Sitting of 7 June 1989

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

    Health Service (Women)
    Mrs. Fyfe: To ask the Secretary of State for Scotland whether he has any plans to consult women on the Health Service.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): My right hon. and learned Friend has consulted a wide range of organisations and professional bodies about the Government's proposals for reform for the NHS. The views submitted will reflect the views of men and women alike.
    Mrs. Fyfe: Now that the Prime Minister has set a new standard in personal health care by treating herself to electric mud baths when she is feeling under par, will the Minister explain to Scottish women why they and their families have to have the cheapest medicines and hospital care, and why they have to undertake so-called community care at great cost to their incomes, career prospects, leisure and health?
    Mr. Forsyth: What the hon. Lady says is rubbish. No one in Scotland is required to take the cheapest medical care. The provisions in the White Paper and the basis on which the National Health Service is run in Scotland are that patients should have access to the best possible medical care, which does not always mean the most expensive.
    Sir Hector Monro: Does my hon. Friend agree that women doctors who often work part time in general practice or elsewhere in the Health Service have an important part to play? Does he further agree that under the new contract their position is safeguarded and enhanced, and that they can look forward to a good future?
    Mr. Forsyth: Yes, I very much agree with my hon. Friend. The new contract which has been accepted by the general practitioners' negotiators protects the position of part-time women doctors. My hon. Friend is right to draw attention to the importance that we attach to having more women doctors in the Health Service, both for the extension of patient choice—many people would prefer to see a woman doctor—and because many women doctors bring precisely the kind of expertise in preventive medicine that we aim to encourage in the Health Service.
    Mrs. Margaret Ewing: On behalf of the women of my constituency and of the community of Moray, I welcome the Minister's announcement last week that a new obstetric and maternity unit is to be built in Elgin in less than 10 years. When does the Minister envisage the option appraisals being completed and the first stone laid?
    Mr. Forsyth: I thank the hon. Lady for her general welcome to the proposals. As she knows, the independent working group that we set up to examine maternity facilities in Moray saw the establishment of a specialist unit as a legitimate goal and suggested that it would take 10 years. I have asked the Grampian health board to try to achieve a specialist unit more rapidly than that. I have met the chairman of the health board and asked him to proceed with the greatest possible speed. As the hon. Lady knows, there are particular problems connected with the site at Dr. Gray's hospital in Elgin, but I assure her that every effort will be made to overcome them and to bring the facility into being as speedily as is physically possible.
    Mr. David Marshall: Despite the Minister's answer to his hon. Friend the Member for Dumfries (Sir H. Monro), is it not true that the proposals for the National Health Service will lead to a reduction in the numbers of women doctors—especially those working part-time in the service? What effect will the proposals have on the career structures of part-time women doctors in the Health Service?
    Mr. Forsyth: The proposals will not reduce the number of part-time women doctors or affect them adversely. I note that the hon. Gentleman produced no justification for his statement—
    Mr. Dewar: Ask the doctors.
    Mr. Forsyth: The doctors argued that it was essential to alter the criteria for the basic practice allowance, to set them at levels at which the allowance was payable, to begin with, for 400 patients and would continue up to 1,200 patients. We responded to that by doing precisely what the doctors asked, and the position of part-time women doctors has been protected as a result.

    Freedom of Speech
    Mr. Amos: To ask the Secretary of State for Scotland whether he will consider extending section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.
    Mr. Andy Stewart: To ask the Secretary of State for Scotland what representations he has received seeking the extension of section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.
    Mr. Forsyth: It was decided in 1986 not to extend to Scotland the provisions in the 1986 Act which became section 43 as there was little evidence in Scotland of the problems that prompted the legislation south of the border. Since then there has been very little evidence of disruption of free speech in universities or colleges in Scotland.
    Mr. Amos: I am grateful to my hon. Friend for that answer. As our universities are funded nationally, how can he justify the fact that the law as it relates to Scotland in this matter is different from the law relating to England?
    Mr. Forsyth: My hon. Friend is right to draw attention to the importance of freedom of speech being a feature of our universities and colleges north and south of the border. I think that it is right to say that the Left have been more disruptive in universities south of the border—hence the need for the 1986 provisions. I can certainly assure my hon. Friend that when there are problems north of the border we shall address them.
    Mr. Stewart: May I take this opportunity to congratulate students attending Scottish universities on accepting the principle of free speech? We take free speech for granted, but there has been a grave loss of life and sacrifice by Chinese students trying to achieve the same freedom. If the situation deteriorates will my hon. Friend consider keeping the matter under review?
    Mr. Forsyth: My hon. Friend is right to draw attention to the responsibilities on students and especially on student unions to ensure freedom of speech in universities and colleges in Scotland. I understand that the Conservative candidate in Glasgow, Central was joined in support by Chinese students at his press conference today in Scotland.
    Mr. McFall: When the Minister visited Glasgow college on 20 October last year there was a spontaneous demonstration against him of the type that takes place whenever he visits in Scotland. After that demonstration the Minister went out of his way to commend the students on their responsible actions. Will he take this opportunity to reinforce that comment and relate it to all Scottish students and thus emphasise that there is no need to introduce such legislation in Scotland?
    Mr. Forsyth: I remember that demonstration. I also remember the demonstration which greeted me in the constituency of the hon. Member for Moray (Mrs. Ewing). At that time many of the placards being waved said, "Thanks for coming, Michael". That was entirely spontaneous. I regret to say that that was not what the placards said when I visited Glasgow college. I can certainly assure the hon. Gentleman that so long as students behave responsibly they will not need to look to the House to embark on legislation to keep freedom of speech in our universities and colleges.
    Mr. McLeish: I am pleased to note that the Minister now endorses the good nature, good sense and good behaviour of Scottish students. I am also pleased to see him distance himself from the hard Right on the Conservative Back Benches who use education in Scotland as a plaything. Is he aware of the review of the 1986 Act being undertaken by his right hon. Friend the Secretary of State for Education and Science? That Act is not functioning well and I sincerely hope that we shall not have any of that nonsense in Scotland. Will the Minister addresss himself to the real issue in Scottish education, which is the under-investment in higher education and not the behaviour of students?
    Mr. Forsyth: There have been a record number of students as a result of the Government's investment in higher education. I am not distancing myself from any of my hon. Friends. They have rightly underlined the importance of freedom of speech in universities and colleges and I have given a clear commitment that, should Scotland experience the kind of problem that occurs in
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    England, we would not hesitate to go down the legislative road. While student unions carry out their proper responsibilities there is no need for the House to become involved in their affairs.

    Conservation (Woodlands)
    Mr. Key: To ask the Secretary of State for Scotland what encouragement is given to conservation groups in the United Kingdom, including the Wiltshire Trust for Nature Conservation, to undertake projects in Forestry Commission woodlands.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): The Forestry Commission actively encourages local conservation groups to undertake projects in its woodlands. The Wiltshire Trust for Nature Conservation is represented on Forestry Commission conservation committees and advises the commission on the management of three sites, managing part of one of them on a leasehold basis.
    Mr. Key: We are fortunate that the Wiltshire trust has been blazing a trail in that respect, but does my hon. Friend agree that the Forestry Commission has been a bit slow to establish joint projects and joint funding involving local environmental groups, and that where that is achieved it gives tremendous new access and recreation not just for tourists but for local people?
    Lord James Douglas-Hamilton: I agree that it is important for tourism that we should strongly support environmental measures and I am glad that Somerford common was given much prominence in the leaflet that the Forestry Commission helped to produce. We give considerable funds—£200,000—to environmental groups. Scottish Office funds do not stretch as far as Wiltshire, but I will draw my hon. Friend's point to the attention of the Forestry Commission's chairman and that of my right hon. and learned Friend the Secretary of State and my right hon. Friend the Secretary of State for the Environment. This year we are contributing £250,000 to setting up the Scottish Woodland Company and we may commit anything up to £50 million over the next 20 years in order greatly to improve environmental standards in the central lowlands of Scotland.
    Mr. Kirkwood: Has the Minister seen press reports circulating in the Borders region that statements were made by Scottish Office Ministers to Conservative candidates suggesting that £500,000 might be available for the Borders road authority to engage in environmental and forestry projects in that region? Does the hon. Gentleman approve of that method of making announcements? Will he now make an official announcement and get round to making real funding available so that the roads authorities in areas such as the Borders can repair and maintain the links to trunk roads being destroyed by the forestry industry?
    Lord James Douglas Hamilton: I met deputations from the Borders region and from Dumfries and Galloway region to discuss roads affected by forestry extraction. We responded after the public expenditure survey round last autumn when we were able to take their points on board. I shall look into the hon. Gentleman's point about the

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    reports, which I have not seen, but we are very much in favour of improving environmental standards everywhere in Scotland.
    Dr. Moonie: With due regard to the Minister's concern for the environmental impact on forests, what research has his Department commissioned in the past two years into the effects on Scottish woodlands of English pests?
    Lord James Douglas Hamilton: I cannot give the hon. Gentleman the exact figure, but I can tell him that we are spending about £6 million on looking into the problems of acidification, which are substantial.
    Mr. Adley: I hope that neither the Opposition nor my hon. Friend will regard me as an English pest. Is my hon. Friend aware that we are entirely happy that the Forestry Commission has its headquarters in Edinburgh and that his Department answers our questions on forestry matters, but that it would be helpful if we could occasionally have answers on the problems in England for which he is ministerially responsible? He has now written referring me to my right hon. Friend the Minister of Agriculture, Fisheries and Food on a matter that I raised with him at a previous Scottish Question Time. Is it still Government policy to encourage the Forestry Commission to sell off land for the highest possible price?
    Lord James Douglas Hamilton: Certainly as far as disposals are concerned, 140,000 hectares have been sold and receipts exceeded £120 million. Obviously certain areas that are surplus to requirements should be sold. It is important that the Forestry Commission should continue to supply timber mills on a steady basis, as that is important for their prosperity and for those whom they employ. I gave a full answer to my hon. Friend's point, which he raised on a previous occasion, in writing last night.

    Collieries
    Mr. Eadie: To ask the Secretary of State for Scotland whether he has calculated the loss of revenue to Midlothian district as a consequence of the proposed closure of Bilston and Monktonhall collieries.
    The Secretary of State for Scotland (Mr. Malcolm Rifkind): The closure of the collieries will, of course, mean some overall loss of income and spending power to the area. But any loss of rate income to the district council will be compensated for in subsequent years through a corresponding increase in revenue support grant.
    Mr. Eadie: The right hon. and learned Gentleman should be aware that 7,000 jobs have been lost in the mining industry in Midlothian since 1978. The Secretary of State claims that the financial impact is very light, but is he aware that we have already undertaken a preliminary survey of the economic impact, which suggests that Midlothian will lose at least £20 million? A small area such as Midlothian cannot afford such a loss. Will the right hon. and learned Gentleman consider meeting Midlothian district council with me to discuss that devastating problem?
    Mr. Rifkind: I have just signed a letter to the hon. Gentleman agreeing to such a meeting. Income from employment in the area will fall as a consequence of redundancies, but excluding redundancy payments, a net
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    loss of disposable income of around £4 million per annum has been provisionally estimated as a result of recent decisions. The hon. Gentleman will be pleased to learn that unemployment in his constituency fell by more than 32 per cent. in the past two years, from 4,700 to 3,300. Although that figure is still far too high, it is encouraging that the trend is significantly in the right direction.

    Health Service (Competitive Tendering)
    Mr. Michael Brown: To ask the Secretary of State for Scotland if he will make a statement on progress on competitive tendering in the Health Service in Scotland; and if he will make a statement.
    Mr. Michael Forsyth: Since the last general election, savings from competitive tendering have increased from £600,000 to £25 million on 74 contracts. That represents substantial additional resources for patient care in Scotland's health service over the next three to four years. Boards will continue to make progress in both the scope and range of services to put to competitive tender and are much encouraged by their success to date.
    Mr. Brown: Bearing in mind the Opposition's attitude to competitive tendering, is it not the case that they would be prepared to deny £25 million of additional resources for patient care in Scotland? Is not that £25 million of extra care the direct result of my hon. Friend's decisions?
    Mr. Forsyth: Yes, my hon. Friend is correct. Boards can use savings for direct patient care. The resources released so far could buy more than 2,000 kidney dialysis machines, or pay for 8,000 hip replacement operations or about 4,000 heart bypass operations.
    Mr. Dewar indicated dissent.
    Mr. Forsyth: The shadow Secretary of State for Scotland scoffs, but he was among those who indulged in disruption to prevent competitive tendering and saw 3,500 operations cancelled in Scotland.
    Dr. Reid: What instructions has the Minister issued to Scottish health boards about value added tax for the purposes of competitive tendering? Is he aware of the Treasury circular of August 1988 which lays down specific guidelines on the conditions under which VAT may be refunded to health authorities when it is incurred in putting work out to private tender? Why has that circular been ignored, and why have health boards been advised instead that the matter is under review? Is it not because strict compliance with Treasury conditions would reveal that much of the savings that the Minister boasts about are bogus?
    Mr. Forsyth: VAT policy is a matter for my right hon. Friend the Chancellor of the Exchequer. I am aware of the circular, with which health boards are complying. They are asked to disregard VAT when evaluating in-house contracts as compared with those of private enterprise. However, the hon. Gentleman's analysis of the situation is incorrect. Three-quarters of the contracts awarded, and the bulk of the savings, have been achieved as a result of in-house tenders being accepted on which VAT was never levied. When making a comparison between in-house and private sector tenders, VAT is disregarded because it is a receipt to the Exchequer. The key point is that savings are made to the public purse as a whole.
    Mr. Galbraith: Why is the Minister conniving with the likes of the Scottish National party through competitive tendering in Tayside to sack some of the lowest-paid workers in Scotland? Is it not the case that competitive tendering in the National Health Service is subject to some extremely dubious accounting practices in which many costs to the private contractor are hidden, to the disadvantage of the in-house tender? Does the Minister agree that it is time that we had a full investigation into accounting practices and competitive tendering in the National Health Service and that until that is complete we should halt further competitive tendering within the National Health Service?
    Mr. Forsyth: The hon. Gentleman's previous position was that there were no savings to be made. Now that savings of £25 million have been made, we are getting bluster. As for conniving with the SNP to make people redundant, the hon. Gentleman will be aware that three quarters of the contracts in the Health Service are the result of successful in-house bids. When people have been made redundant, they have received redundancy payments and many have been re-employed by the private sector. The public interest demands that the best possible value for money be obtained. The hon. Gentleman should look to the conduct of his colleagues in Lothian where, as a matter of political prejudice and ideology, the Labour party has put the ratepayers' interests second.

    Devolution
    Mr. Tom Clarke: To ask the Secretary of State for Scotland what is Her Majesty's Government's policy on devolution for Scotland.
    Mr. Rifkind: We believe that the present constitutional arrangements provide for full and fair representation of Scotland's interests.
    Mr. Clarke: Will the Secretary of State accept that in denying Scottish people a legitimate say in their own affairs, he is flying in the face of the views of the vast majority of Scots, who support Labour party policy, and that in so doing he has given short-term succour and comfort to a separatist minority view whose slogan is as unrealistic in Scotland as it is unworkable in Europe?
    Mr. Rifkind: We believe that Scotland, England and the rest of the United Kingdom see this Parliament at Westminster as our parliament. It is the Parliament of Scotland as it is the Parliament of England, and no citizen of Scotland is denied any rights available to any citizen elsewhere in the United Kingdom. One of the problems of the hon. Gentleman's party's proposal for devolution, apart from its other defects, is that together with all the other proposed reforms it would exchange a system in which Scots pay two taxes for a system in which Scots would pay four taxes. The Labour party wishes to replace the community charge with a property tax and a local income tax, to have Scots paying income tax to the United Kingdom Government and to give a Scottish assembly power to levy a supplementary income tax. Four taxes for two does not seem likely to be in Scotland's interests.
    Mr. Bill Walker: Does my right hon. and learned Friend agree that many of the proposals under the so-called banner of devolution are very difficult to distinguish from separatism, as is the question of
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    Scotland's presence in Europe? Is it not interesting that the hon. Member for Glasgow, Govan (Mr. Sillars) has withdrawn his question about separatism from the Order Paper and is not present in the Chamber, perhaps because he knows that he has no real case to put forward?
    Mr. Rifkind: My hon. Friend is quite correct. In regard to the first part of his question, I am bound to say that I think that the Labour party is running scared. The ridiculous slogan "Independence in the United Kingdom", which has neither grammatical sense nor political wisdom, will live to haunt the Labour party.
    Mr. Salmond: Will the Secretary of State tell us if, in his estimate, support for the independence in Europe policy is running at 52 per cent. or at 61 per cent. as variously estimated by Systems Three? If the people of Scotland regard this Parliament as a parliament for all the United Kingdom, what does the Secretary of State think the reaction would be in Scotland to the fact that five out of the first 10 questions at Scottish Question Time are from English Tory Members?
    Mr. Rifkind: English Members may have tabled some questions, but at least they had the courtesy to turn up to ask them, unlike the hon. Member for Glasgow, Govan (Mr. Sillars), who, having been elected to the House, yet again manifestly fails to appear. Even when he tables a question that would undoubtedly be reached, he withdraws it because he has not the guts to be here to carry out his parliamentary responsibilities.
    Mr. Gow: Is my right hon. and learned Friend aware—[Interruption.]
    Mr. Speaker: Order. I ask the House to settle down; it is very bumpy today.
    Mr. Gow: Is my right hon. and learned Friend aware that I am a Scotsman? Is he further aware that Conservative Members share his view that a legislative assembly in Scotland would put the Union at risk? Will he remind his right hon. Friend the Secretary of State for Northern Ireland of that truth?
    Mr. Rifkind: I have always thought of my hon. Friend as one of the most Scottish of my colleagues, and we are delighted that he is participating in our proceedings. I strongly believe that the Labour party's proposals for Scottish constitutional change would damage the United Kingdom. My hon. Friend will, as he has before, put questions about Northern Ireland to my right hon. Friend the Secretary of State for Northern Ireland.
    Mr. Dewar: If the Secretary of State thinks that the hon. Member for Eastbourne (Mr. Gow) is the most Scottish of his colleagues—
    Mr. Rifkind: One of them.
    Mr. Dewar: That is an important caveat, but it suggests basic doubts about the Secretary of State's judgment. Does the right hon. and learned Gentleman agree that, in voting this week for its own identity, the Institute of Chartered Accountants of Scotland was applying to its own affairs the principles of devolution and the case for passing power to Scotland? Will he join me in welcoming that and recognise that his party will never be a credible force in Scotland if it displays a thrawn refusal to listen to public opinion, putting it on a par with the Scottish National

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    party, which, in refusing to join the constitutional convention, is apparently working on the principle that there should he no compromise with the electorate?
    Mr. Rifkind: The hon. Gentleman must appreciate that one of the stems of the unitary state and Parliament in which we participate is that, over the past 250 years, the Scottish national identity has been preserved and enhanced. It applies not only to chartered accountants but to the Scottish legal system, of which the hon. Gentleman and I are members. It illustrates that it is not inconsistent with a unitary Parliament and a United Kingdom that Scotland's national indentity, institutions, culture and heritage can be preserved and enhanced.
    Mr. Tom Clarke: On a point of order, Mr. Speaker. In view of the Secretary of State's unsatisfactory answer, I shall seek to raise the matter again on the Adjournment.

    Community Charge
    Mrs. Ray Michie: To ask the Secretary of State for Scotland what is his Department's latest estimate of the administrative costs of collecting the community charge in (a) Argyll and Bute, and (b) Scotland.
    Mr. Dalyell: To ask the Secretary of State for Scotland what is his latest estimate of the costs of collection of the poll tax in relation to the costs of collection of the rates.
    The Minister of State, Scottish Office (Mr. Ian Lang): The administrative cost of community charge collection for Scotland in 1989–90, including registration work but excluding the costs of operating the rebate scheme, is estimated by local authorities at £31·8 million. The cost of rates collection in 1988–89 was £17·3 million. Estimates of district councils' costs are not available centrally.
    Mrs. Michie: Is the Minister aware that the cost of implementing the poll tax is continuing to escalate? In Argyll and Bute, extra staff have had to be taken on. In Strathclyde, 720,000 changes have already had to be made to the poll tax register. Strathclyde is having to pay £8 million more than the Government's estimated cost of implementation. How can the Minister justify this escalating cost and bureaucracy to implement the poll tax?
    Mr. Lang: On the contrary, the costs now coming in are lower than those originally estimated when we published the Bill. If the hon. Lady compares the cost of implementing the community charge with that of a local income tax, which is favoured by the Social and Liberal Democratic party and others, she will find that a 1981 White Paper estimated the additional cost of collecting a local income tax at £500 million, in addition to which it would have involved the employment of tens of thousands of additional civil servants.
    Mr. Dalyell: What evidence is there that costs are lower? Does the Minister deny the Strathclyde figure that, whereas the cost of collecting rates was £17 million, the cost of collecting the poll tax is at least £36 million?
    Mr. Lang: What I said was that the costs are lower than those originally indicated when we published the Bill. The costs overall are higher for collecting the community charge because something like double the number of people pay, but the cost is roughly the same per head of the
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    population. I think that that is a price worth paying for the extra fairness and accountability that derives from the community charge system.
    Mr. Buchanan-Smith: Can my hon. Friend tell me how much extra the community charge payers of Grampian have to pay because of the decision of the Labour-controlled city of Aberdeen district council not to operate the administration of the charge?
    Mr. Lang: Such figures are not available to me at present, but it is undoubtedly the case that as a result of the decision of 15 district councils in Scotland not to assist in the handling of the community charge, considerable numbers of people are being put at risk, including the most vulnerable in society who may be unable to get rebates punctually.
    Mr. John Marshall: Can my hon. Friend tell the House how the cost of collecting the community charge compares with the suggested costs of collecting the two local government taxes proposed by the Labour party?
    Mr. Lang: My hon. Friend raises a sensible point. I have already indicated that the cost of a local income tax would be massive compared with the community charge. The community charge itself has a cost of collection of less than half of 1 per cent. of the total expenditure of local authorities. I think that helps put the matter in perspective.
    Mr. Douglas: Is the Minister including the cost of the humiliation of individuals who have to register their offspring, parents, husbands or wives who are severely mentally impaired? How does he estimate that cost? Will he consider the anomaly whereby the services subvent service men who find themselves having to pay high community charges? Why can the Ministry of Defence do that for service men who may be highly paid when the same cannot be done for the disabled?
    Mr. Lang: The arrangements for service men reflect broadly the arrangements that existed under the domestic rating system. As to humiliation, I recognise no humiliation in a system that invites all adult members of the population, with a few exemptions, to contribute to the cost of local authority expenditure and thereby play a fuller part in local authority democracy.

    Local Authority Income
    Mr. Harry Greenway: To ask the Secretary of State for Scotland what proportion of Scottish local authority income comes from (a) central Government funds. (b) the non-domestic rate and (c) the community charge: and if he will make a statement.
    Mr. Rifkind: A total of 52 per cent. of Scottish local authority income in the current year will come from central Government funds, 27 per cent. from non-domestic rates and 21 per cent. from community charges. The proportion to be raised from community charges is higher that it need have been because many authorities have budgeted to increase their spending by well over the rate of inflation.
    Mr. Greenway: Community charge payers will note that answer. Does my right hon. and learned Friend agree that the recent announcement that Scottish business

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    ratepayers will achieve level playing fields with their English counterparts is good news for Scottish industry, for Scottish jobs and for everyone who cares for Scotland?
    Mr. Rifkind: Yes, indeed, it has been a feature for many years of the Scottish business and industrial community that it has had a higher non-domestic rates burden than that south of the border, primarily because of higher local authority spending. Despite the cause of the problem, this Government are the first to ensure that that will cease and that in the United Kingdom we will have a common level of non-domestic rate poundage, thereby bringing the equivalent of £250 million of reduced rates burden to business and industry throughout Scotland.
    Mr. Ernie Ross: Does the Secretary of State concede that his control of non-domestic rates will mean that if local government is to respond to the needs of the local business community, the cost of the expectation of increased services by non-domestic ratepayers will fall directly on domestic poll tax payers? How does he intend to help local authorities because of that?
    Mr. Rifkind: I have to remind the hon. Gentleman that, as I understand it, local authorities have welcomed our plan to reduce the burden on the industrial and business community in Scotland because they appreciate, even if the hon. Gentleman does not, that that not only will be of benefit to industry but will have consequential benefits for jobs and the overall prosperity and competitiveness of the Scottish economy.
    Mr. Wallace: The Secretary of State will recall that when the Green Paper was published he said that there would be special arrangements for Orkney and Shetland because of the high proportion of non-domestic rates from the oil terminals and, in Shetland's case, because of the debt repayment policy that would mean lower non-domestic rates at a time when oil revenues were going down. In the light of his recent announcement, what steps does he propose to take to flesh out the proposals for special arrangements?
    Mr. Rifkind: Yes, we said in our announcement on business rates that there would have to be special arrangements for Orkney and Shetland because of the facts to which the hon. Gentleman referred. We are currently considering what those might be and there will be discussions with officials from the two island authorities to identify the most appropriate course of action.
    Mr. Favell: Is it not a fact that following revaluation, the rating system in Scotland was highly unpopular and that it was only this Government who had the guts to do anything about it, unlike the gaggle of frustrated Socialists on the Opposition Benches, who have nothing to offer but wrecking tactics?
    Mr. Rifkind: My hon. Friend is right, except in one respect. Labour Members are not offering simply wrecking tactics; they are offering in exchange for the community charge a property tax and a local income tax. They seem to believe—[Interruption.]—that two unpopular taxes will somehow be more acceptable to the people of Scotland than one form of rates or community charge. I notice that they are now trying to deny that, but the evidence is in their own policy documents, so we are entitled to refer to it.
    Mr. Maxton: Does the Secretary of State accept that there has been a massive reduction in the level of Government grant given to local authorities in percentage terms, from 68·5 per cent. in 1979 to the present 55 per cent.? That would realise £589 million at present, which would mean £151 per poll taxpayer in Scotland, if it were distributed in that way. Does he agree that it was that reduction in grant that put pressure on the rating system and which led the Government to introduce the absurd and unfair poll tax, which is now putting the burden directly on the very poorest in our community?
    Mr. Rifkind: I remind the hon. Gentleman that it was the last Labour Government who were responsible for the single biggest reduction in what was then called the rate support grant. I notice also that although speaking from the Opposition Front Bench, the hon. Gentleman did not contradict my remarks about the Labour party proposing to replace the community charge with two separate taxes—a property tax and a local income tax.

    Crown Estate Commissioner
    Mr. Macdonald: To ask the Secretary of State for Scotland what plans he has to undertake a further review of the Crown Estate Commissioners' powers in Scotland.
    Mr. Rifkind: I have no plans to do so.
    Mr. Macdonald: I appreciate that the Secretary of State has just recently completed a review, but does he not think that the whole issue needs to be looked at again, following the clumsy and inadequate way in which the commissioners have handled the allocation of test drilling permission for mineral deposits off the west coast of Scotland? Those deposits could eventually be very significant, so does the Secretary of State not think that it is time that such matters were handled by local and central Government working jointly and not left to the Crown Estate Commissioners, who are undemocratic, unaccountable, not especially experienced in this regard and deeply resented in the Highlands and Islands?
    Mr. Rifkind: My understanding is that with regard to the particular incident to which the hon. Gentleman refers, the Crown Estate Commissioners have complied with well-established procedures. Indeed, on this occasion, they have consulted more widely than is usual. At present, all that is being considered is permission for prospecting purposes, not for actual mining, and that involves core sampling, seismic surveys and spot dredging of samples. The consultation procedure has been substantial. If, as a result of that, any further application were to be made, a more widely based consultation process would be required, which would have to be independently and expertly assessed. There would then be a full consultation process conducted by the Scottish Office, involving relevant Departments, local authorities, statutory agencies and others with a legitimate interest in the matter. At this stage, all that is being contemplated is permission for prospecting purposes. Any further action would require the much more substantial procedure that I have just outlined.
    Mr. Kennedy: Will the Secretary of State note that many in the Highlands and Islands will think, listening to that response, that the Crown Estate Commissioners have carried out a more thorough consultation procedure than

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    normal—which would hardly be difficult? Given the growth of fish farming activity, does the Secretary of State not think that there is a strong need now for more local, democratic accountability for seabed leases and the like and that local authorities should be involved in that planning procedure, rather than it being left to an unelected and thoroughly publicly unaccountable body—the Crown Estate Commissioners?
    Mr. Rifkind: The Government have just undertaken a review of the position of the Crown Estate Commissioners. As a result of that, I have just established a fish farming advisory committee and Lord Grieve has agreed to be the chairman of that committee. It will advise the Crown Estate Commissioners on how to deal with cases in which there is an objection to an application for a seabed lease from one or more of the statutory bodies represented on the committee. Cases of particular difficulty will be referred to the Secretary of State for advice and the Crown Estate Commissioners have undertaken to take into account the views of the Secretary of State on any controversial matters. There has been a substantial improvement in the appropriate procedures, which will ensure that the Crown Estate Commissioners will, in practice, take into account exactly the kind of considerations that would be relevant to other planning applications.
    Sir Nicholas Fairbairn: Does my right hon. and learned Friend appreciate that, to get over the difficulties of this apparently unelected body, it would be a suitable customer to be made into a private agency? Will he quickly consider whether it can be so converted and removed from the clutches of the state?
    Mr. Rifkind: It is not so much the state, as the Crown for which the Crown Estate Commissioners are responsible. My hon. and learned Friend's suggestion, ingenious as it is, may not be entirely appropriate to a body that is responsible for administering the Crown's estates.
    Mr. Wilson: I am sure that they will be quaking in their boots in Buckingham palace at the suggestion by the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) that the Crown Estate Commissioners should be privatised.
    The replies given by the Secretary of State are inadequate and alarming. If indeed a review of the Crown Estate Commissioners has been carried out, I am disappointed that he can still give such complacent and inadequate replies. The consultation procedures, about which my hon. Friend the Member for Western Isles (Mr. Macdonald) asked, were totally inadequate. Once again, Scottish coastal communities were left to find out at second or third hand about proposals that could have profound implications for their futures. The Secretary of State must accept that that is unacceptable and that the fate of Scottish coastal communities should not be in the hands of an organisation whose prime function is property development in London and the maintenance of Regent's park.
    Mr. Rifkind: The hon. Gentleman should do his homework. The Crown Estate Commissioners carried out wide consultations, including consultation with the local planning authority.
    Mr. Wilson: They did not.
    Mr. Rifkind: The hon. Gentleman says that they did not. They did. He should check his facts before making such allegations. For the purpose of prospecting, the Crown Estate Commissioners carried out wide consultations, including consultation with the local planning authority. I believe that that was quite sufficient. I have already pointed out that if, as a result of prospecting, the company wished to go further, a much more exhaustive process would be undertaken, conducted by the Scottish Office, and that would provide the safeguards in which the hon. Gentleman is interested.

    Community Charge (Churches)
    Mr. Strang: To ask the Secretary of State for Scotland what representations he has received from the principal Churches in Scotland on the poll tax.
    Mr. Lang: My right hon. and learned Friend has received a number of such representations. In particular, representations have been made on the impact of non-domestic sewerage charges on churches, church halls, charities and other organisations. I share the concern expressed and I am glad to be able to announce to the House today that we are changing the arrangements so that such bodies which already obtain some relief from non-domestic rates and from water rates will also obtain some relief from non-domestic sewerage rates. I shall be bringing forward proposals shortly. Consultations with COSLA will be put in hand at once.
    Mr. Strang: Although we welcome that concession, we hope that it will amount to complete exemption for church buildings in the payment of sewerage rates. Will the hon. Gentleman take on board the need to match the 50 per cent. reduction on domestic rates payable on accommodation provided for Church of Scotland ministers and priests with a comparable concession in the poll tax? Surely the hon. Gentleman understands the dramatic effect of the changes on the finances of the Church of Scotland and the Roman Catholic Church in Scotland.
    Mr. Lang: The community charge is, of course, a different system, being a charge for personal services rather than a property tax, and it would not be appropriate to have special arrangements for ministers. However, we have extended the mandatory relief on certain church property from 50 per cent. to 80 per cent., which may help to some extent.
    We propose to introduce legislation to reduce to between 50 per cent. and 25 per cent. of net annual value the proportion of rateable value against which the sewerage rate is levied. That arrangement applies at the moment in the context of water rates.
    Mr. Steel: Is it not a little difficult to know how warmly to welcome this concession until we know—[Interruption.] Will the Minister please listen to me? It is difficult to know how warmly to welcome the concession until we know its exact relation to the charges made before the poll tax was introduced. Can the Minister tell us how much the concession will be worth?
    Mr. Lang: I had hoped that the right hon. Gentleman would have said "benvenuto". I hope that he will welcome the arrangement. A church in the Lothian region, for

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    example, with a rateable value of £7,000 would currently have sewerage charges of £280, but they might be reduced to £70 under the concession.
    Mr. Jack: Does my hon. Friend think that members of the principal Churches in Scotland will come to recognise the inherent fairness of the community charge, the help that it gives to the single Scot and the generosity of the rebate scheme?
    Mr. Lang: My hon. Friend is right to suggest that the inherently greater fairness of the community charge compared with the domestic rating system is self-evident. I am sure that ministers of the Church will come to appreciate that and to agree that it is far more appropriate that personal services provided by local authorities should be paid for by individuals rather than simply on the basis of property.
    Mr. Canavan: Will the Government consider scrapping the poll tax, which had been described by various Church representatives as an immoral tax, as well as being expensive to administer and difficult to collect? In the light of recent estimates by Scottish local authorities that more than 30 per cent. of people on the poll tax register—well over 1 million people—have failed to pay their first instalment, will the Minister tell us his views on what level of non-payment would be required to force the Government to think again about abolishing this iniquitous tax?
    Mr. Lang: It is clear from figures provided by local authorities that the level of payment is such as to render the hon. Gentleman's question irrelevant. I am sure that anyone assessing the community charge and taking account of the rebate system—which takes particular account of the needs and circumstances of the low paid, for which more than 1 million applications have been received—would recognise that a broader-based tax, such as the community charge, is a fairer and more appropriate way to pay for local authority services than the rating system that fell on only four out of every 10 adults.
    Mr. Buchanan-Smith: Unlike the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), I welcome my hon. Friend's announcement. Is he aware that it will be warmly welcomed, not only by the Churches, but by the many community associations that run halls and voluntary organisations? Is he further aware that in my constituency some local halls were faced with an increase in rates of as much as 1,000 per cent., and in some cases a potential increase of 5,000 per cent.? That is the extent of the concession announced by my hon. Friend, and I congratulate him on it.
    Mr. Lang: I am grateful to my right hon. Friend for his comments. I believe that my announcement will be widely welcomed throughout Scotland and will be of particular advantage to the Churches, bodies and organisations to which my right hon. Friend referred. The sum involved of £3 million is equivalent to about 2 per cent. of total sewerage charges.
    Mr. Foulkes: We might as well be in Hong Kong.
    Mr. Dewar: I shall refrain from commenting on my hon. Friend's remark.
    Does the Minister accept, in general terms, the right of the Churches to speak out against a tax that they believe
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    to be socially divisive and unjust? If so, will he distance himself from the petulant and rather undignified complaints of the chairman of the Scottish Conservative party and the Minister of State, Department of Education and Science about those Churchmen who expressed their concerns about the impact of the poll tax? Is it not right that anyone whose conscience is troubled should protest against a tax that was described by the right hon. Member for Henley (Mr. Heseltine) as placing on an equal footing in the eyes of the tax collector
    "the rich and the poor, the slum dweller and the landed aristocrat, the elderly pensioners living on their limited savings and the most succesful of today's entrepreneurs."—[Official Report, 16 December 1987; Vol. 124, c. 1141.]
    Mr. Lang: I certainly agree that it is appropriate for the Church and for members of Churches to express views on a wide range of issues, and no doubt the community charge comes under that category. I do not recognise the hon. Gentleman's description of the community charge, which clearly takes no account of the extensive rebate system, for which we estimate that some 30 per cent. of the adult population of Scotland may be eligible. It is the rebate system that makes the fairness and generosity of the community charge, taken overall, acceptable. It provides a better and fairer way of paying for the cost of local authorities.

    NHS (Reform)
    Mr. Bill Walker: To ask the Secretary of State for Scotland what representations he has received from general practitioners in Tayside about the Government White Papers on the Health Service.
    Mr. Michael Forsyth: About 80 letters have been received from general practitioners in Tayside, direct or through hon. Members, referring to various matters arising from the Government's White Papers "Promoting Better Health" and "Working for Patients".
    Mr. Walker: I thank my hon. Friend for that reply. Is he aware that at meetings I had with individual GPs and with representatives of GPs in Tayside it became clear that the GPs had not understood—[Interruption.]—properly and fully just how much control they would have over decisions affecting where they could send their patients—because the payment will follow the patient—and how important that was for the popular community cottage hospitals in the future?
    Is he further aware that doctors were horrified when they were made to realise that the lies contained in the leaflet distributed by them on behalf of the BMA were making many pensioners unhappy and concerned because of the fear that in future they would not be able to get their prescriptions and receive treatment, and as a result of that they propose to do something about it?
    Mr. Forsyth: There is no justification whatever for patients being frightened or misled about the White Paper proposals. We have had a positive response from GPs in Scotland—[Interruption.] Indeed, the new contract which has been agreed by their negotiators is based very much on the proposals which were put forward in Scotland.
    In response to Opposition Members who scoff at the assertion by my hon. Friend the Member for Tayside, North (Mr. Walker) about the degree of interest in the extent of control which GPs can obtain as a result of

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    GP-based budgeting and self-governing hospitals, I can say "yes" to my hon. Friend and tell him that I have received from his constituency representations not only about self-governing hospitals but about GP-based budgeting, with considerable enthusiasm being shown by the persons concerned.
    Mr. Foulkes: May I inform the hon. Member for Tayside, North (Mr. Walker), as a psychologist—[Interruption.] He is not; I am. May I inform him that there is absolutely no evidence to show that the general practitioners in Tayside are any less intelligent than the GPs in Ayrshire? All the GPs to whom I have spoken in Ayrshire understand only too well what is meant by the White Paper. They have passed a resolution unanimously condemning it and asking the Government to withdraw it.
    If members of the Government, and in particular the Minister, mean anything when they use the word "consultation"—if they are not to be seen as people who are not men of their word—the only honourable action for them to take now is to withdraw the White Paper.
    Mr. Forsyth: I am tempted to reply to the hon. Gentleman by saying "physician, heal thyself." I had a meeting with GPs in Ayr on Monday. After an hour's discussion with them I formed the same conclusion as my hon. Friend the Member for Tayside, North (Mr. Walker)—that many of the details concerning our proposals were not understood and had not been communicated to them.
    I am happy to tell the House that the objectives of our White Paper—to increase patient choice, to increase the emphasis on preventive medicine and to make the NHS more responsive to the needs and wishes of patients—are objectives which all of those GPs were happy to endorse. The mechanisms, mechanics and best way forward are issues on which GPs should not pass resolutions of condemnation. They should roll up their shirt sleeves and help us to get this right.
    Mr. Hind: When my hon. Friend replies to the representations from the GPs in Tayside, will he emphasise that indicative budgets, both practice and drug budgets, mean that no patients need fear lest the resources for their treatment will not be available? Will he ask them to
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    withdraw the leaflet from the BMA, which unnecessarily winds up elderly and sick patients and makes them fear that the necessary resources will not be available?
    Mr. Forsyth: I wrote to the British Medical Association in Scotland asking it to withdraw the leaflet from Scotland. I received a reply saying that the leaflet had been produced in London and that it did not take entire responsibility for it. I also pointed out the assertions in that leaflet about our proposals, which are frankly just untruths. The response from the BMA in Scotland did not seek to defend the assertions which are made in that leaflet. I believe that events have moved on and that there is a coming together to get the proposals right, certainly in regard to the contract.
    I agree with my hon. Friend that it is completely irresponsible to say to any patient that he will be denied treatment or drugs as a result of the proposals. Thai is not true. No general practitioner, whether a budget-handling GP or a GP subject to indicative budgets, will find that he does not have the resources to treat the patients. Opposition Members who say such things are causing needless anxiety to patients.
    Mr. Robert Hughes: The hon. Member for Tayside, North (Mr. Walker) has made astonishing charges of ignorance against doctors in Tayside. Is he saying, however, that it is because the doctors are too thick to understand the White Paper or that the Minister is too thick to explain it properly?
    Mr. Forsyth: I am saying that the type of intellectual approach that the hon. Gentleman has shown in his question is not one that I would expect from doctors. I would expect doctors to study the proposals carefully, to form a considered judgment, to identify the particular aspects causing them concern and to discuss with the Government the best way forward. That has not always been the case, but I accept what I think is implicit in the hon. Gentleman's question, which is that the vast majority of doctors will rightly see the way forward as being one which looks to their patients' interests. The White Paper is based on putting the patient first and ensuring that the Health Service delivers the best possible quality of care with the substantial additional resources that are available within the NHS.

Short Brothers plc
3.31 pm
The Secretary of State for Northern Ireland (Mr. Tom King): With permission, Mr. Speaker, I wish to make a statement about the privatisation of Short Brothers plc.
Since last July the Government have been working with the management of Shorts to seek a successful transfer of the company to the private sector. On 3 March I advised the House that I had selected two out of the six preliminary proposals for the purchase of the company, and had invited those two to submit final proposals by 30 April. They were the Canadian company Bombardier, and a partnership of GEC and Fokker. Their final proposals have now been fully reviewed, and I can advise the House that I have today approved heads of agreement for the sale of Short Brothers plc to Bombardier.
Under the heads of agreement, Bombardier will pay £30 million for the share capital of Shorts. On behalf of the Government, I have offered Shorts, under its new ownership, grants of £79 million for new capital investment in the next four years and of £18 million for other costs, mainly for training. As regards the company's existing liabilities, the £390 million loan advanced by the Government earlier this year to repay commercial debts for past losses will be written off. I have also agreed to advance a further £275 million to recapitalise the company, to repay the remaining borrowings and to meet anticipated losses on existing contracts.
Of this sum at least £60 million will be in the form of an interest-free loan. That loan will be progressively cancelled as specified targets are met, but would be immediately repayable in the event of a material breach by Bombardier of the commitments it has given in relation to the future of the company. The Government will of course continue to fund the company until the completion of sale but as I announced on 10 January 1989, Government undertakings in respect of Short's liabilities will be withdrawn at privatisation as far as new obligations are concerned.
Beyond the period covered by the terms of the heads of agreement, Short's eligibility for assistance will be on the same basis as other private sector companies in Northern Ireland. In this respect, as I announced on 22 March 1989, I plan to repeal my powers in relation to Shorts in public ownership contained in the Aircraft and Shipbuilding Industries (Northern Ireland) Order 1979.
The terms of the agreement are subject to contract and also a number of conditions including the approval of the European Commission. The necessary estimates will be laid before the House at the appropriate times.
Bombardier recognises the important position occupied by Shorts in the Northern Ireland economy and intends to acquire the company as a long-term investment and to maintain it as a complete entity. Its objective is to develop the three main divisions of aircraft, aerostructures and missiles. In particular, Shorts aircraft division will become a full partner in the detailed design and development of the Canadair RJ regional jet and I have agreed to offer £18 million towards development costs on Short's part of this work.
Bombardier is a Canadian group with a range of products in the transportation industry. In 1986 it acquired Canadair, an aerospace company similar in size to Shorts, from the Canadian Government, and has since developed it successfully. It has recently launched its new
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regional jet for the short to medium range market. Overall, I believe that its activities provide an excellent fit with those of Shorts.
This agreement with Bombardier for the acquisition of Shorts opens the way for the transfer of the company from public ownership to the private sector. The scale of the sums involved illustrates very clearly the problems that the company has faced in public ownership and as a relatively small enterprise in the complex and competitive arena of aerospace. At the same time, it has developed products and skills which, with the right leadership and organisation, can once again make Shorts a successful and viable operation which contributes fully to the economy of Northern Ireland. The Government believe that operating under the commercial disciplines of the private sector and as part of a larger group under Bombardier's ownership, gives Shorts the best possible opportunity for a much brighter future and fully justifies this substantial investment of public funds.
Mr. Jim Marshall: I thank the Secretary of State for answering the question that I put to him some days ago, asking that he should make a decision on the future ownership of Shorts prior to the opening of the Paris air show. Perhaps it is appropriate that a decision has been made on the eve of that show.
We welcome the fact that a decision has been made because it will remove the uncertainty which surrounds the future ownership of Shorts. We also welcome a bid, which, we hope, will seek to maintain the company as a single entity, and its product range.
It will come as no surprise to the Secretary of State to learn that we still continue to dislike the Government's privatisation policy, in particular as it applies to Shorts. Our view has been, and remains, that if the Government had been prepared to provide the level of financial assistance that they are now prepared to give to get rid of the company, Shorts, as a publicly owned company, would have flourished and could have been profitable. However, once the Government persisted in their privatisation policy, we made it clear some time ago that, out of the two bids that the Government were actively considering from Bombardier and GEC-Fokker, the decision should be made in Bombardier's favour. We are delighted that the Secretary of State has seen fit to accept our view.
Does the Secretary of State agree that, important though today's announcement is, of even greater importance is the future strategy for the development of the company in view of its pivotal importance to the economy of Northern Ireland? Paragraph 4 of the Secretary of State's statement refers to the commitments that Bombardier
"has given in relation to the future of the company."
It does not say that commitments will be, or may be, given but that commitments have been given. I and my party do not feel that those commitments were fully and adequately expounded in the Secretary of State's statement. It is those particulars and specifics lacking from the statement on which I wish to question the Secretary of State.
First, during his discussions with Bombardier, has the Secretary of State received any assurance about the existing product range and likely levels of employment? Secondly, I am sure that the Secretary of State agrees that Shorts is a centre of technical excellence. In view of that,

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has he received any assurance that the company will continue with research and development at the very frontiers of high technology?
Thirdly, the success of the bid depends greatly on the financial arrangements announced today by the Secretary of State. However, as he said, those will depend on the agreement or acquiescence of the European Commission. Have there been any preliminary discussions with the European Commission, and, if so, in which direction are they likely to go?
Fourthly, the House will know that Bombardier, although a successful company, is small in international terms. It employs 13,000 people worldwide. It is to take over a company in the north of Ireland, Shorts, which employs about 7,000 people. In those circumstances, is the Secretary of State convinced that the enlarged company has the necessary level of managerial expertise and sources of profitability to ensure its survival?
Fifthly, will the Secretary of State seek to ensure that, between today and the final takeover by Bombardier of Shorts, all members of the work force will be involved in full consultation with the Government, the present Shorts' management and the management of Bombardier?
Finally, Shorts has a distinguished past and deserves a soundly based future. We hope that that can be assured, not just for the sake of the company, but also for the economy of Northern Ireland as a whole.
Mr. King: I am grateful for the hon. Gentleman's comments about Bombardier and the decisions that we have made. Anybody who has any idea of the history and present position of Shorts and who thinks that its problems will be solved merely by pushing more money at them without changing ownership is mistaken. It is absolutely vital to give it the structure of a larger group, within the aerospace world. If we do not we shall simply be pouring more money after the substantial sums that we have already spent. I should have thought that the hon. Gentleman would have reflected on what the structure was that led to the calls for such substantial sums of money. Today, I have announced assistance of £780 million for that. Putting more money in without a substantial change in the arrangements would have been inconceivable.
I am satisfied of Bombardier's commitment to making a success of Shorts as a single company in Northern Ireland. That is one of the commitments into which Bombardier has entered. It will seek to maintain in totality the expertise, research and design development, which it sees as assets and values.
Bombardier took over Canadair which, at the time, was a loss-making, state-owned company in Canada that employed 5,000. Under Bombardier's leadership and ownership, within three years the company is now profitable and employs 6,500–1,500 more than when it was taken over. That must be real encouragement. Anybody who knows the chairman, M. Beaudoin—I have seen him in Belfast today—will know the high price that he attaches to communication with the people who work in the company.
Rev. Martin Smyth: On behalf of my colleagues and the people of Northern Ireland, and of Belfast in particular, I welcome this statement. Bearing in mind the interval between the announcement of the privatisation and the buy-out of Harland and Wolff, will there be a similar prolonged period which will add to the
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doubts and questions about Short's future, or does the Secretary of State foresee a speedier conclusion to these negotiations? He will know that there has been a loss of morale and that workers have left Shorts and that some have even been enticed abroad to look after their own futures because the future of the firm was in doubt.
I also welcome the fact that money has been put into training. Shorts used to have a fine training programrne. Do I take it from the announcement that it will now return to on-the-job training in aircraft design and manufacture as well as other forms of training? I welcome the injection of capital, because although all have agreed that money was put into Shorts in the past, more money was needed in this area to give the company the proper tools for the job.
My colleagues and I await developments. Does the Secretary of State foresee any real difficulties with the Office of Fair Trading or the European Commission?
Mr. King: I am grateful to the hon. Gentleman, who speaks on behalf of himself and of his hon. Friends. He has a direct constituency interest, but everyone would recognise that Shorts affects the interests of all in Northern Ireland because of its important position.
I hope that there is a difference between what happened with Harland and Wolff and these negotiations. The management buy-out and the involvement of employees gave rise to a more complicated procedure, with the prospectus and the offer of shares in the new company. My best expectation is that if, as I hope, we are successful with the European Commission and the Office of Fair Trading, it will be possible for the matter to be concluded within three months.
As for training and the future of the company, this has been a difficult time because the employees, perhaps more than anyone else, knew how serious the company's position was and had been for some time. They knew about the large losses that were being made. If it had gone on as it was, the company had no future. Now it definitely has one—a future in which the Government and Bombardier are prepared to invest. Most importantly of all, provided that all who work in Shorts are committed to ensuring that they make the maximum contribution, if these are to be new investments, new facilities and new products, this will be an exciting development for Shorts and for Northern Ireland.
Mr. Kenneth Warren: I congratulate my right hon. Friend, my hon. Friend the Member for Gosport (Mr. Viggers), and the officials who have supported them in their difficult negotiations and who are not often mentioned.
Is it not good that, on the eve of the Paris air show, the competition that my right hon. Friend has mounted and which has been decided clearly shows the value of Shorts in the international aerospace community? Bombardier is a growing force in international aerospace, as the acquisition of Shorts will show. I hope that my right hon. Friend agrees.
I hope, slightly egotistically, that my right hon. Friend will be kind enough to acknowledge that the Government have entirely agreed with the report by the Select Committee on Trade and Industry on this matter of privatisation.
What guarantee can my right hon. Friend give that the security of the missiles division will be maintained, given

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the sensitive work in which it is engaged? Lastly, is the £18 million which my right hon. Friend has committed to the Bombardier civil aircraft project the end of a commitment?
Mr. King: I have set out the main commitments but I have made it clear that in future the Government will treat Bombardier-Shorts in the same way as a normal private sector company in Northern Ireland.
I particularly appreciate my hon. Friend's comments about my hon. Friend the Under-Secretary of State for Northern Ireland, the Member for Gosport (Mr. Viggers). The difficulty about the whole situation was that this change was absolutely vital if Shorts was to survive. It was not entirely possible to let people in Northern Ireland really understand the seriousness of the situation. We tried to get an element of realism in the approach, but that was not always appreciated. My hon. Friend the Member for Gosport had to take a great deal of flak over that and he deserves great credit for the successful outcome that I have been able to announce to the House.
The agreement offers an exciting prospect for the future. I know that it is very closely in line, although not totally in line, with some of the recommendations that my hon. Friend the Member for Hastings and Rye (Mr. Warren) and his colleagues in the Select Committee pressed upon us.
Mr. Seamus Mallon: I welcome this announcement, and especially the fact that it will end indecision for the work force in the North of Ireland. I am sure that the Secretary of State agrees that, when £800 million of public money is used, it should be used to the advantage of all sections of the community. Will he tell the House what requirements have been written into the agreement to ensure that discrimination in employment at Shorts will end once and for all? What security arrangements have been insisted upon by the Government so that no more missiles or information about them can be stolen from Shorts to the advantage of terrorists in the North of Ireland and their paymasters in the wretched South African Government?
Mr. King: No missiles have been stolen from Shorts and we are determined to make sure that none will be stolen. I make that absolutely clear. If the hon. Gentleman is referring to a demonstration cutaway model stolen from a TA centre, that is a rather different matter. None the less, I need hardly say that we take that very seriously and have been anxious to ensure that proper precautions and proper security are in place.
The hon. Gentleman spoke about public money. This is a substantial injection of public funds for the benefit of Northern Ireland. It is for the benefit of the economy of Northern Ireland and not for the benefit of one community or another. That is important and it is fully understood in the commitments and obligations that Bombardier will enter into. The company fully accepts the laws that obtain in Northern Ireland and I know that it will seek to be a good employer in the Province. It will bring great benefit because the injection of new ideas and a different approach can only be of benefit.
The company will be working together with the recognised skills and abilities that exist in Shorts and, as I said in my statement, that is a very happy fit indeed. I certainly look to this to make a major contribution to the
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Northern Ireland economy. That is the justification for investment on this scale, and it will benefit all the people of Northern Ireland.
Mr. Ian Gow: While unreservedly welcoming my right hon. Friend's statement, may I ask whether he agrees that the story of Shorts while it has been in the public sector has been a very unhappy and costly story indeed? Will my right hon. Friend learn the appropriate lessons from the experience of this company being in the public sector? In so far as there are any other companies which his Department still owns in Northern Ireland, will he undertake to put them into the private sector at the earliest possible moment?
Mr. King: My hon. Friend has made a shrewd and absolutely accurate observation. The figures demonstrate the scale of the problems that have arisen and which are partly connected to market conditions and partly to the size of the company. I profoundly believe that the difficulties owe a lot to the problems that public ownership can bring and the lack of motivation that can flow from it.
My hon. Friend the Member for Hastings and Rye (Mr. Warren) invited me to pay tribute to our officials. I know that my hon. Friend the Under-Secretary of State for Northern Ireland, the Member for Gosport (Mr. Viggers), would wish to be associated with that. The officials are not often mentioned and have taken much criticism during this process. Two or three years ago not many people would have held out many prospects for the survival of Harland and Wolff or Shorts. There has been a massive undertaking and all the people who work for Harland and Wolff and Shorts now have the real chance of a much brighter future. That prospect owes much to the dedicated and hard work of the team in the Department of Economic Development as well as to the companies.
Mr. Doug Hoyle: I welcome the Secretary of State's announcement. He knows my view, that it would have been better to have kept Shorts in the public sector, but does he agree that it is good to bring the uncertainty to an end?
Secondly, as Bombardier makes a jet similar to Short's FJX, will the FJX project come to an end? Does being full partners in the aircraft side mean being full partners in the design, research and development of any future aircraft and those in the Short range?
Thirdly, will the redundancies that have been announced, particularly in the white collar sector, be withdrawn, or will they stand?
Fourthly, what guarantee has the Secretary of State sought from Bombardier that it will continue in Northern Ireland? Will the Government continue to have a holding to ensure that Shorts continues as an integrated entity in Northern Ireland?
Mr. King: The RJ has already been launched. The FJX is some years away from that possibility. It is still only a design concept but some work has been done on it. Bombardier is impressed with some of its concepts and looks to Shorts to he a full partner in the detailed design work on the regional jet and in the design and development of further aircraft that may flow thereafter. I can give the hon. Gentleman that assurance.
Bombardier is making a significant commitment to the future. It wishes to develop into a substantial group within the aerospace industry. It has given a commitment that

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Shorts will remain as a single company and continue in Northern Ireland and our financial proposals are linked to the maintenance of those commitments.
Mr. James Kilfedder: The excellent work force and management of Shorts will be thankful that the decision has been made at long last, because the delay has meant the loss of many jobs and of young, highly skilled technical and craft workers. A substantial amount of public money is to be invested in Shorts, for which the people of Northern Ireland are deeply grateful, but I repeat that, as I said six months ago to the Secretary of State in the House, it is time for the Northern Ireland Office to send out not English Ministers but a representative delegation of politicians, Unionist and nationalist, Protestant and Roman Catholic, to the United States and elsewhere to seek the jobs and investments that are needed in Northern Ireland.
Mr. King: If I heard the hon. Gentleman correctly, he welcomed the announcement and I am grateful for that. He has previously said that it would be appalling if Shorts were split up and sold off in parts and I hope that he welcomes the fact that that will not be the case. I am glad now to have his support for this important development in privatisation.
I would welcome, and I know my right hon. Friend the Minister of State would, the assistance of politicians—elected Members—from Northern Ireland in the work that we try to do to bring jobs to Northern Ireland. That is the first offer of assistance that I have had and, if it is echoed, I shall be glad to see it happen.
Mr. John D. Taylor: The Secretary of State will recognise my interest in Short Brothers because the company has plants in Newtownards and Castlereagh. We welcome Bombardier to Northern Ireland. The right hon. Gentleman's statement is better late than never; the delay associated with the whole matter has created great unrest within Northern Ireland and has certainly hit the morale of the company's staff. The damage done by delays and by the Ministers responsible during the past year is deplorable.
The lack of investment by present Northern Ireland Office Ministers in recent years has been one of the main reasons for the decline in the fortune of Short Brothers. It can be fairly said that when another Government were in power the losses were not as bad and there was investment. The problem at Short's in recent years has been lack of investment, yet today we learn that £700 million and more is being spent to get rid of the company. Delays have also cost the loss of another 700 jobs in the past four weeks. We must not run away from the facts of the situation created by the Minister responsible for handling the future of Short Brothers.
What are the commitments to Short Brothers and to Northern Ireland? Will the company's three main sectors remain in Northern Ireland? If so, is there any time limit? What about the plant in Newtownards? What guarantee is there that Short's will continue to maintain a separate plant in the borough of Ards? What about the successful Belfast city airport which Short Brothers developed in recent years? Is it included in the sale or is the intention to hand it over to the monopoly control of the Northern Ireland Airports Authority? Can the Secretary of State guarantee that Belfast city airport will continue to exist as a separate entity? Will the right hon. Gentleman confirm
234
also that Short Brothers will not only be involved in the design of the regional jet but its manufacture and that the FJX is herewith abandoned?
Mr. King: The right hon. Gentleman spoke of a "deplorable" delay. I think that that was a pretty deplorable contribution. First, I welcome the right hon. Gentleman's interest and am glad to have at last his involvement and his direct addressing of the problems affecting 7,000 people, some of whom are his constituents. That is the first time that I have heard directly from the right hon. Gentleman about their concerns and interests.
The right hon. Gentleman should inform himself better about the realities of the situation. He referred to investment during the term of an earlier Government. What happened to the money that this Government provided? It went in losses because no provision was made for new products. Because the world was becoming more competitive, products also had to be sold at increasingly lower prices. Profits went and losses were incurred. That is why—I now answer the question of the hon. Member for Warrington, North (Mr. Hoyle)—700 redundancies have already been announced and I fear that they will have to proceed. I hope that thereafter—as a result of the new management, new organisation and new opportunities—there will be more jobs and not fewer. I have already drawn attention to Bombardier's record with Canadair.
Belfast city airport is included in the arrangement, so it will remain separate. There are commitments, and there are safeguards against any deals being done to the disadvantage of Northern Ireland. As the right hon. Gentleman rightly said, the airport is an important Northern Ireland asset. I can also confirm that Bombardier will be involved, not only in the design of the regional jet but its manufacture.
Mr. Robin Maxwell-Hyslop: Will my right hon. Friend confirm that the technical contribution which over the years Queen's university of Belfast has made to the success of Shorts and to its potential was one of the valuable factors which Bombardier took into account? May I also put in a word of gratitude to Mr. Rodney Lund, who took over the chairmanship of what was otherwise a moribund company at an extraordinarily tense and difficult time, and express the hope that we have seen the last of restrictive practices on the part of the work force, which would have brought even a state-financed company to its knees and which have no part in the real world of which Shorts is now part, with the best opportunity it has ever had of securing its commercial future since it was expropriated by Sir Stafford Cripps with virtually no compensation to its shareholders, and therefore was not creditworthy as a free-standing and real part of the world aircraft industry?
Mr. King: I am grateful to my hon. Friend, who knows Shorts as well as, if not better than, any other Member of the House and who has taken a close interest in the company. He is well aware, and rightly so, of the real contribution that Queen's university can make in technical and research work. I have no doubt that Bombardier will wish to ensure that those close relationships continue as they benefit Shorts and so many other companies in Northern Ireland. In regard to restrictive practices, this is a very important day, which, as my hon. Friend said could be the start of the best opportunity Shorts has ever had.

235
Bombardier is making its commitment. I am recommending to the House that public funds should be injected to make that possible. It will now depend crucially on the response of all who work in Shorts whether that opportunity is taken successfully. I am grateful to my hon. Friend for mentioning Mr. Rodney Lund. We certainly appreciate his tenure as chairman at a very difficult time.
Mr. Charles Kennedy: May I echo the sentiments already expressed on both sides of the House about the announcement, which is all the more welcome on the eve of the Paris air show? In rightly paying tribute to the management and work force at Shorts, and through the commitment which has been shown by Bombardier, will the Secretary of State sketch in a little more detail the heads of discussion which, in his view, remain outstanding between his Department and the European Commission over the three-month period which he envisages it should take finally to conclude a European level the details of the package that he has announced today?
Mr. King: In respect of that, obviously it is necessary to get European Community approval for very substantial injections of public funds. The European Community will wish to be satisfied that they are not subsidies and distortions of fair competition within the European market. That is the key issue that has to be resolved. Having said that, I am grateful to the hon. Gentleman for what he has said. The announcement has been widely welcomed. The House may be interested to know that I advised the unsuccessful bidders this morning. I spoke to Mr. van Duinen, the acting chairman of Fokker, and I was encouraged by his response, as Fokker will continue to be a very important partner for Shorts. At midday I was pleased to hear the very positive statement by Fokker welcoming the announcement and the end to uncertainty and stating that it believed that Shorts would be in excellent hands in future.
Sir Giles Shaw: May I add my congratulations to those received by my right hon. Friend and his team on his second excellent announcement after his statement on Harland recently? It is little short of miraculous that he has been able to bring those two difficulties safely home at this time. May I remind him, if he needs reminding, that the £780 million which he has now disclosed as the dowry for this enterprise is a direct reflection of the real problems of public sector competition in the aerospace industry? Is he satisfied that Bombardier has the capital resources as well as the immediate resources to find £30 million of share capital to enable development to continue? Finally, will he emphasise still further Short's relationship with the MOD in vital defence operations?
Mr. King: I am very grateful to my hon. Friend, who used the word "miraculous." If I had been asked that question two years ago, I would have used a similar word, because we faced a daunting task. The sale is important to progress and the atmosphere and attitude in Northern Ireland. It will be seen that companies can succeed by their own efforts and will do much to kill the image that exists in some parts of the United Kingdom that Northern Ireland can exist only on subsidy and assistance. My hon. Friend knows from his experience that there are a number
236
of highly successful, profitable and hard-working firms in Northern Ireland. I look to see Harland and Wolff and Shorts join those companies.
The cost involved is not £780 million but £750 million. Bombardier is paying £30 million for the share capital, and I am satisfied that it has the resources to do so.
Mr. Tam Dalyell: On this question of attitude, is the Secretary of State aware that some hon. Members would like, metaphorically, to vomit when they hear the reactions of some Northern Ireland Members? What firm this side of the water has ever received anything like £780 million of Government money? Should it not be recognised in Northern Ireland that for 20 years it has received resources that many of our constituents have not, and at least we should like them to acknowledge that?
What is likely to be the European Commission's attitude to the sale, and is it within regulations? Has there been any discussion about end user certificates, which created so much difficulty last year in relation to arms to Afghanistan? Has there been any discussion with Bombardier about end user certificates in relation to missiles in particular?
Mr. King: On the latter point, the rules will remain as they are. I say to my hon. Friend the Member for Pudsey (Sir G. Shaw), who asked about the Ministry of Defence, that the Ministry of Defence is familiar with Bombardier, from which is has purchased products.
The hon. Member for Linlithgow (Mr. Dalyell) promised to keep his vomiting metaphorical. I understand his reaction to the churlish and thoroughly unpleasant approach of the right hon. Member for Strangford (Mr. Taylor). We believe—I have fought to ensure a future for Northern Ireland—that Northern Ireland has particular problems, but all the people in Shorts whom I saw this morning appreciate that this is a remarkable and substantial investment, and a substantial gesture from which they will benefit. One or two of their representatives should show greater spirit of generosity and appreciation.
Discussions with the European Commission will be tough, but I believe that we can achieve success. Substantial public investment is being made in one company and skilful negotiations will be necessary, but I believe that we can achieve success.
Mr. Michael Brown: does my right hon. Friend agree that one of the problems with the Northern Ireland economy over the past 20 years of political and security troubles is that it has been heavily dependent on the Government? One of the joys of his statement—although initially some hon. Members may recoil in horror at the amount of public funds being made available—is the prospect for the future of the Northern Ireland economy and Shorts in particular. We are transferring a substantial part of the economy to the private sector, thereby offering greater stability and prosperity for the future of the Northern Ireland economy.
Mr. King: I am very grateful to my hon. Friend. What he says is precisely the point. I foresaw no future for Shorts unless there was a change of motivation and unless the benefits of private sector commercial discipline could be felt. It has suffered, needs new investment and a freeing of its debt burden. We shall do that and give every possible encouragement to the people in Shorts to show what they can achieve. The Paris air show will show everybody what

237
a competitive world aerospace is. The buoyancy of the air show will show what a good opportunity this is for the people who work for Short Brothers.
Mr. Harry Barnes: In the first four years, 70 per cent. of the capital will be provided from public funds. Would it not be appropriate, therefore, at least during that period, for 70 per cent. of the equity to be controlled publicly? Have the trade unions in Shorts been consulted? What is their attitude to the proposals?
Mr. Speaker: Briefly.
Mr. Barnes: Last night we discussed the Employment Bill which will attack the position of young people and will lead to other problems. How is it likely to help the position in Shorts?
Mr. King: On the question of the funds being made available, part of them will recapitalise the company, part will repay remaining borrowings and moneys already lost and part will meet anticipated losses on existing contracts. Those are real and substantial costs that will occur in the ensuing period. As regards other funds, I made clear in my statement the way in which the performance of Bombardier and the maintenance of the assurances that it has given will be tied in against the interest-free loan to which I referred. On the question of the trade unions, many efforts have been made to keep all the work force and the trade unions informed of the objectives and of progress. Indeed, they were fully informed today.
Dr. John G. Blackburn: Will my right hon. Friend accept the congratulations of the House and the warm tribute to the Minister for bringing a difficult set of negotiations to a satisfactory conclusion? I visited the company within the last six months. The fact that there is an £18 million investment for research and development is a testimony of our commitment to the company. The provision for the Government to take back £60 million if performance targets are not met is very important. That arrangement is in stark contrast to the financial structure created for the De Lorean company. Will my right hon. Friend assure the House that the financial targets will be strictly adhered to for the safety of the public purse?
Mr. King: We are anxious to ensure that the commitments and assurances that we have had are properly achieved. My hon. Friend correctly notes that that is the clear purpose of the arrangements. I am grateful for what he said about the efforts of my hon. Friend. As my right hon. Friend the Chief Secretary is here as well, we should also recognise the wider support that we have had in this important development.
Mr. Bob Cryer: In view of the need to secure the future of jobs in the company, can the Secretary of State assure us that no civil servants or consultants involved in assessing the position were involved with the last project in which a representative of the enterprise culture was in receipt of such largesse from the taxpayers' pocket on a much larger scale? I refer, of course, to John Z. De Lorean. Can the Secretary of State also assure us that none of the £780 million will find its way into Conservative party funds from grateful recipients?
238
Just in case the Secretary of State intends to reply that I was a member of the Government who gave the money to De Lorean, it is not true, because I was not.
Mr. King: I think that the hon. Gentleman suddenly saw the terrible chasm opening before him just before he sat down. If he had not done so, I would not have dreamt of mentioning that he was associated with the Government who entered into what subsequently proved to be a most unfortunate arrangement. We in this Government approach things in a different and more cautious way. We have been criticised in a relaxed manner by the right hon. Member for Strangford (Mr. Taylor) for too much delay. We have a heavy responsibility to the House and to the taxpayer when such substantial funds are involved. We do not rush into things. We try to ensure that the taxpayer gets the best return and the best bargain for substantial expenditure.
Several Hon. Members rose—
Mr. Speaker: I will call the two hon. Members who have been standing in view of their long-standing interest in this matter, but I ask them to be brief, please.
Mr. James Cran: I too would like to congratulate my right hon. Friend on achieving what I consider to be the impossible, given the hearings we had in the Select Committee on Trade and Industry and especially against the background of the many fears that were expressed, none of which has come to fruition. Does my right hon. Friend not agree that this has been far too long in the coming, given that the Government announced their intention to privatise in 1984? I welcome the amount of public funds going into this venture because of its special nature. However, will my right hon. Friend illuminate for the House what the company itself is putting into future investment, aside from the £30 million in equity participation?
Mr. King: In respect of the sums involved, the significant amount of money I announced for capital expenditure—£79 million—is, of course, our contribution towards the capital investment that the company will be making. From that, my hon. Friend can form an idea of the substantial investment on top of the £30 million for the acquisition of the present Short shares that the company will be making. Together with that, there will be an opportunity for it to be a full partner in the RJ programme being launched just now, which is an important commitment and investment.
Sir Michael McNair-Wilson: I want to congratulate my right hon. Friend and his ministerial team on the most satisfactory conclusion with Bombardier. However, how will my right hon. Friend safeguard the classified nature of the guided weapons work being carried on by the company, especially Starstreak, which is a sought-after missile in the international market?
Mr. King: My hon. Friend is right. Starstreak is a critical and important product with a high security classification. The present arrangements will remain in force and will be an important safeguard. My hon. Friend is right to identify the importance of the issue.

Alar
4.22 pm
Mr. Malcolm Bruce: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent discussion, namely,
"The need to ban the chemical Alar, the apple spraying product."
The request is specific because the product is a chemical growth regulator which helps to make more buds set and grow into mature fruit, so it is being sprayed at this time of year. The matter is important because the chemical is especially dangerous for children, who eat far more apples and apple products for their body weight and have longer to develop the cancers associated with this product. The matter is urgent because we have learnt in the past 24 hours that the American Government have banned the use of this product. We are anxious to ensure that the British Government either do the same or explain why they are not going to do so.
I and my colleagues have expressed concern on this matter and have been in correspondence with the Minister of Agriculture, Fisheries and Food. Although the United States Government are now determined to ban the product, I received a letter from the Minister on 31 May saying that the British Government did not intend to ban the product and did not believe that the product was especially harmful. We need to know from the Government exactly how the British examination has come to an apparently opposite conclusion from that drawn by the American authorities.
The Government have also said that if they find that there is any evidence that should cause public concern, they will publish it. They stated to the Select Committee on Agriculture that they would ensure that the information
240
made available to the Advisory Committee on Pesticides would be made available to the public. I am sure that you, Mr. Speaker, would accept in the light of this development in the past 24 hours that the Government should tell the House exactly what they intend to do about this product. If they intend to ban it, they should do so now and inform the House. If they do not, they should publish all the information available to them and explain why they do not intend to ban it.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"The need to ban the chemical Alar, the apple spraying product."
I have listened with care to what the hon. Gentleman has said. As he knows, my sole duty in considering an application under Standing Order No. 20 is to decide whether it should be given priority over the business set down for today or tomorrow. I regret that the matter that the hon. Gentleman has raised does not meet the criteria of Standing Order No. 20 so I cannot submit his application to the House.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 23 JUNE
Members successful in the ballot were:

Mr. Roger Gale

Mr. Simon Burns

Mr. Irvine Patnick

EUROPEAN COMMUNITY DOCUMENTS
Ordered,
That the proposals described in the unnumbered Explanatory Memorandum submitted by the Department of Employment on 2nd June 1989 relating to safety and health of workers at work be referred to a Standing Committee on European Community Documents.—[Mr. Chapman.]

