's property should be taken to have notice of information on the register of charges. In almost all cases it is likely that the courts would decide that such a person ought reasonably to have searched the register and should, therefore, be fixed with notice, but it is desirable that there should be certainty on this matter. In particular, it is necessary if negative pledge clauses in floating charges are to be effective as against subsequent charges. The question of negative pledges was one

1217
upon which the noble Lord, Lord Williams, tabled an amendment in Committee, which he withdrew when I assured him that the Government would be meeting his concerns on that matter. Without the amendment to new Section 397(5), some subsequent chargees might not have notice of the existence of negative pledge clauses disclosed in the prescribed particulars and, therefore, on the register. The clause would not be effective against them as a result. I beg to move.
Lord Hacking: My Lords, mention has already been made this afternoon of the work of the company law committee of the Law Society. So far during the Bill's passage I am afraid that I have not done justice to that committee's work. It did, as the Minister and noble Lords on the other side of the House will know, an immense amount of work in preparing detailed memoranda which it presented to all those who were concerned in the shaping of the Bill's provisions. More than that, the committee presented subsequent memoranda and attended a number of meetings in a full effort to co-operate, if I may say so, with the Minister's officials.
One of the memoranda it recently presented concerned Section 397(5) of the Companies Act 1985. It presented that memorandum recently (on 22nd March of this year) and commented in it on the earlier draft of this amendment. As a result the Government have picked up some of the points of concern of the Law Society. I should like therefore to express my gratitude to the Government for doing so. However, there is still concern in the Law Society about the drafting of this subsection of new Section 397. The subject is very technical but I shall try to explain why the Law Society is still concerned about the drafting.
New Section 397(5) has the effect of reversing the well established principle that while a person is to be deemed to have notice of the existence of a charge which has been registered by the registar of companies, he is not deemed to have notice of any special restrictions imposed by the charge on the ability of the chargor to deal with its property: for example, a negative pledge imposed by the charge, which was a point taken by the noble Lord, Lord Williams, in Committee. This has been a well established principle of law since the early part of this century. It arose in the case of Wilson v. Kelland. The Government are perfectly entitled to take a different view and to reverse this well established principle. Indeed the Law Society is expressly not opposed to a change in this principle and has actually expressed support for the Government's proposal, based on a recommendation of Professor Diamond, that negative pledges should be registrable at the companies registry.
The Law Society is concerned about the extent of the change to be introduced by the proposed new subsection (5). The Law Society has recommended that the only person who should be treated as having notice of a negative pledge, which appears on the companies charges register at the companies registry, is a person who takes a subsequent charge over the company's property, being, of course, a charge which is itself registrable with the registrar of companies.
1218
Someone who takes a subsequent charge which is not so registrable may well not think to make a search at the Companies Registry before he takes his security. This is particularly so in the case of a person lending money or providing credit against the security of a pledge—for example, where the lender takes physical possession of goods or a document of title to goods by way of security. If the security taken by such a person could be defeated by the holder of a prior floating charge which prohibits the creation of a subsequent charge—but which in practice leaves the chargor free to deal with the goods as he so wishes—this could create commercial confusion.
The problem also revolves around the definition of "charge" in subsection (2) introduced by Clause 80 of the Bill. The question could be put in this way. Does the expression "charge" in new Section 397(5) mean a charge which is registrable under Part XII of the Companies Act 1985 or is it intended to cover all charges, other than charges arising by operation of law which are excluded by new Section 396(3)? This is a complicated matter. I shall raise only one further point of concern.
The proposed Section 397(5) says that a person who for value acquires a charge over a company's property shall be taken to have notice of,
"any matter disclosed on the register".
I quote from the Minister's amendment. Unless a limit is imposed on what restrictions can be registered—this is apparently to be dealt with by statutory instrument—it may lead to all kinds of restrictions being registered, not just those affecting property already charged by the company, in the hope that the restriction could be enforced by an action for inducement to breach of contract against, first, a subsequent chargee by virtue of his having constructive notice of the restriction; and, secondly, against anyone else who searches the register and who acquires actual notice of the restriction. This would seem to go beyond the protection which ought to be provided by a public register of company charges.
It is impractical for a person about to take a charge over a company's property to inspect the register immediately before the charge is acquired. This will create uncertainty and could result in a delay between taking a charge and advancing money on the security of the charge because it will encourage lenders to take a charge, then search and then lend rather than to risk advancing money at the time of the creation of the charge. It is never satisfactory to try to draft a clause on the Floor of the House. However, if the Minister were prepared to consider replacing the words "acquires" and "acquired" by the words "takes" and "taken", we would go some way to meet the concern of the Law Society.
The Minister can take a number of different courses at this stage. In view of the complications which I have tried to explain I wonder whether it would not be more sensible for the noble Lord to take away the amendment and to have further discussions with persons from, for example, the Law Society, upon the reality of the commercial implications of these proposals. I invite the Minister to take that course.
Lord Carter: My Lords, I have little to add to the remarks of the noble Lord, Lord Hacking. That is hardly surprising because both of us received the same brief from the Law Society. I have two questions and one or two points on drafting. In what form will the right to register negative pledges be restricted? It is only to permit the registration of undertakings by the chargor to restrict its right to create a further charge over the same property as that which is charged under the charge which contains the restriction. In what form will this be done?
Is it correct that the proposed new Section 397(5) will ensure that any charge created after the creation of a floating charge containing a negative pledge will be subject to and therefore rank behind a floating charge in an insolvency? Perhaps I could add to the point made by the noble Lord, Lord Hacking, about the definition of a charge. I emphasise the importance of obtaining an answer to the question. Does the expression "charge" in new Section 397(5) mean a charge which is registrable under Part XII of the Companies Act 1985, or is it intended to cover all charges other than those charges arising by the operation of law which are now excluded by new Section 396(3)?
I have a final point on the drafting of the amended clause. It is curious that it is in two parts. The first part is clear. It says:
"A person shall for any purpose connected with a company's property be taken to have notice of any matter disclosed on the register if he ought for that purpose to have inspected the register".
That is clear enough. It continues:
"and a person who for value acquires a charge over a company's property ought to inspect the register immediately."
That is legislation by admonition. It seems a curious way to draft the clause although I understand the intention behind it. It is up to the Minister to meet the concerns expressed by the Law Society and to be prepared to take this amended clause away and come back at the next stage of the Bill.
Lord Lloyd of Kilgerran:My Lords, I was involved with this amendment in Committee and it seems that the noble Lords, Lord Hacking and Lord Carter, are better instructed than I am. I have in my hands a letter from the Law Society dated 31st March which says that the society has had discussions with the Minister's department and hopes to be able to persuade it that the amendment should be changed as suggested in the paper. Failing that it proposed to put forward an amendment and ask a Member of the House of Lords to put down an amendment. I have not seen an amendment to this effect. Therefore when I found attached to my papers a copy of the amendment which is now put forward by the Government I was prepared to say that I accept it.
Lord Strathclyde: My Lords, both the noble Lords, Lord Hacking and Lord Carter, mentioned the definition of "charge". "Charge" is defined in new Section 395(2) as a registrable charge. Furthermore, the negative pledges, about which the noble Lord, Lord Carter, was worried, will be registered by way of the prescribed particulars. The effect of this combined with the rule on notice is that subsequent charges would rank behind in priority to the floating charges.
Lord Williams of Elvel: My Lords, perhaps I may clarify one point. If the registrar's certificate is not to be conclusive on particulars, how do we know whether the negative pledge is properly registered?
Lord Strathclyde: My Lords, perhaps I may come to that point in a moment. In the majority of cases it would be reasonable to expect those taking security over a company's property to inspect the register. They would therefore, even without the amendment, be fixed with notice except where they can reasonably be expected to have searched the register for some other purpose. The Government agree that those who acquire security that arises by operation of law should not be taken to have notice. It is possible that the amendment does not deal with that point adequately and it is something which we continue to discuss with the Law Society, as the noble Lord, Lord Lloyd of Kilgerran, said.
It has also been argued that those who acquire other types of security, such as pledges, or who take charges which are not registrable should not be deemed to have notice. The Government are not yet persuaded about that argument, but naturally we shall consider the point.
The Government are aware that the question of notice is a highly complex one which has to date been determined under common law. During previous discussions in Committee, noble Lords expressed concern about the drafting of the new Section 397(5). As I have already said, and indeed as the noble Lord, Lord Hacking, also said, there have been substantial representations from the Law Society. Moreover, we continue to have discussions with the society. It is vitally important that we should get the drafting of the provisions right, so I shall be happy to look at the comments which have been made today and to consider them in the context of our discussions with the Law Society. With that assurance, I hope that the House will feel able to accept the amendment, although, as I said, we shall continue to look closely at the situation.
5 p.m.
Lord Williams of Elvel: My Lords, before the noble Lord sits down, can he say whether his assurance includes an undertaking to bring forward something better on Third Reading?
Lord Strathclyde: My Lords, I must say that we have no definitive plans to put forward any further amendment on Third Reading. The timetable for discussions with the Law Society would not enable us to prepare an amendment in time. However, this is indeed a complex area of the law and we are prepared to be persuaded that we have not as yet got the matter right. It is therefore important that we take the time to prepare proper amendments, should they be needed.
Lord Hacking: My Lords, before the Minister sits down, would he perhaps consider the matter the other way around? Would he be prepared, for example, to receive an amendment drafted by the Law Society and tabled by a noble Lord for Third Reading?
Lord Strathclyde: My Lords, it is up to any noble Lord to move whatever amendment he may receive from the Law Society. I think that I have made the Government's position quite plain. We continue to hold discussions with the Law Society on the point and we are more than happy to continue such discussions. When the discussions have been concluded, we shall do whatever needs to be done.
Lord Carter: My Lords, I am sorry to intervene, but before the noble Lord sits down can he say whether he has tried to deal with the last point made by the noble Lord, Lord Hacking, about the changing of the words "acquires" and "acquired" to "takes" and "taken"? It seems to me that that is the sort of undertaking which he could give now.
Lord Strathclyde: No, my Lords. I am not willing to give any undertaking other than the one which I have already given. I have said that we are continuing to discuss the situation. My wish is that the amendment put forward by the Government should be accepted, on the basis that we are still considering what the Law Society is proposing.
Lord Hacking: My Lords, I am sorry to intervene yet again, but what is proposed— —
Lord Mottistone: My Lords, it should be remembered that this is the Report stage; we have not yet reached the Committee stage.
On Question, amendment agreed to.
Clause 82 [Duty to deliver particulars for registration]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 140B:
Page 77, line 4, leave out ("on") and insert ("over").
The noble Lord said: My Lords, in moving Amendment No. 140B I shall speak also to Amendment No. 140C. These amendments improve the drafting of new Sections 399 and 400. It is more correct to talk of security over a company's property rather than security on a company's property. The amendments do not change the effect of the new sections. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 140C:
Page 77, line 36, leave out ("on") and insert ("over").
On Question, amendment agreed to.
Clause 83 [Delivery of further particulars]
Lord Strathclyde Lord Strathclyde moved Amendment No. 140D:
Page 78, line 35, leave out from ("registration") to end of line 38 and insert (", then, if—

(a) they appear to him to be duly signed, or

(b) they are accompanied by an office copy of a court order authorising their delivery without a person's signature and appear to him to be otherwise duly signed,

he shall file the particulars in the register, together with any such office copy, and shall note, in such form as he thinks fit, the date on which the particulars were delivered to him.").

The noble Lord said: My Lords, under new Sections 401 and 403, further particulars and
1222
memoranda of satisfaction or release may be delivered only if signed on behalf of both the company and the chargee. Alternatively, if either person refuses to sign, cannot be found, or, in the case of a body corporate, has been dissolved, the court may order delivery in the absence of his signature. At present, the new sections are vague as to the duties of the registrar when he receives further particulars or memoranda. The amendments make it clear that he shall file them only when they appear to be properly signed or when he receives an office copy of a court order authorising delivery. I beg to move.
Lord Carter: My Lords, I should just like to say that we on this side of the House feel that the contents of the amendment are clearer than those in the Bill. We understand the reasoning behind the amendment and it is something which we welcome.
On Question, amendment agreed to.
Clause 84 [Effect of errors and omissions in particulars delivered]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 140E:
Page 79, line 35, after ("in") insert ("or right over").
The noble Lord said: My Lords, this amendment is part of a group of amendments agreed in Committee which made an incorrectly registered charge void against those with rights over property as well as those with an interest in it. That was necessary to preserve the effect of the 1985 Act. We omitted, however, to table a similar amendment to new Section 402, where the change is also necessary. The current amendment puts right the omission. I beg to move.
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 140F:
Page 80, line 5, leave out ("mis-stating") and insert ("mis-spelling").
The noble Lord said: My Lords, we now turn to consider Clause 84, which is concerned with the effect of omissions and errors in particulars delivered. It is a long clause consisting of a whole page which states what can be done to deal with errors and omissions in the particulars delivered. Subsection (6)(b) is rather extraordinary because it says:
"References to the particulars being complete are to their including all the prescribed particulars, but particulars shall not be regarded as incomplete or inaccurate by reason only of their omitting or mis-stating the name of the chargee".
There was therefore a considerable amount of discussion on the matter in that if you m is-state the name of the chargee it is a fundamental matter. For instance, if the name of the chargee is put down as Carter where it should have been Lloyd, surely it is then a matter of fundamental importance. Consequently, in the course of the discussions, I suggested that instead of having the word "mis-stating" we should have the word "mis-spelling", or a word to that effect.
However, if there was just an error whereby half my name and half Lord Carter's name was put down,

1223
then we could understand such confusion. Indeed, if it were the mis-spelling of a name then it would be a different matter. But it seems to me that we cannot accept this clause without suggesting that the word "mis-stating" should be removed and replaced by another word such as "mis-spelling". I beg to move.
Lord Carter: My Lords, as the noble Lord, Lord Lloyd of Kilgerran, said, there was considerable debate on this matter in Committee. Members of the Committee clearly felt then that there was a material difference between mis-stating the name of the chargee and mis-spelling it. Indeed, I had intended to use the example given by the noble Lord. If, for example, the name of the chargee is Carter and the particulars quote the name of Strathclyde, I would regard that as a serious mis-statement.
On the other hand, if the name of the chargee was given as Brown without an "e", whereas the correct name was Browne, then that is clearly a mis-spelling. Another example would be Smith with an "i" instead of Smythe. In my view there is a serious point at issue here. It is not just a question of semantics. I see that in Committee on 14th February the Minister said (at col. 154 of Hansard):
"The result of this is that a charge will not become void as a result of either an error in identifying the chargee in the original particulars or a change in the identity of the chargee after the particulars have been delivered".
Of course one can understand that. The Minister went on:
"Without this exception, the whole charge might become void because of a simple and possibly quite minor mistake in respect of the chargee's name in the original particulars".
A minor mistake in the chargee's name, to call him Mr. Smith instead of Mr. Brown, is not just a mis-statement. It is a serious error. The suggestion that the word should be "mis-spelling" to make the intention of the clause entirely clear is a good one.
Lord Morris: My Lords, I believe that the amendment is unnecessary. Surely, "mis-stating" embraces "mis-spelling". It also gives rise to a difficult problem; namely, the common law with regard to a name. As I understand it the correctness in law of a name is the name by which that person is known. Thus it can be different according to different people in different circumstances and for different purposes. The merit of the drafting of the Bill is that "mis-stating" would in fact embrace all these extremely difficult and rather arcane matters.
Lord Strathclyde: My Lords, I do not believe that there is a great deal of difference between what noble Lords opposite want and what the Government want. However, I believe that there is a fundamental misunderstanding of what the Government are doing here. The Government have looked carefully at the arguments made by noble Lords opposite in Committee with regard to the application of the avoidance sanction where the name of the chargee is omitted or mis-stated. First, it was suggested that a charge might be invalid if it was not executed by the chargee. There are all sorts of reasons why a
1224
charge might be defective, though that is not one of them. But the question of whether the charge is ineffective for some other reason has nothing to do with the extent to which it should be void because of an error in the particulars delivered to Companies House.
Secondly, it was argued that the status of the chargee was an important item of information. The suggestion was that a searcher of the register would attribute more importance to a charge taken by the Bank of England than by the lowest citizen of the land. But the financial stability of the lender has nothing to do with the validity of the charge. The law is not cut according to the pocket of the litigant.
As I said in Committee, the identity of the chargee is not a matter which affects the nature and extent of the rights conferred by a charge. The identity is relevant to a prospective creditor only for the administrative purpose of ascertaining details which are not required to be disclosed in the registrable particulars, such as the amount of the debt outstanding, or (at present) whether a floating charge has crystallised. Since, therefore, the identity of the chargee does not affect the rights conferred by the charge, the mis-statement of this information should not have the effect of invalidating the rights conferred by the charge. In principle, therefore, the Government disagree with the argument that the avoidance sanction should apply where the name of the chargee is mis-stated. It would be an inappropriate sanction in the circumstances.
Even if we did, however, wish to apply the sanction to mis-statements but not to mis-spellings, as envisaged by the proposed amendment, we do not think that the distinction can be made, as I think my noble friend Lord Morris explained. It is not feasible to draw a clear line between a spelling mistake (or a misprint) and a mis-statement of the identity of the chargee. Both noble Lords opposite gave clear examples of substantial changes, but, of course, chargees are most often companies themselves. Company names, and in particular names of companies in the same group, are too similar for it to be practicable to apply the distinction. What is in fact a spelling mistake would often result in a wholly different person being mis-stated as the chargee. Mis-spelling and mis-statement will often be one and the same thing.
On balance, therefore, the Government disagree with both the principle and the practical effect of this amendment. We are not arguing that the identity of the chargee is entirely unimportant. New Section 398 requires the company to deliver correct particulars. It will, therefore, be subject to a criminal sanction if it deliberately mis-states the name of the chargee. There is, therefore, a sanction in the Bill that deals with this matter in respect of original particulars. But the identity of the chargee is important for reasons that do not affect the rights of the chargee nor of subsequent chargees. It would be inappropriate, therefore, to invalidate the rights of the former as a sanction for mis-statement or omission. It is best to rely instead on the criminal sanction. I hope that that explanation will be acceptable to noble Lords.
Lord Lloyd of Kilgerran: My Lords, I am grateful to the noble Lord for the care that he has taken in dealing with this comparatively minor matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Clause 85 [Memorandum of satisfaction or release]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 140G:
Page 80. line 34, leave out from ("registration") to end of line 36 and insert (", then, if—

(a) it appears to him to be duly signed, or

(b) it is accompanied by an office copy of a court order authorising its delivery without a person's signature and appears to him to be otherwise duly signed,

he shall file the memorandum in the register, together with any such office copy, and shall note, in such form as he thinks fit, the date on which it was delivered to him.").
The noble Lord said: My Lords, I spoke to this amendment in moving Amendment No. 140D. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 140H:
Page 80, line 45, after ("is") insert (", so far as it confers any security over the company's property").
The noble Lord said: My Lords, this amendment corrects an omission in the drafting of new Section 403(5). I beg to move.
On Question, amendment agreed to.
Clause 86 [Additional particulars to be delivered]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 140J:
Page 82, leave out lines 8 to 11.
The noble Lord said: My Lords, we are concerned in particular in Clause 86 with Section 406 of the Companies Act 1985 which deals with the notice of crystallisation or attachment of a floating charge, etc. The purpose of my amendment is to delete from that section subsection (1)(a). As I indicated in Committee the lender would appear to be obliged to give public notice of an event and would be entitled to crystallise a floating charge whether or not he exercised the entitlement. I am advised therefore that this could be damaging to the commercial lending process as well as being virtually impossible in practice.
I am not going into the pages of discussion that went on about these matters. However, the Minister said on 14th February at col. 161:
"In view of the concern expressed by noble Lords, I am prepared to look at this point again and report back. I cannot promise a solution, but we shall look carefully at the arguments put forward by both noble Lords".
The purpose of my putting down this amendment again is to ask the Minister what reasons he has for not producing an amendment in view of the concern expressed. I beg to move.
Lord Carter: My Lords, I do not wish to add a great deal to what was said by the noble Lord, Lord Lloyd of Kilgerran, in moving the amendment
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There was considerable discussion at Committee stage regarding the important commercial effects of crystallising a floating charge. The effect of the substituted Section 406 is that the Secretary of State will have the power to make regulations to require a notice to be given of the crystallisation of a floating charge. This occurs when, in accordance with the terms of a charge, an event occurs that enables the lender to declare a charge to be a fixed charge on the specified assets.
This is an important issue of principle and it raises the question of the powers of the Secretary of State. It is clear from the way that the Bill has been presented to us that the Government do not accept the powerful arguments advanced at Committee stage—the possibility of the triggering of cross-default arrangements, and the rest of it—and I shall be interested to hear the reasons that the Minister gives for this.
Lord Strathclyde: My Lords, as both noble Lords have said, we discussed this amendment in Committee when I said that I would consider the points made. The concern is that new Section 406(1)(a) would permit the Secretary of State to require the notification of an event that entitled the chargee to crystallise a floating charge even though he did not exercise that entitlement. The Government believe that this concern is misplaced. Such an event could not be said to affect the nature of the security under a floating charge. Chargees will at any time have a number of rights, contingent or otherwise, to crystallise a floating charge. The transformation of a contingent right to an actual right would not amount to a change in the nature of the security. Such a change will only have taken place when the right is actually exercised and the charge crystallises, changing its nature by attaching to specific property as a fixed charge.
The point at which the charge crystallises will in part depend on the terms of the charge. A charge which is expressed to crystallise on the chargee taking certain actions in certain events will not crystallise unless and until these actions are taken. A charge which is expressed to crystallise automatically in certain events, which are unrelated to any intervention by the chargee, will crystallise without any action being take by the chargee in exercise of his right to enforce the charge. For example, the charge may be expressed to crystallise in the event of any act of execution over the company's property being taken by another creditor; or there may be events in which it crystallises by operation of law, such as the company's cessation of business or the disposal of its entire undertaking. Some of these events will be known to the chargee; some will be known to the company; some will be known to both parties; and some may be known to neither. Our intention is only to prescribe such events as are known to the party on whom the obligation of notification is imposed.
We are not therefore talking of events (such as a default under a loan agreement) which do not cause a floating charge to crystallise by operation of law and which are expressed to have that effect by the terms of the charge. It is only when the event in