Political Honours (Amendment)
4.24 pm
Mr. Bruce Grocott: I beg to move,
That leave be given to bring in a Bill to restrict the granting of honours for political purposes.
It is 10 years since, shortly after assuming office, the Prime Minister restored the power that previous Prime Ministers had had to grant honours for political purposes. This is a particularly urgent matter because, in 10 days' time, there will be a new Queen's birthday honours list, with some 1,000 names on it and some 250 different distinctions and decorations being awarded, ranging from peerages at the top to the British Empire medal at the bottom.
Few hon. Members would object when some recognition is given to people who otherwise receive little reward or recognition—those who are outstanding in times of national disasters and those who for long periods provide voluntary service to their communities. But that is not what is happening under the honours system as managed by the Prime Minister. Indeed, it rarely happened under the honours system in the past.
In the past 10 years, the honours system has had two main characteristics. There has been a massive exercise of patronage by the Prime Minister. It may be called the Queen's birthday honours, and it may be the Queen's birthday, but the honours are the Prime Minister's. In addition, the kind of honour that is given depends not so much on what a person has done as on who he or she is. It is closely related to rank in society. We do not yet know whether in the forthcoming Queen's birthday honours any awards will be given to the people who were involved in the rescue operations after the Lockerbie air disaster, the Clapham disaster and, more recently, the Hillsborough disaster, but we can predict with certainty that the recognition given to them will he nothing compared with the recognition given to a time-serving Conservative Member of Parliament or an industrialist who gives large sums to the Conservative party.
It is historic fact that in the same honours in which the Prime Minister's adviser on publicity and public relations received a knighthood, the fireman who was badly injured in the Bradford fire received the British Empire medal, the lowest of awards that can be given. For anyone who is in any doubt, the citation for the British Empire medal spells it out beautifully: it is to be
"awarded to those who do not qualify by rank for a higher medal".
We know that, whatever aspect of our society is being recognised, the honour depends on a person's rank. If an honour goes to the Civil Service, the permanent secretaries get the knighthoods; the clerical officers, if they get anything at all, get the lowest rank of honour. A knighthood comes as automatic rank for a permanent secretary—[Interruption.] Conservative Members are apparently horrified at the prospect of recognition of rank in our society differing from that.
We know that if honours are to be given to the Health Service, knighthoods go to the chairmen of district health authorities but if nurses and hospital porters were to be recognised, which they are not, the honour would be at the lowest rank. If awards are to be given to the education service, the knighthoods go to the vice-chancellors of universities while teachers in busy city-centre comprehensives get nothing or the lowest level of award.
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My Bill has two objectives. I am sure that the main part of it will be non-controversial and therefore not opposed. It is taken from an editorial in The Times on 31 December 1987, which stated:
"Honours should be taken out of the direct gift of the Prime Minister and politicians. They should be controlled by a strong, independent body."
I agree wholeheartedly with that statement, but I would go even further. We need a commission of inquiry into the honours system to determine whether it continues to serve any useful purpose in our society.
The way in which the Prime Minister has used the honours system is quite disgraceful. For example, the main characteristic in the decision whether to reward an industrialist is not the contribution that his company has made to the economy, but the contribution that it has made to Conservative party funds. Two thirds of the 110 industrialists awarded knighthoods or peerages by the Prime Minister represent companies which contribute to Conservative party funds. Yet only one third of the top 200 companies contribute to Tory party funds. The chance of an honour is roughly doubled if an industrialist contributes to Conservative party funds. That is outrageous and should be stopped.
Another aspect is the granting of honours to Conservative Members of Parliament. When I returned to this place after an absence of eight years I recognised many familiar faces on the Conservative Benches, but I could not get used to the fact that almost all of them had knighthoods. I have done a little checking and discovered that 100 of them have knighthoods and that only four Conservative Members with continuous service since 1964 do not have one—
Hon. Members: Name them.
Mr. Julian Critchley rose—
Mr. Grocott: The hon. Gentleman and his three Friends deserve the admiration of the whole House.
We know of the awards given to the ideological supporters of the Conservative party in the past 10 years. Massive awards have been given to Aims of Industry, the Centre for Policy Studies, and the Institute of Economic Affairs—presumably on the basis of the economic advice that it has given to the Government. Now that the Government's economic policy is falling apart, I wonder whether the awards will be handed back.
I find it a disgraceful practice to reward journalists for doing their job, and I speak as a member of the National Union of Journalists. The overwhelming majority of those given awards are known for their political neutrality, such as Lord Wyatt, but the one group that will not receive awards anything like those given to Lord Wyatt are those doing such an outstanding job reporting what is happening in China under conditions of great danger.
I doubt whether this uncontroversial Bill will be opposed. If it is, I hope that it will not be opposed by any hon. Member who has been either a beneficiary of the present system or hopes to be so in the future. It is common sense to recognise after this length of time that the honours system has been abused by the Prime Minister. We should scrap the present method of fixing political honours and set up a public inquiry. The House should support my Bill.
4.34 pm
Mr. Neil Hamilton: As one who qualifies under the criteria laid down by the hon. Member for the Wrekin (Mr. Grocott) of neither having been a beneficiary, nor likely to be one, of the honours system—[Interruption.] I am encouraged by the objections of my right hon. Friend the Patronage Secretary. I do not know whether it is an indirect attempt to shut me up. In the past, that has sometimes been his objective.
It would be wrong to allow this opportunity to pass without a sensible point of view being put across. I am surprised at the sensitivity—indeed, the gall—of the hon. Member for The Wrekin (Mr. Grocott) in introducing a Bill of this kind. He was a Back-Bench supporter of a previous Administration, which we recall with some fondness, headed by Lord Wilson of Rievaulx, so I can only regard the hon. Gentleman's speech today as a kind of atonement for some of the events that occurred in 1976. We recall that Lord Wilson in the honours list of that year not only provided titles for people, but for many of them he provided official residences as well, particularly residences with a high degree of security—with bars on the windows.
I do not know whether hon. Members representing the centre parties in the House intend, if there is a Division, to support the hon. Member for The Wrekin, but we recall with fondness another man of high principle who held the highest office of state open to a mere commoner—Mr. Lloyd George, who did many great things in the course of his long Administration, the greatest of which was the sale of peerages on a very substantial scale indeed. I do not recall that in the days of the "lavender list" we had any calls for witch-hunts in No. 10 Downing street by, for example, the hon. Members for Linlithgow (Mr. Dalyell), for Walsall, North (Mr. Winnick) and all the other great men of rectitude on the Opposition Benches. Nor do I recall recently—say, just before the last election—the right hon. Member for Islwyn (Mr. Kinnock) being slow off the mark in using the honours list to reward his former right hon. Friend, now Lord Cocks, for the great services that he had rendered to the Opposition in making way—we were delighted at the occurrence—for the hon. Member for Bishop Auckland (Mr. Foster). Clearly, the honours system has its uses from time to time for Opposition Members.
Perhaps I may recall an utterance by the late Lord Keynes, who said that dangerous human proclivities could be canalised into relatively harmless courses by the making of money. We do it far mor effectively and cheaply by the maintenance of an honours system. The worst corruption that we have witnessed in this country in recent years has been the corruption that comes from Socialism, whereby the Government of the day bribe the electors with their own money—[Interruption.]—as in the Hull by-election of 1967, which brought the hon. Member for Great Grimsby (Mr. Mitchell) to the House, although we do not often see him these days, except on television.
The honours system provides a relatively harmless and costless way of rewarding people who perform great functions to the state. Honours are awarded in all walks of life. We have the sportsman of the year, for example. Last year we could have given the Leader of the Opposition the award of foreign traveller of the year for the great services that he performed in Zimbabwe. This year he may qualify
244
for the title of broadcaster of the year for the signal services that he has performed for the Conservative party in recent weeks on BBC radio.
The hon. Member for The Wrekin, in his egalitarian extremism, seems sadly out of touch with the new model Labour party. I do not know whether he is forming an alliance with the right hon. Member for Chesterfield (Mr. Benn), whose desire it is to abolish the whole honours system and perhaps replace it with a kind of dishonours system with the public stripping of double-barrelled names, the expunging of entries from Who's Who, the public burning of pedigrees and the presentation of a certificate of proletarianism to prove that one can be prolier than thou.
The right hon. Member for Chesterfield (Mr. Benn) cane up with the wizard idea just before the last election of creating 1,000 peers in order to abolish the House of Lords. But then, of course, he realised that the whipping system in the House of Lords is perhaps rather less strict than it is in this House and that he would not be able to achieve his objective. It would be a shame indeed to abolish the only real opposition to the Government in this country today, which is in the House of Lords. I say that just to show that I can be fair-minded.
It would also be a shame to frustrate the legitimate expectations of my right hon. and hon. Friends. Mention has already been made in an oblique way to my hon. Friend the Member for Aldershot (Mr. Critchley), of whom it must be said that any attempt to honour him would be merely to put tinsel on the Christmas tree, as he carries such great dignity in any event that it would be impossible to expand it. It would be a shame, too, to frustrate the legitimate desires of the many Labour councillors who petition Conservative Members of Parliament from time to time for some recognition of the great work that they perform in the interest of the public. I am sure that hon. Members will readily agree that the rewards of public life are few and small when compared with the great sacrifices that we make for the benefit of the public.
I hope that all my hon. Friends and perhaps some Opposition Members who have nothing else to look forward to but the prospect of some meretricious honour of this kind, will join me in the Lobby in opposition to the Bill.
Question put, pursuant to Standing Order No. 19 ( Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—
The House divided: Ayes 134, Noes 128.

Division No. 230]

[4.40 pm

AYES

Adams, Allen (Paisley N)

Canavan, Dennis

Allen, Graham

Clarke, Tom (Monklands W)

Archer, Rt Hon Peter

Clelland, David

Armstrong, Hilary

Clwyd, Mrs Ann

Ashton, Joe

Cook, Frank (Stockton N)

Barnes, Harry (Derbyshire NE)

Corbett, Robin

Battle, John

Corbyn, Jeremy

Bell, Stuart

Cousins, Jim

Benn, Rt Hon Tony

Cryer, Bob

Boyes, Roland

Cunliffe, Lawrence

Bradley, Keith

Dalyell, Tam

Bray, Dr Jeremy

Darling, Alistair

Brown, Nicholas (Newcastle E)

Davies, Rt Hon Denzil (Llanelli)

Caborn, Richard

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

Callaghan, Jim

Dixon, Don

Campbell, Ron (Blyth Valley)

Dobson, Frank

Campbell-Savours, D. N.

Duffy, A. E. P.

245

Dunnachie, Jimmy

Martlew, Eric

Eastham, Ken

Meale, Alan

Evans, John (St Helens N)

Michael, Alun

Ewing, Mrs Margaret (Moray)

Michie, Bill (Sheffield Heeley)

Fatchett, Derek

Mitchell, Austin (G't Grimsby)

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

Moonie, Dr Lewis

Fisher, Mark

Morgan, Rhodri

Flannery, Martin

Morley, Elliott

Flynn, Paul

Mullin, Chris

Forsythe, Clifford (Antrim S)

Murphy, Paul

Foster, Derek

Nellist, Dave

Foulkes, George

O'Neill, Martin

Fraser, John

Patchett, Terry

Fyfe, Maria

Pike, Peter L.

Galbraith, Sam

Powell, Ray (Ogmore)

Garrett, John (Norwich South)

Quin, Ms Joyce

Godman, Dr Norman A.

Radice, Giles

Golding, Mrs Llin

Randall, Stuart

Gould, Bryan

Redmond, Martin

Grant, Bernie (Tottenham)

Reid, Dr John

Griffiths, Nigel (Edinburgh S)

Richardson, Jo

Griffiths, Win (Bridgend)

Robinson, Geoffrey

Grocott, Bruce

Rogers, Allan

Hattersley, Rt Hon Roy

Ross, Ernie (Dundee W)

Haynes, Frank

Ross, William (Londonderry E)

Heffer, Eric S.

Ruddock, Joan

Henderson, Doug

Sedgemore, Brian

Hinchliffe, David

Sheldon, Rt Hon Robert

Hogg, N. (C'nauld & Kilsyth)

Short, Clare

Howells, Dr. Kim (Pontypridd)

Skinner, Dennis

Hoyle, Doug

Smith, Andrew (Oxford E)

Hughes, John (Coventry NE)

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

Hughes, Robert (Aberdeen N)

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

Hughes, Roy (Newport E)

Soley, Clive

Illsley, Eric

Steinberg, Gerry

Jones, Barry (Alyn & Deeside)

Strang, Gavin

Kennedy, Charles

Straw, Jack

Kilfedder, James

Turner, Dennis

Lamond, James

Vaz, Keith

Leighton, Ron

Wall, Pat

Lestor, Joan (Eccles)

Wareing, Robert N.

Livingstone, Ken

Welsh, Andrew (Angus E)

Loyden, Eddie

Welsh, Michael (Doncaster N)

McCartney, Ian

Williams, Alan W. (Carm'then)

McFall, John

Wilson, Brian

McKay, Allen (Barnsley West)

Wise, Mrs Audrey

McLeish, Henry

Worthington, Tony

Madden, Max

Young, David (Bolton SE)

Mahon, Mrs Alice

Mallon, Seamus

Tellers for the Ayes:

Marek, Dr John

Mr. David Winnick and

Marshall, Jim (Leicester S)

Mr. Kevin Barron.

NOES

Adley, Robert

Boscawen, Hon Robert

Alexander, Richard

Bowden, Gerald (Dulwich)

Alton, David

Boyson, Rt Hon Dr Sir Rhodes

Arbuthnot, James

Brazier, Julian

Arnold, Jacques (Gravesham)

Bruce, Malcolm (Gordon)

Aspinwall, Jack

Buck, Sir Antony

Baldry, Tony

Budgen, Nicholas

Barnes, Mrs Rosie (Greenwich)

Burns, Simon

Beaumont-Dark, Anthony

Butler, Chris

Beith, A. J.

Butterfill, John

Bennett, Nicholas (Pembroke)

Carlisle, John, (Luton N)

Bevan, David Gilroy

Carrington, Matthew

Blackburn, Dr John G.

Clark, Dr Michael (Rochford)

Bonsor, Sir Nicholas

Clark, Sir W. (Croydon S)

246

Coombs, Anthony (Wyre F' rest)

Maples, John

Coombs, Simon (Swindon)

Marlow, Tony

Cormack, Patrick

Marshall, John (Hendon S)

Cran, James

Mills, Iain

Curry, David

Miscampbell, Norman

Devlin, Tim

Mitchell, Andrew (Gedling)

Dicks, Terry

Mitchell, Sir David

Dunn, Bob

Moate, Roger

Evans, David (Welwyn Hatf'd)

Moss, Malcolm

Evennett, David

Nicholson, David (Taunton)

Favell, Tony

Onslow, Rt Hon Cranley

Fearn, Ronald

Oppenheim, Phillip

Forman, Nigel

Patnick, Irvine

Fox, Sir Marcus

Pawsey, James

Franks, Cecil

Powell, William (Corby)

Fry, Peter

Price, Sir David

Gardiner, George

Raffan, Keith

Gilmour, Rt Hon Sir Ian

Redwood, John

Gow, Ian

Rhodes James, Robert

Grant, Sir Anthony (CambsSW)

Riddick, Graham

Greenway, Harry (Ealing N)

Roe, Mrs Marion

Hague, William

Rost, Peter

Hanley, Jeremy

Shaw, David (Dover)

Hannam, John

Shaw, Sir Giles (Pudsey)

Harris, David

Shaw, Sir Michael (Scarb')

Hayward, Robert

Shephard, Mrs G. (Norfolk SW)

Heddle, John

Shersby, Michael

Hicks, Mrs Maureen (Wolv' NE)

Sims, Roger

Higgins, Rt Hon Terence L.

Skeet, Sir Trevor

Hind, Kenneth

Smith, Tim (Beaconsfield)

Howarth, G. (Cannock & B'wd)

Steel, Rt Hon David

Howell, Rt Hon David (G'dford)

Sumberg, David

Howell, Ralph (North Norfolk)

Summerson, Hugo

Howells, Geraint

Tapsell, Sir Peter

Hughes, Robert G. (Harrow W)

Taylor, Ian (Esher)

Irvine, Michael

Tebbit, Rt Hon Norman

Janman, Tim

Thorne, Neil

Johnson Smith, Sir Geoffrey

Thornton, Malcolm

Kirkwood, Archy

Townend, John (Bridlington)

Knight, Greg (Derby North)

Vaughan, Sir Gerard

Knight, Dame Jill (Edgbaston)

Walker, Bill (T'side North)

Knowles, Michael

Wallace, James

Latham, Michael

Walters, Sir Dennis

Lawrence, Ivan

Wardle, Charles (Bexhill)

Lawson, Rt Hon Nigel

Widdecombe, Ann

Lee, John (Pendle)

Woodcock, Dr. Mike

Lloyd, Sir Ian (Havant)

Yeo, Tim

McCrindle, Robert

Young, Sir George (Acton)

Macfarlane, Sir Neil

MacKay, Andrew (E Berkshire)

Tellers for the Noes:

McLoughlin, Patrick

Mr. Michael Brown and

Malins, Humfrey

Mr. Neil Hamilton.

Question accordingly agreed to.
Bill ordered to be brought in by Mr. Bruce Grocott, Mr. Don Dixon, Mrs. Maria Fyfe, Mr. John Garrett, Mr. James Lamond, Dr. Lewis Moonie, Mr. Jeff Rooker, Mr. Ernie Ross, Mr. Dennis Skinner and Mr. Dennis Turner.

Political Honours (Amendment)
  POLITICAL HONOURS (AMENDMENT)
  Mr. Bruce Grocott accordingly presented a Bill to restrict the granting of honours for political purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 150.]
Opposition Day
  12TH ALLOTTED DAY

    Government Economic Policy
    Mr. Speaker: Before I call the right hon. and learned Member for Monklands, East (Mr. Smith), I must announce to the House that I have selected the amendment in the name of the Prime Minister. In view of the late start to this debate I propose to limit speeches to 10 minutes between 7 and 9 o'clock, but I ask those hon. Members who may be called before then to bear that limit in mind.
    Mr. Nicholas Bennett: On a point of order, Mr. Speaker. You have not announced whether you intend to call the amendment standing in my name, which is supported by 24 of my colleagues, or the amendment tabled by the Democrats. I recognise that there are a number of amendments to the Labour party motion and that it may not be possible to call all of them, but I seek your guidance. You will recall that in the unpublished and unbroadcast part of a radio interview some 10 days ago, the Leader of the Opposition, when asked about his economic policy, said, "I am not"—
    Mr. Speaker: Order. The hon. Gentleman knows that it is only possible for me to call one amendment and I have nominated it, so I have answered his question.
    Mr. Bennett rose—
    Mr. Speaker: Order. It is not a point of order and I cannot deal with it.
    Mr. Michael Brown: On a point of order, Mr. Speaker. I recognise that you have decided to select the amendment in the name of my right hon. Friend the Prime Minister only. During the debate, however, will it be possible for the 25 hon. Members who have signed the amendment in the name of my hon. Friend the Member for Pembroke (Mr. Bennett), should they catch your eye, to refer to the speech recently given by the right hon. Member for Llanelli (Mr. Davies) regarding the views of the Leader of the Opposition and his views of that right hon. Gentleman's economic policies?
    Mr. Speaker: The hon. Gentleman is an old parliamentary hand and he will know that the debate is confined to the Opposition motion and the Government amendment. He must keep his speech within those confines.
    4.54 pm
    Mr. John Smith: I beg to move,
    That this House deplores the confusion and disarray of the Government's economic policy, the record balance of payments deficit, the rising rate of inflation and the damaging level of interest rates; notes with concern the continuing neglect of the real economy and the failures to invest adequately in education and training, research and development, and the regions, which undermine Britain's prospects of success in the single market of the European Community after 1992; and calls upon the Government to give urgent priority to such supply side investment in order to reduce the balance of payments deficit and begin to create a strong, balanced and competitive economy for the 1990s.
    When he presented his Budget in March 1988, the Chancellor of the Exchequer exhibited a sublime degree of
    248
    self-confidence. His Budget gained fulsome praise from the Prime Minister, who said that it was "brilliant". She was not in any way inhibited by the fact that she had sabotaged his exchange rate policy a few days before. The House will recall the Chancellor's confident boast, given in his wind-up to the debate on the Budget resolutions, that Britain was
    "experiencing an economic miracle, comparable in significance to that previously enjoyed by West Germany and still enjoyed by Japan."—[Official Report, 21 March 1988; Vol. 130, c. 109.]
    In presenting his Budget, the right hon. Gentleman said:
    "the present … upswing, unlike almost all its predecessors, has not led to any resurgence of inflation".—[Official Report, 15 March 1988; Vol. 129, c. 994.]
    The Chancellor, warming to his task, said in the wind-up to the Budget debate:
    "we are now talking about getting it down from something between 3 and 4 per cent."—[Official Report, 21 March 1988; Vol. 130, c. 110.]
    As for the balance of payments, there would be
    "no difficulty in financing a temporary current account deficit of this scale".—[Official Report, 15 March 1988; Vol. 129, c. 994.]
    But the self-confidence and the self-congratulation proved to be short-lived, because it was based on blissful ignorance, the sort of ignorance demonstrated by a man on the top of a ladder who does not know he is about to fall off. The so-called temporary current account deficit soared to more than £14 billion and has been sliding relentlessly further into the red ever since.
    Inflation, described by the Chancellor in a phrase that will haunt him as "a temporary blip", has doubled to 8 per cent. So, today, far from talking about temporary blips, the Chancellor prefers to warn us, as he said in his OECD speech of last week,
    "against people who are impatient for quick results".
    That was his message to the OECD Ministers in Paris.
    But, as interest rates blip higher and higher for longer and longer, is it any wonder that people are losing confidence in Conservative economic policy? With interest rates moving to 14 per cent. perhaps higher, with soaring borrowing costs threatening investment in industry and risking overkill and recession, is it surprising that people are becoming impatient for some results? But whose expectations was the Chancellor really trying to calm?
    On the day the right hon. Gentleman announced the latest increase in interest rates he was addressing the Tory women's conference. He was reported in The Independent as having opened his speech to the Tory women by saying as follows about the timing of the interest rates:
    "I had two conflicting thoughts. I thought it was a rather tactless time in the middle of the women's conference. Then I thought—where else could I look for such mature, intelligent, responsible support?"
    They heckled him. I think the Chancellor has a problem with Tory women—[Interruption.]—because there is another place, not too far from where he lives where there is not much in the way of mature, intelligent and responsible support for him. The Prime Minister, in an extremely revealing interview in the Glasgow Herald told us about the nature of her relationship with her Chancellor of the Exchequer. She said:
    "Nigel is a very good neighbour of mine, and a very good Chancellor. Geoffrey is a very good Foreign Secretary. I am not going any further. You know I have to do reshuffles from time to time. I hate them. Why?—because I have a very good Cabinet. But I know that there are young people who have to have an opportunity, as others had it. I hate them."

    249
    I think she must mean the reshuffles.
    "I have to work myself up because I know that I have to do them. I hate them."
    And then, ominously:
    "So will they."
    Good neighbourliness is highly relevant to the confusion and disarray which lies at the heart of Government policy, and, on that subject, my sympathies are, to some extent, with the Chancellor of the Exchequer. After all, when he picks up the telephone and wants to get through to No. 10, it must be rather disconcerting to be told, "Walters here. Would you like to speak to Griffiths?" It is not clear who the real Chancellor of the Exchequer is. We have here the nominal Chancellor of the Exchequer.
    Although he and the Prime Minister are neighbours, he should take account, as many of us who are aficionados do, of the theme song of the "Neighbours" programme which we hear twice a day on BBC television. The song goes:
    "Neighbours—everybody needs good neighbours.
    Just a friendly wave each morning helps to make a better day.
    Neighbours need to get to know each other.
    Next door is only a footstep away.
    Neighbours—everybody needs good neighbours.
    With a little understanding, you can find a perfect blend.
    Neighbours should be there for one another.
    That's when good neighbours become good friends."
    The Chancellor of the Exchequer may be a good neighbour, but Walters and Griffiths are the good friends. Time after time, in the management of his policy, he has been up-ended by the Prime Minister's own intervention.
    The Prime Minister wants some quick results, as Britain's inflation rate soars to 8 per cent. and the ludicrous target of zero inflation looks ever more absurd. To avoid the verdict of the judge and jury, the Chancellor has resorted to the lame excuse of the international trend, his flimsy international alibi. At the Organisation for Economic Co-operation and Development he talked about G7 inflation. What on earth is that?
    The phrase is intended to give the impression that inflation is a national contagion that no one can avoid, the mere fact that one is alive means that one will catch it and that it does not have much to do with the Chancellor. It is instructive to look at the inflation rates of the other G7 countries. Japan has 1·2 per cent., the Federal Republic has 2·7 per cent., France has 3·4 per cent., the United States of America has 5 per cent., Canada has 4·6 per cent. and Italy has 6 per cent. The average is 4·4 per cent., while Britain has 8 per cent.
    There is no such thing as G7 inflation, but there is British inflation, which is not externally caused. Neither oil nor other key commodities have risen spectacularly in this decade, as they did in the 1970s. The resurgence of inflation is domestically driven and caused by the Government's mismanagement of demand, their foolish credit boom, their own utility price increases and the Tories' inflationary "own goals," to borrow a phrase favoured by the Confederation of British Industry.
    The mismanagement of demand has made worse the most serious problem of all: Britain's worsening balance of payments deficit. The 1988 Budget combined foolish and unfair tax cuts with an unsustainable credit boom and dramatically aggravated Britain's emerging external deficit. Sadly, that deficit is no mere temporary blip. Since 1982, Britain's non-oil current account has been in deficit and has grown worse every year except 1985. That
    250
    long-running trend of deterioration, concealed for a while by North sea oil, is at the heart of Britain's balance of payments deficit.
    However, the Chancellor refuses to acknowledge the problem. He has seriously and consistently underestimated its scale. Absurdly, Treasury Ministers claim that the deficit is a sign of success. The Chief Secretary to the Treasury does so regularly. By implication, the growing surpluses of Germany and Japan are evidence of economic failure, and their expanding role as the world's foremost creditor nations must be a lamentable national humiliation for them. Alternatively, the Treasury likes to present the deficit as yet another temporary event: a short-term result of excessive demand and a temporary misalignment of demand and supply in the economy. But the deficit is a long-term structural problem that will not be cured merely by the easing of domestic demand.
    Since the Chancellor fails to understand the cause of the deficit it is not surprising that he cannot accurately forecast it. In 1988, we were told that it would be £4 billion and it was £14 billion. This year, the Chancellor says that it will be about the same, £14 billion, but so far this year we are heading for a new record deficit of more than £17 billion. When he replies, will the Chancellor explain why the European Commission, the International Monetary Fund and the OECD have all forecast a further record slide into the red this year? The OECD's latest forecast, available to the Chancellor in Paris last week, reportedly predicted that Britain would run record deficits this year and next.
    What is the explanation for that discrepancy, given that the OECD forecast must be agreed with the Treasury? I trust that the Chancellor, this afternoon, will tell us the Treasury's revised forecast for the balance of payments this year. Clearly the figures that he gave the House in his Budget statement not so long ago are no longer credible in the House, at the OECD or in the financial markets.
    The forecasts are important because they reveal how long high interest rates will be needed to attract the hot money flows which the Chancellor wants in order to finance the balance of payments deficit. High interest rates are not merely a device to curb inflation, but the price we must pay for living beyond our means. We are having to pay the Lawson risk premium, the speculator's ransom, required to attract capital into sterling and finance the balance of payments deficit. That price is rising, as the market's confidence in the Government's economic policy falls.
    The Government have failed to tackle the weakness of Britain's economic fundamentals: the burgeoning balance of payments deficit and the resurgence of inflation. Those are facts which no amount of hype about Thatcher miracles can conceal from the currency markets or the electorate. The Government's dependence on higher and higher interest rates is more and more a sign of policy weakness and evidence of confusion and disarray, rather than a firm policy resolve.
    A good example of that confusion and disarray arose at Prime Minister's Question Time on 23 May, when the Prime Minister, in answer to a question from my right hon. Friend the Leader of the Opposition, clearly implied that, at 13 per cent., interest rates were adequate to curb domestic demand. The evidence of a slowdown in the credit boom is growing, if not yet fully conclusive.

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    However, 13 per cent. was not enough to satisfy the currency speculators and failed to buy off their anxieties about the British economy.
    Here revealed is the self-inflicted contradiction of the Government's economic policy. The Chancellor has chosen to rely on high interest rates as a universal economic panacea, but interest rates are a double-edged sword. They are a weapon that cuts both ways: raising the exchange rate and curbing demand. Those two objectives can conflict, and that is precisely what is starting to happen in the British economy. As demand begins to fall away, high interest rates threaten overkill and recession. However, the Chancellor still needs to attract that hot money to finance his external deficit.
    Mr. John Townend: If he disagrees with the present rate, would the right hon. and learned Gentleman be good enough to tell the House what the appropriate rate of interest should be at the present time?
    Mr. Smith: I do not agree that the only weapon that we should use should be interest rates. As we have made clear on numerous occasions, there are other methods—[Interruption.] I shall give way to the Chancellor if he will tell me what he thinks the appropriate rate should be. Not only is this House interested in whether he thinks they should be higher; even more importantly, does the Prime Minister think that they should be higher? The markets never know whether the Chancellor, the Prime Minister or Sir Alan Walters speaks for the Government.
    Mr. John Redwood: If the right hon. and learned Gentleman believes that the credit boom is slowing down, why is he recommending credit controls? Is he aware that credit controls and the exchange controls that they would require are illegal under the EEC arrangements which are being put in place for 1992?
    Mr. Smith: There are some signs that the boom in demand is slowing down—and I am not surprised. If one takes £50, £60 or £70 a week out of people's incomes by means of increased mortgage payments, they cannot spend the money on goods produced at home or imported from abroad. But if there is a need to control demand, it should not be met by further increases in interest rates. It should be done by credit controls. Before the hon. Member for Wokingham (Mr. Redwood) departs too far from his former friends in the No. 10 policy unit, he had better read what they are sedulously leaking to the press day after day—that they are considering forms of credit controls as an alternative to the Chancellor's reliance on interest rates. I would not presume to give the hon. Gentleman political advice about his future career, but there is no need for him to stick his neck out too far on this subject.
    The confusion between the Prime Minister and the Chancellor over interest rates and monetary policy merely exacerbates the inherent conflict within the Government's foundering economic strategy. No. 10, as the hon. Member for Wokingham reminded us by implication, is returning to monetarism and wants to avoid any further rise in interest rates. The City catches wild rumours that the Chancellor has resigned, but the Treasury line remains that interest rates will stay as high as necessary for as long as necessary. Is that still the Government's policy?
    The Chancellor of the Exchequer (Mr. Nigel Lawson): Yes.
    Mr. Smith: In that case, they had better get a grip on some of the advisers in No. 10 who tell the press that another Government policy is to be followed.
    In all this confusion and disarray one searches in vain for the medium-term financial strategy, that wonder of modern economics in which the Chancellor would repudiate day-to-day management of the economy, disparaging it as flying by the seat of one's pants, in favour of medium-term targets. But the medium-term financial strategy has turned out to be just another temporary blip in the history of modern economics. The medium-term financial strategy has been aimlessly drifting in ever decreasing circles until it has finally disappeared up the Chancellor's own monetary targets.
    Recently, the Chief Secretary to the Treasury bravely attempted to resuscitate the medium-term financial strategy when speaking to a conference of small businesses, called "Small Businesses: The Quiet Revolution". He told the conference—I quote from his Treasury handout—
    "Government policy now operates in a medium-term framework which gives individuals and firms the confidence to plan ahead."
    He was speaking on Wednesday 24 May, the same day on which interest rates rose to 14 per cent., the tenth such jump in borrowing costs since last summer. That is the medium-term plan to give small businesses confidence with which to plan.
    I shall tell the Chancellor, who seems sceptical, what the small businesses said about his 14 per cent. interest rates. The National Federation of Self Employed and Small Businesses received the news with dismay, commenting that each percentage point increases the cost to industry by an extra £250 million. The federation complained that small businesses will be hit hardest, and went on to say that they were the pawns in the Government's move to defend the pound. So much for the medium-term financial strategy and the confidence it engenders.
    I asked the National Federation of Self Employed and Small Businesses to give me an example of what it meant, which it did, calling it "Real Example No. 1". It concerns a company in Gwent, a supplier of equipment to the heating and plumbing industry. Its owner borrowed £25,000. His repayments on 19 May, when he first took out the loan, totalled £343 a month. This year, on 18 May 1989, his bank statement showed that the repayments had gone up to £552·44. He is also suffering from bad debts on the part of his creditors, because they, too, are being squeezed. If interest rates rise to 15 per cent., as the federation says seems likely, his repayments on the loan will have doubled. So much for the medium-term financial strategy and for encouraging small businesses.
    The truth is that higher interest rates are a costly and ultimately futile attempt to restore confidence in the Government's failed economic policy. They will hurt British industry and British families, and especially home owners, whose mortgage misery is caused by a tax this year on home ownership—the price of the Chancellor's earlier mistakes.
    Sir Peter Hordern: Since the right hon. and learned Gentleman is so much against high interest rates, as he openly told the House, may we take it that the Opposition's policy is a return to hire purchase controls

    253
    and to a reduction in the exchange rate, as is openly avowed by the hon. Member for Dagenham (Mr. Gould)? Is it Labour Government policy to devalue sterling against all other currencies and to reimpose hire purchase controls?
    Mr. Smith: I have made it clear so often that I tire of repeating it that my objection to higher interest rates is that the Government use them as the only weapon of policy to restrict demand. I have argued that there should be alternative credit controls, and that they should not be dismissed dogmatically. Indeed, one of the delegates at the Tory women's conference spoke out to that effect, and the hon. Gentleman, like some of his hon. Friends, should be careful that he is not outflanked by a change of policy under which the Government introduce some form of credit control—
    Mr. Robert Hayward: The right hon. and learned Gentleman has been on his feet for precisely 20 minutes. As this is the first economic debate since the publication of the Labour party's review, will he make clear what his party would do and what the cost of its programme would be?
    Mr. Smith: I gave way in an excess of generosity, thinking that the hon. Gentleman would involve himself in the controversy in which I was engaged with the hon. Member for Horsham (Sir P. Hordern). However, if he will contain himself, I shall develop the points in our motion.
    Mr. Nicholas Bennett rose—
    Mr. Smith: The markets' judgment of the Government's economic policy and the resulting fragility of sterling cannot be reversed by high interest rates alone. Such rates are a recipe for further industrial decline, as soaring borrowing costs become an intolerable burden on British industry. Real confidence will be restored only when the Government start to tackle the fundamental problems of the British economy and stop indulging in what The Daily Telegraph recently called
    "rhetorical self-indulgence abroad accompanied by an ever-burgeoning culture of economic self-gratification at home"—
    something with which we have grown familiar over the weary 10 years of this Government.
    Real confidence will return, as those on all sides of industry know, only when we in Britain invest in the supply side of the economy with the same relentless determination as West Germany does. If we are to boost our industrial capacity and trading performance we must invest, as our motion states,
    "in training, research and development, and the regions",
    and especially in manufacturing industry. Only investment can build the strong and competitive economy that Britain needs to meet the challenge in Europe after 1992.
    Despite the Government's receipt of £78 billion in North sea oil revenues—one statistic that the Government seek to smother: we never hear the apologists in No. 10 drawing our attention to the existence of North sea oil revenues—we have massively under-invested, especially in the manufacturing tradeable sector of our economy. Investment in the manufacturing sector has only just crawled back to the level achieved by the last Labour Government, and the cumulative loss over 10 years amounts to about £18 billion of investment forgone. We
    254
    have squandered North sea oil and have failed to invest, while our major rivals without that unprecedented windfall have raced ahead.
    In that excess of self-indulgence which characterised his 1988 Budget speeches, the Chancellor arrogantly compared Britain's so-called economic miracle with that of West Germany. He was so disparaging as to refer to the West German economic miracle in the past tense. We have heard that the West German economy is sclerotic, arthritic and hidebound and somehow much less efficient intrinsically than the bounding, vigorous economy that characterises the United Kingdom.
    Let us look at our feeble performance compared with West Germany's investment record in manufacturing, research and development and training. The share of GDP invested in manufacturing in West Germany in the eight years from 1980 to 1987 is more than 50 per cent. higher than for the same period in the United Kingdom. Is it any wonder that West Germany's share of world trade since 1980 has gone up from 19·9 per cent. to 21·5 per cent. while that of Britain has fallen from 9·7 to 8·1 per cent.? Is it surprising that our deficit in manufactures with West Germany has grown from the £2 billion that the Government inherited to the £8·5 billion that it is now?
    I looked through a list of figures comparing British investment with that in West Germany, and I shall select a few. West Germany spends £432 per employed person on research and development compared with only £265 in the United Kingdom. Over 70 per cent. of engineers in West Germany have recognised qualifications compared with 40 per cent. in the United Kingdom. The figure that I find the most shaming of all is that only 30 per cent. of our work force have recognised qualifications equivalent to at least one O-level, compared with 70 per cent. in West Germany.
    Let us look at West Germany's investment in machine tools. In 1987, it spent £3 billion on machine tools, compared with £670 million in the United Kingdom. West Germany now installs as many new robots every year as the total number of robots in place in Britain. Overall, machine tool purchases have increased by 100 per cent. in West Germany against a rise of only 10 per cent. in the United Kingdom. That is what is happening in West Germany. What is happening here?
    I hope that the House will not feel that it has to rely on any kind of biased statistic on a matter as serious as this. That is why I shall quote what the Engineering Employers Federation said two days ago in the Financial Times. It said:
    "The federation predicts the negative trade balance in all engineering products will worsen by 30 per cent. from a deficit of £8·9bn in 1988 to £11·6bn this year."
    It says:
    "Aerospace products will be the only significant UK metal-using manufacturing sector to remain in the black in international trade this year, … Mechanical engineering, for the first time in recent years, will slip into the red, moving from a positive balance of £166m last year to a deficit of £1·6bn this year, the federation estimates.
    The engineering industry last had a positive trade balance, of £2·8 billion, in 1982. Last year the deficit more than doubled from £4·2 billion in 1987."
    That is the sad tale of what is happening in a crucial part of our manufacturing sector. No wonder our balance of trade and our consequent balance of payments deficit are frightening.
    Mr. Kenneth Hind: In 1988, there was a record increase in investment in the United

    255
    Kingdom, of 14·5 per cent. At present, investment in British industry is at a record level. The right hon. and learned Gentleman talks about increasing investment. The only way that he would bring that about is by increasing taxation and putting public money into industry.
    Mr. Smith: The hon. Gentleman does what all apologists for the Government do. He seeks to confuse investment in the manufacturing sector with investment in business overall. He includes in his figures investment in casinos, leisure developments and the like. I have concentrated on investment in the manufacturing sector. The hon. Gentleman knows, and the Chancellor will not dispute, that investment in the manufacturing sector has just recently crawled above its 1976 level.
    Mr. Phillip Oppenheim rose—
    Mr. Smith: I have given way repeatedly and I must get on.
    Instead of following the example of successful competitors the Government continue the decade-long neglect of our manufacturing industry, the internationally tradable sector of our economy. That is the fundamental fault in the British economy and the fundamental flaw in the Government's policy. They compound this error, which is right at the heart of the matter, with confusion and disarray in the day-to-day management of the economy, especially on the demand front.
    Before March 1988 the Chancellor was shadowing the deutschmark at the level of DM 3 to the pound. That was until the Prime Minister brutally overruled him, as she pointedly reminded him recently. More recently, the Chancellor has been assuring markets of his firm intention to raise interest rates as high as is necessary for as long as is necessary. No doubt he will seek to make that clear again today and the markets will ask, as they ask every time he says it, whether the Prime Minister agrees with him. Two weeks ago in an answer at Prime Minister's Question Time the right hon. Lady cut the feet from under him and precipitated a currency fall which in turn brought another increase in interest rates. Hardly a day goes by when we do not have a further indication of dissent and confusion in that border zone between No. 11 and No. 10 Downing street.
    Mr. Tim Yeo rose—
    Mr. Smith: No, I shall not give way.
    On the No. 10 side of that zone there are some influential lodgers. There is Sir Alan Walters, the real Chancellor of the Exchequer, and the monetarist guru Professor Brian Griffiths. They are there to torment the Chancellor, and as he gets through and speaks to them, he no doubt remonstrates with them for conspiring against his policies. I do not envy the Chancellor in his difficulty in seeking to make some sense of the policy to which he is committed. He ought to get support from the Prime Minister once the Government have decided upon their economic policy. This country cannot have its economy managed by constant warfare between Nos. 10 and 11 and all the consequences that have flowed from that in recent months.
    Mr. Ian Taylor rose—
    Mr. Smith: I will not give way to the hon. Gentleman. [Interruption.]
    I thought that I had been making clear almost to the point of repetitive boredom the Opposition's commitment to tackling the fundamental problem of Britain's economy, which is the supply side problem. I am making clear not only our disagreement about the incompetent demand management that is practised by the Government but our disagreement about their excessive reliance on interest rates as the only weapon. Can we get that clear?
    I should like all Conservative Members to deal with the policy. I should like them to start explaining why we invest less than West Germany. I should like them to tell us why they do not speak up for small businesses, which complain so vociferously about the effect of higher interest rates. [Interruption.] Perhaps the next time that I meet a representative of small business I will tell him that the hon. Member for Dover (Mr. Shaw) laughed when I raised this matter.
    Mr. David Shaw: Will the right hon. and learned Gentleman accept from a small business man that the Labour party policy for the small business man has been a total and utter joke throughout the party's history? The Labour party has never had any policy to help small businesses and its 1979 and 1983 manifestos had nothing in them about small businesses.
    Mr. Smith: I have changed my mind. I shall not report to the National Federation of Self Employed and Small Businesses; I shall send Hansard as a good example of the lucidity with which Conservative Members approach some of the problems of small businesses. Small business men will not find that tirade very convincing because they have to accept the reality of the 14 per cent. interest rate that the Government have inflicted upon them.
    Sir William Clark rose—
    Mr. Smith: The Chancellor's problem in seeking not only to devise a policy—
    Sir William Clark rose—
    Mr. Smith: No, I shall not give way.
    The Chancellor's problem is not just in deciding what his policy should be but in making sure that it is adhered to. In that circumstance, he is not comforted by what the Prime Minister said in her interview in the Glasgow Herald when she held out two possibilities for people who were retiring from the Government. She said:
    "They can have a great career on the Back Benches. They get respect there, you know."
    I do not know whether the Chancellor will follow that happy route. The signposts along that route are Old Bexley and Sidcup, Shropshire, North, Henley and—I say this almost with some affection—Chesham and Amersham. Those are the signposts to the road to self-respect. The Chancellor may not find them all that beguiling.
    Sir William Clark rose—
    Mr. Smith: The hon. Gentleman has been a bit tiresome, so I shall give way to him.
    Sir William Clark: I am grateful to the right hon. and learned Gentleman. He is criticising the Government's policy on investment in manufacturing industry. Would he be kind enought to tell the House what is the Labour

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    party's policy to accelerate investment in manufacturing industry? Does it require an injection of taxpayers' money which will lead to increased taxation, or not?
    Mr. Smith: One of the things that we should not do is to run a high interest rate policy which makes it almost impossible for people to invest in manufacturing industry. If the hon. Gentleman takes the trouble to read our policies with the care that I am sure most of his researchers are busy doing so at the moment, he will find the answers to the questions that he raises.
    What we are debating here today is the confusion and disarray in the Government's economic policy. [Interruption.] Conservative Members find it entertaining if someone disagrees with his Front Bench. I say one thing back to them—Old Bexley and Sidcup to you.
    The fact is that there is confusion and disarray in the Government's economic policy. A child could see that. Their short-term tactics are as muddled as their strategy is inadequate. That is why today, on behalf of a troubled nation, we call them to account.
    5.33 pm
    The Chancellor of the Exchequer (Mr. Nigel Lawson): I beg to move, to leave out from "House" to the end of the Question and add instead thereof:
    "congratulates Her Majesty's Government on its economic policies which have led to output, investment, and manufacturing productivity growing faster than in any other major European Community country in the 1980s; applauds the Government's firm anti-inflationary stance, and the action it has taken to exert further downward pressure on inflation; and commends the Government's supply side policies which have brought industry's profitability to a 20 year high, led to record rates of new business growth, and seen the creation of nearly three million new jobs since 1983.".
    The first thing to be said about the speech that we have just heard from the right hon. and learned Member for Monklands, East (Mr. Smith) is that it bore no relation whatever to what is happening in the real economy. The one thing that it did bear a close resemblance to was every other economic speech that he has made over the years. However, I have to say, in a spirit of great affection, that the trivia element was even higher than usual. In fact, it was pretty nearly 100 per cent.
    It is remarkable how, whatever the economic circumstances, whether inflation is rising or falling, whether unemployment is rising or falling, whether sterling is rising or falling, whether he professes to be concerned about the threat of recession or the dangers of overheating, up the right hon. and learned Gentleman pops with the same solution—more public spending on training, research and development and investment.
    Now let me try to find some common ground. I cannot accept the right hon. and learned Gentleman's assumption that these things have merit—[Interruption.] These are serious matters and Opposition Members should listen to what I have to say. I cannot accept the right hon. and learned Gentleman's assumption that these things have merit only to the extent that they are paid for by the taxpayer, but I entirely agree that we want to see more training, more research and development and more investment. That is precisely what we are seeing at the present time. Expenditure on training is rising fast and is now running at well over £20 billion a year. Spending on industrial research and development has also been growing steadily year after year. In 1987, the most recent year for which figures are available, industrial research and
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    development was more than 30 per cent. up in real terms over the comparable figure for Labour's last year in office—that is what has been happening—while total civil R and D, as a share of GDP, is well above the European Community average. Those are the facts.
    As for investment, that too is at its highest level ever and still rising fast, with manufacturing investment particularly strong. Indeed, total business investment in the United Kingdom now represents the highest proportion of GDP ever recorded. Whereas under Labour, total investment scarcely grew at all, in the 1980s under this Government we have seen investment growing substantially faster than consumption and faster than in all the other countries of the European Community.
    All that is a clear sign of a healthy and vigorous economy, one far removed from the picture painted by the right hon. and learned Gentleman, who simply demonstrates how hopelessly out of touch the Labour party is with the reality of life in Britain today.
    Mr. Chris Mullin: According to figures supplied to me yesterday by the Department of Trade and Industry, manufacturing investment in the north-east—the area that I represent—in 1987, the latest year for which figures were available, was 53 per cent. of what it stood at in 1979. How does that square with the economic miracle?
    Mr. Lawson: Even the right hon. and learned Member for Monklands, East admitted that manufacturing investment in Britain today is at an all-time record level.
    Mr. John Smith: Will the Chancellor please tell us by how many percentage points investment in manufacturing industry today is above what it was when the Government took office?
    Mr. Lawson: What I will tell him is that not only is it above and rising fast, but manufacturing output, which he considers of such importance, fell under the Labour Government and has risen substantially under this Government. That is the difference between our records on manufacturing.
    What we have heard today from the Opposition is in no sense a new phenomenon. I recall, as some other hon. Members may, the censure debate on the economy that was mounted by the Opposition in January 1985—the last occasion on which interest rates were increased to 14 per cent. In that debate the Leader of the Opposition said:
    "We know that the Chancellor of the Exchequer wants a high growth rate. We know that he wants a low inflation rate and we know that he wants everybody to go busily about their business. But given his record, that is not really on."—[Official Report, 31 January 1985; Vol. 72, c. 421.]
    Mr. Neil Kinnock: That is right.
    Mr. Lawson: The right hon. Gentleman says that that is right, but it is wrong. It is wrong in every particular. Since January 1985 British business and industry have had four of the best years that they have ever known. Since January 1985—I am taking about the particular things to which the right hon. Gentleman referred in 1985—[Interruption.] If the right hon. Gentleman wishes to get to his feet he can.
    Since January 1985, growth has averaged 3·5 per cent. a year, inflation has averaged 5 per cent and unemployment has fallen by more than a million—so much for the right hon. Gentleman's predictions.
    Mr. Kinnock: In the course of doing all that, the Chancellor of the Exchequer—unforgiveably—has given us policies that result in a massive and possibly incurable balance of payments and balance of trade deficit. One of the reasons why he has managed for a part of that time to restrain inflation is that the balance of payments and dependence on foreign manufactured imports restrained inflation. Now that the Chancellor is having to revert to his policy of reliance on interest rates, inflation is shooting up and will go up further than even he wants.
    Mr. Lawson: What is abundantly clear is that, four years after the 1979 debate, we can see that the right hon. Gentleman was wrong about growth, wrong about inflation and wrong about unemployment. In four years' time we shall see precisely that he was wrong about everything that he says today.
    The plain fact is that, over the past five years, Britain has created more new jobs than any other European country, and we have more people in work today than ever before in our history. No wonder the right hon. and learned Member for Monklands, East did not say a single word about unemployment in the whole of his speech—a subject about which we always used to hear so much. The right hon. and learned Gentleman's speeches used to be about nothing else, but now we hear not a single word about unemployment.
    At one point, the right hon. and learned Gentleman referred in a most emotional way to the question of small businesses. Let me mention just one more indicator of the new-found strength of the British economy—a strength that has spread from the south of England to the midlands, to Wales, to the north and to Scotland—and that is precisely the pace of new business formation, which last year achieved a record rate, net of closures, of more than 1,300 new businesses a week. That is what is happening to small businesses, and it is a far cry from the picture painted by the right hon. and learned Gentleman in his speech. That figure is net of liquidations—1,300 more businesses each week.
    If the right hon. and learned Gentleman wants to make speeches about industrial decline, he should have reminded the House of the state of British industry in 1979 after five years of Labour Government. That was indeed an example of how not to run an economy. Industry was unproductive, unprofitable and strike-ridden—crippled by Government controls and interference, and often only propped up by state handouts, all financed by penal rates of taxation—[Interruption.]
    Mr. Cranley Onslow: On a point of order, Mr. Deputy Speaker. Given the acoustics of the Chamber, I know that it is very difficult for you to hear sedentary interventions from the Opposition Front Bench, but if you watch the lips of the Leader of the Opposition you will see that he is continually trying to interrupt my right hon. Friend the Chancellor. Can you persuade him to shut up?
    Mr. Deputy Speaker (Mr. Harold Walker): Order. I like to think that I have learnt a lot in the Chair, but I have yet to learn lip-reading. It seems to me that noise is coming equally from both sides of the Chamber. We could do with less sedentary noise from all parts of the House. I should like to hear the Chancellor of the Exchequer.
    Mr. Lawson: I was saying, Mr. Deputy Speaker, that since 1979 the British economy has been transformed—a
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    fact that has been acknowledged throughout the world. It is an economy immeasurably stronger and more confident than it was 10 years ago.
    Mr. Geoffrey Robinson: How can the economy be seriously presented in that way? After four years of the Chancellor's policies, which he calls good policies, we have under his Government record interest rates, record inflation and a record balance of payments deficit. What can be right about policies that have brought us to that point?
    Mr. Lawson: It is certainly very far from record inflation, which the Labour party knows about.
    I come now to the question of inflation. I readily concede that we have not yet exorcised the spectre of inflation.
    Mr. Kinnock: What spectre? It is real.
    Mr. Lawson: That is the problem we face today, and it is a problem that the right hon. and learned Member for Monklands, East conspicuously failed to address in the whole of the length of his speech in any remotely coherent way. The deficit on the current account of the balance of payments, which he dwelt on at such length, is itself a problem only to the extent that it is a symptom of excessive domestic demand. Exports continue to do well, and over the past three months exports have been up 8·5 per cent. over a year ago.
    No, it is the problem of inflation that the House needs to address today. Once we master that—as we can and will—the British economy is set for an even better decade in the 1990s than we have known in the 1980s.
    The rise in inflation that we are experiencing today is a worldwide phenomenon.
    Mr. Stuart Bell: The Chancellor says that inflation is the major issue that faces the House, which is true, but is he saying that he has no policies at all for the next few years to reduce the balance of payments deficit?
    Mr. Lawson: The reduction of excessive domestic demand will itself cause in due course an improvement in the current account of the balance of payments. I have made that clear time and time again.
    The rise in inflation that we are experiencing today is a worldwide phenomenon. Taking the seven major industrial countries as a whole—that is what the G7 are, as the right hon. and learned Member for Monklands, East seemed not to know—inflation is now at its highest level for almost five years. Indeed, over the past six months the rise in recorded inflation in the United Kingdom has been only marginally greater than the rise in inflation in the G7 as a whole. That is only because, unlike most of the rest of the world, we include mortgage interest payments in our retail price index—[Interruption.] The Opposition do not like the facts, but they are going to get some facts. On a genuinely comparable basis, inflation in this country has increased over the past six months by less than in the G7 as a whole.
    The right hon. and learned Gentleman may care to know that, while admittedly our recorded inflation rate is currently some 3.5 per cent. above the G7 average—that is true—during the whole of the period of the last Labour Government, of which he was a member, the United

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    Kingdom inflation rate averaged 6·5 per cent. above the G7 average. If the right hon. and learned Gentleman wants to make comparisons, let him have the facts.
    Nor is what we are seeing today, either here in this country or worldwide, in any sense a return to the levels of inflation that we suffered in the 1970s. Indeed, the current underlying rate of inflation in the United Kingdom of 5·9 per cent. as measured by the RPI excluding mortgage interest payments, is well below the lowest level ever reached in any month throughout the whole of the lifetime of the last Labour Government, let alone their appalling 27 per cent. peak, so I am not going to listen to any strictures from the Labour party about inflation. I am not interested in the slightest in what the Opposition have to say about inflation.
    Even so, inflation is clearly too high and must come down—and it will come down as the measures that have already been taken work their way through. Those measures are a tightening of monetary policy through higher interest rates within the context of a substantial Budget surplus.
    Over the past year, interest rates have been raised very substantially and the medicine is clearly working. The housing market, which was such a powerful engine of consumer borrowing and spending, has subsided dramatically with prices levelling off in some areas and in most of the south-east actually falling. At the same time, turnover has fallen markedly, too. Retail sales have shown little or no growth since last summer and the growth in the narrow measure of the money supply—M0—has slowed down sharply since last September and is clearly headed back towards its target range. That is encouraging, though I have to say that I will not be content until it is well within that range.
    Mr. D. N. Campbell-Savours: How can a small manufacturer of a particular product in Workington compete with a German manufacturer of exactly the same product when the interest rate paid by the business-man in Workington may well be far in excess of 14 per cent. and the German is able to borrow at perhaps 5 per cent.?
    Mr. Lawson: I can tell the hon. Gentleman this—a small businessman in Workington or anywhere else in the United Kingdom has far more to fear from the rampant inflation that would follow from Labour policies than from any rise in interest rates.
    Inevitably, there is a further time lag between the effect of tighter monetary policy on the growth of spending, which has now been evident for some time, and its effect on inflation.
    In my Budget speech, I indicated that inflation was likely to rise for some months further to reach about 8 per cent. including mortgage interest payments, before falling back again in the second half of the year. Given the impact of higher oil prices, it is now clear that the peak will be slightly higher than this, and could well be reached quite soon. However, from the summer a gradual fall should take place as the policy has its full impact.
    To repeat, the Government are determined to take whatever action is necessary to bring inflation down. Thus, although it is clear from the evidence of the domestic economy that spending—and, in particular, consumer spending—is slowing down at a satisfactory pace, I judged it necessary two weeks ago to raise interest rates by a further 1 per cent. in order to avoid taking risks with
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    inflation. I could not ignore the fall in the exchange rate which had occurred, and which threatened to undermine the firm anti-inflationary stance we have taken. That remains our position. There is, indeed, now a widespread and well-established understanding of the problems which currency depreciation brings in its wake. As the right hon. Member for Leeds East (Mr. Healey) said:
    "Hard experience confirms the findings of economic research—that … depreciation can no longer be treated as a soft option."
    But that was said as long ago as October 1978. The Labour party has had plenty of time since then to unlearn this lesson; and unlearn it it has. So we now have the spectacle of the Leader of the Opposition adopting once again Labour's instinctive devaluationist stance—arguing that sterling is overvalued and should depreciate substantially. We wholly reject this devaluationist and defeatist view, as indeed we always have done.
    Mr. Kinnock: The Chancellor of the Exchequer told us that to prevent the pound from falling he had to intervene with 14 per cent. interest rates. Are we to believe that every time the Prime Minister makes an incautious remark in the House and causes a fall in sterling he will have to raise interest rates by 1 per cent.?
    Mr. Lawson: If it is the case—and I do not know whether it is—that my right hon. Friend's remark in the House had an adverse effect on the markets, it is because the markets wholly misinterpreted what she was saying.
    I have already referred to the censure debate of January 1985. Let me repeat what I said in my Budget speech in March of that same year, 1985. In 1985, I said this:
    "There are those who argue that if we stick to sound internal policies, the exchange rate can be left to take care of itself … but significant movements in the exchange rate, whatever their cause, can have a short-term impact on the general price level and on inflationary expectations … So benign neglect is not an option …
    There is no mechanical formula which enables us to balance the appropriate combination of the exchange rate and domestic monetary growth needed to keep financial policy on track, but a balance still has to be struck, and struck in a way that takes no Chances with inflation."—[Official Report, 19 March 1985; Vol. 75, c. 785.]
    That is what I said then, and that is what we did then, and inflation, which had risen uncomfortably, duly came down again and did so without any adverse effects on British industry.
    The plain fact is that monetary policy is and always has been the only means of curing inflation. This means setting interest rates and holding them at the level needed, and for the time needed, to do their work. This is the weapon which has been tried and tested in the past. It is the weapon on which all the other major economies necessarily rely as they, too, struggle with the forces of inflation. As I have already pointed out, it is once again having the desired effect.
    I accept that effect is not painless. As a result there are always those who seek to peddle some easier alternative. As we have heard from the right hon. and learned Member for Monklands, East today, the Labour party's magic cure is credit controls. I have to tell the House that this is purest fantasy. To listen to the right hon. and learned Gentleman, would imagine that the bulk of household credit comprised hire purchase or credit cards. That is another example of how totally out of touch the Opposition are.
    Of total household debt, some 85 per cent. is on mortgages. The total of credit card and hire purchase

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    lending—the two together—amounts to only a little over 5 per cent. of household debt, so it is nonsense to imply that introducing controls on hire purchase or credit cards would do anything significant to reduce the growth of consumer credit, or to allow interest rates to be one whit lower. In any event any such controls would be simplicity itself to get around.
    As for direct controls on bank lending, these proved increasingly ineffective in this country even before exchange control was abolished. Today they would simply provide a field day for foreign lending institutions. But of course it is only natural for the Labour party to hanker after the ration book and the queue, which for the Opposition is not so much a means to an end as something to be desired for its own sake.
    There are also other, more sophisticated nostrums to which the right hon. and learned Gentleman alluded—neither of them, I have to say, in any way new—and which are currently being touted in the public prints.
    Monetary base control was something we looked at very carefully when we first took office. The arguments were set out fully in the 1980 Green Paper on monetary control. I remember it well because I was Financial Secretary to the Treasury at the time, and had particular responsibility under my right hon. and learned Friend the present Foreign Secretary for that Green Paper.
    Despite its theoretical attractions, monetary base control has severe practical difficulties, which is perhaps why no major country has adopted it. After full consultation and public discussion we decided not to proceed with it, and that remains the position today. Moreover, in essence monetary base control is another way of generating the level of short-term interest rates needed to curb inflation. It is in no sense an alternative to high interest rates.
    The other proposal much aired of late is that we should over-fund—which in present circumstances would mean refraining from using the Budget surplus to repay the national debt. Over-funding was not a device that in fact we used in our first two years, which were so critical in the battle against inflation, but for a time thereafter it did play a part in policy; but it produced increasing distortions—the so-called "bill mountain"—in return for little practical benefit, and was accordingly dropped as an instrument of policy some four years ago. It is an illusion to suppose that over-funding can, of itself, tighten monetary conditions, since money drained out of the system by selling gilt-edged securities over and above the Government's strict funding requirements has to be put back into the system elsewhere.
    In short, there is no substitute, and never has been any substitute, for the use of short-term interest rates. To use a hallowed phrase, which I hear Opposition Members uttering from a sedentary position, there is no alternative. The only thing is that they would never have the guts to carry out a policy of this kind if they were ever discharged into office.
    The right hon. and learned Member for Monklands. East went on at great length about his confusion over the Government's economic policies, and about alleged differences within the Government. Let me take this opportunity to make the Government's position perfectly clear. Our overriding objective is to bring inflation back down. To do that, we will keep interest rates at whatever
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    level is necessary for as long as is necessary. We will maintain our existing funding policy and our existing monetary techniques, and we will not allow the firmness of our monetary stance to be undermined by a depreciation of the exchange rate. These are the policies that have successfully brought inflation down in the past, and will do so again.
    That is where we stand, but where does the Labour party stand on these vital issues? Where does it stand? I have given a full statement of our position and our policy, and we heard nothing at all about the Labour party.[Interruption.]
    Mr. David Shaw: Give way to them.
    Mr. Lawson: I will readily give way to the kebab experts.
    Mr. Alex Salmond rose—
    Mr. Lawson: I am not aware that the hon. Member is a member of the Labour party, but I will let him speak for it.
    Mr. Salmond: Has the Chancellor considered the impact of his high interest policy on areas of the country that are not overheating? Does he believe that at present the Scottish economy is overheating? If it is not, why should Scottish manufacturing industry, farmers and fishermen pay penal interest rates resulting from the inflationary problems being generated in the south-east?
    Mr. Lawson: If the hon. Gentleman knew anything about the Scottish economy, he would know that the Scottish economy is doing extremely well at the present time. Scottish business-men are extremely satisfied with the policies of this Government, and Scottish business and industry are scared stiff of any hint of separatism, which the hon. Member supports.
    After two long years of agonising reappraisal, the Labour party has at least come up with a voluminous policy review, but it has absolutely nothing to say on the key issue of inflation—nothing at all. One of Labour's economic advisers, who apparently asked not to be identified, explained to The Independent newspaper on the day the economic section of the policy review was published:
    "they've no idea what to do on inflation."
    Indeed, everything the Opposition advocate would simply ensure, just as it did when they were last in office, that inflation went through the roof—massive increases in public spending, with no idea of how to pay for them; a new tax on saving, with national insurance contributions levied on savings income; lower interest rates—we have heard this from them today—and, of course, devaluation. All these would send inflation soaring through the roof, and what defences would they erect to stem the inflationary torrent which all this would unleash? Higher taxes, perhaps? That is what the hon. Member for Newcastle upon Tyne, East (Mr. Brown), an Opposition Treasury spokesman—and I see him nodding—told us on television last week. That is very interesting, but, curiously, we heard nothing about that from the right hon. and learned Member for Monklands, East today. Perhaps we shall hear more.
    According to the Leader of the Opposition, in his very interesting interview with Mr. James Naughtie, Labour

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    would resort to price controls, credit controls and import controls. So much, incidentally, for Labour's commitment to the single European market and 1992.
    As the right hon. Member for Llanelli (Mr. Davies)—and I am glad to see him in his place—a Treasury Minister in the last Labour Government, so aptly put it the other day:
    "The Labour Party idea that you should have credit controls is rubbish. There is no way you can control credit except by controlling the price of credit, and the price of credit is Bank Rate. The Opposition front bench, in short, is all over the place."
    Mr. Denzil Davies: If the right hon. Gentleman wishes to advance an argument about credit controls versus interest rates, that is all very well, but will he now answer a question? Why, after four years with him as Chancellor of the Exchequer, does Britain have the highest rate of inflation, the worst balance of payments deficit and the highest rate of interest throughout the industrialised world? Why can other countries do so much better than him and the Prime Minister?
    Mr. Lawson: I do not want to be unkind to the right hon. Gentleman, who has made a constructive comment on the Labour party's policies, but what he said is simply not true. We do not have the worst record by any means in the industrialised world. In a number of ways, we have the best record in the industrialised world.
    Mr. John Smith: Will the right hon. Gentleman say which member of the OECD has a worse record in those three important respects?
    Mr. Lawson: I will tell him, if he likes, of a member of G7, not merely the OECD or the EEC. On a comparable basis, the Italian rate of inflation is higher than ours. Italy's rate of inflation is 6·7 per cent. and ours is 5·9 per cent., and that is a fact.
    Mr. Kinnock: The right hon. Gentleman refers to one indicator. Will he say why we had a trade surplus with Italy in 1979 but now have a £2·1 billion annual trade deficit just with Italy?
    Mr. Lawson: The performance of the Labour Government was so lamentable that they were chucked out of office. If the right hon. Gentleman wants to stand on the performance of the last Labour Government, Conservative Members would be happy for him to do so.
    Mr. Graham Allen rose—
    Mr. Lawson: No, I have given way enough.
    We have learnt a little bit more, as was clearly revealed in the Naughtiegate tapes, which we now have available and from which I will read only a brief extract:
    "Kinnock: I'm not going to—"
    [Interruption] Labour Members should listen to the pearls of wisdom from the leader of their party. It goes like this:
    "Kinnock: I'm not going to sit here and be bloody quizzed on the alternatives. He's the Chancellor of the Exchequer …
    I'm not going to be bloody kebabed talking about what the alternatives are. We're not in control of it.
    Naughtie: Why don't you say that in as strong terms as you want to?
    Kinnock: But wait a minute. Opposition leader asked what he would do. Opposition leader says, 'to cut a long story short, we don't know."'
    Of course, there we have it.[Interruption.] They do not know, and they know they do not know.
    Mr. Ian Gow: On a point of order, Mr. Deputy Speaker. I could not quite hear the last words of my right hon. Friend the Chancellor, and I wonder—
    Mr. Deputy Speaker: Order. If the hon. Gentleman and his right hon. and hon. Friends had been quieter we might all have heard.
    Mr. Lawson: They are windy—they do not want to give us a hearing.
    The Labour party does not know, and what is more it knows that it does not know. The Leader of the Opposition blathers about controlling this, that and the other—he cannot even control himself. So far from running the economy, he could not even run a kebab stall. Despite all the packaging and all the razzamatazz, despite the 88 pages of fine print, despite what must have been hours of careful coaching by his minders, the right hon. Member for Islwyn (Mr. Kinnock) and his party are no more fit to govern now than they were in 1979, 1983 and 1987. Labour Members know it, and so does the country.
    6.9 pm
    Mr. A. J. Beith: I suppose that it is of the essence of these debates that Chancellors are not expected to add to the known facts about Government policy in the course of their remarks lest they cause further runs on the pound or further misinterpretations. But the Chancellor gave one or two things away. For example, he said that the rate of inflation will go higher even than he has most recently predicted and that by the end of the summer it should—he merely said "should" and not "would"—start to fall. With our climate, the end of the summer is a conveniently variable feast. Whether the Chancellor's forecast will be fulfilled remains a question.
    The Chancellor also made great play of the fact that the markets had misinterpreted what his right hon. Friend the Prime Minister had said, which gave rise to the run on the pound and to the current interest rates. What they misinterpreted was the Prime Minister saying that she thought that the Chancellor's policies were working. I presume that she will say that again on a number of occasions. I am sure that the Chancellor hopes that expressions of confidence in his policy will be made from time to time. Will they have the same effect every time that they are uttered? If so, will we see a rise in interest rates as an automatic consequence?
    The right hon. and learned Member for Monklands, East (Mr. Smith) set out accurately and amusingly the key defects of the Government's policy. Bearing in mind Mr. Speaker's injunction, I do not want to go over the ground that the right hon. and learned Gentleman covered.
    We must concentrate on certain key elements. One is the Government's failure to tackle inflation. For some years the Government had a stock of excuses which they brought out to explain the inflation that was around in the system. One excuse was that it was due to previous failure to control the money supply. Now they claim that they have the money supply under control. Then it was oil prices. Despite some recent increases, oil prices present nothing like the problem that they presented in the early years of this Government, or of the previous Government.
    Sometimes the Government blamed the trade unions. Now they reckon that they have the trade unions under control. Sometimes they blamed the Labour Government. When they were not doing that, they blamed the right hon.

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    Member for Old Bexley and Sidcup (Mr. Heath) and his Government, of which some of them were members. Incidentally, when the right hon. Gentleman was last heard of, he was supporting the Conservative Eurocandidate in Inverness. Whether it is a case of him being fed to the Free Presbyterians I do not know, but nothing seems to have been heard of him since.
    The Government have produced a new set of excuses for inflation. First, it was a blip. As inflation began to rise from the slumber induced by 3 million unemployed, what was their reaction? They said that it was just another blip. It is clearly a far worse problem, and putting up interest rates has not made it go away. Then the Government said that it was a sign of success and an indication that their policies were working, but that we had slightly over-performed and gone a little too far in the right direction. No one can remember Japan or Germany suffering from over-performance that produced such inflation rates. If that was success, it almost made failure seem tempting.
    The latest excuse is that inflation is increasing the world over. If our competitors were suffering from inflation rates of nearly 8 per cent., we might have reason to attach importance to that argument but with rates like 3·6 per cent., 3 per cent., 2·4 per cent. and 1 per cent., that argument can hardly be taken seriously.
    Inflation must be tackled more seriously and more effectively. The Chancellor talked about exorcising the spectre of inflation. My rather low-Church views make me no expert on exorcism but I always thought that it required bell, book and candle—in other words, a whole series of measures, not just one. The Chancellor is an inefficient exorcist, insufficiently trained and equipped for the task. He must recognise that a broader strategy will be needed. The measures that he has taken, confined as they are mainly to interest rates, run the risk of inducing recession. Unless he broadens them, we will get the worst of that recession sooner or later.
    It is difficult to imagine in what direction the Chancellor will move when there is fundamental disunity within the Government even about what the basic economic indicators are and mean. One understands that the Chancellor does not attach much importance any more to M0 as a monetary indicator, but the Prime Minister's principal adviser thinks that it is the only important monetary indicator. The Chancellor does not think that broad money indicators are important either. Perhaps that is because they are so far from their target rates that he does not want to refer to them.
    The Prime Minister may not want to buck the market, but the Chancellor is engaged in the task of bucking the market. That is what his policy is all about. It is about trying to buck a market that does not believe that our economy and our currency are worth what we say they are worth. Therefore, we have to keep putting up interest rates to convince the market otherwise.
    What has been lacking from the debate so far has been any clear indication of alternative policies that would meet the need. There are some alternative policies in the Opposition motion to which I can give strong support and which I believe are genuinely necessary, such as greater investment in training, tackling the skill shortage and greater investment in research and development and in
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    regional policy. All those are necessary to tackle inflation in the long term. Indeed, they are necessary if we are to have a fair and more just society, but they will not exert much influence on inflation in the short term.
    The weakness of the motion is that it does not say much about what we should do now. There is confusion about whether the Labour party wants import controls or credit controls. Perhaps the reference to import controls was the result of the Leader of the Opposition being nonplussed in an interview. My picture of the interview is like the similarly blue-suited and white-collared figure in the famous painting who was being questioned by a harsh interrogator. The little boy was asked, "When did you last see your father?" I have in mind a picture of the Leader of the Opposition standing there, appalled that he should be asked such an unfair question as, "What would you do?" The little boy in the painting emerged from the exchange with more dignity than the Leader of the Opposition.
    Mr. Hind rose—
    Mr. Beith: Perhaps the hon. Gentleman would let me proceed a little further into what I think the Government should be doing. If he feels that there are omissions in what I say, I shall give him the opportunity to speak.
    Mr. Hind: The hon. Gentleman has rightly pointed to the message that the right hon. and learned Member for Monklands, East (Mr. Smith) has given the House about what Labour would do. Does the hon. Gentleman agree that no policy has been put forward by the Labour party to deal with inflation? The Labour party has given no idea of its interest rate policy or its tax policy. All that we have had are fuzzy, supposed panaceas that amount to nothing. We want something more specific.
    Mr. Beith: I agree entirely with the hon. Gentleman on that.
    Mr. Norman Hogg: If the hon. Gentleman agrees with that, will he tell us how the Social and Liberal Democrats would deal with inflation?
    Mr. Beith: If the hon. Gentleman had not interrupted me, I would have gone on to do precisely that.
    First, I want to say why I do not think credit controls are an effective mechanism. I do not think that the Labour party has come to terms with the real world if it imagines that the imposition of credit controls on a system of free capital movement would have a significant impact on the economy and on the rate of borrowing. I do not want to create a society in which credit controls are the stock in trade of Government policy. I do not want our citizens to have to encounter the Government every time that they go into a shop to buy a commodity. That is not the kind of society that I want to create. I think that it is an admission of failure if we even have to attempt to return to that kind of world.
    We have to make our position clearer on other policies that are relevant to tackling inflation. One is the exchange rate mechanism of the European monetary system. It is a reputable argument that if we had been in the exchange rate mechanism for a reasonable time, say, two or three years, we would not have the rate of inflation or the interest rates that we now have. Indeed, a powerful discipline would have been exercised on monetary policy in a period when it is recognised, even by the Chancellor, that monetary policy was too lax. Yet the Government intend

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    to join the system only when the time is right. We all know that that time will not be so long as the right hon. Lady is in charge. The Labour party still has not committed itself. It says in its policy review:
    "substantial change would be required before we could take sterling into the Exchange Rate Mechanism."
    The Labour party does not specify what that substantial change is and it remains a reluctant potential convert to British membership of that system. Indeed, the hon. Member for Dagenham (Mr. Gould) has long been a resolute opponent of it.
    There are a number of measures that we have already argued are relevant in such a situation. One on which I know the Labour party agrees is that the public sector price increases in water and electricity, for example, which arise directly out of privatisation, should not be taking place. They are Government-induced inflation and are not a response to cost pressures. They arise directly out of the attempt to make the industries saleable, and the Government could have acted on that already.
    Secondly, the Government could do more to promote savings. The measures that they have taken in the Budget are not sufficient to induce savings from new savers—from people who are currently not saving. The Chancellor has the opportunity to act on that.
    Thirdly, I was interested in the Chancellor's comments on funding policy. The Chancellor delivered a criticism of the idea that we should change policies on funding, as though somebody in the course of the debate had already suggested that. I wondered to whom the Chancellor's remarks were directed. They could not have been directed towards the right hon. and learned Member for Monklands, East because he did not suggest such a change. They must have been directed—
    Mr. Giles Radice: To Professor Alan Walters.
    Mr. Beith: I certainly do not believe that the Chancellor was anticipating what I was going to say. Clearly, his remarks must have been directed at the Prime Minister's advisers. However, the mere fact that Professor Alan Walters suggests something is no reason for not taking it seriously. The fact that there is an area of policy which both monetarists and Keynesians consider to have some prospect of having a beneficial effect on anti-inflation policy is sufficiently surprising in itself to make one think that it should be taken seriously.
    There is good reason to believe that if the Government—to put it in a simpler way than some of the commentators have—overfund, borrowing more than they need to do at a time of substantial public sector surplus, it could have the effect, among others, of raising the longer-term interest rate. There are fears about the consequences of that, but the Chancellor's current policy is based on the assumption that high interest rates will ensure that the rest of the economy responds to those high rates and that inflation will not take off. He should know full well that high interest rates bear most heavily on the domestic borrower and on small businesses, not on large companies.
    Generally, the larger companies are able to borrow long term and have been insulated from the effect of high interest rates. That means that it is often small and innovative businesses which are struggling hard with high interest rates. The Chancellor says that they have got to suffer this to drive inflation out of the system, but he will
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    not drive inflation out of the system if the effect is confined to that sector and does not extend to the large firm sector, which is benefiting from the much lower long-term interest rates. The gap between long-term and short-term interest rates does not seem to be a sensible part of economic policy. We all want to see the short-term interest rate brought down, but the current disparity between the two has an element of unreality about it.
    The Chancellor was far too ready to dismiss one measure which, as an almost unarmed Chancellor, he could reasonably consider, which is the use of funding policy to exercise some effect on inflation. Whether he wants to believe in that policy as a monetarist, believing, as some monetarists do, that such a policy exercises restraint on the money supply, or as a Keynesian, viewing it as something that would have an effect on the yield curve and on long-term interest rates, either way it is likely to have some short-term impact on inflation. Surely we are looking for short-term measures at present which can have some beneficial effect. We have argued that the Chancellor should add some measures to his armoury and that is another that could be added to that list.
    Clearly, some of the problems that the Government have faced have been problems of market perception of Government policy or market misunderstanding, as the Chancellor would say. We still have no clear explanation of the balance of power in the Government's economic policy. In a small way, it is like trying to weigh up what is happening within the power structure in Peking. We do not know who is in charge. As long as that is the case, the market will take cognisance of the fact and it will lead to short-term pressures, which will give rise to further increases in interest rates.
    There are short-term disadvantages and dangers in the Government's present disunity, but there are also long-term dangers. That disunity also relates to Britain's role in Europe, Britain's place in the European monetary system and the extent to which Britain will become involved in the development of European currency and a European central bank. The danger of the Government's present attitude of hostility in varying degrees is that Britain will exclude itself from developments that it should he leading.
    Our long-term economic prospects will be severely damaged both in general terms and because London will not be able to take its place as the natural financial centre of Europe. On many European issues, Britain is not merely missing the train, but throwing away the ticket at the same time. In the long term, that is as damaging for Britain as is much of the short-term damage which is being caused by the disunity between the Prime Minister and the Chancellor.
    6.25 pm
    Mr. Cranley Onslow: I want to make a short speech, so I shall make no reference to the opening speech of the right hon. and learned Member for Monklands, East (Mr. Smith) other than to say that, although it contained some amusing bits, that did not conceal the fact that it was fundamentally shallow and unconvincing. Most of my hon. Friends feel the same way about it.
    Mr. Radice: The great economic expert.
    Mr. Onslow: One does not have to be an economic expert to be able to judge a shallow and unconvincing speech.

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    I want to refer briefly to one other Opposition Member. The performance of the Leader of the Opposition was just as we have learnt to expect. As my right hon. Friend the Chancellor said, he is a man who could not control inflation because he cannot control himself and we saw that demonstrated again today in the way in which he clowned it up in a sedentary position on the Front Bench. Reflecting on the reports of his interview and the episodes that did not reach the microphone, I noted that the hon. Member for Dagenham (Mr. Gould) said of his right hon. Friend the Member for Islwyn (Mr. Kinnock) that he was a man of immense self-discipline. For a man to make such a statement with a straight face, as I presume he did, tells us more about himself than about anyone else. The hon. Member for Dagenham does not make a very percipient judgment on some of his colleagues.
    I want to test the credentials—
    Mr. Doug Hoyle: Tell us what you want to do.
    Mr. Onslow: I will tell the hon. Gentleman what I want to do. I want to test the credentials of the right hon. Gentleman's leadership and his party. I hope that he will not mind my doing so and I am sure that he will not be sensitive about that. I want to ask some questions that I hope the hon. Member for Dagenham will be prepared to answer and that many of us hoped that the right hon. and learned Member for Monklands, East would have answered in his opening speech.
    The first question is that if we suppose that the Opposition had the opportunity to deal with this situation, what would they do? Where would the money come from? It is fair to put that question on the basis of some points that others have already managed to squeeze out of the Labour party's reluctant spokesmen. It is fair to ask what the basic rate of income tax would be under a Labour Government. We know from a reply by the right hon. and learned Member for Monklands, East to a question from Jonathan Dimbleby on 12 February that there would be changes in the basic rate of income tax paid by 95 per cent. of the taxpaying public. The right hon. Gentleman went so far as to say:
    "some will pay less, some will pay more, some will pay the same."
    We and the public would like to know how many of that 95 per cent. will pay more and how much more they will have to pay. It is not unfair to put the questions in those terms.
    My second detailed question is whether the right hon. Gentleman and his colleagues have made any estimate of how many pensioners would be made worse off as a result of Labour's proposals to impose an investment income surcharge. The Labour party is committed to that, so it seems fair to ask on behalf of the taxpaying public and pensioners, in particular, who have some savings, how many of them would be hit by such a proposal if, by some misfortune, it was ever possible for it to be implemented.
    I have asked where the money would come from because the Labour party has a clear commitment to spend a great deal more money if it were in government. In its policy review, there are numerous spending pledges. Does any Labour Member have any idea what those pledges add up to in cost terms? If so, may we please be told? If not,
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    may we please be told? In an economic debate, a party that wishes to be taken seriously should be able to cost its proposals.
    By how many billion pounds—not million pounds—would a Labour Government intend to increase public sector investment, and hence demand? In asking that question, I am placing the Labour party in some difficulty because it defines its terms in a way that suits it rather than in a way that adds to general understanding. I recognise that, in using the word "investment", the Labour party rules out the factor that many of us consider important—the profitability of such investment. Experience has shown that the Labour party tends to equate expenditure with investment. I imagine that it admits that an increase in expenditure, even if it is called investment, must increase demand. Will some Labour Member please tell us what effect that will have on inflation? Presumably, increasing demand is likely to increase inflationary pressure. To say that the Labour party is concerned only with manufacturing industry begs more questions, and that does not strengthen its case.
    I shall ask another question, to which I suppose I will not get an answer, but I will ask it just the same. Does the Labour party want the exchange rate to remain at its current level or does it want it to be lower? Has the Labour party made an estimate of the increase in consumer credit that would result from its proposal to reduce interest rates? I understand from the speech of the right hon. and learned Member for Monklands, East that he does not wish to rely on higher interest rates alone, so presumably he intends that interest rates should be reduced—in spite of the wise advice that the right hon. Member for Llanelli (Mr. Davies) has given.
    If there are to be credit controls under a Labour Government—if that ever comes about—what sort will they be? How will they be administered? To what will they apply? May we be told more about them? May we please be told more about the import controls to which the Leader of the Opposition apparently committed his colleagues in that celebrated non-interview? To what will they apply? How will they be administered? How will they be reconciled with our international obligations? How long will it be before we are back to price controls? There is already a sign in the Labour party's policy review that under a Labour Government there will be price controls on water and electricity. What else is to be subject to price control?
    Finally, if I may put this indelicately, will the hon. Member for Dagenham define what he means by the "real economy"? Having heard what the Opposition have said on this and many other occasions, Conservative Members have little doubt, as I think have people outside, that the real Socialist economy is one of controls, strikes, runaway inflation and national disaster.
    6.33 pm
    Mr. Norman Hogg: I am grateful for the opportunity to contribute to this important debate. I certainly support the official Opposition motion because it identifies the problems in the economy and sets out in general terms the steps that are required to rectify weaknesses. I want to relate my remarks particularly to the Scottish economy and I hope that hon. Members will forgive me for doing so. There are important differences between the economy in Scotland and the

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    eonomy in the rest of the United Kingdom. I am sorry that representatives of the Scottish National party have vanished from the Chamber. One short intervention during the Chancellor's speech is not a contribution from a party that claims to speak for Scotland. The absence of SNP Members from the Chamber is deplorable.
    The problems faced by the Scottish economy are the direct result of the Government's policies. The Government hope that many small businesses will be set up in Scotland and that those small businesses employing small numbers of people will take the place of the traditional industries that have vanished over the past decade. The Government seem to put their faith in electronics, in light engineering, in engineering in support of the electronics industry and in service industries. In my constituency, there has been some success in attracting such industries. OKI, a high-technology industry, recently opened, and low-technology firms such as Hinari, which manufactures televisions, have started operations. The success in bringing such firms to Scotland has been due to the work of Locate in Scotland and the development agencies which operate in the five new towns. The big push has been for small businesses, but they have been badly affected by a 14 per cent. interest rate.
    I was interested to hear what the Chancellor said about the success in attracting small businesses to Scotland, but he did not say how a 14 per cent. interest rate would facilitate their development. Those small firms often operate to small margins. The margin for reinvestment is very much smaller, given their nature, than it is for larger firms. Initially, under-investment is often a feature. I worry greatly what is happening to small firms in Scotland. I do not believe that the statistics cited earlier this afternoon will hold up much longer.
    Companies are disappearing because of the difficulties with which they are faced. Estimates in Scotland show that a one percentage point increase in interest rates can cost industry as much as £20 million or £25 million. Extra costs also fall on those who run small businesses. Often they are home owners in those places where industries and businesses are being set up. The average mortgage in Scotland is £45,000, which means that home owners have had to find an extra £100 per month because of increased interest rates. Often they are the young, high-flyer managers who are so necessary for the success of small businesses. The position will not improve in the short-term. If the building societies follow the bank interest rate increase with an increase in their rates, the position will become very worrying.
    Sir Nicholas Fairbairn: Before the hon. Gentleman bleeds his heart blue, will he remind us of the number of small businesses in Scotland that we lost under his Government and of the increased number under our Government? Will he remember that, thanks to our fiscal policies, the number of small businesses in Scotland has mushroomed? That is all thanks to our reversal of his Government's policies, which, whatever they are wrapped in, a future Labour Government would put back to destroy small businesses again. Will the hon. Gentleman give the Government a pat on the back because big business, namely, Ravenscraig, is safe and healthy, thanks to our economic policies?
    Mr. Hogg: I cannot do that because the hon. and learned Gentleman is not correct. During the first two
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    years of the decade of Conservative Government my constituency lost 2,000 jobs, which was precisely the number created by the Labour Government during the preceding four years.[Interruptions] The hon. and learned Gentleman should pay attention to what I am saying before he interrupts me because I paid tribute to the work of Locate in Scotland and the development agencies in the five new towns, which have been responsible for 70 per cent. of all inward investment to Scotland since the second world war. The Government know that they must protect Ravenscraig because if it were lost, that would end any Conservative changes in Scotland. The Government's position in Scotland is parlous enough without threatening the future of Ravenscraig.
    Before I was interrupted, I was talking about interest rates. I had hoped that the Chancellor would give some encouragement to home owners, but he said nothing on that matter. I had hoped that he would announce a freeze on mortgage interest rates, by agreement with the building societies, but he did not do so. I am afraid that that is the hallmark of the Treasury Bench and its inflexible approach to the economy.
    Mr. Hind: The hon. Gentleman said that he was surprised that my right hon. Friend the Chancellor had not agreed a freeze on mortgage interest rates with the building societies. If building societies lost money as a consequence of uncompetitive rates compared with the banks, how would the loss be made up to them so that they could continue to lend, especially to first-time buyers, the money that is much needed for mortgages?
    Mr. Hogg: Any such freeze would be short term. If the hon. Gentleman had any confidence in the Government's economic strategy he would accept that a short-term policy would not result in the difficulties to which he referred. If he is confident that the Government are right, I do not understand why he does not support the call for a mortgage freeze.
    In addition to interest rate difficulties, inflation is now running at 8 per cent., with every possibility of rising further. That eats into our standard of living and is a disincentive to companies to invest. There is also a balance of payments deficit which, on a year-on basis, could run as high as £17 billion. The danger is that the country will be caught in a pincer movement between an industrial slump and price inflation.
    The Chancellor's policy is not working in Scotland, unless its aim is to curb spending on Scottish products and investment in plant and machinery. When interest rates are used to bolster the pound, firms lose their competitive edge in export markets. Scotland is being asked to help to cool down the over-heated south-east. There is no boom in Scotland, despite what the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) said, but it is being asked—
    The Economic Secretary to the Treasury (Mr. Peter Lilley): The principal Scottish forecasting body, the Fraser of Allander Institute, records that the Scottish economy grew last year more rapidly than that of the remainder of the United Kingdom and forecasts that it will do so again in the coming year.
    Mr. Hogg: I shall refer to the Fraser of Allander Institute later in my speech.

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    Scotland is being asked to accept the medicine being dished out to the south-east although it does not suffer from the same problems. The latest figures—not from the Fraser of Allander Institute, but from the Scottish Office—show a fall of 3 per cent. in manufacturing output for the last two quarters of 1988—the largest fall in five years and a consequence of earlier rate rises. The boom is being nipped in the bud and the threat of recession once again looms over the Scottish economy.
    While output fell in Scotland by 3 per cent., it rose in the remainder of the United Kingdom by 0·7 per cent. We heard a great deal about total output in the Chancellor's speech. The Scottish construction industry's output fell by 8·7 per cent. while that of the remainder of the United Kingdom rose by 2·6 per cent. The electrical instrument engineering industry, so important to Scotland, suffered a fall of 12 per cent. against a United Kingdom rise of 2 per cent. There was a fall in investment goods of 9·6 per cent. against a United Kingdom rise of 1·7 per cent. If there is cheer for Scotland in all that, what is the Treasury's prediction for Scotland for the next 12 months? What is the future for the Scottish economy?
    The Fraser of Allander Institute is certainly not a friend of the Labour party. I readily accept that and understand why the Minister is so quick to pray in aid anything that it might say. However, even that institute has identified pessimism among manufacturers as worse now than at any time since the oil price collapse in 1986. It says that the decline in manufacturing must soon filter through to the labour market. What is the Government's prediction for unemployment levels in Scotland during the next 12 to 18 months? There is a loss of confidence in Scottish industry that is directly attributable to the Government's policies.
    Where does all that leave Scotland as it faces the advent of 1992? Professor Neil Hood, who has close connections with the Scottish Development Agency and with Locate in Scotland, said that Scotland is insufficiently prepared for 1992. My constituency is industrial—the sort of place about which the Government are fond of saying, "This is where success lies." However, as I go around my constituency I find confirmation of what Professor Hood said and, indeed, of what the Fraser of Allander Institute said about pessimism among manufacturers. In addition to all those problems the Channel tunnel will not help the northern or Scottish economies.
    The Government's record in Scotland shows a decline in manufacturing and a fall in the number of employees in manufacturing as high as 34 per cent. Regional grants have fallen from £289 million in 1978–79 to £95 million in 1989–90. The Government can account for only 30,000 jobs created in Scotland between 1983 and 1986, yet 700,000 were created in the south-east during the same period.
    Scotland has no confidence in the Government's policies and that will be reflected in the European election results a week on Thursday and in the Glasgow, Central by-election on the same day. The Government came second in that constituency at the last election and it will be interesting to note where they come this time.
    Judged by any indicator, the economy is in trouble, and the position is much worse north of the border. The Government have failed to support the Scottish economy, failed in education and training and failed in investment.
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    They have not failed, however, in their record of low support for their policies. In all the years that I have been active in politics, I cannot recall a time when the Government had such low support among the Scottish people. They are in for a severe shock in the European elections and the Glasgow, Central by-election. I am confident that the Labour party will gain the seats because it is clear in Scotland that that is where the future lies. There will be a Labour Government; that is coming soon, and the sooner the better.
    6.50 pm
    Mr. Tim Smith: The hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) argued that the economic situation in Scotland was somehow different from that of the rest of the United Kingdom because, he said, there was no overheating in the Scottish economy. In a telling intervention, the Economic Secretary said that in a recent period Scotland had enjoyed a higher rate of growth than had the rest of the country. Inflation is a problem wherever we find it in our economy. It is as much a problem for Scottish businesses as it is for any other British businesses, and the hon. Gentleman admitted that inflation was a disincentive to invest.
    That is precisely what it is. If small businesses must choose—it is not a pleasant choice to have to make—between high interest rates and getting inflation down, they must accept that it is in their interest to reduce inflation as quickly as possible, and high interest rates will achieve that end.
    The Chancellor announced that the net growth of small businesses in the United Kingdom has been higher than ever before. I have a simple message for the Chancellor. I urge him to stick to his guns, to persist with his policy and to continue to concentrate on getting inflation down. That must be our top economic priority.
    There has been much talk in the debate about short-term measures. For example, the hon. Member for Berwick-upon-Tweed (Mr. Beith) said what he would do in the short term, although he rightly rejected the possibility of credit controls. He spoke of over-funding, and the Chancellor explained why that would not be effective.
    We knew when the policy was introduced that it would take time to work through, and it will. He must think back a couple of years, to the events of late 1987 and black Monday; it is fair to date recent events from that time. The right hon. and learned Member for Monklands, East (Mr. Smith) wanted the Chancellor to go further at that time in reducing interest rates. The fear in late 1987 and early 1988 was of a recession because nobody knew how the real economy would respond to the sudden collapse of the financial markets.
    Industrialists today wonder why politicians and ecomomists were so concerned at that time. They say, "Our businesses were going well and we were doing good business. What did a sudden collapse in the stock market matter?" They were unconcerned, and so far from having a recession in 1988, we had high growth stimulated by low interest rates, though it was higher than we could ultimately sustain. The policies of the right hon. and learned Gentleman would merely have exacerbated the problem.
    The policy, if mistaken, was right at the time, but we must now put matters right. It will take time for that to

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    happen and for the Chancellor's policies to work through. Patience is required, and I appreciate how difficult that is for an owner-occupier whose monthly mortgage payments have gone up substantially in the last 12 months. People in that position are bound to be impatient. They want the interest rate to fall so that their monthly payments can fall.
    I am convinced, however, that when the situation is explained properly to people, they appreciate that the present measures are necessary if we are to avoid a repeat of the inflationary trends of the last 20 or 30 years. That is why our top priority must be to get inflation down.
    I fear that there could be a danger of over-reacting. I was disappointed at the recent rise in interest rates. I felt that it had been at 13 per cent. for quite a time, and it seemed that the policy was working. I remain convinced that it is working. I hope that it will not be necessary for the Chancellor to raise interest rates again, although I support him when he says that he will maintain interest rates at their present levels until he is satisfied that inflation is on a downward path and that, if necessary, he will raise them further.
    I read with interest an article in the CBI magazine by the confederation's director-general headed:
    "Danger: Scribblers in the dark."
    It appears that the director-general, John Banham, is as unhappy about some scribblers as is the Chancellor. Mr. Banham complained about information that sometimes appeared in press stories concerning the economy. He wrote:
    "Recent headlines have blared bad news which was just plain wrong."
    For example, although one headline said 'Export slump in February" Mr. Banham wrote:
    "in fact, seasonally adjusted, exports … were 9·5 per cent. in volume up on the same period last year."
    Another headline declared:
    "'Import surge continues'—yet imports of consumer goods in the three months to the end of March were down, in volume terms, compared with the preceding three months."
    Later in the article, Mr. Banham wrote—and he should know, representing a huge proportion of British industry—that the Government's policy was working. He said:
    "Consumer spending has slowed right down. This was clear from the CBI's Distributive Trades Survey as early as last autumn … The slowdown will affect other sectors of the economy as we move through the year. Distributors' stocks have built up and this means less orders—for importers as well as United Kingdom producers. ….Investment is, at present, holding up well … Capacity utilisation is easing."
    There is plenty of evidence to show that the Chancellor's policy is working, and that is why we must stick to our guns. Then we will see, as the year progresses, that the figures start to come right.
    Other people have more confidence in the British economy than some of our commentators, and I have details of a number of recent examples of people putting their money where their mouths are and investing in the British economy. On successive days in April there were announcements to that effect. The first came from Toyota, with news of a large investment in Derbyshire. Then Bosch announced a large investment in south Wales.
    I was particularly pleased that Robert Bosch Ltd decided to invest in Britain because the company has its United Kingdom head office in my constituency. Up to now the company has been importing everything that it sold in this country. Now it is to establish a car component factory in south Wales which will eventually employ 1,200
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    people and create another 1,500 jobs. The investment will total £100 million and I am told that 80 per cent. of the output will be exported.
    There are many other examples of inward investment, and we have heard about the success of the Scottish development agency in attracting overseas investment to Scotland. It is clear, therefore, that this type of investment is occurring throughout the country. Many overseas investors are coming here in preference to other countries. When I discussed with Robert Bosch why it had chosen the United Kingdom—remembering that there is great competition throughout the European Community for this type of investment; Bosch already has a large investment in Spain, where it employs 6,000 people—I was told that the company had confidence in our economy, that it believed that the United Kingdom was a stable area in which to invest, that prospects here were good, that industrial and labour relations were good and that manufacturing productivity had risen substantially. Foreign companies have confidence in our economy. My hon. Friends and I have confidence in my right hon. Friend's policies. I am sure that, given time, they will succeed.
    Several Hon. Members rose—
    Mr. Deputy Speaker: Order. I remind the House that Mr. Speaker earlier announced that speeches falling between 7 o'clock and 9 o'clock would be subject to the 10-minute limit.
    6.58 pm
    Mr. Denzil Davies: The Chancellor made what one could describe as a knockabout speech. He failed to answer the central question why, after 10 years of Conservative rule, with the present Prime Minister in charge, Britain has the highest inflation rate in western Europe, has by far the worst balance of payments deficit of all the industrialised nations and has the highest interest rates among all our main industrial competitors. For that sorry state of affairs only one person can accept the blame, and that is the Prime Minister. She is very fond of blaming everyone else inside and outside of the Government. She cannot, in fact, blame the trade unions for this sorry state of affairs. The public sector, high rates of income tax, the dreaded public sector borrowing requirements—or what she used to describe as the frontiers of Socialism—have all gone. All those dragons from the past have either been slain or at least caged. The blame lies with her policies and, indeed, those of the two Chancellors who have held office in the past 10 years.
    When the Government came to power in 1979. they made the control and the reduction of inflation their main target. One way they would do that—a point that was made recently in an article in The Sunday Times—would be by increasing the supply of British goods by improving the supply side of the economy, and by controlling and reducing by monetarist means the money supply. They would increase the supply of goods and reduce the supply of money and thereby try to get inflation down.
    The Prime Minister's first Chancellor, the present Foreign Secretary, was certainly able to reduce the supply of money. However, in doing so—I accept that that was combined with a world recession—he diminished Britain's industrial capacity and its ability to increase the supply of goods.

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    The right hon. and learned Gentleman, the present Foreign Secretary, is a mild man, but when it came to reducing the money supply he was a veritable rottweiler. With his tight monetary targets—we all have examples in our constituencies—he managed to mangle large sections of British manufacturing industry. A number of industries disappeared, never to appear again.
    There were some productivity gains, but the price that was paid in productivity gains was far too low in respect of the industries that were destroyed.
    The right hon. and learned Gentleman then went to the Foreign Office and the present Chancellor took over. I would not describe the right hon. Gentleman the present Chancellor as a monetarist, but at least he is reported to understand monetarism. If he does understand monetarism, he will also understand its limitations—especially in an open financial system, such as is the British economy. The contradiction in monetarism is that, although it is thought to be, and is, a Right-wing financial ideology, one of the best countries in which it could be practised would be the German Democratic Republic, because a command economy is much more capable of controlling the money supply than an open economy.
    During the Chancellor's period in office, he has kept missing his monetarism targets, changing his monetary targets and relaxing his monetary targets. In fact, over the years he has considerably increased the supply of money in the economy, so that today what is called "broad money"—he never mentioned that in his speech, because now his target is "narrow money"—which is notes, coins and bank deposits, is probably running at the rate of 20 per cent. or more. On top of all that we have had the tax-cutting Budgets—especially the one two years ago—which have flooded the system with even more money.
    However, the trouble by then was that the supply of domestic goods had been so curtailed as a result of the policies of his predecessor in the first four years that the increase in the supply of money, which the Chancellor engendered, has left us with high inflation rates and an horrendous balance of payments deficit, because that was the only way in which the goods could match the money in the economy.
    So a Government, who started off 10 years ago determined to increase the supply of goods and reduce the supply of money, now find themselves in the extraordinary position, through mismanagement, of having reduced the supply of goods and having increased the supply of money.
    What is to be done? The Chancellor is in a corner. He is caught between the foreign exchange markets, domestic inflation and the hang-ups of his neighbour next door. I am sorry to say that the person who does not understand monetarism is the Prime Minister. The Prime Minister thinks that she understands monetarism and she wants to be a monetarist, but then she recoils from some of the harsh consequences of monetarism. She brings in professors from America or gurus. I thought that the Chancellor dealt very well with Tim Congdon, but the Prime Minister did not look very happy. The Chancellor could not see her face, but she did not like it. She was not too happy at that point in the Chancellor's speech. I do not believe that she does understand monetarism, and I have some sympathy with the Chancellor in having to deal with her in that respect.
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    As I think I have said before, I do not believe that old-fashioned credit controls or, indeed, new-fangled deposit controls, imported from America by Professor Walters, can solve the problems. In the end, if the policy is just about monetarism, it will be about high interest rates. Our complaint is that the policy should not just be about monetarism.
    I believe that there are alternatives, although they would not have a dramatic effect. The House knows very well, sadly, through debating the British economy over the past 20 years, that there are no immediate panaceas, and certainly not in fiscal or monetary policy. We need a substantial restructuring of the British economy to solve our real problems. There are some things, however, that can be done without relying entirely on a monetarist policy and on high interest rates.
    It is no secret that the Chancellor wants to join the exchange rate mechanism of the EMS, but the Prime Minister will not let him. It is difficult for me to say this, but the right hon. Lady should now stop being silly and should allow the Chancellor to go to Europe and negotiate entry into the EMS. She should let him go quietly on Sunday afternoon. He could join the other Finance Ministers in some West German spa town and he could negotiate entry into the EMS and a realignment of currencies. I believe that that is what he wants to do. The Treasury is right. However, the right hon. Gentleman's next-door neighbour prevents him from doing so.
    Membership of the exchange rate mechanism would restore confidence to economic policy, provide some stability for the pound, and take some pressure off interest rates. Whether we like it or not—thanks considerably to the mismanagement of the economy over the past 10 years and the reduction in Britain's manufacturing capacity—sterling is rapidly ceasing to be a world currency. It is still trying to behave as if it were a world currency, but it is rapidly becoming a regional one.
    Most of our balance of payments deficit in manufactured goods is with western Europe. In fact, most of our balance of payments deficits altogether are with western Europe. The world currencies today are the deutschmark, the yen and the dollar. I am sure that the Chancellor enjoys himself when he goes to the G7 meetings but, with all respect to him, he is really a bit player on the world stage. It is the yen, the dollar and the deutschmark that count. We should recognise the fact, at last, that sterling is a regional currency. More than half of our trade is with the EEC and that proportion will increase as 1992 approaches.
    If this were not such a dogmatic Government, the Chancellor could also reverse some of the income tax cuts that he so foolishly put into effect two years ago. He should make the income tax system progressive again. He should introduce further rates and raise some money in taxation to balance his policy between monetarism and a fiscal policy. Of course, he will not do that either. If he did that, pressure would be taken off interest rates and industry.
    None of that will happen. Interest rates may well have to go up again to stop a run on the pound. There will be a recession. Whether one calls it a hard or a soft landing, the only way that inflation can be brought down by monetary means and high interest rates is by creating a recession. Unemployment will rise and British industry will again pay a heavy cost. We are back where we were

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    when the Government first came in, with policies to reduce the money supply which, in turn, reduces the supply of domestic goods.
    There will not be much improvement in the balance of trade. In a very careful statement, the Chancellor appeared to indicate that it will take some time before the balance of trade improves. Ten years have gone by since the Government came to power—10 years of great opportunity, of very favourable international conditions on inflation and on commodity prices and of great opportunity at home in terms of £75 billion in oil revenue. However, those 10 years have been wasted. The Prime Minister can blame no one but herself for that.
    7.9 pm
    Sir Ian Gilmour: I agree with the right hon. Member for Llanelli (Mr. Davies) that we should join the EMS at the right exchange rate. I understood him to say—I may have misheard him—that the Government have reduced the supply of goods. I do not believe that he could possibly have meant that, because although we all have some criticisms—at least I do—of the Government's economic policy, I do not believe that anyone can seriously say that they have reduced the supply of goods.
    I am sure that we would all agree, however, that the consumer boom got out of hand last year. Since mid-1985 the growth in consumption has been 6·1 per cent. a year—far greater than in any other period. Although that growth was conspicuously set off last year, it would be a grave error to say that it was merely a short-term problem or a short-term blip. It is much more deep-seated than that.
    The right hon. Member for Llanelli referred to the monetarists of earlier days. There is a view going round that the monetarist experiment of the early 1980s was a great success and that all would have been well if my right hon. Friend the Chancellor had continued with such policies and maintained a firm control of the money supply. That view has been argued recently by Mr. Tim Congdon, who has been making some good forecasts. That argument does the Chancellor a serious injustice and I am happy to defend him from it. The fall in inflation in 1983 to 4·5 per cent. could hardly have been the result of controlling the money supply one or two years previously, because M3 rose 16·5 per cent. in the year to the second quarter of 1981 and 14 per cent. in the year to the second quarter of 1982. In any case, the years of alleged monetarism were far from being the halcyon days now depicted. I do not believe that anyone would reasonably want to return to them and my right hon. Friend is right not to do so.
    Between the second quarter of 1979 and the second quarter of 1986, total output grew by an average of 1·25 per cent. a year and unemployment rose by 2 million. Inflation did fall, thank heavens, to 2·5 per cent. in 1986, but, obviously, that was not the result of controlling the money supply, because the money supply was not controlled. During the years it grew at an average of 14 per cent. a year. I think the right hon. Member for Llanelli possibly misunderstood that point.
    Whatever mistakes the Chancellor or the Government may have made recently, my right hon. Friend was certainly not guilty of abandoning a successful monetarist
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    policy. All that has happened has been to advance, by about two or three years, a crisis that was going to occur anyway.
    As I have endlessly pointed out, economic growth can never be permanently sustained unless the growth of domestic demand is appropriately balanced by a growth of exports. Unfortunately, over the entire post-war period, long before the Government took office, there has been a persistent weakness in the ability of British industry to compete successfully. By the end of the 1970s it was already clear that if we continued to lose market share—particularly in our own markets—a critical point would soon be reached. That problem was masked for a bit by North sea oil, but certainly not now.
    Our troubles spring not from the abandonment of monetarism but from the fact that the Government never addressed the problems of industry's competitiveness. Although the Government have bashed the trade unions handsomely, probably their policies have made our competitive position not better, but worse. The first three years of the Government—1979 to 1982—far from being halcyon days, look like a catastrophic mistake. Although we were continually assured that there was no alternative —I was glad to hear my right hon. Friend reintroduce that well-known phrase this afternoon—and that solid foundations were being laid for non-inflationary growth, what happened was that deflation merely dug a great crater from which our industry has been able to climb out only at a serious competitive disadvantage.
    The combination of a collapse in demand and an over-valued exchange rate led to widespread scrapping of plant. For three years, investment in manufacturing was lower than capital consumption, so there was a fall in productive capacity. That must be one of the main reasons why, although the growth of output from 1979 until now has been exceptionally slow and unemployment has risen by nearly 1 million, we are now up against the limits of our capacity to produce, while inflation is climbing back uncomfortably close to the figure we inherited from the Labour party.
    The main point is that the increase in import penetration is emphatically not a phenomenon that belongs to the past three years of consumer boom. It has been an almost continuous process during the past 10 years and before that. The rise in the proportion of imports of manufacturing to GDP from 14 to 18 per cent. between 1979 and 1985 was as large as it was between 1985 and 1989 when it rose from 18 to 22 per cent. One of the necessary conditions for continued growth is a cut in domestic demand. That is obviously right, because the deficit in our balance of payments is now at least 4 per cent. of GDP. At the same time, however, further growth of output is being constrained by lack of capacity.
    At the moment, I cannot see from any constellation of policies now in prospect that the other necessary condition for continued growth—that net export demand will rise enough, if at all—will be fulfilled. It is not hard to see what should happen. The cut in domestic demand obviously should be confined so that the damage is limited to consumption rather than blighting the welcome recovery in investment in the past year, which at long last has got going. That cut in demand also should not frustrate the much-needed increase in net export demand.
    Unfortunately, the instruments of policy which the Government have chosen—high interest rates and a high rate of exchange—do not meet those requirements.

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    Obviously, high and, possibly even higher, interest rates are particularly bad for investment. A high rate of exchange makes investment in exporting industries, as well as exports themselves, unprofitable. Moreover, high interest rates coming at a time when household indebtedness has been encouraged to grow to unprecedented levels causes severe, random and unmerited distress.
    The best way to cut domestic demand was not advocated by the right hon. and learned Member for Monklands, East (Mr. Smith), for obvious reasons. It was, however, advocated by the right hon. Member for Llanelli. Surely the right club for the Chancellor now to take out of his bag is one to put up income tax. If income tax was increased, interest rates could be reduced without causing a loss of confidence in sterling. In due course there could be a reduction in the exchange rate with much less risk of inflation. Under those circumstances there would be a much better prospect of growth coming from exports and investment, in which case growth could be sustained.
    I do not accept that the existence of a Budget surplus, as measured by the PSBR, means that one should not increase taxation. It is the state of the economy that matters and if a cut in demand is, by general assent, required—as it is—the mere fact that there is a surplus in the public sector accounts tells us nothing about whether the chosen instrument should be fiscal or monetary policy.
    Mr. David Nicholson: My right hon. Friend knows that I listen to his speeches with great interest. How would an increase in income tax contribute to pay claims and pay settlements that are currently giving cause for concern?
    Sir Ian Gilmour: I recognise that difficulty, but an awful lot of people who receive wages are also buying houses so it is no good thinking that high interest rates do not affect wage claims.
    The Government are looking ahead to the single market of 1992, but on present trends, it is likely to be a mixed blessing for the country. It is therefore vital that we should try to use the mechanisms of the European Community to develop a thriving and competitive industry. That would meet the needs of the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) and of those areas that currently have high levels of unemployment. It means playing an active role in the formation of Community policies and not seeking to turn it into a glorified free trade area. That is not what the Community is about and it would be directly contrary to British national interests.
    The Government have, I fear, wasted a good deal of time since they cottoned on to the deterioration in our trading position. If they go on relying on their one club, they may find themselves in an electoral bunker as well as other ones. Moreover, their one club is particularly inappropriate since, for understandable reasons, the Government are extremely reluctant to use it. Therefore, the Government are in danger of going from a one-club policy to a no-club policy, as a result of which little would be done.
    I hope that the exchange markets and foreign Governments have gained confidence from what my right hon. Friend the Chancellor has said this afternoon, but it is high time that a new and better policy was brought in.
    7.19 pm
    Mr. Giles Radice: I shall confine most of my remarks to the balance of payments deficit, for three main reasons: first, because the deficit is big and growing; secondly, because it takes out of the Government's hands the power to run our own economy; thirdly—here I agree with the right hon. Member for Chesham and Amersham (Sir I. Gilmour)—because it reflects our failure to pay our way in the world.
    The Chancellor has consistently underestimated both the size of the deficit and the speed at which it has grown. In March 1988, he forecast a deficit for the year of £4 billion. At the time of the Budget he told the House that it would be equivalent to 1 per cent. of GDP and that he foresaw no difficulty in financing what he called a temporary current account deficit of that scale. By last November, in his autumn statement, he revised the forecast for 1988 upwards to £13 billion. The deficit for the year turned out to be £14·5 billion, £10 billion worse than the Chancellor had estimated in the 1988 Red Book.
    As hon. Members well know, the forecast in this year's Red Book also gives a deficit for 1989 of £14·5 billion. As our Select Committee report stated, even to maintain a similar level of deficit in 1989 as that for 1988, the Treasury must rely on an extremely ambitious reversal in the behaviour of both exports and imports. So far, the monthly figures have been extremely discouraging.
    Taking the first four months' figures together and putting them on an annual basis, the deficit now runs at more than £18 billion a year. To put that figure in perspective, as a percentage of GDP it is well over 3 per cent. I think that the right hon. Member for Chesham and Amersham was right and that it is nearly 4 per cent. It is greater than the deficit in any other major industrial country. Contrary to what the Chancellor said in March 1988, the deficit is neither small nor temporary. Furthermore, there is no evidence of any country of a comparable size sustaining a deficit of that level for any length of time.
    One view which has been sedulously encouraged by the Chancellor is that somehow the balance of payments deficit no longer matters in the way in which it used to in the 1960s. His argument goes something like this: by definition, all economies cannot be in surplus. Some will be in surplus and others in deficit. His argument runs that, in a world in which there are free flows of capital, which is very much the case at the moment, some countries will export capital and others will import it. His implication is that Britain will be an importer of capital.
    Last year, the Chancellor advised the Select Committee, making up economic theory as he went along, that the countries with current account deficits would tend to be those in which the investment opportunities were attractive because they attracted mobile savings. He has also argued that we are constantly using the import of capital to re-equip British industry.
    According to the Chancellor, by running a larger current account deficit we are not only doing the rest of the world a favour, but helping ourselves. The Chancellor also tells us that there is no reason why we cannot continue to run a large balance of payments deficit for a considerable length of time. What a wonderful world it would be if it were really like that. We do not need to be old-fashioned mercantilists to see that there are flaws in the Chancellor's

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    argument. Of course there is a case for financing a temporary deficit, but if it is large and continuing, it will produce considerable dangers and risks.
    If we have to finance a deficit the size of ours, and continue to finance it over a number of years, we will virtually be putting the economy into the hands of the holders of sterling. A Chancellor with a deficit of that size is bound to shape his policy according to the currency markets. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, it will mean that British interest rates will have to be at such a level that they continue to attract the holders of sterling. If we continue to run deficits at this level, our interest rates will have to be considerably higher than those of our main rivals. Therefore, we shall have to continue to increase the level of our interest rates. We have already seen the impact of high interest rates on mortgage holders and industry. How much worse could the position become? Our higher interest rates will undermine the investment plans of industry, particularly small businesses, and cripple the prospects of British exporters.
    It is quite possible, indeed highly likely, that, despite the interest rate differential, the holders of sterling will lose patience with the British economy. If that happened, our fate would be totally in the hands of the market. A run on the pound and a precipitous fall in the value of the currency would follow, with all that that could mean for the British economy. The fact that there has been considerable official intervention in the market during the past month and that our reserves fell by more than £1 billion in May, is a sign that, despite the Chancellor's propaganda, the Government are acutely aware of the risks of their policy.
    I agree with the right hon. Member for Chesham and Amersham that it is entirely obvious that our current account deficit is not some benign phenomenon but a symptom of serious structural problems which, for most of the 1980s, were masked by North sea oil.
    How far are British goods over-valued? The Red Book shows that, during the past two years, there has been a significant loss of competitiveness. Sooner or later there will have to be an adjustment. Even more disturbing is evidence, during the 1980s, of a growing import penetration, particularly of manufactured goods. The figures are there for all to see. We can look at the latest OECD report and listen to what the National Economic Development Office has to say. A table in the Red Book must be extremely disturbing for the Government.
    I agree with the analysis of the right hon. Member for Chesham and Amersham that the recession knocked out at least 20 per cent. of British manufacturing capacity. We failed to replace that capacity with enough of the newer industries and products which can compete successfully with our industrial rivals.
    As the Director General of NEDO said in his March memorandum:
    "The range of products in which the UK is internationally competitive may be limited, and when demand grows as fast as in 1988 the goods British producers no longer manufacture competitively may have to be imported."
    He goes on to state, in an extremely disturbing conclusion:
    "if we simply cannot produce the goods we are now importing, the relief of demand pressures will only slightly improve the balance of payments."
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    It is an extremely pessimistic conclusion. In short, we are in danger of becoming a nation which, year in, year out, imports more than it exports. Our present policies no longer seem to pay our way in the world.
    In conclusion, the balance of payment deficits matter. Sooner or later they must be brought under control and we shall need a responsible policy on demand, which we do not have at the moment. I agree with the right hon. Member for Chesham and Amersham that we need to ensure that our goods are not over-valued. I agree with my right hon. Friend the Member for Llanelli (Mr. Davies) that we ought to join the EMS. As my right hon. and learned Friend the Member for Monklands, East said, we will need more rigorous policies on the supply side.
    If the Government fail to act on the balance of payments they will hand over control of the British economy to the holders of sterling. As the Chancellor well knows, they are rapidly losing confidence in the Government's handling of the economy. As my right hon. and learned Friend the Member for Monklands, East said, they are uncertain who is running the economy. Once they lose confidence in the economy, they will force on our Government and economy an adjustment in a way and at a time that could be harmful to the long-term prospects of the British economy.
    7.29 pm
    Mr. William Powell: The right hon. and learned Member for Monklands, East (Mr. Smith) is a jolly fellow and he hugely enjoyed himself this afternoon. He always exhibits some of the most engaging characteristics of his profession as a barrister. He has to the fullest degree the forensic skills and the analytical abilities that we would expect in a man of his profession, but, like me, he has spent far too much of his time defending criminals, and to defend criminals one has to have destructive analytical abilities. There is no necessity to put together the patient, constructive policies that are needed when holding the office of Chancellor of the Exchequer, to which the right hon. and learned Gentleman aspires.
    Of course, the right hon. and learned Gentleman is a wise man, too. He knows perfectly well that he does not want to saddle himself with any of the flotsam and jetsam of the policies that emanate from the party on whose behalf he speaks. He is determined to commit himself to nothing on the future policies of a Labour Government. It was, as always from him, a class performance. He roared with laughter through most of it, and he will be taken no more seriously in the House than outside it.
    I want to return to the themes of the speech of my right hon. Friend the Member for Woking (Mr. Onslow). The questions that he posed, to which we shall not get an answer today, are those from which the Labour party will be unable to run away. If the wishes of the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg), who looked forward to the prospect of the return of a Labour Government, are to be fulfilled, the questions posed by my right hon. Friend the Member for Woking will have to be answered. I hold the hon. Member for Cumbernauld and Kilsyth in considerable affection, but he was clearly wrong about one thing—the imminent return of a Labour Government. At best, that is three years away. Anyone who imagines that a general election will be held in two years' time, or in just over two years' time, with any

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    prospect of the Labour party winning it, is living in cloud-cuckoo-land. At best, the Opposition can hope for one about three years from today. If we have one before then, we shall not have another Labour Government in three years' time—that will be in seven or eight years' time, a very long time for the hon. Gentleman to wait. Meanwhile, real problems will have to be confronted by the party that he represents.
    It is always nice to hear the right hon. Member for Llanelli (Mr. Davies). We hold him in considerable respect and affection. This decade has been a testing time for him. He has had to come to terms with some of the unpleasant and unfortunate aspects of his party's policies. As defence spokesman, and now as a commentator on economic affairs, he is always robust and independent—and he can afford to be, because his prospects of office in any future Labour Government have long since disappeared. So, from the Back Benches, he can give us the benefit of his wisdom and his commentaries on the policies being advocated by his party's Front Bench spokesmen, and very revealing they are, too.
    Fundamental policy questions will have to be answered because they will be asked again and again. The right hon. and learned Member for Monklands, East said that interest rates were too high. He seemed to support a policy of high interest rates—but not quite as high as they are now—to be combined with credit controls, the nature of which he was unprepared and unable to spell out.
    Mr. Allan Rogers: In his lengthy six-minute preamble, the hon. Gentleman has dwelt on the trivia spoken by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and by everyone else who has participated in the debate. He has given us a wonderful commentary, but as he is a supporter of a Government who have been in power for 10 years, will he comment on the Government's handling of the economy instead of discussing this destructive trivia?
    Mr. Powell: The point made by the hon. Gentleman which will be noted most keenly was his reference to the trivia in the contribution made by the right hon. and learned Member for Monklands, East.
    The Labour party will have to answer questions. What level of inflation is acceptable? What level of interest rate would the Opposition support? What level of public borrowing do they regard as sustainable and acceptable? What level of taxation? Are we to return to the days of restrictive practices, of overmanning and of secondary picketing? All these questions, asked by my right hon. Friend the Member for Woking, will not disappear.
    Unfortunately, the hon. Member for Durham, North (Mr. Radice) is not a historian. He is an economist who has forgotten his history. What has happened in the 1980s has been the product of what happened in the 1970s, by the end of which this country had been brought to its knees. The nation, the House and the Labour party know that. In the 1980s we have had to begin the process of reconstruction. I, like many of my right hon. and hon. Friends, have seen it in my constituency. The Corby steelworks was closed by the Labour party, which brought my constituents to their knees. In the course of this decade we have had to rebuild and have done so extremely
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    successfully. Employment has never been as high as it is now; nor has investment. Factories are being built all the time, and training is taking place.
    The right hon. and learned Member for Monklands, East mentioned the need to improve education. That was another of his light-hearted points, because every measure that has been brought forward to improve the quality and standards of education in this country has been opposed in the House by the party that he represents. Given this opposition, this "Mr. No" attitude on the part of the Labour party to any proposal designed to improve matters, the country is entitled to take note that these people are not serious about their ambition to govern.
    I want to draw two matters to the attention of the House. I remember talking last year in Germany to senior executives of that country's biggest bank. I asked them what advice they were giving to their clients about placing investment. They said that there were three places in Europe in which to invest: the corridor between Munich and Stuttgart, the greater Paris area and the whole of Great Britain. They were telling their clients that the most promising place in which to invest was the whole of Great Britain. My hon. Friend the Member for Beaconsfield (Mr. Smith) referred to the Bosch investment in south Wales, and there are many other similar examples in the regions. The need for such investment in the regions has already been mentioned.
    I close with another telling statistic. Shortly before he died, that great Conservative Franz Josef Strauss was in this country, analysing the difference between the German and British economies. He said that the average hourly wage in West Germany which an employer has to pay is DM31, half of which goes on wages and salaries and the rest on social insurance costs of one sort or another. The equivalent figure in Great Britain is DM21, an hour. Our competitive advantage over Germany is considerable and we must not lose that opportunity. Any glimmer of a policy that we hear from the Opposition is designed solely to destroy that competitive advantage, not to reinforce it. As long as that is so, they are not worthy of the confidence of our people.
    7.39 pm
    Mr. D. N. Campbell-Savours: Unlike the hon. Member for Corby (Mr. Powell), I do not wish to indulge in a harangue directed at hon. Members on the other side of the House. I wish to do as the Chancellor suggested and try to establish where there is common ground and whether we can proceed, perhaps not altogether with alternatives that I regard as ideologically acceptable, but on lines that the Government might be willing to accept in principle. We can agree that last year's current account deficit was £14·7 billion, which is 3·2 per cent. of GDP, and that we have a projected deficit this year of between £17 billion and £18 billion. We can also agree that we face a rapidly deteriorating balance of trade. Import penetration has doubled since 1970.
    The Government publishes a booklet on United Kingdom overseas trade statistics, from the various sections of which one can glean the statistics about finished and semi-finished goods. One can select headings such as glass, footwear, domestic electrical goods, furniture, sports goods, beer and coal. I found today that there are even statistics about condoms, on which Britain has a substantial trade deficit, a major part of which is due to

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    our European partners. Exports rose 10·1 times over the period 1970–88 and in the crucial area of consumer items exports rose 9·6 times. In the same period, imports rose 35 times. All the figures are identified in the overseas trade statistics.
    The Government believe that they can offset some of the deficit by way of invisibles, although they now have to admit that there has been a substantial reduction in the invisible balance over the three years since 1986, from £8·5 billion in 1986 to £5·9 billion in 1988, so the Government can no longer depend on that area despite the substantial investment which took place overseas following the abolition of exchange controls.
    How can we reduce the manufacturing deficit? I have a constructive proposition for the Government which does not necessarily require major ideological compromise. It depends on the private sector and I hope that the Government will seriously consider it. We should have a sectoral approach to the restoration of the manufacturing economy and it should be achieved by pump priming—what Walter Eltis, director-general of the National Economic Development Office recently referred to as "product loss areas". I am sure that the Minister knows what that means.
    I wish to consider an area that I knew many years ago as an example of where this could work. Before I came to the House I was a clock manufacturer and one of my interests in clock manufacturing, over and above my commercial interests, was to examine what was going on in the electronic quartz clock movement market. I came to the House in 1979 and within two years the only British manufacturing plant of electronic quartz clock movements in the whole United Kingdom was in Wishaw, in the constituency of my hon. Friend the Member for Motherwell, South (Dr. Bray) and it faced closure. The factory was owned by Smith's Industries and I and my hon. Friend the Member for Motherwell, South went to the Department of Trade and Industry to argue the case for sectoral support. We did that on the basis that it was the only remaining quartz clock manufacturer in the whole of the United Kingdom, but Ministers turned us down. At the time, about eight years ago, I told the Minister that if that firm closed, within a few years the whole market would be dominated by electronic quartz clock movements made in Germany, Switzerland, Japan and France.
    As a result of checks that we have made in the past few days I can now tell Ministers that every quartz clock movement in the United Kingdom, except for those fitted to Metamec clocks which are made by a firm in Norfolk which produces its own movements but only for its own finished products, is now imported from the continent. The manufacturers are Ahttori from Japan, Jungans, Hannart, Staiger and Kienzle from Germany, and those firms totally dominate the United Kingdom market. Anyone who goes through the trade statistics in the way that I have suggested will find that that has happened in many sectors of British industry.
    Is it not in the national interest to restore areas that are critical to specific industries? I have mentioned only the clock industry. Is it not wise to examine what has happened in that area in the way that the National Economic Development Office used to do under the Labour Government? Working parties used to examine and define the area of loss and then set out with the National Enterprise Board and other organisations to try to promote the redevelopment of investment. Today
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    NEDO has 16 working groups, but they only make recommendations. They advise manufacturing industry, whereas previously they were in a stronger position in terms of investment decisions.
    At very little expense, the Government could set up an industrial reorganisation corporation. Only civil servants would be involved and they could identify, in the same way as NEDO did in the 1970s, product loss areas where there should be manufacturing to substitute for imports. They could identify sponsors in the private sector. In the case of clock manufacture, they could go to a company such as Metamec which has experience of movement manufacture in the United Kingdom and say, "We want to re-establish a foothold in this market because almost 100 per cent. of the market is dominated by imports." The company could be offered substantial sectoral grant support of perhaps as much as 50 per cent.
    I add no rider that it should be a regionally based industry, because I understand that the Government want to rely on more market-oriented policies to develop the regions. My proposal is simply that the Government adopt a sectoral approach with substantial grant aid to re-establish our position in markets that are subject to heavy import penetration. The sectoral sponsors would raise the other 50 per cent. of the capital necessary 1.0 set up the plants. They could put up perhaps half the 50 per cent. by borrowing, which might be a requirement of the Government. The companies could go to the markets to raise money for sectoral developments and might even float on the stock exchange in the same way as Eurotunnel, whose offer was speculative.
    Market penetration targets could be set by the industrial reorganisation corporation with the private sector sponsors. Apart from the grant assistance to get the companies off the ground, there would be little further public support. The enterprise would be totally privately controlled with no state interference apart from endeavouring through the corporation to establish some sort of target arrangement for markets. The Minister may say that that will not work. I talked to Metamec today about it. The company's managing director, Mr. Herbert Hanna, told me that the company tried to do that three years ago and had to put up all the money. It spent £2 million developing a plant to produce the movement that I have mentioned, but because of the absence of a United Kingdom sectoral grant the company simply could not compete.
    Sectoral grant is available in West Germany, which also has research and development grants and grants from the local authorities and the Läander Parliaments in Germany through regional industrial committees. The technology went in but Metamec was not able to effect the model changes necessary to keep pace with German advances in technology.
    Mr. Hanna told me that if a private sector offer were made to him, substantial grant was available for putting down the equipment, and he had to go to the market to raise a quarter of the capital required, it would have an almost immediate effect on Britain's market for clock movements. He said that within a matter of months the company would be hiring another 250 people in the Norfolk area. He knows that all that the British market wants is a cheap movement that works, is reliable and i5 internationally competitive. We are talking about tight competitive conditions where Kienzle can sell a quartz

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    movement into the United Kingdom market for as little as 85p per unit. Mr. Hanna said that Britain would otherwise inevitably fail to get back into that area of the market.
    It is not only in the clock sector that that can take place. I have identified a series of sectors in which the market is almost entirely dominated by imports. The market for trainer shoes is almost entirely dominated by imports, except for high quality products such as New Balance, which has a factory in my constituency. Why cannot we produce such goods here in the United Kingdom when everyone knows that, as the hon. Member for Corby (Mr. Powell) accepted, labour is cheaper in the United Kingdom?
    One can cite the wire and cable sector; major parts of the chemical industry; photographic materials; cameras; watch movements; hosiery; the white cloth used by most cloth manufacturers when they print their fabrics ready for the market; video equipment and personal computers, which invariably carry a British name such as Amstrad but which, when one looks at the back of the machine, have been made in Japan, Korea or some other country in the far east. In office machinery and data equipment import penetration stands at 93 per cent. In man-made fibres it is 38 per cent.; in instrument engineering, 58 per cent.; in electrical and electronic engineering 49 per cent.; and in the boot and shoe and leather goods trade it is also 49 per cent.
    If Britain adopts a sectoral approach, based on private sector investment in the way that I suggest, the Government's ideological position will not be compromised. That is the only way to interfere directly in manufacturing industry to reduce substantially the trade surplus. We cannot rely on market factors any more. We need positive intervention.
    7.51 pm
    Mr. David Shaw: My constituents want me to thank the Government and my right hon. Friend the Chancellor for the successful way in which the economy has been managed. They remember the way in which the economy was managed by Labour. Now we have lower inflation and people such as pensioners have benefited. Now we have lower unemployment and the young and the school leavers have benefited. Now that Britain has the highest employment in its history, women have benefited, with more job opportunities than they ever had under Labour. Now we have higher wages from which nurses and other deserving people have benefited, as well as all wage earners. In other words, we have all benefited from the Government's policies.
    It is true that interest rates are not at the level that we would like, but they have increased in all major industrialised countries. In those countries inflation has been increasing. For example, Dr. Richard Rahn of the United States chamber of commerce has shown that inflation in the United States of America has risen from 5·1 per cent. to 6·4 per cent. The United States Federal Reserve has tightened its monetary policy still further, even to the point of risking recession. Britain has no choice but to stay competitive and to squeeze out inflation by increasing interest rates. The Government have been right
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    to push the regrettably necessary policy of higher interest rates in order to achieve a more successful economy during the 1990s.
    The Opposition make much fuss about the current account deficit. That is strange, since foreign currency assets in Britain are at an all-time high, equivalent to some 10 years of deficits at the current level of deficit. Why do Labour make so much fuss about that deficit? It may be to hide their own mistakes. Labour killed our manufacturing industry during the 1970s, when low productivity was encouraged and when low investment was necessarily accompanied by low profits, as any Opposition Member must realise. Without high profits there cannot be high investment.
    In 1976 there was a surplus in motor cars and accessories because that account and the balance of trade in it ran well. By 1979, when the Labour party left office, there was a deficit in motor cars and accessories because the amalgamation of companies such as British Leyland failed. Labour's industrial policy had failed. The Industrial Reorganisation Corporation and other Labour policies on planning the economy and industrial markets had failed.
    Now, in 1989, it is likely that a major improvement in the balance of trade in manufacturing is on its way. We have new car plants. Nissan is producing record levels of cars. [Interruption.] If the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) wishes to intervene, I shall be delighted to give way to him.
    Mr. Brian Sedgemore: I was just thinking that it is possible to argue a case chronologically. The hon. Gentleman was talking about the so-called devastation of our manufacturing industry between 1975 and 1979 and then he leapt from 1979 to 1989. Would he care to work through the figures from 1979 to 1981?
    Mr. Shaw: I am delighted to point out that one of the Government's great successes has been to reduce employment in manufacturing industry by some 2 million people, leaving manufacturing industry in a much more efficient state than it was under Labour. Hon. Members must accept that 5 million people in Britain are now producing more than were 7 million in manufacturing industry under Labour. That is success. British industry has higher productivity now than it did under Labour.[Interruption.] I am confident that I am driving my points home because of the reaction of Opposition Members.
    We heard earlier about the Labour party's new policy document, but the one group of people who were not prepared to talk about it was Labour Members. It was my right hon. Friend the Chancellor who had to dissect the document. I note that the Labour party's new policies take us back not to the 1970s, but to the 1960s. I remember that in the days of Harold Wilson the Labour party was long on promises and short on answers. That certainly seems to describe today's new policy document from the Labour party.
    The Labour party now promises us low interest rates. It believes that we can isolate ourselves from the rest of the world. It believes that if the rest of the world has high interest rates we can somehow have low interest rates. Many years ago King Canute tried to hold back the waters but he failed, just as those who try to hold back the waters of high interest rates in the rest of the world will fail.[Interruption.] I have already given way to the hon.

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    Member for Hackney, South and Shoreditch. I shall be delighted to do so again if he has anything useful to say, but he did not previously so it is probably not worth giving way to him again.
    Increased public expenditure is still being put across by the Labour party as being the answer to our problems. We do not have the problems that the Labour Government had. We do not need cures for increased public expenditure. They did not work in the 1970s. The Labour party did not have the money to increase public expenditure in the 1970s. It is amazing that the Labour party should still believe that public expenditure can be increased and that interest rates will remain low. How can we issue more debt to finance increased public expenditure and yet reduce interest rates? If someone has to borrow money, they have to pay high interest rates. That market fact cannot be bucked. The Labour party's policy is a contradiction.
    I regret that the hon. Member for Islington, South and Finsbury (Mr. Smith) is not here today. I often listen with interest to his speeches. Earlier this year he said that we must have lower interest rates and a more stable and competitive exchange rate. If interest rates are lower than market conditions require, foreigners will not hold pounds and we would have to devalue. Therefore, low interest rates, cannot, as he says, go hand in hand with stable and competitive exchange rates. Indeed, stable and competitive exchange rates cannot go together because if an exchange rate is stable it is unlikely to be competitive and if it is competitive it is not likely to be stable. The more one examines Labour's policies—
    Mr. Tony Worthington: Will the hon. Gentleman repeat that?
    Mr. Shaw: I am sorry if the hon. Gentleman, like many Opposition Members, cannot follow the economic facts of life. The more one examines Labour's policies the more one finds that they are based on the mathematics of wishful thinking. It is a very special version of mathematics, taught only at the Walworth road school of policy review.
    The Opposition claim they have a new economic policy but the right hon. and learned Member for Monklands, East (Mr. Smith) again and again refused invitations earlier in the debate to outline Labour's proposals. Why did he decline to tell the people of this country about them? We must conclude that it was because those policies are not capable of being argued in rational debate on the Floor of this House. That point was proven when the Leader of the Opposition ran away from his BBC interview on economics. What kind of a man runs away from an interview on economics? The Opposition claim that they now understand competition and the market, but I do not believe that they have an economic policy that can compete with that of the Government. I shall support the Government amendment in the Lobby tonight.
    8 pm
    Mr. Doug Hoyle: One of the problems we face in this debate is not knowing how long the Chancellor will be in his job. We do not know when that dreaded knock will come and he will be ushered into No. 10 and told that he is on his way. It is difficult to propose any long-term solutions to a person who may have only a short-term contract.
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    The Chancellor and the Prime Minister both have strong views on keeping inflation down, but we hear nothing these days of zero inflation. It is no longer bedtime reading for the young in every Conservative household. It has disappeared out of the window. When the Minister replies, I shall be pleased to hear when that target will be achieved.
    We do know that inflation is higher in this country than any other in the EEC except Greece and Portugal. There seems to be some complacency about our record by comparison with the rest of the Community, with the Government saying that all is right, but this country is paying a very high price for having the Government in office. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) was right to point out that the failure to invest on the supply side is now catching us out. British industry continues to lag behind because of failure to invest. It also faces high interest charges and rising costs as a consequence of gas privatisation and the proposed privatisation of the power industry. British industry costs are far higher than those of its competitors in Germany or France, which makes domestic companies even more uncompetitive than they were.
    The Department of Trade and Industry and even the noble Lord the Secretary of State himself talk only of a venture economy. We get from them tinsel rather than substance. To hear Conservative Back Benchers, one would think that Labour was in office, because Government Members spend all their time attacking Labour policies while not one of them gives an iota of information about what they would do.
    We are heading for a record Community trade deficit of £18 billion, yet the Government's only response is to raise the interest rate time and time again. It now stands at 14 per cent. and all the signs are that it will rise to 15 per cent., which will make a bad situation even worse. Britain's metal industries are falling into deficit, and we shall shortly be left with only aerospace. When a Labour Government were in power, our engineering industry was in the black. Today, the trade deficit in engineering products has deteriorated by 30 per cent., rising from a deficit of £8·9 billion in 1988 to £11·6 billion in 1989.
    In the years 1985 to 1988, for which the hon. Member for Dover (Mr. Shaw) claimed a special degree of Government success, the deficit increased by 600 per cent. Does he call that a success story? Our trade deficit with West Germany is a calamity. Last year it totalled £845 million, which is the biggest deficit with any of our trading partners. The deficit trebled between 1979 and 1988, yet Conservative Members have the cheek and impudence to speak of that as a success story. I should not like to experience a Conservative failure.
    Another Government ploy, particularly from 1979 onwards, was to say, "It does not matter much about the metal-bashing industries because the sunrise industries such as information technology will be our saviour." Information technology was the in thing which would save us all, but our IT trade deficit is rising year by year. I sit on a Committee that has just produced a report on information technology. Its advice to the Department of Trade and Industry was ignored because it would have interfered with the market. As long as we rely on market forces alone, we shall never recover from our IT trade deficit or have any hope that information technology will be our saviour. The situation will only get worse.

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    Whenever we spell out to the Government what ought to be done, they make no response and refuse to face the facts. I do not know where the hon. Member for Dover gets his figures about motor vehicles. Last year, we imported from the Common Market £6 billion more in motor vehicles that we exported.
    Mr. David Shaw: I was making the point that we enjoyed a surplus in 1976 but suffered a small deficit in 1979. I do not deny that the deficit increased, but for the first time the trend is reversing. That has been shown up in the Oxford Economic Forecasting studies. By the mid-1990s, we may return to a trade surplus on motor vehicles as a consequence of the new efficiency that will come with Nissan and Toyota. That Government achievement cannot be denied.
    Mr. Hoyle: I just wonder where the hon. Gentleman lives. I think his problem is that he gazes out to the Channel without looking at the mainland behind him. It is remarkable that the hon. Gentleman can make such a statement. I repeat that we suffered a record £6 billion deficit in our trade with the EEC.
    Mr. Calum Macdonald: The hon. Member for Dover (Mr. Shaw) is really saying that after 10 years of pandering to British management, the Government have given up on it and now rely upon foreign management to get Britain out of the mess that it is in.
    Mr. Hoyle: Absolutely. The Government's problem is that they have no faith in Britain. It does not matter who owns our industries. They just hope that the Japanese will capture the European market for Britain and rescue our record £6 billion trade deficit with the EEC that the Government created.
    It is nonsense for the Government to continue to claim a success story. One of the consequences of the Government's present policy will be that unemployment will rise again, especially in the areas represented by Opposition Members. Barclay's Economic Review estimates that there will be a 200,000 rise in unemployment, but, I think that that estimate is probably rather low.
    The Government are producing slogans instead of remedies. As has been said, the problem is that the Government are running a casino economy. They are like gamblers who are drunk on the roulette wheel. All they are doing is throwing chip after chip into the casino. We can no longer afford the luxury of this Government, nor can we afford their incompetence.
    Several Hon. Members rose—
    Mr. Deputy Speaker (Sir Paul Dean): Order. I am very grateful to those hon. Members who have co-operated so well in observing the 10-minute limit on speeches. The wind-up speeches are expected to begin at 9.20 pm and five hon. Members still wish to speak. If my mathematics is correct, that means that I can now relax the 10-minute limit on speeches, but I hope that hon. Members will bear in mind that five hon. Members hope to speak between now and 9.20 pm.
    8.11 pm
    Mr. Kenneth Hind: The hon. Member for Warrington, North (Mr. Hoyle) said that Conservative Members have criticised the Opposition. I join in those criticisms. The Opposition introduced the debate to criticise Government policy. National politics today is essentially a two-horse race. The Conservative and Labour parties agree that the centre parties are a broken force: therefore the public look to the two major parties for policies for the future. It does not come well from the Opposition simply to ask what the Government will do when recently they have produced a detailed document for public examination setting out what they would do if they were in power. Therefore, it is fair for us to say to the Opposition that we accept that there are problems in the economy, but we and the public are entitled to know what they would do if they were in power. We have repeatedly asked that question in today's debate.
    The right hon. and learned Member for Monklands, East (Mr. Smith) opened the debate by making a number of points that revealed the weakness of the Opposition. But what are the strengths of the Government's present position? In the past four years, unemployment has fallen by 1 million. Since 1982, more jobs have been created in Britain than in the rest of Europe put together. Inflation has fallen to an average of 5 per cent. per year, there have been major reductions in taxation and an average annual growth in industry of 3·4 per cent. We have the highest productivity growth in the OECD except Japan. The growth in small businesses has mushroomed, creating 1,300 new businesses a week. Company profits are higher than they have been for 20 years. Despite the criticisms from the Opposition, manufacturing industry has grown by 7 per cent. in the past two years—twice the growth in the economy. That is a major achievement.
    The right hon. and learned Member for Monklands, East leads the Opposition charge and states that what is required is new investment in training, research and development and new machinery. I agree with him. We all agree on that, but we recognise that to close the gap between our imports and exports we need to increase the capacity of British industry. Our industrial base has to grow. My right hon. Friend the Chancellor of the Exchequer has encouraged that. In 1988–89, the last year for which detailed figures are available, there was a 14·5 per cent. increase in investment in British industry and we are now witnessing record levels of investment, achieving precisely what the right hon. and learned Member for Monklands, East wants us to achieve.
    A large proportion of our trade deficit is created by new machinery which is imported only to increase the British industrial base to close the gap between imports and our exports. In 1987 half our trade deficit was made up of imports of machinery into the United Kingdom. British industry has the confidence to expand and to create jobs, and that is a major achievement.
    Mr. Worthington: I wish to ask the hon. Gentleman a simple question. Why is capital machinery being imported?
    Mr. Hind: We have to go back a fair number of years. I regret that much of our manufacturing industry was killed off in the 1960s and 1970s and cannot easily be replaced. Anyone who knows anything about economics knows that, at the first sign of an upswing in any economy,

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    the manufacturers of machinery benefit first. However, we do not have as big a machinery industry as we should like, so we have to import machinery, but we have the beginning of the upswing and the about-turn that will help to close our trade gap.
    The major enemy that the Government face is inflation. I fully support the line taken by my right hon. Friend the Chancellor of the Exchequer when he put that at the top of the problems that we face. He is right to attack that problem as his first priority. There is pressure on the pound at the moment because of the improvement in the American economy and external pressure. There is an increase in inflation across the board in the G7 countries. It is no good Opposition Members saying that it is not happening elsewhere. Of course it is happening elsewhere and that is recognised, but unfortunately we in Britain have a greater dose of the disease than we should like, but we know that the cure lies in introducing higher interest rates to suppress demand and reduce inflation.
    No one should think that the Conservative party likes high interest rates. No one who has worked in any industry wants high interest rates. We can see the damage that they do and I am sure that my right hon. and hon. Friends agree that they are a short-term measure which will improve our financial performance and help to close our trade gap, dampen down demand and reduce imports. That solution is working now. Mortgage inflation is beginning to reduce.
    The Opposition suggested introducing credit controls, particularly for credit cards, but that is such a small part of the problem, representing less than 5 per cent. of debt, that it will not tackle the problem. It will take time, but the economy is stronger than it has been for many years and that has been shown by the winds that it has faced in the past few years—black Monday, the crash in the world markets, the fall in the value of sterling a few years ago and various problems created in the economy by the fall in oil prices. The British economy has been strong enough to weather those storms and will be strong enough to weather the problems that we are facing at present.
    The Opposition have offered no solutions. The right hon. Member for Llanelli (Mr. Davies) is on record in The Independent saying that the Opposition have no idea how to deal with inflation. One of the Labour party's advisers was quoted in The Independent as saying that it has no idea what to do about inflation. The Leader of the Opposition admitted in an interview with James Naughtie of the BBC, which has been hidden away in the archives and which we will never hear, that he did not know what to do about it. He said, as have Opposition Members throughout the debate, that the Government are in power, so, "Let us see what they can do about it." The British public are entitled to ask the Labour party what it would do if it were in power.
    In an interview this morning, the right hon. and learned Member for Monklands, East ducked a question about control of sterling. He could not speculate on the appropriate level of the pound because he does not have an idea what it should be. The Opposition have no policy to deal with the pound, which is an essential part of managing the economy.
    The Labour party has produced a document outlining its policies for the future. It clearly emerges from it that the Labour party is the party of higher taxation. It proposes to return to the old remedies such as raising taxation and renationalisation. The right hon and learned Member for Monklands, East ducked my question when I challenged
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    him in an intervention about how new investment will be financed. It will be financed using ratepayers' money, by raising taxes and using that increased taxation to intervene in industry. Higher taxation, intervention and failure to control inflation and the pound will increase inflation and make a bigger mess of the economy than the Labour party has done previously. We all remember what a terrible mess it made of the economy in 1976.
    The abolition of the upper earnings limit on national insurance contributions will make anyone earning more than £17,000 a year worse off. The married couple's allowance will gradually be withdrawn, making 12 million couples worse off as they lose indexation. Labour has taken a step backwards from the clear-cut pledge to restore cuts in the basic rate of income tax. It is trying to conceal its intention by talking about an income tax regime of many different rates. The right hon. and learned Member for Monklands, East admitted that any reform of income tax along the lines proposed will make some basic-rate taxpayers worse off.
    We have asked the Labour party to cost its programme. It ducks the question because it knows that it will inevitably lead to higher rates of tax, increased inflation and lower standards of living and show that they are not in a fit state to control the economy or run the country.
    I should like to mention a matter to which my hon. Friend the Member for Dover (Mr. Shaw) referred. We must consider expert forecasts of the performance of the British economy. The survey by Oxford Economic Forecasting, which was published on 31 May, predicts that manufacturing industry will boom throughout the next decade, generating thousands of new jobs. By 1995, manufacturing output is expected to be 60 per cent. higher than today. Car production is forecast to rise from 1·25 million today to 2 million by 1995, helped by the dramatically improved efficiency and profitability of United Kingdom car plants. Such profitability will run right through the British economy.
    The Chancellor of the Exchequer and Conservative Members accept that mistakes have been made in the past, but the right policy to correct the economy is being pursued, despite the criticisms of the Opposition. The Government do and mean what they say. At least we are prepared to say to the public, "This is where we stand, and this is what we shall do," unlike the Opposition, making it clear that we are fit to govern this country and that they are not.
    8.25 pm
    Mr. Tony Worthington: I wish to return to the central problem—the fact that Britain is not paying its way.
    Last year we ran a current account deficit of £14·7 billion, and it seems that this year's deficit will be £18 billion to £20 billion. I treat the problem seriously because the Chancellor has always done so with other countries. A few years ago he lectured the Americans about a deficit of 3 per cent. of gross domestic product, but our deficit is now 3·2 per cent. of GDP. The Chancellor lectured debtor nations, whether they were developing or developed countries, when they were in deficit. He never visits Japan or Germany and says, "How weak your economy is—it is in surplus." Strangely, our economy is supposed to he the only strong economy with a record deficit.