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question results in crystallisation that that event will have to be notified. Consequently, the regulations that the Secretary of State may make are in fact quite narrowly prescribed and he will not have the power to do what the noble Lord fears.
The fact is that, as I said in Committee, there is a growing commercial practice to include clauses in charge agreements that automatically crystallise the charge without the need for the chargee to take any further action. There has been some disquiet about the use of these clauses, which change the nature of the charge clandestinely. It is events under these clauses that the subsection is designed to catch, not those described by the noble Lord. I think that some confusion has arisen about the meaning of the word "nature", which is in fact much narrower than that supposed by the amendment. I hope that this allays the concern of the noble Lord and that he will feel able to withdraw the amendment.
Lord Lloyd of Kilgerran: My Lords, again, I must express my gratitude to the Minister for clarifying the position in the way he has done. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 88 [Copies of instruments and register to be kept by company]:
Lord Strathclyde Lord Strathclyde moved Amendments No.s 140K to 140M:
Page 84, line 5, leave out from ("open") to ("to") in line 9.
Page 84, line 12, leave out from beginning to end of line 13 and insert ("as may be prescribed").
Page 84, line 21, leave out from ("of") to end of line 23 and insert ("such fee as may be prescribed").
The noble Lord said: My Lords, I should like to speak to these three amendments together. In Committee your Lordships agreed to a new clause (now Clause 102) which gives the Secretary of State the power to make regulations defining the nature of a company's obligations where the Act requires that the register, index or document be available for inspection or copying. The Secretary of State also proposed to prescribe such obligations in respect of the company's own register of charges at the same time as doing so with respect to the other registers.
The amendments to the new Section 409 bring the provisions on the company's register of charges into line with those agreed by the Committee in Clause 102. Instead of obligations such as these being laid down, they are left to be prescribed by the regulations. Therefore the point of principle underlying these amendments has already been accepted. I beg to move.
On Question, amendments agreed to.
Clause 89 [Charges on property of oversea company]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 140N:
Page 85, leave out lines 24 and 25 and insert—
("(3) Section 397(3) to (5) (registrar's certificate and circumstances in which person has notice as a result of registration)
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apply in relation to the registration of any particulars or other information under this Chapter.").
The noble Lord said: My Lords, in moving this amendment I should like to speak also to Amendments Nos. 140Q and 140R. These three amendments make small drafting improvements to Clause 89, which contains the provisions on registration of charges created by oversea companies. I beg to move.
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 140P:
Page 86, line 29, leave out ("400 and 402") and insert ("and 400").
The noble Lord said: My Lords, in moving this amendment I must confess at once to the sin of plagiarism because this is an amendment that was put down initially at Committee stage by the noble Lord, Lord Williams. I put it down and forgot to tell the noble Lord, Lord Williams, that it was his amendment that I was putting down; and he forgot that I had put it down or that he should have put it down.
It deals with a highly technical matter. The noble Lord, Lord Hacking, who is not in his place at the moment, made a most useful contribution at Committee stage when he pressed the Government very hard to note that the Law Society considered this amendment to be a very important one. The amendment is to subsection (2) of Section 703D of the Companies Act 1985. It says in effect that Sections 399, 400 and 402, which deal with failure to deliver and late delivery of particulars and the effect of errors and omissions in particulars delivered, should be reduced to the fact that only Sections 399 and 400 should be relevant and that Section 402 should be omitted. I am sorry that is rather complicated.
The noble Lord, Lord Hacking, emphasised the importance of this matter and here again the noble Lord, Lord Strathclyde, was quasi-sympathetic, if I may say so, to the representations that were made. I wondered what his reasons were for not having returned at Report stage with another amendment. I beg to move.
Lord Williams of Elvel: My Lords, the noble Lord, Lord Lloyd of Kilgerran, is quite right in pointing out that it was a lapse of memory on my part that I failed to move this amendment again on Report—an amendment I had moved in Committee. I am most grateful to the noble Lord for correcting me on that point and indeed confessing to plagiarism, which is a rare event. In supporting the noble Lord, I would just point out that there is a printing error in line 31 on page 86 of the Bill. Perhaps that could be corrected when the Bill is reprinted.
Lord Strathclyde: My Lords, I am glad to hear that the noble Lord, Lord Lloyd of Kilgerran, was confessing and that the noble Lord, Lord Williams, was saying that he had made a mistake: also a confession. I am afraid that so far I have nothing to confess, but if your Lordships will bear with me I am sure that as we continue with this Bill there will be many things I shall have to confess.

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During the Committee discussion noble Lords urged the Government to consider the points made in the memorandum, and we have done so. In addition, officials from the DTI have met representatives of the Law Society to discuss, among other things, the treatment of oversea companies. On this topic, however, I am afraid that the Government are not able to agree with the views contained in the Law Society's memorandum, for reasons that I shall give.
Under the existing arrangements in the 1985 Act only minimal special provision is made to deal with the specific circumstances of oversea companies. In general, they are subject to the same regime as domestic companies. This has given rise to some anomalies, which Clause 89 of the Bill is designed to address. There is no dispute therefore about the fact that something must be done to provide for oversea companies. The debate is about how much should be done. At present, charges created by oversea companies are subject to an obligation to register charges which is not adapted to accommodate the particular considerations which apply to them. But where that obligation continues to apply, it is right that it should be supported by the same sanction as that which applies to domestic companies. The Law Society, and noble Lords who support its representations, argued that we should go very much further and disapply the avoidance sanction altogether. The Government cannot agree with that view.
There is a fundamental principle at stake here. Where security is created by an oversea company over property that is located within the United Kingdom, notice of that security should appear on the register at Companies House. Failure to register the security should, as for domestic companies, render the charge void. This is necessary to protect subsequent chargees and to ensure that there is an effective incentive for registration. It is entirely right and proper that persons who are resident in other countries should have their security subject to our laws when taking over property located here. If not, those resident in the UK who are offered security over the same property will not be able to take it with any confidence.
Given that argument of principle the question is: what is a practicable and equitable system for registration of charges created by oversea companies that is consistent with the law for domestic companies? The Law Society said in its memorandum that there were three aspects in which Clause 89 caused difficulties. Since discussing these points with officials from the DTI, I understand, however, that The Law Society has been satisfied that its concerns on these aspects are in fact met by Clause 89 as it stands. I hope therefore that in view of what I have said the noble Lord will be able to agree that we are in this case taking the right course.
5.30 p.m.
Lord Carter: My Lords, before the noble Lord sits down, is he saying that he is now satisfied that the Bill as drafted gives protection to prospective creditors of oversea companies which they are entitled to expect? I think that that was the gravamen
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of the argument at Committee stage. That was the concern expressed.
If I may remind the noble Lord, it was also pointed out at Committee stage that varying the times and dates on the various documents could give rise to considerable technical difficulties for oversea companies. That is, I believe, a point with which the noble Lord has not dealt.
Lord Strathclyde: My Lords, I am sorry if anything remains that I have not dealt with. Perhaps I could say a little more.
The Law Society originally criticised the requirement to deliver particulars of a charge within 21 days of its creation if the property subject to the charge is situated in Great Britain on the 21st Day. The Government continue to take the view that there is no great difficulty caused by the fact that a company or a chargee will not know whether there is a requirement to register until the 21-day period has elapsed. We have adopted this approach in order to preclude the need to register a charge when property is in Great Britain on the date of creation but is taken out of the country before the end of the 21 days. It would be anomalous to require registration in those circumstances.
Companies and chargees will not have to wait until the last day of the 21-day period before delivering particulars. They may do so at any time during that period. So their position is no different in practice from that of domestic companies. They will only face difficulties if they choose to wait until the last minute to see if there is a requirement to register. I believe that this is a point now accepted by the Law Society.
The noble Lord, Lord Carter, mentioned a specific point. It is of course a question of balancing the rights of oversea creditors with those of people searching the register.
Lord Morris: My Lords, while we are on the subject of errors and omissions, the noble Lord, Lord Williams of Elvel, referred to a spelling mistake in line 29 which I still cannot see. I am sorry; I misunderstood. I thought that he was referring to "oversea company", rather than "overseas company". I believe that "oversea" is more correct than "overseas".
Lord Lloyd of Kilgerran: My Lords, for my part, having heard what the Ministers said about the position of the Law Society, I feel I should now withdraw my amendment. However, having confessed to the sin of plagiarism, I might be in breach of copyright in relation to the noble Lord, Lord Williams. He asserted his property rights in this matter here in the House. I wonder whether I may have his consent in some unseen form before I finally withdraw the amendment. I have received that consent. The noble Lord nods in favour of my withdrawing the amendment and sitting down as quickly as possible. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Strathclyde Lord Strathclyde moved Amendment No. 140Q:
Page 87, line 1, leave out ("further") and insert ("additional").
The noble Lord said: My Lords, I spoke to this amendment in moving Amendment No. 140N. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 140R:
Page 87, line 3, leave out ("charge of which particulars") and insert ("registrable charge particulars of which").
On Question, amendment agreed to.
Clause 91 [Consequential amendments]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 140S:
Page 88, line 21, after ("(1)") insert—
("In section 3 of the Land Charges Act 1972 (registration of land charges)—

(a) in subsection (7) (registration in companies charges register to have same effect as registration under the Act), for "any of the enactments mentioned in subsection (8) below" substitute "Part XII, or Chapter III of Part XXIII, of the Companies Act 1985 (or corresponding earlier enactments)"; and

(b) in subsection (8) for "The enactments" substitute "The corresponding earlier enactments" and at the end insert "as originally enacted".

(2)").
The noble Lord said: My Lords, this amendment inserts a new subsection into Clause 91. It has no substantive effect because under Section 17(2)(a) of the Interpretation Act 1978, the references to the earlier Acts are to be construed on references to the Companies Act 1985 for the purpose of charges registered under the 1985 Act. It merely makes the modern reference express. I beg to move.
On Question, amendment agreed to.
5.39 p.m.
Lord Strathclyde: My Lords, I beg to move, pursuant to the Resolution of the House of Tuesday last, that the House do now resolve itself into a Committee upon the Bill in respect of Part V.
Moved, That the House do now resolve itself into a Committee upon the Bill in respect of Part V.—(Lord Strathclyde.)
Lord Williams of Elvel: I am grateful to the Government for assenting to recommitment of Part V. I have believed for some time that the ultra vires amendments to which we are about to come needed much greater discussion than they were able to receive at the Committee stage of the Bill and that the new amendments tabled after Clause 96 by the Government needed detailed examination on a Committee basis.
However, I must point out that the Government have tabled no fewer than 14 pages of amendments on Part VII of the Bill. While agreeing to the recommitment of Part V, I make the point that Part VII, when we come to it, may well need some very detailed scrutiny on a basis which I cannot forecast at the moment.
Lord Lloyd of Kilgerran: I very much agree with what the noble Lord, Lord Williams, has just said.
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It seems to me rather hard that on a Bill of such importance to industry we should be given very short notice of important amendments which the Government desire to put down at this late stage. Perhaps it may be necessary to bring a motion to which I hope the Government will agree to have another recommitment in relation to Part VII. However, we shall deal with that matter in due course.
Lord Strathclyde: I thank both noble Lords who have spoken. I hope that in dealing with the recommitment of Part V we shall be able, as far as possible, to treat our remarks on clauses which we have already discussed in Committee as though this were a Report stage. I hope we shall be able to look more closely at the new clauses which we have brought forward. As for the criticism that the noble Lord, Lord Williams of Elvel, levelled against the Government on the new amendments to Part VII, I should like to point out to the Chamber that although these amendments are very lengthy they are substantially grouped, and only include a total of about a dozen full discussions. Therefore, I do not think there is the substantial problem that the noble Lord, Lord Williams, made out.
Lord Williams of Elvel: My Lords, I am most grateful to the noble Lord for explaining that the amendments that have been tabled, which comprise 14 pages of the Marshalled List, include only a few minor debates. Nevertheless, the Opposition, the noble Lord, Lord Lloyd of Kilgerran, and our advisers will have to look at these matters. We cannot simply nod them through.
On Question, Motion agreed to.
House in Committee (on Recommitment) accordingly.
[The Principal Deputy Chairman of Committees (BARONESS SEROTA) in the Chair.]
Clause 92 [A company's objects and the power of the directors to bind it]:
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C1:
Page 88, line 47, at end insert ("done within the powers of the board of directors or a person authorised by it").
The noble Lord said: The new sections to be put into the Companies Act 1985 by Clause 92 were described by the noble Lord, Lord Strathclyde, as important, and indeed they are. On 21st February the noble Lord, Lord Strathclyde, said that these matters involved:
"the capacity of a company …the authority of the board of directors and the rights of shareholders".—[Official Report, 21.2.89; col. 509].
We would add the interests of creditors and employees. The Minister continued at col. 509:
"These issues go to the heart of the operation of the limited liability company … The clauses are therefore of no little importance to commercial life in this country. They also happen to be difficult, technical clauses".
These new principles at the heart of our commercial law therefore need very full examination. The ultra vires doctrine on legal capacity for companies is to be abolished. We await with interest the

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Government's Bill to abolish it for other bodies such as building societies and trade unions. We agree that the doctrine has come, as my noble friend Lord Williams put it, to a full stop; that it is an inadequate protection for companies and, at times, an arbitrary limit upon reasonable commercial expectations. But its reform has long been advocated by the Cohen Committee in 1945, by the Jenkins Committee in 1962 and by the report of Dr. Prentice in 1987, not to speak of that excellent Companies Bill of 1973, which was a rare reason to mourn the fall of the Conservative Government of 1974.
It was, therefore, a disappointment that the proposals in Clause 92 were not ready when the Bill was published last December, and that they were produced only six days before, on 21st November, and then received only three-quarters of an hour's debate. It is right—this is the reason for my prefatory remarks—that we should look at them much more carefully now. In these linked amendments, the first of our amendments goes to the limitation of the right of the shareholder to bring an action in respect of transactions outside the objects of the company.
At the heart of the law on limited liability companies is a balance. Although it has become a defective instrument, the ultra vires doctrine was meant to be part of that balance in order to ensure some guarantee to investors, creditors, customers, and indeed employees that the assets of the company would not be used for purposes other than those for which they were raised.
Our amendments on new Section 35 and new Section 35A, as I shall refer to them for convenience, question whether the Government's new scheme at the heart of company law tilts the balance too far against protection of the interests of shareholders, creditors and employees, and of the company itself, in favour of the third party, and sometimes in favour of the unscrupulous third party. I say immediately that it is our view that the new scheme goes much further than is required by the first directive of 1968 of the European Community. Indeed, in a later amendment we shall question whether some of the provisions do not take us further away from the scheme in the first directive.
The ultra vires doctrine is to be abolished by new Section 35, but the new section then preserves the right of the minority shareholder to sue in respect of acts outside the company's objects, or at least to restrain it. It then abolishes that right to take proceedings wherever the ultra vires act is to be done, as is stated in subsection (2):
"in fulfilment of a legal obligation"
arising out of a previous act binding on the company.
We are not arguing that merely because the shareholder has had this right since 1860 to stop transactions and, as I shall later argue, to bring an action in a derivative action to recover compensation for the company where those acts are outside the objects, that should be a reason for keeping it. However, the change here is dramatic. Any previous act which creates a legal obligation prevents the company, and now the shareholder, from bringing an action on the ground that the matter is beyond
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the objects. That, in our view, means one needs to look at this matter again.
Let me take one example. I shall try to take only one example in each amendment for brevity's sake. These are rather fundamental matters. Suppose that the directors of a company enter into a contract, which is binding within their normal authority, to sell a substantial part of the enterprise and close it down. They believe that they are acting in the best interests of the company, but it turns out the transaction is outside the objects clause of the memorandum. Suppose that the third party buyer induced those directors to enter the transaction by fraudulent misrepresentation—one might put this as a clear case of wrongdoing—which gives the company a right to rescind the contract, but the directors in their discretion, using their management powers, say they will not rescind the contract. The new section states that this cannot now be in any way questioned in proceedings by the shareholder. It is true that the new section states that the shareholder cannot do so where the ground is lack of capacity, but that is exactly the case. It is a legal obligation, albeit that the contract is voidable, because while the contract exists there is the legal obligation until it is avoided, and he has no power to avoid it. There are many such examples where the fact of a legal obligation may not be exactly the right line to draw between his ability and non-ability to bring an action on the company's behalf by a derivative action to challenge such a transaction. One can take even more complicated and worse examples. However, it seems to us that a transaction which is outside the powers of the directors would be even worse, but there is on this a curiosity in the Bill. When we come to new Section 35A(3), where the third party is in good faith, he can enforce a transaction, but, under subsection (3), the member of the company can bring an action to restrain an act which is:
"beyond the powers of the directors".
He can do so without the limitation that his right of action falls when a legal obligation has been entered into. That is very odd. There is a curiosity in the middle of the Bill, so I must ask the Minister in relation to this amendment whether it is the case that the shareholder can recover under new Section 35A(3) when he has just lost his right of action under new Section 35(2). Our amendment would be a start towards sorting out this matter. It would state that the ultra vires doctrine would go, but where the transaction was not only ultra vires but wholly unauthorised, one begins from the proposition that the shareholder's right to bring proceedings is preserved. One would then need to go on to new Section 35A to look at the position of third parties. However, that is the subject of later amendments.
I ask the Minister in responding to this amendment to tell us, first, why that should not be the rather closer cutoff point. Secondly, if it is not to be accepted, what is the relationship between new Section 35A(2) and new Section 35A(3)? I beg to move.
The Lord Advocate (Lord Fraser of Carmyllie): I shall follow the noble Lord and preface my remarks