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    It is difficult to find a part of the world with which we are not running a deficit. We are not running a deficit with north America, but the surplus is falling. We are not in deficit on oil, but that surplus is also falling. The reason why we are in deficit is that after 10 years of Tory Government we cannot compete effectively with other countries. When Tory history books are written, the chapter on the period between 1979 and 1981 is always missing.
    Absurd reliance has been placed on service industries. When Labour Members said that we needed manufacturing industry to survive, we were criticised by the Financial Secretary to the Treasury and others for concentrating only on that sector. The chickens are coming home to roost and what we have been saying for many years about the Government's neglect of manufacturing industry is being proved correct. My hon. Friend the Member for Workington (Mr. Campbell-Savours) said earlier that we must play a more interventionist role in manufacturing industry, perhaps on a sectoral basis. It is certainly difficult to see how market forces can cause manufacturing industry to re-emerge.
    We run deficits on almost everything. One would have thought that we produce a lot of potatoes, yet we export £18 million-worth and import £58 million-worth. The picture is similar for sports goods.
    Mr. Macdonald: And condoms.
    Mr. Worthington: Condoms are mentioned yet again, which reflects some hon. Members' obsession with them, but there is only a £3 million deficit there. Last year, we exported £64 million-worth of coal but imported £427 million-worth. Twenty years ago, no one would have believed that we would be running a £24 million deficit on carbonated water.
    In the 18 years from 1970 to 1988 there was a 23-fold increase in imports of capital goods and a 35-fold increase in imports of consumer items. In those 18 years there was less than a tenfold increase in exports. There was a 78-fold increase in car imports but only a sixfold increase in car exports. We assemble cars but although the wages are earned in this country the profit and the control are elsewhere.
    We can no longer rely on oil as a surplus. The surplus in 1985 was £8·1 billion but by 1988 it had been reduced to £2·3 billion. We can no longer rely on invisible exports. In 1986 they amounted to £8·5 billion, but by 1988 they had fallen to £5·8 billion. Earlier we were told that we need not worry about the deficit because we were importing capital goods. We are indeed importing them—we have ceased to manufacture capital goods.
    The hon. Member for Corby (Mr. Powell) pointed out that the average wage in Germany is 31 deutschmarks per hour and that the average wage in this country is 21 deutschmarks per hour. He said that we had a competitive edge. It is strange that Germany is beating us hollow on wages as well as having all the social benefits, extra training, better pensions and nurseries for children that we are denied.
    We had the clearest confession from the hon. Member for Corby that the Government's strategy is to seek a low-wage economy, but the people do not want a low-wage economy. They want an economy with high
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    wages, high education standards, better research and development. They want a Government who believe in the future of the United Kingdom as an economy which can compete with countries like Germany.
    The speech of the hon. Member for Corby reminded us of the words a few months ago of the director general of the CBI, who said that a combination of British productivity and German social costs would be lethal for this country. He was right. That is the legacy that the Government have given us.
    It is essential that we abandon our non-interventionist strategy in industry. There are no grounds for thinking that work will return to many areas simply by leaving things to market forces. Capital remains the most portable of the factors of production and it can go anywhere in the world. Labour has to stay here; it should stay here and should have a good life. Certainly we need far more investment in education and training. We should abandon the pretence that the employment training scheme is anything other than a means of lowering unemployment figures. It is an insult to the people to pretend that the employment training scheme will provide adequate training for people to compete in the modern world.
    We have a capital-oriented economy on the Government Benches. We need an economy much more oriented to the needs of the people. There has been much reference in the House to the creation of jobs. Jobs may have been created in some parts of the country but in Strathclyde, the region that I represent, total employment had fallen in September 1988 to 767,000, a decline of 10,000 jobs since September 1987, and the number of jobs in manufacturing industry had fallen by 162,000, or 49·7 per cent. Since 1979, the last peak in the trade cycle, Strathclyde's total employment is estimated to have fallen by 220,000 or 22·3 per cent. Strathclyde's share of employment in the United Kingdom has fallen from 4·3 per cent. to 3·5 per cent. since 1979. That is the economy within which I live and work. That is the reality of life there and in Glasgow, Central, where male unemployment in Bridgeton and Dalmarnock is 38·2 per cent.
    All that the Government promise us is that there will be a decline in the economy over the next few years while their high interest rates continue to take effect. The Government have to recognise that the only hope for many parts of the country is for them to abandon dependence on market forces. They must realise that in area after area we have no products to sell and that the only way to have products is by taking a much more interventionist stance.
    When we lost television manufacturing to the Japanese, we then lost video, compact discs and all the developments that occurred after that. My hon. Friend the Member for Workington (Mr. Campbell-Savours) referred to the knock-on effect of the loss of production of quartz digital mechanisms for clocks, and showed how we have lost products in one area after another. We must abandon reliance upon market structure and take a much more interventionist role.
    8.37 pm
    Mr. Tim Janman: I congratulate the Chancellor, the Government and my hon. Friends on the Front Bench on the many positive aspects of the economic advance that we have made over the last decade. Deregulation, lower taxation, privatisation and the control of public spending—all the things that the Labour

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    party never sought to do when in power—have led to increased productivity, investment and profitability in British industry, and to a longer period of sustained real growth in the economy than we have seen for many decades, whereas in the past we were continually in stop-go cycles.
    All that could be undermined if inflation is not brought under control. It is vital to regain full discipline of the money supply. I want to concentrate on one concern—that broad money is no longer targeted and has not been targeted for some time; broad money is no longer under control. I acknowledge that narrow money has been brought under control, although clearly it was out of control until fairly recently. The December 1988 increase in MO was the biggest monthly increase since 1979. Recent figures show that the interest rate increases, which the Chancellor was correct to bring in, have been working and that narrow money growth has been tumbling.
    That is shown by some recent statistics. In the year to January, narrow money increased by 7·4 per cent., in the year to April, it increased only by 5·7 per cent. and in the six months to April, narrow money has been increasing at an annual rate of only 0·9 per cent. That is one of the key ingredients in bringing inflation under control and getting it out of our economic system.
    My concern is that broad money is not under control. If we look at the rates of growth in M3 and M4, we see that those rates of growth are far too high. In the 12 months to April this year, M3 grew at 20·6 per cent. Over the six months to April, it grew, annualised, at 19·1 per cent., and over the three months to April, it grew, annualised, at 18·8 per cent. The equivalent figures for M4 money supply growth show 18·1 per cent., 16·7 per cent. and 20 per cent. increases.
    The figures for narrow money are welcome and, if anything, narrow money growth over the past few months has been slightly too tight compared to current and expected general growth in the economy. But the M3 growth and the M4 growth are not acceptable. Those figures are the result of printing money last year to buy deutschmarks and of attempts to fix or control exchange rates by allowing the commercial banks to throw money at the problem. The strength of sterling should not be a major consideration in counter-inflation policy. It should be the result of counter-inflation policy achieved through sound money policies, which we have still not wholly achieved or certainly have not been achieving for the past few years.
    There was a considerable time after 1979 when we were well on the way to achieving sound money and well on the way to achieving zero inflation. Our policies achieved an inflation rate of less than 3 per cent. in mid-1986, when inflation reached a trough of 2·4 per cent. Sceptics will say that broad money is not important. However, taking into account the longer time lags that exist, the M4/retail price index relationship is clear.
    I want to go through some figures for the period from 1972 to the present, which clearly show that there is a relationship between broad money and inflation, albeit not quite as tight or with such short time lags as with narrow money. In 1972 and 1973, the average increase in broad money on the M4 measure was 22 per cent. From January 1974 to August 1975, inflation increased from 12 per cent. to 26·9 per cent. During 1974, broad money growth was reversed and it went down to a trough of 12 per cent., which resulted, in July 1976, in inflation coming back
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    down to 12·9 per cent. During 1975, with the election of a Socialist Government, we inevitably saw an irresponsible increase in broad money supply growth—
    Mr. Bryan Gould: The election was in 1974.
    Mr. Janman: I am quite aware that the election was in October 1974, but in 1975, the Labour Government had already escalated broad money supply growth to 16 per cent. That increase resulted in inflation peaking in June 1977 at 17·7 per cent. During 1977, as a result of the International Monetary Fund coming in, broad money supply was again reduced to a trough of 11 per cent. growth on an annualised basis and this worked through to produce a reduction in inflation to 7·4 per cent. in June 1978. During 1978, while inflation was coming down, broad money supply again reached a peak growth rate of 18 per cent., which in turn, in May 1980, produced an inflation rate of 21·9 per cent.
    During 1982, after this Government's heroic Budget in 1981, broad money again reached a trough of 13 per cent. in annualised growth terms and this resulted, in May 1983, in inflation coming down to a low of 3·7 per cent. In more recent years, between 1983 and 1986, broad money, on the M4 criteria, grew between 13 per cent. and 14 per cent. and that resulted in inflation between 1984 and 1987 averaging 4·7 per cent. The disturbing news is that, between the fourth quarter of 1987 and the fourth quarter of 1988 inclusive, broad money has been allowed to creep up to a growth range of 16 per cent. to 18·5 per cent., which has unfortunately resulted in an inflation rate of about 8 per cent. in April 1989.
    I am not saying that narrow money is not important, because it is probably more important than broad money, but I am trying to show that broad money is also an important consideration. If we take snapshots of two periods in the middle and late 1980s, we can see that that is the case. Between the fourth quarter of 1984 and the fourth quarter of 1985, the annualised rates of broad money varied between 12·8 per cent. and 13·8 per cent. The equivalent figures for narrow money were 5·6 per cent. and 3·3 per cent. In 1986, allowing of course, for a time lag, that resulted in inflation coming down to 3·4 per cent., with the lowest figure in the middle of 1986 being 2·4 per cent.—the lowest figure for about 20 years, which was a fantastic achievement at that time.
    If we now look at the 1987–88 picture, we see that between the fourth quarter of 1987 and the fourth quarter of 1988, broad money grew at a rate of between 15·3 per cent. and 18·6 per cent. and narrow money has been allowed to increase to growth rates of between 4·2 and 8·5 per cent. over that same period of five quarters. That has resulted in the current inflation rate of 8 per cent. and rising.
    From those figures it is clear that we can conclude that not only is narrow money supply important in looking at inflationary trends and seeing what is going to happen in the future, but so is broad money. Broad money targets, preferably M4 targets, should again be set and achieved, although I take the view that those broad money targets can be more liberal than they otherwise would need to be if narrow money is under control. If we go back to having targets both for broad money and narrow money, and try to achieve and be seen to achieve those targets, I am confident that that will give a signal to the financial

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    markets that the Government are serious about maintaining sound money and about attempting to achieve 0 per cent. inflation.
    There is an article in The Guardian today in which several hundred words are printed to try to show that there is no connection or no particular relationship between either narrow money or broad money and inflation, but the graph printed at the end of the article shows exactly the opposite. The graph shows a clear relationship between narrow money and the retail prices index, and with a time lag, with broad money. The figures show that to achieve zero per cent. inflation, we need to bring down broad money growth to not more than 10 to 11 per cent. per annum and narrow money, on which we have already perhaps gone slightly further than we need to, should be brought down to an annualised rate of no more than I to 2 per cent. growth at present.
    This particular aspect of economic policy, about which this evening's debate has given me an opportunity to speak, is a matter about which I have some concern and which I would ask my right hon. Friend the Chief Secretary to review. It is not a matter about which one should be dogmatic and there are no simplistic solutions. If we look at the trends and the figures, and the fact that over the past few years we have ditched broad money targets, whereas for the first four or five years in office after 1979 we had such targets, it is clear that to achieve that worthy target of zero per cent. inflation, we need to keep high interest rates for as long as we need to. We need to allow exchange rates to float freely. We should encourage the Bank of England to sell securities to the banks to mop up that 7 or 8 per cent. of broad money that needs mopping up.
    When considering the tenor of our economic policy and all the measurements upon which our economic success can be judged, it is ludicrous for the Opposition to deny that the past 10 years have brought this country excellent economic success. It is even more ludicrous for them to snipe at the Government's achievements when clearly, from the leadership of the Labour party downwards, Labour Members have no realistic alternative to put in its place and no understanding of how they can even try to find an alternative. We must consider having both broad and narrow money targets. If we do that, we shall have policies that will achieve the target, which we all want, of sustained zero inflation.
    8.50 pm
    Mr. John Battle: One line in the Chancellor's response to our motion drew my attention —his claim that so far not a word had been said about unemployment. I was surprised that he drew attention to what might be described as the forgotten factor whenever Conservative Members participate in a debate on economic policy. I should like to focus on the forgotten factor of unemployment.
    As we have commented throughout the debate, when we have a Government who have given us record interest rates and a record trade deficit, we should not forget that they have also given us a record unemployment level. It is still unacceptably high. The unemployment level represents not figures, numbers and statistics but real people who do not have jobs. It is worth reminding the House
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    that, according to the Government's figures, nearly 2 million people are still without work. The Unemployment Unit estimates that we should add at least 500,000 to that figure to take account of changes in methods of calculation.
    There is talk about handling inflation and references have been made to the Government having the single instrument of interest rates. There is another secret, unmentionable weapon—unemployment. The Prime Minister offered the following economic advice in February 1981 to readers of Time magazine:
    "bringing down inflation does mean that you have increasing unemployment and I don't know of any other way of doing it."
    Clearly, unemployment is a weapon in the Government's armoury, although they are not anxious to stress that. However, this year's economic policy statement paragraph 3.04 in the Red Book, "Financial Statement and Budget Report 1989–90", refers to the labour market, and spells it out:
    "Unemployment … is most unlikely to continue falling".
    What else can that mean, except that unemployment is expected to rise? That is the basis of the Government's economic and budget strategy.
    My hon. Friend the Member for Warrington, North (Mr. Hoyle) referred to Barclays Economic Review, which has estimated that unemployment will increase in real terms by at least 200,000. On 21 April, the Parliamentary Under-Secretary of State for Employment was asked in a written parliamentary question when he expected
    "unemployment levels will fall to the 1979 level".
    He replied:
    "The Department does not forecast future levels of unemployment."—[Official Report, 21 April 1989: Vol. 151, c.347].
    We are entitled to ask why on earth not, when it seems to be part and parcel of the Government's strategy. The country knows that since 1982 the Government's unemployment figures have been subjected to 24 changes in the method of counting and there are another four to come. According to the Government's figures, unemployment has been more than 3 million for nearly six of their years in office.
    I shall draw attention to one group that is often forgotten—the long-term unemployed, who, understandably, could be the most aggrieved at the talk of the economic boom in Britain and all that we hear about the economic miracle of the Government's policies. The proportion of people who have been unemployed for more than a year rose from 25 per cent. in 1979 to 41 per cent. last year. It is not that those people were in and out of jobs. They and their families were paying the long-term price for the Government's faulty economic experiments.
    There are regional inequalities in the distribution of employment. The 1988 "Regional Trends" shows that the Yorkshire and Humberside region, part of which I represent, had the highest proportion of people in the United Kingdom who had been unemployed for between one and two years—17–2 per cent. That region had the second highest proportion of people who had been unemployed for between two and three years—9·4 per cent. It had the fifth highest proportion of people who had been unemployed for more than three years—22–7 per cent. Unemployment is still high in the region. It has the second highest level of unemployment generally, with

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    more than 270,000 people still unemployed. To take a smaller area, long-term unemployment in West Yorkshire is 42 per cent.
    When dealing with statistics, how often do we forget the hopelessness of the long-term unemployed? On 4 May 1980, in the News of the World, the Prime Minister was reported as saying:
    "I could not live without work. That is what makes me so sympathetic towards those people who are unemployed. I do not know how they live without working."
    Under this Government many of the long-term unemployed have had to live without work, and it seems that the Prime Minister either has forgotten her sympathy for them or is pretending that they no longer exist.
    We are entitled to ask what future the Government offer to people in my constituency who are living with long-term unemployment, with no hope of employment for their children. When considering the prospects, we need look no further than the CBI quarterly report. Its industrial trends survey points out that, after a period in which manufacturing employment has risen, firms now expect to cut their work forces. No region comes out of that survey worse than my region of Yorkshire and Humberside. Commenting on the report, the Sunday Times said:
    "it suggested that firms are still tending to cut back employment rather than make a determined effort to rein back pay. Indeed, the CBI's own evidence on skill shortages, with more than a fifth of companies regarding them as a constraint on output, suggests that many firms have no option but to meet employees' demands.
    The more fundamental point was that economic behaviour still conforms to the view that there is a trade-off between unemployment and inflation. In addition, if we regard the current-account deficit as in part an outlet for inflationary pressures, there is also a trade-off between the jobless total and the trade gap."
    Mr. Janman: I have no quarrel with the hon. Gentleman's genuine concern about unemployment, and it is true that at the beginning of this decade there was a period of high unemployment. Given that every Labour Government have ended their term of office with higher unemployment levels that when they took office, can the hon. Gentleman tell the House how the return of a Labour Government would improve matters?
    Mr. Battle: I must make it absolutely clear that the levels of unemployment under Labour Governments were a great deal less than those under this Government.
    The paper presented by the Centre for Economic Policy Research, entitled "The Thatcher Miracle", points out that the unemployment-inflation trade-off has not disappeared during the past 10 years but has simply been clouded by the existence of North sea oil. That is the key point. The centre points out that the level of unemployment required to reduce inflation—the non-accelerating inflation rate of unemployment—would have to be well above the current jobless total.
    To achieve a steady rate of inflation of even 4 per cent. to 5 per cent. under current Government policies would require a higher level of unemployment. Higher unemployment levels will be inevitable in regions such as mine as a consequence of the Government's efforts to reduce inflation, yet the Government's response in a written answer was that the Department did not forecast future levels of unemployment. Perhaps they dare not do so; perhaps they are deliberately suppressing economic
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    data. We have the right to challenge the Government on why they will not forecast the levels of unemployment that would be a consequence of their policies.
    What will happen when unemployment rises? It will be much easier for employers to dismiss workers or to make them redundant, because workers' rights have been undermined through legislation to eliminate trade unions, the reduction of wages councils' minimum provisions and the removal of social security entitlements. Even during the past few weeks, the Government have introduced measures to ensure that unemployment will no longer be seen to rise because those who do not accept low paid jobs will be taken out of the social security records. Perhaps, even now, officials at the Departments of Employment and of Social Security are working at their computers trying to find programmes for new ways to conceal the unemployment figures when they begin to rise again. At the very least the Government have a duty to spell out the Labour market implications of their economic policies.
    In a party political broadcast on 4 May 1977, the then Leader of the Opposition—the right hon. Member for Finchley (Mrs. Thatcher)—said:
    "Sometimes I have heard it said that Conservatives have been associated with unemployment. We would have been drummed out of office if we had had this level of unemployment."
    At that time unemployment stood at 1·3 million. Since then, and for every year of this Tory Government's office, the level of unemployment has been higher than 1·7 million. When the Prime Minister was Leader of the Opposition she said that a Government presiding over 1·3 million unemployed should be drummed out of office, so perhaps the time has come for her Government to be drummed out of office. Who, other than the long-term unemployed—the forgotten factor of the economy—have more right to beat that drum loudly and call upon the Prime Minister and the Chancellor not to get their act together? They manifestly cannot get their act together. Together they should go.
    9.3 pm
    Mr. Calum Macdonald: The hon. Member for Thurrock (Mr Janman), who has unfortunately left the Chamber, showed why the Conservative Government have got the economy so badly wrong over the past 10 years. The hon. Gentleman was becoming further and further lost in the clouds of monetarist mysticism with his talks of MO, M4, M25, and so on. The Conservative party used to boast that it was the party of household economics. I should love to hear the hon. Gentleman giving a speech to housewives and to hear what they made of it. The hon. Gentleman's speech was difficult to follow, but I think that the gist was that the Government had it right at the time of the big recession, but that in the past few years they had made a terrible mess of things.
    While I do not wish to go over ground that has already been traversed in the debate, I cannot resist referring to the latest issue of Business magazine, not only for the value of .its leading article but because I recall Conservative Members referring to that magazine a couple of weeks ago, citing the then leading article which was headlined:
    "Born again Britain. How industry is getting it right."

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    I remember well how that magazine was held aloft and waved regularly at Question Time, with Conservative Members proclaiming that industry was once again confident of the British economic miracle.
    The latest issue of Business magazine has a different tone to its leading article. It is not "Born again Britain" but
    "How Britain lost its balance"
    and the first sentence of the article reads:
    "Britain is gripped by a trade crisis."
    There is no better illustration of the collapse in business confidence than the change in tone of Business magazine and its attitude towards the Government's economic policy. The magazine's latest article goes on to say that its analysis suggests
    "that the country might be facing a trade crisis even more deep-seated and fundamental than recent monthly figures indicate."
    In this debate various figures have been given for the different industrial sectors. It is clear that one by one they have all slipped further into deficit. What I find most telling—this has not been mentioned in the debate—is the fact that we have now slipped into deficit in the umbrella trade. I should have thought that if there was one area in which Britain could stay ahead, it was in the manufacture of umbrellas, but we are now importing £28·7 million-worth of umbrellas compared with exports worth £6·4 million. That must surely be a latter-day example of carrying coals to Newcastle.
    When we examine the various regional sectors with which Britain trades, we find the same dismal tale. We are in deficit with all but two of the world's regional trading blocs, the two exceptions being the Arabian countries and North America. Amazingly, we are in deficit with the Socialist bloc. Indeed, we are in deficit with Russia. Even Mr. Gorbachev's perestroika has outstripped our Prime Minister's economic miracle.
    It is important to note that the item so often pointed to in the past—our export surplus on invisibles—is no longer sufficient to keep our heads above water. Even that has decayed over the years. Whereas our surplus in invisibles was running at £8·5 billion in 1986, it slipped last year to £5·9 billion. In all those sectors we see a steady decay in Britain's economic situation, such that Business magazine concludes that the Government have managed to
    "dig the biggest hole in Britain's economic history."
    If that is the view of that magazine, it is little surprise that the financial markets are showing less confidence in the Government's performance. The key to finding our way out of the present difficulty must be to tackle the long-term underlying structural problems that the country faces.
    Conservative Members regularly jump to their feet to ask what we, the Opposition, would do in this situation. It is certainly a difficult task to devise the Houdini trick that will get the Government out of the present mess. I do not believe that this is the right kind of approach. Our approach should not be to find some way of slipping out of a particular conjunction of bad figures in one month. Our approach should be one that is rigorously applied over a number of years and one which will resolve the long-term problems of the British economy.
    The hon. Member for Lancashire, West (Mr. Hind) said—it was about the only point on which I agreed with him—that a solution to the present crisis would take time. It definitely will take time; there are no immediate
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    solutions. The Government, however, have had time enough and they have only got us deeper into our economic mess and have not brought us any nearer to resolving it.
    It was interesting that, when during his speech the Chancellor felt himself to be in a position of weakness, he turned to what he called some area of common ground. He said that he recognised the problems to which we have pointed, such as those in education and in training, but the point is that after 10 years of this Government and four years of the right hon. Gentleman as Chancellor we are no nearer resolving any of those problems.
    My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) cited the very telling example of the level of training in this country as compared with West Germany. In West Germany 70 per cent. of the working population are trained to the equivalent of having at least one 0-level, whereas in this country it is 30 per cent. That is after the Government have been in office for 10 years, so it is no use Conservative Members saying that solutions take time or the Chancellor saying that he recognises the problem—the Government have had 10 years to deal with the problems and nothing has been done.
    Mr. Allen: I must have misunderstood the Chancellor's remarks, because I thought that the common ground that he was seeking was between No. 11 and No. 10 Downing street, as my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) elucidated.
    Mr. Macdonald: I think that the Chancellor has given up on that. That is why he was hoping to strike up a friendship with my right hon. and learned Friend the Member for Monklands, East.
    The policies that the Government have pursued to try to fight their way out of the economic hole that this country is in boil down largely to privatisation, reform of industrial relations and taxation policy. I do not believe that anyone could sensibly argue that privatisation has made an iota of difference to this country's competitive performance. The Conservative party has made much the same mistake that we tended to make at one time, which was to think that a simple operation in nominal ownership would actually introduce some zest and vim into trading performance. It did not happen when we nationalised, and it certainly has not happened after privatisation.
    This summer of strife must take its place among other famous seasons of industrial discontent. That shows how weak, one-sided and inadequate the Government's approach to industrial relations has been. Industrial relations are still characterised by a mediaeval culture of industrial lords and industrial serfs. There is still the primative indignity of separate canteens and toilets in too many factories. All that there has been in the past 10 years is an alteration in the balance of power between management and labour. There is still the old situation of conflict—the subdued warfare that is peculiar to Britain. It is one of our great social shames and a great source of industrial weakness.
    Despite everything that has been said today by Conservative Members, the Government have still failed to reduce taxation. They have, indeed, increased taxation as a proportion of national wealth. Moreover, it is an entirely false goal to consider that the simple totem of reducing taxation will reinvigorate the economy. Sweden

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    has high taxation rates, but it has one of the richest economies in Europe. One should not conclude, however, that if one increases taxation one will have a wealthier society. Nevertheless, the example of Sweden certainly makes people think twice about making a simple equation between reducing taxation and increasing wealth and industrial initiative.
    The Chancellor likes to think of himself as a tax reforming Chancellor. We have also heard a great deal from the Government about how keen they are to improve efficiency in various sectors. They often talk about the National Health Service in this context. I was surprised, therefore, to discover how poorly the efficiency of the Inland Revenue compares with other countries. The collection costs of the Inland Revenue service absorb 2 per cent. of income tax receipts—twice the amount absorbed by the similar service in Sweden, a country often cited as an example of administrative efficiency. It is staggering that our collection costs are four times greater than those in the United States of America which employs the same number of people to handle twice as many taxpayers. The tax reforming revolution is a sham, the industrial miracle is a sham and, day by day, those shams are ever more exposed.
    9.16 pm
    Mr. David Nicholson: This is, after all, an Opposition Supply day, but we have heard little from the right hon. and learned Member from Monklands, East (Mr. Smith) or from the hon. Member for Western Isles (Mr. Macdonald) who spoke of shams, about Opposition policy.
    During the speech of the right hon. and learned Gentleman, I was struck by the appearance of the Leader of the Opposition trying to show his weight and, perhaps, to overshadow his shadow Chancellor. The bicentenary of the French revolution is coming up next month and I was struck by the contrast between the two right hon. Gentlemen—one representing the great voice of Danton and the other the trim figure of Robespierre. Every French pupil and perhaps one or two English pupils know what Robespierre did to Danton and what eventually happened to Robespierre.
    To run an economy and to present an alternative economic policy a degree of comradeship, agreement and fraternity is needed. When I observe the Labour party I am reminded of a remark about the French revolution that my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) is often fond of quoting:
    "Having seen what was done in the name of fraternity, If I had a brother I should call him cousin."
    Mr. William Powell: Will my hon. Friend give way?
    Mr. Nicholson: I am sorry, but I only have two minutes to go.
    Reference has been made to trade deficits and to various business forecasts. It is interesting to refer to the British Chambers of Commerce quarterly economic survey for the first quarter of the year, which was published last month. That showed that, after a slack growth in export orders towards the end of last year, in the first quarter of this year export orders were firmly up. That survey covered 3,000 businesses in 12 regions. I was particularly pleased to notice that in the south-west there was an increase in the export orders. The hon. Member for
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    Leeds, West (Mr. Battle) spoke about regional imbalance, but I was pleased to note that that increase in export orders also occurred in the north-east.
    The survey report also stated:
    "There is now clear evidence that the effect of interest rate rises has now put the trend in home orders growth firmly on a downward path."
    This will encourage my right hon. Friend the Chancellor, who has been looking to high interest rates to cool down home demand. Despite the difficulties which have been caused for many people and businesses, the first quarter survey also shows that business confidence in increased growth in turnover is increasing, as is confidence in profitability growth, and I am pleased to welcome that.
    I receive many letters from retired people in my constituency. Often, they are from solid Conservative voters who are not entirely happy with aspects of Government policy. One thing which they absolutely emphasise, and which concerns them because they lived through the Labour Government of the 1970s, is that the Government must reduce inflation.
    I hope that this debate will show the whole-hearted support for my right hon. Friend the Chancellor which comes from his colleagues in the Conservative party and in the House.
    9.20 pm
    Mr. Bryan Gould: We have had a valuable and interesting debate, of which one of the most interesting features has been the marked change of mood as we discussed today's economy. We have certainly heard some assured and skilled contributions from the Opposition. It has been noteworthy that the Government have had some difficulty in finding enough speakers to keep the debate going. Perhaps that was because those Government Back Benchers who have contributed have exhibited some anxiety about the current state of the economy. There has been some tendency towards admitting mistakes, even a little self-criticism.
    The Chancellor was largely immune to that trend arid was his usual boastful self. However, even the Chancellor was just a little muted. I also noted that his speeches contained no blips. A year or six months ago his speech were full of blips. There were so many blips that his speeches often sounded like the Greenwich time signal, but he now finds it a little more difficult to dismiss some of his handiwork as mere blips.
    He forecast 4 per cent. inflation, then 7 per cent., then 8 per cent. and he was constrained to admit today that it may go beyond 8 per cent. That can hardly be regarded as a blip. He has raised interest rates no fewer than 10 times, to their current level of 14 per cent., and he assures us that he stands ready to raise them yet further. That is hardly a blip. A trade deficit, which he forecast as £4 billion last year, turned out to be £14 billion. He said that it would be £14·5 billion this year, it is already heading for £18 billion and he concedes that it will take some time to deal with it. That can hardly be regarded as a blip. From Conservative Members today we have heard, not a series of blips, but a long cry of pain, which has been echoed by many families in Britain and much of British industry.
    That is not the only change that we have noticed in the Chancellor's presentation of his policy. Barely a year ago the Chancellor was forecasting inflation of 4 per cent. and a balance of payments deficit of £4 billion. He was saying, by implication, that the correct rate against the

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    deutschmark, which he was implicitly shadowing, was 3 deutschmark to the pound. When asked to pronounce on the subject he made it clear that 3 deutschmark 10 pfennigs was unsustainable, and he may be right.
    A year or so later, our inflation rate is twice that of Germany. If a rate of 3 deutschmark 10 pfennigs was unsustainable a year ago it must be doubly unsustainable today. The Chancellor goes to the barricades in defence of an exchange rate against the deutschmark of 3 deutschmark 10 pfennigs. The Chancellor may be prepared to spill his last drop of blood in defence of that new target, but it comes a little hard when he is prepared to spill the blood of others in support of something which he so recently invented.
    Not often do I feel a twinge of sympathy for the Prime Minister, but even the hardest-hearted among us can feel a little sympathy for her if she feels a little bemused by these gyrations on the part of her Chancellor. She herself has changed her stance somewhat. We do not hear too many references these days to her brilliant Chancellor. Her comments are decidedly less flattering. She vouchsafed to the World Service that mistakes had been made, and that the mistake had been to shadow the deutschmark, for which we know exactly who was responsible. It was that mistake which pushed up inflation, so the prime ministerial finger was pointed directly at her Chancellor.
    On 23 May the Prime Minister said in this House that she saw no reason to put up interest rates. Less than 24 hours later she was directly contradicted by the Chancellor —one assumes that she went along with it—who promptly put up interest rates. That was more evidence of the growing divergence between the Prime Minister's view of the economy and what the Chancellor thought was required and desirable—
    Mr. Tim Smith: Will the hon. Gentleman give way?
    Mr. Gould: I want to conclude this little catechism.
    Underlying all this is the Prime Minister's famous nostrum, "One cannot buck the market." As we see the Chancellor wrestling with the foreign exchange markets, urging them to support the pound and pushing up interest rates, we realise that he is trying to do exactly that—buck the market. He is engaged, as the central tenet of his economic policy, in trying to do something which the Prime Minister says cannot be done—and that encapsulates the nub of the problem, which is that the Chancellor and the Prime Minister were fair weather friends. They would stick together while the going seemed good, but as soon as it got tough they set off on different paths.
    We know what path the Chancellor is on. He may sometimes strike a rather undignified posture as he proceeds along it, trying to stand on his head as he moves along, but at least the path is clear. He continually tells us —he said so again today—that he is determined to push up interest rates every time there is bad economic news and every time sterling comes under pressure. There is no shortage of bad economic news; the problem for the Chancellor is that he is so often called to account to make good that threat, promise or boast, whichever it is. The problem is that promising in advance to be tough and to ask others to take the necessary medicine is good tactics and policy as long as the action does not have to be taken.
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    When it has to be taken, and then taken again and again and again and again and again and again and again and again and again, it starts to lose some of its magic. It also starts to lose some of its credibility.
    The markets have called the Chancellor's bluff, and they now demand thick and fast, almost day by day, that he should make good his threat, promise or boast. If he does not, they will conclude, as we shall, that the Chancellor's stated policy is no longer the policy being applied by the Government.
    Having raised interest rates no fewer than 10 times, the Chancellor now faces the following comment from a respected City adviser—not a teenage scribbler, but Roger Bootle of Greenwell Montagu, who said on 5 June:
    "To all intents and purposes the policy of relying solely on short-term interest rates to effect a major turn-round in the United Kingdom economy has failed".
    That is the judgment of the City. The Chancellor persists with his one-club policy, however damaging it may be to personal and family budgets or to British industry. The CBI survey, the most pessimistic in two years, shows that business confidence and export orders are at their lowest ebb for two years.
    Mr. Tim Smith: Will the hon. Gentleman give way?
    Mr. Gould: I shall give way in a moment.
    The Chancellor persists with interests rate hikes even though they have been shown in recent months to be almost totally ineffective in securing his own stated policy objectives. High interest rates have not reduced inflation. So far as we can measure their impact, they have pushed it up. Interest rates are a price, and like other prices will feed through into the RPI as the Chancellor well knows. Why else is he so anxious to get mortgage rates out of the RPI? He persists with interest rate rises even though they have notably failed to reduce demand. Vehicle sales are at their highest ever level and yesterday consumer credit was still soaring ahead. The Chancellor has found that increasing interest rates and pushing up the value of the pound does not reduce demand. It stimulates it because every over-valued pound will buy more cheap imports than it should. He is caught in that cleft stick.
    Mr. Tim Smith: What is the hon. Gentleman's view on the value of the pound? Does he want to see it go up or down or would he prefer to see it stay the same?
    Mr. Gould: I am inclined to say that it is difficult to buck the markets. The Chancellor insists on pushing up interest rates to ridiculous and dizzying levels which do great damage, and one of the consequences is that the pound is held at an over-valued level. As the CBI makes clear, that makes it difficult for British industry to compete. The paradox is that the Chancellor uses interest rates to try to dampen demand, but as fast as demand comes down, the supply side of British industry is damaged. That discourages investment, reduces our competitiveness and makes it more difficult for British industry to meet demand.
    The Chancellor persists with an interest rate of 14 per cent. and threatens us with 15 per cent. I invite him to tell us why it is that, after 10 years of Tory stewardship, with inflation at the highest level in the G7 countries and a record trade deficit, we have to have an interest rate of 14 per cent.—twice as high as the German interest rate. What is the purpose of that? Why is it so essential for us to have the interest rate at such a level? We are entitled to a

    313
    straightforward and simple answer, and the Chancellor has the opportunity to put the answer on the record. I invite him to do so.
    The Chancellor's problem is that, every time he pushes up interest rates, he makes the basic situation inherently more unstable and makes us more and more dependent on hot money. He makes the rate for sterling more and more vulnerable and makes the prospect of a hard landing more and more likely. No wonder the Prime Minister is distancing herself from a Chancellor who seems to have lost control. No wonder her office briefs the weekend press to the effect that the Chancellor is now under threat. Is it surprising that she told the Glasgow Herald that, although he is a good neighbour, she will go no further? When the hard landing that the Prime Minister now expects occurs, she has decided that part of the wreckage that will have to be cleared off the runway is the Chancellor himself.
    The problem is that the evidence is mounting daily that the Chancellor has lost the argument. Since rates went up on 24 May, sterling has continued to be under pressure. Every day that goes by without the Chancellor making good his boast suggests more and more strongly to the markets that the Chancellor is no longer running the show; that other counsels now weigh the Prime Minister. If we continue to see pressure on sterling for the remainder of the month and we do not see the Chancellor raising interest rates, we can all afford to draw the obvious conclusion.
    The Chancellor is in trouble and that may be why today he chose—unwisely some may think—to fight back. First, he ticked off the Prime Minister for her indiscretion on 23 May. Judging by the expression on her face, he did nothing to make his position more secure.
    The Chancellor then decided to conduct a little seminar on the practical deficiencies of monetarism. There was a delicious irony about his dismissal of monetary-based control and over-funding, but what was remarkable about that was that it must have been the first time that any hon. Member present could recall a lesson in economics being delivered by a Chancellor to the Prime Minister in public and on the Floor of the House.
    Then, perhaps most unwisely of all, the Chancellor assented to the proposition that there is no alternative. Those of us who could see the Prime Minister's expression and who also noticed some of the occupants of the Government Front Bench will fear that, in that as well, he may prove to have been mistaken.
    The problem is that all this is too late. The Chancellor has lost the argument because the Prime Minister is now listening to other advice. Sir Alan Walters is telling her that a mistake was made in shadowing the deutschmark, that the price for that mistake has to be paid, that a fall in sterling as a consequence of that mistake cannot be avoided, so it is impossible and futile to try to buck the market by pushing up market rates in order to defer the evil day. I would not embarrass right hon. and hon. Members by naming them, but I see that there are those on the Government Benches who entirely agree with that analysis.
    That is bad news for the economy because it suggests that the Prime Minister, with her new advisers, is now intent on a return to the basic rigours of monetarism. That is bad news because it means that we are about to re-enter the sort of recession that was created in 1980–81, which wiped out fully one fifth of British manufacturing industry.
    314
    But that is even worse news for the Chancellor. It means that the Chancellor's strategy is in tatters and his reputation in shreds, and with very good reason. His legacy is an under-invested, ill-equipped badly trained economy, saddled with an inflation, interest rate and trading deficit burden, which means that we are in no shape to face the fierce competition of the 1990s and the single European market. The only hope for the economy is that we should make a new start, and the European elections on 15 June give us the chance to take the first step towards it.
    9.37 pm
    The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): I had intended to start by saying that we had a wide-ranging, if in some respects rather predictable, debate. It has certainly been predictable, not least the last thirty seconds or so of the speech made by the hon. Member for Dagenham (Mr. Gould), but it has certainly not been wide-ranging enough to give us one second's insight into the policies of Her Majesty's Opposition. That has been the most striking single fact about the whole debate.[Interruption.]
    Mr. Speaker: Order. The Opposition Front Bench spokesman was heard in silence.
    Mr. Newton: In a speech that made a ritual genuflection to the terms of the Opposition motion, which at least purports to have something to do with economic policy, the hon. Member for Dagenham made reference to what I know he is prone to describe as "the real economy", which the motion also mentions—and the neglect of which is one of the themes of that motion. I leave aside the question of what that phrase is supposed to mean, although the more I listen to or re-read the speeches of the hon. Member for Dagenham, the more difficult I find it to discern the distinction that he draws between one aspect of economic activity and another.
    Whatever distinction the hon. Gentleman draws, it is clear that by any measure of output, jobs or investment, the real economy—and I presume that output, jobs and investment are what he means by "the real economy"'—shows no sign of neglect. On the contrary, over the past two years unemployment has fallen. My right hon. Friend the Chancellor remarked how interesting it is that we hear so little from the Opposition about unemployment.
    Mr. Battle: As the Minister did not hear some of the contributions made by my hon. Friends, perhaps he will say why unemployment under the present Government has been higher every single year than it was under any Labour Government.
    Mr. Newton: Over the past two years the rate of unemployment in the United Kingdom has continued to fall faster than in any other major industrialised country. On agreed international definitions the United Kingdom's unemployment rate is about 21/2 percentage points lower than the European Community average. The United Kingdom has a lower unemployment rate than Spain, Italy, France, Belgium, Ireland, Greece and the Netherlands.
    What is more, we have enjoyed much greater success than other European countries in creating jobs. Since March 1983, the number of people in employment increased by nearly 3 million to more than 26½ million,

    315
    which is the highest number of people at work ever in this country. The latest available international comparisons —I know how keen Opposition Members are on international comparisons—show that the increase in the number of people in employment in the United Kingdom between 1983 and 1987 was greater than in the rest of the European Community put together. That is one of the achievements of the real economy.
    Mr. Kevin Barron: Will the Minister give a British comparison and say when unemployment in this country is likely to return to the numerical level of 1979?
    Mr. Newton: Given the speed at which the economy has been growing and the pace at which unemployment is falling, we can certainly look forward to a further reduction. The hon. Gentleman knows very well that it would not be right for me to make a prediction of the kind that he seeks. He knows also that under this Government unemployment has fallen faster than the rate promised by the Opposition at the time of the last general election.
    All United Kingdom regions have shared in the downward trend in unemployment, with the west midlands and Wales experiencing the biggest reductions over the past year. That reflects the fact that, during the 1980s, the United Kingdom has grown faster than all other major countries of the European Community, whereas in the two previous decades it was at the bottom of the growth league. The same holds true for investment. We have heard a great deal from Opposition Members about investment. In the 1980s the growth of total investment in Britain was higher than in any major European country, after being very much lower in the 1960s and 1970s. As my right hon. Friend said, last year alone the growth in business investment was more than 14 per cent. and we expect a further substantial rise this year.
    Mr. Mullin: Yesterday, the Minister's Department supplied me with figures for the level of manufacturing investment in the north-east of England, which includes my constituency. In 1987 they were 53 per cent. of what they were in 1979. Those figures were supplied by the Minister's Department. I drew them to the attention of the Chancellor of the Exchequer but he chose not to address them. Would the Minister care to do so?
    Mr. Newton: Since the period to which those figures relate, there has been a substantial further increase in investment. One has only to go to Newcastle and the north-east to know how much investment is being made there and how the spirit and confidence of industry in the north-east has increased.
    Mr. Pat Wall rose—
    Mr. Newton: I shall not give way for a moment.
    The hon. Member for Dagenham and the right hon. and learned Member for Monklands, East (Mr. Smith) have persistently failed to acknowledge the extent to which we have achieved a substantial increase in investment in the economy and we have changed the pattern of decades in which our consumption consistently rose faster than our investment. In the past seven years we have produced a pattern in which, for the first time in a generation,
    316
    investment has grown twice as fast as consumption. During the 1970s, consumption rose almost five times faster than investment.
    Mr. Wall rose—
    Mr. Newton: In view of the hon. Gentleman's persistence, I shall give way.
    Mr. Wall: The Minister talks about patterns of investment. Investment in manufacturing industry has barely reached the level that it was in 1979. Investment in financial and service industries has doubled in that time, but investment in the infrastructure has halved. Surely anyone can understand that if we do not create wealth and support the infrastructure we shall be unable to support the banking and service side of the economy for any length of time.
    Mr. Newton: I have two points in response to that. First, the shifting pattern between manufacturing industry and other aspects of the economy is part and parcel of the development of all advanced industrial economies. The strength of the financial services and other sectors so despised by Opposition Members is not the least of the achievements of the present Government in the past decade. Secondly, just a few weeks ago we had a debate on manufacturing industry and the hon. Member for Dagenham made a speech in which virtually his entire argument was that manufacturing industry was not stronger than it had been for a considerable time. He said that the level of investment in manufacturing had still not quite reached the level that it was in 1979. I said to him then that that argument was a figleaf which would last very little time. Indeed, within a week, the figures showed that manufacturing investment in Britain was at a record level.
    Mr. Gould: I am glad to welcome the Government's achievement in at last bringing manufacturing investment back to the level that it was in 1979. But the Minister misrepresents my speech. My major point to show the decline in manufacturing industry was the turnround of £19 billion in our trade in manufactured goods. I wonder whether the Chancellor of the Duchy can explain that away.
    Mr. Newton: I was about to deal with the balance of payments position. It is not in dispute between the hon. Member for Dagenham and me—whatever view we take about the right position of manufacturing industry in the economy and what I regard as the rather antique approach of the hon. Gentleman—that manufacturing output has risen steadily and now stands at record levels; that manufacturing productivity has increased at a pace not experienced in the economy for decades; and that manufacturing investment has risen sharply, not least over the past few years.
    The hon. Member for Dagenham ignored the fact that not only the quantum but the quality of investment and what it achieves for productivity and output is important. The increase in productivity of British manufacturing industry bears witness to the greater profitability and higher quality of investment since 1979.
    For British manufacturing industry, the 1970s were a period of overmanning, stagnant productivity, declining profitability and dismal industrial relations. Many companies were not gaining the full benefit from their investment. During the 1980s, the growth of productivity

    317
    in manufacturing has been faster than in any major manufacturing country, and manufacturing productivity has improved 50 per cent. since the beginning of the decade.
    The hon. Member for Dagenham spoke little about what he termed the "real economy". He did not refer to the substantial turnround that has occurred in some of our important industries, not least our important manufacturing industries. I shall take one example to which Labour Members frequently devote attention—the vehicle industry. The production of passenger cars in 1988 was 7 per cent. higher than 1987. More cars were produced in this country last year than since 1977, and that trend is continuing. The same pattern emerges for commercial vehicles, with 318,000 being produced in 1988, which was no fewer than 29 per cent. more than in 1987. The success stories of the individual companies can be seen.
    Mr. Rhodri Morgan rose—
    Mr. Newton: I shall complete this point, which is of some significance, not least in relation to the questions that the hon. Member for Dagenham asked.
    Just under 1·25 million motor cars were produced last year, compared with just over 1 million in 1979.
    Mr. Gould: What about the trade balance?
    Mr. Newton: I shall come to that in a moment.
    In 1974, 1·5 million cars were produced. During the period of the last Labour Government, the production of cars fell by about 300,000 or 500,000, but it has recovered by about 200,000 since the Government took office.
    I shall tell the hon. Member for Dagenham what happened to the import penetration of motor cars. In 1988, it was almost the same as in 1979, but between 1974 and 1979 it doubled from 27·9 per cent. to 56 per cent. That is when the worsening of trade in that crucial sector occurred, and it is clear from what is happening to production and investment, not least inward investment, in the British motor car industry that we are now beginning to recover from that disastrous position that the last Labout Government created.
    Mr. Morgan: The Minister keeps reeling off trade deficit-defying, wondrous success stories. He leaves us with a question. If our batting averages are so good, how come we are losing all the test matches?
    Mr. Newton: The point is almost exactly illustrated by what I have just shown in respect of motor cars. During the 1970s and to a substantial extent the 1960s as well, the policies, in so far as there were any, advocated by Opposition Members led to poor industrial relations, low increases in productivity and low increases in investment. Not least, credit controls such as the Labour party now advocates had a serious effect on many consumer goods industries. One industry after another began to sink in the same way as the motor car industry sank, as was shown clearly by the figures that I have given.
    Of course, it has taken time to make inroads into the problems and to turn things round, but it can be seen clearly not only in the motor car industry but in other industries that productivity and output have been rising and that there is more investment. The scope for an improvement in performance that we all want to see has increased steadily.
    318
    The hon. Member for Clydebank and Milngavie (Mr. Worthington) spoke of the loss of the television industry. In the light of the point that the hon. Gentleman made, it is worth noting that in the first quarter of 1989 we had a trade surplus in colour television sets and video tape recorders. That reflects in part the contribution being made by inward investment which shows that people around the world do not accept the analyses of Her Majesty's Opposition of the British economy, and that they are voting with their feet by coming to do business with us in the construction of factories.
    The fundamental strengths of the economy are clear from the record to which I have referred, with its sustained growth, its falling unemployment, its surge in investment in manufacturing and throughout the economy, and the extent to which people from other parts of the world are voting with their feet by doing business here. That strengthening results from the policies that the Government have pursued.
    The debate has been remarkable for its confirmation that the Opposition have no serious policy. The right hon. and learned Member for Monklands, East told us that he would be coming to his policy and to what he would do about inflation. He never did; he could not because he does not know. In that he has at least achieved unity with his leader. We have already heard about the celebrated interview with James Naughtie. I am in the unhappy position of not being able to quote most of it because, even if it were printable in the Evening Standard, it would not be quotable in the House within the terms of order. I can quote the reporter's magnificent description of what happened:
    "The disagreement began after Mr. Naughtie, a respected and experienced journalist, asked Mr. Kinnock what would be his plans on bringing down interest rates. A long silence followed".
    The approach of the Leader of the Opposition is not just that he has not got a policy, but that it is not even fair to expect him to have one. His excuse is that he would not be starting from here. Of course he would not be. We know where he would have started. He would have started where the last Labour Government left off, with inflation higher, with investment lower, with growth slower and with the country's industrial relations in a shambles. Neither the House nor the country has any intention of going back down that road with him.
    Mr. Derek Foster rose in his place and claimed to move, That the Question be now put.
    Question, That the Question be now put, put and agreed to.
    Question accordingly put, That the original words stand part of the Question:—
    The House divided: Ayes 184, Noes 315

    Division No. 231]

    [10 pm

    AYES

    Adams, Allen (Paisley N)

    Beckett, Margaret

    Allen, Graham

    Beith, A. J.

    Alton, David

    Bell, Stuart

    Anderson, Donald

    Bermingham, Gerald

    Archer, Rt Hon Peter

    Bidwell, Sydney

    Armstrong, Hilary

    Blair, Tony

    Ashley, Rt Hon Jack

    Blunkett, David

    Ashton, Joe

    Boyes, Roland

    Barnes, Harry (Derbyshire NE)

    Bradley, Keith

    Barnes, Mrs Rosie (Greenwich)

    Bray, Dr Jeremy

    Barron, Kevin

    Brown, Gordon (D'mline E)

    Battle, John

    Brown, Nicholas (Newcastle E)

    319

    Bruce, Malcolm (Gordon)

    Leighton, Ron

    Buckley, George J.

    Lestor, Joan (Eccles)

    Caborn, Richard

    Lewis, Terry

    Callaghan, Jim

    Livingstone, Ken

    Campbell, Menzies (Fife NE)

    Lloyd, Tony (Stretford)

    Campbell, Ron (Blyth Valley)

    Lofthouse, Geoffrey

    Campbell-Savours, D. N.

    Loyden, Eddie

    Canavan, Dennis

    Macdonald, Calum A.

    Cartwright, John

    McFall, John

    Clark, Dr David (S Shields)

    McLeish, Henry

    Clarke, Tom (Monklands W)

    Madden, Max

    Clay, Bob

    Mahon, Mrs Alice

    Clelland, David

    Mallon, Seamus

    Clwyd, Mrs Ann

    Marek, Dr John

    Cohen, Harry

    Marshall, Jim (Leicester S)

    Cook, Frank (Stockton N)

    Martlew, Eric

    Cook, Robin (Livingston)

    Meacher, Michael

    Corbett, Robin

    Meale, Alan

    Corbyn, Jeremy

    Michael, Alun

    Cousins, Jim

    Michie, Bill (Sheffield Heeley)

    Crowther, Stan

    Michie, Mrs Ray (Arg'l &Bute)

    Cryer, Bob

    Mitchell, Austin (G't Grimsby)

    Cunliffe, Lawrence

    Moonie, Dr Lewis

    Cunningham, Dr John

    Morgan, Rhodri

    Dalyell, Tam

    Morley, Elliott

    Darling, Alistair

    Morris, Rt Hon A. (W'shawe)

    Davies, Rt Hon Denzil (Llanelli)

    Morris, Rt Hon J. (Aberavon)

    Davies, Ron (Caerphilly)

    Mowlam, Marjorie

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

    Mullin, Chris

    Dixon, Don

    Murphy, Paul

    Dobson, Frank

    Nellist, Dave

    Douglas, Dick

    Oakes, Rt Hon Gordon

    Duffy, A. E. P.

    O'Brien, William

    Dunwoody, Hon Mrs Gwyneth

    O'Neill, Martin

    Eastham, Ken

    Orme, Rt Hon Stanley

    Evans, John (St Helens N)

    Pike, Peter L.

    Ewing, Mrs Margaret (Moray)

    Powell, Ray (Ogmore)

    Fatchett, Derek

    Prescott, John

    Fearn, Ronald

    Quin, Ms Joyce

    Field, Frank (Birkenhead)

    Radice, Giles

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

    Randall, Stuart

    Flannery, Martin

    Redmond, Martin

    Flynn, Paul

    Rees, Rt Hon Merlyn

    Foster, Derek

    Richardson, Jo

    Foulkes, George

    Robertson, George

    Fraser, John

    Robinson, Geoffrey

    Garrett, John (Norwich South)

    Rogers, Allan

    George, Bruce

    Rooker, Jeff

    Gilbert, Rt Hon Dr John

    Ross, Ernie (Dundee W)

    Godman, Dr Norman A.

    Rowlands, Ted

    Gould, Bryan

    Salmond, Alex

    Grant, Bernie (Tottenham)

    Sedgemore, Brian

    Griffiths, Nigel (Edinburgh S)

    Sheerman, Barry

    Griffiths, Win (Bridgend)

    Sheldon, Rt Hon Robert

    Grocott, Bruce

    Short, Clare

    Harman, Ms Harriet

    Skinner, Dennis

    Hattersley, Rt Hon Roy

    Smith, Andrew (Oxford E)

    Haynes, Frank

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

    Henderson, Doug

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

    Hinchliffe, David

    Snape, Peter

    Hogg, N. (C'nauld & Kilsyth)

    Soley, Clive

    Howarth, George (Knowsley N)

    Spearing, Nigel

    Howell, Rt Hon D. (S'heath)

    Steinberg, Gerry

    Howells, Geraint

    Strang, Gavin

    Howells, Dr. Kim (Pontypridd)

    Straw, Jack

    Hoyle, Doug

    Turner, Dennis

    Hughes, John (Coventry NE)

    Vaz, Keith

    Hughes, Robert (Aberdeen N)

    Wall, Pat

    Hughes, Roy (Newport E)

    Wallace, James

    Illsley, Eric

    Walley, Joan

    Ingram, Adam

    Wardell, Gareth (Gower)

    Janner, Greville

    Wareing, Robert N.

    Jones, Barry (Alyn & Deeside)

    Welsh, Andrew (Angus E)

    Jones, leuan (Ynys Môn)

    Welsh, Michael (Doncaster N)

    Jones, Martyn (Clwyd S W)

    Williams, Rt Hon Alan

    Kennedy, Charles

    Williams, Alan W. (Carm'then)

    Kinnock, Rt Hon Neil

    Wilson, Brian

    Lamond, James

    Winnick, David

    Leadbitter, Ted

    Wise, Mrs Audrey

    320

    Worthington, Tony

    Tellers for the Ayes:

    Young, David (Bolton SE)

    Mr. Allen McKay and

    Mrs. Llin Golding.

    NOES

    Adley, Robert

    Devlin, Tim

    Alexander, Richard

    Dicks, Terry

    Alison, Rt Hon Michael

    Dorrell, Stephen

    Amery, Rt Hon Julian

    Dover, Den

    Amos, Alan

    Dunn, Bob

    Arbuthnot, James

    Dykes, Hugh

    Arnold, Jacques (Gravesham)

    Eggar, Tim

    Arnold, Tom (Hazel Grove)

    Emery, Sir Peter

    Ashby, David

    Evans, David (Welwyn Hatf'd)

    Aspinwall, Jack

    Evennett, David

    Atkins, Robert

    Fairbairn, Sir Nicholas

    Baker, Rt Hon K. (Mole Valley)

    Fallon, Michael

    Baker, Nicholas (Dorset N)

    Favell, Tony

    Baldry, Tony

    Field, Barry (Isle of Wight)

    Banks, Robert (Harrogate)

    Fishburn, John Dudley

    Batiste, Spencer

    Fookes, Dame Janet

    Beaumont-Dark, Anthony

    Forman, Nigel

    Bellingham, Henry

    Forsyth, Michael (Stirling)

    Bendall, Vivian

    Forth, Eric

    Bennett, Nicholas (Pembroke)

    Fowler, Rt Hon Norman

    Benyon, W.

    Fox, Sir Marcus

    Bevan, David Gilroy

    Franks, Cecil

    Biffen, Rt Hon John

    Freeman, Roger

    Blackburn, Dr John G.

    French, Douglas

    Blaker, Rt Hon Sir Peter

    Fry, Peter

    Bonsor, Sir Nicholas

    Gale, Roger

    Boscawen, Hon Robert

    Gardiner, George

    Boswell, Tim

    Gill, Christopher

    Bottomley, Peter

    Gilmour, Rt Hon Sir Ian

    Bottom ley, Mrs Virginia

    Glyn, Dr Alan

    Bowden, Gerald (Dulwich)

    Goodhart, Sir Philip

    Bowis, John

    Goodlad, Alastair

    Boyson, Rt Hon Dr Sir Rhodes

    Goodson-Wickes, Dr Charles

    Braine, Rt Hon Sir Bernard

    Gorst, John

    Brandon-Bravo, Martin

    Gow, Ian

    Brazier, Julian

    Grant, Sir Anthony (CambsSW)

    Bright, Graham

    Greenway, Harry (Ealing N)

    Brooke, Rt Hon Peter

    Greenway, John (Ryedale)

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

    Gregory, Conal

    Bruce, Ian (Dorset South)

    Griffiths, Sir Eldon (Bury St E')

    Buchanan-Smith, Rt Hon Alick

    Griffiths, Peter (Portsmouth N)

    Buck, Sir Antony

    Grist, Ian

    Budgen, Nicholas

    Ground, Patrick

    Burns, Simon

    Gummer, Rt Hon John Selwyn

    Burt, Alistair

    Hague, William

    Butcher, John

    Hamilton, Hon Archie (Epsom)

    Butler, Chris

    Hamilton, Neil (Tatton)

    Butterfill, John

    Hampson, Dr Keith

    Carlisle, John, (Luton N)

    Hanley, Jeremy

    Carlisle, Kenneth (Lincoln)

    Hannam, John

    Carrington, Matthew

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

    Carttiss, Michael

    Hargreaves, Ken (Hyndburn)

    Cash, William

    Harris, David

    Channon, Rt Hon Paul

    Haselhurst, Alan

    Chapman, Sydney

    Hawkins, Christopher

    Chope, Christopher

    Hayward, Robert

    Churchill, Mr

    Heathcoat-Amory, David

    Clark, Hon Alan (Plym'th S'n)

    Heddle, John

    Clark, Dr Michael (Rochford)

    Hicks, Mrs Maureen (Wolv' NE)

    Clark, Sir W. (Croydon S)

    Hicks, Robert (Cornwall SE)

    Clarke, Rt Hon K. (Rushcliffe)

    Higgins, Rt Hon Terence L.

    Colvin, Michael

    Hind, Kenneth

    Conway, Derek

    Hogg, Hon Douglas (Gr'th'm)

    Coombs, Anthony (Wyre F'rest)

    Hordern, Sir Peter

    Coombs, Simon (Swindon)

    Howard, Michael

    Cope, Rt Hon John

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

    Cormack, Patrick

    Howarth, G. (Cannock & B'wd)

    Couchman, James

    Howell, Rt Hon David (G'dford)

    Cran, James

    Howell, Ralph (North Norfolk)

    Critchley, Julian

    Hughes, Robert G. (Harrow W)

    Currie, Mrs Edwina

    Hunt, David (Wirral W)

    Curry, David

    Irvine, Michael

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

    Irving, Charles

    Davis, David (Boothferry)

    Jack, Michael

    Day, Stephen

    Jackson, Robert

    321

    Janman, Tim

    Miscampbell, Norman

    Johnson Smith, Sir Geoffrey

    Mitchell, Andrew (Gedling)

    Jones, Gwilym (Cardiff N)

    Mitchell, Sir David

    Jopling, Rt Hon Michael

    Moate, Roger

    Kellett-Bowman, Dame Elaine

    Monro, Sir Hector

    Key, Robert

    Montgomery, Sir Fergus

    Kilfedder, James

    Moore, Rt Hon John

    King, Roger (B'ham N'thfield)

    Morris, M (N'hampton S)

    Kirkhope, Timothy

    Morrison, Sir Charles

    Knapman, Roger

    Moss, Malcolm

    Knight, Greg (Derby North)

    Moynihan, Hon Colin

    Knight, Dame Jill (Edgbaston)

    Mudd, David

    Knowles, Michael

    Neale, Gerrard

    Knox, David

    Newton, Rt Hon Tony

    Lamont, Rt Hon Norman

    Nicholls, Patrick

    Lang, Ian

    Nicholson, David (Taunton)

    Latham, Michael

    Nicholson, Emma (Devon West)

    Lawrence, Ivan

    Norris, Steve

    Lawson, Rt Hon Nigel

    Onslow, Rt Hon Cranley

    Lee, John (Pendle)

    Oppenheim, Phillip

    Lennox-Boyd, Hon Mark

    Page, Richard

    Lightbown, David

    Paice, James

    Lilley, Peter

    Parkinson, Rt Hon Cecil

    Lloyd, Sir Ian (Havant)

    Patnick, Irvine

    Lloyd, Peter (Fareham)

    Patten, Chris (Bath)

    Luce, Rt Hon Richard

    Patten, John (Oxford W)

    Lyell, Sir Nicholas

    Pattie, Rt Hon Sir Geoffrey

    McCrindle, Robert

    Pawsey, James

    Macfarlane, Sir Neil

    Peacock, Mrs Elizabeth

    MacGregor, Rt Hon John

    Porter, Barry (Wirral S)

    MacKay, Andrew (E Berkshire)

    Portillo, Michael

    Maclean, David

    Powell, William (Corby)

    McLoughlin, Patrick

    Price, Sir David

    McNair-Wilson, Sir Michael

    Raffan, Keith

    McNair-Wilson, P. (New Forest)

    Raison, Rt Hon Timothy

    Madel, David

    Redwood, John

    Major, Rt Hon John

    Renton, Tim

    Malins, Humfrey

    Rhodes James, Robert

    Maples, John

    Riddick, Graham

    Marlow, Tony

    Ridley, Rt Hon Nicholas

    Marshall, John (Hendon S)

    Ridsdale, Sir Julian

    Marshall, Michael (Arundel)

    Roberts, Wyn (Conwy)

    Martin, David (Portsmouth S)

    Roe, Mrs Marion

    Mates, Michael

    Rost, Peter

    Maude, Hon Francis

    Rumbold, Mrs Angela

    Mawhinney, Dr Brian

    Sackville, Hon Tom

    Maxwell-Hyslop, Robin

    Sainsbury, Hon Tim

    Mayhew, Rt Hon Sir Patrick

    Sayeed, Jonathan

    Mellor, David

    Scott, Nicholas

    Meyer, Sir Anthony

    Shaw, David (Dover)

    Miller, Sir Hal

    Shaw, Sir Giles (Pudsey)

    Mills, Iain

    Shaw, Sir Michael (Scarb')

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    Shephard, Mrs G. (Norfolk SW)

    Tracey, Richard

    Shepherd, Colin (Hereford)

    Tredinnick, David

    Shepherd, Richard (Aldridge)

    Trippier, David

    Shersby, Michael

    Trotter, Neville

    Sims, Roger

    Twinn, Dr Ian

    Skeet, Sir Trevor

    Vaughan, Sir Gerard

    Smith, Tim (Beaconsfield)

    Viggers, Peter

    Soames, Hon Nicholas

    Waddington, Rt Hon David

    Speller, Tony

    Wakeham, Rt Hon John

    Spicer, Sir Jim (Dorset W)

    Walker, Bill (T'side North)

    Spicer, Michael (S Worcs)

    Walker, Rt Hon P. (W'cester)

    Stanbrook, Ivor

    Waller, Gary

    Stanley, Rt Hon Sir John

    Walters, Sir Dennis

    Steen, Anthony

    Ward, John

    Stern, Michael

    Wardle, Charles (Bexhill)

    Stevens, Lewis

    Watts, John

    Stewart, Andy (Sherwood)

    Wells, Bowen

    Stewart, Rt Hon Ian (Herts N)

    Wheeler, John

    Stradling Thomas, Sir John

    Widdecombe, Ann

    Sumberg, David

    Wiggin, Jerry

    Summerson, Hugo

    Wilshire, David

    Tapsell, Sir Peter

    Winterton, Mrs Ann

    Taylor, Ian (Esher)

    Winterton, Nicholas

    Tebbit, Rt Hon Norman

    Wolfson, Mark

    Temple-Morris, Peter

    Wood, Timothy

    Thatcher, Rt Hon Margaret

    Woodcock, Dr. Mike

    Thompson, D. (Calder Valley)

    Yeo, Tim

    Thompson, Patrick (Norwich N)

    Young, Sir George (Acton)

    Thorne, Neil

    Thornton, Malcolm

    Tellers for the Noes:

    Thurnham, Peter

    Mr. Tristan Garel-Jones and

    Townend, John (Bridlington)

    Mr. Tony Durant.

    Townsend, Cyril D. (B'heath)

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
    MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House congratulates Her Majesty's Government on its economic policies which have led to output, investment, and manufacturing productivity growing faster than in any other major European Community country in the 1980s; applauds the Government's firm anti-inflationary stance, and the action it has taken to exert further downward pressure on inflation; and commends the Government's supply side policies which have brought industry's profitability to a 20 year high, led to record rates of new business growth, and seen the creation of nearly three million new jobs since 1983.