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with a few more general observations about these provisions for just the reasons that he has set out.
The provisions aim to remove the uncertainties which remain for persons dealing with a company as a result of the lingering operation of the ultra vires rule. We have sought to put right the difficulties which have been found in the present Section 35 of the Companies Act, and to bring our law into line with the European Community First Company Law Directive. We have also sought to retain what I may describe as the internal operation of the ultra vires rule, namely the effect of the limitation of capacity on the fiduciary duties of the directors to the company and its shareholders as a whole. I shall have more to say on these points as the various amendments are considered, but it seems to me that the noble Lord's amendment threatens those basic objectives.
Although those objectives can be simply stated, drafting provisions to give effect to them is by no means an easy task. We do not necessarily regard the present draft as our last word, and we shall be grateful for any suggestions as to how the provisions might be improved. Officials have already had fruitful discussions with the Law Society and as a result the Government intend to bring forward a number of drafting amendments at a later stage.
Turning to Amendment No. CI, I suggest that if the amendment were to be accepted it would bring about an unnecessary and unfortunate degree of uncertainty for persons dealing with a company. Our basic aim has been to remove this uncertainty in so far as it springs from limits on the capacity of the company and the authority of the directors under the company's constitution.
The effect of the amendment would be to allow a member of a company in certain circumstances to bring proceedings to restrain the performance of an ultra vires act which is in fulfilment of a legal obligation arising from a previous act of the company. The circumstances are that the previous act was carried out outside the powers of the board of directors or persons authorised by the board.
The noble Lord, Lord Wedderburn of Charlton, gave an example, which I shall come to shortly. However, I should like to put an example to the noble Lord which seems to me to necessitate the provision as it is presently drafted.
Suppose a company has entered into a contract to buy a piece of land from another company, but the conveyance has not been completed. Such a contract might involve a substantial sum of money. If the provision which the noble Lord has suggested is included, there is a risk that the second company will, before entering into the contract, feel obliged to check on the authority of the other company's board of directors under its constitution. That might involve discovering and then seeking to construe an elaborate objects clause. That would be a bureaucratic and wasteful activity in a modern commercial environment.
The provisions in this section are to be considered alongside those further provisions to be found in Section 35A. The particular example which the noble Lord gave seems to me to be covered by the
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provisions of Section 35A. That is not accidental; it is intended that it should be covered in that way. As I understood the noble Lord's example, in that particular context the third party would have been a wrongdoer. He would not have been acting in good faith within the meaning of Section 35A. On that basis, the transaction could be challenged on the grounds of a lack of authority and not on the grounds of capacity. In such circumstances, while the matter might be approached in a different manner from that suggested by the noble Lord, nevertheless it would provide a route whereby the shareholder would be able to achieve the result that the noble Lord seeks.
Actions in excess of the powers conferred on the directors by the company's constitution ought not, merely for that reason, to be a matter for an honest third party: they are a matter for the directors and the shareholders. The proposed amendment would have effect whether or not the third party had notice of the lack of authority. In that respect it is worse than the existing Section 35. Morever it is not in accordance with the first directive.
With that explanation, I hope that the noble Lord will withdraw his amendment.
Lord Lloyd of Kilgerran: Before the noble and learned Lord the Lord Advocate sits down, perhaps I may welcome him and congratulate him on his maiden speech in relation to the Companies Bill. It is always a good thing to have the fresh air provided by experts on the law of Scotland.
Lord Fraser of Carmyllie: I am grateful to the noble Lord, Lord Lloyd of Kilgerran, for those remarks. I am not sure whether my noble friend Lord Strathclyde will consider them quite as flattering.
Lord Wedderburn of Charlton: I hope that the noble and learned Lord will believe me when I say that it was my intention to offer the same felicitations. However, I felt that I ought not to do so before he had spoken in case anything happened. The noble and learned Lord has been kind enough to deal with my example and to give two of his own. Both he and I appear to be suggesting that these two clauses could keep us here for a very long time, partly because they are interlinked. The noble and learned Lord was correct to say that they are interlinked. The reason why I refrained from going into detail on Section 35A was because I have points to make in relation to that section later.
I should like to make three points in relation to what the Minister said. First, all the uncertainties that he cures could be cured by the existing Section 35A. He does not need Section 35 for any single one of the points which he made. Secondly, he is right that my example concerns a purchaser—or was he a vendor?—who does not fall within the terms of Section 35A because he is acting fraudulently. That is true. However, I gave the example not precisely in relation to my amendments but as an example of whether directors have acted with authority, and to illustrate how unfair Section 35(2) is at the moment. The mere fact that fraudulent misrepresentation has induced the contract makes the contract only

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voidable—at least in England and Wales. I would not venture to suggest what the position is elsewhere The contract would exist and the legal obligation would exist. That is the whole point. Many such examples could arise.
Lastly, perhaps I could wrap those two points into one general proposition. It is an important point for the purpose of these debates. I hope that the Government will not rely on Section 35A to justify the terms of their Section 35. The noble and learned Lord mentioned no defect in the existing section—which for clarity I shall call the 1972 section since that was the section which was introduced when we entered the Common Market, in accordance with the first directive. The 1972 section has defects but none of them relates to this particular point. Therefore, when discussing Section 35, the Government have to justify the terms of that section in its own right and not in relation to Section 35A.
I leave the noble and learned Lord with this thought. As he said, the lingering operations are ultra vires. Albeit that ultra vires will be abolished in relation to its external application—a policy which we support—the so-called retention for internal puposes is more apparent than real. The entire set of interests which might on occasion be protected—the interests of creditors, shareholders and employees—interests which are reflected in the shareholders' minority action, are not it seems to us protected under Section 35. The balance is a new one, and I hope that the Government will look at Section 35(2) again very carefully. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C2:
Page 88, line 47, at end insert—
("(2A) Nothing in this section affects any liability arising from section 14 of this Act.").
The noble Lord said: This amendment and the next are an attempt to follow the same train of thought. As the ultra vires doctrine is to be abolished, what happens in other areas of company law? This matter may affect a company, large or small, any day of the week. These are not the arid matters that the words ultra vires suggest. What happens to the other matters of company law that are affected?
This amendment concerns Section 14 of the Act which, in summary, states that, subject to the provisions of the Act, the memorandum and articles bind the company and its members as a contract. The exact words are,
"as if they [the memorandum and articles] respectively had been signed and sealed by each member".
But, as Mr. Justice Slade said in 1978,
"it is a legitimate and indeed necessary inference that the company is to be treated as under a contractual obligation to its members".
That has been proved for many years.
The contractual obligation on both sides includes the obligation not to proceed outside the objects of the company. That is a particular obligation on the
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company's side. The point is of particular importance to the shareholder in situations where there are procedures within the articles that allow him, even more easily, to stop an action going outside the objects of the company; for example, where certain transactions may not take place without the consent of a director who is perhaps on the board to represent a particular interest. In a case in 1988, Mr. Justice Harman said that, in such a case, where the articles are broken,
"it is plainly wrong that the company's affairs be conducted in a manner which is wholly unauthorised"—
unauthorised by the memorandum and articles—
"and a shareholder in my view has a right to bring an action to restrain the company from so conducting itself.
The Government may say that Section 14 is not affected for two reasons. First, it states that the measure is subject to the provisions of the Act. So, when the new Section 35 is implemented, it will be subject to whatever Section 35 states. Secondly, Section 35 prevents proceedings on the grounds of lack of capacity. Plainly, those two grounds—lack of capacity and preventing the company from acting otherwise than in accordance with its memorandum or articles—may overlap. Is it to rest as a fortuitous circumstance of drafting whether the shareholder has a case for preventing his company entering into what may be a disastrous transaction? That will depend on whether the articles are drafted so as to make it look as though the procedure is not a matter of capacity or related to the objects. The unfortunate draftsman who made it look as though it did would fall under the scope of Section 35(2) whenever any kind of legal obligation, however voidable, had arisen from a previous act.
If that is the intention, our first point is that it must be spelt out. I must tell the Minister that I have tried to keep up with the rapid developments in the Bill. I apologise if I have missed some reform of Section 14 in a revision of a schedule, but I do not believe that there has been any such reform. There must surely be a clear statement in the Bill about the effect of Section 35 on the contract under Section 14. As I have said, that point concerns many day-to-day matters and affects every shareholder and the directors who run the company.
Perhaps I may make a subsidiary point. The noble and learned Lord did not answer my point before, but I shall continue to press it because it is one of the interaction points. Section 35A(3), in what I might call the "third party section", refers to the ability of the shareholder to sue which is not affected where he wants,
"to bring proceedings to restrain the doing of an act which is beyond the powers of the directors",
whether or not, it seems, a legal obligation has arisen on the company from a previous transaction. In that connection, it is important to know whether the shareholder can always rely on that point. If he can, he has an easy way round any problems under the old Section 35(2). I beg to move.
Lord Fraser of Carmyllie: I first wish to thank the noble Lord for his kind words. As one who did his company law poring over a famous set of articles written by him in 1957 in the Cambridge Law

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Journal, it is a matter of some anxiety to have to go into the great detail of these provisions of company law with him.
Perhaps I might say, with regard to Section 14, that our aim is to abolish what I have already called the external consequences of the ultra vires rule; namely, its operation as between the company and the world in general. We do not intend to affect the consequences of the rule for the relationship between the members, the company and its directors. We believe that we have achieved that goal, but, as I said on the last amendment, we recognise that this is a complex area of law and, if it is in any respect wrong, we shall certainly consider it very carefully to establish that we have done nothing that unhappily alters that arrangement.
There is a difficult relationship between the two clauses. As the noble Lord has already encountered, there are difficulties in keeping the two separate. I should perhaps have told him that we are considering further the position under Section 35A(3). The difference at the moment is that the challenge is more likely to arise under Section 35(2), as the personal right of the shareholder. If one were to proceed under Section 35(3), that would have to be a derivative action. In that respect, we are looking further at the provision.
The noble Lord prefaced his remarks by asking why we were relying on the clause at all when we have new Section 35A in any event. The short answer is one that he will appreciate: it is because we have Article 9(1) of the first directive. It may be that, in some respects, our policy approach to Article 9(1) may not meet wholly with his approval. I nevertheless hope that he will appreciate that, given the policy approach and the necessity to comply with the first directive, the clause must be contained within the Bill. I hope that I have answered the noble Lord's question.
Lord Wedderburn of Charlton: I am grateful for the words of the noble and learned Lord, but I am not very happy with them. In fact, I am rather alarmed that the Government are again looking at Section 35A(3) because the longer we go on, the more the argument always turns upon enforcing a transaction in favour of the third party. We shall deal with that matter when we come to Section 35A. With great respect to the noble and learned Lord, he does not need Section 35 to put into effect the first directive. I believe that there are defects in Section 35A. That is another matter. I believe that those defects make it less likely that we shall be brought into conformity with the first directive than would have been the case with the old 1972 section.
If we went off for a drink, we could find a form of words between us that did not do so badly, but Section 35 concerns the abolition of the ultra vires rule. The first directive does not require one to abolish that rule. It requires one to protect third parties in respect of acts done by the organs of the company. Not to have the limitations of the organs of the company would defeat transactions for third parties. I take that to be why the Government have taken this dichotomy between "internal" and
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"external". They were abolishing it for external purposes and keeping it for internal purposes. These amendments are aimed to prod, so to speak, at the difficulty, to which I do not think the Government have faced up for a moment, about finding that line between what is external to the company and what is internal to it.
However, we shall come to the first directive later. It would not be right for me to go in the direction in which the noble and learned Lord is pointing on this matter. I am happy to admit that it is my view too that none of the articles that I have ever written has solved any of these problems. That may be of some use to the noble and learned Lord. I happily beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C3:
Page 88, line 47, at end insert—
("(2B) this section does not affect the right of any member of the company to bring proceedings in the form of a derivative action.").
The noble Lord said: In view of the comments of the noble and learned Lord the Lord Advocate I shall move this amendment quickly in the hope of receiving a favourable response. I understand it to be the kind of thing that the noble Lord, Lord Strathclyde, mentioned (the reference in Hansard is to the debate on 21st February at col. 517), when he agreed that one paragraph in the Bill might be said to be strictly unnecessary. He went on to say:
"However, in our view it provides a useful pointer to the operation of the section".
I had intended to say that the derivative action mentioned by the noble and learned Lord was put at its narrowest most recently by Mr. Justice Knox in a very famous judgment as at least comprising those situations where the wrongdoers who are in control of the company have caused it to suffer loss. As he put it:
"Where what is sought is compensation for the company for loss caused by ultra vires transactions the wrong … is a wrong to the company, which has the substantive right to redress".
That can be found in Smith v. Croft (No. 2).
The shareholder has that right of action in the sense that he can bring it on the company's behalf. He loses it under Section 35(2) wherever there is a legal obligation—or that is how the Bill appears at the moment. I was hoping that that was not so and that the derivative action would be kept on a wider basis. It is not the most common remedy in the world but it is the residual line of defence against acts which are right outside the purposes of the company, whoever has committed them.
Perhaps I may interpose a remark and say that many of the examples involve directors who have done something wrong because those are the easiest examples to give; it does not in any way suggest that that would always be so. But where the directors have acted wrongly and ultra vires then the derivative action provides some residual line of defence. What the noble and learned Lord said led me to believe that the Government thought perhaps that that form of action should not be affected by the section. With those comments, I beg to move.
Lord Lloyd of Kilgerran: I interject briefly to ask the noble Lord, Lord Wedderburn, to be kind enough to repeat the reference he gave to the Committee stage of the Bill on 21st February when he mentioned the noble Lord, Lord Strathclyde. I did not quite catch what he said. Would he tell me the relevant page in Hansard?
Lord Wedderburn of Charlton: I apologise to the noble Lord. I mentioned the words of the noble Lord, Lord Strathclyde, at col. 517.
Lord Lloyd of Kilgerran: I am much obliged to the noble Lord.
Lord Fraser of Carmyllie: I have to say to the noble Lord, Lord Wedderburn, that far from its receiving a favourable response from me I consider this to be a wholly undesirable amendment. It is undesirable because it would conflict with the basic objective to the new Section 35 of giving protection to third parties dealing with a company from the operation of the ultra vires rules. Although he seems to have some disagreement with me over this, I also assert that it is undesirable because it would conflict with the United Kingdom's Community obligations.
As I understand it, the purpose and effect of the amendment would be to allow a member of a company to bring proceedings in the form of a derivative action seeking to set an act aside on the grounds that is ultra vires. There are only certain circumstances in which a derivative action can be brought, the most important for present purposes being where there is a fraud on the minority by those in control of the company. There is no reason to think that a third party would know that those circumstances would apply, and in any case we wish to end the uncertainty which arises in commercial transactions from the operation of the ultra vires rule and to protect third parties. Breaches of the ultra vires rule, as I said before and doubtless will repeat before we finish this chapter of amendments, should be a matter for the directors and shareholders and not for third parties.
Those are the very basic propositions which lie behind new Section 35, and this amendment runs counter to them. Minority shareholders will remain able to bring a derivative action against the company's directors for breach of their fiduciary duties. Moreover, they have a remedy under Section 459, which we have amended so as to ensure that it is an effective protection. As the noble Lord will certainly appreciate, minority shareholders may use their personal right, which is indeed preserved by subsection (2) to restrain proposed ultra vires acts.
I indicated that as I saw it the amendment also conflicted with our Community obligations. Article 9 of the first directive provides that the acts of a company are to be binding on it even if they are not within the objects, subject to a member state's option to provide that knowledge of the objects by the third party renders a transaction with him which is beyond the objects. By allowing ultra vires acts to be rendered void where a derivative action succeeds, without introducing an element of knowledge on the part of
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the third party, this amendment would be contrary to that article.
Although this is still part of the complicated area to which the noble Lord has drawn our attention, I hope that I have answered the queries that he raised.
6.15 p.m.
Lord Wedderburn of Charlton: I am grateful to the noble and learned Lord. In response, I should like to raise two issues. This amendment takes one a little further down a road that may be described simply as follows: the Government wish to uphold transactions with third parties even though they are outside the objects of the company. They must do that because of Article 9 of the first directive so long as the acts are done by the organs. We shall come to that point in a moment. That is what Section 35A states. Anything outside the constitution of the company in terms of the powers of those who are to be designated as the organs can be en forced by the third party if he acts in good faith. That is enough, subject to the other sub-clauses, to satisfy the first directive.
What the Government wish to do—rightly, we think—is to go further than that. The first directive does not require the abolition of the ultra vires doctrine but the Government wish to do so. We agree with that, subject to a balance being struck on the internal interests. When one comes to the internal interests, one finds that the shareholder can no longer bring his derivative action. One finds that his personal right to bring proceedings is said to exist, but as soon as any legal obligation is entered into he loses that personal right. In other words, the shareholder's action of whatever kind is cut off in practice at a very early stage.
The very fact that it is cut off by a legal obligation in all the examples that the noble and learned Lord has given shows—to put it briefly—that it is the third party in Section 35A who steps backwards into Section 35(2) in order to create the legal obligation to defeat the shareholder's action. The two sections are interlinked. There is a sense in which one would not need anything at all in Section 35 for that argument except to say that it was binding in favour of the third party. One might also wish to say that it affected Section 14. I hope that the Government want to do that and will do so now. If that is what they mean, perhaps they will state it on the face of the Bill. Otherwise there will be litigation about this point.
We shall come later to matters in which the 1972 section did not spell out what the Act meant, partly because no one understood what it meant. However, we understand it now because there has been litigation over it. There will be litigation on these matters but just how far it will affect Section 14 as regards derivative actions and so on we shall not know unless the Government spell it out. From the remarks of the noble and learned Lord I do not think that I shall like it when it is spelt out.
There it is. We have tried our best. At least let the matter be clear and certain and not left to litigation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C4:
Page 88, line 49, after ("them") insert ("or any liability incurred by any person as a constructive trustee.").
The noble Lord said: This amendment concerns what might be called a very important internal matter relating to acts committed outside the objects of the company. I take it from what the Government have said in subsection (3) of the new Section 35 that it is common ground that the liability incurred by the directors, or by any of them, is to be retained in that very important circumstance in which they become constructive trustees.
As Mr. Justice Ungoed-Thomas said in the Selangor rubber case in 1968, their duty was to apply the company property to specified circumstances for others beneficially; that is, to hold it on trust for the company. He continued:
"That is why a misapplication of it is equally in each case"—
as in the case of settlement trustees—
"a breach of trust"
Cases from the 19th century have made clear that the foundation of the fiduciary obligation of the directors in terms of their control of corporate property and their control of their corporate powers is that of the high level of trustee. Cases in the last two years have illustrated this very well. It does not depend even upon honesty although of course—and we debate the matter on this footing—under the Companies Act 1985, as under previous Acts, the court has power to excuse, where it is reasonable and fairly should be done, the director who acted honestly and reasonably. That is of course perfectly right. But the consequence of directors being trustees is that the third party who acquires property or benefit from their breach of duty himself becomes a constructive trustee.
There is a little uncertainty about the level of knowledge that is required. However, it is now fairly clear that the third party—either with knowledge or wilfully shutting his eyes, or with what is sometimes called Nelsonian knowledge—will fall into that category.
The 1972 Act ignored this problem. It said that directors could bind the company to third parties even when they had no authority or it was ultra vires. It said nothing about constructive trust. That had to be litigated in the case of International Sales and Agencies Ltd. v. Marcus in 1982. Understandably in my view, Mr. Justice Lawson held that the doctine of constructive trust was not in any way affected by the new obligation in our law to bind the company to transactions which were outside its objects.
Inferentially that appears to be the Government's view again. I should like to have it confirmed. I should like to have it confirmed with the words in the amendment, not merely for directors, who are the only people who are dealt with in subsection (3) of the new Section 35, but also for any person who falls under that obligation. The Government cannot have it both ways in terms of drafting. They cannot say that it is unnecessary to mention any other person who becomes a constructive trustee, or indeed is under any other liability when they have mentioned the directors themselves; they may
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criticise my amendment as being too narrow. Either the liabilities are there for everybody or they are not. I am sure that they do not have such situations in Scotland, but occasionally one comes across them in England and Wales. As the clause is drafted at the moment, a perverse tribunal might take the view that only the directors were to be liable and not the third parties because they had been left out, and might so construe the section.
This is a very important area. It has long seemed to me that there are too many people who wish to get rid of the fiduciary obligations of directors whereas they are in fact the one bulwark of business ethics which stands in our company law. It is therefore very important indeed in my view not to allow any uncertainty on this matter. I hope that, now we are dealing with just an internal matter relating to abolition of ultra vires, the noble and learned Lord and I will be able to find more common ground than before. I beg to move.
Lord Fraser of Carmyllie: I think that there is at least partially a common ground between the noble Lord and myself. We are at one in believing that as a matter of policy the new Section 35(1) should not prevent a constructive trusteeship arising in cases where a third party is aware that the directors are engaging in a fraud or misfeasance. We believe that in those cases the courts would hold that a constructive trusteeship arose.
However, there is a particular case of a breach of fiduciary duty where we think that the courts would not so hold, and we are concerned that they should not. The noble Lord made reference to the case of Selangor United Rubber Estates in 1968. As I understand the law in that case, in the absence of a statutory provision, if a third party dealing with the company knew no more than that the directors were exceeding their powers or were causing their companies to enter into an ultra vires transaction with him, he would seem to be liable as a constructive trustee. It would be apparent that this would confound the purpose of new Section 35(1) for it would in effect be saying that knowledge of the fact that an act is beyond the capacity of the company—and I stress that in relation to Section 35, as he will appreciate, it is a question of capacity—is to prejudice the position of a third party. I would not wish to uphold the constructive trusteeship principle to the extent that it is set out in the Selangor rubber case. I suggest to the noble Lord that to do so would mean that in terms of Article 9(1) and (2) to allow that extended principle of constructive trusteeship to continue would be to run contrary to it.
I do not agree with the noble Lord that what we have done is to increase uncertainty. Section 35 is concerned only with validating transactions. It does not affect the internal operation of the objects clause.
The provisions that we are now discussing have been discussed with the Law Society and others. They have not expressed any serious worries to us, only on points of detail and emphasis. While we are sympathetic to those, and are still considering them, we shall consider very carefully what he has said. There is a difficult line to be drawn between setting out every nuance of legislation and relying on the

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courts to fill in the detail. At the moment we believe that we have the balance right. However, we shall read what the noble Lord has said. If there are continuing difficulties to be addressed, we shall do so.
The noble Lord has mentioned the judgment of Mr. Justice Lawson, as he then was, in the International Sales case. I agree with what he has said about that. Clearly what he had to say, and the stress that he placed on the use of the word "dealing' in that case may be to some extent affected by the changes that are being proposed in Section 35A. I seek to emphasise that where a third party knows that there is some additional wrongdoing—more than a lack of authority—he would be caught by the new Section 35A. But where he is simply a constructive trustee, as in the example of the Selangor rubber case—possible simply through knowlege although I accept what the noble Lord said about a Nelsonian blind eye, if I may adopt his wording from a well known textbook—it would seem that such a person needs to know something of a dishonest design. It is not a matter of simple knowledge. However, I believe that he understands the set of circumstances that we seek to exclude from constructive trusteeship. There is a degree of common understanding between the two of us on this. I trust that I have explained the Government's position.
6.30 p.m.
Lord Grantchester: I am induced to speak because I spent some 60-plus days in the hearing of the Selangor Rubber case. Do these amendments have the effect in the Selangor case of allowing the bankers, who were found liable as constructive trustees, no longer to be liable in those kinds of circumstances? The case concerned gentlemen in the City who thought up a scheme to buy company shares out of the company's own funds. They procured bankers—that bank now no longer exists—to take part in meetings and, by passing cheques through accounts, to use company money to buy the company's own shares. In those circumstances, the banker as constructive trustee was held to be held liable to make good to the people who suffered the loss. Is this amendment such that in those circumstances the bankers would now escape?
Lord Fraser of Carmyllie: I am not sure whether to congratulate or whether to commiserate with the noble Lord for having to spend so much time on this matter. I do not know whether he was on cases one. two or three or possibly all three. What concerns the Government, given the structure and the approach we take to Clause 35, is that if one takes the logic of what was the decision in the third case, that would mean that a third party dealing with the company who knew no more than that the directors were exceeding their powers and was not involved in any way further, then it would be simply a matter of knowledge. I indicated to the noble Lord, Lord Wedderburn of Charlton, that it is possibly a somewhat grey area, but if it was only a matter of knowledge there is at least the risk that he would be liable as constructive trustee.
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Having regard to that structure of Clause 35, and what is seen as an important discharge of duties under the European directive, the Government would not want the full extent of the Selangor Rubber Company case, particularly the principle that I have enunciated concerning the number three case, to be implemented and it would be sought to be excluded by the present provisions.
Lord Wedderburn of Charlton: I must admit that I have sat here in a state of increasing terror because of what we are prising open. With no disrespect to the noble and learned Lord, I believe that this is the first time that the Government have committed themselves to this in public. I have riot been party to any consultations. We see that where directors act—I would not say outside their authority—in the case we have, outside the powers or objectives of the company, which is the highest or the lowest breach that directors can commit, that is to remain internally within the company and is still something for which they are liable to the company, but the shareholder may bring a derivative action. I shall not argue with the noble and learned Lord about exactly when that could be done, but in some situations plainly it can be done. But that which is internal, as we have seen on every previous amendment, can become external. I had thought that when the externality was a third party who had sufficient knowledge—I agree with the noble and learned Lord and am not defending very word in those long Selangor judgments—by and large we know that there must be some dishonest designs, as was said in Barnes v. Addy, with sufficient knowledge, or Nelsonian knowledge, of the breach of duty. It is no good speaking about the breach of authority because it is a breach of duty which is central.
In those situations surely the third party in our law should remain liable as a constructive trustee. One might argue whether he would be able to use new Section 35A because he might not be in good faith. The noble and learned Lord runs into that point immediately, that if he thinks has third party, (who has Nelsonian knowledge of a breach of duty of directors acting ultra vires) can then use the new Section 35A, it can be argued that it is not in good faith. Yet the Government seem determined that every time there is a clash of interests the third party should win.
It is not required by the first directive, Article 9, that in that situation constructive trust cannot operate. I was not relying on the Marcus judgment of Mr. Justice Lawson for points relating to the word "dealing". I agree that that is a different matter. But I was relying and do rely upon the argument which he made succinctly and clearly that a constructive trust in the third party who became liable as a constructive trustee under our law in fiduciary areas remained and was not required to be expelled by the first directive. I believe that that is correct.
The idea seems to be that the Government in this clause are to give a charter to unscrupulous third parties who will not be liable for constructive trust. If they do not mean that they should say, "Yes, constructive trustees will remain constructive

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trustees. Let us put your words into the Bill". Those are my words, and that is why I moved the amendment. We want to see that those who act unscrupulously remain under trustee-like obligations. We want to see that those who act in good faith have their transactions enforced. That seems to us to be correct. I thought that these few words would make that clear, but the noble and learned Lord has told us that the Government intend to alter the law and to reverse the Marcus decision. If I have misunderstood him I give way.
Lord Fraser of Carmyllie: Obviously I did not express myself very clearly. There is a circumstance in the Selangor case which the noble Lord first set out upon which concerned an extreme case where a little more than knowledge is required. I want to stress to him that the Government's view is that if that third party which so concerns him knows more than that, simply the directors are exceeding their powers and causing the company to enter into ultra vires acts—the third party knows, for example, that they are benefiting themselves from the property or otherwise and are not acting in the company's interests—it is our view that in such circumstances the courts would have no hesitation in imposing a constructive trust. I hope with that explanation I have satisfied him that the gulf he seemed to see yawning between us is no gulf at all. It is only a small matter as I sought to indicate at the outset in relation to the Selangor case that I could not accept his amendment.
Lord Wedderburn of Charlton: I am grateful to the noble and learned Lord. Clearly there will never be a gulf between us, but merely a division. I am grateful for those words because they help to clarify this. I must ask leave to withdraw this amendment; but in doing so, I ask him to consider subsection (3) very carefully in the light of what he has said and the emergent policy of the Government and the department upon this matter, and to ask themselves whether a court necessarily would decide what he has said it should decide in subsection (3). That is what the legislation is all about. It is not a matter of guessing. I do not believe that that is so. The court could hold many interpretations of subsection (3). I hope that they will be encouraged to take the wide interpretation on constructive trust. Even now the Government do not seem very keen on that, but I hope they will reconsider. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C5:
Page 89, line 3, after ("or") insert ("expressly to").
The noble Lord said: We now come to the new Section 35A, in other words this is the clause which purports to satisfy the first directive and to replace the much criticised Section 9 in the 1972 Act, passed in rather a rush which was said to have defects, although in the courts it has held up pretty well. Although the amendment is small, we are seeing that these small amendments are throwing up fundamental issues of policy.
The new Section 35A begins by stating that in favour of a third party dealing with a company in good faith, the power of the board of directors shall be deemed to be free of limitations. That is a good beginning towards satisfying the directive. The section then states that the power of the board of directors to bind the company or authorise others is deemed to be free of limitation. We question whether that goes too wide and in the wrong direction.
There are two parts to the argument. The first concerns the first directive and the second concerns the doctrine of ostensible authority. I put the arguments in that way because the points relate to later amendments and if the argument is made now it need not be made twice.
Paragraphs (1) and (2) of Article 9 of the first directive, issued in 1968, make three points. They are that the acts done by the organs of the company are binding upon it, even if not within the objects. However, secondly, a state may provide that the company shall not be bound where such acts are outside the objects of the company if the third party knew that was so. Thirdly, paragraph (2) states that the limits on the powers of the organs of the company arising from the statutes—which I shall now call the memorandum and articles—or from a decision of a competent organ, may never be relied on as against third parties even if disclosed.
Third parties are to be protected within that structure. However, the structure has one fatal problem. I am astonished that the Government have not had the courage—which, as we saw earlier this afternoon, is so strong in respect of other matters—to deal with the matter. The problem is that most of the systems of member states either have, or have adopted, the concept of an organ of the company. An organ is very different from an agent. An organ can always represent you; an agent must act within his authority. That is the starting point.
Our directors are agents. Even our boards of directors are, in law, sets of agents. Therefore, we enter into the ghastly problem which already exists in connection with the previous amendments. It is where our law has attempted to adapt an agent into an organ without saying so.
This, together with the next amendment, which encourages the Government towards the direction of treating the directors as organs of the company, would bring us closer into accord not merely with the directive but also with the systems for company law in the other member states. Therefore, one would think that, even in 1992 terms, the Government would wish to go in that direction. The notion of an organ is familiar to German company law and to that of the Netherlands and Denmark. It has been adopted in France, Belgium and Italy and in 1973 was adopted in Ireland. I do not know whether the Government have looked at it, but the Irish precedent is interesting and might have been adopted.
Since 1972 when, in a famous communication, Sir Geoffrey Howe, as Solicitor-General, said that he thought it was reasonable to equate the organ of the company and the act of an organ to a transaction decided on by the directors, we have tried to use the

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directors as the organ of the company. It was the words "the directors" which got us into trouble in the 1972 section. However, the trouble was two-fold. I should like to ask a direct question of which I gave the Minister's noble friend notice this morning. It was late and may not have reached him, but I should like to put forward the point. First we need to identify an organ of the company to satisfy the directive properly. Secondly, under Article 2(d) of the directive there is an obligation to register,
"The appointment, termination of office and particulars of persons who ‖ are authorised to represent the company in dealings with third parties and in legal proceedings".
The article then provides that one must state whether those persons are authorised to represent the company alone or jointly.
Those two points have not been answered in the Bill. Our amendments are small pressures towards proper fulfilment of the first directive. However, a fulfilment, if it was eventually made, would make our system of company law very similar to almost all other systems. I understand that Greek company law has not yet been adjusted but most of the major systems in the Community would be similar. We do not satisfy in terms of what is an organ and we do not satisfy in terms of what should be registered under Article 2. I have combed the Bill and the amendments looking for amendments to Section 289 of the 1985 Companies Act, which would be the obvious place to put the new registration provision conforming with the European Court of Justice decisions. However, I have not found one and I shall be only too pleased if it exists.
The first directive point addresses the amendment for this reason. Under the section the board of directors binds the company irrespective of breaches of authority or objects. But, without limitation, it can also give authority to represent the company on any matter, anywhere and at any time, to some other person; Mr. A. N. Other. It might be the office boy. In this connection there is no limit in respect of ostensible authority—they can do it. The first directive does not require the company to permit, or even require, that the whole enterprise can be sold by the office boy. It requires organs to have complete authority and it requires one to register who the organs are.
Secondly, on 21st February the noble Lord, Lord Strathclyde, spoke twice about ostensible authority at cols. 512 and 520 of the Official Report. He did so once "off his own bat" and once in reply to a question put by my noble friend Lord Williams of Elvel. I shall not read the passages but I am sure that he will agree that he was categorical in saying that ostensible authority was included within the concept of authority where the directors have complete power to authorise others to bind the company on any matter free of any limitation.
That worries me for another reason. It takes us further away from the directive and from commercial sense. Ostensible authority normally has four elements. They are the representation that an agent has some authority, usually made by conduct; the representation made by someone who has actual authority to manage the business or conduct the particular matter; the representation which induces
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the third party and is relied on by him to make the transaction; and, in the companies case, the lack of any memorandum or articles.
In the circumstances of the organs of the company we must get rid of the fourth element; namely, limitations by memorandum and articles. They are not allowed. The Government do so but they also get rid of the second element; namely, that the principal must have actual authority to hold out the agent. I suggest that it also reduces and perhaps gets rid of the third element. Where the third party can say, "I relied upon the matter and the fact that I knew it was a breach of their duty does not matter", one should look at the new Section 35A(2)(b). Knowledge is not to stand against him.
What is left of ostensible authority is some appearance that the directors, who can do anything, possibly appear on reasonable grounds to have held out this person. No doubt the directors were negligent in that matter but every piece of slack negligence whereby the directors appear to have held someone out gives the possibility of the third party enforcing a transaction against the company. The new Section 35A(1) does not incorporate ostensible authority but it creates a new doctrine. There will be a new chapter in the books of non-existent apparent authority which will require nothing else than the appearance. Perhaps it will be called "ghost authority".
There are two points against the section which purports to indicate that. I really believe that, although those are extreme examples, in terms of commercial reality the prospect for a company which has any fear of major directors acting in a way which might hold out somebody else—and I have to press this point—just does not relate to the board because the board is there but it must be looked at without any limitation of authority. One limitation of authority is to have a quorum, but the board might be less than a quorum, only two out of 12 directors. The quorum in table A is two, but let us suppose that it was three and only two below the quorum came to the meeting and purported to act or to hold out somebody. That is a limitation which a third party can sweep aside under Section 35A(1).
Therefore, whereas before under Section 35 I questioned whether the abolition of ultra vires had been done in a way which perhaps tilted the balance towards a third party, Section 35A(1) enacts something which is nothing like the structure of the first directive and does not speak of organs but gives complete authority to anyone who is purporting to be an agent, refuses to allow any limitation of authority in that situation at which the first directive stopped short long ago, and then uses a notion of authority to add to it as though it was ostensible authority which turns out not to be obstensible authority at all.
In terms of certainty, if that subsection is enacted that will be a cause of major uncertainty in commercial transactions. Britain will be the one place where people say, "Oh dear, do you have authority to do that?" or "Will you find some way of binding the company?" Internally in the company there will be great worry about what can and cannot

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be done. You may say that shareholders take the risk when they elect their directors. In a sense that is a great vote of confidence in shareholder democracy, but the reality is that shareholders cannot know how the executive members of the board will behave. While 90 per cent. of members of such boards will be excellent, in the other 10 per cent. of cases some protection of the internal interests is worth putting into the formula in the form which the first directive does, because where you know who are the registered organs of the company, there you have much more certainty and clearer control. Therefore, this first amendment is small but it raises those issues. I beg to move.
Lord Fraser of Carmyllie: The noble Lord has certainly given me food for thought. However, when I look at the particular provisions in Section 35A(1) I am bound to say that on the face of it I have remarkably little difficulty with it because it states:
"In favour of a person dealing with a company in good faith, the power of the board of directors to bind the company, or authorise others to do so, shall be deemed to be free of any limitation under the company's constitution".
If I wish to see how that is elaborated I see that subsection (2) gives me a definition of what is "dealing" and it also spells out in paragraph (b) that:
"a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors".
Paragraph (c) spells out that:
"the limitations under a company's constitution include limitations deriving from a resolution of the company",
and so on.
When the noble Lord speaks on such matters, one listens with great care but, with respect, it seems to me that he has adverted to matters which are illusory rather than immediately or commercially real. In answer to the specific matter as regards the obligation to register authority which he indicated, the view which the Government take is that the obligation to register names of directors at Companies House is a sufficient compliance with the directive.
Section 35A(1) is concerned with the authority of the board of directors and the authority of no other person. What is indicated here is that the effect of making the board the indisputable source of authority to bind the company is the centre of the subsection. We agree, nevertheless, that this subsection in part moves towards making directors an organ of the company in the way which the noble Lord suggests would bring us closer to compliance with the directive and a form which is closer to our European partners in their approach to company law.
As I understand it the intention of the amendment which he has tabled would be to remove a degree of protection from a third party who deals with a person who only has ostensible authority to bind the company. By only fully protecting a third party who was dealing with a person who had express authority from the board, the amendment would introduce an undesirable degree of uncertainty into a third party's dealings with a company, or else require the third party to check that there were no limitations on the
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authority of the board of directors to delegate their powers. In that respect we clearly approach this matter differently. The noble Lord sees that his amendment would reduce that uncertainty while I contend, as forcefully as I can, that it will have the opposite effect, certainly as regards a third party.
Modern business life is too fast moving to require a third party to check on the authority which may have expressly been given to a person, and it needs a degree of certainty in order to function. We need that in a modern, commercial world. A third party ought to be able to judge by appearances. That is to say, he ought to be able to rely on the managing director of a company having the authority that a person in that position is commonly regarded as having, and a senior manager having the authority that such a person is expected to have. This result is achieved by the doctrine, to which the noble Lord referred of ostensible authority. We believe that it is entirely suited to modern business life.
We do not believe that it will be open to third parties to abuse the doctrine. For example, it will not be open to a third party reasonably to assume that a non-executive director has authority to sell one of the company's major assets. Non-executive directors are not commonly regarded as having that authority, and a third party who relied on the presumption that they did without a very good reason—for example, evidence that that director had been given that authority by the board—would not be protected. Moreover, under the law of ostensible authority a person is only allowed to judge by appearances if he does not know, and it was reasonable for him not to have known, of the reality. Section 35A(1) does not alter this basic rule. Its purpose is rather different. It seeks to establish the board of directors, in favour of an honest third party, as the undisputable source of power to bind the company and to remove questions as to whether they are free under the company's constitution to delegate their powers.
The noble Lord appreciates that the courts have experience of the operation of the doctrine of ostensible authority. We believe that it provides a sensible basis for a degree of certainty in commercial dealings while still preventing abuse.
Lord Lloyd of Kilgerran: I hesitate to intervene in the very interesting dialogue which has been going on between the noble and learned Lord the Lord Advocate and the noble Lord, Lord Wedderburn. However, I did not understand the noble and learned Lord the Lord Advocate's argument when he referred to the question of certainty and harmonisation with the directives referred to.
He referred to paragraphs (a), (b) and (c) and said, "and so on". Did he mean to include in support of his argument subsection (4) of Clause 35A? Perhaps later I may raise an argument that I produced in Committee in this connection. I took the view that subsection (4)(b) was totally unnecessary. I put that forward as an amendment and I was supported by the noble and learned Lord, Lord Brightman, who said:
"I take exactly the same view as the noble Lord, Lord Lloyd of Kilgerran. On a brief reading it seems that the amendment is right".—[Official Report, 21/2/89; col. 516].