Offenders
10.15 pm
The Minister of State, Northern Ireland Office (Mr. Ian Stewart): I beg to move,
That the draft Treatment of Offenders (Northern Ireland) Order 1989, which was laid before this House on 9th May, be approved.
This is the first of two orders before the House tonight. With the agreement of the House, it will be convenient to discuss also the second motion:
That the draft Community Service Orders (Northern Ireland Consequential Amendments) Order 1989, which was laid before this House on 9th May, be approved.
That order is purely consequential on the first. I appreciate that it will have to be moved separately.
The first draft order comprises a package of measures which primarily concern the powers of the courts to deal with offenders and which, I am glad to say, have been generally welcomed. While some relate chiefly to juveniles, there are others which have implications for adults. A number of the changes are designed to bring the law in Northern Ireland into line with that of England and Wales. Experience of the operation of existing law in the Province has led to other changes which I shall describe.
In the case of the measures concerning juvenile justice, I remind the House that these arise from the report of the children and young persons review group published in 1979 which came to be known as the Black report, after its chairman. These measures introduce a number of new non-custodial options which should lead to a decrease in the number of juveniles in custody.
Article 3 will extend the powers of the courts to attach what are commonly known as "fourth conditions" to probation orders so as to provide greater flexibility in their use. The changes to the Probation Act (Northern Ireland) 1950 are similar to those provided for England and Wales by the Criminal Justice Act 1982 and will enable the court to make it a condition of a probation order that the offender attends an activity centre or a day centre for a maximum of 60 days.
Article 4 provides that, where a juvenile is jointly charged with an adult, he or she may be referred to the juvenile court for both trial and sentence if the adult defendant pleads guilty and the juvenile pleads not guilty. Under existing law, a juvenile charged jointly with an adult must be tried in an adult court and may be referred to the juvenile court only for sentence. I am sure hon. Members will agree that it is more desirable that juveniles should attend a court which is constituted to meet their needs.
Article 5 provides for the extended use of attendance centre orders, which can often be a useful alternative to custody. In Northern Ireland, these orders may be imposed only on persons under 17 years of age, and indeed the latest available figures indicate that about 70 per cent. of attendance centre orders are imposed on persons aged 15 or under. In view of the young age of the majority of persons who are ordered to attend an attendance centre, it is proposed to place a responsibility on the parents to produce their children at the centre at the specified time. This is important, because failure by the child to attend the centre could lead to a more serious disposal.
Articles 6 and 7 deal with custodial sentences. In Northern Ireland, young persons under 17 may be sent to a training school where the child or young person is found guilty of an offence, which, in the case of an adult, is
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punishable by imprisonment. Under present law, a training school order gives authority to detain the child or young person for a period of up to three years. However, he or she may be released on licence at any time after committal, except that if this is proposed within 12 months of committal, the consent of the Secretary of State is required. Article 6 of the order will reduce the maximum period of detention from three to two years. It will also reduce the period within which the consent of the Secretary of State is required from 12 months to six months. These changes should help to reassure those who expressed concern about the length of time that young persons might have to spend in custody.
Article 7 will increase the maximum period of detention in a young offenders centre from three years to four years. This is not intended to increase the length of the term of detention in individual cases. Instead, it will mean that a number of young offenders who are given a term of detention of between three and four years will be eligible for admission to a young offenders centre rather than to prison, a facility much better suited to their needs.
Articles 8 and 9 deal with the abolition of the common law power of the courts to record sentences and its replacement by an enhanced power to suspend sentences. Recorded sentences, which are peculiar to Northern Ireland and the Republic of Ireland, are similar to suspended sentences, in that sentence can be deferred while the convicted person enters into an obligation to be of good behaviour during a specified period.
However, in the case of the recorded sentence, there is no limit on either the sentence or the period during which the person may be bound over. In addition, it lacks the flexibility of a suspended sentence as it must be reactivated in full if the person reoffends within the operational period. Because of that inflexibility, injustices can arise if, for example, there is a subsequent conviction for a trivial and quite unrelated offence which automatically reactivates the recorded sentence. We therefore consider that the power to suspend sentences is more satisfactory and that the new provisions will achieve this.
I referred earlier to the provisions of articles 3 and 5, which aim to provide alternatives to custodial sentences. The aim of article 10 is similar. That will reduce the age for community service from 17 to 16 and, again, that corresponds to a change introduced for England and Wales by the Criminal Justice Act 1982. Because the age for community service in Northern Ireland at that time was 17, the 1982 Act imposed a restriction on courts elsewhere in the United Kingdom to ensure that a community service order was not imposed on a person under 17 who intended to reside in Northern Ireland. As the effect of the treatment of offenders order will be to make 16 the age for community service throughout the United Kingdom, that restriction is no longer necessary and is removed by the Community Service Orders (Northern Ireland Consequential Amendments) Order.
I return now to the treatment of offenders order. Article 11 will amend the powers of the courts to defer sentence and provides that the period of deferment will run from the date on which it is announced rather than, as at present, from the date of conviction. That change will ensure that the defendant will obtain the benefit of a full six months period to enable him or her to demonstrate to the court, either by making reparation for the offence or by a change in circumstances—for example, by finding a job or getting

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married—that he or she has both the desire and the ability to stay out of trouble. Again, that mirrors present law in England and Wales.
Article 12 will increase the maximum penalty for a number of offences to bring them into line with similar penalties that are available in England and Wales. The maximum penalty for indecent assault on a female will be increased from two to 10 years, and the maximum term of imprisonment for attempted rape or assault with intent to commit rape is to be increased from seven years to life imprisonment. The maximum penalty for child cruelty, which was increased recently for England and Wales by the Criminal Justice Act 1988, is to be increased from two years to 10 years. Although I am glad to say that the evidence does not suggest that such crimes are widespread in Northern Ireland, the House rightly regards them as very serious offences for which substantial terms of imprisonment may often be appropriate.
Finally, article 13 will, for the first time, enable a number of young offenders who are remanded in custody to be held at the young offenders centre. Under present arrangements, all male persons over 17 who are remanded in custody are held in Her Majesty's prison, Belfast. As some spare capacity exists in the young offenders centre, it is sensible and much more suited to their needs to allow a number of young persons to be held there while on remand.
Taken as a whole, this package of proposals should provide the criminal courts in Northern Ireland with useful additions to their powers to determine the most satisfactory disposal for both young and adult offenders and offer greater scope for the use of alternatives to custody.
I commend the order to the House.
10.23 pm
Ms. Marjorie Mowlam: We welcome this opportunity to consider young offenders in Northern Ireland. Sadly, such offenders are not focused upon often, as we spend so much of our time discussing the sentencing and treatment of terrorists.
There are few surprises in the orders, but we consider that they are a further example of the Government's piecemeal approach to young offenders. There is no clear overall strategy and no coherent plan to deal with young offenders in Northern Ireland. We had hoped that the Government would use the orders as a means to introduce such coherence, but, instead, we have been presented with the piecemeal approach tonight.
We would like to see provisions that were more rational and relevant and that would strike a balance between punishment, reform and rehabilitation. The Government have not offered us that recipe tonight.
The orders try to tackle the problems of young offenders in Northern Ireland. We had hoped that a clearer, twin-track approach would have been adopted by the Minister. We would have liked the provisions to deal in a sensitive and constructive manner with offenders and, at the same time, give more emphasis to preventing those crimes from taking place. If we attempt to take preventive action it is necessary to study the crimes that are common among young people, including theft, burglary, vandalism or the particular problem that has developed in Belfast, of which I am sure the Minister is aware—joy-riding. That has grown in popularity in recent months. We must
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understand the rationale behind such crimes if we are to prevent them and we must understand why young people commit them.
We would like to think that, among other things, the Government would address the problems of frustration, boredom, despair bred from unemployment, lack of decent housing and lack of money. The preventive framework set down by the Government is not impressive.
In Northern Ireland, unemployment among young people is above 16 per cent. The Minister should also consider the implications of the 1987 decision to take away the funding for the education service, which is targeted directly on young offenders. That service represented preventive action against crime and the Minister should have left it intact. Another important consideration is the fact that benefit has been taken away from 16 and 17-year-olds. That age group now has no link with the society. If they are not in full-time education or not in a job they have no reason to connect with society. The Minister should consider the implications of that decision carefully when studying preventive action against crimes committed by young offenders.
The preventive work that has taken place has occurred not because of the Government, but despite them. I am sure that other hon. Members would like to give credit to the voluntary sector in Northern Ireland, which has done so much work with young offenders. We are not merely thinking of the Northern Ireland Association for the Care and Resettlement of Offenders—NIACRO—and its employment initiatives, particularly the after schools.
It would be useful if the Minister clarified some of the implications of the orders as they do little to help to deal with young offenders. It is clear that a court will be able to stipulate, as part of a probation order, that an offender attend certain places or activities. It would be useful to know whether the Minister has had any planning or funding discussions with the voluntary sector about that provision. I am sure he is aware that day centres in Northern Ireland, unlike those in England and Wales, are not funded by local authorities but lie within the voluntary sector. There is a greater need for communication and planning in Northern Ireland than there is in England and Wales.
It would also be useful if the Minister were to give us more details about the community service orders. In his introduction he stated that they are an "alternative to custody," but I am sure that he is aware, as are other hon. Members, that they often become an alternative to non-custodial options.
It would be useful to know what discussions the Minister has had, particularly with probation officers, about the compulsory nature of the orders. We appreciate the rationale for the compulsion, but I am sure that if the Minister has talked to probation officers about this he will have found that problems arise when compulsion is built into a relationship between a young offender and a probation officer, because developing that relationship is largely based on trust. I have talked to many probation officers across the water and in England and Wales, and the compulsory element of the legislation, as it matches up to legislation this side of the water, worries them.
We would appreciate the Minister's comments on attendance centre orders, which the Opposition greatly welcome. The creation and use of attendance centre orders will be useful. However, we are greatly concerned that only one centre is open in Belfast. Under the Children and

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Young Persons (Northern Ireland) Act 1968, as I understand it, a young offender can attend one of the centres only if he or she lives within 10 miles of it. Therefore, although they will be useful, their use will be limited to certain groups within the Province. What plans, if any, has the Minister for further development of attendance centre orders?
Two parts of the provisions particularly disappoint me, and the first concerns the training school orders. The Opposition are keen for them to be done away with, because the money and staffing could be used for community projects which, in the long run, would be much more useful for young people. Much of the informed opinion in the Province acknowledges that the training schools have failed to work for many young offenders.
We would be grateful if the Minister would comment on the increase in the maximum terms that he outlined when referring to article 7. It represents a classic example of the Government's belief that, by definition, stiffer penalties result in success. There is very little evidence to prove that long sentences reduce the likelihood of sex attackers reoffending. It would be useful if the Minister could bring some to the House tonight. The assumption that a more punitive measure will produce success needs substantiation. It seems to be the ideology, or prejudice, behind much of the Government's thinking on young offenders.
The orders have offered the Government an opportunity to make a radical overhaul of the young offender system in Northern Ireland. Sadly, they have not taken that option, but have produced piecemeal provisions, lacking in coherence and clear planning. We hoped that they would take the chance to outline much more clearly the preventive action that they would like to take to reduce the number of young people sentenced to custody and, most importantly, to encourage and develop new, innovative methods for dealing with offenders. Sadly, the Government have missed the opportunity to develop such initiatives, and have merely introduced the orders which reveal the same stubborn, misguided beliefs of previous legislation and the belief that punitive sentencing deters crime.
That is the basis of the policy which we have seen fail in Northern Ireland since the Black report. Tonight, we hoped that the Government would have listened more carefully to the united advice of informed opinion in the Province that would have asked for a much more radical cutting edge to the legislation which has been introduced this evening.
10.34 pm
Mr. James Kilfedder: I welcome the opportunity to follow the hon. Member for Redcar (Ms. Mowlam), whose thoughtful and caring speech is to be commended. I hope to be able to refer to some of her points later in the short time available.
It is a sad comment on our times in Northern Ireland that Northern Ireland business comes on so late in the evening. We were fortunate that it started just before 10.30 pm today, but it has been much later on other occasions.
I want to refer to two parts of the legislation'. First, I welcome the increase in the penalty for indecent assaults on females, bringing Northern Ireland into line with
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England and Wales, where the maximum penalty is now 10 years. Making life imprisonment the maximum penalty for attempted rape or assault with intent to commit rape is belated recognition of the increasing number of such attacks, not only in Northern Ireland but throughout the United Kingdom. I hope that the courts will use their new sentencing powers in Northern Ireland to protect women, who often feel so vulnerable. The media recount many such assaults, often committed in frightening circumstances.
I also welcome the increase from two to 10 years in the maximum penalty for cruelty to children. Sad to say, we live in an age in which children can be treated with appalling cruelty by sadistic or uncaring parents, and every effort must be made to curb such ill treatment.
It is impossible in this limited time to debate the order in its entirety. As the hon. Member for Redcar said, this is a rare opportunity to debate the needs of children and young offenders, and it is sad that our time is so limited. I shall therefore restrict myself to some observations on the treatment of young offenders.
I must concur with NIACRO, which criticised the order. The hon. Member for Redcar followed that body in saying that this is another example of the piecemeal approach adopted by the Northern Ireland Office. There is no comprehensive policy for children and young persons in Northern Ireland, nor any overall plan or coherent strategy. NIACRO referred to the Black report and alternatives to custody. I cannot go into the recommendations of that report now. Suffice it to say that there is tremendous anxiety in Northern Ireland about the amount of juvenile crime. It is often prompted by drink or drug abuse, a disturbed family background or inadequate discipline, although I hasten to add that those are not the only reasons for delinquency.
The primary responsibility for the care and control of children and young persons must lie with the parents, but they should not stand alone. Standards must be established for the youth of today, as in years gone by, and the school and church have a central role to play in providing the child or young person with guidelines as well as discipline and support.
In this age of unemployment, to which the hon. Lady also referred, and of drink and drugs, the insidious undermining of society by television programmes, and the craving for money to feed into slot machines and to purchase items with which to keep up with someone else's lifestyle in the pop world, it is not surprising that delinquency is on the increase. That is why Northern Ireland needs good schools, with classes of reasonable size and proper discipline.
We also need an adequate police force. After all, the police are the representatives of law and order and should command respect. Police officers need to be seen walking about our housing estates and the streets of our towns.
The police must have the support of the public. It is no use if, when the police call at the home of a young person about his misconduct, the parents automatically side with their son.
More needs to be spent on facilities for young people, so that they have every chance to make good use of their leisure time. It is a shame that in parts of North Down proper facilities are not available. One such area is Holywood, but it is not unique. Many areas in the Province lack proper facilities for young people. The Government should set up an inquiry to find out which

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areas suffer from such deprivation and then ensure that the local authority in conjunction with Stormont makes money available. More also needs to be spent on the probation service.
All those things require expenditure, but I think I am taking up the theme put forward by the hon. Member for Redcar when I stress the prevention of delinquency as much as treating those who offend against the law. We need money if we are to deal with the problems. Who would deny that which may prevent young people from falling into delinquency or assist them back to the straight and narrow path? Needs must be balanced against cost. What is the present cost of residential care in Northern Ireland and what success has such care achieved? We need to know the cost of custodial treatment, whether the taxpayer is getting value for money and whether the treatment is helping children and young persons in Northern Ireland.
It is generally agreed by experts that the re-conviction rate for young people placed in institutions is extremely high. That may also be the experience in Great Britain. My hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) nods in agreement. He above all hon. Members present knows about such matters. The Howard League for Penal Reform has emphasised that a spell in custodial care can easily confirm a young person in a delinquent way of life. Of course, in some cases young people must be placed in custody, in restraint in a home, because they have refused all other treatment, defied the treatment offered or have committed an offence which merits custodial treatment.
There is certainly a need for effective sanctions which reflect the condemnation of the entire community and the grief that the crime has caused to the victim. Such sanctions must also provide a reasonable prospect of correcting the offender and turning him from delinquency. Sadly, custodial sentences are sometimes given to young people who might benefit from a different type of treatment. We must consider the cost of custodial treatment. If the Minister cannot give that information now, I hope that he will write to me.
More and more crimes are being committed without anyone being found guilty and many such crimes are committed by children and young persons. That is why there is a need for more police officers, whose presence will deter potential offenders. They may also be able to catch offenders. I have complained many times that there are not enough police officers in North Down, which has a large and ever increasing population. Why has the number of community police officers been reduced in North Down? They carried out a useful job in Bangor and in other parts of my constituency.
Whether an adult or a young offender commits an offence when drunk, the public house or off licence which sold the drink to him should also have to face some financial penalty. Public houses and off licences make large profits out of drink, the pubs often staying open until late hours and then spewing their patrons on to the streets. I see people in Bangor late at night and in the early hours of the morning engaging in what I can only describe as anti-social behaviour. Before long they may commit some crime, such as smashing a window or threatening someone, in the vicinity of the public house where they have spent a great deal of time and money consuming alcohol. A disgraceful situation exists in Bangor, which I am sure is typical of many towns in Northern Ireland.
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We must bear that in mind when discussing the treatment of offenders because that situation cannot be tolerated much longer. There must be some sanction on public house owners, who are only too delighted to welcome people in but do not care tuppence what those people do when they leave the premises.
Mr. Norman Miscampbell: How on earth can anyone prove who sold a person too much alcohol, whether it be in a pub or an off licence, or whether it was the responsibility of the last licensee who sold the person alcohol? How on earth can that be made an offence? There would never be a conviction.
Mr. Kilfedder: I do not share my hon. and learned Friend's pessimism. He may have sat too long on the bench. I view the matter from the point of view of the public. Something must be done. Those who sell drink make vast profits out of the people who buy it but they do not care what happens to those people when they leave the public house.
Police officers may see someone leaving a public house and they often go into public houses to watch what the patrons are up to. If such a police officer says that somebody drank alcohol in certain premises it should be possible to apply a sanction against the owner of that public house. That is the only way in which we shall ever stop the vile behaviour of people who drink in public houses in Bangor and elsewhere. I should add that many people who frequent public houses behave in a decent and sociable way, but I am talking about those who have no regard for other people or their property.
How many of the 14 to 17-year-old males who appeared before juvenile courts were sent to borstal or detention centres in the last year for which figures are available compared with 10 or 20 years ago when the Northern Ireland treatment of offenders legislation was enacted? The treatment of young people is a precise science. A study was carried out in conjunction with magistrates in Leeds where 50 per cent. of young truants were given supervision orders and 50 per cent. had their cases adjourned periodically and were given a magisterial wigging but nothing else. Those truants whose cases were adjourned and to whom the magistrates addressed a few remarks did much better than those who were given supervision orders, in terms both of school attendance and delinquency rates.
That study contains a lesson for all of us and the experts in this precise science. We need to spend more time considering why young people in particular engage in deviant behaviour and studying how to deal with that situation, for the benefit not only of the public but of those guilty of delinquency.
10.49 pm.
Mr. William Ross: As usual, we find ourselves considering late at night Northern Ireland legislation under the Order in Council procedure. I make my now traditional protest because this matter is one that should be dealt with by a Bill, not by an Order in Council late at night. Later, I shall say why I believe that a Bill is required in this particular case.
Reference has been made to the Black report published in 1979, yet the jigsaw picture is still being built up bit by bit, though perhaps not in quite so an unrelated way as the hon. Member for Redcar (Ms. Mowlam) would have us believe. We are taking far too long. The Black report was

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comprehensive and detailed, and most of its recommendations should have been dealt with in a far shorter time scale than that which we are currently observing. I remember the Black report debates, which were fairly thorough, and I see no reason for such delay before all of its recommendations are made law.
The argument as to how one reforms criminals has waged much longer than the 10 years that have elapsed since the Black report, and will probably continue for many a day yet if we are to strike the right balance between a punishment that fits the crime and reform—especially in relation to the young criminal, guilty of the loutish vandalism that so besmirches many towns and villages throughout Britain, never mind Northern Ireland. We must make such offenders face the consequences of their crimes.
It is easy to smash something or to cause difficulty, pain, terror and hardship. But many of those who commit such crimes seem to live their lives with no sense of personal conscience or discipline. Anything that we can do to instil a sense of responsibility for their own actions and towards the welfare of others and of society in general must be welcomed. However, I am not certain that we shall get all the answers from the legislation that is now before the House.
The hon. Member for North Down (Mr. Kilfedder) said that much of the responsibility for people's action lies in the home, the churches and the schools. I believe that it is in the home that an individual's sense of personal responsibility begins to develop and is nurtured to rule his life and his actions. Far too many cases of bad parenting bring out evil in young people.
The hon. Member for Redcar said that one reason for bad behaviour was lack of money. However, most young people complain that they lack enough money. We all like to have money when we are young. From what I have seen of the well-off yobboes in the south of England, I do not think that money would help to improve their behaviour at all. Bad behaviour has nothing to do with money, or the lack of it, but with the personal discipline that is instilled in young people in their own homes. Far too many parents throughout the United Kingdom do not take their responsibilities seriously enough.
The Minister remarked that parents will have to take their children to an attendance centre, which is a good thing. Perhaps it would be better if parents had to bring their children into school every day, as they would have responsibility for the children they bring into the world, and the children would not grow up to be quite so nasty.
As many of the problems that we are discussing are the consequence of loutish, yobbish behaviour by young adults, I welcome the reduction from 17 to 16 in the age at which they are forced to face the consequences of their action in court. Our object should be to prevent reoffending as far as possible. Like the hon. Lady, the Member for Redcar, I commend the efforts already made by voluntary and community groups. They do a tremendous job, but they need to be carefully monitored in case undesirable individuals take control, and that is an ever-present threat in Northern Ireland. If they are carefully monitored and properly run, those organisations have a great part to play, provided that the Government give them the funding to do their job.
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A number of interesting factors emerge from a brief examination of the crime profile in Northern Ireland. An excellent publication by the probation board in Northern Ireland reveals that at approximately 3,800 offences per 100,000 population, the crime rate is less than in 40 of the 42 police force areas of England and Wales. Either Northern Ireland is still a much more law-abiding place than most of the rest of the United Kingdom, or a much higher percentage of crime is reported in England and Wales than in Northern Ireland. I do not know whether that is so, but I find it astonishing that the crime rate in Northern Ireland is lower than it is in 40 of the police force areas in England and Wales.
Clearly, the root cause of many of the problems in Northern Ireland is the terrorist campaign. It is not surprising that armed robbery is much higher on the list of crimes in Northern Ireland than it is in the rest of Britain.
The profile of the prison population starkly reveals the effect of terrorism in Northern Ireland. It reveals that 25 per cent. of the prison population in Northern Ireland are serving life sentences, compared with 6 per cent. in England and Wales. That is a direct result of the terrorist campaign. If it were not for the terrorist campaign, prisoners serving life sentences would represent a lower percentage of the prison population in Northern Ireland than they do in England and Wales as there is much less really violent crime. Without the terrorist life sentences, I suspect that there would be very few prisoners serving life sentences in Northern Ireland.
In April this year, 7 per cent. of sentenced prisoners were aged between 16 and 20, and 72 per cent. of those over 21 were convicted of scheduled offences—or terrorist crimes. In other words, seven out of 10 of the people in prison in Northern Ireland are there as a result of the activities of terrorist organisations. That is a huge proportion. If that is taken out of the equation, Northern Ireland is clearly a peaceful, law-abiding society, strange as it may seem.
The hon. Member for North Down (Mr. Kilfedder), who mentioned what happened in Bangor, was referring to quite unacceptable behaviour that should be stopped. But the police cannot stamp it out because they are so tied up in solving terrorist crime, and we all appreciate that.
Mr. John Taylor: Because there are a lot of Conservative voters there.
Mr. Ross: The right hon. Gentleman is correct, there are a lot of Conservative electors there; perhaps the wealthy section of the community is committing all the offences along the sea front and wherever else. It is apparent from the south-east of England that it is not poor kids who are committing offences in the area.
An interesting statistic appears in the probation service's report, and it astonished me when I first learned of it 18 months ago. Fine defaulters represent more than half the sentenced receptions in prison in Northern Ireland. Does the Minister find that a disquieting as well as an amazing fact? Is the figure for this side of the Irish sea the same? If so, it is about time we stopped putting people in prison for not paying their fines. They should be made to do community service. What sort of unpaid work does an offender have to do under a community service order? An offender has to do gardening, labouring, painting and

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decorating, work with senior citizens and to help with youth clubs and voluntary organisations. Such tasks are tailormade for people who do not pay their fines.
If someone is sentenced to imprisonment for about a fortnight they can be released after only two days, or, if they are fortunate, only one day.
Mr. Seamus Mallon: It sounds as though the hon. Gentleman could write a book about it.
Mr. Ross: I assure the hon. Member for Newry and Armagh (Mr. Mallon) that there is nothing like personal experience for discovering facts. He should try it some time and show whether he has the courage of his convictions, which he so often proclaims in the House.
If someone who takes home £70 or £80 a week is fined £150 or seven days' imprisonment, he will take the seven days, as he will probably serve only two and a half anyway. The cost of keeping such a person in prison must be astronomical. We should consider this issue sensibly and try to do something about it.
Community service orders should be made on folk for whom they will be effective. I am sure that many old people need their hedges or grass cut. I would sooner send out a chap who has not paid his fine to do community work than some young thug who may case the old person's house and return the following week and clean up. This is a fruitful sector for reassessment of sentencing policy.
I remember the creation of the probation service in Northern Ireland, which is different from the service throughout the rest of Britain.
Mr. James Molyneaux: It is more efficient.
Mr. Ross: Is it a more efficient service? If it is doing as well as it appears to be, why has it not been tried over here? Given the crime rate here, it appears to be more necessary. Some hon. Members are fond of saying how bad things are in Northern Ireland and what a terrible place it is, but the service is doing well and the Government are sitting on their hands and refusing to modernise it. I should have thought that this modernising, efficient, privatising Government would have wanted to introduce this successful system in the rest of Britain so that it can benefit from the experiment that has been so successful on the other side of the Irish sea.
Mr. Roy Beggs: Does the hon. Gentleman agree that the excellent probation service in Northern Ireland could be improved if the case burden on each officer were further reduced?
Mr. Ross: That possibility had not occurred to me. No doubt the case work is heavy but if it is paying such rich dividends, more expenditure on the service might be a good investment. If we can reform these young people and improve their behaviour, it will be time and effort well spent.
Other factors should be taken into consideration. The courts should make full use of community service orders. I have suggested one area where their use could be extended. As well as making good use of the orders, the authorities in Northern Ireland ensure that they are carried out in full. I confess that Northern Ireland is a very different place from central London, if only because of the
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size of the population. In smaller towns and villages individuals are more easily located and can be made to do the work.
If a sentence is passed and if someone is told that he must do certain things to discharge his liability, the end is much worse than the beginning if the authorities do not ensure that the liability is discharged. The service would become a laughing stock. If community service orders are used, the Government should make sure that the system is carried out properly.
It is sad that some 60 per cent. of those who are given community service have four or more previous convictions. There may be good reasons. Perhaps the Minister could tell us why there is such a high level of repeat performances.
On the structure of the probation board, we are told that it will consist of
"(a) a chairman, deputy chairman, and not less than 10 or more than 18 other members, appointed by the Secretary of State for Northern Ireland;
(b) not more than 5 members co-opted by the board with the approval of the Secretary of State. (This power has not been used?."
Why is there such a wide range of 10 to 18 members and why is the power referred to in paragraph (b) provided if it is not being used?
The subject is of great interest to everyone who is concerned about getting rid of loutish behaviour in the community. There are critical factors about the implementation of the orders. The probation board draws attention to one:
"There is some evidence in England and Wales to suggest that the growth in Probation Orders has replaced lower tariff disposals of the Court such as a fine. It is therefore vital in the operation of this new legislation in Northern Ireland that the new intensive Probation Supervision is not used as a substitute for lesser penalties but is used instead of a custodial sentence."
That is important. I should like an assurance from the Minister that that advice is being accepted.
NIACRO expressed considerable concern about the level of funding for day centres. Perhaps the Minister will tell us about that. How many day centres will there be, where will they be sited, and how widely does he intend that they should be used?
On paper, there are quite a few staff, but keeping a check on young offenders, making sure that they behave themselves and keeping a close eye on their out-of-school activities, so to speak, is difficult. I do not think that it can be done cheaply, but it pays rich dividends. Staffing should be examined again.
It seems that there was a call in the Black report for an integrated strategy. The hon. Member for Redcar made a complaint. I do not believe that a complaint is fully justified. I am complaining not about the development as such, but about the long time that it has taken for that development to happen. As I said earlier, I would like the structure to be created and put in place very soon. Adding bits and pieces is not good enough. We need a comprehensive set of proposals to be brought forward to deal with other matters concerning young people. There is much work going on in that area. Can we be given a time scale for its completion?
I have a quibble about article 12, which is the tiddly bit that was slipped in, I believe. The article deals with the increasing of maximum terms of imprisonment for offenders in cases of child cruelty and assaults on and rapes of women. We are told that the maximum penalty for

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indecent assault on a female will rise from two to 10 years imprisonment. That brings the penalty for assault on a female into line with that for assault on a male. That is the only reason we are given for the increase. There is no explanation of why 10 years rather than two years is right for offences against either sex. Can we be given those reasons? Why should the penalty not be 15 years, or remain at two years?
The Government say that the increase in the penalty for child cruelty reflects the concern arising from a number of recent cases. I thought that one of the basic precepts was that hard cases make bad law. Hard cases probably make good law in this instance, but that is by the way. Is public concern the best reason the Government can give for multiplying the possible sentence by five? Why do we not have a more detailed explanation of why the Government decide on certain levels of sentencing, rather than the Government just saying what they have about these?
The reason given for increasing the penalty for attempted rape is that it is similar to the increase in England and Wales brought about by the Sexual Offences Act 1985. That brings me back to my first point. If these matters were being dealt with by Bill instead of by order, the Minister could not get away with the bland statement that the penalties were being increased to bring them into line with what happens in England and Wales. He would have to give a full and clear explanation in the House and in Committee of the Government's reasons for deciding on those periods of imprisonment.
I am not saying that those periods are wrong; I just want to be told why they are right. I want to be told in detail and through the Bill procedure. I want to be told in Committee and I want to be able to question the Minister in a way that I can never question him in this nonsense that we go through here, night after night. We are not able to question, not able to obtain answers and not able to dot an i or cross a t. That is not good enough and it has been going on for almost 20 years too long.
11.13 pm
Mr. Seamus Mallon: I regard these orders as important pieces of legislation, not so much for what is in them—although there is much substance and much good in them—as for the implications of the elements that are not included and the limit of the scope of the orders. It is almost impossible to seek a solution to the problems about which other hon. Members have spoken, without considering the context in which the problems exist. I do not see how we can discuss these orders unless we discuss the context in which young people find themselves.
I am not talking about the people with money who behave in a loutish way in places such as Bangor on a Saturday night. Such behaviour occurs in every other village and town and probably in every country in the world. I am talking about young people from deprived backgrounds, who have never worked, whose fathers and grandfathers have never worked and who, in their own hearts, know that they will never work. They do not have a stake in society. They have been thrown into the trap of despair before they are even adults. If we are ever to get to the root of the problem, we must tackle that aspect.
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During today's excellent debate on the economy, it struck me forcefully that if one of the young people to whom I spoke last night when canvassing in a deprived area had been sitting here today he would have heard about a different world. His economy is not the economy of today's debate. He will never see it, because he will not be employed. He sees around him not just financial deprivation but terrible social and environmental deprivation. From the hour he is born, he lives in that deprivation, which in the North of Ireland is exacerbated by many factors, not the least of which is violence. Many young people fall into that trap early in their lives. They are the people whom we should consider, not the people in the flashy cars who screech around the town late at night, having had a skinful of drink.
The issues are compassion and concern for people who, through no fault of their own, find themselves in a difficult position. That is why the legislation is so important. It could be improved, but only by looking at the scope of the problem. We have heard that 16 to 19-year-olds constitute a higher percentage of the prison population in Northern Ireland than in any other European country. The figures are exaggerated by the number of young people who have been convicted of scheduled offences, but that is not the whole story. Under legislation, imprisoning people has been an easier option than the constructive approach of rehabilitating them. That is one reason why the prison figures are so unbalanced. Unless we aim at rehabilitation, custodial sentences will continue to be the norm, not for the right reason but because it is an easy option which gives less trouble to the judicial bench and everyone else involved.
The hon. Member for Londonderry, East (Mr. Ross) referred to fine defaulters. We should consider that valid point because there are alternatives to imposing fines which will not be paid anyway, but the options have been reduced by this legislation. The Minister will correct me if I am wrong, but I understand that a person in England and Wales who defaults is arrested and brought before the courts, which can exercise options. That does not happen in the North of Ireland. A person who defaults is immediately sent to prison and the courts do not have the discretion to try another approach. That, too, contributes to the prison figures in the north of Ireland. It makes no sense to have such a difference between England and Wales and the north of Ireland. From one point of view, it is careless, and from another it is extremely punitive.
Our thrust must be towards rehabilitation rather than punishment and towards creating an alternative to imprisonment for fine defaulters.
Mr. William Ross: I made the point that that is an economic benefit for those, especially the unemployed, who are prepared to spend two or three nights in prison rather than pay the fine. Surely it would far better if they did something useful for the community.
Mr. Mallon: I readily take the hon. Gentleman's point. If I may be anecdotal for a moment, I started my career working in a training school for young offenders. At that time such schools were called reformatories. One person, whom I shall call Joe, went to the city centre in Belfast each time he was released and threw a brick through the biggest window that he could find so that he would be sent back to the reformatory. It was the only place of stability that he had known during his poor life. It would be no use

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talking to that kid about a fine because it would be irrelevant. It would be no use talking to the people mentioned by the hon. Member for Redcar (Ms. Mowlam) because they would not have the money to pay a fine. We must find a constructive way of showing such people that the sort of offences that they have committed are not just bad for society but bad for their own lives and those of their children. That might go some way towards solving the problem.
I wish now to discuss a sensitive part of the problem. I do not think that this sort of legislation, in its totality, will work without two factors. First, it must be worked properly by magistrates and judges. I have my doubts about that. I have the highest regard for those who sit as magistrates and judges, but there are some people who should not sit as magistrates and judges. Anyone dealing with young people in the North of Ireland recognises that fact.
I cite another personal experience. One of the ways in which the Black report has not been accommodated is by not removing non-attendance at school from this legislation and putting it into the education sphere. I dealt with the case of a young boy who was not attending school. His father did not attend the court hearing. It is true that that young boy should have attended school and that the father should have appeared at the court. The bench gave the order for the police to arrest the young boy on the school bus and take him to a training school. There was no reference to the family. There were no options. I do not blame the police, because they did not have any options. That was a most insensitive approach, but it has been repeated time and again by the same magistrate. That is a matter of record.
Unless the magistrates and judges operate this legislation in the spirit in which it is written, working towards the aims that it embodies, it will fall down. If they perceive the easy options to be imposing a fine or putting a young person in prison, some of them will do that, because some of them do not have the humanitarian approach that is required if we are ever to solve the problems of young offenders.
The second factor, which has already been mentioned, is a comprehensive approach to the problem. You will notice, Mr. Deputy Speaker, that we are all using the same terminology. I readily admit that the good briefings that we have received from concerned people in the north of Ireland have rightly stressed that problem. There is an a la carte approach not only to this legislation but to the whole of Northern Ireland legislation. To mix a metaphor, it is like choosing dolly mixtures—a piece of this legislation and a consequential amendment to tie it in with another piece of legislation, and so on. Anyone who has ever dealt with the Emergency Provisions Act, the Prevention of Terrorism Act, the public order legislation and this legislation knows that he needs about six Acts to cross-reference.
We do not want any sleight of hand, such as the reference in the explanatory document to the Black report and the children and young persons review group. That is sleight of hand because it implies that the measure is in accord with what was proposed. We want a complete children and young persons measure for Northern Ireland in its totality, a measure which will deal with all the problems on the basis of the Black report. The Government must not pick bits out of the report when it suits them, leaving other bits out when it does not suit,
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thereby creating a bag of dolly mixtures, so to speak, with a great deal of cross-referencing having to be done. That cannot lead to efficiency, effectiveness and justice.
Mr. William Ross: Will the hon. Gentleman join the Ulster Unionist party in asking that this matter be dealt with by way of a Bill? That would enable us to show a degree of cross-community support in the interests of all the people in Northern Ireland. That is the only means by which we will achieve the kind of investigation that the hon. Gentleman is seeking.
Mr. Mallon: For a moment I thought that the hon. Gentleman was inviting me to join the Ulster Unionist party—an offer which I appreciate but must decline. However, I willingly join Ulster Unionist Members in making the demand to which he refers. Having deliberated for many long hours on the emergency provisions and the prevention of terrorism legislation, I have no hesitation in joining those Members in trying to obtain children and young offenders legislation which is comprehensive and strategic and deals with all the problems in one measure. Indeed, I would join anybody in seeking that end. Unless we can examine such a measure line by line, we shall end up with a bit of this, a bit of that, with consequential amendments here and there, and everything in the garden will be rosy except the net result.
I do not propose to discuss the detail of the orders, much of which has been covered, but will the fourth conditions be used and, if so, how? How can they most effectively contribute to the welfare of society and of the young people involved? Will there be enough funding for day centres? I gather that there will be just one day centre and that it will be in Belfast. There will not be one west of the Bann, so there will not be the reasonable accessibility that will be required if the bench is to have the option of pursuing that course rather than imposing a fine or custodial sentence.
I take it as a compliment to those of us west of the Bann when it is implied that we do not have the same degree of law-breaking by young people. It would be nice if that were the case. Even so, are we to throw on to the voluntary groups the onus, and on an ad hoc basis and almost weekly, the task of setting up a day centre situation—not a day centre—which will be able to cope adequately? I have discussed this with various people, who say that they are confident of being able to deal with the problem by means of existing funding and their own structures. I hope that they are right, but I fear that we shall have to tackle the joint problems of the number of centres and the siting of them.
I welcome in this legislation the removal of the negative conditions which have applied, and which I believe still apply, in England and Wales. They are unenforceable and in most cases they make no sense. Generally, they cost more time, money and energy than they are worth. I compliment the Minister on having had the good sense to leave that aspect out this legislation. It shows that he and his advisers listened to those with experience of this in England and Wales.
I welcome article 6, which relates to training schools. The term of the order is to be reduced from three years to two years
"or until he attains the age of nineteen".
The period during which a detained person may not be placed out under licence without reference to the Secretary

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of State is to be reduced from one year to six months. These reductions are improvements. They represent an act of faith in the legislative approach.
Article 7 deals with the extension of the maximum term of detention in young offenders centres from two years and 364 days, as I understand it, to four years. If that means that fewer young people will go to prison, that is grand. That would be a positive step forward. However, if young offenders' centres are to be turned into alternative prisons, that is bad. Such a move would confuse the issue and substantially change the complexion and context of young offenders centres. Such a change should be monitored. We must at least question the possible consequences. An increase in non-custodial sentences could ensue.
Will magistrates and benches generally take these provisions in the spirit in which they are written? If they do, we are on the way to solving the problem. If they do not, we shall be moving away from a solution.
The minimum age for a community service order causes a problem. I am confused about this, and I think that the same can be said for the proposed legislation. We are talking of young people who reoffend and increase the tariff for themselves. In effect, there is a postponement of the custodial sentence. That does not benefit the system or the circumstances of the individual. There is an inherent danger which must be reconsidered. Is there an alternative? I think that there is. There must be a clear separation between the ages of 16 years and 17 to 21 years. If the domino effect is to start at 16 years and continue through to 21 years, the result will be immensely counter-productive and unintended.
Article 13 provides for an option to remand young people to young offenders centres. Will the option be exercised by magistrates and judges? I would much prefer a mandatory provision that young people should be remanded to young offenders centres for non-scheduled offences. Better still, they should be remanded to the type of centre which could have been established under the Treatment of Offenders Act (Northern Ireland) 1968. I am talking not of Risley but of a properly staffed, run and thought out remand centre for young people. There is a danger that in the end the easy option will be taken.
Some young offenders are imprisoned for long periods at the Secretary of State's pleasure, having been convicted of scheduled offences, and in many cases having committed horrific crimes. Nethertheless, they are still young offenders. I shall not dwell on the matter, because there will be other opportunities to ask again and again that the review procedure for those young offenders be overhauled quickly, dramatically, and in a way which demonstrates, as I think everyone agrees, that the present system is unjust, unfair and, in many ways, unworkable. Surely we must include in our consideration young offenders who remain in prison at the Secretary of State's pleasure.
I pay tribute to the Probation Board, which has an onerous task. It is funded by the Secretary of State but it is then left to do its job. There is nothing between the board and its funding. It is the board to which the voluntary groups have to be responsible. The members of the board deserve tremendous credit. They have done a magnificent job in difficult circumstances. I should love to think that the Northern Ireland Office and the Secretary of
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State and the Minister would do those people the greatest courtesy by listening intently when they ask for a comprehensive and strategic approach to the problem rather than the dolly mixture approach adopted so far.
11.34 pm
Mr. Ian Stewart: With the leave of the House, I shall reply to the debate.
During the past hour, we have had a wide-ranging debate. Some of it has been related specifically to the contents of the orders, but much of it, for perfectly understandable and justifiable reasons, has dealt with young offenders, their offences and general sentencing policy. I hope that the House will understand if I concentrate on those matters directly related to the orders. I shall not, however, overlook what has been said tonight about the wider matters.
The hon. Member for North Down (Mr. Kilfedder) suggested that the proprietors of public houses should carry some responsibility for drunkenness. He also spoke about sentencing policy, but that is a question for all of the United Kingdom. I shall draw the attention of my right hon. Friend the Home Secretary to the general matters discussed.
I am not an expert on the law in England and Wales, but some of the suggestions given tonight appear to involve some practical problems of implementation, as pointed out by my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell). Some interesting comments have been made about judicial and sentencing policy that applies throughout the United Kingdom in addition to the policy directly related to Northern Ireland. I have taken note of what has been said.
The hon. Member for Londonderry, East (Mr. Ross) asked about the timing of the Treatment of Offenders (Northern Ireland) Order. He pointed out, quite fairly, that it is a number of years since the Black report was completed and originally discussed. It has taken many years to bring forward the proposals because the question of training schools proved an extremely contentious one on which a wide range of views were expressed by those reacting to the proposals. It was not until 1986 that a decision was eventually taken that training schools should continue, but that the terms should be reduced. That decision has been implemented under article 6 of the order. In a sense that decision represented a compromise, but it was also a reflection of the consensus, which contained widely different views about the possible role of the training schools.
In the context of the Treatment of Offenders (Northern Ireland) Order and the general debate on sentencing, training schools have been considered in the light of their use by and for offenders. Hon. Members will be aware, however, that such schools are also used for care cases. One cannot take a simple view of such schools based on the care of offenders; we must remember the other role of those institutions.
A number of hon. Members have spoken about the co-ordination of particular measures and our decision to put the measures dealing with the treatment of offenders in one parcel even though it does not cover the range of issues that are relevant to the behaviour of young people or the non-offence aspects of the problem. In many ways it would be convenient to draw more legislation together, but the House should recognise that a number of the matters fall

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under the responsibility of different Departments in Northern Ireland, just as they do in the rest of Great Britain. Whereas the general law relating to children is a matter for the DSS or the Home Office, issues relating to offenders in Northern Ireland fall under my responsibility and are solely a Home Office concern in the rest of the United Kingdom.
There are practical problems in relating those two issues in the legislation, but I assure hon. Members that great care is taken. I should like to pay tribute to my officials and others who have played a part in drawing up these measures and ensured that the wider picture is carefully assessed.
We intend to produce a children and young persons order for Northern Ireland in the next Session of Parliament. It will deal with a range of matters—
Mr. John D. Taylor: Will the Minister give way?
Mr. Stewart: I shall give way in a moment if the right hon. Gentleman will allow me to finish my comments. The order will deal with a range of matters which were also covered in Black report and are certainly in need of attention in the House. It will parallel developments which are taking place in England and Wales through the Children Bill.
Mr. Taylor: I welcome the Minister's statement that new comprehensive legislation on this subject will be introduced, but I regret the fact that he referred to an order. In light of the views expressed by the official Opposition, the hon. Member for Newry and Armagh (Mr. Mallon) and, of course, by Ulster Unionist Members, will he consider introducing a proper Bill, with rights for full parliamentary debate and amendments?
Mr. Ian Stewart: I noted the comments of the right hon. Gentleman and other hon. Members from Northern Ireland who have raised this point this evening. As they will know, my right hon. Friend the Secretary of State has said that he will be willing to consider the procedures by which we take Northern Ireland business through the House, particularly the possibility of having debate through a Northern Ireland Committee. He remains open to discuss those possibilities with representatives from Northern Ireland.
I cannot undertake, and it would be irresponsible of me to do so, that the House is likely to be able to provide—
Mr. Mallon: Will the Minister give way?
Mr. Stewart: If the hon. Gentleman will possess himself, and if other hon. Members will allow me even to complete my sentences, of course I shall give way.
I cannot foresee a time when the House will have the available capacity to deal, in full primary legislation through Bills and Acts, with all legislation for Northern
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Ireland, much of which substantially replicates that which is enacted in England, Wales or the rest of the United Kingdom.
Mr. Mallon: I welcome the Minister's confirmation that there will be some form of legislation for Northern Ireland for children and young offenders. Will he go further and say that it will be fresh legislation, which will supersede existing legislation and will not be consequential either on that which we are discussing tonight or on an Act dealing with children and young offenders which might be introduced for England and Wales?
Mr. Stewart: As the hon. Gentleman will know, all Northern Ireland legislation is considered in relation to the particular circumstances of that Province. I am not the Minister responsible for this particular legislative proposal, but I shall convey the hon. Gentleman's comments to my hon. Friend the Parliamentary Under-Secretary of State.
I wish to illustrate not merely that we need to tackle the recommendations of the Black report, and other discussions on this matter, consistently over a period, but to emphasise that none of our decisions are taken in the sort of isolation which the hon. Member for Redcar (Ms. Mowlam) unfairly suggested.
It being one and a half hours after the motion was entered upon, MR. DEPUTY SPEAKER put the Question, pursuant to Order [26 May].
Resolved,
That the draft Treatment of Offenders (Northern Ireland) Order 1989, which was laid before this House on 9th May, be approved.

NORTHERN IRELAND (COMMUNITY SERVICE)
MR. DEPUTY SPEAKER then proceeded, pursuant to order [26 May], to put the Question on the remaining motion relating to Northern Ireland.
Motion made, and Question put.
That the draft Community Service Orders (Northern Ireland Consequential Amendments) Order 1989, which was laid before this House on 9th May, be approved.—[Mr. David Hunt.]
Question agreed to.

PRIVILEGES
Ordered,
That Mr. Attorney General, Mr. Tony Benn, Mr John Biffen, Sir Bernard Braine, Mr. Frank Dobson, Sir Philip Goodhart, Mr. Terence L. Higgins, Sir Peter Hordern, Sir Russell Johnston, Mr. Michael Jopling, Mr. John Morris, Sir Charles Morrison, Mr. Stanley Orme, Mr. Cranley Onslow, Mr. Merlyn Rees, Mr. Peter Shore and Mr. John Wakeham be members of the Committee of Privileges.—[Mr. David Hunt.]

Snapethorpe Hospital, Wakefield
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]
11.45 pm
Mr. David Hinchliffe: I am grateful for this opportunity to raise the proposed closure of Snapethorpe hospital. It is of the greatest concern to my constituents.
At the outset, I express my gratitude to the Minister for agreeing to meet me in a fortnight's time to discuss this important matter. This debate is about the proposed closure of the most modern hospital in my constituency. It is about the potential for the future use of the excellent facilities and environment at Snapethorpe. It is about the questionable way in which the hospital has been run down over 10 years, and the way in which local opinion about the hospital's future has been treated with utter contempt by the Wakefield health authority and the Yorkshire regional health authority.
The debate is also about the Government's policy towards medium-sized and small hospitals such as Snapethorpe, and about the Government's policy on initiatives for community care of the sort put forward by the local authority in Wakefield in respect of Snapethorpe hospital.
The formal campaign to save Snapethorpe hospital from closure has recently celebrated 10 years of existence. It would be appropriate for me to express my sincere appreciation to the many people and organisations who have been involved in that campaign over 10 years. I should like to mention especially Alice Lannagan and Penny Roberts, two former nurses at the hospital—when it was in operation—who have worked ceaselessly as chair and vice-chair of the campaign for 10 years.
I want to mention the Wakefield trades council and the local Labour party, which have continued to fight to retain the hospital; also the Wakefield community health council which has never ceased to reflect the views of Wakefield's people on this issue; and my predecessor as the Member for Wakefield, Walter Harrison, who sought vigorously over many years to ensure that the hospital was kept open and in public use. It would be remiss of me not to mention that several stalwart campaigners for the hospital in these 10 years are unfortunately no longer alive to witness this latest chapter in the fight.
The fact that, after 10 years, the district and regional health authorities have still not disposed of Snapethorpe is evidence that the campaign has been extremely effective and fully justifies the efforts made in it. The way in which the closure of Snapethorpe has been engineered is a matter of deep concern.
I do not usually read The Times, but someone drew to my attention the parliamentary sketch in that paper of 26 April, which reported health questions from the previous day, when I had raised the issue of Snapethorpe hospital.
The article states:
"'But Snapethorpe Hospital hasn't had a patient since 1984,' sneered Junior Minister David Mellor at a Labour back bencher, David Hinchliffe (Wakefield), who had asked about a hospital closure. Laughter followed, at Hinchliffe's expense. Only later did one reflect that Health Authorities empty hospitals before closing them. Mellor was offside."
The penultimate sentence in that quotation is unintentionally highly perceptive, because the manner in which the hospital was emptied was a scandal in itself. My predecessor Walter Harrison described the Snapethorpe
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problem as "closure by stealth". That sums up what has happened to this important hospital in the past 10 years. The highly questionable way in which the rundown occurred merits more attention than I am able to give in this short debate. However, some important matters need to be brought to the attention of the Minister. First, the health authority has for 10 years sought the closure of the hospital but has never had the courage to face local people and admit its real intentions. Over many years we have been given all sorts of excuses for ward closures but all along we have been told officially that there has never been any intention to close the hospital. However, that is the proposal before the Minister.
Secondly, arbitrary decisions have been made by unaccountable hospital consultants who in some instances—I stress "some instances"—have been more concerned about the personal inconvenience of travelling to Snapethorpe hospital than about any issue of patient care. They have withdrawn from the treatment of patients at the hospital and have made it inoperative.
Thirdly, my constituents have been deprived of the infectious diseases facility that was valued and used over many years and relatives, without cars, of patients who suffer from such diseases face three bus journeys to the far side of Leeds to the Seacroft hospital. As a result of the closure of Snapethorpe hospital and in particular the Barden ward, the excellent convalescent facilities at that hospital no longer exist. Wakefield health authority has taken no action to provide convalescent facilities elsewhere in its area. That means that my constituents are now deprived of any form of convalescent facilities and I am especially concerned about that because I receive information about a significant number of people who have been prematurely discharged from hospital. Those people would have benefited from a week or a fortnight of recuperative care in the facility of the kind that Snapethorpe hospital used to offer.
As I have said, the debate is also about Government policy on medium and small hospitals. On 22 May 1980 the Government issued a consultative paper entitled "Hospital services—the future pattern of hospital provision in England". That made clear the Government's belief that medium and small hospitals should play a more important role than they were playing at that time. That was a significant policy statement by the Government and it was produced by a Minister of Health who, at the invitation of Walter Harrison, visited Snapethorpe hospital and blocked a proposed temporary closure. That was unanimously welcomed by Wakefield people.
The press release that accompanied the consultative paper said:
"The time has come for a critical look at the giant 'super' hospital with over 1,000 beds—impersonal, complex and remote … these hospitals are frequently remote from the people they are intended to serve, also they lead to the closure of smaller hospitals which are much loved and much needed by their local communities."
Perhaps when the Minister replies to the debate he will tell us what happened to those worthy expressions of concern for just the kind of situation that we have in Wakefield. In Wakefield a much loved, much needed and much valued hospital which was donated to the people of Wakefield in the 1930s by a benefactor, is to be closed because of a huge development on the Pinderfields hospital site. That site is inconvenient for vast numbers of people in Wakefield. As the Minister may know, Snapethorpe is at the centre of the local community and it can be argued

345
on behalf of the majority of my constituents that Pinderfields hospital simply is not in as convenient a position as Snapethorpe.
It is important that the Minister responds to the clear policy statement of 1980. I am not aware of the Government formally changing their view on this matter, and the policy statement relates directly to hospitals of the kind that we are discussing. Snapethorpe is a small and valued local community hospital.
I said at the outset that we are also considering local initiatives in community care. The Minister may have been informed that Wakefield metropolitan district council has formulated detailed plans to use Snapethorpe as a focal point for community and support services for the elderly and disabled with a range of much-needed provisions, including shelter, extra care units, workshops for the disabled and a day centre.
Since I became a Member of Parliament I have had detailed discussions over a number of years with various members and officers of the local authority about its proposals, which would provide valuable facilities for the people of Wakefield, and for which there is considerable support among my constituents.
The local authority has had detailed discussions at officer and member level with the Wakefield health authority about its proposal. Wakefield council, in effect, sought the joint use of Snapethorpe hospital. It is that point that I hope the Minister will deal with tonight. For whatever reason, at the behest of the Wakefield health authority those discussions were discontinued after the removal of Sir Jack Smart as the authority's chairman.
There is a will within the district council to continue that dialogue and I am sure that that will be supported by the vast majority, if not all, of my constituents. The local authority pressed the health authority to support the continued use of Snapethorpe. I envisaged the provision of respite nursing care and the reinstatement of the much-needed convalescent facilities that had been withdrawn by the health authority. Those facilities would, if they were provided by the Wakefield health authority as part of a joint venture, fit in ideally with the local authority's provisions to form the basis of an excellent initiative which would enable people to remain within the community with support. Sadly, the minds of Health Service managers nowadays seem to operate like cash registers and Wakefield health authority has no vision of what could be achieved.
The Minister knows that I have tabled a number of questions about the performance-related pay and one area that concerns me is that hon. Members such as myself cannot discover under what circumstances performance-related pay is given to Health Service managers. But I am aware that one of the performance objectives is the achievement of hospital closures and it is likely that, if the closure of Snapethorpe is ratified by the Secretary of State, the general manager on a salary of £35,000 a year could receive a performance-related cash bonus.
It is nonsense that a person paid from public funds should receive a bonus from public funds for achieving such a closure completely against the wishes of those who pay him. The Government must look at the way in which performance-related pay operates, particularly in relation to hospitals such as Snapethorpe.
346
Snapethorpe has been empty for some considerable time and the officers of Wakefield health authority had no intention other than to see Snapethorpe sold as a valuable asset.
The permanent closure and disposal of Snapethorpe was discussed at a meeting of the Wakefield health authority on 22 December 1988. A report written by officers of the Wakefield health authority on the local authority's plans said:
"none of the proposals would have a significant direct benefit to the local health service."
That made clear the officers' belief that the proposals of Wakefield district council would not have a bearing on the Health Service within the Wakefield authority.
I find it astounding that anyone looking at the proposals for community services of the kind that I mentioned earlier could reach the conclusion that those provisions would not have a bearing on the health sevices. It says something about the people who are now running the National Health Service at local level that they are unable to anticipate just how much the local health service could benefit from the kind of initiatives we propose.
We hope that the Government's long overdue response to the Griffiths report will be made before long and that they will consider proposals of the kind being put forward by Wakefield. They should be supported by the Government because they are about ensuring that people remain in the community and do not enter institutional care that they do not require. The council's proposals would ensure that many people who would otherwise be hospitalised will remain in the community with day care, with day support, and with the help of the other initiatives proposed, rather than end up in long-term institutional care. If that does not have a direct bearing on the local health services, I do not know what has.
I want to give the Minister adequate time to respond to my comments. I am sure that he is well briefed. Although these are early days in the hon. Gentleman's role as Under-Secretary of State for Health, he is certain to have had already his fair share of grief from Back Benchers such as myself fighting for much loved local hospitals. I know that the hon. Gentleman will have to respond to another Adjournment debate later this week, and I sympathise with him for having to remain here until such a late hour to deal with such issues.
By comparison with the arguments advanced by other right hon. and hon. Members, not all can boast, as I can, the proud history and excellent potential of Snapethorpe hospital. Not all can boast of formal objections to the proposal to close the hospital not only from the constituency Member of Parliament but from hon. Members representing surrounding constituencies. They include my hon. Friends the Members for Dewsbury (Mrs. Taylor), for Leeds, Central (Mr. Fatchett), for Hemsworth (Mr. Buckley), for Pontefract and Castleford (Mr. Lofthouse), and for Normanton (Mr. O'Brien). They have all, without prompting, but knowing of the strength of feeling about Snapethorpe, objected formally to the health authority.
Not all right hon. and hon. Members can boast the support of all political parties at local level for the future of their hospitals. Wakefield Conservative party fully supports the future of Snapethorpe. It does not say very much about the matter except at election time, but it does support the hospital's future. Had I been defeated at the last election, I would fully have expected the elected

347
Conservative Member, God forbid, to be making a plea for the hospital's future in my place, because I know that the Conservative candidate shares my concern.
Not everyone can boast that their hospital has been visited by two Health Ministers and by at least three shadow Health Ministers, all concerned about its threatened closure. And not all right hon. and hon. Members can boast petitions containing the signatures of 100,000 local people supporting their hospital's future. Surely none can boast the level of local commitment that has enabled the fight to retain Snapethorpe hospital to continue for more than a decade.
Snapethorpe has a future in the hands of local people. There are clear proposals to ensure that it will have a future of use to the community; a future of carrying on the good work that it has performed as a hospital over many, many years. I appeal to the Minister to block the proposed permanent closure so that the hospital may enjoy that future.
12.4 am
The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): The hon. Member for Wakefield (Mr. Hinchliffe) is a doughty fighter for his constituency causes. I pay tribute to him for his energy and his relentless efforts in pursuit of his constituents' interests. That must be right and I make no complaint about it, however many parliamentary questions, Adjournment debates or letters there are. It is his duty and his responsibility and I respond with enthusiasm and a willingness to reason with him. Ultimately we have to exchange argument and discussion on the basis of reason and what is in the best interests of his constituents who are patients of the National Health Service but within limited resources. Resources were always limited. They were limited under the Labour Government and they are limited under the present Administration in any one year. We have to make the best use of the resources available.
I have nine minutes to address some of the points that the hon. Gentleman has raised. One of his key points was about community hospitals. The Government firmly believe that community hospitals have a role to play in the National Health Service. I am bound to say that the argument in support of community hospitals is stronger in rural areas than in urban areas.
I do not know the borough of Wakefield. I have passed through it but I have not visited it. I am sure that the hon. Gentleman will appreciate that in an urban area, or a comparatively densely populated area, the argument for having several separate community hospitals is very different from that in the sparsely populated areas of Norfolk where I was last week, when it was put to me that very sophisticated, high-technology medical equipment was not so important and could be provided in the provincial cities and towns, but it was important that commmunity hospitals should remain to provide non-acute services. That is an important policy and we stand by it, but, as I am sure that hon. Gentleman will agree on reflection, it is more relevant to rural areas than to urban areas.
The hon. Gentleman raised the specific issue of Snapethorpe hospital. As he said, he, I and a delegation are to meet on 20 June. It is somewhat unusual to have the
348
Adjournment debate before the meeting. Nevertheless it will serve as a benefit in putting the hon. Gentleman's comments on record for the Department and the district health authority to study beforehand. I shall certainly study them before the meeting.
It might be helpful if I spent three minutes putting on record the sequence of events which has led up to the current proposal for the permanent closure and disposal of the hospital. I shall try to deal with the hon. Gentleman's two main points.
Snapethorpe hospital opened in 1933 and originally had a complement of 103 beds. The benefactor of the hospital, as the hon. Gentleman has pointed out in a recent series of questions in the House, was a Mr. Benjamin Sykes. The hospital site and buildings were later vested in the Secretary of State under the National Health Service Act 1946, free of any trust.
The transfer of services at the hospital to elsewhere in the Health Service occurred over a period of years, culminating in its temporary closure in April 1984. That has been the situation since then. For the past five years it has been relatively unused; only one service remains—the sterile supplies unit. This state of affairs has been the result largely of clinical and not administrative decisions.
As long ago as 1978, the consultant in charge of the infectious diseases unit based in Elgin ward decided that he could no longer provide a fully comprehensive service at the hospital. Over the three preceding years the average bed occupancy of this 12-bedded ward had never exceeded 50 per cent. At that time the seriously ill patients were always transferred to Seacroft hospital in Leeds. The service was subsequently transferred completely to Leeds together with the resources.
Further clinical decisions to return Dewsbury chest patients to their home health authority and to close a pre-convalescent ward showing a negligible bed occupancy resulted in only one ward remaining in use. Both decisions received community health council approval. The remaining ward, Barden, stayed open to provide a chest service to Wakefield.
In July 1980, the health authority commenced consultation on the closure of Barden ward, along with other proposals for the closure and change of use of facilities within the district. Closure was opposed by the CHC and the matter was referred to Ministers for a decision. In 1981, full closure was deferred pending a further review of services. In April 1984, the then Minister of State, my right hon. and learned Friend the present Secretary of State, agreed to temporary closure. The hospital has remained closed since that time.
In November 1987, the health authority resolved to consult again on permanent closure. The consultation process has now been completed and because of the continued opposition of the community health council, the matter has again been referred to Ministers. I assure the hon. Member for Wakefield that Ministers will wait until the meeting is held so that we can take full account of the representations that he and others will make.
The health authority has considered the possibility of providing acute services at Snapethorpe, but the hon. Gentleman is aware of the hospital at Pinderfields in which £25 million is to be invested to enhance the capacity of that excellent hospital to 700 beds. Acute services are more sensibly located at the district general hospital.
I am advised that the buildings at Snapethorpe are not suitable for the long-term care of elderly people and would

349
have to be rebuilt. I am further advised that they are not suitable for refurbishment, but if they are perhaps the hon. Gentleman will so advise me at the meeting. Back-up services would be located four miles away at the district general hospital. Mentally handicapped people are provided for in Wakefield, and other plans and facilities are available for mentally ill people.
I am advised that, within limited resources, the district health authority has decided that providing further services on site, bearing in mind that the buildings could not sensibly be used in their present state and would have to be demolished, is not top of the list of its priorities.
The hon. Member for Wakefield referred to a joint venture with the local authority. We welcome joint ventures with local authorities. The Department of Health has not issued any instructions about joint ventures and encourages them. When the Government have announced their conclusions following the review of Sir Roy Griffiths' report into community care—an announcement will be made soon—doubtless district health authorities and local
350
authorities will reconsider the provisions of facilities in the community for the different client groups that the hon. Gentleman cited.
At present the health authority believes that it would be in the best interests of the patients it serves for the site to be sold and for the proceeds to be used now to the benefit of the patients in the area. That is not to say that in the future, with more resources or different priorities, the health authority could not decide, perhaps jointly with the local authority, to provide additional services on a different site within the urban area. Surely it is better, after five years of planning blight and the facilities lying empty, for the uncertainty to come to an end, the site sold and the proceeds reinvested immediately to the benefit of patients in the area.
I look forward to meeting the hon. Member for Wakefield and his delegation shortly.
Question put and agreed to.
Adjourned accordingly at thirteen minutes past Twelve o'clock.

HOME DEPARTMENT

  Television Licences (Pensioners)
  Mr. Skinner
  To ask the Secretary of State for the Home Department what representations he has received seeking the introduction of free television licences for retirement pensioners; and if he will make a statement.

  Mr. Renton
  Since 1 January this year, we have received five letters—in four cases referred to us by hon. Members —seeking the introduction of free television licences for retirement pensioners.

  Television Licences
  Mr. Gareth Wardell
  To ask the Secretary of State for the Home Department if he has any plans to permit war widows the same concession with regard to television licences as residents in sheltered accommodation.

  Mr. Renton
  The concessionary TV licence is available to retirement pensioners and disabled people who live in residential or nursing homes, or in equivalent sheltered housing provided by a local authority or a housing association. There are no plans to extend the concession.

  Barrow Borough Transport Ltd.
  Mr. Franks
  To ask the Secretary of State for the Home Department if he will call for a report from the chief constable of Cumbria as to any investigations being undertaken into the activities of former directors and executives of Barrow Borough Transport Ltd. arising from the finding of the administrators appointed to oversee the company.

  Mr. Douglas Hogg
  1 understand that the police are not conducting any inquiries into this case.

  Radio Tara
  Mr. Tredinnick
  To ask the Secretary of State for the Home Department what action he has taken since receiving a request from the Independent Broadcasting Authority that representations be made to the Irish Government seeking alteration to the Radio Tara, Atlantic 252, aerial siting or its configuration.

  Mr. Renton
  We have made representations to the Irish authorities and await their reply.

  Her Majesty's Prison, Leicester
  Mr. Vaz
  To ask the Secretary of State for the Home Department how many rule 43 prisoners are held in the segregational unit at Her Majesty's prison, Leicester; and what proposals he has for improving the conditions in this unit.
  136
  Mr. Douglas Hogg
  [holding answer 6 June 1989]: On 5 June 1989, one prisoner was held in the segregation unit at Leicester prison under rule 43 for the maintenance of good order or discipline. There are no proposals for improving the conditions in that unit.

  Mr. Vaz
  To ask the Secretary of State for the Home Department what is the extent and effect on the running of gym, exercise and education periods of staff shortages at Her Majesty's prison Leicester; and if he has any plans to reverse this situation.

  Mr. Douglas Hogg
  [holding answer 6 June 1989]: The PE department currently has a full complement of four full-time PE officers and the PE programme does not suffer from staff shortages. However, for the 12 months prior to 15 May 1989 the department did run with one PE officer short. This caused 90 classes to be cancelled. Nevertheless, the inmates spent some 29,248 hours on physical education from May 1988 to May 1989.

FOREIGN AND COMMONWEALTH AFFAIRS

  Vienna Convention
  Mr. Sillars
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the 82 states which voted for the adoption of the 1978 Vienna convention on succession of states in respect of treaties; and if he will indicate which of those countries have moved to ratification.

  Mr. Eggar
  According to the official records of the conference, the Vienna convention on succession of states in respect of treaties was adopted on 22 August 1978 by 76 votes in favour (including the United Kingdom) to none against with four abstentions. Subsequently two of those countries which had abstained informed the UN Secretariat that they had received authorisation to support the convention. This was not a roll call vote and the records do not list who among the 94 participating countries voted in favour.

  As at 31 December 1988 the following countries had ratified the convention: Dominica, Egypt, Ethiopia, Iraq, Morocco, Seychelles, Tunisia and Yugoslavia.

  Katyn Massacre
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of his Department's studies of Soviet involvement in the Katyn massacre taking account of the recent statement by the Polish Government on this matter.

  Mr. Waldegrave
  We are following developments closely. There is substantial circumstantial evidence pointing to Soviet responsibility for the massacre. We urge the Soviet authorities to help establish the facts once and for all.

  Cambodia
  Mr. Battle
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on Vietnamese troop withdrawals from Kampuchea; and what development he envisages in Her Majesty's Government's policies on recognition of(a) the coalition Government of democratic Kampuchea or (b) the state of Cambodia PRK.
  137
  Mr. Eggar
  Vietnam has withdrawn some troops from Cambodia, but significant numbers remain. We welcome Vietnam's stated intention of withdrawing fully by September.

  We recognise states, not Governments, and have dealings with neither the CGDK nor the PRK. We currently for see no change in this policy.

  Egypt
  Mr. Tony Lloyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussion Her Majesty's Government have had with the Egyptian authorities about the use of torture of political detainees in Egypt.

  Mr. Waldegrave
  None.

  Hong Kong (Ivory Trade)
  Mr. Tredinnick
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the Hong Kong Government concerning the trade in ivory in Hong Kong.

  Mr. Eggar
  We have informed the Hong Kong Government about our decision to support a ban on trade in new ivory. They are now urgently reviewing their position.

  Abduction
  Mr. David Nicholson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received during the present Parliament about the abduction and taking abroad by their foreign-born fathers of the children of United Kingdom citizen mothers; what information he has of the numbers of such children and the countries where they are now believed to reside; and if he will make a statement.

  Mr. Eggar
  [pursuant to the reply, 23 May 1989, c. 455]: Foreign and Commonwealth consular records are kept on an individual case-by-case basis. However, it has been possible to identify 56 cases in which Foreign and Commonwealth Office Ministers have received, during the present Parliament, representations about British children who have been taken overseas or are being kept overseas against the wishes of their mothers in the United Kingdom.

  The following table gives details of the number of cases together with the countries to which the children have been taken or in which they are believed to be being kept.

  In five of these cases—one in Cyprus, two in the United States of America, one in Yemen Arab Republic and one in Yugoslavia—custody of one or more of the children concerned has now been restored to their mothers in the United Kingdom.

  Country

  Number of cases

  Afghanistan

  1

  Algeria

  3

  Chile

  1

  Cyprus

  3

  France

  1

  India

  1

  Iran

  3

  Libya

  1

  138

  Country

  Number of cases

  Malaysia

  1

  Morocco

  2

  Netherlands

  1

  New Zealand

  2

  Pakistan

  9

  Saudi Arabia

  4

  Singapore

  1

  Spain

  3

  Sri Lanka

  1

  Thailand

  1

  United Arab Emirates

  3

  United States of America

  9

  Yemen Arab Republic

  3

  Yugoslavia

  2

TRANSPORT

  Lichfield—Redditch Railway Line
  Mr. Heddle
  To ask the Secretary of State for Transport if he has now received British Rail's submission for the electrification of the cross city line from Lichfield to Redditch via Birmingham New Street.

  Mr. Portillo
  Not yet.

  Heavy Vehicles
  Mr. Adley
  To ask the Secretary of State for Transport how many motor car axle-load movements of 12-cwt could be undertaken to equate with the equivalent damage caused by 1,000 12-ton axle-load lorries.

  Mr. Peter Bottomley
  Except for special vehicles, 12-ton axle loads are not allowed. The road wear from 1,000 12-ton axle-load movements would be about the same as from 160 million 12-cwt axle loads.

  Speed Limits
  Mr. Adley
  To ask the Secretary of State for Transport what assessment he has made of how much the kinetic energy as affecting road surfaces has increased through the raising of speed limits(a) of lorries from 50 to 60 mph and (b) of coaches from 60 to 70 mph.

  Mr. Peter Bottomley
  Detailed research into this aspect of road wear is still in progress. The interplay of the different vehicle forces and suspension types is complex, and the effect on the road surface varies according to speed and loading. Current indications are that, at higher speeds, dynamic effects increase the loading on road surfaces. The increases are small and are countered by the improved load spreading properties of most roads at such speeds. The research programme is aimed at determining where the balance between these opposing effects lies.

  Barrow Borough Transport Ltd.
  Mr. Franks
  To ask the Secretary of State for Transport on what date Barrow-in-Furness borough council applied to him for approval for the council to guarantee with National Westminster bank plc the overdraft facilities of Barrow Borough Transport Ltd.; and what was his reply.

  Mr. Portillo
  Barrow-in-Furness borough council applied to the Secretary of State for Transport for
  139
  approval to guarantee an overdraft facility on 12 August 1988 and submitted further information in support of this application on 16 September and 13 October. The application was, however, overtaken by subsequent events leading up to the appointment of administrators on 21 December.

  Mr. Franks
  To ask the Secretary of State for Transport (1) on what date Barrow-in-Furness borough council applied to him to make loans to Barrow Borough Transport Ltd.; and what was his reply;

  (2) what information he has as to the total amount of loans made by the Barrow-in-Furness borough council to Barrow Borough Transport Ltd. and as to between what dates these loans were made; and whether he gave his prior consent to the making of such loans under section 79 of the Transport Act 1985.

  Mr. Portillo
  We were informed in December 1988 by the council that it had made certain payments on behalf of the company between October 1986 and March 1987 and were asked whether consent was needed. We indicated that retrospective consent was not possible. Otherwise no application for consent to loans has been received and I have no information on loans made by the council to the company. The council does not need the Secretary of State's consent to make loans in connection with the provision or improvement of assets, provided that such loans are on terms no more favourable than those on which the authority can itself borrow.

  Mr. Franks
  To ask the Secretary of State for Transport what information he has as to(a) how many directors were appointed at any one time to the board of directors of Barrow Borough Transport Ltd., (b) how many of these directors were also councillors on Barrow-in-Furness borough council and (c) the financial status of such appointees.

  Mr. Portillo
  We have no specific knowledge on these points.

  Mr. Franks
  To ask the Secretary of State for Transport what information he has as to(a) on what date administrators were appointed by Barrow Borough Transport Ltd. and (b) what the total amount of indebtedness by Barrow Borough Transport Ltd. to Barrow-in-Furness borough council was at the date of the appointment of the administrators; and whether he gave his consent to the appointment of these administrators.

  Mr. Portillo
  Administrators were appointed on 21 December. We understand from the council that £628,000 was owed to them by the company. The Secretary of State's consent was not required to the appointment of administrators, which was made by the courts following an application by the directors of the company under the Insolvency Act 1986. The Secretary of State was, however, kept informed by the council and made clear that he had no objection to the council's action in connection with the appointment of administrators.

  Mr. Franks
  To ask the Secretary of State for Transport what information he has as to the amounts Barrow-in-Furness borough council transferred to Barrow Borough Transport Ltd. between 6 October 1988 and 10 November 1988; and whether his prior consent was sought for such transfers.
  140
  Mr. Portillo
  We have no information about any such transfers.

  Mr. Franks
  To ask the Secretary of State for Transport whether his consent was sought for the National Westminster Bank plc to obtain a legal mortgage over Barrow Borough Transport Ltd. property.

  Mr. Portillo
  No, and we have no information about any such mortgage. Public transport companies are, however, entitled to borrow from banks by way of temporary loans or overdrafts without the Secretary of State's consent, and may offer property as security for such borrowing.

  Fuel Duty Rebate
  Mrs. Margaret Ewing
  To ask the Secretary of State for Transport by how much revenue to the Exchequer would increase if the fuel duty rebate was abolished.

  Mr. Portillo
  In 1988–89 some £158 million of fuel duty rebate was paid to local bus operators.

  Mrs. Margaret Ewing
  To ask the Secretary of State for Transport what assessment he has made of the effect of the abolition of fuel duty rebate on(a) bus fares and (b) bus services in sparsely populated rural areas.

  Mr. Portillo
  We have estimated in 1988 that, assuming all else stayed the same in the local bus industry, the abolition of fuel duty rebate would result in either an increase in fares of some 13 per cent., supposing the whole effect was on fares, or a decrease in bus miles of some 12 per cent., supposing the whole effect was on bus miles. In practice it is likely that there would be some combination of these two effects. No separate estimate has been made of the effect on bus services in sparsely populated rural areas.

  Motorcycle Test
  Mr. Roger King
  To ask the Secretary of State for Transport when he expects to introduce the new accompanied motor cycle test; and what will the fee be for the test.

  Mr. Peter Bottomley
  We intend to introduce the new accompanied motor cycle riding test, for both motor cycles and mopeds, throughout Great Britain on Monday 2 October 1989. The examiner, instead of conducting the test on foot, will accompany the candidate on another motor cycle (or sometimes in a car) giving directions by radio link. This will make the test more rigorous. It will cover more ground. The examiner will see the entirety of the candidate's performance in the prevailing road and traffic conditions. The change in the test has been generally welcomed.

  The test will be available from 212 driving test centres throughout the country.

  Because of the extra costs involved in providing an accompanied test (provision of examiners' motor cycles, protective clothing and mobile radio equipment) it is proposed that the current test fee of £ 16·50 be increased to £24, compared with £18, with effect from 5 June for a car test. We are consulting all interested organisations on the change in regulations to effect this increase.

  Taunton Bypass
  Mr. David Nicholson
  To ask the Secretary of State for Transport what plans he has for repairing the Taunton bypass section of the M5; and if he will make a statement.

  Mr. Peter Bottomley
  Four major maintenance schemes will be carried out over the next few years to renew completely the southbound carriageway to enable it to carry the traffic expected well into the next century.

  The first of these contracts has recently been completed to the north of junction 26.

  Every effort will be made to minimise inconvenience to road users during the works, which will be programmed to avoid peak holiday periods.

  The decision to do the work following a study of the long-term maintenance needs of this length of M5 which was commissioned by Somerset county council at the Department's request.

  Unleaded Petrol
  Sir Hal Miller
  To ask the Secretary of State for Transport what progress has been made on the availability of unleaded petrol at motorway petrol service areas since the hon. Member's reply from the Minister for Roads and Traffic of 16 February,Official Report, column 294.

  Mr. Peter Bottomley
  My hon. Friend the Parliamentary Under-Secretary of State for the Environment and I are pleased that unleaded petrol is now available at all motorway service areas. The number of unleaded petrol pumps at sites is being increased to meet demand.

  British Rail (Investment)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport if he will uprate to 1989–90 prices the figures for investment by British Rail in the reply given to the hon. Member for Pembroke on 6 April,Official Report, columns 263–64.

  Mr. Portillo
  The figures are as follows:

  £ million cash

  £ million 1989–90 prices

  1948

  40

  603

  1949

  44

  640

  1950

  43

  624

  1951

  41

  548

  1952

  38

  468

  1953

  56

  666

  1954

  63

  749

  1955

  68

  771

  1956

  90

  966

  1957

  120

  1,235

  1958

  134

  1,324

  1959

  154

  1,512

  1960

  147

  1,427

  1961

  130

  1,220

  1962

  94

  855

  1963

  73

  646

  1964

  83

  710

  1965

  92

  748

  1966

  81

  632

  1967

  65

  488

  1968

  58

  423

  1969

  39

  267

  1970

  48

  305

  1971

  59

  346

  1972

  73

  397

  142

  £ million cash

  £ million 1989–90 prices

  1973

  81

  410

  1974

  103

  456

  1975

  157

  546

  1976

  176

  534

  1977

  193

  511

  1978

  208

  494

  1979

  248

  518

  1980

  304

  529

  1981

  277

  433

  1982

  243

  352

  1983

  252

  347

  19841

  280

  368

  1985–86

  399

  491

  1986–87

  399

  475

  1987–88

  526

  594

  1988–89

  596

  2629

  1 1984–5 was a 15 month financial period. The figure shown for 1984 is the 12 month internally reported result.

  2 forecast outturn.

  The figures include investment in Freightliners, BRML and BREL but exclude the laying of continuous welded track which BR do not now classify as investment.

  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

  781

  1990–91

  865

  1991–92

  928

  1992–93

  865

  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. 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.

  EC Transport Ministers' Council
  Mr. Amos
  To ask the Secretary of State for Transport what was the outcome of the recent European Council of Transport Ministers meeting in Luxembourg; and if he will make a statement.

  Mr. Channon
  I successfully negotiated a satisfactory end-date for the United Kingdom derogations from the Community maximum lorry weight limits. Against a Commission proposal that our derogation should end in 1996 I insisted that we needed more time to bring sufficient of our bridges up to suitable strength. It was a major achievement that the 40 tonne gross and 11·5 tonne drive axle weight limits will not apply in the United Kingdom until 1 January 1999.

  The Council also agreed to an improved inter-regional air services directive; a regulation to improve the working of air transport computer reservation systems, but with suitable data protection; a directive on road haulage statistics; a Resolution highlighting the need for improved co-operation in air traffic control; and conclusions reaffirming the need to make progress in the Community's

  143
  transit negotiations with Austria, Switzerland and Yugoslavia. The Commission's proposal on charging infrastructure costs to heavy goods vehicles was referred to Finance ministers. Against the United Kingdom's wishes, but on qualified majority voting, the Council agreed to increase the maximum permitted length of articulated vehicles from 15·5 to 16·5 metres; and to adopt a measure requiring a minimum tyre tread depth of 1·6 millimetres over three quarters of tyres' width.

  There was discussion but no agreement on a proposed short-term road haulage cabotage experiment; blood alcohol levels for drivers; the wearing of seat belts; and west Africa shipping.

  The Commission presented a proposal on shipping "positive measures" and a revised proposal for Community spending on transport infrastructure. There was some general discussion on the environment and transport under "any other business".

  Heavy Lorries
  Mr. Teddy Taylor
  To ask the Secretary of State for Transport what was the outcome of the Council meeting on heavier lorries on 5 June; and what are the implications for the United Kingdom and roads and bridge expenditure.

  Mr. Peter Bottomley
  We agreed that 40-tonne lorries will not reach British roads until 1999. We succeeded in persuading other member states that an earlier end-date would he premature.

  This date will give us the time needed for our bridges to be adequately strengthened. The strengthening programme is already underway. There are no new expenditure implications on trunk roads. We shall be talking further to local authorities to consider any implications for their programme.

  The Council also agreed on a work programme for improving lorries so that by the late 1990s they should be fitted with road-friendly suspensions which will be less damaging to roads and bridges, safer, quieter and better for the environment.