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He goes on to justify that subsection (4)(b) should be removed from the Bill. If I have the opportunity I shall be asking later for any further reasons why they have disregarded the views of the noble and learned Lord, Lord Brightman; though it may be that this is irrelevant at this stage.
Lord Fraser of Carmyllie: What the noble Lord has to say is not irrelevant. I regret a failure on my part. I think I must have been growing weary of reciting the whole of the new Section 35A(2). Having gone all the way through subsections (2)(a) and (b) I attempted to summarise or shorten subsection (2)(c). I assure the noble Lord that I did not intend to encompass within "and so forth" subsections (3) and (4) and anything that follows. I apologise to the noble Lord if he thought that I intended to encompass them in that way. I did not. I appreciate that there are questions that both the noble Lord, Lord Lloyd of Kilgerran, and the noble Lord, Lord Wedderburn of Charlton, want to raise on subsequent amendments.
Lord Lloyd of Kilgerran: I am obliged to the noble and learned Lord for that explanation.
Lord Wedderburn of Charlton: It is necessary to respond briefly to what the noble and learned Lord kindly said. He said that third parties must be able to trust appearances. Curiously enough, that is precisely what was said in the Friedrich Haaga case, where the European Court of Justice pronounced on parts of this area. It was pronouncing on the need, indeed the obligation, to register under Article 2 the names of the organs which the noble and learned Lord says we do under the Companies Act, Section 289. With respect, that is not in any way a compliance with the directive, as the Commission said twice in 1977 in two communications. What the article requires is not merely the names but much more detail and a description of the circumstances in which they can act as organs, if I may so summarise it. The clause is therefore defective in that way.
Secondly, it seems to me that once again the Government are moving into a position where they must protect the third party in every example. I doubt whether that is reasonable. Every time the noble and learned Lord gives an example he must protect the third party. Where he is quite wrong about being required to protect the third party in one of his examples is where a sub-agent of the board, say, deals with the third party without any authority except that the board tells him to do so. Those persons are dealt with not by Article 9.1 but by Articles 9.3 and 3.5 where there is a perfectly clear provision in the directive dealing with other agents with general powers of representation who are not organs.
With respect to the noble and learned Lord, it will not wash to say that you must allow general power to all agents without any consideration of normal agency doctrines so far as concerns the position of the board of directors and to include purportedly ostensible authority. The Government are beginning to take some cognisance of the effects of their own drafts and I hope they will look again at some of
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them. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Strathclyde: This is a convenient moment to break until 7.45 p.m. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

European Parliamentary Elections (Amendment) Regulations 1989
7.5 p.m.
The Earl of Arran The Earl of Arran rose to move, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].
The noble Earl said: My Lords, with the leave of the House, I shall speak also to the Representation of the People (Variation of Limits of Candidates' Expenses) Order 1989. That order may then be moved formally at the end of the debate. Both these instruments deal with increases, to keep pace with the fall in the value of money, in financial limits prescribed by law in relation to elections.
First, they raise the permitted maximum level of a candidate's expenses during an election. The increase for United Kingdom elections is, as always. strictly in line with inflation. The powers of my right honourable friend in respect of European elections are more flexible so that, in that case, it has been possible to apply a degree of rounding and produce a rather tidier figure as hitherto. But the increase applied is still broadly that indicated by the change in the value of money since the last European parliamentary election in 1984.
Secondly, the European parliamentary election order raises the candidate's deposit for the European parliamentary elections from £750 to £1,000. A European parliamentary constituency is approximately eight or nine times the size of a parliamentary one. In 1979 when the deposit was set at £600 the deposit for a Westminster election was £150. Now it is £500.
Restoring the European deposit to its full 1979 value would have meant an in acceptably big increase—£600 in 1979 is the equivalent of nearly £1,200 now—but we felt bound to make some move to arrest its drop in value. The figure of £1,000 now proposed represents a compromise between the £900 indicated by inflation since the last increase and the full £1,200 needed to restore the original value.
The political parties represented in Parliament have been consulted about the proposal to increase these limits, and the aim is to have the increase in place in time for the county council elections in May and the European parliamentary elections in June. I beg to move.
Moved, That the draft regulations laid before the House on 16th February be approved [10th Report from the Joint Committee].—(The Earl of Arran.)
Lord Underhill: My Lords, I am grateful to the noble Earl for explaining these two orders and I need not say much about them. We recognise that changes have to be made in order to keep level with the RPI. As the noble Earl rightly said, in the case of the European elections while I might have jibbed at £1,000 deposit I recognise that each European constituency covers the same area as a large number of parliamentary constituencies.
In referring to the second order dealing with parliamentary and local government expenses, I note that the increase is approximately 7.6 per cent., which is correct as the last change was made in 1987. Therefore, while nobody likes to see increases we recognise the common sense of them and approve the orders.
Lord Houghton of Sowerby: My Lords, this is a shocking proposal to put before the House during the supper break. I have constantly complained about the abuse of the supper break to ask the House to deal with business which, although presumed to be non-controversial, can be acutely controversial. This is certainly an example of that.
We are dealing with a form of taxation on candidature for the European Parliament. I know that in another place these draft regulations were approved without debate, but that shows the conspiracy that exists among the major parties to weaken the position of smaller parties. The aim of a deposit for any election is to act as a deterrent to what are called frivolous candidatures, but some of the most frivolous for our own parliamentary elections are not deterred by the amount of the deposit because they are all rich fanatics.
Here we have not frivolous candidatures but a small party—the Green Party—emerging into becoming a more substantial part of our political life. All the major parties are becoming greener. The Prime Minister is not only stealing the clothes of the Green Party but she is wearing them. That is what other political parties will be doing. The Green Party is the party of the future, and it already has a present in West Germany. The movement throughout the world to save mankind and our planet from destruction will grow in intensity as the peril comes closer.
One can juggle figures about what the deposit should be. However, one must bear in mind that at present, apart from the major parties, the Green Party is the only party contesting the European elections. There were 27 candidates at the last election for the European Parliament who did not represent the parties represented in the other place, and 17 of them were Green Party candidates. That left only 10 to be classified in any way one wishes as frivolous.
To talk about the Green Party as being a frivolous candidate is an insult. Therefore I feel that this is an important matter and I do not believe that the House should approve the regulation. Before I finish, I shall probably object to it. The House is entitled to take notice of what it is asked to do while the rest of our colleagues are having their supper. It is like stealing a march on the workers during the tea break. That is not our way of doing business.
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The proposal is to increase the deposit for the European Parliament from £750 to £1,000. It was last increased from £600 to £750 just over two years go. Since the last election, the deposit has been increased from £600 to £750 and now on the eve of the 1989 election it is proposed to increase it to £1,000. I find that objectionable. I do not know what the arguments are in support of doing so. We are playing tricks on our electoral system which is, in itself, a reprehensible assortment of democratic principles and party interests.
The major parties do not want to be challenged by emerging parties. They want to keep them out as long as they can. That is why they are against proportional representation. The idea that one can object to proportional representation on the grounds of any democratic principle is ridiculous. The objection to proportional representation can only be on the ground that the results of proportional representation will, in some way, fail to provide satisfactory stability and strength of government. That is rubbish.
The 25 per cent. increase in the deposit that took place just over two years ago is followed by a 33 per cent. increase in the deposit before an election has even been held on that raised amount. Does everything have to be adjusted for inflation? What is the principle behind that adjustment for inflation? In the Budget, did the Chancellor increase indirect taxation on alcohol and tobacco in line with the fall in the value of money? No, my Lords. He deliberately refrained from doing that. He made beer and tobacco relatively cheaper under the Budget by not touching the level of indirect taxation; and yet when it comes to an election to the European Parliament, oh, yes, we must look at the fall in the value of money!
I am sorry to be talking thus to the noble Earl, Lord Arran. He is a nice man, and it pains me to have to lecture him, but those who accept posts in the Government must expect to carry some ugly babies, and this is one of them. I must address my remarks to the noble Earl but not in a personal capacity or personal spirit. For him to sponsor the regulation with such a brief justification was inadequate.
If we are to deter frivolous candidatures, what have we done about frivolous candidatures for our parliamentary elections? We raised the deposit for parliamentary elections from £150 to £500 some years ago, but we have not considered increasing that deposit to take account of the fall in the value of money. We have left it alone. Why have we left the deposit for our parliamentary elections alone and gone for the deposit for the European elections? Why that disparity of treatment? It may be argued that in 1984 we increased the deposit for our parliamentary elections by a swingeing percentage of well over 100 per cent. and that that will stand for a little time to come; but that was relative to the value of money at the time. We are dealing with relativities all the time.
This regulation will cost the Green Party a lot of money in terms of the resources that it will have to deposit. I am informed that at the rate of £750 the Green Party would currently have to pay a deposit

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of £58,500. The regulation will increase that deposit by a further £19,500. We say that that is a comparatively small sum, but it is a significant sum for a small party. It can of course be argued that if the party wins the minimum proportion of votes it will get back its money; but in the meantime that money is being held. It has to deposit cash. It is cash that it cannot use for the purposes of the election. In the circumstances, one again sees how that is an imposition on a small and emerging party.
I was on the government-appointed committee on the finances of political parties and when we recommended some measure of state aid we had it in mind that there should be some reimbursement of the actual expenses, up to certain limits, of those who were able to save their deposits. That was an inducement to those who wished to try their adventurous political spirits to go to the election feeling that if they worked hard enough to obtain more than the proportion of votes required to save their deposits they would not only get back their money but they would also get a grant-in-aid on their expenses. There is no grant in aid of the expenses involved here.
This is no small matter. I attach no importance whatever to the behaviour of another place on the regulation because it is the type of thing that can happen when there is no party interest involved in the other place. Those who seek to get a foothold in the parliamentary system are those who find their foot stamped on in this way. It is shameful. I do not belong to the Green Party, or do I? I may. I am not sure. I am liberal in my membership of political parties.
Lord Dormand of Easington: My Lords, with a small "I".
Lord Houghton of Sowerby: My Lords, I am disposed to fight for causes these days and not for wide, grandiose political purposes. I have been 40 years in that game, and they have been entirely unrewarding. Any party that has its eyes on the salvation of the planet is probably thinking more of the reality of the future than those who are bothering their heads about nuclear bombs, the level of inflation or anything else.
I must champion this small party. After all, the Labour Party was in this position years ago. Most members of the Labour Party do not remember those days. I do; very much so. I was a member of the Labour Party 65 years ago. At that time deposits were being lost all over the place. In many cases the Labour Party felt quite unable to fight election because it knew jolly well that it would lose its deposits. It was a long time before Labour felt confident enough—and then by sharing the risk—to fight every constituency.
The Green Party has decided for the forthcoming European election to fight every one of the 78 seats allotted to this country. This deposit arrangement will therefore create considerable hardship. I see a certain amount of coming and going on the Front Bench opposite, but I am by no means finished yet. Noble Lords ought to wait until they have the whole package of my argument before going to get
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reinforcements for reply. It has been. suggested, I understand, in formal discussions with the Home Office that one should take into account the value of the increase in the free post. The increase in the free post has no intrinsic value to candidates. They will get free post and have had free post for a long time no matter what the rate of postage. That is relative too. What is constant is the freedom of the post. It is worth no more or no less because the postal rates go up. It happens to be free. It is like fresh air. Every other candidate, whether or not he has the money, will have free post too. That is not an argument. I understand that it was never put on paper. When one goes to see Home Office officials, one finds that they can make all kinds of suggestions as to reasons for doing things which may or may not represent part of the Government's. conclusions. However, the issue has been raised.
I want to know what the Government feel about the effect of the regulation upon the democratic process, or do they employ only statisticians in the Home Office? Do they not have political psychologists or those who understand the meaning of "the representation of the people"? My goodness me! The words "Representation of the People" are stuck at the head of the regulation. It should be "Discouragement of the Representation of the People" at the head of the regulation. Then we should probably get a little nearer the truth.
I am sorry to take up the time that has been allocated to such exotic items on our menu as swordfish steaks and haunches of wild boar, which I am sure are very desirable things to have for supper if you can get there. Why should I be kept out of this? Why should those of us sitting in the Chamber at the present time be excluded from our meal break? I had to go in for a rushed bowl of soup to enable me to stand on my feet. Noble Lords may laugh, but when one is 90 years of age, as I am now, one jolly well needs something to help one to stand on one's feet. If one does not have it in inspiration, one must get it in a bowl of soup. That is what I have done.
I have not finished yet. I know that everybody having supper will think that they ought to be coming back to resume the business of the House, but having handed over their supper break to us here to debate what they are not here to debate themselves, they cannot grumble if, having been given possession of the Chamber, we decline to give it up. If they want to go back into Committee on the Companies Bill, let them find some other accommodation elsewhere. We happen to be in possession, and we are entitled to make the most of it. I am not filibustering. I am retaliating against the impudence of the Government in putting down for the supper break an item which I think is highly controversial and quite unjust. I therefore think that this House should exercise its constitutional instincts, say that it will not have it and ask the Government to think again.
After all, what does the difference between £1,000 and £750 matter to the Government? The answer is nothing at all. What does it mean to frivolous candidatures—nothing at all or very little. Even if donkeys were standing there could not be more than 10 of them. Indeed 17 of the 27 candidatures that were not of political parties already represented in

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the House of Commons were from the Green Party. I should have expected to see the Liberal and the Social Democrat Benches full in defence of the embryo political party in Britain today. If they have any sense they will go green and greener still. I see a noble Lord rising to go green now.
Lord Tordoff: My Lords, I am grateful to the noble Lord. He will remember that on an earlier occasion we on these Benches divided the House on this very subject in order to protect the rights of minority parties, of which incidentally we do not count ourselves as one. The only noble Lords who voted against the Government on that occasion were members of my party. I suspect that the noble Lord himself joined us. However, as I remember, none of his party came with us on that occasion and we were defeated by a large majority.
7.30 p.m.
Lord Houghton of Sowerby: My Lords, the noble Lord's intervention was nearly as long as my speech. I am sure that he will rise to speak in a few minutes and enlarge on that point. I am trying to help him. I am pointing to where the political future of some of our smaller parties lies at the present time.
Perhaps I may return to my main theme. We must ask the noble Earl to tell us more and to be candid about this. Is this just a rule of thumb business? Is it a statistical exercise? Has it been thought of from the point of view of the interests of the candidates concerned? Have the Government looked at it as a proposition in relative justice to political parties? When these increases were first proposed by the Home Office it presumably communicated with all the other political parties but did not communicate with the Green Party.
That is significant. It learnt about it from the same source from which most of us learn about these things. It shows the arrogance of attitudes that can develop towards the small and the relatively weak. The reason why very often there is such malice and authoritarian retaliation in politics is that when those who have been weak become strong they decide to take it out on the people who were their enemies earlier. That is a common factor in the development of historical differences in weight and power.
I do not suggest that the Green Party will come into office in the near future and decide to exterminate the Conservative Party, but at the same time it will feel that it does not owe anything to the establishment—let us call it that—in facilitating its entry into European politics. Nothing that we have done in recent years to help and encourage candidates for election in parliamentary and other elections has made any noticeable contribution to making their efforts more worthwhile. We have somehow regarded standing for election as something which one ought not to do, and therefore we have made it rather more difficult than one probably thinks it ought to be.
We should be encouraging candidates, so far as we can, without penalising those who, despite a considerable endeavour to establish a new line of
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thought on politics, find that they do not make much of an impression to begin with. I feel that very much in my heart when I see the results of elections where someone in the Green Party or perhaps in some other party representing quite notable causes who has fought an election, gone through all the problems of communication with the public, relying solely upon the free post and having little or no other resources to do it any other way, finally ends up by losing his or her deposit. For those who are not frivolous candidates, that is a great shame. Very often, by trying to stop minority delinquency or irresponsible behaviour one stops worthy people making a first effort to enter into public life. I think that that fact is very much to be deprecated.
I notice that I have now been speaking for only 25 minutes and I think that the supper break will last for a little time yet. I cannot think of any other way in which I can make this protest. There is of course a remedy available in your Lordships' House which is not possessed by another place, but I do not expect any noble Lord to rise and move that this noble Lord be no longer heard. I say that because I have discovered that that is a debatable Motion. In my view a device of that nature will not necessarily save any time. As we know, there are precedents in the House of Commons to deal with honourable Members who speak at great length in order to protest against another matter which would come before that House if they were to stop speaking. Indeed that course of action can be most effective at times; but it cannot be effective tonight, because even if I were to speak all night I would really not have stopped anything very much—except, perhaps, the concluding stages of the Companies Bill.
I am not really given to this form of protest. I can tell noble Lords quite frankly that I do not enjoy it. But what else can I do? I fear that I shall not receive an answer from the noble Earl which will satisfy me. Moreover, I hope that I am not giving any confidences away when I make inquiries. Is it possible for us to divide on these regulations? The information I have received is that we never do. Indeed, that is the trouble with this House; there are so many things that we never do, and no one knows why we never do them. I feel that there are some things which we really ought to do now and again, if only to show our displeasure at what is happening.
Therefore, perhaps I may make an appeal to the noble Earl that the Government should withdraw the regulations and table it for another occasion, at a better time, when those of us who may feel that we wish to test the feeling of the House on the matter can do so with relative peace of mind. It is simply not fair on a noble Lord like myself; indeed, there may be other noble Lords present, and others not present, who feel the same way. We do not always have noble Lords here who feel the same way as we do. Nevertheless, I think that it would be a gesture of goodwill towards the objections to these regulations if that course of action were to be considered.
In my view when a regulation has not even been subject to a word of debate in another place, it should not be dealt with here during the supper break. That is not the way to deal with affirmative

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resolution procedures in Parliament. I do not think that anyone can justify that at all. Therefore, I must continue with my protest and make a very strong request to the noble Earl, or to his colleague sitting beside him, that the regulations should be withdrawn. Moreover, as I understand it, his colleague is a Government Whip and probably has some baton of authority in his hand which he can wave and say, "All right, we will take the matter another day". I do not care at what hour the matter is put on, just so long as one can follow the normal procedures of the House without feeling guilty about it.
I notice that the noble Lord, Lord Tordoff, is speaking to the noble Lord on the Woolsack. I hope that he is not consulting the noble Lord about moving the resolution that I should no longer be heard. If he is, I warn him that I can also debate that issue at great length. I see that the noble Lord wishes to interrupt me again.
Lord Tordoff: My Lords, I am most grateful to the noble Lord for giving way. I must stress that I was not consulting the noble Lord on the Woolsack with any suggestion other than that it would be interesting to see what would happen if the noble Lord were to continue with his protest until 9.30 tomorrow morning. At that time some 57 noble Lords, most of them barristers, will enter the Chamber and occupy it for most of the day. Indeed, that would be a sight worth seeing.
Lord Houghton of Sowerby: My Lords, I think that an attempt is being made to undermine my confidence and make me feel a little guilty.
Lord Dormand of Easington: My Lords, that will be the day!
Lord Houghton of Sowerby: My Lords, I am protesting because the business is being taken at this time. If it were tabled for another time, it would not be necessary to make these reproaches. Moreover, I do not see any battery of legal luminaries in the Chamber at the present time; indeed they are entitled to their supper like everyone else—except us. Therefore we are bound to feel some consideration for them.
I am quite sure that there is a limit to the patience of noble Lords, however few there are, and I really should not pursue my objections to the point of being somewhat ridiculous. However, I have spoken for 31 minutes in the House before, but that has been when I have had a very lengthy discourse to present for the consideration of noble Lords. Nevertheless, I soon learnt that if one speaks for over, say, 17 minutes, one has to be jolly good in what one is saying and how one says it in order to hold the attention of the House. Indeed if there was no one present in the Chamber, except noble Lords on both of the Front Benches, I believe that I could hold the attention of the House for a very long time to come. In fact, I am not quite sure that I cannot hold it already.
Lord Dormand of Easington: My Lords, if my noble friend would be kind enough to give way, I should
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be most grateful. I wish to make but a brief comment on the matter. I think that he is putting forward a very powerful case. However, in fairness to the Front Bench, I think that the main point at issue—and I say this quite seriously—is that the increase in expenses is being made because of inflation. I know that my noble friend has dealt with that point, but I rise to put this particular question to him. It seems to me that he is really saying that he is in favour of a reduction in the deposit. That is his argument as I see it, because he is not allowing for inflation. If that is the case then his argument is quite legitimate. However, I think that he is ignoring the fact that the matter was not debated in another place because Members there felt that it was a self-evident case. Indeed, I presume that is why so few noble Lords are present this evening. Will my noble friend comment on the main point which I have just made?
Lord Houghton of Sowerby: My Lords, I shall be very glad to comment on that point. I fully understand my noble friend's argument and at least from that angle there may be some justification for what we are doing. That is probably why in another place—and in this Chamber too—for that matter—Members may feel that this matter is almost part of the indexing of certain elements in our affairs. However, I draw attention again to the fact that nothing is being done at present to raise the amount of the deposit for parliamentary elections here. That is left where it was put. In 1985 the deposit at home was put up from £150 to £500. That was a big increase, but it had been £150 for years and years right back to my time, and I was elected 40 years ago. If I am right it was £150 then, and it remained £150 until 1984.
When it was put up it had to be jumped up. It was, from £150 to £500, but it was £500 in 1985. No adjustment has been made on that, and presumably we shall go into the next general election with it still being £500, but the European figure has been raised since the last election two years ago when the increase was made from £600 to £750. There has been no general election for the European Parliament since then. That one is coming on now, and it is jumped up from £750 to £1,000 just before the election.
This is quite extraordinary as an exercise in dealing with the European election deposit alone, and I find it difficult. If you look at the level of the deposit for parliamentary elections here alongside the deposit for the European Parliament at the same time, there is no justification for raising the deposit for Europe now while leaving the deposit for parliamentary elections alone. It depends on what premise one is going to base the logic of the matter.
I am sure my noble friend is friendlily disposed towards me and I am grateful to him for his intervention. I am sorry that I am having to persist as I do, and I do not want to put any further strain on the patience of noble Lords opposite. I like both of them on the Bench opposite, and I know it upsets them to see me behaving like this. Our personal relationships in this House are so pleasant and so agreeable that they make life worth living, and yet all of us have a political and parliamentary duty,

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and sometimes it is painful and sometimes it is even unpleasant.
Anyway, here we are. I have said my piece. Despite the fact that the Government have put me in this position at the present time I cannot divide the House without pulling everybody out of the dining rooms and dragging them in here, probably failing to get tellers, so that they go back feeling that this fellow Houghton is just playing fast and loose with the convenience of this place. We have a term for that, but it does not happen to be a parliamentary one.
I do not like to be put in that position, but I am being put in that position and I must object to that too. That is why I say we should take business of this kind when we can act freely. Do not take it when we are inhibited by the innate courtesy of this House from disturbing the convenience of large numbers of Members at present enjoying their supper break, so that we cannot divide the House on a matter which at least to me is of considerable importance. I thank noble Lords for keeping their seats for so long.
The Earl of Arran: My Lords, if I may I should like first to thank the noble Lord, Lord Underhill, for his quick, straightforward and courteous acceptance of these two orders. Secondly, it is always a pleasure to see the noble Lord, Lord Houghton, in his place, as it is tonight. He has apologised for keeping us from our boar heads and soup and I shall do my best not to keep your Lordships from your pudding as well. However, it would be discourteous if I were not to answer the noble Lord, Lord Houghton, although I can assure noble Lords that I shall not be as long as he was in making his points.
To take his two most important points, first as regards the European deposit, we accept that the European parliamentary elections have so far been free from frivolity or disruption by candidates. Some of this freedom may have been due to the level of the deposit, but probably more to the lack of attention paid to these elections by the media. However, the European Parliament has, in the context of the forthcoming elections, been conducting a vigorous campaign to catch the attention of the media, and it seems likely that this year's European elections will attract far greater public interest than earlier ones. If so, only a higher deposit would protect serious candidates from the attentions of the frivolous or maverick candidates with whom many members had to contend at the general election.
The Government wish to proceed as far as possible by consensus when changing electoral law. We know that some other parties would prefer not to see an increase in the deposit, and because of that we are not proposing an increase that would secure the original 1979 value, but there is a strong case for some increase which reflects the erosion in the deposit value. It is important to maintain the principle of raising the deposit from time to time so that we never again face the difficulties that arose with the deposit at parliamentary elections, which, until 1985, had not been increased since 1918, a point brought out by the noble Lord, Lord Houghton.
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As regards the increase in Westminster deposits, the Euro deposit was originally set at four times the Westminster deposit, whereas Euro constituencies are on average nine times the size of Westminster ones. As a consequence of the size of Euro constituencies, the free postage concession will, if fully used, be worth at least £50,000. We are aware that there may be a need to raise the Westminster deposit to maintain its value in due course, and we shall of course continue to monitor that situation and keep it in mind.
I suspect that whatever I say the noble Lord, Lord Houghton, is not necessarily going to agree with it. Nevertheless, I thank him for the passion and conviction that he always conveys in your Lordships' House. I commend these regulations to the House.
On Question, Motion agreed to.

Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1989
The Earl of Arran: My Lords, I beg to move.
Moved, That the draft order laid before the House on 16th February be approved [10th Report from the Joint Committee]—(The Earl of Arran.)
On Question, Motion agreed to.

Companies Bill [H.L.]
7.48 p.m.
House again in Committee (on recommitment) in respect of Part V, on Clause 92.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C6:
Page 89, line 3, leave out ("others") and insert ("one or more directors").
The noble Lord said: This amendment follows on the previous amendment. I may move it briefly by saying that I should like to incorporate the line of argument advanced on that amendment, but there are some particular points, and I shall put them quickly. Its effect would be that those on whom the third party could rely in order to bind the company as the organs of the company who could act irrespective of any question of authority would be the board or one or more of the directors. As I said in moving the last amendment, that is, or would be, similar to the position in many of the European member states of the Community. It would be very similar to Germany and not unlike Denmark: it would not be unlike France, which may have a rather narrower notion of organ now. So there is at any rate that presumption in its favour, rather than this vast expanse of others who can be given the character of organ under the Government's new Section 35A(1), if that is what it means.
The point on the directives, (if I may just recapitulate it) would be with this amendment to satisfy the first directive in Article 9, paragraphs 1 and 2; although, as we said earlier—and in view of the noble and learned Lord's response I must put the

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point again—we would still have to satisfy Article 2. But at least we would begin here with the directors: a known group and a registered group whose ability to act, when it came to individuals below the board, jointly or separately, could be placed upon the register just as is done in connection with the commercial register in the Federal Republic of Germany.
On the other hand, we would then have other agents who would be governed, in terms of the directive, by Article 9 sub-paragraph (3) and Article 3 sub-paragraph (5), and to most purposes by the law of agency. That is the structure that the directive suggests. This amendment would take us along that road. I say "along that road" because the Government appear to be under a number of misapprehensions. For example, during the debates on the 21st February (at col. 510 of Hansard) the noble Lord, Lord Strathclyde, said it was hoped that their proposals:
"would achieve substantially the same beneficial effects as Dr. Prentice's proposals but would avoid some of the pitfalls that had been identified with them."
Then, at col. 512, he said:
"We believe that the application of the doctrine of ostensible authority sufficiently accords with commercial practice, without going further and conferring authority on individual directors".
Our amendment would not—nor does the Prentice Report—go further. It would go in a slightly different direction and it may go slightly less far than the Government in protecting the third party. The only reason for that is that the Government's haste in protecting the third party unbalances the balance of other interests and produces uncertainty. Perhaps I might remind the Government that Dr. Prentice, in his reform of the ultra vires rule report to the Department of Trade and Industry, first of all identified the board as the principal organ—he deliberately uses that term—for conducting the business of the board, and then rightly says that the company will seldom act through its board in all transactions. Then in paragraph 31 he suggests:
"in the light of the contemporary role of the company director, it is proposed that the acts of an individual director be made binding on a company".
However, he makes clear that for other agents normally rules of agency would apply.
So Prentice was in accord with the structure of the directive and our amendment, although not being pure Prentice, is half Prentice in that it accepts the Government's clause in 35A(1) and says "Yes, the board of course and any other director who is authorised to act for the company" and we would wish to add—perhaps this could be a matter for Third Reading because it is, after all, compliance with Community obligations, as the Commissioners pointed out in 1977—of proper registration of their position in regard to representation under Article 2(1)(d)(1) of the directive.
That seems to us to be not only a necessary but a sensible situation. It is true that the company is then at risk of anything the directors do in regard to outsiders; but the shareholders elect the directors and if there is any control there it will be exercised. That seems to us to be a sensible and certain structure. I stress "certain" because, again as was
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said in the Haage case by the Advocate General in 1975, you can get certainty as a third party by looking at the register to see who is on it as one of the organs.
So I beg the Government to consider carefully what need they have to go beyond the structure of the directors being the organs, a practice adopted by almost all the member states. I believe that one or two who do not at present adopt the practice are moving towards it. It produces certainty, which is so highly valuable in commercial operations, and it produces a situation where the third party is properly protected and which is in accordance with the directive, not only in spirit but in actual legal structure. This amendment would not get us there completely, as I say; but if it were accepted, I believe that the other small bricks that would be needed for the complete structure could easily be added. I beg to move.
Lord Fraser of Carmyllie: While I note what the noble Lord has said about proposals of now a greater degree of European assimilation might be achieved, this amendment cuts down on the protection which third parties ought to have in dealing with a company. It would appear to me, in connection with the European comparisons made by the noble Lord, rather to hark back to the present Sect ion 35 of the Companies Act, which refers to acts:
"decided upon by the directors".
I should have thought the noble Lord would agree that that section has not been regarded as a very happy provision.
If I may risk repeating briefly what was said in relation to the last amendment, Section 35A is concerned with the authority of the board of directors. It does not confer authority on anyone else. It is concerned with the limitations on the board's authority. We have not gone beyond the structure of the board of directors as being the organ of the company. Section 35A is concerned with the authority of that board.
It does not seem as though there is really a great deal between us on this. The Government's intention is that the law should correspond to commercial reality, with the company, as the noble Lord appreciates, seldom acting through its board: it normally acts rather through agents and officers. If the third party is only fully protected when he deals with the board or indeed with particular directors, either he will not often be protected or he will have to take the trouble on each occasion to check that the board has authority to delegate power to agents. The latter would be likely to hinder rather than help the workings of commerce.
In these circumstances, it is our view that a third party ought to be protected, provided always that he is honest and that the person with whom he is dealing has authority, actual or ostensible, from the board to enter into the transaction. The third party should not have to be concerned with the inner workings of the company and its constitution.
Lord Wedderburn of Charlton: I see that dinner has not improved matters. First, we are not arguing that third parties should look inside a company's

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constitution: of course not. The third party should be able, as was said in the Haage case, to rely upon appearances. Why did they say that? It was because the third party, if he wants to, can always see whether or not somebody is on the register as an organ of the company. That is the end of the matter. That point is about Article 2. Nobody is contesting that except perhaps the Government, and they will not put down an amendment to satisfy Article 2.
I say again that unless the commission has changed its view since 1977, we are not in contravention of Article 2. Maybe it has changed its view and the noble Lord will not tell us: pehaps he will tell us at Third Reading. Of course I see the point that it is the authority of the board of directors which is primarily an issue as the first part of Section 35A(1). We traversed that ground when we looked at the types of authority on the previous amendment. It is not just a question of actual delegation but of implied, apparent or ostensible authority. In among all those matters, if you extend it to all other persons who may then be the object of such types of authority, you get a much wider extension. I quite agree about that.
The lines of battle are drawn up like this. The Government say that the third party must be protected; and so do we. The Government say a third party can only be protected if the board of directors has complete authority, and that authority includes all forms of authority to any other person, whoever they may be, including the office boy. We say that is too wide. We say we want certainty because that is very uncertain. We want what the director says we ought to have; namely, a clearly stated number of people, wider than the directors, if one likes, who are registered as the organs of the company. Then the third party knows where he stands every single time. I cannot understand why the Government do not want to adopt the structure which—give or take cultural differences—is the structure in most commercial systems of law in Western Europe and the Community. However, we put it to them; I am sure that as always they will say that they will think again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Murton of Lindisfarne):The next amendment, Amendment No. C7, pre-empts Amendments Nos. C8 and C9. If it were to be agreed to I should not be able to call Amendments Nos. C8 and C9.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C7:
Page 89, line 9, leave out from ("party;") to ("and") in line 12.
The noble Lord said: It would of course be a joyous moment if Amendment No. C7 were agreed to. I very much hope that the Government will do so. However, this amendment turns to the other matter, the other side of the coin in Section 35A, particularly subsection (2).
The other side of the coin is what the noble and learned Lord referred to just now as "provided the
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third party is honest". That becomes rather important because as we have picked our way crabwise through the sections we have found that at all points the third party is being protected. The interests of the shareholder and the internal interests of the company which include those of the employees are put aside at all points where there can be two views.
Now we come to the question: who is the third party who has this vast armoury of weapons to bind the company? I put it that way because that is the way to test it. We agree with the noble and learned Lord, "provided the third party is honest". I would add one other feature—that is, within what is allowed under the directive. I have relied on the directive, as I must, which does not allow the mere disclosure of the limits on the powers of the organs of the board of directors to estop a third party. That is in Article 9(2).
It obviously suggests that the third party is not to be put on inquiry. The Government have logically included Section 35B more or less to provide for that. We agree with it. However, the first directive does not require that a court must be instructed always to ignore the bad faith of a third party if the only evidence of his bad faith arises from his knowledge of the lack of authority. There is a clear distinction, if you like—a distinction which is found in more than one system—between the disclosure of the articles not being an estoppel and the knowledge on the third party's part being evidence of bad faith.
We may take various examples if need be but the point is obvious without them. The third party knows all about it. What can be made of his knowledge? The Government again in Section 35A(2)(b) have gone way beyond the directive, balancing out in the interests of the third party. This is a very delicate matter because as the clause stands the company can use the third party's knowledge in the other persons presumably authorised by the directors as sufficient evidence to persuade the court of his bad faith. All that paragraph (b) says is that the act is beyond the powers of the directors.
So as regards the other person the knowledge can be used as evidence and if necessary, complete evidence—whereas in regard to the board of directors, it cannot. That seems to be, first, rather illogical; and, secondly, very uncertain in its effects. In our submission, this oddity—and it is merely an oddity in drafting which the Government may wish to examine—discloses the way in which the knowledge of the third party is wrongly approached.
We say that the courts have the right approach at the moment. If the noble Lord tells me that there is a view that that is contrary to the directive, as I believe some people have said, I should wish to argue about it, I believe it is not. In the case of Barclays Bank Ltd. v. TOSG Trust Fund Ltd. Mr. Justice Nourse (as he then was) said in 1984:
"Notice and good faith, although two separate beings are often inseparable".
Then he cites another judgment, and says:
"What it comes to is that a person who deals with a company in circumstances where he ought anyway to know that the company has no power to enter into the transaction will not

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necessarily act in good faith. Sometimes, perhaps often, he will not. And a fortiori where he actually knows".
I stop there because I think the subsequent comment may not be one on which I would wish to rely. However, I rely upon that passage. The courts have applied it largely in that way, knowledge in the third party of lack of authority can be evidence of bad faith.
Here we are told, "If that's all you've got, you can never make out bad faith". Or to put it a better way perhaps, "If all you've got is complete knowledge in the third party"—let us imagine a case where the third party is the only person who knows what is going on. The directors and the agents have all made a mistake about the powers of the directors. The third party is allowed to enforce the transaction, no matter what qualitative assessment a court might put on that evidence which may continue for years in a complex and expensive transaction. We say, "That cannot be right, it is not what the directive says". We do not advance it merely for that reason, we say it is permissible to advance another view. The view is much more like that which was put by Mr. Justice Nourse in the TOSG case. It is certainly not one which should pre-empt and prohibit a court from examining that knowledge where it is the only evidence of bad faith. I beg to move.
Lord Fraser of Carmyllie: We need to provide some gloss to the meaning of "good faith" in terms of Clause 35A, otherwise—and I have to disagree with the noble Lord on this—we shall continue to be in breach of our Community obligations.
Perhaps I may explain it thus. The courts have interpreted the "good faith" test in Section 35 of the 1985 Act—and their arguments would seem to apply equally to the new Section 35A(1) if it were to stand alone—as meaning that merely if a person knows of any limitation on the authority of the board of directors to bind the company deriving from the company's constitution, he will not be protected. However, as I have explained, the first directive protects a third party from a limitation on the authority of the board of directors even when he knows of the limitation. At the risk of telling the noble Lord something which he already knows, perhaps I may remind him of what the first directive says in Article 9(2); namely:
"The limits on the powers of the organs of the company arising under the statutes or from the decision of the competent organs"—
I stress this—
"may never be relied on as against third parties, even if they have been disclosed".
The noble Lord will be aware that the preamble also states that the protection of third parties must be ensured by provisions which restrict to the greatest possible extent the grounds on which obligations entered into in the name of the company are not valid. As a result, Section 35 does not properly implement the first directive and we would not properly implement it if we deleted the new Section 35A(2)(b). While I appreciate from what the noble Lord said that he does not agree with the initial assertion that I made that to do otherwise would be in breach of Community obligations, nevertheless I
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have to say to the noble Lord that that is certainly the Government's view.
In view of what was said as we moved on to this amendment, perhaps I may suggest to the noble Lord that I might have something of a small treat in line for him when we reach the next amendment.
Lord Wedderburn of Charlton: I do not know whether to be afraid or pleased at that. However, I really cannot accept what the noble and learned Lord says. The Government should look at this matter again. It is rather amusing that when the Commission has told us twice that we are in breach of Article 2, there is not a peep from the Government as regards doing anything about that. However, on this occasion when they rely upon some unspecified dicta in the cases—I say that with great respect—and say we are in breach for the Government's own reasons, they insert a paragraph.
I quite agree with the noble and learned Lord that there are other cases and dicta upon which I did not rely, and that there are variations. If the noble and learned Lord wishes to clarify those cases, that is fine. However, if he takes a look at Mr. Justice Nourse and the judgment of the noble and learned Lord, Lord Wilberforce, in Midland Bank Trust Co. Ltd. v. Green which is cited by Mr. Justice Nourse he will find something rather different from the case he put before me without citation.
I agree that we do not wish to come to full citations, but it is not true that the courts have always interpreted knowledge of a limitation to be lack of good faith. That is just not the case. The courts have said that they are different things and 1hat notice may be evidence of lack of bad faith. That is a very different proposition. There may be a form of words between what the noble and learned Lord the Lord Advocate advocates and what I advocate, but I resist very strongly the notion that this form of words is required for Article 9.2 in the light even of the preamble, because that is not what Article 9.2 states. The article does not talk about lack of good faith always being derived from things other than a knowledge of the limits. One can look at the Italian situation in this regard. Laws were adopted in 1969 and have never been challenged. In the Italian situation, for agents outside the objects problem, the third party cannot rely upon the transaction if he has an intention to harm the company. Of course it may be good evidence of that that he knew about the limits. It may be very strong evidence of that, or even full evidence.
That is true also of the French code. Articles 98 and 113 show that the third party in the objects case on this occasion is someone who knew or should have known about the limits. It is strange that the Government want to insist upon this very extraordinary, strong prohibition. I am not in favour at all of uncertainty, and I am not in the least bit against third parties realising their reasonable legitimate expectations and throwing out the ultra vires principle to do that, and relying upon the directive to cut out lack of limitation of the directors being useful against the third party. That is all perfectly correct. However, I am against the unscrupulous third party who fraudulently uses an opportunity

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which everyone in the company, shareholders, directors, employees and everyone else, are mistaken about, and which does the company enormous damage. The third party knew that that opportunity was wrong and that everyone else was mistaken and that he would derive benefit from his action. The Government are saying that if the only evidence one can show is that knowledge, even though it be the evidence that absolutely pins it down, one cannot throw him out from the umbrella of good faith. I do not believe most people in this country would take that view of commercial reality or of commercial ethics. I do not believe the directive requires us to take that view. However, the noble and learned Lord has told me the Government's view. He has told me that there are better times to come and I can only hope for them.
Lord Lloyd of Kilgerran: Before the noble Lord decides what he is going to do about this important matter, I must say that I agree entirely with what I understand he has been saying. However, I should say to the noble and learned Lord the Lord Advocate that from time to time I have been trying to get into the Bill from the parameters of directives other than the first and second directives. I have been considering directives that have not yet been considered fully—for example the 13th directive. Was the noble and learned Lord the Lord Advocate saying when he referred to good faith that the construction in new Section 35A(2)(b) which states:
"acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors",
was contrary to Article 9.2 of the first directive? I understand that the noble Lord, Lord Wedderburn, agrees with my summary. If that is the case, we should consider this matter very carefully.
8.15 p.m.
Lord Fraser of Carmyllie: I am saying that, yes, we do require to include this provision if we are to comply with what is required of us in terms of our Community obligations. Without that provision, we are not complying with the terms of Article 9.2 of the directive, which I read out earlier in my original response to the noble Lord. I believe indeed that we must have this provision.
Lord Lloyd of Kilgerran: I am even more bewildered. I understand that the noble and learned Lord is therefore saying that the present provision in new Section 35A(2)(b) must be included because of Article 9.2. Is that the noble and learned Lord's submission?
Lord Wedderburn of Charlton: The point that has just been made is also my understanding of the submission of the noble and learned Lord the Lord Advocate. I take the point of the noble Lord, Lord Lloyd of Kilgerran, very strongly. Presumably, therefore, the noble and learned Lord the Lord Advocate and the Government would not mind reproducing instead of new Section 35A(2)(b), Article 9.2? So if I moved an amendment in the words of Article 9.2 the noble and learned Lord would accept it?
Lord Fraser of Carmyllie: I am saying that in terms of new Section 35A(2)(b) we comply with what is required of us in terms of Article 9.2. If it is accepted that that is a compliance, I do not quite follow why the noble Lord thinks it would be in any sense an improvement simply to adopt into the article— —
Lord Williams of Elvel: Before the noble and learned Lord replies to the submission of my noble friend, I should say that my noble friend is trying to say very clearly that the Government go beyond the directive. If we were to move an amendment on Report which sticks literally and closely to the directive, would the Government accept it?
Lord Fraser of Carmyllie: I should say that I would look at that proposal without commitment. However, I have some difficulty in accepting that what is laid down goes in any sense beyond what is presently required of us. It certainly would not be appropriate, as the noble Lord seemed to be suggesting, that the terms of Article 9.2 which I read out, could simply be lifted holus-bolus out of the article and incorporated as new Section 35A(2)(b). However, I believe there is a further amendment on this matter, and I may be able to expand on this a little further.
Lord Lloyd of Kilgerran: The noble and learned Lord the Lord Advocate has been most helpful about this matter. However, he mentioned taking hocus-pocus——
Noble Lords: Holus-bolus!
Lord Lloyd of Kilgerran: I apologise. My classical knowledge is very weak indeed. I am trying to be helpful. I wonder what the original directive stated in French as regards bad faith. Is there a translation here? I do not understand how the noble and learned Lord has come to use the English term. What is meant by the term "bad faith"? Is the term "bad faith" the difficulty?
Lord Wedderburn of Charlton: I do not wish to get the Government off the hook or out of the consequences of what, in view of the remark of the noble Lord, Lord Lloyd of Kilgerran, they have done in having bought a bit of a pig in a hocus-pocus. I believe that is what they have done here.
I am sure the noble and learned Lord the Lord Advocate would agree that the French text is still the authoritative text on a 1968 directive. The only difficulty with the French text is the word statut, meaning statute, which we would normally translate as memorandum and articles. Here it is translated as statutes. But other than that I think the translation is very good, especially as it talks about competent organs. However, I ask the Government to consider this matter very seriously. The purpose of my asking the Government whether they would incorporate Article 9.2 into the Bill rather than new Section 35A(2)(b) was not any kind of a trick; it was to draw attention to the fact that if the Government will not accept Article 9(2), other than for translation or literal reasons, they must be going slightly beyond its provisions, as my noble friend Lord Williams suggested. I believe that they have gone somewhat