EDUCATION AND SCIENCE

  Teachers' Pay
  Mr. Ian Taylor
  To ask the Secretary of State for Education and Science when he next intends to meet the teaching unions to discuss the introduction of localised pay agreements.

  Mrs. Rumbold
  I refer my hon. Friend to the reply given by my right hon. Friend to the hon. Member for Hendon, South (Mr. Marshall) on 6 June 1989 at column 14.

CIVIL SERVICE

  Interchange with Outside Organisations
  Mr. Tim Smith
  To ask the Minister for the Civil Service what was the level of interchange between the Civil Service and outside organisations in 1988.

  Mr. Luce
  My Department's report on the interchange of staff between the Civil Service and other organisations in 1988 shows that the number of long-term secondments 144
  —that is, those of at least three months' duration—between the Civil Service and industrial or commercial organisations increased by 7 per cent. in 1988 to 505. There was a slight decrease—of some 3 per cent.—in the number of long-term secondments between the Civil Service and other organisations, of which there were 499 in 1988.

  On 1 March 1989, my right hon. and noble Friend the Secretary of State for Trade and Industry and I launched the Bridge programme to increase contact between Government and business. I am confident that, building on the substantial level of interchange achieved in recent years, this programme will provide a valuable boost to secondments and lead to even higher numbers of people being seconded between the Civil Service and other organisations.

  A copy of the 1988 interchange report has been placed in the Library of the House.

NATIONAL FINANCE

  Interest Charges
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will make a statement setting out his forecast of the effect of current levels of interest charges on inflation.

  Mr. Lilley
  Current levels of interest rates will, in due course, lead to a reduction in inflation.

  Exchange Rates
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will make a statement setting out the considerations he takes into account in establishing whether the pound is overvalued or undervalued against(a) the deutschmark and (b) other principal currencies.

  Mr. Lilley
  The considerations the Government take into account in formulating their monetary policy, in which the exchange rate plays a key role, were set out in my right hon. Friend the Chancellor of the Exchequer's Budget speech on 14 March, at columns 294–309.

  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will make a statement setting out the considerations which govern his policy in relation to the level of the pound sterling against other currencies.

  Mr. Lilley
  I refer my hon. Friend to my right hon. Friend the Chancellor of the Exchequer's Budget speech on 14 March, at columns 294–309.

  Exchange Rate Mechanism
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer if he will now specify the considerations which would make the time appropriate to join the exchange rate mechanism of the European monetary system.

  Mr. Lilley
  I refer my hon. Friend to the speech my right hon. Friend the Chancellor of the Exchequer made to the Royal Institute of International Affairs on 25 January.

  Payroll Giving
  Mr. Hoyle
  To ask the Chancellor of the Exchequer what arrangements have been made to introduce chargeable payroll deductions in the Civil Service and associated non-departmental public bodies.
  145
  Mr. Brooke
  Where appropriate a collection charge of 2½ per cent. of the amount of the deduction is made.

  Customs Officers
  Mr. Denzil Davies
  To ask the Chancellor of the Exchequer how many Customs officers were in post at the ports of(a) Fishguard, (b) Pembroke Dock and (c) Holyhead as at (i) 5 April 1979 (ii) 5 April 1984 and (iii) 5 April 1989.

  Mr. Lawson
  [holding answer 6 June 1989]: The numbers of Customs officers in post at the ports of Fishguard, Pembroke Dock and Holyhead at 5 April in the years 1979, 1984 and 1989 were as follows:

  1979

  1984

  1989

  Fishguard

  21

  22

  21

  Pembroke

  17

  118

  220

  Holyhead

  45

  39

  67

  1 excludes four mobile staff not solely engaged in port duties.

  2 excludes 14 mobile staff.

  Mr. Denzil Davies
  To ask the Chancellor of the Exchequer how many Customs officers were in post in Britain as of(a) 5 April 1979 and (b) 5 April 1989.

  Mr. Lawson
  [holding answer 6 June 1989]: On 5 April 1979 there were 7,600 Customs officers in post at ports, airports and inland premises. The figure for 5 April 1989 was 8,000.

  Value Added Tax Registrations
  Sir Anthony Meyer
  To ask the Chancellor of the Exchequer what were the numbers of new value added tax registrations for businesses with registered addresses in Wales for the calendar years 1987, 1988 and for 1989 to date.

  Mr. Lilley
  [holding answer 6 June 1989]: The local VAT offices that cover Wales also cover parts of England along the Welsh border. These offices are at Chester, Cardiff, Swansea, Carmarthen, Shrewsbury and Colwyn Bay.

  The numbers of VAT registrations processed by these officers for the years in question were:

  Year

  New registrations

  1987

  11,577

  1988

  14,748

  1989—to 31 March

  4,061

TRADE AND INDUSTRY

  Small Businesses
  Mr. David Nicholson
  To ask the Chancellor of the Duchy of Lancaster what estimates he has of the number of small businesses with a turnover of less than £1 million which went into liquidation in(a) 1986, (b) 1987 and (c) 1988; and if he will make a statement.

  Grade

  1 April 1984

  1 April 1985

  1 April 1986

  1 April 1987

  1 April 1988

  1 April 1989

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  E/DIR/L

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  1

  INS/GD/A

  1

  1

  1

  1

  1

  1

  1

  1

  2

  2

  3

  3

  INS/GD/B

  5

  5

  6

  5

  7

  6

  7

  8

  8

  7

  12

  12

  146
  Mr. Maude
  I regret that the information requested is not available.

  North East Shipbuilders Ltd
  Mr. Trotter
  To ask the Chancellor of the Duchy of Lancaster what arrangements he envisages for the disposal of the assets at NESL.

  Mr. Newton
  I made it clear earlier this year, following the announcement that British Shipbuilders was to close NESL, that the remaining work on ferries originally ordered by Danish interests would take some months to complete, and that no action would be taken to break up the assets in the yard before the end of June.

  In the intervening period, there have been several expressions of interest in some or all of the yards for a number of purposes including shiprepair, shipbuilding and general engineering.

  I have therefore asked British Shipbuilders and its financial advisers carefully to evaluate all such proposals with a view to advising me by the end of this month whether one or more of them provides a basis for detailed negotiation for the disposal of some or all of the assets. As with the evaluation of bids for NESL prior to the announcement of closure particular weight will be given to the security of resulting employment. In judging viability it will be necessary to allow for the fact that subsidy from the intervention fund would not be available.

  In making its judgment on the advice offered by British Shipbuilders on any possible disposal, the Government will need also to take appropriate account of its acceptability under the EC sixth directive on shipbuilding of the balance of advantage by comparison with the alternative of acquisition by the Tyne and Wear development corporation for clearance and development; of the extent to which any form of Government financial assistance was envisaged.

  Should such a disposal take place, the Government would also have to decide whether measures to assist the creation of employment to replace that in the yards continued to be necessary. Pending a decision, elements of the proposed remedial package not yet implemented, including designation of an enterprise zone, will be held in abeyance.

  Companies Investigation Branch
  Mr. Cousins
  To ask the Chancellor of the Duchy of Lancaster what is the establishment and staff in post in each grade of the companies investigation branch of the Department of Trade and Industry in each year since 1984.

  Mr. Forth
  The following table shows the posts allocated by grade to the companies investigation branch on 1 April in each of the years in question. Staff in post tends to change in the course of a year. The table, there,fore also lists the staff in post on 1 April.
  147

  Grade

  1 April 1984

  1 April 1985

  1 April 1986

  1 April 1987

  1 April 1988

  1 April 1989

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  Allocation

  Staff in Post

  INS/GD/C

  14

  14

  14

  14

  14

  14

  20

  18

  25

  25

  25

  22

  G7

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  1

  1

  HEO

  —

  —

  —

  —

  1

  —

  1

  1

  1

  1

  2

  2

  EO

  1

  1

  1

  1

  1

  —

  1

  1

  1

  1

  2

  1

  INS/GD/D & E

  4

  4

  5

  3

  5

  5

  8

  8

  7

  5

  7

  4

  AO

  4

  4

  5

  4

  5

  3

  5

  5

  5

  5

  6

  7

  AA

  1

  1

  1

  1

  1

  1

  1

  1

  2

  2

  3

  3

  PS

  1

  1

  1

  1

  2

  1

  2

  2

  3

  2

  4

  3·5

  TYP

  —

  —

  —

  —

  —

  —

  —

  —

  —

  1

  1

  1

  Total

  32

  32

  35

  31

  38

  32

  47

  46

  55

  52

  67

  60·5

  Private Limited Companies
  Mr. Evennett
  To ask the Chancellor of the Duchy of Lancaster (1) how many private limited companies registered in England and Wales have a paid-up share capital of greater than £100,000;

  (2) how many private limited companies registered in England and Wales have paid-up share capital in each of the bands (a) £25,000 to £50,000, (b) £50,000 to £75,000 and (c) £75,000 to £100,000.

  Mr. Maude
  This information is not currently available for all private limited companies on the companies' register. However, work is in hand to compile data on the lines requested for companies formed since May 1987 and this is expected to be available from Companies house in a few weeks' time.

  Mr. Evennett
  To ask the Chancellor of the Duchy of Lancaster what information he has regarding the minimum share capital required by private limited companies seeking authorisation under the Financial Services Act 1986 from the Securities and Investments Board or any self-regulatory organisation; and if he will make a statement.

  Mr. Maude
  The financial resources requirements for persons authorised by the Securities and Investments Board or by self-regulating organisations recognised under the Financial Services Act are matters for the board and the organisation concerned. As far as I am aware, none of these regulatory bodies expresses its requirements in terms of minimum share capital.

  Barlow Clowes
  Mr. Hardy
  To ask the Chancellor of the Duchy of Lancaster what is the sum recovered so far from the Barlow Clowes international fund; and how much has been returned to investors.

  Mr. Maude
  I understand the gross realisations, including bank interest, made by the receivers of funds promoted by Barlow Clowes International Limited amount so far to approximately £20 million.

  No distribution has yet been made to BCI investors pending the outcome of three court cases, two of which have already been heard with judgment reserved. The third case, to be heard in late June, will determine the basis upon which each individual investor's entitlement to any distribution will be calculated. I understand that it is hoped that after judgment of the three cases an interim distribution to investors in BCI may be made in the late summer or autumn this year.

  Bankruptcy (Scotland) Act
  Mrs. Margaret Ewing
  To ask the Chancellor of the Duchy of Lancaster if he will list regulations made under section 74(7) of the Bankruptcy (Scotland) Act 1985; and what plans he has to extend such definition.

  Mr. Maude
  Regulations made under section 74(7) of the Bankruptcy (Scotland) Act 1985 are set out in regulation 11 of the Bankruptcy (Scotland) Regulations 1985 (SI 1985 No. 1925 (s147)). There are no current plans to extend the definition.

  Mrs. Margaret Ewing
  To ask the Chancellor of the Duchy of Lancaster if he will consider legislation to introduce one period applicable to gratuitous alienation to an associate of the debtor or other parties in terms of section 34(3) of the Bankruptcy (Scotland) Act 1985.

  Mr. Maude
  No such legislation is considered necessary at present.

  An associate of a person who has subsequently been bankrupt would have been in a better position than any other person to judge the bankrupt's financial circumstances when the alienation took place. To be fair and just, an alienation in favour of an associate should continue to be challengeable if it was effected five years before the date of sequestration of the bankrupt's estate while an alienation in favour of any other person should be challengeable if it was effected two years before the date of sequestration.

  Tourism
  Mr. Redmond
  To ask the Chancellor of the Duchy of Lancaster what was the total value of tourism in Yorkshire and Humberside at current prices in each of the years from May 1979 to May 1989.

  Mr. John Lee
  I have been asked to reply.

  The available information relates to expenditure by international and domestic visitors staying at least one night in Yorkshire and Humberside in each calendar year from 1979 to 1988. Figures for expenditure by United Kingdom residents on day-trips within Yorkshire and Humberside are not available.

  Expenditure by tourists in the Yorkshire and Humberside region

  £ millions

  British residents1

  Overseas residents2

  Total

  1979

  255

  60

  315

  1980

  275

  65

  340

  1981

  300

  80

  380

  1982

  295

  85

  380

  1983

  335

  110

  445

  149

  Expenditure by tourists in the Yorkshire and Humberside region

  £ millions

  British residents1

  Overseas residents2

  Total

  1984

  385

  115

  500

  1984

  3405

  —

  3520

  1985

  3375

  145

  3520

  1986

  3435

  125

  3560

  1987

  3420

  150

  3570

  1988

  3500

  4

  4

  1 Source: British Tourist Survey Monthly.

  2 Source: International Passenger Survey.

  3 From 1984, an improved method of estimation was introduced, therefore, figures from 1984 to 1988 are not strictly comparable with earlier years.

  4 Not available.

WALES

  Agricultural Department
  Mr. Geraint Howells
  To ask the Secretary of State for Wales whether he has any plans to restructure his agriculture department in Wales; and if he will make a statement.

  Mr. Peter Walker
  Agriculture Department staff presently located at Plas Crug are in the process of moving to Trawsgoed. This relocation will produce worthwhile savings in accommodation costs and some staff economies. There will be no redundancies.

  Heart and Lung Transplants
  Mr. Geraint Howells
  To ask the Secretary of State for Wales how many people in Wales are on the waiting list for(a) heart and (b) lung transplants for each of the last five years; and if he will make a statement.

  Mr. Grist
  Heart and lung transplants are carried out at supra-regional centres in England and the information requested is not held by the Welsh Office.

  Disabled People (Housing)
  Mr. Alfred Morris
  To ask the Secretary of State for Wales what action he is taking to ensure a sufficient supply of wheelchair housing for people with disabilities who wish to leave residential care or to set up home on their own; and if he will make a statement.

  Mr. Grist
  It is for local authorities and housing associations in conjunction with Housing for Wales to assess housing need in their area and to make appropriate provision for people with special needs including those with disabilities.

  Mr. Alfred Morris
  To ask the Secretary of State for Wales if he will list the number of completions of(a) wheelchair housing and (b) mobility housing by (i) local authorities, (ii) housing associations and (iii) the private sector in each of the last 10 years for which figures are available.

  Mr. Grist
  Returns from local authorities indicate the number of dwellings built for the disabled to be as follows. Reliable estimates as regards the private sector are not available.
  150

  Completions of Wheelchair Housing

  Completions of Mobility Housing

  Local authority and New Towns

  Housing association

  Local authority and New Towns

  Housing association

  1979

  16

  —

  14

  —

  1980

  16

  —

  17

  —

  1981

  8

  —

  37

  —

  1982

  9

  —

  72

  —

  1983

  16

  —

  147

  —

  1984

  31

  2

  159

  —

  1985

  46

  —

  9

  4

  1986

  1

  27

  39

  1

  1987

  29

  10

  64

  175

  19881

  9

  5

  49

  26

  1 provisional.

  East Glamorgan General Hospital
  Dr. Kim Howells
  To ask the Secretary of State for Wales if he will list the major obstacles remaining in the way of an announcement by him of the start-up date for the construction of a replacement for East Glamorgan general hospital.

  Mr. Grist
  It is for the Mid Glamorgan DHA to indicate when construction of a replacement for this hospital might commence.

  Purolite Factory, Talbot Green
  Dr. Kim Howells
  To ask the Secretary of State for Wales what action he is taking in response to the messages received by the Welsh Office from people in the Talbot Green area expressing concern about the operation of the Purolite factory in that village.

  Mr. Grist
  I refer the hon. Gentleman to the reply sent to him on 6 June by my right hon. Friend.

  Higher and Further Education
  Dr. Kim Howells
  To ask the Secretary of State for Wales what assessment he has made of the adequacy of the increase in the current year of 3 per cent. in expenditure on institutions of higher and further education in Wales, in the light of the current inflation levels.

  Mr. Wyn Roberts
  The higher education quantum for 1989–90 is based on a figure 8·75 per cent. higher than last year's allocation. Some LEAs may provide further resources for higher education in addition to their share of the quantum to meet local priorities. Recurrent expenditure on further education is supported from the overall provision for local authority current expenditure on education, which rose by 6·3 per cent. between 1988–89 and the current year. Capital expenditure on higher and further education institutions in 1989–90 is expected to exceed last year's figure of £10·7 million by a substantial factor.

  Young People (Qualifications)
  Dr. Kim Howells
  To ask the Secretary of State for Wales what he intends to do to overcome the shortage of young people in Wales with the higher education qualifications and training required by industry and the financial services.

  Mr. Wyn Roberts
  The reform of college governing bodies under the Education Reform Act, the priorities
  151
  adopted by the Wales Advisory Body in formulating its advice on the distribution of the higher education quantum and the establishment of a transbinary Wales access unit to encourage and support the development of access courses will all assist higher education institutions to meet the demands of industry for highly skilled manpower. We have been encouraging employers to prepare for potential labour shortages by retraining existing workers, and drawing on the unemployed and other adults entering or re-entering the labour market. Our own training programmes are designed to facilitate this. We are particularly aware of the needs of the financial services sector in Wales and my right hon. Friend is discussing with interested parties measures to strengthen the skill base. He will be making an announcement on this shortly.

  Stone Quarrying (Taff Ely)
  Dr. Kim Howells
  To ask the Secretary of State for Wales what is his policy towards a physical expansion of stone quarrying in and around the borough of Taff Ely.

  Mr. Grist
  Responsibility for mineral planning in Taff Ely lies with the mineral planning authority, Mid Glamorgan county council.

  Litter
  Dr. Kim Howells
  To ask the Secretary of State for Wales what measures he intends to take to combat the problems of litter on and around the streets of the valleys communities.

  Mr. Peter Walker
  We are considering placing a duty on local authorities to clean public areas, having regard to codes of practice which the Government would issue. We are also looking at ways of enabling local authorities to enforce the Litter Act more effectively.

  Sewage Disposal
  Dr. Kim Howells
  To ask the Secretary of State for Wales, what measures he intends to take to ensure that the Welsh water authority reduces the volume of sewage which it releases into the rivers of south Wales during periods of high rainfall.

  Mr. Grist
  None. The operation of storm sewage overflows during periods of high rainfall is a necessary practice to prevent the surcharging of sewers and the likely consequent flooding of properties with sewage.

  Research and Development (New Industries)
  Dr. Kim Howells
  To ask the Secretary of State for Wales what measures he intends to take to promote the business of research and development in the new industries of south Wales.

  Mr. Peter Walker
  My Department actively promotes a wide range of measures aimed at stimulating industrial research and development. Financial assistance is available for collaborative research and for exploring key technologies. The Link scheme encourages companies to work jointly with universities and polytechnics, while small firms can benefit from the SMART competition and the regional enterprise grants for innovation. WINtech, a division of the WDA, has been established specifically to 152
  advance the development and use of new technology in Welsh industry. It provides quality advice on technology transfer and product development, and access to seed capital. Welsh Development International complements this broader effort by working hard to encourage inward investors to establish research and development facilities in Wales.

  Welsh Water Authority (Headquarters)
  Dr. Kim Howells
  To ask the Secretary of State for Wales what proportion of the bill for the current construction of the reinforced concrete monitoring building at the Welsh water authority's area headquarters at Nelson, Mid Glamorgan, will be written off under the Government's write-off of water authority debts.

  Mr. Grist
  Recent Government statements on debt write-off relate only to water authority borrowings from the national loans fund. The Government will not be seeking to identify notional borrowings against specific projects.

  Out-patient Waiting Lists
  Dr. Kim Howells
  To ask the Secretary of State for Wales what information he has on the reasons for the differences in the time it takes to clear out-patient waiting lists in Glamorgan general hospital, Cardiff royal infirmary and the average for all hospitals in Wales.

  Mr. Grist
  As the introduction to Welsh Hospital Waiting List Bulletin 1989: No. 1 makes clear, for a variety of reasons care is needed in interpreting the data given in the bulletin, thus making meaningful comparisons difficult. In the case of Cardiff royal infirmary the hospital provides a range of specialties which are particularly to it and may be different from those found in other hospitals, notably East Glamorgan hospital. There are further differences between individual specialties, notably in the case of Cardiff royal infirmary trauma and orthopaedics. The East Glamorgan general hospital is understood to have had staffing problems at consultant level which will have affected the notional waiting time figures there, at least in the short term. Detailed information on the explanation for waiting list performance by particular hospitals may be obtained direct from the relevant health authorities, upon which the responsibility to achieve the right balance of services and resources in serving their patients in the light of local circumstances and needs.

  Channel Tunnel
  Dr. Howells
  To ask the Secretary of State for Wales if he will takes steps to ensure that south Wales rail passengers and freight will enjoy direct access to the continent via the Channel tunnel as soon as any other region of the United Kingdom.

  Mr. Wyn Roberts
  I am keen for British Rail to provide Wales with an appropriate level of service to meet identified needs. It is for British Rail to determine the level and nature of such services in the light of available forecasts of traffic.

  Cash Limits
  Mr. Gwilym Jones
  To ask the Secretary of State for Wales if he proposes to make any changes to the 1989–90 cash limits for class XVII, vote 5 and WO/UA1.
  153
  Mr. Peter Walker
  Yes. Subject to parliamentary approval of the necessary Supplementary Estimate for class XVII, vote 6, I propose to increase the WO/UA1 urban aid non voted cash limit by £7,000,000, from £58,646,000 to £65,646,000. This will permit enhanced land acquisition this year by the Cardiff Bay development corporation.

  This increase will be offset by reductions elsewhere within my expenditure programmes and will not therefore add to the planned total of public expenditure.

  These savings are being found from the roads and transport section of class XVII, vote 5. Accordingly, the cash limit for this vote is being reduced by £7,000,000, from £273,711,000 to £266,711,000.

DEFENCE

  Nuclear Weapons
  Mr. Harry Barnes
  To ask the Secretary of State for Defence what proposals exist for the multiple launch rocket system to be capable of firing short-range nuclear weapons.

  Mr. Grocott
  To ask the Secretary of State for Defence what proposals exist for the multiple launch rocket system to be capable of firing short-range nuclear weapons.

  Mr. Archie Hamilton
  I refer the hon. Members to the reply I gave to the hon. Member for Newport, West (Mr. Flynn) on 20 February 1989, at column 445.

  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence, pursuant to his oral reply to my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) of 7 March,Official Report, column 738, what distinction he makes between (i) a warhead and (ii) a system when comparing the North Atlantic Treaty Organisation and Soviet reductions in nuclear weaponry.

  Mr. Archie Hamilton
  A warhead is that part of a missile, projectile, torpedo, rocket or other munition which contains either the nuclear, thermo-nuclear or high explosive device, the chemical or biological agents, or the inert materials intended to inflict damage. A weapon system is the means of delivering the warheads.

  Mr. Redmond
  To ask the Secretary of State for Defence how many nuclear missiles have been removed from the United Kingdom since the United States/Soviet intermediate nuclear forces treaty; and if he will make a statement.

  Mr. Archie Hamilton
  By the end of 1988, 16 operational missiles had been removed.

  Mr. Redmond
  To ask the Secretary of State for Defence if he will make a statement on the North Atlantic Treaty Organisation general political guidelines for use of nuclear weapons; and how many times they have been followed.

  Mr. Archie Hamilton
  The general political guidelines were agreed by Ministers at the Gleneagles NPG meeting in October 1986. The purpose of the document is to provide political guidelines for the employment of nuclear weapons in defence of NATO within the framework of NATO's strategy of flexible response and forward defence.154
  These guidelines are the basis for both peacetime planning by political and military authorities and a guide for carrying out their respective responsibilities in times of tension or conflict. They are consulted regularly.

  Nuclear Deterrent
  Mr. John Marshall
  To ask the Secretary of State for Defence what recent representations he has received about the case for modernising the nuclear deterrent.

  Mr. Archie Hamilton
  My right hon. Friend has received a number of letters from individuals and organisations.

  F111G Aircraft
  Mr. Redmond
  To ask the Secretary of State for Defence how many United States Air Force F111G aircraft are based in the United Kingdom; and if he will make a statement.

  Mr. Archie Hamilton
  None.

  NATO (Scotland)
  Dr. Godman
  To ask the Secretary of State for Defence what is the estimated total value to the economy for(a) Strathclyde and (b) Scotland as a whole of the presence of military establishments of the North Atlantic Treaty Organisation armed forces in various locations in the region and the country.

  Mr. Archie Hamilton
  No such estimate has been made for Strathclyde or for Scotland.

  Type 23 Frigates
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what is his programme for ordering Type 23 frigates for 1990, 1991 and 1992.

  Mr. Sainsbury
  Tenders have recently been invited for a batch of up to four type 23s. Decisions will be taken on the precise size and timing of the order after the tenders have been received, evaluated and fully analysed. In the longer term, we have plans to place sufficient orders to maintain a force of about 50 destroyers and frigates.

  Procurement Staff
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what is the average time in post of each of the grades in the procurement executives of his Department.

  Mr. Sainsbury
  Information about average time in post, by grade, is not compiled in the form requested, and could be provided only at disproportionate cost.

ATTORNEY-GENERAL

  CPS (Pay)
  Mr. Allen
  To ask the Attorney-General what recent discussions he has had on the pay levels within the Crown prosecution service; and what was the outcome of his discussions.

  The Attorney-General
  Pay for lawyers in the Crown prosecution service at grade 7 and above was settled in July 1988, setting levels until the new review date of 1 August 1989.
  155
  It is not my practice to disclose matters relating to any discussions of the nature of those referred to by the hon. Member.

  Serious Fraud Office
  Mr. Cousins
  To ask the Attorney General, what is the establishment and staff in post in each grade of the Serious Fraud Office in each year of its existence, together with the number of cases referred to it.

  The Attorney-General
  The Serious Fraud Office was established on 6 April 1989. On 31 March 1989, the final day of the financial year 1988-89, the position was as follows:

  Grade

  Establishment

  Staff in post

  2

  1

  1

  3

  2

  2

  5

  10

  9

  6

  18

  13

  7

  5

  5

  Senior Executive Officer

  5

  6

  Higher Executive Officer

  10

  8

  Executive Officer

  8

  7

  Administrative Officer

  3

  1

  Administrative Assistant

  2

  0

  Senior Personal Secretary

  1

  1

  Personal Secretary

  4

  5

  Typing Manager

  0

  1

  Typist

  6

  0

  Support Manager 3

  1

  1

  Support Grade 2

  3

  0

  Of those staff in post, one higher executive officer was on loan from the Crown prosecution service. There were in addition to the figures shown 29 agency staff employed on a temporary basis.

  The position to 1 June 1989 in the financial year 1989–90 was follows:

  Grade

  Complement

  Staff in Post

  2

  1

  1

  3

  2

  2

  5

  10

  10

  6

  18

  13

  7

  5

  5

  Senior Executive Officer

  6

  6

  Higher Executive Officer

  11

  8

  Executive Officer

  9

  8

  Administrative Officer

  3

  2

  Administrative Assistant

  2

  0

  Senior Personal Secretary

  1

  1

  Personal Secretary

  6

  5

  Typing Manager

  1

  1

  Typist

  12

  0

  Support Manager 3

  1

  1

  Support Grade 2

  4

  1

  Total

  92

  64

  Of those staff in post, one higher executive officer was still on loan from the Crown prosecution service. Three of the four grade 5 accountants currently in post are seconded from private practice. There are in addition 29 agency staff employed on a temporary basis.

  In the period 6 April 1988, when the Serious Fraud Office was established, to 31 December 1988, 109 separate cases were referred to it for consideration. This number includes some matters which have previously been dealt with by the Crown prosecution service. From 1 January 1989 to date 28 separate cases have been referred.

ENERGY

  Pacific Sandpiper
  Mr. Flynn
  To ask the Secretary of State for Energy why, pursuant to his reply to the hon. Member for Newport, West,Official Report, 11 May, column 481, on the Pacific Sandpiper, a consignment of spent irradiated nuclear fuel was transported into and out of the United Kingdom without it being reprocessed; and on how many occassions such a stop-off has taken place since May 1979.

  Mr. Michael Spicer
  The irradiated fuel was from an overseas research reactor and was being returned to its country of origin. The material was subject to international safeguards. It came to the United Kingdom as part of a cargo of irradiated fuel the balance of which was for reprocessing at Sellafield. Since May 1979 there has been an average of about one such shipment a year.

  World Association of Nuclear Operators
  Dr. Thomas
  To ask the Secretary of State for Energy what departmental representation was made at the launch of the World Association of Nuclear Operators in Moscow on 15 May.

  Mr. Michael Spicer
  None. The World Association of Nuclear Operators comprises representatives of every organisation that operates electrical power producing nuclear reactors. It is independent of Government. However, I welcome its establishment and support its aims.

  Pressurised Water Reactor, Wylfa
  Mr. Martyn Jones
  To ask the Secretary of State for Energy if he has considered the terms of reference for the public inquiry into the proposed pressurised water reactor at Wylfa in Anglesey; and if he will make a statement.

  Mr. Michael Spicer
  My right hon. Friend received an application from the CEGB on 18 April 1989 for his consent to construct a PWR nuclear power station to be known as Wylfa B. He directed the board to advertise its application and allowed a period of up to 31 July 1989 for objections to be made to him.

  Until the response to the advertisements is known and the views of the relevant local planning authorities are received, it is too early to speculate whether a public inquiry will be necessary or, if a public inquiry is held, what matters my right hon. Friend will ask the inquiry inspector to consider.

  Berkeley Nuclear Power Station
  Mr. Martyn Jones
  To ask the Secretary of State for Energy if he will give a timetable for the decommissioning of Berkeley nuclear power station over the next 14 years; and if he will make a statement.

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

  Trawsfynydd Power Station
  Mr. Martyn Jones
  To ask the Secretary of State for Energy if the Central Electricity Generating Board has any
  157
  plans to reschedule the natural circulation test at Trawsfynydd nuclear power station that was cancelled due to public concern; and if he will make a statement.

  Mr. Michael Spicer
  I understand from the Central Electricity Generating Board that it has no immediate plans to carry out a natural circulation test at Trawsfynydd nuclear power station. However, if the board should decide to undertake such a test it will publicise its plans in advance. No test can go ahead unless the Health and Safety Executive's nuclear installations inspectorate is satisfied that it is safe.

  Miners' Pension Scheme
  Mr. Skinner
  To ask the Secretary of State for Energy when he intends to introduce the amending order with regard to the retired mineworkers pension scheme benefits lost by former mineworkers due to changes in the availability for work procedures.

  Mr. Michael Spicer
  The draft Redundant Mineworkers and Concessionary Coal (Payments Schemes) order 1989 will be introduced shortly.

EMPLOYMENT

  Birkenhead Jobcentre
  Mr. Frank Field
  To ask the Secretary of State for Employment if Birkenhead jobcentre has sufficient staff to answer claimants' inquiries about possible job opportunities; and if he will make a statement.

  Mr. Lee
  Birkenhead jobcentre has sufficient staff to deal with the range of functions and activities offered by an office of its size. There have been no reports of queues or delays from either staff or members of the public.

  Disabled People
  Mr. Ashley
  To ask the Secretary of State for Employment on what date he plans to publish his Department's internal review of employment services for disabled people commissioned in March 1988; and if he will make a statement.

  Mr. Lee
  I have nothing to add to the reply I gave my hon. Friend the Member for Exeter (Mr. Hannam) on 8 November 1988, at column 54.

  Mr. Ashley
  To ask the Secretary of State for Employment what consultations his Department has had with disability organisations and disabled people on the review of employment services for disabled people.

  Mr. Lee
  I have nothing to add to the reply I gave to my hon. Friend the Member for Exeter (Mr. Hannam) on 7 November 1988, at columns 54–55.

  Employment Protection (Consolidation) Act
  Mr. Norris
  To ask the Secretary of State for Employment what plans he has to implement section 131 of the Employment Protection (Consolidation) Act 1978.

  Mr. Cope
  My Department has published a consultation paper today seeking views on the desirability of extending the jurisdiction of industrial tribunals to cases 158
  involving breach of employment contract in certain circumstances. The consultation paper, a copy of which has been placed in the Libraries of both Houses, has been sent to a number of interested organisations. The deadline for receipt of comments is 4 August.

PRIME MINISTER

  Gross Domestic Product (Defence)
  Mr. Austin Mitchell
  To ask the Prime Minister if she will publish in the Official Report a table showing the information she has on the percentage of gross domestic product spent on defence in (a) Russia and (b) North Atlantic Treaty Organisation countries, together with figures showing (i) gross domestic product and (ii) gross domestic product per head in dollar terms.

  The Prime Minister
  The table sets out the information requested for NATO countries for 1987, the latest year for which complete figures are available. Provisional figures for 1988 defence expenditure as a percentage of GDP in each NATO country were included in the 1989 Statement on the Defence Estimates, Cm. 675-I, page 39. The Soviet Union has recently stated that its defence expenditure for 1989 will be 77·3 billion roubles. We do not know how this figure has been compiled and assess that, when compiled according to the definitions common to NATO countries, outlays should be roughly twice this level. As such, they would constitute an estimated 15 to 17 per cent. of Soviet GDP. No accurate estimates can be given of Soviet GDP or GDP per capita in dollar terms; conversion of rouble data into dollars using commercial exchange rates is likely to prove highly misleading.

  Defence expenditure as a percentage of GDP

  GDP million US$1

  GDP per capita US $1

  Belgium

  3·0

  138,526

  14,030

  Canada

  2·1

  414,244

  16,050

  Denmark

  2·1

  101,315

  19,750

  France

  4·0

  879,879

  15,710

  Federal Republic of Germany

  3·1

  1,118,839

  18,270

  Greece

  6·2

  47,179

  4,720

  Iceland

  —

  5,326

  21,740

  Italy

  2·4

  751,261

  13,090

  Luxembourg

  1·2

  6,061

  16,290

  Netherlands

  3·1

  214,641

  14,630

  Norway

  3·4

  82,661

  19,770

  Portugal

  3·1

  36,312

  3,530

  Spain

  2·4

  288,098

  7,420

  Turkey

  4·4

  65,044

  1,250

  United Kingdom

  4·7

  665,732

  11,730

  United States

  6·5

  4,436,018

  18,190

  1 Based on 1987 average market exchange rates.

  Russia—Nato (Military Advantage)
  Mr. Austin Mitchell
  To ask the Prime Minister if she will publish in the Official Report a table showing the Government's assessment of the change in the balance of military advantage between Russia and the North Atlantic Treaty Organisation countries in 1959, 1968, 1978 and 1988 respectively.

  The Prime Minister
  Information on the balance between NATO and the Warsaw pact forces for 1978 and 1988 is available in the relevant tables in the Statements on
  159
  Defence Estimates for those years, Cmnd. 7099 and Cm. 344-I. Similar information for 1959 and 1968 is not available.

  Self-governing Hospitals
  Mr. Austin Mitchell
  To ask the Prime Minister in what ways the costs of self-governing hospitals can be expected to be reduced.

  The Prime Minister
  Self-governing hospitals are not being established as a cost saving exercise. They will help to improve the choice and quality of the services offered to the public and the efficiency with which these services are delivered.

  Council for Mutual Economic Assistance (Troops)
  Mr. Austin Mitchell
  To ask the Prime Minister what assumptions about the proportion of the Council for Mutual Economic Assistance nations' troops which would be supplied to take part in an invasion of Europe underlie Her Majesty's Government's defence policy.

  The Prime Minister
  The Council for Mutual Economic Assistance is not a military organisation. Details of the forces available to the Warsaw pact are set out in chapter six of the Statement of the Defence Estimates 1989, Cm. 675-I.

  Patient Care (GPs' Budgets)
  Mr. Austin Mitchell
  To ask the Prime Minister what will be the effects on patient care of the Government's proposal that overspending by a group of general practitioners in one year will result in a reduction in their budget in the following year.

  The Prime Minister
  None. If a practice budget becomes overspent, it will be open to the budget holders to seek a budgetary review. Should the review find that a higher level of spending was justified by virtue of changed circumstances since the initial budget was set, there will be no compensatory reduction in the following year. In any event, practice budgets will always be set at levels which safeguard the interests of patients and no changes will be made to budgets which would jeopardise this fundamental principle.

  Nuclear Weapons
  Mr. Austin Mitchell
  To ask the Prime Minister (1) whether any nuclear weapons sited in Britain may be used for defensive purposes without the consent of Her Majesty's Government;

  (2) whether nuclear weapons sited in West Germany can be used for defensive purposes without the consent of the Government of the Federal Republic of Germany.

  The Prime Minister
  At the North Atlantic Council meeting at Athens in 1962, both the United Kingdom and the United States specifically committed themselves to consult their allies, time and circumstances permitting, before releasing their nuclear weapons for use. The Council also adopted guidelines on the degree to which political consultation on such use might be possible. Subsequently the nuclear planning group, meeting in The Hague in 1968, agreed that special weight should be given to the views of the NATO countries most directly affected. It would not be in the public interest to reveal the precise details of the arrangements.
  160
  The separate arrangements for joint decision over the use of United States bases in the United Kingdom were set out in the reply of my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) to the hon. Member for Edinburgh, East (Mr. Strang) on 24 February 1987, at column 222.

  Mr. Allen
  To ask the Prime Minister whether she is prepared to use nuclear weapons first.

  The Prime Minister
  The possibility of first use of nuclear weapons in response to a conventional attack is central to NATO's strategy of deterrence to which I fully subscribe.

  Mr. Austin Mitchell
  To ask the Prime Minister what are Her Majesty's Government's policies on the use of available nuclear weapons in the event of a Soviet breakthrough to the Channel ports using conventional weapons.

  The Prime Minister
  It would undermine our strategy of deterrence to spell out in advance the precise way in which nuclear weapons would or might be used in any given circumstance.

  European Community (Benefits)
  Mr. Allen
  To ask the Prime Minister what benefits have been brought to Nottingham and Nottinghamshire arising(a) from membership of the European Community (b) the consequences of the Single European Act.

  The Prime Minister
  Membership of the EC has contributed, with the policies of the present Government, to faster growth and greater prosperity in which Nottinghamshire has shared, and which has reduced unemployment in the Nottingham travel-to-work area from 12·8 per cent. to 8·3 per cent. in the two years to April 1989ߞa reduction of 35 per cent.

  The Single European Act will facilitate the creation of the single European market which will enhance these opportunities still further, particularly in view of the United Kingdom's proven attraction as a location for inward investment projects such as Toyota's, which will create new business and employment opportunities throughout the east midlands.

  Nottinghamshire is likely to benefit substantially from the EC's recent decision to make new areas of the county, including Mansfield and Worksop, eligible for help from the European regional development fund.

  Kincora Boys' Home
  Mr. Livingstone
  To ask the Prime Minister if she will establish a further inquiry into events at the Kincora boys' home following the publication of the book "Who Framed Colin Wallace?" by Paul Foot which gives evidence of doubt concerning the validity of information supplied to the Hughes inquiry by the Royal Ulster Constabulary.

  The Prime Minister
  No. The matter has been fully and carefully investigated by successive inquiries. Any new evidence should be presented to the appropriate authorities.

  "Forward Area" (Definition)
  Ms. Ruddock
  To ask the Prime Minister, pursuant to her oral reply to the hon. Member for Banbury (Mr. Baldry) of 11 April,Official Report, column 738, what precise area is covered by the term "forward area".

  The Prime Minister
  The area referred to in my reply covers territory of the German Democratic Republic, Poland, Czechoslovakia and Hungary.

  Taxation
  Mr. Austin Mitchell
  To ask the Prime Minister if Her Majesty's Government will bring forward proposals to amend section 2 of the European Communities Act 1972 to enable Parliament to decide the level of taxation.

  The Prime Minister
  We have no plans to amend section 2 of the European Communities Act 1972.

  EEC (Harmonisation)
  Mr. Austin Mitchell
  To ask the Prime Minister if she will make it her policy that Her Majesty's Government will not agree to any form of harmonisation within the European Economic Community of monetary, fiscal or exchange rate policy under the treaty of Rome or the Single European Act.

  The Prime Minister
  I refer the hon. Member to the exchange between myself and my hon. Friend the Member for Thanet, South (Mr. Aitken) on 18 May at column 1474 and to the answer I gave to my hon. Friend, the Member for Crawley (Mr. Soames) on 2 May at columns 13–14.

  Monetary Union and Fiscal Harmonisation
  Mr. Austin Mitchell
  To ask the Prime Minister what assessment has been made of the disadvantages for the United Kingdom, France, West Germany, Benelux and Spain agreeing to monetary union and fiscal harmonisation.

  The Prime Minister
  I refer the hon. Member to the speech 1 made to the College of Europe at Bruges, Belgium on 20 September last year and to the speech my right hon. Friend the Chancellor of the Exchequer made to the Royal Institute of International Affairs on 25 January.

  Labour Statistics
  Mr. Austin Mitchell
  To ask the Prime Minister what is the Government's estimate of the number of jobs which will be lost in United Kingdom manufacturing as a result of the completion of the internal market.

  The Prime Minister
  Completion of the single market should result in job gains over a number of years: whether or not these potential gains are achieved will depend on how employers and employees respond to the opportunities that the single market will present.

  European Community (Integration)
  Mr. Austin Mitchell
  To ask the Prime Minister whether Her Majesy's Government will commission a survey of public opinion to measure the proportion of voters which want the United Kingdom to be more integrated into the European Community.
  162
  The Prime Minister
  No.

  Germany (Reunification)
  Mr. Austin Mitchell
  To ask the Prime Minister whether Her Majesty's Government will promote the reunification of Germany and a political settlement between Germany and the East European states on terms acceptable to the Federal Republic of Germany.

  The Prime Minister
  I remind the hon. Gentleman of article 7 of the convention on relations in the Bonn-Paris conventions of 1955:"Pending the Peace Settlement the signatory states will co-operate to achieve, by peaceful means, the common aim of a reunified Germany enjoying a liberal-democratic constitution, like that of the Federal Republic."
  This long-standing commitment enjoys our continuing support.

  EEC (Social Policy)
  Mr. Austin Mitchell
  To ask the Prime Minister whether she will publish in the Official Report a table showing which of the proposals put forward by the European Economic Commission in the social field could not be enacted by the British Parliament on its own account.

  The Prime Minister
  Parliament can enact legislation in all of the areas proposed in the social field. However, in framing any legislation, the Government will of course have regard to our international obligations, including our obligations under Community law.

NORTHERN IRELAND

  Disabled People (Housing)
  Mr. Alfred Morris
  To ask the Secretary of State for Northern Ireland what action he is taking to ensure a sufficient supply of wheelchair housing for people with disabilities who wish to leave residential care or to set up home on their own; and if he will make a statement.

  Mr. Needham
  The Department of the Environment (NI) funds the provision of special needs housing in response to proposals by the Housing Executive and by registered housing associations. It is a matter for the Housing Executive and individual associations in consultation with statutory bodies and voluntary agencies to determine the numbers and locations of units to be provided to wheelchair standard. In practice the supply of wheelchair accommodation has, I believe, kept broadly in line with the needs of physically handicapped people who wish to leave residential care or to set up home on their own.

  Mr. Alfred Morris
  To ask the Secretary of State for Northern Ireland if he will list the number of completions of(a) wheelchair housing and (b) mobility housing by (i) local authorities, (ii) housing associations and (iii) the private sector in each of the last 10 years for which figures are available.

  Mr. Needham
  i. I am advised by the chairman of the Northern Ireland Housing Executive that information in the form requested is not readily available and could be compiled only at disproportionate cost. However during the period 1976 to 1 April 1989 102 dwellings were built for use by tenants confined to a wheelchair and 6,044 dwellings were built to mobility standard.
  163
  ii. The number of wheelchair units completed by registered housing associations in Northern Ireland in each of the last 10 financial years is as follows:

  Year

  Number of units completed

  1979–80

  10

  1980–81

  11

  1981–82

  11

  1982–83

  15

  1983–84

  53

  1984–85

  29

  1985–86

  39

  1986–87

  10

  1987–88

  41

  1988–89

  79

  Total

  298

  No separate record is kept of units built by registered housing associations to mobility standard. However, most sheltered housing for the elderly is built to mobility standard and the number of such units completed in each of the last 10 years is as follows:

  Year

  Number of units completed

  1979–80

  181

  1980–81

  285

  1981–82

  97

  1982–83

  448

  1983–84

  356

  1984–85

  448

  1985–86

  497

  1986–87

  227

  1987–88

  364

  1988–89

  421

  Total

  3,324

  iii. Further units to mobility standard were provided for client groups other than the elderly but specific numbers are not readily available.

  There are no statistics available for the provision of facilities for the wheelchair disabled within the private housing sector.

  Short Bros. plc.
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Northern Ireland what progress he is making towards the privatisation of Short Bros. plc.

  Mr. Tom King
  I refer my hon. Friend to the statement that I made this afternoon, a copy of which has been placed in the Library.

ENVIRONMENT

  Rating Reform
  Sir William Shelton
  To ask the Secretary of State for the Environment what would a(a) single person on half average earnings, (b) single person on average earnings and (c) typical ward sister pay in capital value rates and local income tax combined, assuming an 80/20 capital rate to local income tax split if he or she lived in a property in Lambeth worth (i) £65,000, (ii) £75,000, (iii) £85,000, (iv) £100,000 and (v) £150,000.
  164
  Mr. Gummer
  The information requested is provided in the table.

  Illustrative annual liability in Lambeth under a system of capital value rates combined with local income tax, 1988–89

  Property value £

  (a) single person1 earning £6,360 £

  (b) single person2 earning £12,725 £

  (c) typical3 ward sister £

  65,000

  1,220

  1,400

  1,415

  75,000

  1,395

  1,570

  1,585

  85,000

  1,656

  1,745

  1,755

  100,000

  1,825

  2,000

  2,015

  150,000

  2,685

  2,860

  2,875

  Notes:

  1 Assuming taxable income of £3,755 per year.

  2 Assuming taxable income of £10,120 per year.

  3 Assuming taxable income of £10,595 per year.

  The figures are based on the illustrative tax rates placed in the Library on 23 June 1988 and are for 1988–89. No allowance has been made for rebates for those on low income. They assume that the person lives alone, in each case.

  Departmental Policy
  Dr. Thomas
  To ask the Secretary of State for the Environment if he will list(a) the failures of implementation of policy and (b) the successes in the implementation of policy by his Department since May 1979.

  Mr. Ridley
  I refer the hon. Member to the answer given by my right hon. Friend the Prime Minister to my hon. Friend the Member for Pembroke (Mr. Bennett) on 25 May(Official Report columns 695–719). Columns 706–08 list the major achievements for which my Department is responsible. There have been no failures.

  Community Charge
  Mr. Cohen
  To ask the Secretary of State for the Environment if he will list the circumstances in which a carer, as a consequence of their caring, may become subject to paying more than one poll tax; and if he will take steps to introduce legislation to remove all such circumstances.

  Mr. Gummer
  The Government have no plans to introduce a poll tax. By the act of caring no one becomes responsible for anyone else's community charge.

  Development Grant
  Mr. Redmond
  To ask the Secretary of State for the Environment what was the total budget for the Yorkshire and Humberside region in grant-in-aid for development for the years May 1979 to May 1989; how much central Government gave towards the budget; and how much was obtained from other sources.

  Mr. Trippier
  Comprehensive figures for Yorkshire and Humberside are not available, but as a measure of the contribution made by Government the three main Departments concerned with encouraging development—Environment, Employment and Trade and Industry—contributed £489 million in 1988–89 alone.

  Housing Grants
  Mr. Ken Hargreaves
  To ask the Secretary of State for the Environment what is his Department's policy on the timing of announcements as to who will receive grants under(a) section 16 of the Housing and Planning Act 1986 and (b) section 73 of the Housing Act 1985 in relation to the beginning of the relevant financial year; and how many times this target has been achieved in the last five years, for each grant.

  Mr. Trippier
  It is the Department's policy now to announce the award of grants under section 73 of the Housing Act 1985 and under section 16 of the Housing and Planning Act 1986 where possible before the start of the financial year to which they apply. Applications may be considered (and grants awarded) at any time during the year.

  Section 73 grants

  Over the last five years, awards of grants were notified in each July or August with the exception of 1987–88 when grants were not announced until September.

  Section 16 grants

  This grant regime started in May 1987. Awards for the latter half of that year were made in October 1987. For 1988–89 and 1989–90, all recipients of grant were notified before or at the start of the financial year.

  Housing (Grants)
  Mr. Knox
  To ask the Secretary of State for the Environment whether the grants which are made by his Department under section 16 of the Housing and Planning Act 1986 and under section 73 of the Housing Act 1985 are normally made on an annual basis; and for what periods grants have been made under those powers for the current financial year.

  Mr. Trippier
  The grants made by my Department under section 16 of the Housing and Planning Act 1986 and under section 73 of the Housing Act 1985 are normally made on an annual basis. This year has been no exception for grants made under section 16. Section 73 grants have been offered for six months pending the outcome of the review of the section 73 grant regime.

  Community Charge
  Mr. Allen
  To ask the Secretary of State for the Environment, pursuant to his reply to the hon. Member for Nottingham, North of 16 May,Official Report, column 183, what was the exact amount of the city of Nottingham expenditure on the setting up costs of the community charge which has been supported through the rate support grant.

  Mr Gummer
  The grant-related expenditure assessment for Nottingham for 1989–90 included £307,000 in respect of community charge preparation costs. This is the level of expenditure which is supported through rate support grant. As I explained in my answer to the hon. Member on 16 May, there will in addition be a specific grant of £306,864 made available to Nottingham in 1989–90 for these purposes.

  Housing (Kirklees)
  Mr. Reddick
  To ask the Secretary of State for the Environment how many new dwellings have been built in 166
  the area covered by Kirklees council in total since 1979 and in each of the last five years for which figures are available by (a) private builders, (b) Kirklees council and (c) housing associations.

  Mr. Trippier
  The reported housebuilding completions in 1979 and 1988 for the borough of Kirklees are published in issues 59 and 89, respectively, of "Local Housing Statistics". Annual figures for intervening years appear in "Housebuilding in England by local authority areas: 1980 to 1987."

  Copies of these publications are in the Library.

  Mr. Riddick
  To ask the Secretary of State for the Environment how many tenants of Kirklees council have exercised their right to buy their council house or flat in each of the last 10 years for which figures are available.

  Mr. Trippier
  I refer my hon. Friend to the "Statistics on Right to Buy and Other Council House Sales" tables which have been placed in the Library giving available information up to December 1988. The tables show year by year information since 1979–80 together with cumulative figures since April 1979. No returns of sales to sitting tenants have been received by the Department from Kirklees district council since December 1986.

  Mr. Riddick
  To ask the Secretary of State for the Environment what is the latest figure for the number of council houses in the Kirklees council area which are empty.

  Mr. Trippier
  The information was provided by Kirklees metropolitan district council in its April 1988 housing investment programme return (HIP 1), a copy of which is in the Library.

  Housing Statistics
  Mr. Riddick
  To ask the Secretary of State for the Environment what was the total number of dwellings in the United Kingdom in 1979; and what is the equivalent figure today.

  Mr. Trippier
  It is estimated that there were 21·3 million dwellings in the United Kingdom at the end of December 1979 and 23·0 million at the end of December 1988.

  Housing Needs (National Forum)
  Mr. Wray
  To ask the Secretary of State for the Environment what response he is giving to the report of the national forum on housing needs in the nineties; and if he will make a statement.

  Mr. Trippier
  My right hon. Friend has received no such report. If he does, no doubt he will consider it carefully.

  Renovation Grants
  Mr. Hannam
  To ask the Secretary of State for the Environment what are the proposed lower thresholds for a renovation grant contained in the consultation paper "Renovation Grants: Proposed Test of Resources", for(a) a single disabled person with a disability premium, (b) a single disabled person with a severe disability premium, (c) a married couple, one of whom is in receipt of the disability premium, and (d) a married couple with two children one of whom is in receipt of the disability premium.
  167
  Mr. Trippier
  The consultation paper proposes that the lower income threshold for the new renovation grants should be related to each household's circumstances. It would be calculated using weekly allowances and premiums broadly similar to those used in the calculation of housing and community charge benefits, with the addition of a £20 per week "renovation grant premium". Using the allowances and premiums currently in force under the housing benefit regulations, the lower income thresholds would be as follows:

  (a) Single disabled person: £68·60 (£3,567 pa)

  (b) Single severely disabled person: £94·80 (£4,930 pa)

  (c) Married couple, one disabled: £94·30 (£4,904 pa)

  (d) Married couple, two children, one disabled: £122·50 (£6,370 pa)

  In each case the applicant is assumed to be between 25 and 59 years old and any children are 11 to 15. Where the applicant is younger a different personal allowance would apply, and there will be a scale of allowances for children of different age groups. There will also be different premiums for people aged 60 or over. The lower threshold will therefore depend upon the precise composition of the household.

  Mr. Hannam
  To ask the Secretary of State for the Environment what are the proposed upper income thresholds for a grant for eligible works contained in the consultation paper "Renovation Grants: Proposed Test of Resources, amounting to(a) £5,000, (b) £10,000, (c) £15,000 and (d) £20,000 in each of the following cases (a) a single disabled person with a severe disability premium, (b) a single disabled person with a severe disability premium, (c) a married couple, one of whom is in receipt of the disability premium and (d) a married couple with two children one of whom is in receipt of the disability premium.

  Mr. Trippier
  The upper income threshold for renovation grant eligibility depends upon the cost of eligible works and the composition of the applicant's household. Net income would be assessed according to rules broadly the same as those applicable to housing and community charge benefit and be subject to similar disregards. Using the rules currently in force for housing benefit, the upper income threshold for renovation grant eligibility in each of the cases cited would be as follows:

  case

  Upper net income threshold for renovation grant eligibility—£pw (£pa) by cost of eligible works

  £

  £

  £

  £

  Works costing

  £ 5,000

  £ 10,000

  £ 15,000

  £ 20,000

  (a) Single, disabled

  170·48 (8,865)

  257·35 (13,382)

  344·23 (17,900)

  431·10 (22,417)

  (b) Single, severely disabled

  196·68 (10,227)

  283·55 (14.745)

  370·43 (19,262)

  457·30 (23,780)

  (c) Married couple, one disabled

  19618 (10,201)

  283·05 (14,719)

  369·93 (19,236)

  456·80 (23,754)

  (d) Married couple, two children, one disabled

  219·38 (11,408)

  306·25 (15,925)

  393·13 (20,443)

  480·00 (24,960)

  These figures assume that the applicant is earning, and take into account the appropriate earnings disregards (£15 per week in cases (a) to (c), £10 per week in case (d). In
  168
  each case it is assumed that the claimant is between 25 and 59 years old, any children are aged 11 to 15, and that capital after any appropriate disregard is £5,000 or less.

  Disability Premium
  Mr. Hannam
  To ask the Secretary of State for the Environment what is the maximum proposed level of grant contained in the consultation paper "Renovation Grants: proposed test of resources" in each of the following cases(a) a single disabled person with a disability premium, (b) a single disabled person with a severe disability premium, (c) a married couple, one of whom is in receipt of the disability premium, and (d) a married couple with two children one of whom is in receipt of the disability premium for a person with savings of (i) nil, (ii) £3,000, (iii) £5,000, (iv) £8,000 and (v) £10,000.

  Mr. Trippier
  The amount of grant will depend upon the cost of eligible works, the composition of the applicant's household and the financial resources of the applicant. There is no grant maximum.

  Rating Reform
  Mr. Tony Lloyd
  To ask the Secretary of State for the Environment (1) if he intends to seek powers to rectify the position where local authorities have sought information on poll tax registration forms in excess of his recommendation; and if he will seek powers to determine what information local authorities are able to seek in future years;

  (2) what guidance he issued to local authorities about the information they should seek on the poll tax registration form; which information he has concerning local authorities which have asked for information in excess of his recommendation; what communications he has had with those authorities; and what advice he has given to them concerning rectification.

  Mr. Gummer
  The Government have no plans to introduce a poll tax.

  It is for community charges registration officers to ensure that any request for information made for the purpose of compiling registers falls within their statutory powers. Guidance on these matters is contained in Community Charge Practice Note No. 8 published in November 1988. Copies of all practice notes are in the Library.

  Mr. Cohen
  To ask the Secretary of State for the Environment what information he has on the progress in the establishment of local arrangements to cover payment by student nurses of the poll tax; and if he will make a statement.

  Mr. Gummer
  [holding answer 26 May 1989]: The Government have no plans to introduce a poll tax.

  Most student nurses training under the existing arrangements are salaried and will pay the full personal community charge reduced by any community charge benefit to which they may be entitled. Nursing students training under the proposed Project 2000 scheme will pay only 20 per cent. of the personal community charge like other full time students.

  Home Improvement (Document)
  Mr. Hannam
  To ask the Secretary of State for the Environment if he will list the disability organisations
  169
  which responded to the consultation document entitled "Home Improvement Policy: Proposed Test of Resources".

  Mr. Trippier
  The following disability organisations responded to the consultation paper "Renovation Grants: Proposed Test of Resources":

  Association of Disabled Professionals;

  Derbyshire Centre for Integrated Living;

  Disabled Living Foundation;

  Disablement Information Centre and Advice Line, Wakefield;

  Royal Association for Disability and Rehabilitation (RADAR);

  Royal Society for Mentally Handicapped Children and Adults (MENCAP)

  Mr. Hannam
  To ask the Secretary of State for the Environment if, in light of responses from disability organisations to the consultation document entitled "Home Improvement Policy: Proposed Test of Resources", he plans to review his decision to impose a test of resources on disabled facilities grants; and if he will make a statement.

  Mr. Trippier
  The proposed test of resources is intended to ensure that those least able to afford the costs of adaptations receive the grants that they need. We do not propose to abandon the principle of the test, but we are not committed to the precise details proposed in the consultation paper. We shall announce our decisions in due course.

  Rural Development (Leicestershire)
  Sir John Farr
  To ask the Secretary of State for the Environment if any of the expenditure for 1989–90 by the Rural Development Commission will be for rural development programmes in the county of Leicester.

  Mrs. Virginia Bottomley
  There is no rural development programme as such in Leicestershire. The Rural Development Commission makes grants under other headings in the county, as well as providing advice and loans to small rural businesses.

  Steel-framed Homes
  Mr. Allen
  To ask the Secretary of State for the Environment if he will meet a delegation in July from the National Steel-Framed Home Owners Association and their local members to discuss the problems of steel-framed homes.

  Mr. Trippier
  No.

  BISF Estate, Nottingham
  Mr. Allen
  To ask the Secretary of State for the Environment on what grounds the Nottingham city council's estate action application for the BISF estate in Nottingham was rejected; and if he will make a statement.

  Mr. Trippier
  The Nottingham city's application for Estate Action resources for the BISF houses was turned down because the scheme did not meet the main Estate Action criterion which is to promote innovation in the way local authorities manage and refurbish their estates.

  Mr. Allen
  To ask the Secretary of State for the Environment what offers of estates action assistance were made to the deputation on Nottingham BISF properties.
  170
  Mr. Trippier
  Nottingham city council was invited to make an application for funding improvements to the Bilborough estate which would meet the Department's Estate Action criteria.

  Council Tenants (House Purchase)
  Mr. Battle
  To ask the Secretary of State for the Environment if he will list each local authority which has applied to his Department under the Housing Act 1988, section 129, for approval for a scheme providing cash incentives for their existing tenants to purchase homes elsewhere; and if he will list for each such scheme submitted to his Department for approval(a) the total amount of cash which would be made available per annum for the scheme, (b) the total number of households which would be eligible each year for assistance, (c) the minimum level of assistance which the scheme would provide per household, (d) the maximum level of assistance which the scheme would provide per household, (e) the criteria which would be used to select which households would be assisted and (f) the criteria which would be used to select which properties they would be assisted to buy.

  Mr. Trippier
  The table sets out the local authorities which have sought approval for schemes in 1989–90, the maximum expenditure to be incurred, and the grants to be made available to households. Most of the schemes are limited to tenants of family houses, and in some cases the grant to be paid varies according to the size of the property vacated; it will be for each authority to determine which tenants to assist if the number of eligible applicants exceeds the funds available. The choice of a new home is left to the recipient of the grant, subject to a price limit.

  Local authority

  Maximum expenditure £

  Maximum number of households assisted

  Grant for each household £

  Adur

  80,000

  8

  10,000

  Arun1

  50,000

  5

  10,000

  Bromley1

  1,000,000

  100

  10–13,000

  Carrick1

  100,000

  20

  5,000

  Colchester1

  150,000

  20

  10,000

  Croydon1

  650,000

  50

  13,000

  Ealing

  1,500,000

  70

  15,000

  Hammersmith/Fulham

  200,000

  30

  5–10,000

  Haringey1

  500,000

  38

  13,000

  Harrow1

  200,000

  16

  12,500

  Hart1

  100,000

  12

  8,000

  Havering

  350,000

  35

  10,000

  Hillingdon

  250,000

  16

  15,000

  Leominster

  Details awaited

  Mendip1

  80,000

  21

  10,000

  New Forest1

  250,000

  30

  7–9,000

  North Beds

  100,000

  13

  7,000

  North Cornwall1

  70,000

  13

  7,500

  Rochester1

  200,000

  15

  6–8,000

  Rushmoor1

  50,000

  6

  7–8,000

  Shepway1

  100,000

  8

  13,000

  Slough1

  500,000

  30

  18,000

  South Bucks1

  66,000

  6

  9–11,000

  St. Albans

  150,000

  12

  13,000

  Taunton Deane1

  275,000

  35

  10,000

  Test Valley1

  250,000

  25

  10,000

  Tunbridge Wells1

  200,000

  20

  10,000

  Wandsworth1

  2,000,000

  150

  13,000

  Wealden1

  60,000

  10

  6,000

  Westminster

  1,500,000

  100

  15,000

  1 Approved schemes.

  Rent Officers (Guidance)
  Mr. Battle
  To ask the Secretary of State for the Environment if he will place in the Library a copy of his Department's guidance to rent officers in carrying out their new role under the Housing Act 1988, Part V. as from 1 April 1989.

  Mr. Trippier
  The detailed basis on which rent officers assess the rent paid by, and accommodation occupied by, private tenants claiming housing benefit is set out in the Rent Officers (Additional Functions) Order 1989. Advice on how rent officers might approach their new task—particularly in circumstances where no direct market evidence is available—was included in a study of the private rented housing market commissioned by the Department from the consultants Price Waterhouse. Copies of that report were circulated to rent officers and were placed in the Library in February.

  Homelessness
  Mr. Battle
  To ask the Secretary of State for the Environment what are his Department's plans to monitor the impact of the Housing Act 1988, Part I, on(a) the number of homeless households accepted by local authorities in England and (b) the ability of local authorities in England to secure housing for homeless households.

  Main housing subsidy (MHS) claimed and net rate fund contributions (RFCs) made

  (£0·0 million, 1987–88 prices)

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  Area

  MHS

  RFCs

  MHS

  RFCs

  MHS

  RFCs

  MHS

  RFCs

  MHS

  RFCs

  MHS

  RFCs

  MHS

  RFCs

  (a) Inner London boroughs and Corporation of London

  466·0

  287·0

  367·6

  252·7

  321·0

  283·7

  318·2

  217·0

  359·8

  211·8

  328·8

  234·2

  287·1

  227·4

  (b) Outer London boroughs

  226·2

  89·1

  122·4

  68·2

  84·4

  67·6

  81·8

  40·1

  93·3

  21·7

  80·8

  22·9

  66·0

  11·1

  (c) GLC/LRB

  105·2

  122·3

  47·8

  126·3

  37·8

  142·1

  30·5

  130·5

  17·5

  144·4

  —

  —

  —

  —

  (d) South-East — outside London

  127·6

  -3·6

  32·3

  0·4

  16·6

  -2·2

  16·3

  -3·1

  23-2

  -7·9

  18·0

  -8·6

  15·9

  -15·3

  (e) Metropolitan areas —outside London

  327·9

  195·6

  68·6

  167·5

  19·7

  154·9

  25·0

  103·6

  34·5

  65·1

  35·1

  45·2

  30·2

  65·4

  (f) Non-Metropolitan areas —outside the South East

  344·1

  38·8

  51·5

  33·6

  21·4

  28·9

  22·0

  19·5

  66·9

  13·2

  44·2

  -0·9

  37·4

  -8·4

  (g) All England

  1,597·0

  729·2

  690·2

  648·7

  500·9

  675·0

  493·8

  507·6

  595·2

  488·3

  506·9

  292·8

  436·6

  280·2

  Notes:

  1. The LRB ceased to operate a Housing Revenue Account after 1985–86.

  2. The main housing subsidy figures are entitlements for each financial year and not payments made in that year.

  3. The rate fund contributions may not be the final figure for each year but are based on information received by the Department in connection with housing subsidy claims.

  Disabled People (Water Bill)
  Mr. Hannam
  To ask the Secretary of State for the Environment what provision he is proposing to include in the Water Bill to protect disabled people on dialysis machines from disconnection.

  Mr. Howard
  Water undertakers already take special precautions to ensure continuity of supplies to customers who use dialysis machines. Further safeguards against disconnection of domestic customers will be included in the conditions of appointment of the new water undertakers. Disconnection will not normally be allowed without prior application to the county court for debt recovery, nor where the local social security or social services office has requested a delay to examine the customer's circumstances. No Bill amendment is needed.
  172
  Mr. Trippier
  Part I of the Housing Act 1988 should improve the supply of rented accommodation and therefore reduce homelessness. Research into its effects will be carried out in due course, as part of the Department's research programme.

  Housing Revenue Accounts
  Mr. Battle
  To ask the Secretary of State for the Environment what was(a) the level of central Government housing subsidy, and (b) the level of discretionary rate fund contributions to local authority housing revenue accounts (a) in inner London. (b) in outer London, (c) in the south-east outside London, (d) in metropolitan areas outside London, (e) in non-metropolitan areas outside the south-east, and (f) in England as a whole in each year from 1981–82 to 1987–88; and if he will give this information at constant 1987–88 prices.

  Mr. Trippier
  The information requested is shown in the table. The rate fund contribution figures (RFCs) are net amounts (the balance between contributions to housing revenue accounts and transfers the other way to general rate funds). For completeness, the information for the GLC/LRB is shown also. The main housing subsidy figures will differ from those published previously because they include subsequent adjustments to the original claims received by the Department and are expressed at 1987–88 prices.

  Rural Development
  Sir John Farr
  To ask the Secretary of State for the Environment what criteria are used in reaching decisions on rural development programmes in(a) the county of Leicester and (b) Northamptonshire.

  Mrs. Virginia Bottomley
  Rural development programmes are drawn up for the rural development areas designated in 1984 by the rural development commission. The criteria which the Department laid down for the selection of such areas were:

  (a) above average unemployment;

  (b) an inadequate or unsatisfactory range of employment opportunities;

  (c) adverse effects from population decline or sparsity of population;

  (d) net outward migration of population;

  (e) disproportionate number of elderly people;

  (f) poor access to services and facilities.

  Disabled People (Housing)
  Mr. Alfred Morris
  To ask the Secretary of State for the Environment what action he is taking to ensure a sufficient supply of wheelchair housing for people with disabilities who wish to leave residential care or to set up home on their own; and if he will make a statement.

  Mr. Trippier
  It is for housing authorities to analyse needs locally and to bid for resources through the housing investment programme system to enable provision to be made—in collaboration with voluntary and private agencies.

  My Department will be sponsoring a research project this year to assess what proportion of disabled and elderly people need special accommodation and to examine the most cost-effective methods of provision.

  Mr. Alfred Morris
  To ask the Secretary of State for the Environment if he will list the number of completions of(a) wheelchair housing and (b) mobility housing by (i) local authorities, (ii) housing associations and (iii) the private sector in each of the last 10 years for which figures are available.

  Mr. Trippier
  Numbers of new completions of wheelchair and mobility dwellings for local authorities and new towns and for housing associations in 1988 appear in table 1.6(b) of "Housing and Construction Statistics", part 1 No. 36; figures for earlier years appear in table 6.7(b) of "Housing and Construction Statistics 1977–87"; copies of both publications are in the Library. No reliable estimates of private sector completions are available.

  Bottle Re-use Schemes
  Mr. Menzies Campbell
  To ask the Secretary of State for the Environment if he has commissioned any studies on the operation of bottle re-use schemes, with standard specification bottles, in other countries.

  Mrs. Virginia Bottomley
  The former Waste Management Advisory Council published a study in 1981 of returnable and non-returnable containers, based on a review of overseas practice. The Government believe that the council's recommendations against mandatory re-use schemes are still valid.

  Discharge Consents (South West Water)
  Mr. Matthew Taylor
  To ask the Secretary of State for the Environment what ministerial permission has(a) been requested and (b) been granted for relaxation of STW discharge consents for South West Water; and what period of time they are to cover.

  Mr. Howard
  [holding answer 6 June 1989]: On 7 December (Official Report, column 199) I announced a capital programme costing around £1 billion to bring sewage treatment works into compliance with their discharge consents by March 1992. Water authorities may apply for time limited consents for those works to regularise current performance and maintain the current river water quality while improvements take place.

  Eighty three applications for such consents have been received from South West Water. A list of those sewage works for which these applications have been made has been placed in the Library of the House. None has yet been
  174
  granted. The capital works will generally be completed by March 1992. The time limited consents for any individual works will cover the period up until commissioning of the upgraded works. Thereafter consent conditions no less stringent than those which currently apply will be imposed.

  EC Habitats Directive
  Mrs. Margaret Ewing
  To ask the Secretary of State for the Environment what progress is being made on discussions about the EEC habitats directive; and when he expects an agreement to be reached.

  Mrs. Virginia Bottomley
  [holding answer 6 June 1989]: Discussions on the proposal for an EC directive on habitat protection have continued at three working group meetings called by the Spanish Presidency. A technical and scientific working group has been set up to prepare four of the annexes omitted from the Commission's draft. Many of the points which led member states unanimously to reject the Commission's proposals at the Environment Council on 24 November 1988 remain to be resolved.

  Grants
  Mr. Knox
  To ask the Secretary of State for the Environment what system his Department operates to ensure that recipients of grant aid under section 16 of the Housing and Planning Act 1986, and section 73 of the Housing Act 1985 are accountable to his Department for expenditure and performance; and whether that system takes into account such factors as the size of the grant made by the Department, and the administrative capacity of small organisations in receipt of such grants.

  Mr. Trippier
  [holding answer 26 May 1989]: The formal conditions of grant for organisations contain the expenditure and performance targets and rules designed to secure the necessary accountability for the proper and effective use of funds. Any organisation unable to meet these vital terms would not receive grant aid. Monitoring by my Department is through audited claims and accounts, general and specific reports and through visits and meetings with the organisations concerned.

  Land Register (Statistics)
  Mr. Steen
  To ask the Secretary of State for the Environment how many sites are currently on the land register; and what is the total acreage owned by local authorities.

  Mr. Trippier
  [holding answer 6 June 1989]: There were 7,900 sites on the land register at 31 May 1989. The total acreage owned by local authorities is 49,900.

  Barrow Borough Transport Ltd.
  Mr. Franks
  To ask the Secretary of State for the Environment if he will exercise his powers under section 22(2) of the Local Government Finance Act 1982 to require the Audit Commission to order an extraordinary audit into loans made by the Barrow-in-Furness borough council to Barrow Borough Transport Ltd.

  Mr. Gummer
  These are matters which the auditor would normally examine in the course of the audit and on which he could take such action as he thought necessary.
  175
  Mr. Franks
  To ask the Secretary of State for the Environment if he will seek to obtain a copy of the report by the chief executive of Barrow-in-Furness borough council dated 20 April and entitled "Inquiry into the Formation of Barrow Borough Transport Ltd. and the Borough Council's Investment in the Company".

  Mr. Gummer
  This is a matter for the local authority and its auditor.

SOCIAL SECURITY

  Housing Benefit
  Mr. Darling
  To ask the Secretary of State for Social Security how many people in Scotland are in receipt of housing benefit in the private and public sectors, respectively.

  Mr. Peter Lloyd
  The estimated number of recipients in 1988–89 in Scotland is:

  Persons

  Rent rebate (public sector)

  490,000

  Rent allowance (private sector)

  75,000

  Disabled Persons (Partial Incapacity Benefit)
  Mr. Hannam
  To ask the Secretary of State for Social Security if, in light of the Social Security Advisory Committee's report entitled, "Benefits for Disabled People: a Strategy for Change," he is examining ways in which a partial incapacity benefit for disabled people could be introduced.

  Mr. Scott
  I have noted the views of the Social Security advisory committee. We shall look at the need for a partial incapacity benefit when we examine existing benefit provision against the findings of the OPCS surveys.

  Disabled Persons Act
  Mr. Ashley
  To ask the Secretary of State for Social Security (1) what is his latest estimate of the costs of implementing section 7 of the Disabled Persons Act 1986;

  (2) when he plans to conclude discussions with local authority associations on the implementation of section 7 of the Disabled Persons Act 1986;

  (3) when he plans to implement section 7 of the Disabled Persons Act 1986.

  Mr. Scott
  We cannot at present indicate when we will implement section 7 as we are still in discussion about the costs, which the local authority associations estimate at more than £100 million a year. We hope to reach firm conclusions later in the year.