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beyond the directive and further than most people would want to go. In view of tonight's debate I think that we would be entitled to come back to the matter at a later stage.
We urge the Government to look at the matter. It is a non-partisan point. It is simply a question of where one thinks good faith ends, subject to the requirements of the directive. I think that the Government have gone too far. This is another example of their drafting pushing away the interests of the third party and perhaps being somewhat indiscriminate. However, at this stage perhaps I may leave the matter there. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C8:
Page 89, line 12, after ("directors") insert ("under the company's constitution").
The noble Lord said: This is a mere point of drafting. The amendment would make the clause better. I beg to move.
Lord Fraser of Carmyllie:It is accepted.
On Question, amendment agreed to.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C9:
Page 89, line 12, after ("directors") insert ("but shall be presumed not to be acting in good faith if it is shown that he knows, or must in the circumstances be aware, that such an act is beyond the objects of the company stated in the memorandum").
The noble Lord said: This is also a good amendment and would make the Bill a great deal better. That phrase seems to produce the effect one desires. In the light of the noble and learned Lord's earlier comment, I believe that I ought to restrict my remarks and be brief. The amendment is moved on the basis that where the excess in the act is an excess outside the objects of the company, the directive (under Article 9(2)) allows a member state to produce an exception such that the transaction is not binding if the third party knew or must in the circumstances have known that the act was such an excess outside those objects. That is the position in France, Belgium, the Netherlands, Denmark and the Republic of Ireland. It is not quite the position in Germany and Italy, although it almost is. I hope that it will be the position here. I beg to move.
Lord Fraser of Carmyllie: I recognise that the wording of this amendment is drawn from an option in Article 9(1) of the directive and that its adoption would not be contrary to our Community obligations. However, we have identified certain difficulties with this option which we have sought to overcome by the wording of new Section 35(2)(b).
I think that it is necessary for me to elaborate upon this to explain why I adopted the attitude I did towards Amendment No. 7. I should like to set out some of the circumstances which led us to the view that a person should not automatically be presumed to be acting in bad faith if it is shown that he knew, or in the circumstances must have been aware, that the act was beyond the objects of the company stated in the memorandum.
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First, a person may know of the contents of a company's memorandum or articles of association but may have honestly—and, given the length of some objects clauses at the present day, not unreasonably—have failed to grasp the implications of the contents for his transaction with the company. New Section 35A(2)(b) makes it abundantly clear that he is not to be taken as having acted in bad faith solely for that reason.
Secondly, a corporate body may act through one agent in a transaction with a company who is ignorant of any limitations on the authority of the company's directors to enter into the transaction. Those limitations may, however, be well known to another agent of the body corporate who is unaware of the transaction. For example, if the body corporate is a bank, the knowledge may be held by one branch of the bank and not another. New Section 35A(2)(b) makes it clear that the body corporate will not be taken as acting in bad faith solely because the knowledge of the other agent is imputed to it.
Thirdly, a body corporate has what I might call an "institutional" memory. Like an elephant, it is regarded as never forgetting a fact. A limitation on the authority of a board of directors of a company may well have been known to the managing director of the body corporate ten years ago. However, he may have left or the file may have been mislaid, and the present managing director may honestly enter into a transaction with the company in ignorance of the limitation. New Section 35A(2)(b) makes it clear that the body corporate will not be regarded as having acted in bad faith solely because of this institutional memory.
The key word in new Section 35A(2)(b) is "only". Ultimately it will be a matter for the courts to balance the interests of shareholders and persons dealing with the company. The word "only" is inserted to assist the courts in this difficult task. The effect of the provision is just that notice is not to be automatically taken as amounting to bad faith. It will be up to the courts to establish whether bad faith is established by the surrounding circumstances.
We believe that the honest should be protected. We also believe that the policy of the directive in connection with authority—that knowledge of lack of authority itself, without more, is not to mean dishonesty—is right.
Lord Lloyd of Kilgerran: I listened very carefully to the presentation which the noble and learned Lord made from his brief, and I have tried to understand the three points he has in mind. I put my name to the amendment, but I wonder whether it might be better if it were to read,
"shall be presumed to be acting in bad faith if it is shown that he knows".
There is some confusion between the words "good faith" and "bad faith" and whether bad faith is the opposite of good faith in the context of Article 9(2) of the directive. I shall study carefully what the noble and learned Lord has said and consider whether an appropriate amendment should be put forward at Report stage.
Lord Fraser of Carmyllie: I should be grateful if the noble Lord would read what I have said. I have sought to stress that the test exists by reason only of a person knowing. If that is appreciated I believe that the matter falls into the proper context.
Lord Lloyd of Kilgerran: I am obliged to the noble and learned Lord.
Lord Wedderburn of Charlton: The noble Lord, Lord Lloyd of Kilgerran, may have understood the noble and learned Lord. I am not sure that I did.
Lord Lloyd of Kilgerran: I did not say that I understood him. I said that I would read what the noble and learned Lord had said.
Lord Wedderburn of Charlton: The noble and learned Lord the Lord Advocate appears to have been attacking either Article 98 of the French code on companies or some other provision. He did not talk about our amendment. Our amendment does not say that anyone shall automatically be said to be acting in good faith. Leaving aside what we have just debated, which we hope that the Government will look at again because that would make this the substantive part of the paragraph, our amendment says that the third party,
"shall be presumed not to be acting in good faith if it is shown that he knows, or must in the circumstances be aware, that such an act is beyond the objects of the company".
Those last words are taken almost verbatim from the directive. The noble and learned Lord and I are at one in agreeing that it is permitted—not only that it is permitted but that those are the words of the directive, with minor adjustments.
We propose taking that option from Article 9(2) of the directive. That has been adopted by six member states and incorporated in their commercial law. What is the argument against it? The noble and learned Lord says that the argument against it is that one should not say that people are automatically said to be acting in bad faith because they have certain knowledge. That is partly a result of what they insist on in paragraph (b). We shall let that go. However, we say that a presumption should arise if, within the terms of the directive, the third party is in that position. Then it is for the court to decide.
I cannot for the life of me see what commercial argument the Government are advancing. That is the legal argument. It is not only permitted by the directive but encouraged, if one looks at the preamble. It has nothing to do with two agents. The two agent problem is as old as the hills and will continue to exist. Any code of law has to deal with the problem of two agents within a corporate body, one knowing something and the other not knowing. However one drafts the Bill, that problem will arise. In relation to the question as to how a company forgets, I remember writing an article on that subject in the light of a judgment of Mr. Justice Megarry in 1984.
I do not see that those problems have anything to do with this matter. We say that, as the directive suggests, a third party who knows that it is beyond the objects shall be presumed not to be acting in
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good faith, but the court should decide. That is what the directive says, but the Government have no reply to that. I thought that the noble and learned Lord intended to give me good news about this amendment, but we are further apart than ever and that distresses me. I do not like to have to let this amendment go, and I ask the Government to look at it.
Lord Lloyd of Kilgerran: Before the noble Lord sits down, I must tell him that I did not quite catch what he said. He referred to an article that we should read before the Report stage. What is that article?
Lord Wedderburn of Charlton: The noble Lord presses me to full citations. I have to do them from memory. In 1984, there was a judgment by Mr. Justice Megarry in a case which I believe is called Stanfield against somebody or other, on which the noble Lord will find a note of not abysmal quality in the Modern Law Review of the same year. It is headed: "When does a company forget?"
Lord Lloyd of Kilgerran: Did the noble Lord write that article?
Lord Wedderburn of Charlton: Yes, I wrote the article. There is very little literature on the subject because it does not seem to come up very often. The noble and learned Lord raised it tonight so it is not my fault.
We must ask leave to withdraw the amendment, but I must say that the effect on paragraph (b) of not having this and insisting on the previous one should make anyone who is concerned with commercial morality and who is not an unscrupulous third party rather sag at the knees. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.30 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C10:
Page 89, line 20. after ("directors") insert ("or of any person to whom they have given, or have purported to give, authority to bind the company").
The noble Lord said: In moving Amendment No. 10 I shall speak also to Amendment No. 11. These are drafting amendments which I shall move with just a word of explanation. They are similar to the amendment that we moved concerning new Section 35. In each case there is a preservation of powers or liabilities in respect of directors. It would seem sensible that there should be mention of those other persons who have been authorised by them or to whom they have purported to give authority. If the noble and learned Lord wants a principle, which is perhaps more quoted in Scotland than in England these days, it would be: expressio unius exclusio alterius. It seems to me that it is arguable that a court could get into a problem if it applied that maxim here. We believe that these amendments would clear up the mess and, as with most of our amendments, bring about greater certainty. I beg to move.
Lord Fraser of Carmyllie: I should like to suggest that this amendment—indeed, Amendment Nos. C13 and C14—are wholly unnecessary and should be resisted on the grounds that they might cause confusion. As I understand it, the noble Lord has picked up this point because new Section 35A mentions persons authorised by the board of directors. Noble Lords may wish to ensure that the rights of members against such authorised persons——
Lord Williams of Elvel: I am sorry to interrupt the noble and learned Lord. Is he speaking to Amendments Nos. C10 and C11 only?
Lord Fraser of Carmyllie: I can assure the noble Lord that, as I understand it, I am speaking to the amendments that refer to page 89, line 20, and state certain words to be inserted after the word "directors".
Lord Williams of Elvel: I am sorry to interrupt the noble and learned Lord again. We are trying to get on with the Bill. The grouping that I agreed for the Opposition was Amendments Nos. C10 and C11 together.
Lord Fraser of Carmyllie: That is what I thought I was speaking to and I am sorry if I misled the noble Lord. I should have said that I was speaking to Amendments Nos. C10 and C11. I apologise for that.
Before I was corrected, I was saying that noble Lords may wish to ensure that the rights of members against such authorised persons are unaffected by the protection conferred by that new section. However, if one looks carefully at the new section, it is apparent that it is only the power of the board of directors that is to be deemed free of any limitation under the company's constitution. The new section speaks of
"the power of the board of directors to…authorise others to [bind the company]".
Since it is only the power of the directors which is affected by new Section 35A(1), it follows that no qualification of the new section needs to be made in respect of members' rights arising from proposed acts of persons authorised by the board which exceed the authority conferred in them.
The same arguments apply to a large degree in relation to the second of these amendments, which is concerned with the liability of an authorised person or one who is purportedly authorised. Nothing in new Section 35A affects his liability where he has exceeded the authority given to him. It is, however, true that such an agent, other than a director, who knows only that a power delegated to him is beyond the powers of the board of directors, or that there is no power to delegate to him, is entitled to rely on new Section 35A(1) against the company if it is sought to make him liable for any loss. That is because he is entitled to assume that the directors must sort out the matter of their authority. But that is as it should be. Subsection (3) makes it clear, however, that an agent who is a director is not entitled to rely on subsection (1).
Lord Wedderburn of Charlton: I see that point as far as it goes. It is interesting that the noble and learned Lord's response again brings out—and in this case I do not think that I would argue against it—how insistent the Government are about preserving the rights of the third party, because we are here dealing with the sub-agent. The distinction that they draw between external and internal effects of ultra vires and the like is not sustained because here, as the noble and learned Lord said, the third party is in fact an internal party. He is the sub-agent of the board, but he is to be treated as a third party under subsection (1). It is for that reason that his liability is to be put aside.
That is a most important clarification which will no doubt hearten those who will be agents of boards without authority. Nevertheless, curiously enough, such a person will be in a better position than the agent of a board with authority in certain respects if he does anything in excess. That is a most important clarification and we are grateful for it.
I am not sure whether the noble and learned Lord answered the point relating to Amendment No. C 11. I shall not go through all the circumstances because that amendment concerns line 22 and relates to liability. There I think the expressio unius point is a valid one—I see that the noble and learned Lord may have answered the previous point—in the sense that this is a liability point and never mentions the directors. Why does it not mention those to whom authority is purportedly given, as that is the situation under subsection (1)? What about such matters as warranty of authority? Presumably the directors retain that liability of breach of warranty of authority, but does that apply to the sub-agent who is given reputed authority sufficient to bind the company under subsection (1)?
What about a third party who can rely only on that doctrine? Why exclude the third parties referred to in our second amendment? I see the point about the first amendment, but I cannot see how it relates to the second. Unless the noble and Darned Lord wishes to add anything, I shall leave him to perform that degree of cogitation on the matter that he thinks proper, and I hope that it will be profound. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. C11 and C12 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. C13:
Page 89, line 26, at end insert ("and that act does not cause any director to become a constructive trustee for the company").
The noble Lord said: I appreciate that Amendment No. C12 was grouped with Amendments Nos. C13 and C14. I hope that it does not inconvenience the noble and learned Lord if I move Amendment No. C13 and speak also to Amendment No. C14 because Amendment No. C12 has to some extent been overtaken by our debates.
The point in these amendments can be put very briefly. In a sense it has been made into one of the most important points that has come out of our debates on the new Section 35 and the rest of Section 35A, to the extent that they have shown that the

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constructive trusteeship doctrine is possibly to be cut down. We shall look very hard at those passages in Hansard. When we were considering earlier the amendment to the new subsection 35(3) it appeared that the constructive trusteeship of the directors would be limited in certain respects by the lack of derivative action, and that of third parties it seemed might well be limited a great deal.
That makes it all the more important that it should be absolutely clear under this section that, as we submit, there cannot be a ratification of an act, which I suppose, in colloquial terms, one could talk of as a misappropriation of corporate assets or opportunities. That would be the colloquial way to put it. We have put it in two forms: first, the narrow form in which the directors become constructive trustees; and secondly, adopting some words of Lord Davey in the famous case of Burland v. Earle, that the minority shareholder may sue where those in control have misappropriated money, property or advantages directly or indirectly (see 1902 Appeal Cases, page 93). That is a citation which I am sure is never far from the heart of the noble and learned Lord the Lord Advocate.
There are thus two ways of putting this matter: the constructive trustee way or a descriptive way. We believe that in those two situations if the Bill is enacted in this form it will not only cut down upon constructive trusteeship, which is at the root of company law in terms of the higher fiduciary duties—and I am not talking about negligence or a mere secret profit—which to my knowledge no one in any document anywhere has ever suggested should be cut down.
The reason why this matter would be serious is that there is a big difference between adopting a transaction and ratifying it. Ratification is a well-known doctrine. If I am the company in general meeting and I am allowed by whatever resolution to ratify that which the noble and learned Lord the Lord Advocate has done, then it is validated. It is true that there are long articles on this matter of just what ratification means. I could refer the noble Lord, Lord Lloyd of Kilgerran, to many of them later this evening if he so wishes; he says "not tonight", although they say that there is no time like the present. However, there is a difference and everyone knows it.
The Bill chooses ratification and I ask why in cases of this type. I quite see that where it is just a matter of a secret profit which the general meeting can ratify anyway it is quite sensible, and here what would have been the ultra vires transaction is to be ratified. But if it amounts to a constructive trustee misappropriation of corporate assets, then it is a very serious matter indeed to give a new power of ratification to the general meeting. It will not do to say, "Oh well, it does not matter too much because it can only be done by special resolution". There has been quite a wave of approval for the idea that the company could use a special resolution instead of a general resolution in adopting what would have been ultra vires transactions.
One must remember that in our law under the authorities as they have been since 1887 it is quite
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clear that the directors and those with the same interests can normally go into the general meeting and vote perfectly properly on that resolution. I have always rather been in favour of saying that if one is to have an enterprise company, one might as well have some enterprise about it and people should vote in their own interests at the general meeting. That is perfectly sensible. However, that is the situation, and it is no good saying that the directors and their interests can be excluded from the vote. One cannot do that.
So what we have is a breach of trust, as the courts always call it, by misappropriation which, if it is beyond the powers which flow from the objects of the company—and one could debate that precise formula but it is the one used in the Bill—can be ratified. If the word "adopted" had been in the Bill—and I deliberately did not move an amendment to replace the word "ratified" by "adopted" because it is a wider issue than a question of semantics— it would at least be better. Perhaps the Government would at any rate think about using the word, "adopted". If they will not do that, perhaps they will think of something even better, such as the wording of our amendments. I beg to move.
8.45 p.m.
Lord Fraser of Carmyllie: At the outset perhaps I may say to the noble Lord that, although at one point he seemed to have some difficulty in understanding the relationship between Section 35 and the new Section 35A, from his observations on this subsection it appears to me that he understands the relationship very well. As he said, Amendment No. C13 would prevent ratification if the act in question has caused the board to be liable as constructive trustees, while the third amendment—the second one referred to—would prevent ratification where the act amounts to a misappropriation or fraud, or misfeasance on the part of the directors.
In looking at the amendments tabled by the noble Lord, it has been assumed that his concern is essentially twofold and stems from the possibility that the courts might take ratification as being, of itself, sufficient to exonerate the directors from any liability for the act. If ratification does have that effect, then two questions of minority protection arise: firstly, where delinquent directors themselves are in control of the company; and secondly there is the further problem that the full facts may not be before the meeting at which the question of ratification arises.
I can assure the noble Lord—and the noble Lord, Lord Lloyd of Kilgerran, indicated to me earlier that this subsection was of particular interest to him—that it is not our intention that ratification of itself should exonerate directors from a breach of their duty. Shareholders should be able to decide that they wish to take the benefit of a transaction, but sue the directors for any loss arising from it.
The noble Lord made some play on the use of the word "ratification". I think I would have to accept that the present law on the effect of ratification is not altogether clear. However, there have been useful discussions with representatives of the Law Society at which, among other things, the effect of ratifi