  Fraud
  Dr. Godman
  To ask the Secretary of State for Social Security if he will publish the number of prosecutions and convictions for social security frauds in Scotland in each of the past ten years, giving the sums of money and the number of people involved; and if he will make a statement.

  Mr. Peter Lloyd
  The number of people prosecuted at the instigation of the Department and convicted for social 176
  security frauds in Scotland are detailed in the table. Information relating to the sums of money involved is not held centrally and could be obtained only at disproportionate cost. Statistics prior to 1984–85 are not available.

  Total

  Benefit fraud

  Instrument of payment fraud

  Prosecutions

  1984–85

  463

  306

  157

  1985–86

  541

  327

  214

  1985–87

  791

  578

  213

  1987–88

  769

  430

  339

  1988–89

  986

  566

  420

  Convictions

  1984–85

  444

  301

  143

  1985–86

  529

  320

  209

  1986–87

  777

  569

  208

  1987–88

  754

  424

  330

  1988–89

  950

  550

  400

  Dr. Godman
  To ask the Secretary of State for Social Security how much money he estimates has been lost in each year since 1979 as a result of fraudulent social security claims and how many persons have been successfully prosecuted in(a) England and Wales, (b) Scotland, (c) Strathclyde and (d) Greenock and Port Glasgow.

  Mr. Peter Lloyd
  [pursuant to his reply, 10 February 1989, columns 857–58]: I regret an inaccuracy has been discovered and the corrected information is as follows:

  The numbers of successful prosecutions instigated by the Department in respect of fraudulent social security claims is as follows:

  Great Britain1

  Scotland2

  Strathclyde2

  Greenock and Port Glasgow2

  1979–80

  16,236

  —

  —

  —

  1980–81

  18,369

  —

  —

  —

  1981–82

  13,856

  —

  —

  —

  1982–83

  11,312

  —

  —

  —

  1983–84

  5,987

  —

  —

  —

  1984–85

  6,550

  301

  —

  —

  1985–86

  6,586

  320

  176

  3

  1986–87

  6,203

  569

  147

  9

  1987–88

  6,931

  424

  181

  3

  1 Includes both fraudulent benefit claims and fraudulent instrument of payment encashment. Separation of figures not available.

  2 Relates only to fraudulent benefit claims. Earlier information is not available.

SCOTLAND

  Local Authority Tenants
  Mr. Gow
  To ask the Secretary of State for Scotland how many houses and flats are owned by local authorities in Scotland; and what proposals he has to give to their tenants the opportunities to become owner occupiers.

  Lord James Douglas-Hamilton
  Returns by local authorities indicate that, at 30 September 1988, local authorities in Scotland owned some 808,000 houses and flats.

  In the light of the continuing success of the Government's right-to-buy policy, we have no plans at present to change the current statutory arrangements.

  Bus Services
  Dr. Bray
  To ask the Secretary of State for Scotland if he will make a statement on his plans for the privatisation of bus services in Lanarkshire.

  Mr. Ingram
  To ask the Secretary of State for Scotland if he will make a statement on his plans for the privatisation of buses within Lanarkshire.

  Lord James Douglas-Hamilton
  Legislation to provide powers for the privatisation of the Scottish Bus Group, including its operations in Lanarkshire, is currently before Parliament. The Government welcome the interest shown by management and employees of the Scottish Bus Group in Lanarkshire in the opportunities provided by privatisation. The Government are encouraging local authorities to dispose of their bus undertakings and welcome Strathclyde regional council's plans to privatise its undertaking including its operations in Lanarkshire.

  European Community
  Mr. Salmond
  To ask the Secretary of State for Scotland what direct input Scottish Office Ministers and officials have on the European Commission and the Council of Ministers.

  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland what direct input Scottish Office Ministers and officials have on the European Commission and the Council of Ministers.

  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what direct input Scottish Office Ministers and officials have on the European Commission and the Council of Ministers.

  Mr. Sillars
  To ask the Secretary of State for Scotland what direct input Scottish Office ministers and officials have on the European Commission and the Council of Ministers.

  Mr. Rifkind
  The Scottish Office is represented at meetings of the Agriculture and Fisheries Councils by Ministers and/or senior officials. There are also frequent meetings between the Scottish Office and the EC Commission on a wide range of policy issues.

  Mr. Maclennan
  To ask the Secretary of State for Scotland what considerations he has given to the future representation of Scottish interests within the European Community; and if he will make a statement.

  Mr. Rifkind
  Ministers and officials will continue to represent Scottish interests through attendance at Agriculture and Fisheries Councils. Officials will also continue to ensure that particular Scottish interests in other Councils are identified and taken into account in the most appropriate way.

  Mr. Marlow
  To ask the Secretary of State for Scotland what estimate he has of the proportion of(a) primary and (b) secondary legislation relating to Scotland in the last 12 months which originally emanated from institutions of the European Community.

  Mr. Rifkind
  The only item of primary legislation concerns the adoption of the EC directive requiring member states to recognise professional qualifications 178
  obtained elsewhere in the Community, as it applies to teachers. This is included in the provisions of the Self-Governing Schools Etc. (Scotland) Bill. So far as secondary legislation is concerned, my Departments have implemented 16 regulations or statutory instruments ranging over agriculture and fisheries, environmental protection, planning and health.

  National Health Service
  Mr. Redwood
  To ask the Secretary of State for Scotland what representations he has received from general practitioners about the proposed changes in the National Health Service.

  Mr. Michael Forsyth
  About 1,650 letters from GPs and members of the public have been received about the White Paper on the Health Service "Working for Patients", and/or the new contract for general practitioners. Agreement on all the major outstanding contract issues was reached with the profession's negotiators on 4 May.

  Mr. Alan Stewart
  To ask the Secretary of State for Scotland what progress has been made in implementing policies of competitive budgeting in the National Health Service in Scotland; and if he will make a statement.

  Mr. Michael Forsyth
  Since the last general election savings from competitive tendering have increased from £600,000 to £25 million on 74 contracts. This represents substantial additional resources for patient care in Scotland's health service over the next three to four years. Boards will continue to make progress in both the scope and range of services to put to competitive tender and are much encouraged by their success to date.

  Mr. Ernie Ross
  To ask the Secretary of State for Scotland how many representations he has received supporting his proposals for the National Health Service in Scotland.

  Mr. Michael Forsyth
  Most correspondence on the White Paper has shown support for some proposals and criticism of others. It is not therefore appropriate to categorise the responses in the manner requested.

  Mr. Steel
  To ask the Secretary of State for Scotland what further representations he has received from doctors in the Borders about the proposals in the White Paper "Working for Patients" since his reply of 5 April,Official Report, column 231, to the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey).

  Mr. Rifkind
  It is not possible to supply the information in the form requested. About 30 letters have been received from doctors in the Borders region since 5 April 1989, either direct or through hon. Members about the White Papers "Promoting Better Health" and/or "Working for Patients" and/or the new contract for GPs.

  Mr. Wallace
  To ask the Secretary of State for Scotland how many replies have been received to the letter sent to general practitioners in Scotland by the Parliamentary Under-Secretary of State, the hon. Member for Stirling (Mr. Forsyth) on 12 April.

  Mr. Michael Forsyth
  About 762 letters have been received from GPs since I wrote on 12 April, but it is not possible to identify which of these are specifically in
  179
  response to my letter. Agreement on all the major outstanding contract issues was reached with the profession's negotiators on 4 May.

  Freedom of Speech
  Mr. David Shaw
  To ask the Secretary of State for Scotland what representations he has received seeking the extension of section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. McLoughlin
  To ask the Secretary of State for Scotland what representations he has received seeking the extension of section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. Bowis
  To ask the Secretary of State for Scotland what representations he has received seeking the extension of section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. Nicholas Bennett
  To ask the Secretary of State for Scotland whether he will consider extending section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. Devlin
  To ask the Secretary of State for Scotland whether he will consider extending section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. Janman
  To ask the Secretary of State for Scotland whether he will consider extending section 43 (Freedom of speech in universities, polytechnics and colleges) of the Education (No. 2) Act 1986 to Scotland.

  Mr. Michael Forsyth
  I refer my hon. Friends to the answer given earlier today to my hon. Friends the Members for Hexham (Mr. Amos) and Sherwood (Mr. Stewart).

  Secondary Schools (Expenditure)
  Mr. Knox
  To ask the Secretary of State for Scotland how much was spent per pupil in secondary schools in Scotland in the most recent year for which figures are available; and what was the comparable figure in 1978–79 at constant prices.

  Mr. Michael Forsyth
  In 1987–88 net current expenditure per pupil in secondary schools in Scotland at outturn prices was £2,000. This is 36 per cent. more in real terms than the comparable figure in 1978–79 which at 1987–88 prices was £1,469.

  Schools
  Mr. Riddick
  To ask the Secretary of State for Scotland what representations he has received arguing that schools in Scotland should be allowed to opt out of local authority control; and if he will make a statement.

  Mr. Michael Forsyth
  I have received a number of representations from individuals and groups of parents expressing interest in the possibility of self-governing status for schools. I expect that when the Self-Governing 180
  Schools Etc. (Scotland) Bill reaches the statute book parents associated with individual schools will begin to assess seriously the benefits of self-governing status for their schools.

  Community Charge
  Mr. Douglas
  To ask the Secretary of State for Scotland when he now expects to be able to make a statement on the numbers who have not paid the poll tax for April.

  Mr. Lang
  I refer the hon. Member to the reply I gave him on 3 May 1989, at column 166.

  Mr. Canavan
  To ask the Secretary of State for Scotland what estimate he has of the number of people in Scotland who are on poll tax registers but who have not yet paid at least the first instalment of the poll tax; and whether he will express this figure as a percentage of all the people in Scotland who are on poll tax registers.

  Mr. Lang
  Local authorities are continuing to receive initial payments of the community charge. However the information required from local authorities to enable an estimate to be made of the numbers of people throughout Scotland who are liable for the community charge but have not made a payment will not become available for some months.

  Mr. McAllion
  To ask the Secretary of State for Scotland what has been the cost of publicising the implementation of the poll tax in Scotland.

  Mr. Lang
  Expenditure to date on the public information campaign on the community charge has been in the region of £950,000.

  Dr. Reid
  To ask the Secretary of State for Scotland what plans he has to modify the poll tax regulations.

  Mr. Lang
  The Government are monitoring the present community charge arrangements in Scotland. If experience shows that there is a need for any changes to the regulations or to statute we will take appropriate action.

  Ayr Bypass
  Mr. Dunnachie
  To ask the Secretary of State for Scotland if he will make a statement on his plans for the Ayr bypass.

  Lord James Douglas-Hamilton
  I assume the hon. Member is referring to the section of new road planned between Drumbreck road and Glasgow city boundary which is the responsibility of Strathclyde regional council, and the new trunk road from the city boundary to Malletsheugh which together constitute the Ayr road route.

  My right hon. and learned Friend is considering the report of the public local inquiry in respect of this project. The works are at present programmed to start in late 1990 but achieving this will depend upon the outcome of the inquiry.

  Criminal Injuries Compensation Board
  Mr. Worthington
  To ask the Secretary of State for Scotland how long it takes the Criminal Injuries Compensation Board in Scotland to deal with a typical application.
  181
  Lord James Douglas-Hamilton
  Since the criminal injuries compensation scheme operates on a Great Britain basis, information in this form is not available. Details of the time taken by the board to resolve cases were provided in the reply given to my hon. Friend the Member for Isle of Wight (Mr. Field) on 20 January 1989, at column 350, by my right hon. Friend the Minister of State, Home Office.

  Hospitals (Opting Out)
  Mr. David Marshall
  To ask the Secretary of State for Scotland what discussions he has had with health organisations in Scotland about the possibility of hospitals opting out under the Government's proposals for the National Health Service.

  Mr. Michael Forsyth
  I am currently giving consideration to this matter.

  Economic Growth
  Mr. Oppenheim
  To ask the Secretary of State for Scotland what was the rate of economic growth in Scotland in the latest year for which figures are available.

  Mr. Lang
  The output-based estimates of Scotland's gross domestic product show that between 1986 and 1987 Scotland's economy grew by 2·4 per cent. Later information is available only for the output of the production and construction industries which grew by 5·8 per cent. between 1987 and 1988, the fastest rate of growth since 1973.

  Single European Market
  Mr. Nigel Griffiths
  To ask the Secretary of State for Scotland if he has any plans to alter regional development policy in Scotland in the light of the forthcoming single European market.

  Mr. Lang
  The Government made a number of changes to regional policy in 1988 which took into account the single European market. In addition, through the Government's "Europe Open for Business" campaign information, advice and assistance is provided to all United Kingdom businesses in an effort to increase understanding during this run-up period.

  Regional Policy
  Mr. McFall
  To ask the Secretary of State for Scotland if he has any plans to make regional policy for Scotland more effective.

  Mr. Lang
  The Government already have an effective regional policy. Provision for regional assistance in Scotland this year is approximately £120 million and we do not expect any underspend. This level of provision is broadly maintained for the following three years.

  Fishing Policy
  Mr. Harris
  To ask the Secretary of State for Scotland what steps he takes to co-ordinate fishing policy in Scotland.

  Mr. Michael Forsyth
  Officials of the Department of Agricultural and Fisheries for Scotland are in regular contact with their colleagues in the other United Kingdom fisheries Departments and representatives of the fishing industry, and they participate in EC meetings and working groups as appropriate. My noble Friend the Minister of State, Scottish Office is regularly in touch with the other United Kingdom fisheries Ministers and attends meetings of the European Council of Fisheries Ministers as a member of the United Kingdom delegation.

  Development Agency
  Mr. Martin
  To ask the Secretary of State for Scotland when he will next be meeting the chief executive of the Scottish Development Agency to discuss attracting industry to areas of high unemployment.

  Mr. Lang
  My right hon. and learned Friend and I met the Agency Board, including the chief executive, on 22 May and discussed a range of issues of mutual interest.

  Mr. Foulkes
  To ask the Secretary of State for Scotland when he next expects to meet the chairman of the Scottish Development Agency; and what matters he intends to discuss.

  Mr. Lang
  My right hon. and learned Friend and I met the Agency Board on 22 May and discussed a range of issues of mutual interest.

  Farmers
  Sir Hector Monro
  To ask the Secretary of State for Scotland when he now expects to meet the president of the National Farmers Union of Scotland.

  Mr. Rifkind
  My noble Friend and I have regular meetings with the union to discuss current issues affecting the farming industry in Scotland. My noble Friend met the president on 19 May and expects to meet him again at the Royal Highland show later this month.

  GPs (Seniority Payments)
  Mr. Kirkwood
  To ask the Secretary of State for Scotland what representations he has received from Scottish general practitioners about the changes to seniority payments.

  Mr. Michael Forsyth
  A number of the letters which have been received from general practitioners referred to the proposal to replace seniority allowances and redistribute the released income through other payments. At the meeting on 4 May with the profession's negotiators it was agreed that seniority payments would be retained but reduced by the value of the new postgraduate education allowance.

  "Working for Patients"
  Mr. Hind
  To ask the Secretary of State for Scotland how many representations he has received on the White Paper "Working for Patients" and if he will make a statement.

  Mr. Michael Forsyth
  Some 1,900 letters have been received, offering comments and suggestions in relation to various aspects of the White Paper.

  New Towns
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland if he will make a statement on the future of the new towns.

  Mr. Lang
  It is intended that the Government's proposals for the future of the Scottish new towns will he announced before long.

  Electorates
  Mr. Holt
  To ask the Secretary of State for Scotland what is the average electorate in each Scottish constituency.

  Lord James Douglas-Hamilton
  The average electorate of the constituencies in Scotland on publication of the 1989 electoral registers in February was 54,624.

  Bathing Waters
  Mr. Malcolm Bruce
  To ask the Secretary of State for Scotland what action he intends to take to ensure that Scotland's bathing waters conform to standards set by European Economic Community directives.

  Lord James Douglas-Hamilton
  I refer the hon. Member to the answer which I gave to my hon. Friend the Member for Dumfries (Sir H. Monro) on 13 April 1989, at columns 682–83, and in particular to the paper placed in
  184
  the Library on that day which sets out the results of monitoring in 1988 and the plans to improve bathing waters where necessary.

  Dogs
  Mr. Buchanan-Smith
  To ask the Secretary of State for Scotland if he will carry out a review of measures for control of dogs in Scotland and, in particular, of the powers and financial resources of local authorities in this respect; and if he will make a statement.

  Lord James Douglas-Hamilton
  Such an exercise is already in hand as part of a general review of the provisions of the Civic Government (Scotland) Act 1982 upon which we intend to consult later this year. There is, however, a range of powers relating to the control of dogs already available to local authorities.

  Mr. Sillars
  To ask the Secretary of State for Scotland if he will set out the statutory powers under which local authorities have power to control dogs; and if he will indicate which authorities are empowered to act.

  Lord James Douglas-Hamilton
  The information is as follows.

  The Dogs Act 1906, as amended by the Civic Government (Scotland) Act 1982, empowers the police and proper officers of district and islands councils to seize, detain and dispose of stray dogs, and prescribes procedures for dealing with dogs so detained. The Control of Dogs Order 1930, made under powers consolidated in the Animal Health Act 1981, requires dogs to wear identity discs bearing the name and address of their owner when in a public place and enables district or islands councils to make curfew regulations to control dogs. The Pet Animals Act 1951 provides for the inspection and licensing by district or islands councils of pet shops and the attachment of conditions to the licence. The Animal Boarding Establishments Act 1963 provides for the inspection and licensing of boarding establishments for dogs and cats by district or islands councils and for the attachment of conditions to the licence. The Road Traffic Act 1972 makes it an offence for a dog to be on a designated road without being held on a lead. The regulations prescribing the procedure involved in designation by regional or islands councils are contained in the Control of Dogs on Roads Order (Procedure) (Scotland) Regulations 1962. The Breeding of Dogs Act 1973 provides for the inspection and licensing by district or islands councils of dog breeding establishments and for the attachment of conditions to the licence. The Guard Dogs Act 1975 lays down requirements for the supervision of guard dogs and the licensing of guard dog kennels by district or islands councils.

  There are, in addition, indirect powers such as the power conferred by section 112 of the Civic Government (Scotland) Act 1982, whereby any local authority may make management rules which could include rules relating to dogs while on land or premises owned, occupied or managed by the authority.

  Mr. Sillars
  To ask the Secretary of State for Scotland what representations he has received from community groups or statutory organisations about the problems posed by lack of control of dogs; what replies he has sent; and if he will make a statement.

  Lord James Douglas-Hamilton
  My right hon. and learned Friend has received representations from the
  185
  Royal Society for the Prevention of Cruelty to Animals, the Scottish Society for the Prevention of Cruelty to Animals, the Convention of Scottish Local Authorities, the National Farmers Union, Scotland as well as from hon. Members and individuals about the problems posed by dogs. Most of these have urged tighter legislative controls and the introduction of a dog registration scheme. Replies to these representations have indicated that we are not convinced that registration would be an effective answer to the range of problems associated with dogs but that we intend to publish later this year a consultation paper in which other options for improving existing measures for more effective control of dogs will be explored.

  Prescription and Residential Charges
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland (1) whether he has any plans to extend exemption from prescription charges in Scotland to people requiring long-term medication related to mental illness;

  (2) whether he has any plans to introduce a sliding scale of charges for residents with mental health problems in special accommodation schemes in Scotland who have other sources of income.

  Mr. Michael Forsyth
  When the existing list of specified medical conditions for which exemption from prescription charges is given was drawn up it was suggested by the medical profession that it should include only readily identifiable conditions which called for prolonged medical treatment, in most cases replacement therapy. The list has been reviewed on a number of occasions by successive Governments, but on each occasion it was decided no change could be made. There are no plans to extend the list at this time or to introduce sliding scales of charges relating to patients' circumstances.

  Disabled People (Housing)
  Mr. Alfred Morris
  To ask the Secretary of State for Scotland what action he is taking to ensure a sufficient supply of wheelchair housing for people with disabilities who wish to leave residential care or to set up home on their own; and if he will make a statement.

  Lord James Douglas-Hamilton
  The Government attach high priority to the provision of all types of special needs housing. It is for housing authorities to assess local needs. Scottish Homes has been asked in determining its expenditure programme for housing associations for 1989–90 to place more emphasis on housing provision for the disabled. I am pleased to note that the number of sheltered wheelchair and wheelchair houses provided by public agencies in Scotland has increased from 636 in 1979 to 2,586 in 1988.

  Mr. Alfred Morris
  To ask the Secretary of State for Scotland if he will list the numbers of completions of(a) wheelchair housing and (b) mobility housing by (i) local authorities, (ii) housing associations and (iii) the private sector in each of the last 10 years for which figures are available.

  Lord James Douglas-Hamilton
  This information is not available. Information on housebuilding by user category has been collected centrally for authorities on a quarterly basis since 1986 but not for the breakdown required.

  Leaflets
  Dr. Godman
  To ask the Secretary of State for Scotland how many information leaflets were published by the Scottish Office in each of the past five years: and what was the total cost each year.

  Mr. Rifkind
  Leaflets have been produced in a wide range of circumstances, and central records do not make it possible to provide the information requested without incurring disproportionate cost. If the hon. Member has a particular subject area in mind, perhaps he could write to me about it.

  Midwives
  Dr. Godman
  To ask the Secretary of State for Scotland how many midwives there are in Scotland; how many claims for regrading he has received; and if he will make a statement.

  Mr. Michael Forsyth
  In the current year 4,119 midwives have been indexed to practise in Scotland. Claims for regrading are for health boards to deal with. Information on such claims is not held centrally.

  Health Budget (Research)
  Dr. Godman
  To ask the Secretary of State for Scotland how much of his current health budget is spent on research in Scotland as a percentage and as a cash sum; and if he will make a statement.

  Mr. Michael Forsyth
  The provision for research expenditure in the current year is £5,144,000, or 0·2 per cent. of the total health budget. The cash figure represents an increase of nearly 12 per cent. over estimated expenditure in 1988–89.

  Water
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland what long-term funding his Department will be apportioning to upgrade water treatment plants in Strathclyde region.

  Lord James Douglas-Hamilton
  The Scottish Development Department has asked all regional and islands authorities to provide information about improvements necessary to achieve compliance with drinking water quality standards. When this information has been fully assessed Strathclyde regional council's needs will be taken into account, along with those of other authorities, in reviewing the capital expenditure allocations for water and sewerage services in Scotland.

  Mrs. Ray Michie
  To ask the Secretary of State for Scotland what representations he has received regarding the reduction in capital allocation to Strathclyde regional water authority for the next financial year.

  Lord James Douglas-Hamilton
  None. Allocations for water supply services are not issued separately. The provisional allocation for Strathclyde region's water and sewerage programme in 1990–91 was first set in 1988 at £41 million but was increased in February 1989 to £44 million, a rise of £3 million. While this increased provisional allocation is £1 million less than the capital allocation for the present year, it is still provisional and subject to review before final allocations for 1990–91 are set.
  187
  Mrs. Ray Michie
  To ask the Secretary of State for Scotland whether he has any plans to reduce the proposed time of 20 years given to Strathclyde regional water authority to satisfy European Community requirements for drinking water.

  Lord James Douglas-Hamilton
  A time period has not yet been agreed with Strathclyde regional council for achieving full compliance with European Community drinking water standards. Water quality improvement schemes currently programmed are due for completion not later than the end of 1995.

  Sheepmeat Regime
  Sir Russell Johnston
  To ask the Secretary of State for Scotland what information he has about the current negotiations on the EEC sheepmeat regime and its implications for Scottish farmers.

  Mr. Rifkind
  At last week's meeting of the Council of Agriculture Ministers member states once again made it clear that they had difficulties with the Commission's current proposals for reform of the sheepmeat regime. The Council agreed, however, that it should seek to make early progress in the first instance through discussions at official level.

  Energy Sources
  Mr. Speller
  To ask the Secretary of State for Scotland what steps he is taking to promote alternative and renewable energy sources including wind, wave, water and solar technology.

  Mr. Lang
  Scotland already enjoys the large-scale development of our hydro-electric resources. In addition, a comprehensive research and development programme is under way which incorporates a number of major projects based in Scotland.

  Local Health Councils
  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland what representations he has received regarding local health council funding; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 6 June 1989]: I have received a number of representations and I am currently considering the most effective means of representing consumers interest in the NHS.

  Mr. Andrew Welsh
  To ask the Secretary of State for Scotland what funds, in cash and in real terms, his Department has allocated to local health councils since 1979.

  Mr. Michael Forsyth
  [holding answer 6 June 1989]: The information is as follows:

  Year

  Local health council expenditure on a cash basis £'000

  Local health council expenditure at 1989–90 prices 1 £'000

  1979–80

  430

  852

  1980–81

  505

  844

  1981–82

  556

  847

  188

  Year

  Local health council expenditure on a cash basis £'000

  Local health council expenditure at 1989–90 prices 1 £'000

  1982–83

  596

  848

  1983–84

  605

  823

  1984–85

  661

  856

  1985–86

  705

  866

  1986–87

  760

  903

  1987–88

  820

  928

  1988–89

  867

  915

  1989–902

  909

  909

  1 Using GDP deflator.

  2 Estimate.

  Village and Community Halls (Grant Aid)
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland what level of grant aid was approved by the Scottish Education Department in 1988–89 for village and community halls in Scotland; what is the anticipated level for 1989–90; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 6 June 1989]: In 1988–89 the Scottish Education Department approved projects for the building and improvement of youth, village and community halls in Scotland to the value of £2·35 million (on which a grant of £1·14 million will become payable over the next few years assuming the projects proceed as planned). In the same year the total amount actually paid in grants in respect of these, and projects approved in earlier years, was £950,000. Provision has been made for the payment of up to £1·045 million in grant aid in 1989–90 and I am at present considering how to allocate this amount, having regard to commitments in respect of previously approved projects.

  Fishing
  Mr. Salmond
  To ask the Secretary of State for Scotland what is his assessment of the current financial position of the Scottish fishing industry; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 23 May 1989]: The value of landings reached a record high in 1987 but declined during 1988 and there are indications that this trend will continue in 1989. This is mainly because of reductions in quotas for North sea cod and haddock, but we have accepted the need for these reductions based on scientific advice to be made to secure the long-term fishing opportunities and the future prosperity of the industry.

  Children (Dumbarton)
  Mr. McFall
  To ask the Secretary of State for Scotland how many children in Dumbarton constituency are dependent upon(a) supplementary benefit or income support, and (b) family income supplement or family credit in each year since 1978–79 (i) in total and (ii) as a percentage of all children in Scotland.

  Mr. Peter Lloyd
  I have been asked to reply.

  I regret that this information is not available.

HEALTH

  Deaf-Blind People
  Mr. Hannam
  To ask the Secretary of State for Health how many people are deaf-blind; and how many are aged between five and 65 years.

  Mr. Freeman
  I refer my hon. Friend to my reply to the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) on 15 March 1989 at column 235.

  Abortions
  Mr. Amess
  To ask the Secretary of State for Health (1) if he will list the number of women resident in the United Kingdom who had an abortion in 1987 who already had(a) one, (b) two, (c) three, (d) four and (e) five previous abortions;

  (2) if he will list the number of women in the Basildon area health authority who had an abortion in 1987 who already had (a) one, (b) two, (c) three, (d) four or (e) five previous abortions.

  Mr. Freeman
  The notification form for abortions carried out under the Abortion Act 1967 requires information about previous abortions to the woman concerned to be recorded, distinguishing between spontaneous miscarriages and legal terminations.

  The table shows the information requested for abortions performed in England and Wales in 1987 for those women having had one or more previous spontaneous miscarriages or legal terminations.

  Notifications having at least one previous spontaneous miscarriage and also at least one previous legal termination, and women having more than one abortion under the Act in 1987 will be counted more than once in the statistics.

  Numbers of abortions performed to usual residents of (a) United Kingdom and (b) Basildon District Health Authority where the woman had had 1, 2, 3, 4 or 5 previous abortions, England and Wales, 1987

  United Kingdom

  Basildon DHA

  Previous spontaneous miscarriages

  1

  9,269

  881

  2

  1,592

  85

  3/4/5

  626

  11

  Previous legal terminations

  1

  26,466

  173

  2

  3,703

  17

  3/4/5

  832

  3

  Mr. Amess
  To ask the Secretary of State for Health how many abortions have been performed in England and Wales under the Abortion Act 1967; how many of these abortions were performed in an emergency to save the life of a mother; and what percentage this latter figure represents of the lower, in each year since 1968.

  Mr. Freeman
  The information is shown in the table.
  190

  Number of abortions performed in England and Wales, under the Abortion Act 1967, and number performed under ground 5 of the Act3, 27 April 1968 to September 19881

  Year

  Total abortions

  Number under ground 5

  Per cent.

  A

  B

  B of A

  1968

  23,641

  16

  ·068

  1969

  54,819

  14

  ·026

  1970

  86,565

  10

  ·012

  1971

  126,777

  10

  ·008

  1972

  159,884

  10

  ·006

  1973

  167,149

  7

  ·004

  1974

  162,940

  3

  ·002

  1975

  139,702

  6

  ·004

  1976

  129,673

  1

  ·001

  1977

  133,004

  3

  ·002

  1978

  141,558

  5

  ·004

  1979

  149,746

  3

  ·002

  1980

  160,903

  4

  ·002

  1981

  162,480

  5

  ·003

  1982

  163,045

  7

  ·004

  1983

  162,161

  3

  ·002

  1984

  169,993

  9

  ·005

  1985

  171,873

  5

  ·003

  1986

  172,286

  2

  ·001

  1987

  174,276

  3

  ·002

  19881

  137,103

  4

  ·003

  Total2

  2,949,578

  130

  ·004

  1 1988 data are provisional.

  2 Total from 27 April 1968 to 30 September 1988.

  3 In emergency, to save the life of the pregnant women.

  Mr. Amess
  To ask the Secretary of State for Health (1) how many abortions have been performed on girls under the age of 16 years; and what percentage this represents of abortions performed, in each year since 1968;

  (2) how many abortions were performed on girls in the Basildon area health authority, under the age of 16 years; and what percentage this represents of abortions performed, in each year since 1968.

  Mr. Freeman
  The information is shown in the table.

  Number of abortions performed in England and Wales, and to usual residents of Basildon and Thurrock2 , all ages and to those under 16 years, 27 April 1968 to 31 December 1987.

  Year

  England and Wales

  Basildon and Thurrock2

  Total under 16

  Per cent.

  Total under 16

  Percent.

  A

  B

  B of A

  A

  B

  B of A

  1968

  23,641

  553

  2·3

  151

  4

  2·6

  1969

  54,819

  1,231

  2·2

  287

  9

  3·1

  1970

  86,565

  1,822

  2·1

  427

  10

  2·3

  1971

  126,777

  2,618

  2·1

  435

  6

  1·4

  1972

  159,884

  3,320

  2·1

  592

  16

  2·7

  1973

  167,149

  3,660

  2·2

  541

  10

  1·8

  1974

  162,940

  3,948

  2·4

  620

  23

  3·7

  1975

  139,702

  4,006

  2·9

  628

  24

  3·8

  1976

  129,673

  3,835

  3·0

  635

  21

  3·3

  1977

  133,004

  4,067

  3·1

  626

  29

  4·6

  1978

  141,558

  3,724

  2·6

  624

  21

  3·4

  1979

  149,746

  3,856

  2·6

  614

  22

  3·6

  1980

  160,903

  4,143

  2·6

  549

  17

  3·1

  1981

  162,480

  3,949

  2·4

  586

  20

  3·4

  1982

  163,045

  4,343

  2·7

  687

  22

  3·2

  1983

  162,161

  4,566

  2·8

  602

  26

  4·3

  1984

  169,993

  4,609

  2·7

  779

  21

  2·7

  1985

  171,873

  4,427

  2·6

  840

  25

  3·0

  1986

  172,286

  4,240

  2·5

  958

  30

  3·1

  1987

  174,276

  4,075

  2·3

  998

  27

  2·7

  TOTAL1

  2,812,475

  70,992

  2·5

  12,179

  383

  3·1

  191

  1 Total from 27 April 1968 to 31 December 1987.

  2 1968–1974: Basildon and Thurrock non-metropolitan counties.

  1975–1982: Basildon and Thurrock Health District.

  1983–1987: Basildon and Thurrock District Health Authority.

  Mr. Amess
  To ask the Secretary of State for Health how many abortions were performed on girls aged 10, 11, 12, 13, 14, 15, 16 and 17 years of age in each year since 1968; and how many were performed to save the life of a pregnant woman.

  Number of abortions performed in England and Wales to usual residents of England and Wales by single year of age, 10 to 17 years, 1968 to 1987

  Year

  Age of mother

  10

  11

  12

  13

  14

  15

  16

  17

  1968

  n/a

  3

  6

  21

  150

  363

  559

  693

  1969

  n/a

  2

  7

  38

  279

  848

  1,445

  1,816

  1970

  n/a

  3

  20

  85

  391

  1,233

  2,530

  3,188

  1971

  n/a

  3

  16

  77

  529

  1,671

  3,465

  4,426

  1972

  n/a

  0

  7

  98

  586

  2,113

  4,318

  5,395

  1973

  1

  4

  14

  108

  693

  2,270

  5,082

  5,775

  1974

  0

  1

  9

  117

  718

  2,490

  5,348

  6,225

  1975

  0

  0

  12

  120

  747

  2,691

  5,411

  6,394

  1976

  0

  6

  14

  122

  738

  2,545

  5,429

  6,285

  1977

  0

  1

  13

  105

  805

  2,701

  5,510

  6,367

  1978

  0

  3

  20

  113

  708

  2,454

  5,675

  6,733

  1979

  0

  9

  18

  116

  698

  2,693

  6,030

  7,412

  1980

  0

  5

  17

  141

  770

  2,717

  6,370

  8,108

  1981

  8301

  2,701

  n/a

  n/a

  1982

  9311

  2,921

  n/a

  n/a

  1983

  1,0291

  3,058

  n/a

  n/a

  1984

  0

  1

  9

  111

  898

  3,139

  6,802

  8,406

  1985

  0

  0

  7

  118

  899

  2,978

  6,648

  8,432

  1986

  0

  0

  5

  77

  842

  2,970

  6,175

  8,309

  1987

  1

  1

  10

  114

  781

  2,858

  6,251

  8,252

  n/a + Data not readily available.

  1 These data relate to "under 15 years of age".

  Mr. Amess
  To ask the Secretary of State for Health what information he has as to the medical circumstances which created the need for abortions to be performed in emergency to save the life of the mother in those cases which have arisen since 1967; and if he will indicate the number of times each of those conditions has been a relevant factor.

  Mr. Freeman
  The information could be provided only at disproportionate cost.

  Special Hospitals
  Mr. Ashton
  To ask the Secretary of State for Health (1) what compensation he is offering to nurses at special hospitals for their loss of civil servant status;

  (2) what consultations he has had with representatives of the Prison Officers Association concerning the recommendations of the Olliff report; when he next expects to meet them; and whether he will list the organisations with whom he has discussed the report;

  (3) what is his policy regarding the future negotiations, with the Prison Officers Association on promotion procedures, uniforms, assisted travel, grievances, disciplinary procedure and security if the Olliff report is implemented; and whether the Prison Officers Association will still be able to negotiate locally at each special hospital;

  (4) whether he will pay an official visit to Broadmoor, Rampton, Park Lane and Moss Side special hospitals to discuss the Olliff report with nurses who are members of the Prison Officers Association;

  (5) whether it is his policy to act on the Olliff report recommendation that the influence of the Prison Officers
  192
  Mr. Freeman
  The information on the total number of abortions performed in England and Wales to the requested ages could be provided only at disproportionate cost. However, the readily available data is shown in the table, which relates to abortions performed on usual residents of England and Wales. Information on the number of these which were performed under ground 5 of the Abortion Act cannot be released for reasons of maintaining confidentiality.

  Association in special hospitals must be eroded and its assessment that attitudes within the special hospitals concentrate more on the secure control of patients than their treatment;

  (6) why the future conditions of service and negotiations with the Prison Officers Association at special hospitals is being transferred to the Whitley council; what date he expects this transfer to be implemented; and whether legislation is required for this and for the transfer of direct responsibility for the admission of patients from the Secretary of State to the Special Hospitals health authority;

  (7) why the Olliff report on the future of special hospitals was not distributed to the Prison Officers Association.

  Mr. Freeman
  [holding answer 26 May 1989]: The Government are setting up the Special Hospitals Service Authority (SHSA) to take over the management functions presently exercised by my Department and the three local hospital boards, which are to be abolished later this year. These changes were announced in a ministerial statement in May 1988. Later in 1988 the Government specified the following six main national objectives for the service:

  (i) to continue to ensure the protection of the public;

  (ii) to ensure the provision of appropriate treatment for patients;

  (iii) to provide a good quality of life for patients, and a good working environment for staff;

  (iv) to develop closer working relationships with local and regional psychiatric services;

  (v) to promote the hospitals as centres of excellence for the training of staff of all disciplines, in forensic and other branches of psychiatry;

  193

  (vi) to promote research into forensic psychiatry, and related conditions.

  The statements referred to are in the Library.

  Statutory instruments have been laid before Parliament which will establish the SHSA from 1 July 1989, and render it fully operational from 1 October 1989. From that date the SHSA will assume all functions, including the admission of patients.

  There has already been extensive discussion and consultation on these important changes with staff, management and unions. I have myself visited all the four special hospitals where I met a cross section of staff and patients. Department of Health officials have also been engaged in a programme of visits to all the hospitals where they have had wide ranging discussions with all groups of staff. We are producing full briefing packs to explain the rationale for and effects of the changes. These packs will be sent to all staff and patients before 1 October, when the SHSA becomes the new employing authority for all but administrative staff.
  194
  There have been exchanges with staff side interests, including the POA. Indeed, at a meeting with my officials on 18 May the General Secretary of the POA and his colleagues were assured that their members and other non-administrative staff will suffer no material loss through the removal of Civil Service status and will remain on existing NHS terms and conditions. As pay and superannuation will not be affected, the question of compensation does not arise. The POA was also assured that it will continue to be recognised as representing its members in the special hospitals locally (in the hospitals) and centrally (with the new special health authority) in the new arrangements.

  It will be for the SHS authority to consider the appropriateness of existing staff procedures in the new arrangements, and in reviewing such procedures we would expect it to talk with the relevant staff interests, including the POA. The Olliff report was a confidential, internal working document about the future operations of the Department's HQ branch responsible for the special hospitals.

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

The Earl of Essex—Sat first in Parliament after the death of his kinsman.

Trees: Planting Target
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
Whether the target for new forest planting is 33,000 hectares per annum, and if so how far planting for 1988–89 falls short of that target.
The Minister of State, Scottish Office (Lord Sanderson of Bowden): My Lords, I can confirm that our new planting objective is still 33,000 hectares per annum. The total area of new planting in the year to 31st March 1989 was about 29,000 hectares, made up of some 25,000 hectares of planting by the private sector, for which grants were paid during the year, and some 4,000 hectares undertaken directly by the Forestry Commission.
Lord Taylor of Gryfe: My Lords, I am grateful to the Minister for confirming that the target is 33,000 hectares per annum. Is he aware that the Timber Growers Organisation, the official organisation of treeplanting and timber growing, has estimated that this year's planting programme will be 11,000 hectares? Is he also aware that some of us saw the sad sight of vast areas of nursery trees being burned and destroyed, and in the past few weeks it is estimated that between 50 and 60 million small trees have been destroyed since there is no market from the nurseries? Does this indicate any assurance to the industry that the targets will be met?
Lord Sanderson of Bowden: My Lords, I have never made any secret of the fact that there will almost certainly be a drop in planting while the industry adapts to the substantial though necessary changes which we introduced last year. However, I have also heard some fairly pessimistic figures, but I shall not crystal-gaze as to what those figures might turn out to be. We are mid-season at the moment and the commission's conservators are collecting information on what the figures are likely to be. I do not share the extreme gloom of some pessimists.
Baroness Sharples: My Lords, can my noble friend tell me what proportion of the plantings are hardwood as opposed to softwood?
Lord Sanderson of Bowden: My Lords, a growing number of hardwoods have been planted over the
846
past few years. I would rather get the exact figures for the last year and write to my noble friend.
Baroness Nicol: My Lords, do the figures which the Minister has given include anything to do with the new Community forests? Can he tell us when he expects the first applications to be made in relation to the new Community forests and whether they will start in the next planting season?
Lord Sanderson of Bowden: No, my Lords, the figures I have given refer to last year and do not contain any of the new Community forests. We would expect to see planting starting next year.
Lord Gisborough: My Lords, is my noble friend aware that not only has the new regime damaged, or is about to damage, the planting programme, but, worse still, when it starts to bite it will seriously damage the management of existing timber? That will tend to create forestry which is massive, unmanaged and unattractive, as opposed to the production of high forest, which is good for conservation and for the country.
Lord Sanderson of Bowden: My Lords, I am very well aware of the discussions that we had when the Budget changes took place. The transitional arrangements which we brought into force as a result of the last Budget were for a fairly long period. It has to be remembered that many woodland owners will have benefited substantially from the reduction in the top rate of tax to 40 per cent. and can now look forward to tax-free sales of timber. However, we are keeping the matter under review, particularly in regard to maintenance of forests.
Lady Saltoun of Abernethy: My Lords, in view of the fact that we have an adverse balance of payments on timber and paper products of £6·5 billion, and also bearing in mind the beneficial effect of trees in combating the greenhouse effect, does the Minister think that this is a satisfactory situation?
Lord Sanderson of Bowden: My Lords, the fact that we are now seeing a sizeable increase in felling year by year is very satisfactory. I can give figures for 1987 of 5 million cubic metres having been felled as a very clear indication of the increase. That is good news, as is also the downstream activity. We need to be sure that we have a sustained programme of planting, but we also ought to remember that the size of the forest estate as it stands in the United Kingdom has risen dramatically over the past few years.
Lord Rees: My Lords, does my noble friend recognise that last year's ill-considered measures have damaged long-term confidence in forestry? Does he also recognise that the statistics with which he will no doubt be furnished in due course are based largely on application for grant, but that not all applications are translated into planting? Will he therefore, against that background, use his considerable influence with his colleagues in government and with the Forestry Commission to ensure that the planting applications are handled

847
and processed properly and quickly and that they do not involve the applicant in undue time, trouble and expense?
Lord Sanderson of Bowden: My Lords, as a result of what my noble friend has said and from his experience I am well aware that we are constantly wrestling with applications and the problems related to them. I shall do everything I can to speed up those applications because they have a real bearing on the tree-planting programme.
Lord Molloy: My Lords, does the Minister agree that, because large tracts of forestry land are privately owned—in some cases by individuals rather than by organisations—in the national interest there should be a check on whether the destruction of forests should be permitted and whether the planting of new trees should be encouraged? Does he agree therefore that in the national interest there should be investigation and control over all forms of forestry land?
Lord Sanderson of Bowden: My Lords, it has always been accepted on all sides of the House that the forestry industry is most important to the United Kingdom. The Government, in the form of the commission, own 916,000 hectares, which is a sizeable amount. However, we must always bear in mind the balance within the United Kingdom and consider how many trees should be grown.
Lord John-Mackie: My Lords, surely the Government, the Ministry of Agriculture and whoever is responsible must appreciate the long-term situation in forestry. The cut was made over one year and approximately 14,000 trees were burnt. That is a result of not looking at the matter on a long-term basis. I do not know whether the Minister saw the television programme shown on Monday night about the ozone layer. The Prince of Wales made an appeal for more forestry in this country. After all, we have planted just under 10 per cent. and are the fourth lowest in the European Community. I believe that the target area of 33,000 acres is ridiculous and that it should be almost doubled. It would help if——
Noble Lords: Question!
Lord John Mackie: My Lords, is the Minister aware that the moratorium covering many areas in England is an absolute disgrace, that it should be removed straightaway and that people should be allowed to plant on those areas.
Lord Sanderson of Bowden: My Lords, the noble Lord is most pessimistic. By the end of April the Forestry Commission had received applications for almost 36,000 hectares of new planting. Of that, over 20,000 hectares was for new areas not included in any previous grant schemes. That is an encouraging start. I know that it does not always lead to new planting but it is an encouraging start. It compares most favourably with what was done in 1987 and 1988.
848
As regards the uplands in England, I know very well to what the noble Lord directs his question. Perhaps it should be directed at another department but I understand the position in England. However, I also believe that the vast majority of tree-planting in the uplands will take place in Wales and in Scotland.
Lord Leatherland: My Lords, does the noble Lord know of any future plans for altering the nature of Epping Forest? I must confess that I have a vested interest because it runs along the bottom of my garden.
Lord Sanderson of Bowden: My Lords, as far as I am aware, there are no plans to alter the forest running along the bottom of the noble Lord's garden.
Lord Taylor of Gryfe: My Lords, will the Minister accept that there was no question of crystal-gazing when I quoted the figure showing that over the past few weeks between 50 million and 60 million young trees have been destroyed in this country because there is no market for the nurseries? Is that not a scandal? Is it not clear evidence of the lack of acceptance that the 33,000 hectare target will be met? Is the Minister further aware that over the past decade the paper and pulp industry has invested in this country £1 billion on the assumption that trees will be available to supply the industries? Alternatively, are we again to be dependent on an adverse balance of payments and imports from Sweden or the Soviet Union?
Lord Sanderson of Bowden: My Lords, I am well aware of what the noble Lord is saying. I recall that before the last Budget various representations were made by members of opposition parties that changes should be made to the taxation regime. The Government introduced those and we believe that it is a much better system. However, of course such a change brings about problems for nurserymen. I am well aware of that but believe that they can adjust to Budget changes in the same way as any other industry. I understand how difficult those changes are for the industry.
I am confident that the downstream activities will grow. At the moment the production of wood and the downstream activities are in the right kilter. We are able to supply the new industries which I am pleased to see have been developed.

Telephone Directories
2.49 p.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
Whether, in view of the failure of British Telecom to provide telephone directories which assist the public to find numbers they are looking for, they will provide them themselves.
The Secretary of State for Trade and Industry (Lord Young of Graffham): My Lords, British Telecom supplies a free telephone directory regularly to every

849
residential and business subscriber covering the local telephone area. In addition, both BT and Mercury make available free of charge a directory inquiry service to assist any of their customers or member of the public seeking information about telephone numbers. I am sure they will welcome suggestions which my noble friend or indeed any noble Lord may wish to make for improving their service.
Lord St. John of Fawsley: My Lords, while thanking my noble friend for that reply, is he aware that the arbitrary division of entries into two categories, business and residential, makes it extremely difficult to find urgent numbers such as those of doctors? Is he further aware that worse is to come in that directory inquiries is apparently to be computerised into a metallic voice so that inaccuracy in name or address will mean that the inquirer will not find the number?
Lord Young of Graffham: My Lords, I assure my noble friend that I have not found that mistakes are confined to computerised voices. It is possible for humans to make mistakes. British Telecom's market research on the customer reaction to their changed format reveals that 71 per cent. of the public are satisfied with the new format of the directory and only 2 per cent. were dissatisfied, while some 19 per cent. had no preference. I do not know what we should do further on that. What has become obvious is that such has been the growth of the usage of telephones in the London area that it was necessary for BT to look at different ways of dividing up the directory.
Baroness Macleod of Borve: My Lords, will my noble friend make representations to British Telecom about the weight of these new books which have been published within the London area? Some of us do not have very large or strong hands. I believe that the 2 per cent. who were dissatisfied could well have been women who do not have very strong hands and who find the weight of the books enormous.
Lord Young of Graffham: My Lords, one of the effects of dividing the book up between residential and business subscribers means that the directories are lighter and smaller. If they were put back again into one book, by necessity they would be larger and heavier.
Lord Donaldson of Kingsbridge: My Lords, can the noble Lord encourage British Telecom to see that their directories are available in public telephones? I had to go to three different telephone boxes half a mile apart the other day to obtain a number.
Lord Young of Graffham: My Lords, the last survey on public telephone call boxes showed that no less than 96 per cent. were in working order. Over the past months we have seen a continuing increase in the number of call boxes which are in working order and I suspect that the noble Lord was rather unlucky.
Lord Donaldson of Kingsbridge: My Lords, the point was not that the telephone was out of order but that there was no directory there.
Lord Young of Graffham: My Lords, books are no longer kept in telephone boxes for a very good reason; that is, that they were consistently vandalised and set alight. Part of the policy of British Telecom, in order to ensure that telephone boxes are in working order, is to take out the telephone books and to make available a directory inquiry service. I suspect that it is better in the long run for that to happen.
Lord Orr-Ewing: My Lords, is my noble friend aware that the more difficult it is to find a number and to find the right book before you find the right number, the greater will be the load put on directory inquiries? Is it not true that that service has coped extremely well and has improved its service markedly in recent years? However, has consideration been given to the French system where they have done away with telephone books altogether and subscribers are supplied free of charge with a very small visual display unit and dial their own inquiry and, therefore, save on manpower? That is infinitely adaptable and can be very conveniently kept up to date. There would seem to be considerable merit in that system, which has prospered in France.
Lord Young of Graffham: My Lords, I assure my noble friend that Minitel, of whatever is the name' of the particular receiver system, may be free to the subscriber but it is expensive to the taxpayer. That system is very expensive. The fullness of time will show whether that is a good bargain for the French taxpayer. The present system is far more competitive and efficient.
Lord Jenkins of Putney: My Lords, is the Minister aware that I am among the 71 per cent. and that the noble Lord, Lord St. John, is among the 2 per cent., and that that is a situation which I hope will be sustained in the future over a wide area?
Lord Young of Graffham: My Lords, as long as we confine that wide area to British Telecom, I am content.
Lord Gisborough: My Lords, is my noble friend aware how unsatisfactory the computerised system is for the countryside because, where an addressee is not within a definite town—that is, he is within a country area—it is almost impossible for the computer to find the number?
Lord Young of Graffham: My Lords, I doubt whether any system could be perfect but I shall ensure—and I know that this will happen in any event—that the Chairman of British Telecom will read what your Lordships have said this afternoon and he will no doubt take that into account.
Lord Peston: My Lords, will the Minister reflect again on his answer to the noble Lord, Lord Orr-Ewing? Does he not agree that the telephone directory, as we know it, is obsolete and is

851
economically harmful? Goodness knows how many forests are cut down every year in order to provide all those telephone directories. Would it not be much more sensible if we had a computerised on-line direct dial system for telephone numbers? I do not see that that should place any burden on the taxpayer. The real point is: would it not be advantageous to encourage British Telecom to provide precisely such a system?
Lord Young of Graffham: My Lords, if it were economic to do so then I suspect that British Telecom would take that quite seriously. However, from the figures I have seen, the cost to the French Government and French Telecom in providing that system is out of all proportion to the utility.
Lord Morris: My Lords, with reference to a previous answer of my noble friend where he quoted the survey and said that 2 per cent. of the population did not like the new format, 17 per cent. had no view and 71 per cent. preferred the new format, can he tell what the balance of 10 per cent. felt?
Lord Young of Graffham: My Lords, 19 per cent. had no preference and the balance of 8 per cent. had no opinion.

Minicab Proprietors: Licensing
2.56 p.m.
Lord Teviot Lord Teviot asked Her Majesty's Government:
Why they have not published a Green Paper on the licensing of minicab proprietors in the light of the discussion of the Maxwell Stamp Report (Cmnd. 4483), published in 1970.
Viscount Davidson: My Lords, I have little to add to the reply given on 11th May by my honourable friend the Minister of State for Public Transport in reply to a Question in another place. The Stamp Report was published many years ago and I think it is of doubtful value to assume that its recommendations are automatically valid today or for the future.
Lord Teviot: My Lords, I thank my noble friend for that Answer, but he will not be surprised that I am not very pleased with it because it does not precisely relate to the Question. Will my noble friend please agree that I do not ask for 40,000 minicab drivers to be registered, as are taxi drivers, but that the minicab proprietors should be registered so that they can find drivers of suitable character in order that the public can be properly protected?
Viscount Davidson: My Lords, I am sorry that I misunderstood my noble friend's Question and I hope that he will not misunderstand my Answer. The evidence seems to suggest that private hire cars outnumber taxis and that there is no need at present for any legislation in that direction.
Lord Bruce-Gardyne: My Lords, can my noble friend enlighten your Lordships about the reasons behind the decision apparently to preserve that
852
well-loved Spanish custom—the black cabs' "knowledge". Can he tell us in what way that differs in principle from the National Dock Labour Scheme?
Viscount Davidson: My Lords, no I cannot.
Lord Underhill: My Lords, does the noble Viscount appreciate that, contrary to the noble Lord, Lord Teviot, we welcome the statement made by his ministerial colleague Mr. Portillo that he does not propose any changes at all in the legislation in London affecting the relative position of taxi and hire car trades and that we also welcome his praise for the service given by the London taxi service? Does that imply that there will also be no legislation affecting the 1976 Act, of which there has been some criticism? I also ask the noble Viscount, in the light of the statement by Mr. Portillo, which action is being proposed when the London Local Authorities (No. 2) Bill comes before the Select Committee, Clause 49 of which proposes an allocation of minicab licences to each of the individual boroughs in London?
Viscount Davidson: My Lords, I assure the noble Lord, Lord Underhill, that the statement by my honourable friend the Minister for Public Transport says that it is too early to propose new legislation, so no new legislation is proposed. As regards the London Local Authorities (No. 2) Bill, although technically neutral on private Bills, the department's Ministers have indicated that they do not welcome the proposals because the Bill would make each borough an independent licensing authority. Different approaches to licensing would cause confusion as so many journeys cross borough boundaries. I am told that the Bill is in some difficulty. As I have already indicated, although the Government are either benevolently or malevolently neutral on private Bills, on this occasion it is malevolently neutral.
Lord Thomas of Swynnerton: My Lords, in relation to the adjective used by my noble friend Lord Bruce-Gardyne concerning Spanish customs, is my noble friend the Minister aware that it is not always accepted as being identical to procrastination, dishonesty and laziness?
Viscount Davidson: My Lords, I am of course aware of my noble friend's interest in Spanish customs, but I do not think I should go further than that.
Lord St. John of Fawsley: My Lords, may I have an assurance which many people would welcome? Can the Minister assure me that the black taxi cab service, which is the best taxi service in the world, will in fact be preserved and not deregulated? May I take this opportunity in relation to the remarks made by my noble friend Lord Bruce-Gardyne to wish him luck the next time he wishes to get a taxi?
Viscount Davidson: My Lords, I can give my noble friend that assurance.
Lord Bruce-Gardyne: My Lords, perhaps I may try once again. May I ask my noble friend what sort of signal he thinks it gives to other negotiators in possession of state supported monopoly positions when apparently the black cab taxi drivers are sanctioned in their longstanding restrictive practice and, furthermore, given an 11 per cent. fare increase to reward them for maintaining it?
Viscount Davidson: My Lords, all I can tell my noble friend is that the evidence seems to suggest that private hire cars now outnumber taxis, and we believe they are growing at a faster rate, so there is plenty of competition.
Lord Campbell of Alloway: My Lords, does my noble friend agree that there are certain types of service which justify the maintenance of a restrictive practice?
A noble Lord: The legal profession!
Viscount Davidson: My Lords, I am not sure whether I am expected to act as an umpire or referee on this Question. I think I shall leave it at that.
Lord Teviot: My Lords, I am not deliberately seeking to get the last word, but does my noble friend agree that the Question on the Order Paper does not in any way denigrate the London black taxis? I agree with all that has been said for them. However, will my noble friend please think again and ask his honourable friends in another place to look into possible legislation to ensure that those who drive minicabs are suitable people for looking after the public?
Viscount Davidson: My Lords, perhaps I may remind the House that the Question on the Order Paper is:
"To ask Her Majesty's Government why they have not published a Green Paper on the licensing of minicab proprietors in the light of the discussion of the Maxwell Stamp Report … published in 1970".
The answer I gave is that we are not proposing any legislation and therefore there is no point in a Green Paper.

Business
3.3 p.m.
Viscount Long: My Lords, with the leave of the House, I should like, as usual, to say a word about the two short debates standing in the names of the noble Viscount, Lord Chandos, and the noble Lord, Lord Ross of Newport. It is customary in short debates that the mover is allowed approximately 15 minutes and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debates. In the case of the short debate in the name of the noble Viscount, Lord Chandos, this means that all other speeches should be limited to a maximum of 10 minutes and in that of the noble Lord, Lord Ross of Newport, to eight minutes. If any noble Lord should speak at greater length, it would be at the expense of subsequent speakers in the debate.

South Yorkshire Light Rail Transit Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

European Community: Increased Integration
3.4 p.m.
Viscount Chandos Viscount Chandos rose to call attention to the case for Britain's full participation in a more integrated European Community while maintaining Britain's national interest and cultural identity; and to move for Papers.
The noble Viscount said: My Lords, Europe looms large in your Lordships' House. The work of the House and its Select Committee is central to Britain's monitoring and absorption of Community law and directives. There is, as a consequence, a consistent and strong European theme to your Lordships' debates. Over and above that, I am conscious of the great part that Europe has played—sometimes happy; sometimes unhappy—in the lives of so many of your Lordships with a few years seniority over me: the world wars and their aftermath; the long campaign to achieve Britain's belated membership of the Community; the dissolution of old-established political loyalties over the issue of continuing membership, and hence the very creation of my own party.
It is hardly surprising, therefore, to feel a sense of nervousness at least in introducing today's Motion, as well as concern that the recent debates on European issues such as 1992 and the single market might make further discussion of Britain's role in and relationship with the Community redundant. But it seemed that, only eight days before polling in the third direct elections to the European Parliament, it would have been an opportunity missed not to try to address some of the very fundamental differences in the European vision held in this country, not least by members of Her Majesty's Government, ironically at a time when there is perhaps greater consensus about many of the practical imperatives of the single market.
Fate has, I think, further encouraged me that this was a justifiable choice of subject for, though the intervention of Mr. Edward Heath may sometimes seem like that of a tormented Trollopian figure drawn from a mixture of The Pallisers and the Last Chronicle of Barset, the charges against the Government are serious and, I shall argue, largely well-founded.
Only yesterday Mr. Norman Tebbit kept the pot boiling merrily when, in the Goodman lecture at the Royal Society, he announced that he stood absolutely alongside the Prime Minister and that any major transfer of sovereignty to Brussels would create not just a clash of governments but a clash of parliaments and a resulting disintegration of the Community. That came not just from a member of the government which put through the Single European Act but the Secretary of State for Trade and Industry in the period during the legislation's preparation, if not its final enactment.
Sovereignty is an emotive word, and although I felt it best not to include it in the wording of the Motion, it is impossible to address the core of the disagreement about Britain's role in the European Community without considering the question of sovereignty and the extent to which it can be pooled or partially transferred without either abuse of the English language or neglect of the national interest.
Let me begin by saying that the most outspoken proponents of European federalism can in their way harm the European cause, not perhaps as much as the equivalent extremists from the nationalist or little England school, but harm it nonetheless, through arousing unnecessary fears and suspicions among even the most sympathetically inclined supporters of the Community. When I talk to fervent federalists, and I see that gleam in their eyes, I am irresistably reminded of the words of one of the great past Members of your Lordships' House:
"I do not know what effect these men will have upon the enemy, but, by God, they terrify me".
If the provocation and counter-provocation between federalists and the militant nationalists is as destructive as the equivalent interchange between Right and Left in domestic politics, we can nonetheless reaffirm our commitment to a European Community based on something other than the lowest and meanest common denominator.
Last week the Foreign Secretary—the Foreign Secretary whom the Prime Minister is reputed to be thinking of sacking for his extreme and irritating support for the European Community—said:
"The single market is a brilliant amalgam of economic liberalism and European commitment that sums up the philosophy of the late 1980s to a T.
"It is the Visa card not the social charter, which is the instrument of the ever closer union of the peoples of Europe foreseen in the Treaty of Rome".
Your Lordships on this side of the House will probably agree that the Visa card and not the social charter sums up the philosophy of the Conservative Government throughout the 1980s. But I do not believe that it sums up the philosophy of the European Community; and nor, in truth, does the Foreign Secretary whatever his attemps to prove to his leader that he can be as narrow minded as her in his concept of Europe. Although the earliest manifestation of the European Community was predominantly in the areas of trade and agriculture, let nobody be in any doubt that its origins were far broader and more multifarious than that.
Forty-one years ago Sir Winston Churchill said:
"It is impossible to separate economics and defence from the general political structure. Mutual aid in the economic field and joint military defence must inevitably be accompanied step by step with a policy of closer political unity".
The Visa card vision of Sir Geoffrey Howe reduces the European ideal to that of a prefabricated hypermarket, while the inconsistencies and contradictions of the Prime Minister's speech in Bruges betray her fear of a great, carnivorous European monster threatening to devour the British people and their traditions, like a child's fear of the dark. That is perhaps less surprising if we examine the achievements and failures of the Prime Minister.
When confronted by an identifiable and indisputable enemy, the single minded determination of the Prime Minister has proved a national asset. But while the noble Lords, Lord Donoughue, Lord Bridges and Lord Greenhill, have in recent debates paid tribute to the occasional benefits to the Community of the Prime Minister's obdurate approach, her single mindedness, regrettably, turns to simple mindedness in trying to respond constructively to the complex and interwoven fabric of a European movement and the European Community and an imaginary enemy must be conjured up.
If, then, the Community is to be more than a glorified free trade area, what then is the resolution of Mr. Tebbit's concern about the transfer of sovereignty? Professor Kenneth Minogue of the LSE wrote recently that sovereignty can be abandoned but not pooled. But while Mr. Heath, and indeed the SDP European manifesto, refer to a pooling of sovereignty, in his speech in The Hague in 1948 Sir Winston Churchill had already gone far further in saying:
"It is said with truth that this involves some sacrifice or merger of national sovereignty, but it is also possible and not less agreeable to regard it as the gradual assumption by all the nations concerned of that larger sovereignty, which can alone protect their diverse and distinctive customs and characteristics, and their national traditions".
Yet I believe that pooling of sovereignty correctly denotes the nature of the relationship between the Community and the member country. Professor Minogue himself acknowledges that a sovereign power can choose to delegate the right to make certain decisions by way of a treaty, and that the ability to revoke that treaty represents precisely the over-ride control which preserves the country's ultimate national sovereignty. When assets or resources are pooled in other walks of life there is almost always the ability for partners to reclaim what they have pooled, sometimes easily, though sometimes with greater difficulty and disruption.
So long as every member state in the Community has the individual right to revoke the Treaty of Rome, however painful that may be, then I would argue that sovereignty can be safely, constructively and not irreversibly pooled. The United States of course saw bitter civil war to prevent states seceding from the Union, but it is the nature of the non-federal political union encapsulated by the European Community that every member country should be free to secede if it wishes.
Perhaps I may turn briefly to just a few of the specific issues which have been at centre stage in the European debate and the European election campaign. My noble friend Lord Kilmarnock will talk in greater detail about the social charter whose concept has so aroused the Government's fears of allowing socialism in through the back door. Let me just say that, in the eyes of many people who are no more socialist than noble Lords opposite, the core of what is being proposed by the Commission is fair and logical and that, with active and constructive participation by Britain with the other Community members, a wholly acceptable social dimension can and should be agreed.
The very origins of the Community lie, as I have suggested earlier, in similar post-war roots as NATO and there is much more, as my right honourable friend Dr. David Owen has argued, that can be done to enable Europe collectively to defend itself more strongly and less wastefully. As a new era of international turbulence and instability threatens, co-ordinated European diplomacy—the preventive medicine of international relations—will, as our ally the United States has made clear, so often achieve far more than the efforts of individual countries. This is all the more true in terms of overseas aid as well where Britain's budget also lamentably falls behind the example of our European partners.
I am sure that your Lordships will be aware that Britain is in breach of the Treaty of Rome through having, alone of the 12 member countries, a disproportionate electoral system for the European elections. I shall not seek your Lordships' sympathy for the effect that this has on the representation of the SDP and of the Democrats in the European Parliament, but rather draw your attention to this as both a cause and a symptom of what the director of the Centre for European Policy Studies today described as Britain's unfamiliarity with, and dislike of, the kind of coalition politics that are inevitable in a multi-party parliament. Britain's influence on the Community is thereby significantly reduced and the unnecessary sense of being a passive passenger in a coach driven and navigated by others is fostered.
The continuing prevarication of the Government over full membership of the EMS and their knee-jerk opposition even to the consideration of the progressive evolution of monetary union, are symbols of the Government's but, most of all, of the Prime Minister's muddled concept of national sovereignty. A novice student of international monetary economics can identify that, even for the locomotive economies of Japan and the United States, there is no such thing as complete economic or monetary sovereignty.
Full membership of the EMS would not be an economic panacea and neither I nor my colleagues in the SDP have ever argued that. But it would be a valuable weapon in the fight not only against inflation but for market share for our industries as well. On the day after the Spanish Government announced their definitive intention to join the exchange rate mechanism by the middle of 1990, this Government should be ashamed of the insincerity of their promises to join "when the time is ripe", after innumerable opportunities to do so over the past few years with immediate and lasting benefit to the British economy. Let none of your Lordships underestimate the additional handicap this places on British industry or the growing threat to our financial markets and the position of our financial institutions.
There are few metaphors left to describe Britain's missed opportunities in Europe that have not become cliches. I have sought to argue that even now it is not too late to claim the benefits arising from full participation and a broad vision of our role in the Community, without the unacceptable or irreversible loss of sovereignty, national interest or
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identity. If, on the other hand, the Government continue to pursue their suspicious, grudging and limited approach to membership of the Community, we will have less prosperity, less influence and no greater real independence. My Lords, I beg to move for Papers.
3.20 p.m.
Lord Thomas of Swynnerton: My Lords, I recently had the privilege of serving on an international jury to give the first "Catalonia" prize to the philosopher Sir Karl Popper. Sir Karl travelled to Barcelona to receive his cheque for 100,000 dollars for services to liberty, since that is what the prize is for. As I listened to this English philosopher who is of Austrian origin talking in the mediaeval palace of the Generalitat in Barcelona about Peisistratus and Homer, I had an irresistible reminder of the significance, serenity, continuity and grandeur of European civilisation.
European civilisation (of which the British culture mentioned in the Motion as part of the title of the debate of the noble Viscount, Lord Chandos, is not just a contributor but an essential part) is not the same as the European Community; or is it?—since after all the European Community would not have received the motor and the energy which it has had behind it without the recollection of the civilisation of the past and indeed of the present. The Motion of the noble Viscount gives us a good opportunity to consider the character of the European Community in the future, not after 1992, or after for the British perhaps the more important year of 1993 when the Channel Tunnel opens, but in the years leading up to the year 2000.
By the year 2000 I suppose that we shall be doing far more things in common with our European neighbours than would have been conceived possible 50 years ago. After all, we already have what is by most definitions one might say European agriculture. It is not called that but that is what it is. By the year 2000, policies in relation to transport, scientific research, the environment and other matters will have also no doubt been put into effect and we shall have seen how well they work. Above all, European law, which as we know has considerable competence already in spheres of safeguards, in relation to the environment and in relation to the equal treatment of men and women in employment, will have made a very substantial impact on all our countries.
The name of this association of European countries will probably still by the year 2000 be being debated. "Federation" will not be used since it is a word that has a great many enemies in different countries for a large number of reasons. "Confederation", with its comforting Swiss connotation, perhaps will be a better word. The "United States of Europe" will probably not be a very popular expression, even though Napoleon used it, since it has naturally American connotations. The "Union" which we already have also has an American connotation and, as we have seen, is extremely vague and is open to many interpretations. I suspect that the word "Community" will still be being used. That will disappoint a number of Europeans. I heard M. Rocard, the Prime Minister

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of France, recently say that he hoped that he would be achieving a "European nation" during his time in politics.
Perhaps more important than the definition of what this association will be is the question of who will be participating and what it will be doing. As to the participants, I think we can envisage very well that, by the year 2000, several more western European states—Austria and Switzerland; perhaps Sweden and Norway—will have after all decided to associate themselves with this adventure. Even more important, and anyway more inspiring, will be the possibility that one or other of the nations of what we have come to regard as eastern Europe, but which we should surely think of as central Europe—Mitteleuropa—will also have drawn back towards us. I very much hope so.
As to the other question of what this association of European states will be doing, of course this is at the heart of the most important political issue in Europe today. It is worth recollecting in this debate that the concessions which we have already made towards European collaboration have been on such a scale that our predecesors in this House, whose pictures we see along the corridors, would certainly not think that the state we have at the moment is the same as their state. They would find it surprising, even if some would find it inspiring, to enter this country by a gate marked "European Community nationals".
The second point of which I want to remind the House is that in the 1990s there will be a considerable momentum towards European collaboration, regardless of what we ourselves think should be done, partly because of the great weight which the Government have given towards the idea of the single market of 1992. In the mid-1990s, it will be as if we are in a boat on a river trying to catch hold of a willow or a tuft of grass at the side. We may find the current extremely strong and we may not be able to stop exactly where we want. For those reasons we should think very carefully about where the river is in fact going.
Whatever happens to the current dispute between the Government and the European Commission, it seems likely that many Europeans, despite our eccentric selves, will, even if they are Europeans by culture or by impulse (or élan, as M. Rocard put it in the speech to which I referred a moment ago) will find that some of their interests and ideals may be threatened by what they see as centralisation, corporatism and a lack of adequate democratic control.
I have no doubt that we should try to draw a line between what we hope in the future will remain a national sphere of competence and a European one. This may not be very popular in the Commission. It will not seem very communautaire since of course the treaties to which we have given our name are open-ended ones. More or less any intervention can be justified if one looks at the preambles. Nor may it be very popular as an idea with Her Majesty's Government since it may seem premature. Nevertheless, something ought to be done, although it will not be easy.
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The geographical frontiers of Europe have been very difficult to define, especially in the East, and so perhaps will the functional ones be inside our borders. However, something along those lines should be done. We may otherwise very well find that the European ideal—which despite superficial pedantries is a great ideal—will be poisoned by continuing arguments about radishes or school textbooks.
3.30 p.m.
Lord Stoddart of Swindon: My Lords, the noble Viscount, Lord Chandos, whom we should thank for initiating the debate at this particular time, seemed to complain in his speech that the EC was still seen as a trading and economic Community. However, the noble Viscount will of course remember that the idea of the EC was sold—or perhaps it was not sold—to the British electorate on that basis; it was not put to the electorate on the basis that it would be a unitary Europe or a federal Europe or, indeed, an integrated Europe of the sort which he and his party apparently believe in.
There are of course continuing doubts about the EC. The reason for such doubts is that the promises which were made to the British people—and, indeed, to others—that they would derive great economic benefits from the EC, simply have not transpired. Before considering the future of the EC, we must consider the past. I contend, as do many others, that the promise which was made of great economic benefit to this country arising from our membership of the EC has simply not been kept.
Let us look first at our balance of payments situation in relation to that of the other countries of the EC. Before we entered the EC we had a positive balance of trade of about £400 million in cash terms. In 1988 we had an adverse balance of trade with the EC of about £14 billion, representing virtually the whole of our adverse balance of trade. Therefore the economic benefit of trade has not arisen; indeed, far from being an economic benefit, our membership of the EC has been an economic liability.
Let us then look at what else has happened to our people. We were promised good, wholesome and cheap food; but, arising from our membership of the EC, every family of four in this country pays an extra £700 per annum for its food. Has our membership of the Community assisted the environment? There was a great hoo-ha, a great fuss and complimentary remarks from the faddist lobby when we had imposed upon us from the EC a directive which stated how we must label cigarette packets. As I said, there was a great cry of approbation from the health lobby. But, what those people had not realised is that, while the EC was doing that and spending a mere £7 million on advertising the adverse effects of cigarette smoking, it was spending £2 billion on subsidising tobacco growers. That is the sort of Community which we have; but it is not the sort of Community which was promised to this electorate in 1972 during the passage of the European Communities Act, nor indeed during the referendum of 1975.
Therefore the promises have not transpired. Moreover, because the promises have not been kept