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cation under this provision was discussed. I must say to the noble Lord that in the light of this discussion we are considering whether the intended effect of ratification under subsection (4) should be made clear and can be clarified without affecting, by implication, the general law as to the effect of ratification.
Given that indication of some further discussion, I hope that he will appreciate that the concerns he expressed are indeed understood. Clearly it is a very important matter. I trust that in those circumstances, and appreciating the linkage that there is between Section 35A and Section 459 of the 1985 Act, as I mentioned before, the noble Lord will be prepared to withdraw the amendments as they stand.
Lord Peyton of Yeovil: I should like to associate myself very briefly with the tribute paid by my noble friend to the noble Lord opposite when he referred to the interesting observations that the noble Lord had made. I have had the opportunity of hearing the noble Lord speak on many occasions in this Chamber but I do not think that I have ever heard him speak in a manner so penetrating, so profound, so stimulating or so entertaining as he has done tonight. I look forward to hearing him exceed those obvious talents that he has shown on many occasions.
Lord Wedderburn of Charlton: What can I say, except that I am very grateful to the noble Lord. He is very kind. However, I would rather win occasionally as well. As this is the last of this series of amendments, perhaps the noble and learned Lord the Lord Advocate will allow me to make a few remarks before with drawing the amendment as I obviously have to do.
The argument shows—if it were not the noble and learned Lord I should have used the words—how hollow is the distinction between external effects of ultra vires and internal effects. We have here something that is pre-eminently internal. It is the question of directors, and liability of directors inside the company. All kinds of efforts are made to change the law. Our position is that ratification should end the liability. The noble and learned Lord says that that is not the case. If so, why do they not alter the word "ratify" to "adopt"? He says that discussions are taking place. We look forward to the results. That is something that ought to be changed.
It occurred to me when I was listening to the noble and learned Lord the Lord Advocate, who is very stimulating, that subsection (3) ought to be changed. At the moment subsection (3) states that subsection (1) does not affect the liability of the directors. However, it ought to state that subsections (1) and (4) do not affect the liability of the directors if that is what is meant. Otherwise, no matter what word is used, even with the insertion of "adopt" the court could say, "if you adopt it in the light of subsection (3), in subsection (4) you must be adopting and curing the invalidity."
There is a big problem here. This is the last discussion on this clause. We do not want a long "stand part" debate. However, when we look back over these amendments we see that Section 35 and Section 35A hang together as a package. But it is a
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lopsided package. It is unbalanced. These sections always take the part of the third party even when he is not a nice chap; when he knows everything and has grabbed an opportunity. All the people around him are innocent but because they are within the company, and he is outside, he receives the benefit. That is unfair. I do not think that most people would regard it as sensible commerce.
It might have a greater impact if I talk in language concerning investment. If I tell someone who is going to set up a company that if he comes to Britain his company will have its opportunities snatched at unfairly and will be bound to all kinds of transactions, and then I show him the French code, I believe that he would go there, assuming these measures make any difference. Of course as lawyers we know that law does not sometimes make a great deal of difference. However, it is supposed to do so; otherwise we would not be debating the matter.
I believe that the noble and learned Lord should look with his advisers at the entire structure of this measure. To pick out one matter in the system of company law for him to consider—in both English and Scottish company law (because it is the Scottish precedents that make some of the best company law)—the fiduciary duty is the most precious part in terms of management and the directors. One could ask any French lawyer—I could quote a number—what they think they have lacked in their company law structure; it is the fiduciary duty. It is that that is being attacked at every point as vie come to it through the constructive trustee concept being whittled away. It is a terrible pity.
Lord Williams of Elvel: Before my noble friend decides what he does with this amendment, I think that the noble Lord, Lord Lloyd of Kilgerran, wishes to speak.
Lord Lloyd of Kilgerran: The noble and learned Lord the Lord Advocate referred to me in his recent speech and mentioned Article 4. In order to save time—as the noble Lord, Lord Wedderburn, has said, one does not wish to have a long harangue about "clause stand part", and I had not given notice about it—I should like to ask this question. There have been discussions as to what is meant by ratification. Subsection (4)(b) states:
"in the absence of such ratification".
When the matter came up at Committee stage I moved an amendment that Section 35A(4)(b) should be deleted. I shall not give the arguments for that. However, the noble Lord, Lord Strathclyde, at the end of his first speech, asked me once more whether I would consider reflecting further in the light of what he had said. At this stage the noble and learned Lord, Lord Brightman, intervened to say at col. 516 of the Official Report on 21st February 1989:
"I take exactly the same view as the noble Lord, Lord Lloyd of Kilgerran. On a brief reading it seems that the amendment is right. Subsection (4)(b) is totally unnecessary. In the absence of the ratification set out in paragraph (a) I ask myself what else could happen except that, 'the above provisions of this section apply as in relation to any other limitation on the powers'. I believe that the amendment is correct and that paragraph (b) plays no useful part whatever".

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I fully realise that I have not given notice of this. I would have raised it at Committee stage on stand part, but I raise it now. I see that the noble and learned Lord is anxious to intervene.
Lord Fraser of Carmyllie: On the contrary, while the noble Lord is waxing eloquent I do not wish to stop him in mid-flow. However, it might be helpful if I indicate that the position that is indicated there remains much the same. We are indeed considering whether Section 35A(4)(b) might be deleted since, as he pointed out, and was indeed supported in that view, there is an argument that it is redundant.
Lord Williams of Elvel: Will the noble and learned Lord tell us what stage his considerations have reached since Committee?
Lord Fraser of Carmyllie: I do not think that I can elaborate beyond what I have said. The matter is being considered.
Lord Williams of Elvel: Perhaps the noble and learned Lord can tell us when his considerations will be completed?
Lord Fraser of Carmyllie: I do not think that I can give an immediate commitment to the noble Lord. I thought that it was nevertheless helpful—if not to him, then to the noble Lord, Lord Lloyd—to say that he need not elaborate on it. He apologised for having put down no amendment but wished to raise the subject again. I thought that it was only courteous and helpful to him to indicate that consideration was indeed under way. If the noble Lord considers our progress, and I know how anxious he is to move forward on this Bill, the likelihood is that it will be put down in the Commons.
Lord Lloyd of Kilgerran: At this stage it would be only courteous for me to say to the noble and learned Lord the Lord Advocate that I would not press him as hard as the noble Lord, Lord Williams, as to when this would be. I must apologise that I did not understand that this matter was under consideration; otherwise I would not have intervened at such length. I understand that it is under consideration and I look forward to the results of the consideration by the Government.
Lord Wedderburn of Charlton: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. C14 not moved.]
Clause 92, as amended, agreed to.
9 p.m.
Baroness Lockwood Baroness Lockwood moved Amendment No. C15:
After Clause 92, insert the following new clause:
("Non-executive directors.
Every public company shall ensure that there is a fair representation of appropriate interests in the appointment of non-executive directors, including a fair representation of women").
The noble Baroness said: Amendment No. C15 takes us away from the rather detailed consideration
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and interpretation of words into the realm of the kind of procedures that might be necessary to cope with some of the social changes that are taking place in our society. If, as we are led to believe, we are moving into an era of democracy through wider shareholding, then we have to make sure that some of the wider interests of the wider group of shareholders are taken into consideration at boardroom level.
The question of widening the interests of those held by non-executive directors of the boards is not a new one. It is the kind of consideration that brought into existence the organisation Pro Ned, which has the support of institutions such as the CBI, the Bank of England, and so on. Perhaps it is worth pausing for a moment to consider some of the documentation that has been produced by Pro Ned. It emphasises the importance of a well balanced board. It recommends that non-executive directors should provide "detachment", "wide experience", "a fresh and impartial view", "an external objective view", "commonsense", and so on. Those attributes are not exclusive to people whose careers are focused on reaching the top of their industry or profession; nor indeed are they exclusive to men because women too possess these kinds of qualities.
It is on women that I want to concentrate. We all agree that women are in a minority in the boardroom. It is true that women are in the minority in all spheres of power, influence and decision-making, but changes are taking place in most institutions. Perhaps the changes that are taking place in the boardroom are not quite so fast as in other places. Women are moving into higher positions in industry and in higher education. Two professions which are popular in the boardroom are the law and accountancy. Women are to be found in almost equal numbers to men in the schools of these professions. A larger and increasing number of women are going into management, not just in the "manageress" sense of the old days, but the higher realms of management. We want to see more women moving up the ladder on the basis of their own abilities.
In the executive director field, women of ability are succeeding, but businessmen admit that it is still more difficult for a woman to reach the top and to be recognised. We need to take definite steps to bring about changes in attitude and to ensure that women are given an opportunity to progress to the top in both executive and non-executive spheres of business.
The position of non-executive directors is somewhat different to that of executive directors. Women are invisible in this sense because the appointment of non-executive directors is in effect on a patronage basis. I suggest that women do not feature very much on this patronage wagon. It was the feeling at one time that there had to be a statutory woman on the committees of public bodies. There is now a feeling in some boards that there needs to be a statutory woman director, but even so many boards do not have a woman director. There is no clear evidence on this issue. No statistics are published, but I have been told that the top 200 holding companies have about 2 per cent. of women

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directors. Beyond the holding companies there is no information about the subsidiary companies. The position there is probably worse, although subsidiary companies would form a good area for the appointment of women as the first stage.
My amendment suggests that there should be an obligation on companies to take this problem seriously and to give careful consideration to ensuring that more women are appointed as non-executive directors. Women can bring, to quote Pro Ned, a fresh and impartial view. They can also bring a deeper perception of some of the consumer needs important to the majority of boards. I suggest that women are used to taking hard decisions. Many women spend most of their lives taking hard decisions within the family. They have much to contribute. The nation is losing out by not ensuring that more women are appointed as directors. I hope that the Minister will look favourably on the amendment. I beg to move.
Baroness Seear: I should like briefly to support the amendment. I want to amplify one matter implied if not expressly stated in the speech of the noble Baroness, Lady Lockwood. I am sure that it needs to be made clear to the Committee that the noble Baroness is not asking for anything that could be regarded as a quota of women on boards. That is not the intention. We are arguing that there probably are, and may always have been, a large number of women who, either through professional or business training or through the kind of experience that women have had by being prominent members of county or district councils, are eminently qualified to fulfil the role of executive directors. It is obvious from the very small number of women appointed that it is not thought that women have the kind of experience and background that would be valuable. Companies are not drawing on the available talent because the idea of appointing a woman is still foreign to a great many of them.
We are not asking for a quota; we are asking for what in the term of art in this field is usually referred to as a "positive policy" of investigating whether there are not women with the qualities required—perhaps at a higher degree than the available men who might be appointed. With that in mind I wish to support the amendment.
Lord Mottistone: Putting an industry point of view, this amendment is very unwelcome. It brings non-executive directors into legislation and though industry is in favour of non-executive directors, it is not in favour of non-executive directors by statute. Certain companies need a balance of non-executive directors but others do not. It is important not to fetter companies too tightly in that general area.
In the case of this amendment, particularly as explained by the noble Baronesses, it is difficult to see how one can follow the normal practice which is to appoint directors, whether non-executive or executive, who have the appropriate and best skills to satisfy the needs of the company. That is the requirement. If special interests are to be represented, who is to say what is an appropriate interest? It could be widely interpreted and it is not appropriate for inclusion in statute.
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One then comes to the question of fair representation. What is that? Fifty-two per cent. of the inhabitants of the country are women and, presumably, fair representation would mean that 52 per cent. of all non-executive directors must be women. It is not so much that that is seen to be an exaggeration of what the noble Baroness said but it is a question of what is fair representation.
The amendment would hamper the development of boards of directors. I do not wish to ramble on for too long but I hope that in reply my noble friend will join with me in asking the Committee to reject the amendment as strongly as possible.
Lord Williams of Elvel: From the Opposition Front Bench I should like to support the amendment tabled by my noble friend Lady Lockwood— —
Lord Mottistone: You would!
Lord Williams of Elvel: I am glad to hear the noble Lord, Lord Mottistone, who claims to be a spokesman for the CBI, criticising me as a spokesman of the Labour Party. The noble Lord said that industry does not like the amendment. He would, wouldn't he? Does he speak for industry? He speaks for the CBI. In this House he speaks for himself but, as the Government Chief Whip knows, on frequent occasions the noble Lord, Lord Mottistone, says that he speaks for the CBI.
Lord Denham: The noble Lord is most kind for giving way. Any noble Lord who speaks in this House speaks for himself and for no one else. Noble Lords may represent views which are also shared by other outside interests but any noble Lord speaks for himself alone and is responsible for what he says.
Lord Williams of Elvel: I am grateful to the noble Lord. I speak for the Opposition Front Bench. From time to time the noble Lord, Lord Mottistone, says that he speaks for the CBI. That may be right, or it may be wrong, but he does so.
Lord Mottistone: Perhaps the noble Lord will allow me to say that, having been well educated by the Government Chief Whip, I take great care not to say that I speak for the CBI. I say that the CBI advises me. That is a different matter because I speak for myself.
Lord Williams of Elvel: That is a better formulation than some I have heard. 'The noble Lord, Lord Mottistone, spoke of the appointment of directors. In my innocence I believed that directors were elected by shareholders rather than being appointed. That is not a minor issue.
The noble Lord, Lord Mottistone, asked about fair representation. I believe that my noble friend Lady Lockwood has made perfectly clear what she means by the words "fair representation". It is that there should be no bias against women who are equally qualified to men. It is perfectly clear from the response we have had from the noble Lord, Lord Mottistone, that we have had bias. That can be seen by anyone who works in any organisation, as do

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the noble Lord and I. It can be seen that properly qualified women do not have the same chance as properly qualified men.
As regards non-executive directors, at a later stage in our proceedings I shall try to define what non-executive directors should be. I know that a number of people in the CBI and a number of noble Lords opposite do not like the idea of defining a non-executive director. I shall seek a mechanism for doing so later. I say to the noble Lord, Lord Mottistone, and to the Government that we believe that there should be no bias. Although the noble Baroness, Lady Seear, does not like the expression I shall use it and say that there should be "positive discrimination"because— —
Baroness Seear: I cannot let the noble Lord get away with that. I am in favour of positive policies but I am against quotas. Do get it right!
Lord Williams of Elvel: I understand what the noble Baroness is saying. She is in favour of a positive policy. I am in favour of positive discrimination and I believe that it amounts to the same thing.
Baroness Seear: No, it does not. This is quite a serious point. Positive discrimination implies quotas. We are definitely not in favour of quotas. However, we are in favour of a deliberate policy to go out and find the women who have the necessary qualifications. That is something quite different and is a very important distinction.
Lord Williams of Elvel: Perhaps I may say to the noble Baroness that positive discrimination does not involve quotas but involves making sure that when there is a list of people, that one says, for example, "We want more people of an ethnic origin". We want more people like that if they are suitably qualified. I do not want to have so many ethnic directors in terms of quotas. However, I believe that we should have more people from ethnic origins on boards of directors of public companies. However, I believe that that is a problem of semantics and not the issue here.
We believe that there should be a removal of any bias against the appointment of people of ethnic origins or of a particular sex or whatever it might be. For that reason, I support my noble friend.
9.15 p.m.
Lord Peyton of Yeovil: The noble Lord opposite made extremely heavy weather of his support for the amendment. If anything was really required to convince me that this amendment would be misplaced if accepted, it was the speech made by the noble Lord from the Opposition Front Bench. He reminded us quite frequently and unnecessarily that he was speaking from the Opposition Front Bench. We may not be very observant but I have noticed that before.
What is meant by this business of positive discrimination of which he spoke? It would be so difficult to translate that into meaningful words on
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the statute book that I believe the noble Lord would end up by bringing in a quite unnecessary degree of confusion to an area where there is already sufficient doubt.
I should like to end on a serious note because I do not believe that the noble Lord's speech was all that serious. If there is prejudice—and I believe there is—then I believe that the last way to overcome that prejudice is to make silly provisions on the pages of the statute book.
Lord Williams of Elvel: The only notable thing about the speech of the noble Lord was part of his last sentence. Perhaps I may say that he was extremely sarcastic to my noble friend on the discussion of ultra vires. That is his privilege and he is entitled to be. However, I wish that just because we cannot reach his amendments in time this evening he would pay attention to the debate and take us a little more seriously than he obviously does at the moment.
Lord Peyton of Yeovil: I shall take the noble Lord seriously as and when he deserves it but not until.
Lord Tordoff: Perhaps we could just calm the atmosphere slightly. It seems to me that the case has been shown that there is bias, and I believe that there is general acceptance of that throughout the Committee. The question of how we should redress that bias may cause differences across the Committee. It seems to me that one of the best examples of bias in this situation is that I happen to be a non-executive director of a company and my noble friend Lady Seear is not a non-executive director of any company because, so far as I know, she has never been invited to be one. She is far better qualified than I to be a non-executive director of a company—and I say that quite seriously. I believe that that is the problem we face as regards non-executive directors.
Baroness Seear: Perhaps I may record the fact that I am now above the age.
Lord Strathclyde: Perhaps I may say that I am no happier replying to this amendment than I would have been if I had to reply to the amendments of the noble Lord, Lord Wedderburn. However, in that case I have my noble and learned friend the Lord Advocate to help me out. In this instance, I have to do it myself.
The first point I should like to make in relation to this amendment is that it is fundamental to company law that directors are not and should not be appointed to represent particular interests. They are appointed as individuals and have a common responsibility.
Lord Tordoff: I am sorry to interrupt the noble Lord but it is quite clear that this amendment is not designed to represent particular interests.
Lord Strathclyde: I only reached my second sentence. I have hardly started and I have quite a lot to say. I take the point that the amendment as

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drafted does not require representation of particular interests. However, it states that:
"Every public company shall ensure that there is a fair representation of appropriate interests".
Therefore, I believe that it is fair that I should speak of particular interests. Of course, in this amendment that could lead to far wider issues.
Directors are appointed as individuals and have a common responsibility for the conduct of a company's affairs. They are accountable to the shareholders as a whole. When a company takes a decision to appoint non-executive directors, whether by co-option or by a vote of the shareholders, its aim should therefore be to appoint in their own right those individuals who have the most appropriate skills and experience for that task.
The noble Baronesses, Lady Lockwood and Lady Seear, and others, have argued that a woman can, by virtue of being a woman, bring certain special qualities to the membership of a board.
Baroness Seear: I am sorry to intervene, but at no point did I say that. I do not believe that women have special qualities. I said that there are many women who have the personal qualities that are required on boards of directors. That is all I am saying. I ask the noble Lord to get that clear.
Lord Strathclyde: I apologise to the noble Baroness if I have misunderstood what she said. I totally agree with her. There is no intention to particularly draw out women as having special qualities that perhaps men do not or could not have.
The contribution which non-executives make depends very largely on choosing the right people. Personal qualities are vital, as noble Lords know. They are as vital, as are knowledge and experience; not necessarily of the industry in which a company operates but of the wider environment in which it works—for example, markets, customers, management problems, financial situations, and so on. No one individual will have all those skills. What one should be looking for is a team of non-executives who jointly bring to a company the experience and wider outlook it needs to operate most effectively. Some companies may have a particular need to ensure that they are aware of women's interests and concerns where those may be different from men's. Retailers are the obvious example. However, it is vital to identify and choose the right person.
In so far as the noble Baroness may be concerned that in co-opting candidates to a board, or in nominating candidates for election, companies do not look beyond a narrow circle, it should be borne in mind that the shareholders have the right to put up alternatives. In making their choice of such alternatives the shareholders have the same freedom as the board to take into account whatever factors they consider relevant.
The Government are therefore opposed to this amendment primarily because we regard its central principle of representation of special interests as objectionable. I use the phrase "special interests" again because it is implicit in the amendment. Moreover, it is our view that acceptance of this
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amendment would give rise to a legislative obligation which would be wholly unenforceable because of the lack of any objective test of compliance. I am sure that the argument will not rest there. It has been an interesting debate and I am sorry that we have come to it so late and with a relatively thin Chamber, but I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Lockwood: I said that we were moving away from the interpretation of words, but that does not seem to have been the case. There has been some difference of emphasis on what we are seeking. I must say, having for the past 14 years been involved in this whole question of promoting equality of women alongside men, that I agree completely with the noble Baroness, Lady Seear. We are not seeking quotas. We are seeking a positive policy to promote opportunities for women.
I am sorry that the noble Lord, Lord Mottistone, said that the amendment was unwelcome. He seemed emphatic that it was unwelcome. I truss: that, as the Chief Whip indicated, the noble Lord was speaking for himself and not for industry. So far as I am aware it is now the policy of most companies within industry to seek to promote more women, not because they are women but because they can contribute to the success of companies.
It seems that it is agreed across the Chamber, first, that there is still some discrimination against women; and, secondly, that we need more women in those posts. However, we do not need' quotas and we do not want quotas.
Perhaps the wording of my amendment was not appropriate. I accept entirely what the Minister said about the responsibility of shareholders as individuals and not representatives. That is completely understood, but we want to ensure that there are more women in industry and that steps are taken, and an obligation is placed on industry, to look for more women; not to fetter it, as the noble Lord, Lord Mottistone, said, and to take positive steps to promote more women. It is in that sense that the amendment was moved. I shall not press it this evening. I am prepared to withdraw it and to look at its wording to see whether I can return on Third Reading with something that may be more acceptable to the Minister.
Amendment, by leave, withdrawn.
Clause 93 [Invalidity of certain transactions involving directors]:
[Amendments Nos. C16 and C17 not moved.]
Clause 93 agreed to.
Clauses 94 to 96 agreed to.
Lord Denham: I think that we have probably gone as far as we usefully can this evening. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Nottingham Park Estate Bill [H.L.]
Committed to a Select Committee.
United Medical and Dental Schools Bill [H.L.]
Committed to an Unopposed Bill Committee.

British Railways (No. 2) Bill
Returned from the Commons with the amendments agreed to.
House adjourned at twenty-seven minutes past nine o'clock.

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