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and because it is now not possible for the proponents of the EC to show the British people what benefits they have derived, we have a new philosophy: having entered a failed Community we should in fact enter it even further. In other words, because we have had detrimental effects from the EC, perhaps if we give more power to the Community we may derive some benefits. Frankly it is a mirage and the Government are absolutely right to say to the EC and to this country, "So far in relation to sovereignty and no further".
The noble Viscount criticised the Prime Minister; indeed I do often, but not on this occasion. The spectre of the loss of sovereignty to a European superstate was raised not by Mrs. Thatcher but by Jacques Delors. It was M. Delors who told this country, and the world, that by the end of the decade 80 per cent. of all the important financial and economic decisions would be taken in Europe. That was what alerted the people who believe in the future of Britain as a sovereign state. That is what made them ask, "What is happening here?" It was not anything to do with socialism; it was all to do with where and at what level decisions affecting the people of this country should be taken.
The noble Viscount, Lord Chandos, and his colleagues, who unlike the Labour Party—and unlike the Conservative Party as a matter of fact—have succeeded in maintaining a lesser part of popular support in this country, believe that we should join the ERM. Indeed I believe they also think that we should go into further economic and monetary union. But, we should understand that economic and monetary union, as proposed in the Delors package, implies the surrender by national governments of their fiscal, monetary and exchange policies. They would be surrendering them to the institutions of the EC, one of which would be a European central banking system outside the control of any single government, including the British Government, or any parliament. Therefore under these proposals the Government of Britain would reside not in Westminster, or even in Whitehall, but in a system of central banks under the control of a small junta of financiers who would be impervious to the views of the electorate. That is not the kind of community I want.
I believe in European co-operation and, like the noble Lord, Lord Thomas of Swynnerton, I also believe that Europe has frontiers far wider than the 12 nations of Western Europe. Europe is far bigger than the EC, it is far more important and it also has a long cultural heritage. I am no little Englander, although I very much believe in the people of this country and their abilities which have contributed so much to the world. What I should like to see, and what I think most people of goodwill in this country would wish to see, is good co-operation between all the nations of Europe.
But that must be under a system of government which they understand and which is responsive. There has been no need for Japan, Korea, Taiwan or Singapore to unite into some common market to make themselves successful. They are successful on the world stage because they believe in themselves
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and they have leaders who believe in their countries. That is what I want to see for Britain That, I hope, is where our future lies.
3.40 p.m.
Lord Bonham-Carter: My Lords, I thank the noble Viscount, Lord Chandos, for introducing this debate at this apposite moment. I agreed with the general tenor of his remarks. When talking about sovereignty, which I shall be doing later, one must say that if one is going to increase the powers of the European Community that must be combined with decentralisation within the Community and within the member states of the Community.
I listened, as usual, with the utmost interest to the words of the noble Lord, Lord Stoddart of Swindon. His speech it seemed to me to be an interesting exposition of the utter confusion in which his party finds itself as regards its attitude towards the Commission. I do not know whether he represents the majority or the minority.
Lord Parry:My Lords, the noble Lord should raise the level of the debate not lower it.
Lord Bonham-Carter: My Lords, it is perfectly fair for me to comment on a speech which has just been made. If the noble Lord wishes to intervene, I shall be happy to listen to what he has to say.
Lord Parry: My Lords, I merely ask the noble Lord and the House to keep the debate at the level that it has reached and not to lower it.
Noble Lords: Order, order!
Lord Bonham-Carter: My Lords, I am astonished that the noble Lord is so sensitive. I am merely commenting upon certain divisions within his party which were made apparent by his noble colleague's speech. I shall continue to point to some aspects of the noble Lord's speech which I found difficult to follow; for example, he has suggested that in the campaign to persuade this country to join the European Community no reference was made to the political implications of so doing. I can only say that in the old Liberal Party, which was the first party to advocate this country's entry into the European Community—a position which has since been adopted by the Conservative Party and the Labour Party—we always made it 100 per cent. clear that a derogation of sovereignty was implicit in the Treaty of Rome.
According to my recollection, that was made clear in the referendum campaign. The noble Lord went on to say various things about the way in which the Community had worked, and ended by saying that it was not the sort of Community that he wanted. What I was not sure about was whether he was advocating that we leave the Community. If so, he is in minority. At the moment, many countries wish to join the Community. They include, neutrals such as Austria and Scandinavian countries such as Norway. In Eastern Europe a number of countries have indicated that that is what they wish to do. It is odd that people should advocate at this moment

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the view that the Community is something which has done this country what amounts to harm.
It if for those reasons that I found the noble Lord's speech an interesting, but rather unconstructive contribution. That having been said, one must go on to say that whenever one discusses this country's position vis à vis the Community, one has to start by reminding all British governments that from its earliest beginnings, the European Community was inspired by a political idea, prompted by the experience of a succession of European civil wars. That it chose to achieve that political idea by economic means did not make the Community any less political. It was the misunderstanding, whether deliberate or not, and the refusal to recognise that fact that led to us excluding ourselves from the Community, to the creation of the free trade area, and to the breakdown of the free trade area negotiations in 1958–59.
Today it seems to me that once more the same refusal to recognise the essentially political nature of the Community has led to a supposition that the Single European Act, creating a single European market, can be seen largely in economic terms, and that its implications in political terms are marginal. In fact, its political implications are of great importance and are inescapable. That is obvious from a reading of the Act.
If we are not to repeat the mistakes we made in the past, it is essential that we should not blind ourselves to that fact or pretend that those political implications do not exist. For example, M. Delors' prediction, to which the noble Lord, Lord Stoddart of Swindon, referred, was not a spectre or mirage. When he said that by 1995 80 per cent. of all important economic decisions would be taken at EC level rather than national level, he was saying something which seems to me more and more likely to be true, and something that we should recognise.
I ask noble Lords to look at what is already happening today. Mr. Ludlow, whose article was referred to by the noble Viscount, Lord Chandos, and who is the Director of European Policy Studies, calculates that in environmental policy in 1988, 80 per cent. of all legislation adopted in Britain was of EC origin. Do not let us pretend that those political implications do not exist; or, secondly, do not let us pretend that the Delors Committee's plan for economic and monetary union is not developing a momentum or a current, as the noble Lord, Lord Thomas of Swynnerton, called it. It is a current which I and, he, if I understood him rightly, doubt whether the Government can stop. If we try to exclude ourselves from those movements which are going forward and gathering momentum, we shall do so to our detriment. We may be fairly confident that the other countries will go ahead without us.
Thirdly, the Single European Act—this is on the same theme of the momentum which is developing—requires the European Community to review European political co-operation in 1992. We shall find, I predict, as the founders of the European Community foresaw, that economic integration demands political integration; that political integration requires political machinery; and that the existence of political machinery and political
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institutions legitimises and formalises political co-operation.
Each of those developments inevitably involves a derogation of sovereignty. That has always been the case. That will always be the case. It is in the Treaty of Rome. It is in the Single European Act, both of which we have signed. In addition, there now exists a European Parliament, to which this Parliament, this Government and the British press pay all too little attention. Parliaments like to accumulate power, and the European Parliament is no exception to that rule. It has in recent years accumulated power, and it will continue to do so. I would argue that it is right and proper that it should.
It is no use the Prime Minister complaining about European bureaucracy if she does not take any steps to curb it. The way to curb bureaucracy is to make that bureaucracy responsible to a democratically elected parliament and to a Council of Ministers, which acts almost as a second chamber in the European Community, and which conducts its business not in private but in public.
President Gorbachev spoke of ossified dogmas which he said had to be abandoned. It seems to me that the Prime Minister clings to some ossified dogmas about the European Community. One represents the European Community as a threat to our cultural identity. If the Prime Minister occasionally went abroad for her holidays, she would find French, German and Italian cultures unconcerned about this dreadful threat to their identities. I cannot see why she should think that the British cultural identity is so much more vulnerable than theirs. If there is a threat to our cultural identity, it comes not from the European Community but from Sky Television and the Americanisation of our television screens which this Government are so busy promoting.
Another ossified dogma is the EC's bureaucracy. The third which has been so well and thoroughly dealt with by the noble Viscount, Lord Chandos, is that national sovereignty must be protected at all costs and in all circumstances. I believe that the sooner we abandon that last dogma, the better we shall be able to influence and direct the future of the European Community.
3.50 p.m.
Lord Benson: My Lords, the Motion calls for a more integrated European Community. I should like to make the plea that there is very little hope of an integrated European Community until we get the basic organisational structure of the Common Market on to a common sense basis. It comprises at present six different layers of authority, disjointed and uncoordinated. First, there is the European Council, which considers wide policy issues after meeting two or three times every year. It does not determine legislation.
The second layer is the Council of Ministers, which is the main decision-making body. It comprises Ministers from each of the member states who fight their own corners, and think of their own particular state in making their decisions. The composition of the council meetings varies depending upon the

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subject: transport, finance, agriculture. Different members meet, making their decisions in isolation and without reference to the others. The Council of Ministers does not meet in public; its proceedings are secret. Its decisions are communicated to the national governments after they have been made. Inconsistency is virtually guaranteed by changing the presidency every six months. Important decisions have to be unanimous.
The third layer is the representatives and ambassadors of the member states who sit in Brussels. A great deal of their time is spent in planning the work and the sessions of the Council of Ministers. They are not a formal Community institution, but by common consent they carry a great deal of influence in the conduct of Community affairs.
The fourth layer of authority is the European Parliament, but it has no legislative powers. It can express opinions; it can talk; it can give advice. But the ultimate decision rests with the Council of Ministers meeting in secret. Basic decisions which affect all citizens of the Community are not therefore made by the European Parliament, however elected. They are made by the Council of Ministers.
The fifth layer is the European Commission, which carries out the day-to-day work, but it has the sole power of initiative. Also, apart from the court, it has the sole power of interpreting the provisions of the Treaty of Rome. Technically, it is under the surveillance of the European Parliament, but that is wholly unrealistic because the only way in which the European Parliament can enforce its authority is by removing the whole of the Commission en bloc on the basis of a two-thirds majority of the European Parliament—a totally unrealistic proposition.
The sixth layer of authority is the 12 member states in which the bulk of the revenue arises and the expenditure is made. The degree of surveillance which is possible by the other five layers of authority over the sixth layer of authority is very small and very difficult to apply.
If we had set out to formulate an organisational structure which would be transparently inefficient, and indeed a long way removed from democracy as we understand it in this country, we could not do better than the organisation we have in post at present. Let us look at some of its achievements. The annual budget of the Community is £25 billion per annum. Of that sum, every year between £2 and £6 billion is squandered and frittered away in fraud and irregularities. That has been going on for years. Next, the gross mismanagement of the common agricultural policy has been continuing for years. The great bulk of the revenue is expended on that policy, but only nine out of every 100 workers are engaged in agriculture. The accumulation of huge stocks of unsaleable goods and the vast expenditure of money on storing them is totally inexcusable.
The financial and budgetary administration of the Community is wretchedly weak. Year after year in annual reports and special reports the Court of Auditors draws attention to bad and inefficient administration. Sometimes a little is done with those
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reports, but on the whole most of them are ignored or not treated seriously. Then there is the lack of political will, to which Select Committees have drawn attention. Again and again decisions are not made because they are politically difficult or because the necessary majority cannot be obtained.
If we really feel that an integrated Europe is necessary, I suggest that the first thing we must do is to get the organisation right. Until that is done, I cannot believe that there is any hope of a united Europe with freedom of frontiers and the free movement of people, goods, capital and services. There is further talk of a single currency, but the smallest economic principles must be observed, that we cannot have a currency unless we have a federal government who can manage the economy upon which that currency is dependent. So I think that the first task is to get the organisation right. It has been recognised for a long time that it is weak and inefficient. The real problem is that nobody has the courage to tackle it.
3.57 p.m.
Lord Kilmarnock: My Lords, I wish to say a few words about the so-called social dimension mentioned by my noble friend, which has suddenly emerged as an elixir newly discovered by the Labour Party—though not apparently by the noble Lord, Lord Stoddart of Swindon—and has correspondingly become the subject of bitter denigration by the Government. I do not believe that either of these reactions is justified by proposals for a social charter, as far as we know them at present, although we have yet to see the final version of the Solemn Proclamation of Fundamental Social Rights that the Commission wants to propose to the Council.
Let us therefore look first at the motivation behind the pryoject. It is clearly designed to reassure unions and employees generally that the 1992 completion of the internal market is something more than a charter for capitalists. It is in the nature of a quid pro quo to the European labour forces for the dismantling of the last trade barriers and the opening up of the single European market to transnational companies which are naturally likely to locate where labour and social costs are least. Obviously there is some considerable merit in the aim to introduce civilised minimum standards of employment and to ensure that one member state cannot blatantly undercut another.
Our own record of industrial relations is not such that we can afford to sneer at efforts to get the people of Europe on board for the more dynamic economy at which the 1992 project is aimed. But as the social proposals spring from a tradition of social partnership and co-determination which is somewhat alien to our own, the Government immediately dismiss the package as creeping or backdoor socialism, without troubling to distinguish what is industrially useful or ethically desirable from what should be treated with a little more caution.
Let me start with one or two reservations. Personally, I attach great importance to preserving freedom of manoeuvre nationally in two vital areas—fiscal policy and the control of social security.

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I think any British government of whatever persuasion would, or should, aim at that. The fiscal side does not fall strictly within the broadly social remit that I have set myself. However, with the various kinds of interesting possibilities of fiscal innovation in the direction of tax neutrality on the agenda, I would want to keep my options open here.
The European exchange rate mechanism would, I am convinced, have been a help to Mr. Lawson in controlling domestic inflation, as my noble friend Lord Chandos said, and as he himself clearly believed when he was shadowing the deutschmark. However, central budgetary control is not a necessary element on the road to a common currency, and he would be right to resist that.
Next, the social security system is another extremely potent weapon of domestic social policy in the hands of any government. I, for one, would be extremely reluctant to surrender control of it. This is especially so because we on these Benches are opposed to the idea of a European minimum wage. I am not sure whether that will be included in the final draft of the solemn proclamation. The phrase used in the press release of 17th May was a "fair wage". That sounds unexceptionable until we remember that the concept of the just wage went out with the mediaeval guild system and its redefinition has been the subject of profound political dispute ever since. It would, therefore, be extremely difficult to establish, particularly if Community-wide figures were attached to it.
The arguments against such wage-setting are well known. It introduces rigidities into the labour market with the ultimate effect of keeping people out of work. Further, it penalises poorer countries, unless perhaps their wage bills are subsidised out of Community funds. That is not to say that there should be no norms of basic social protection. However, in our view, it is much better to go for a minimum income through an integrated tax and benefits system, which would, incidentally, remove the worst affliction of all suffered by low paid British workers, which is the punitive combined marginal rate of tax and national insurance contributions at the bottom end of the scale. This is another area in which a British government should preserve some freedom to act.
If the Commission is in danger of being somewhat over-ambitious in some aspects of the proposed social charter, when one comes nearer to the human and civil rights aspects, it is on much firmer ground. Thus, freedom of movement and association and collective bargaining must command universal, or at least very broad, assent. So, too, must equal rights and equal pay for men and women in the same jobs, and parental leave. Equality of opportunity must command broad assent in so far as it can be achieved through education and training. Therefore, I strongly support the Commission's proposal for a right to continuing vocational training, particularly if it gives a boost not only to adult retraining but also to the radical restructuring of the arrangements for the 16 to 19 age group which is so urgently required in this country. If it does anything to push us towards an educational maintenance allowance at 16 plus, I shall be happier still.
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Then there is the matter of health and safety at work and the protection of children and young people. No person in his right mind would oppose that. The same goes for the integration of disabled people which has been so remarkable a feature of recent social advance.
It might be thought that, given our long tradition of social legislation, which dates back to the mid-19th century, we might be ahead of the rest of the Community in many of these matters. But the only area in which our legislation, if not our practice, seems to be ahead of the Community is that of health and safety at work. Otherwise, the indications are that there is a general trend away from the standards outlined in the charter. The charter would, for instance, make provision for the limitation of the hours worked by young people. This would have an obviously beneficial effect on their possibilities of further education and training. However, the Government's Employment Bill, which had its Report stage in another place yesterday, goes straight in the opposite direction. It removes restrictions on the hours and wages of minors, thereby encouraging them pell-mell into the labour market at too early an age, and thus into a downward spiral of low paid, unskilled work.
As regards sex discrimination, there is more litigation in this area from Britain and Ireland than from anywhere else in the Community. This may be a tribute to the role of the Equal Opportunities Commission, but it does not say very much for our employers' practices. So, while there are some things that we are right to be chary of, there are other widely accepted social and employment standards against which we do not measure up too well. If we are afraid of creeping or back door socialism, or any other bogey conjured up by the Government, it is worth looking at what we actually put our name to, or rather what that enlightened lady, Mrs. Chalker, did on our behalf, in the Single European Act.
In subsection III on social policy in Article 118A, we read that:
"Member States shall pay particular attention to encouraging improvements, especially in the working environment, as regards the health and safety of workers, and shall set as their objective the harmonisation of conditions in this area, while maintaining improvements made".
We then learn that directives under this section may be made by qualified majority, laying down:
"minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States".
This is followed by what amounts to an exemption for:
"small and medium-sized undertakings".
I can see little there which should cause Mr. Fowler too much loss of sleep or send the Prime Minister into a towering rage. Gradualism is the order of the day and they will have much less difficulty in making reasonable British points if they are prepared to listen to the points made by others. The British Monster Raving Loony Show is now frankly out of date in Europe and should be taken off the road. It should definitely not be trundled out again in Madrid. Perhaps the noble Lord, from his more balanced Foreign and Commonwealth Office

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perspective, could pass that on as one of the messages of this debate. Perhaps if that particular show were managed by his department, it might work out very much better for all of us.
The truth of the matter is that the wider the social charter seeks to range, the less it will be possible for its promoters to argue that it is a necessary precondition of the success of 1992. The Government therefore have some freedom of manoeuvre. But, rather than putting the boot into something that clearly accords with the aspirations and values of practically all our fellow members, a wise government would be in there talking coherently and persuasively about those areas, which I have mentioned, on which they have reservations, while acknowledging those in which we ourselves are less than perfect.
We do not want any more ranting about socialism, which is in any case on the decline worldwide. We do not want the negativism of Bruges. What we do want are the particular British virtues of perspicacity, pragmatism and good sense. A modicum of courtesy would also not come amiss. In that way we are more likely to influence the final shape of the proclamation, which will be made with or without us, and to diminish the number of unnecessarily intrusive directives.
Finally, the social market economy which we espouse is fundamentally predicated on securing the social acceptability of a free market system. We believe that that requires fair, as opposed to merely formal, equality of opportunity, a wide dispersal of property and a basic income guarantee. To the extent that any European proclamation or instrument meets these aims, we will support it wholeheartedly. But if, and where, it strays into excessive bureaucracy, or conformism, or centralism, or corporatism, or utopianism, our voice will be raised against such threats to our national interest and cultural identity. The noble Lord, Lord Thomas of Swynnerton, pointed towards some of those dangers as possibilities along the road. It seems to me that that position is well expressed in the terms of the Motion of my noble friend, which he moved so eloquently. I congratulate him on it. Although convention will require him to withdraw it, I commend its spirit to the House.
4.8 p.m.
Lord Gladwyn: My Lords, I propose to say a very few words regarding the possible effects of recent events on the North Atlantic Alliance and, hence, on the European Community. The prospects for both have, I believe, been improved by President Bush's very welcome initiative. It is true that agreement between the super powers on the limitation of their conventional weapons in Europe—weapons comprising aircraft, tanks and, for the first time, men—may well take longer than he suggests. But if, as we must all hope, the negotiations are at least partially successful, then talks on short-range nuclear weapons will certainly start. I agree, at least on this, with the Prime Minister,' that once they do start the day of the so-called "third zero" will not be very far off.
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Incidentally, the row on short-range weapons has probably only been postponed if, as seems quite likely, the West German Government, emerging from the coming elections, refuses to allow modernised Lance missiles to be stationed on German soil, where United States troops are nevertheless likely to remain—at least we must hope so.
This brings me to the point that, whether we like it or not, the emergence of what may broadly be termed left-wing or left-of-centre coalition governments in practically all the continental member states of the Community is something that must now be seriously contemplated. Without venturing into party politics, I might add that some such government or coalition might possibly in the next year or two even take the place of the present Gaullist régime in this country. In any case our continental colleagues are very likely to agree fairly shortly on some scheme for giving effect to the Single European Act and hence making the Community more efficient which, as the noble Lord, Lord Benson, has said, is now essential. If we stand out, all the chances are that they will go ahead without us.
The noble Lord who is to reply to this debate will correct me if I am wrong, but I just do not believe that the Americans would welcome such a development. They would surely prefer us to be part of a united Europe on the broad lines proposed by the Commission rather than a kind of aircraft and missile carrier on the edge of a Europe with which, for so long at any rate as their troops remain, they will inevitably have a "special relationship" rather than with us. All the more so if our absence results in an increase in anti-American or even neutralist tendencies, especially in Germany.
That is not to say that all the hopes now placed on 1992 will necessarily be realised, particularly if it results simply, as the Government apparently want, in the abolition of all impediments to trade and nothing else. There has recently appeared in France—and it is said to have created a great impression—a book by a brilliant young inspecteur des finances called Alain Minc entitled La grande Illusion. By this he apparently means that a purely economic solution of the problem of increasing unity is likely to be disastrous. The Darwinian conception, as he calls unrestricted free trade—a kind of survival of the fittest—would result, he thinks, in appalling and intolerable hardships for many nations and for most smaller industries unless accompanied by some control of credit including a central bank, great financial asistance for the backward countries, some social or welfare state provisions, and above all a common policy on defence.
M. Minc's book is rather irritating. I think that he is too pessimistic regarding the withdrawal of United States troops, which in the long run he regards as inevitable. He also appears to think that the Germans would willingly accept an Anglo-French nuclear umbrella if the American one was withdrawn. However, his general argument that there is now a real danger of what he calls "continental drift" towards the East, and an ensuing "Finlandisation" of Europe unless Western Germany is firmly

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embodied in some form of meaningful political union—including, if possible, the United Kingdom—is surely unanswerable. Must we really assume that Mrs. Thatcher cannot recognise this obvious danger and the obvious means of avoiding it? If so the hope must be that she will eventually be replaced by somebody who can.
4.15 p.m.
Lord Monson: My Lords, we are all grateful to the noble Viscount, Lord Chandos, for the chance to debate this thought-provoking topic—thought-provoking because implicit in the wording is the tacit acknowledgement that the attainment of further integration of the EC without jeopardising either national interests or cultural identities (not just Britain's) would be a difficult and delicate task. Why, therefore, attempt the task, one wonders. It is not as if further political integration were a prerequisite for fostering friendship between peoples. Indeed, the opposite may be true, as I shall argue later.
Euro-fanatics are notorious for their hostility towards "Atlanticism", which one might loosely define as friendship and co-operation between English-speaking peoples. One sometimes wonders whether they also feel that we are duty bound to like the West Germans better than the Austrians, the Belgians better than the Swiss, the Danes better than the Norwegians, the Greeks better than the Turks, the Spanish better than the Poles, and the Sicilians better than the Maltese merely because the first group in each case are members of the EC and the second group are not.
By the same token the absurd notion that further integration is essential in order to prevent physical conflict between nations simply will not wash. If this were so the EC nations, individually or collectively, would long since have clashed with Sweden, Switzerland, Austria, Hungary, East Germany and so on. Logically there would have been clashes between Canada and the United States and between Australia and New Zealand as well. Nor is there anything in the preposterous claim made at the time of the 1975 referendum campaign that integration would, in some suitably vague and unspecified way, give the people of the United Kingdom greater access to Beethoven, Voltaire, Breughel, Carpaccio and so on. Art, music and literature have always transcended national frontiers, thank goodness, and always will. The Common Market plays no role in this whatsoever.
The long-term viability of an integrated foreign policy must also be open to question. The much vaunted EC united front in response to the Argentinian invasion of the Falklands was more apparent than real. Had the conflict continued any longer serious cracks would have appeared in the facade of European unity, or rather EC unity. One must not make the far too common error of using "Europe" as a synonym for the EC.
So what are we left with?—the idea, I would guess, that further integration is needed to increase wealth and prosperity within the Community. Only an ivory tower elitist totally out of touch with ordinary people would deny that all people in every era welcome
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greater prosperity, both in their capacity as private consumers and in their capacity as beneficiaries of public spending, but not at any cost, which is why the vast majority of British people will, for example, welcome the Government's ban on juggernauts over 38 tonnes, which our overcrowded island simply cannot cope with whatever may be the case on the Continent, even if such a ban reduces the average family's income by a few pence per week. In other words, for the British public economic efficiency is not the be all and end all.
Furthermore, the average family's prosperity depends not only on dismantling barriers within the Community but also on dismantling barriers around the perimeter of the Community. Banning or severely restricting imports of sugar from the Caribbean not only impoverishes Caribbean sugar producers but makes EC consumers poorer than they would otherwise be. So far as concerns the internal barriers, most of those are already well on their way to being dismantled in any case. The United Kingdom has been more scrupulous than many other countries in fulfilling its obligations in this respect.
The trouble is that the majority of draft directives now emanating from Brussels—at a rate that would never be tolerated by the House of Commons or by this House—have nothing to do either with the unimpeded flow of goods and services between the different nations of the Community on the one hand or joint action against pollution, drug smuggling and terrorism on the other. In any case, the latter requires the co-operation of the entire Western world, not only of the 12 EC countries.
The issue of so-called workers' rights and the social charter apart—I make no comment on that given my mixed feelings about it—we seem to be left with an absolute spate of over-zealous legislation seeking to interfere in the purely domestic affairs of countries throughout the Community. I do not particularly care for bull fighting, but it is none of my business. It is no business of anyone else either, except the Spaniards, yet the EC is apparently trying to ban it despite the protestations of King Carlos himself. So much for the "protection of cultural identity". Efforts are doubtless now being made to ban the Frenchman's traditional Gauloises and Gitanes on the grounds that they contain too much nicotine or tar. The German autobahnen are also threatened with speed limits for the first time, against the wishes of the Germans themselves.
As for ourselves, the list of proposed impertinent interferences in our domestic affairs is too long to recite. I shall mention just four at random: the ban on the driving of minibuses within the UK by deaf drivers; the requirement for a vet to be present at a game shoot; the introduction of a close season for vermin; and a ban on the imperial system of measurement, even for unpackaged fruit and vegetables sold directly by greengrocers and farmers to British people. I am not talking about items that are exported to the Continent. The human-scale imperial system forms part of our cultural identity, as a glance at Shakespeare will demonstrate, as it formed part of the Continental cultural identity until

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the totalitarians of the French Revolution abolished it just under 200 years ago.
Even those measures that are admirable in themselves, such as the requirement for greater minimum tread depths on motor tyres announced the other day, are surely matters that lie solely within the competence of national parliaments. If that is what a more integrated European Community is all about, one wants no part of it. The noble Viscount, Lord Chandos, said that he was unhappy with the word "sovereignty". I am not very happy with it either. Let us talk rather about self-determination; that makes the whole matter clearer. Why should there be this urge to legislate, to dominate, to override the national will in so many matters, both trivial and important? The clue must lie in the alarming analogy that I have heard twice recently. It goes like this: the European Community is like a bicycle; unless one keeps pedalling it forward furiously, it will collapse. What an admission of instability and innate weakness? Can one imagine institutions such as the British monarchy, the Roman Catholic Church, the American Constitution—notwithstanding their gradual, inevitable adaptation to changing times—being described in such terms?
The logic of the bicycle analogy is that the EC should proceed at all speed to become, first, a federal state and then a fully fledged unitary state. Only when it has reached the end of the road can the bicycle be safely stored in its rack. That logic is borne out by the fact that much of the proposed legislation is more appropriate to a unitary state than to a federal state. The components of a federation have far more freedom to decide matters for themselves than the allegedly sovereign nation states of the EC appear to have at the moment.
Common Market enthusiasts—among whom I have never pretended to count myself—must put a brake on the zealots and Utopians in their midst if they want their ideal to be attained. The reality is that the ill will created by excessive harmonisation will destroy the only harmony that one needs or wants—harmony between peoples.
4.25 p.m.
Lord Ezra: My Lords, it was only on 3rd May that the noble Lord, Lord Cledwyn of Penrhos, introduced an important debate on the challenge of 1992. I think that, in spite of the relatively short lapse in time, the noble Viscount, Lord Chandos, is absolutely right in introducing a similar subject for debate today. After all, as he has pointed out, this is the week before the European elections. It therefore gives noble Lords the chance to survey the whole European scene.
I think that we should begin by reminding ourselves of the very positive progress that has been made towards the achievement of the single market. In the same debate on 3rd May, the noble Lord, Lord Young of Graffham, pointed out that 50 per cent. of the measures that needed to be introduced to achieve the single market had in fact been achieved. That is slightly beyond the half-way mark, so it is a great achievement.
Furthermore, there is not the slightest doubt that at what one might describe as the working level,
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involving industrialists, trade unionists, trade organisations and bodies such as the British Standards Institution, a great deal of contact of a positive nature is being developed in Europe, at Brussels and at other meeting places. Such contact forges the sort of European Community that is being prepared for the future.
However, it is disturbing that, while that positive work is going on at that level, speeches are unfortunately being made from time to time at what one might call the political level which throw doubts on the whole endeavour. I should have thought that it would be far better to encourage the achievements at the working level by more positive speeches from now on, as we near the full achievement of the single market, than to go on raising those doubts.
The question arises whether that single market can simply be a free trading area. It cannot. If we are to remove barriers between the movement of goods, people and money, the rules under which that free movement is to be undertaken must be agreed; otherwise there is bound to be distortion. The rules that must be agreed must ensure that trading is fair and therefore that standards of health and quality should be common so far as possible. In the case of the movement of people, we must agree on which qualifications will count in the various countries of the Community, so they must be linked together in some way. So far as concerns the free movement of money and capital, we must not only consider the rules that apply in each of the member countries but must also be concerned about the rules that apply outside, particularly with regard to the banks which have been established to such a large degree in London and other Community centres but are based in the United States, Japan and elsewhere. Those rules must all be worked out.
In my opinion, it is therefore idle to suppose that one can simply say, "Let us have free trade, but leave it at that". We must go into the other matters to make sense of the situation; otherwise we shall have total distortion. I believe that that point is fully recognised at what I call the working level. I hope that in future top level political pronouncements the Government will pay regard to that and show that this indeed is an inevitable consequence of agreeing to create a free market in Western Europe.
Some doubts have been expressed by some of today's speakers, I have no doubt with very genuine motives, as to whether we are looking at this Community in too small a perspective or whether it could jeopardise our sovereignty and so on. However, the fact is that the objective of creating the single market in 1992 has put Western Europe on the map.
A few days ago I was at an international meeting in Vienna which was attended by people from the Community countries, non-Community Western European countries, one country from Eastern Europe, America and Japan. We were discussing general economic and financial trends in the world. The largest part of our discussions centred around the creation of the single market. The Americans expressed their concern about whether or not it would be a fortress Europe, but they are gradually coming round to the view that it will not be. They

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have been assured time and again—and I am glad to observe the role of the United Kingdom Government in giving those assurances—that such is not the intention. However, clearly we have to live together on a fair basis with the interchange of goods, financial services and resources. The Japanese also made very clear their concern; hence their great interest in establishing themselves in various European countries and in particular in Great Britain. So far as concerns the Eastern European country—and perhaps as it was a private meeting I should not mention it by name—those people were nonetheless very keen on finding ways in which they could be associated with this development, which they saw as of great and historic importance so far as concerns the whole of Europe.
Whatever doubts and hesitations some of us may feel about this development, let us be quite sure that in a world sense it is regarded as very important indeed. It is gratifying that Britain is among those who are at the centre of this movement, and I believe that we shall receive much added strength from these developments so long as we participate in a positive way.
Perhaps I may illustrate that by mentioning a personal experience which occurred when I was in the coal industry. We were trying to stimulate the sale of British mining equipment throughout the world, but we found that there was a move in Brussels to fix the standards for European mining equipment on the German DIN system. The Germans were perfectly justified in pressing for that move but our response was not simply to sit back and say how unfair it was. We sent a very strong team to Brussels to negotiate in favour of the British standards. I am very glad to say that the outcome was a reasonable compromise which enabled us to continue to export on a substantial scale.
The lesson which I derive from that experience is that we should not sit back and complain about events that have gone wrong and decisions against our interests that have been made by people in Brussels; we must ask ourselves whether we have made the effort to send the experts over there. We must make the effort to contact our representatives within the Commission and the other institutions and those Ministers who attend the meetings of the Council of Ministers in order to make absolutely sure that British interests are clearly identified and put forward at the right time and in a constructive manner.
I would be the last person to suggest that we should accept everything that comes out of Brussels. There are many occasions on which obviously we must express a different opinion. Indeed, that is the case with every single member of the Community. The question is how we do it. I suggest that we get in early, quickly and positively. It is still felt in Brussels that British representation at the working level is not as strong and adequate as that of some other countries. We are still not putting in quite enough effort in spite of the progress made. The right way to influence this important development is to contribute as much as we possibly can to shaping it in the right direction. If that can be one of the
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messages to come out of this important debate, I shall be delighted.
4.35 p.m.
Lord Taylor of Gryfe: My Lords, it is always a pleasure to follow the good common sense and practical contribution of the noble Lord, Lord Ezra. I am in the fortunate position of being sandwiched between the excellent contribution to this debate of the noble Lord, Lord Ezra, and the wisdom that we are about to hear from the noble Lord, Lord Jenkins of Hillhead, which is based on his experience as the president of the Commission.
I have only one or two points to make. One of them is that I regret very much that there has been only one speaker from the Conservative Benches. We are on the eve of the European elections but only one speaker from the Conservative Party has participated in this debate. It may be that this debate clashes with some sporting event taking place this afternoon. On the other hand, it may be that if two speakers from the Conservative Benches were to address us, they would speak with diametrically different views because it is quite clear that the Government are in disarray. So much is obvious from the kind of lively debate that is taking place between the Prime Minister and Mr. Heath.
This afternoon I might have been tempted to correct the balance and quote from a book written by Mr. Michael Heseltine as his contribution to this debate. I commend to the Minister and the Government the wise words of Mr. Heseltine, with his view of Europe. He deplores our lack of initiative and lack of commitment to the European idea and he addresses that topic very forcibly in his book. I might even quote another Conservative leader in support of our argument and mention the great speeches of Sir Winston Churchill at the end of the Second World War when he showed us a vision of a united Europe. I must say that the speeches of the present Conservative Prime Minister fade into insignificance beside the statemanship shown by earlier Conservative leaders who addressed themselves to this subject.
It is sad that this great debate about Europe is being trivialised by arguments about the size of advertisements on cigarette packets. We are in the midst of great events in Europe. As we read the news bulletins we must all be aware that ideas are changing in Eastern and Western Europe. It is the end of communism and the end of a faith by which people in Eastern Europe have lived. In this vacuum people are seeking a new vision and new ideas to which to commit themselves because they have lived by a faith which is now discredited.
Under these circumstances I think it is right that we should look at this European idea with the breadth and vision to capture people's imagination. People are seeking an idea and an ideal. One may say that that is all right for the broad vision but let us look at the detail. In the earlier debates on this subject we spent some time on European monetary union and also on the report over which M. Delors presided. The bankers who prepared this report were not Marxists. They were not socialists. In fact I believe that Mr. Robin Leigh Pemberton sat on the

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committee, and you cannot get much more conservative than that. They agreed to these proposals for a further development of European monetary union.
Why did they do so? You may talk about keeping our country and its institutions pure and undiluted by European influences. That is not the real world any more. Last week the Bundesbank decided not to increase its interest rates. Mr. Lawson sat in No. 11 Downing Street and waited for the message because it was the Bundesbank which last week determined whether our interest charges would go up in Britain in response to their decision. That is the kind of world we live in today. We are no longer isolated from these events. We can no longer build a wall around ourselves.
I believe that this country can make a useful contribution to Europe. I listened with great interest to the noble Lords, Lord Monson and Lord Benson, and I have some sympathy for their criticism of some of the inadequacies of the Community. It is easy to criticise the frauds and all the other weaknesses that have emerged. We are building a large, new institution and it would be a miracle if difficulties such as have been mentioned had not emerged.
But what do we do? We complain about the common agricultural policy. The trouble about the common agricultural policy is that it was devised before we entered Europe, and therefore we had to accept the rules. New problems are emerging in Europe today. If we were to sit outside these events there would be no point in complaining about the inadequacies or weaknesses of the CAP when we were outside. Our job—indeed as part of our national pride and responsibility as a nation—is to play a full part in these great historical events. I hope that today's debate will encourage us to grasp the opportunity and see the vision.
4.43 p.m.
Lord Jenkins of Hillhead: My Lords, I congratulate my noble friend Lord Chandos on having chosen this Motion, and also on the relevant and perceptive terms in which he phrased it and phrased his speech. I should like to make a comment in a moment or two about his choice of the words "national interest and cultural identity". Before I do that I should like to say a word or two about some of the interesting speeches that his Motion has provoked.
The first, is the speech of the noble Lord, Lord Stoddart of Swindon. The noble Lord spoke with unusual dogmatic eloquence this afternoon. I do not say that in any way in criticism. I have some sympathy for it for a reason that I shall come to in a moment. He is in a rather uncomfortable position at the moment because he sees his party slipping away from him on Europe. The reason for my sympathy is that I once saw my party slipping away from me on Europe in the opposite direction. Maybe that made me a little dogmatic and possibly a little more eloquent than usual at that time too. Therefore I have some sympathy with him on that issue. I welcome the present movement in the Labour Party,
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which I regard as strong and important, but in view of the history of somersaults I take it with just a pinch of salt, and I am a little sceptical about the degree of widespread conviction or commitment that goes with it.
I listened with great interest to the noble Lord, Lord Benson, who spoke, if I may say so, with great detailed knowledge for someone from outside about the Community institutions. Of course they are not perfect. They are far from perfect. Of course they are too complicated. However, they do in a sense represent an inevitable ambiguity within the Community at its present stage of development. That is the ambiguity in the feeling throughout the member states that a lot of things have to be done at a European level if they are going to be done at all, combined with a certain doubt about how much transference of sovereignty they are willing to engage in.
That is really the essence of the problem. As it is peculiarly strongly represented by a feeling in this country, it is not altogether sensible for us to criticise the Community because it does not sit down with more speed and detailed application than the Founders of the American Constitution in Philadelphia in 1766, and work out a perfect, brand new constitution for Europe in a short time. To say that Europe cannot progress until it has introduced perfection, or something near perfection, in its institutions is, if I may say so with respect to the noble Lord, a recipe for despair.
Nor do I think that the noble Lord was wholly accurate in his assertion that you cannot have some form of currency union without a full federal government. I believe that events will contradict him probably in the course of the 1990s or as we get to the year 2000, but that is speculation. However, there is also a certain amount of history. There was such a thing as the Latin currency union which prevailed for pretty well 50 years between France, Italy, Belgium, Switzerland and maybe one or two other countries until 1914 unsupported by any federal government or any political superstructure. Therefore I think that the noble Lord's proposition is not entirely true.
I come back to the two phrases in my noble friend's Motion; first, the question of "maintaining Britain's … cultural identity". I do not believe that that is remotely in danger or at issue. My noble friend Lord Bonham-Carter spoke with great force about that point. If it is in danger, that danger comes from across the Atlantic and not from across the Channel. Such a fear is not felt by countries which have at least as strong a national cultural identity as we have ourselves. Indeed I know of nobody in Europe—I do not know of the most determined European—who thinks it right or feasible that we should see in anything like the near future, or perhaps ever, an exact replica of the United States of America in Europe.
That is for a very good reason. The Europeans who founded the United States had turned their backs on their countries of origin and been through a melting pot. That is not the case in Europe, will not be the case, and should not be the case. Therefore what is achieved in Europe will be something

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different from that, but not something which will in any way threaten our cultural identity.
The other point that my noble friend talked about was the importance of "maintaining Britain's national interest" while progressing towards greater European unity. I did not entirely agree with the point made by the noble Lord, Lord Monson, but the fact that he put this in showed that he thought that it was a very difficult enterprise. I do not think that it is difficult at all. I am rather filled with dismay at the now increasingly likely prospect that this Government, under the leadership of the Prime Minister, are going to repeat for the fourth time the mistake that we made in our relations with the Continent of Europe in 1951, 1957 and 1978, not out of Euro fanaticism but because by following this policy, by learning nothing from the past, we unnecessarily reduce British influence in Europe and serve British interests, let alone European interests, extremely badly.
There is no doubt that this recipe that we apply to ourselves is not one that the noble Lord, Lord Stoddart, might wish for; his had a certain logical consistency, although I do not agree with it. It was that we go off in another direction and we find a different policy which has nothing to do with the Community. We always hesitate at the point when we are asked to participate in some new way forward, and then join belatedly, rather shamefacedly, dragging our feet at a late stage. What is absolutely inevitable is that by doing this we sacrifice our influence over the formation of the institution that we ultimately join. It guarantees that leadership in Europe remains almost exclusively Franco-German, not by the wish particularly of Paris or Bonn but by the decision of London. It does not mean Britain against the rest of Europe. It does not mean Britain on top. It means, unnecessarily, Britain third, fourth or even fifth in Europe.
I was interested in the point to which my noble friend Lord Chandos also drew attention: the decision of the Spanish Government to join the exchange rate mechanism of the EMS by mid-1990. I shall never forget that at the end of 1985, the month before Spain entered the Community, I asked Felipe Gonzalez, the Prime Minister of Spain, what he intended to do about the exchange rate mechanism. He said, "Join as soon as I possibly can. Economically it is rather difficult for Spain, but I am absolutely convinced that in order to play a part in Europe and to have influence in Europe, one has to participate at all levels of co-operation within Europe. That is why I was so determined to keep Spain in NATO and why I want Spain to be in the exchange rate mechanism as soon as possible". I was extremely struck by that and also depressed that a Spanish Prime Minister—who at that stage had not been in the Community at all—could see the truth that had eluded successive British prime ministers during the preceding 13 years in which we have been in the Community.
I have no doubt at all that this laggardly policy, this policy of always being reluctant, is extremely damaging to British interests and British influence in Europe. I have also been dismayed in the past few
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weeks and months to see the speed with which this Government, or some members of it, have slipped— surprisingly, in view of what we were saying a short time ago—into anto-European rhetoric. They are looking for bogeymen in Brussels—into building up M. Delors into some kind of Marxist foreigner who has to be mistrusted for those reasons. He is of course a foreigner. He can hardly help that. Indeed in Europe one cannot entirely avoid having certain dealings with foreigners. That is in the nature of the enterprise, but to describe M. Delors as Marxist is stretching language beyond the bounds of plausibility.
The major thing which M. Delors did before becoming President of the European Commission was to jerk the first Mitterrand government—he was the finance Minister in it—away from the dogmatic doctrinaire socialist, if you like, policy towards a much more open trading policy to remain faithful to the partnership with Germany and to the European orientation of France. That he did firmly and decisively. To believe that he is a Marxist bogeyman is the language of fantasy and, indeed, the language of anti-European fantasy, and not the language of constructive European fact. I hope that before it is too late the Government will draw back from this increasingly anti-European note which is coming into many speeches and which will render a mockery of 1992, let alone what may come after 1992.
4.53 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to the noble Viscount, Lord Chandos, for his Motion and for the impressive speech with which he introduced it. As other noble Lords have said, the noble Viscount could not have timed his debate better as the elections to the European Parliament are imminent and the atmosphere within the Conservative Party and the Government is, I understand, electric. The noble Viscount's Motion seems balanced and reasonable, but in her present mood the Prime Minister may not be attracted to the call in the latter part for,
"full participation in a more integrated European Community".
I shall deal with our own attitude to the Community in a moment. Our recently-published policies are forward-looking and constructive. I am grateful to the noble Lord, Lord Jenkins of Hillhead, for his encouraging remarks about them.
Today our concern is with the Government. The responsibility for tackling and resolving the problems which stand in the way of Community unity belongs to the Government. If there is failure and disunity the fault will be theirs. It is therefore our duty in this debate to examine the Government's response to the problems which face Britain at present. The general view—and this goes beyond the party political argument—is that the Government are in a real mess. As the Financial Times said on 23rd May:
"The split over Europe which has broken through the Conservatives' normally impenetrable gloss of unity will not go away".
In the approach to 1992—we have the Madrid summit later this month—we need a clear policy and a firm lead from the Government. In international matters it is the duty of all governments to work for a

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united view. But what do we see on the Government Benches in both Houses? We see the biggest split in the Conservative Party since Robert Peel repealed the Corn Laws. Let us look at the facts. We are Members of the European Community. Mrs. Thatcher set a final seal to that when we signed the Single European Act in 1986. We presume that she realised what she was doing. Yet, at this crucial moment in our history, the Prime Minister contrives to be at odds with virtually all European leaders and with members of her own party. We are witnessing a very strange drama.
The recent speeches of the former Conservative Prime Minister, Mr. Edward Heath, are known to us all. I do not propose, out of sympathy for noble Lords opposite, to enter into any detail; I know that his speeches are engraved on their hearts. Then there are Mr. Michael Heseltine's speeches. Those, along with his recent book, mentioned by the noble Lord, Lord Taylor of Gryfe, calling for closer British participation in Europe, reflect the views of an important segment of the party opposite. The noble Lord, Lord Plumb, leader of the Conservative Party in the European Parliament, pleads for European unity.
We are aware too that there are strains within the Government. Sir Geoffrey Howe does his best to pour oil on troubled waters. We must all feel sympathy for him. We know that the Prime Minister views the Foreign Office more or less as Mrs. Mary Whitehouse views the media—with considerable suspicion. Sir Geoffrey, as we know, is a committed European.
One of the key issues involved in integration is the Government's reaction to the Delors committee's recommendation on European monetary union. As the House knows, there are three stages. The first is that the EMS would be refined; the second, that new Community institutions would be set up; the third, the establishment of a central bank and a European currency. Can the noble Lord tell us whether the Government support these three proposals, or any of them? I am sure he will agree that they are central to the impending single market in 1992 and that they will be accepted by a majority, if not all the Community partners.
Some commentators have said that the Government will accept stage one but not the other two. But stage one means putting sterling in the European monetary system. Do the Government support that? If they cannot answer now they will have to decide in time for Madrid. This is a crucial issue. Again, on the question of integration the Government give the impression of resisting reasonable Community measures. Let me give four examples some of which have been mentioned by noble Lords. The first is the Lingua programme which is to help young people learn at least two foreign languages. That seems to me an admirable objective as we approach 1992. But the Government seem to be against it.
The second is the proposal to strengthen health warnings on cigarette packets. I turned to The Times to see what it had to say. It described the Prime Minister's attitude to the proposal as "pointless
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obduracy". The third is compliance with the EC drinking water directive, which this House has accepted. Mr. Ridley has said that the Government will see that that decision is overturned in another place. In my view that would be disgraceful and I hope that the noble Lord can be prevailed upon to bring about a change of mind. The fourth is the social charter about which the noble Lord, Lord Monson, had some doubts. It seems to Members on this side of the House a moderate and reasonable document.
I regret to say that there is a touch of hysteria about the Prime Minister's all-out condemnation of these modest proposals. I do not wish to be unfair and I find myself wondering whether the Prime Minister and some of her colleagues believe in the Community and wish to remain within it. They appear to me to reflect the spirit of the old European Free Trade Area—EFTA as we called it—rather than that of the European Community. If that is the case, then she and they should say so plainly. Mr. Edward Heath went further than that when, on the BBC on 29th May, he said:
"One can only reach one conclusion; that she would like to see the break up of the Community".
That may be going a little too far, but the Prime Minister's current attitudes could have unpredictable consequences. She has made plain ther views on sovereignty—an emotive word, as the noble Viscount, Lord Chandos, said. We understand that she has told Ministers to oppose in Brussels anything that seems an arrogation by the Community of national sovereignty. I can understand that attitude, but we have already conceded important elements of sovereignty. The Prime Minister did so in 1986. As a Welshman, I recognise that Wales did so substantially several centuries ago. We conceded our sovereignty to a larger concept and I sometimes wonder whether we were wise to do so!
The noble Viscount's Motion refers to,
"maintaining Britain's national interest and cultural identity".
We fully support that, as, I believe, does the Conservative Party. As the House knows, the Welsh people are especially concerned about the preservation of their language and their cultural identity. We understand that those will be protected within the Community by the Treaty. We on this side of the House assert that we must sustain and preserve in this Parliament our rights to determine matters which are of direct national interest.
Furthermore, we believe that if we co-operate in good will with other member states we can gain considerable benefits for the people of this country. I usually find myself in agreement with my noble friend Lord Stoddart. However, I do not share his pessimism in these matters. He holds his views sincerely but I regret that he does not find himself in agreement with the present policies of our party on the issue.
On 3rd May we in this House debated "The Challenge of 1992". We stressed that the problem of fraud must be tackled decisively. Again, the noble Lord, Lord Benson, rightly referred to the allegations of fraud and to the distortions created by the

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common agricultural policy. There are other issues to be considered such as social rights, the environment and industrial regeneration. However, if crucial decisions are to be taken at a Community level we must also ensure that effective democratic accountability is established.
The noble Lord, Lord Thomas, referred to the need to "draw a line". I agree. The roles of the European Parliament and of our own Parliament must be clearly defined and understood. We must pay the warmest tribute to our own Select Committee, now under the chairmanship of my noble friend Lady Serota, which scrutinises European legislation. It has a reputation not only in this country but throughout the Community. Soon we may have to consider how that committee with its sub-committees should be extended.
We are also closely concerned with the social dimension. Again, I regret the Prime Minister's reaction to the social charter. In social terms we have a great deal to gain from co-operation on a variety of issues. It would be far better if we held ourselves ready to discuss these proposals step by step rather than condemn them without consideration. Let us masticate a little before we swallow! Incidentally, there was a good deal of common sense in the comments of the noble Lord, Lord Kilmarnock, about social security.
Again, we must co-operate to create a cleaner and safer Europe. I believe that every noble Lord will agree that environmental pollution cannot be tackled by national governments on their own. We believe in working with our European partners to raise environmental standards.
In conclusion, I believe that at the present time we are in real difficulty because of a lack of clarity in government policies on the future place of Britain in the European Community. The Prime Minister appears to be leading us into a Hampton Court maze. She and some of her colleagues appear to have no idea how to get us out of it. As the noble Lord, Lord Ezra, said, we need a positive, clear and constructive approach which will help to shape Community policies in concert with our partners.
The forthcoming Madrid summit will give the Prime Minister an opportunity to define her attitudes to the major issues that noble Lords have dealt with in this debate. We welcome the promise of unity which emerged from the NATO conference. I hope that the Prime Minister will depart from Madrid with a similar promise of co-operation and unity in the European Community. If she fails in this it will be an unpredictable day for the United Kingdom. I do not like to contemplate the consequences which could ensue from a divided government in Britain on the threshold of historic developments.
5.6 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, it is not long since we debated a Motion tabled by the noble Lord, Lord Jenkins of Hillhead, on the conduct of British foreign policy. The future of the European Community was one of the main subjects which
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we then addressed. As the noble Lord, Lord Ezra, reminded us, in May your Lordships had the opportunity to focus particularly on the issues connected with the completion of the internal market during a debate tabled by the noble Lord, Lord Cledwyn.
Both noble Lords, made notable contributions to our debate today. However, I cannot say that I agree with every word that they have said, but both debates were worth while. I join with those noble Lords who have expressed gratitude to the noble Viscount, Lord Chandos, for giving us yet another opportunity to consider our policy towards the Community.
While I listened with great care and enjoyed much of his speech, I found some of his remarks to be a little cynical. I hope in my remarks to paint a slightly more constructive picture on many aspects. While I agree with my noble friend Lord Thomas and the noble Lord, Lord Stoddart of Swindon, about the concept of a wider European identity, the fact is that the Community is moving forward. The Single European Act and the accession of Spain and Portugal have given it a new dynamism. As my noble friend Lord Thomas of Swynnerton pointed out, in February of last year we succeeded in putting the Community's finances on a sound footing through tight control of the common agricultural policy. The next major Community frontier is 1992.
I agree with the noble Lord, Lord Bonham-Carter, that the European Community has a political basis and it has been a great success. By 1992, devastated post-war economies will become the biggest trading bloc in the world. It will be a beacon of prosperity and liberal values. The diversity of the traditions contained within it is very much its strength. We want greater unity and not uniformity. "Pluralism" and "choice" are our European watchwords. It is a complex tradition, as my noble friend Lord Thomas pointed out when during his speech he painted the picture of the ceremony in Barcelona.
In the march towards 1992 and the Europe of the future, Britain is in the van. One would not believe that from some of the remarks that have been made today. However, the Government have repeatedly made clear that Britain's future lies in Europe as an active member of the Community. British prosperity depends on the prosperity of the Community as a whole. I shall not follow the noble Lord, Lord Taylor of Gryfe, or indeed the noble Lord, Lord Cledwyn of Penrhos, on the matter of individuals' views on Europe in any sense. The fact is that our commitments—and by that I mean the commitments of this Government—are a matter of record, most recently, for example, to make concrete progress towards European unity and to strengthen the Community's economic and social cohesion as provided by the Single European Act. We want a Community which speaks with authority on the international stage. Therefore, our aim is a more united Europe which can compete better in world markets, contribute more fully to Western security and promote European and Western values more effectively.
How do we achieve those ends? When it comes to the matter of sovereignty I do not dispute the suggestion of the noble Viscount, Lord Chandos,

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that we need a more integrated European Community. That is already our aim and is also the aim of our partners. However, the Community is a unique organisation and we need to be clear what we are talking about. The relationship between Community institutions and the structure of decision-making in the Community tells its own story. The same is true in the United States, where the division of responsibility between the national government and the 50 states on the one hand and between the three co-equal branches of federal government on the other produces a deliberate political balance.
Balancing interests is also inherent in the Community's constitution; that is, the treaties. We need strong Community institutions and Community law in order to ensure that progress is made to provide direction and consistency. For that purpose we and other member states have pooled sovereignty in the areas covered by the treaties in order to make common decisions. However, we have not lost it. Despite the institutional changes introduced by the Single European Act, including the new co-operation procedure with the European Parliament, the last word remains with the Council of Ministers and therefore with member states' governments, who are accountable to national parliaments.
I agree with my noble friend Lord Thomas of Swynnerton that there is also a natural division between those issues covered by the treaties on which there should be common action by the Community and those which should be left to member states. Issues such as public health, culture and school education are not part of the treaty and should remain matters for national governments and other institutions within member states. We must in any case observe what the Commission calls the principle of subsidiarity; that is, that the Community should not get involved, even in areas where it has competence, in things which member states can do as well or better. As far as I can tell, that is only common sense. I am glad that that was very much the theme of the remarks of the noble Lord, Lord Stoddart of Swindon.
Having said that about the noble Lord's speech, I cannot follow him all the way. I beieve that it may be beneficial if he and his party would perhaps cease to look backwards and look further forward. I suspect that they are facing in the opposite direction from the Community in which we are trying to work. As regards trade in the European Community, it takes 50 per cent. of our exports. The export-import ratio has been doing better than that with the rest of the world. The trade deficit is due to faster growth in demand in the UK than the rest of the European Community and the falls in price and production of oil. The fact is that the deficit in services is little changed in real terms since 1973.
If the framework which I have described is observed, we have the basis for Community development in those areas where common action is required. However, we respect also the richness and diversity of our European tradition. The Community's top priority at present is the
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completion of the internal market in 1992. That was a priority of successive British Governments but for too long the scale of the task intimidated the Community. However, that is not so now. Today the philosophy underlying the single market programme is that of deregulation, liberalisation, openness and enterprise. If those sound to your Lordships like British lyrics to a British tune, you would not be wrong. We have brought down the barriers in the United Kingdom and are now doing the same with our partners in the Community. Those who claim that Britain is out of step with Europe need to be able to explain that away.
Some 90 per cent. of the proposals in the Commission's single market White Paper of 1985 have now been tabled and nearly half have already been agreed. Those include major UK objectives such as liberalisation of capital movements, liberalisation of transport, mutual recognition of professional qualifications, opening up of public works and supply contracts and other measures such as those on food law and standards. There is still some way to go, but we are on course. In fact 1992 is already all around us. It is a phrase which 60 per cent. of British people, according to a recent poll, and 90 per cent. of British business are aware of.
Despite the fears of the noble Lord, Lord Kilmarnock—and I think he somewhat distorted our attitude towards it, although I am sure he did so inadvertently—we also believe in the legitimacy of the social dimension to the single market and to Community policy generally. I do not believe that I can follow him into the detail of health and safety legislation and that sort of thing, but we have a proud social record in the United Kingdom on job creation, equal opportunities and the partnership between public and private sectors. Completion of the single market will create more growth and that will generate more jobs.
However, for the reasons that I have given, we believe, like the noble Lord, Lord Monson, that in this area each country should be free to develop its own policies in accordance with its own traditions. We are proud of our approach to the social areas. We too care about the human dimension. However, we also care about growth in jobs and enterprise and we need to hit all those targets in the Europe of the 1990s. We oppose European Community-wide social harmonisation for its own sake. That would risk diverting the Community from its main task; namely, completing the internal market on time. To pick up some of the individual points made by the noble Lord, Lord Monson, it is certainly true that we should avoid over-prescriptive and unnecessarily intrusive Community interventions.
Community legislation on the lines proposed in the social charter would be a throwback to a past which we in this country and many others in the Community would prefer to leave behind us. Of course we touched on the matter of economic and monetary co-operation raised by the noble Viscount when he introduced the debate and also by the noble Lords, Lord Bonham-Carter, Lord Taylor of Gryfe and Lord Cledwyn of Penrhos.
The report of the Delors Committee on economic and monetary union was published on 17th April.

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The noble Lord, Lord Cledwyn, referred to one particular stage. The paper proposes three stages of undefined length concluding in an economic and monetary union. The report is certainly a thorough analysis of what economic and monetary union would entail and the major transfer of sovereignty which that would imply, although it quite rightly sets no timetable for the achievement of its three stages. However, it suggests that stage one should begin in July 1990.
That stage contains a number of practical measures which the Community can take to further economic and monetary co-operation. Some of those measures have been on the agenda for many years and we believe that the Community should take them forward as soon as possible. They include the financial aspects of the completion of the single market such as capital liberalisation and improved economic and monetary co-operation.
We also support other practical measures such as the wider use of the privately traded ecu and its use where appropriate in intervention and increased holdings of EC currencies and foreign exchange reserves. We have made quite clear in discussions with our EC partners our readiness to take forward work on this substantial programme of practical measures. The Community should now concentrate on such practical steps. The United Kingdom can play a major role in such discussions, having led the way in the abolition of capital control, the issuing of Treasury bills and the holding of ecus and a variety of EC currencies in our reserves.
The noble Viscount, followed by the noble Lord, Lord Jenkins of Hillhead, referred to the European monetary system. Nothing that I say will be news to your Lordships. We support the underlying principle of the EMS which is consistent with the priority we have given to monetary stability and control of inflation in this country. That is the background against which, as your Lordships know well, we have long made clear that we have decided on the principle of membership of the EMS, which means, yes, we will join and the only question is when.
The noble Lord, Lord Cledwyn, referred to parliamentary scrutiny, as indirectly did the noble Lord, Lord Benson. In this regard we believe that parliamentary scrutiny is an essential part of the EC legislative process. Westminster scrutiny works well. It is certainly the best in Europe. Nonetheless, we believe that existing procedures could be improved, though no radical change is necessary. As your Lordships will be aware, the Government are currently looking at ways to bring about changes in that scrutiny.
The noble Lord, Lord Benson, referred to the common agricultural policy. He will be aware that intervention stocks are falling: butter is down 90 per cent. in the past 12 months; there is no longer a milk powder mountain; stabilisers are working; the 1989 price fixing (that is, the general price freeze) has reinforced reforms; agricultural expenditure in 1988 is estimated at 1.1 billion ecus (£750 million) lower than the guideline, with 1989 expenditure likely to be more than 2 becus below the guideline.
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The noble Lord, Lord Benson, raised an important point concerning fraud. The subject was touched upon in the debate in May. The United Kingdom has led the way in ensuring that fraud against the Community budget is treated with the seriousness that the problem certainly deserves. It was an initiative taken by the United Kingdom which ensured that the annual reports of the Court of Auditors were discussed substantively by the Council of Economic and Finance Ministers. These reports have consistently played an invaluable role in helping to highlight the nature of fraud and possible counter-measures. We have also produced many new ideas for tackling fraud, including pressing the Commission to produce new or revised proposals to improve controls in agricultural export refunds and intervention storage. These have been welcomed.
I very much agree with the noble Lord, Lord Gladwyn, that the Community should play its part in strengthening our security. The British contribution to the co-ordination of European foreign and security policy is second to none and we have consistently supported a better Western European contribution to wider Western defence; for example, through the recent awakening of the Western European Union. As regards frontiers—another point put by the noble Lord, Lord Monson—our concern is to ensure freer movement for Community nationals between member states. However, that cannot be at the expense of the continuing security needs of the United Kingdom and other member states. We need to continue to combat threats of terrorism, drug trafficking and illegal immigration both through retaining essential residual checks and by encouraging increased co-operation between member states.
I am grateful to the noble Lord, Lord Ezra, for his recognition of the practical work on the single market. The Government are involved in that every day and many of the measures which he mentioned—recognition of professional qualifications, to which I have referred, and rules for a single "passport" for foreign banks—have been British priorities for some time. We have pressed for this sort of measure to British advantage in Community councils.
The European identity does not stop at the external frontiers of the European Community. Our love of freedom based on the rule of law and constitutional government and our vision of the dignity of man and the prime role of the individual in our societies are shared across the European Continent.
For the first time since the war the countries of Eastern Europe, for so long cut off from their European legacy of freedom, are beginning to rebuild the type of society their peoples want. The Government wish this process of reform well. If it succeeds, our wider European identity will again be enriched. The Community has a part to play and our success and the challenge of 1992 are a magnet for other countries throughout the Continent.
It is the values of openness and enterprise which the Community must project to the rest of the world as well, keeping open the world trading system,

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contributing to the freeing up of relations between East and West and cementing trade and political relationships with our major western partners. That is the way forward.
Viscount Chandos: My Lords, I thank all noble Lords who have spoken today for making what I think has been a most interesting and lively debate, demonstrating on the one hand the continuing diversity of views on our very membership of the Community and on the other our extensive and expert detailed knowledge about European issues.
I cannot say with any honesty that the skilful and polished speech of the noble Lord, Lord Glenarthur, has convinced me that the Government do not in fact have deep divisions on our proper role in Europe—divisions which are terribly damaging to British interests, as the noble Lord, Lord Jenkins of Hillhead, emphasised. However, I am sure that your Lordships' House can rely on the Minister and his department of state to act as a helpful influence on their colleagues in government.
If, like my noble friend Lord Taylor of Gryfe, I was sad not to hear more contributions from the Benches opposite—even if the noble Lord, Lord Thomas of Swynnerton, can certainly do the work of many noble Lords—it would be inconsistent with my desire to maintain our cultural identity to regret the competing attractions of one of our great national sporting events. Perhaps though in the light of our debate today I might have wished that it was Longchamps and not Epsom which cast such a bewitching spell. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Homelessness
5.28 p.m.
Lord Ross of Newport Lord Ross of Newport rose to call attention to the problems of homelessness, particularly in central London; and to move for Papers.
The noble Lord said: My Lords, I seek the leave of the House to debate the Motion which appears in my name on the Order Paper; namely, the problems of homelessness particularly in central London. I recognise at once that this subject has been discussed by your Lordships on a number of occasions in the past and that proper concern has been expressed from all sides of the House about the desperate plight that can befall our fellow citizens, most often through no fault of their own.
Perhaps I should at the outset remind the House of the limited provisions of the Housing (Homeless Persons) Act which I had the honour of putting on the statute book in 1977. Put briefly, it gave statutory backing to two circulars issued in early 1974 by the then Conservative Government which asked local authorities to give priority voluntarily to finding accommodation for, first, anyone with dependent children or with whom dependent children might reasonably be expected to reside; secondly, to anyone vulnerable because of old age, mental or physical
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disability or other special reason, specifically including pregnant women; and, thirdly, anyone becoming homeless as a result of an emergency such as fire or flood.
The majority of the authorities complied but others did not. That is why in the end statutory backing had to be given. When I introduced that Bill it also extended to Scotland and switched the requirement for finding that accommodation from the social services to the housing authorities which made sense because they were the organisations with the houses. At that time the social services were having to find enormous sums of money for bed and breakfast accommodation. The whole objective was to try to keep families together and to avoid the cost and distress of placing children in care.
I regret to say that no priority was given to the single homeless which was widely criticised at the time. As a former councillor I knew that the local authorities just could not cope with that additional responsibility any more than most of them can today. But I must say to their credit that about 5 per cent. of them have taken this need on board. As regards the review that we understand has been taking place within the Department of the Environment over many months, I hope that we can at least receive an assurance from the Minister when he comes to reply that those priorities will not be weakened in any way.
Despite certain siren voices suggesting the abolition of priorities—I have heard them myself and I believe that they are being listened to in government circles—I consider that to do otherwise would be criminal folly. It can only lead to women and children sleeping on our streets. I am sure that the response must be shared by all sides of the House, but the sight of young mothers begging, particularly at the London rail termini, is distressing enough. The other day I saw three of them holding out plastic cups outside the gents at Euston. I suspect that that is more to do with the cutbacks in social security payments which came into effect in April and which perhaps should be the subject of another debate on another day.
Suffice it to say at this stage that the situation certainly has not improved the prospects of the single homeless teenagers in obtaining accommodation for themselves. I am assured that something over 40 per cent. of the single homeless teenagers in central London were previously in care up to the age of 16. I suggest to your Lordships that that is quite a staggering and worrying statistic. So much greater co-operation between the Department of the Environment and the Department of Social Security on this aspect is highly desirable, if not absolutely essential.
While the wording of this debate refers specifically to central London, I am well aware that the problem affects the whole nation. The cardboard boxes that are a so familiar and depressing sight at Charing Cross and Waterloo are now appearing at places as far apart as Canterbury and towns in West Yorkshire. In fact 43 per cent. of homelessness occurs outside London. A recent Audit Commission report found that the growth in acceptances was some 16 per cent. in metropolitan boroughs outside

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London; 14 per cent. in the non-metropolitan boroughs and 9 per cent. in London. At the end of 1988 homelessness in Britain stood at 126,825 which is double the figure of 10 years ago. In Greater London the figure was 28,950. Those are actual acceptances. The number of applications totalled 242,000, so over half were turned down for one reason or another. So much for the so-called "soft" local authorities.
What happens to these people we do not seem to know. I suggest that we should try to find out. As regards the single homeless, the London housing unit claims that there were 64,500 in central London alone, the majority being between the ages of 16 and 19. Many of us fear that this situation, which has already reached crisis proportions, can only get worse with prevailing high interest rates and many other increasing burdens such as water and electricity charges and the poll tax all on the horizon. In a Daily Telegraph article which appeared on 30th May it was reported that the School of Advanced Urban Studies at Bristol University had told the Association of District Councils that in East Anglia alone the number of families in work who cannot afford to purchase a house at current average prices has risen to 53 per cent. in Essex, 55 per cent. in Hertfordshire, 57 per cent in Suffolk, 59 per cent. in Norfolk and some 66 per cent. in Cambridgeshire. What on earth the position is in Surrey I dread to think!
While it is true that more private properties to let are now coming on to the market, a study of the columns of the Evening Standard will quickly reveal that the rents quoted are way beyond the means of the lower income groups. The other night I made a quick assessment and the average rent appeared to be about £150 a week. There was hardly anything available under £100 a week. That is the measure of the problem that will not disappear and which is already costing the nation over £100 million a year in bed and breakfast payments alone.
What is to be done? The Audit Commission which reported to the Department of the Environment last February indicated areas where local authorities could manage there affairs more efficiently. I am quite certain that the Minister will be telling us all about that when he comes to reply. The Commission was itself quite definite that there was no way in which 30 or more local authorities in the areas of greatest stress—namely, London and the south of England, where, incidentally, residential council house sales have been the greatest—can cope and avoid the massive use of bed-and-breakfast accommodation without the provision of much greater resources.
I know that he is not taking part in this debate, but there was a letter in the Independent newspaper recently from the noble Lord, Lord Hylton. He said that we are getting increased public expenditure on roads and in many other areas, but nothing on housing. How right he was! Certainly, leasing from the private sector is one temporary way forward and it is happening among London boroughs now. But what happens at the end of three years? The lease is for two years less one day of the third year, but
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where do the tenants go after that? Encouraging tenants to move out of council housing into housing association properties is another method. But are the people who have been persuaded to move then going to face market rents and less security of tenure?—because, as I understand the Housing Act 1988, that is what it means.
The London boroughs have actually co-operated to a quite remarkable degree despite differing political views, but they can only achieve so much. Moving families into other boroughs can cause stress and racial disquiet. What is to be the future role of housing associations in the provision of homes for the homeless? Only 2,600 homeless families have so far been housed by housing associations despite the provisions of Section 72 of the Housing Act 1985. New starts in both sectors are quite abysmally low though I gather that the 1987 figures for completions—namely, only 15,000 council houses and 9,000 housing association homes—are now being reversed, with housing associations actually making more completions than local authorities. But the figures are all appallingly small. It is a far cry from the forecast of the late Harold Macmillan of 300,000 houses a year. I remember a Conservative conference applauding that statement 20 or more years ago—I suppose it is 30 years now. The figures are still pathetically small.
I am assured by my local housing association, of which I was recently a member, that in the west of England the housing corporation funding has actually gone down from 12 per cent. to 8 per cent., and that is in one of the areas of stress. If the Government really intend that in future housing associations should play the major role in social housing provision, they will have to provide far greater resources and direct that that money be allocated to the areas of greatest stress. The Government will also have to make clear the housing associations' statutory responsibilities as regards homelessness. I suggest that they will also have to change their hostile attitude towards local authorities which still, at the end of the day, own by far the greatest number of properties that can be used to house those in need at affordable rents.
The housing market is currently depressed, particularly in London and the South-East. This then is surely the time to fund the councils and housing associations in the acquisition of properties on new estates for first-time buyers that are not selling at the present time. They can do bargains with those at discount prices. I believe that a bargain has just been struck at New Cross. I am sure that the Wimpeys and the Barratts of this world will be delighted to negotiate. There are also the larger properties that are suitable for conversion. I shall tell a sad tale of one that we attempted to buy in the Isle of Wight. In March we agreed terms to have four residential units in the property and there was also to be a resident caretaker. But by the time the money came through from the housing corporation in May the property had been sold. That was because of bureaucracy, which is so stupid.
As long ago as 1971 Professor John Greve published his widely-acclaimed study of homelessness in London. He said that it was a book:

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"about inadequacy and failure; about defects and shortfall in the effectiveness of policies and the allocation of resources to cope with some of the most perplexing and resistant problems of urban society".
At that time he concluded that the need was for,
"housing of a reasonable standard, at affordable rents and with security of tenure".
If that was true then, how much more is it the case today?
In recent years we have done much to provide sheltered accommodation for the elderly. It is now surely time to give much greater attention to the needs of the younger generation. Last September I spoke at the launching of a booklet published by SHAC and Shelter entitled An Act of Compromise, a term I used to describe the 1977 Act. I said that it was "an Act of compromise". The document contains 13 recommendations, which I most fully support. I should like to summarise a few of them. There should be effective management to ensure that the number of empty properties is kept to a minimum. Local authorities have made great advances in this respect. The Government have been right to pressurise them and I think it is having an effect. Bed and breakfast should be used only as a last resort. If it is to be used, it should be regularly inspected, reasonable standards should be applied and there should be a co-ordination of support services, such as health and social services, to ensure that families have the necessary support and help. When the Housing (Homeless Persons) Act went on the statute book I was bitterly disappointed that the severance between social services and housing departments became much wider. It was promised at the time that they would co-operate. In fact they did not.
All obstacle courses to permanent housing such as minimum periods of time in temporary accommodation should be removed. Direct or indirect discrimination against black and other ethnic minority households in the offers of housing should stop. There should be a recognition of the reality that homelessness is now the main route to local authority housing and the removal of policies which inhibit the speedy and effective housing of homeless households. There should be adequate funding for women's refuges and an end to policies which force women to return to violent partners. Greater emphasis should be laid on prevention. Good advice from social services, securely funded, should be provided. More than two-thirds of local authorities still do not have adequate housing advice facilities either provided directly by them or by the voluntary agencies in the area. What is cheaper: paying for good advice or putting a family in bed and breakfast for two years?
The Audit Commission drew attention to this. I listened to a speech only this morning on the same subject. The Government should let local authorities get on with the job. They have the people, the expertise and the will. It is no good talking about ending their role unless it is quite clear who will carry it on and how. I praise some authorities for trying very hard in Housing Week to get statistics from local people by advertising in the local paper.
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In Powys the Radnor borough council should be congratulated on doing just that. There are others too.
The Government should ensure through housing benefit or other subsidies that homes are affordable. Cannot the Department of the Environment and the Department of Social Security co-ordinate? There should be clear enforceable agreements with landlords taking over council stock so that local authorities can nominate homeless people to that stock. There should be minimum standards for temporary accommodation of all forms and an end to the punitive use of intentional homelessness provisions. It is being abused at the present time.
Finally, we want to see a phased programme—I realise that this is asking for a great deal—to extend the present legislation to all homeless people over a five-year period beginning with the young single homeless and those approaching retirement age. In what we still hope and claim is a Christian society we surely should look after our fellow citizens to the very best of our ability. In this Motion I am asking the Government to do just that. My Lords, I beg to move for Papers.
5.43 p.m.
The Earl of Selkirk: My Lords, I am glad that the noble Lord, Lord Ross, has raised this extremely important aspect of housing. I would call it the Achilles heel of housing policy in this; country. It is the most difficult one to resolve. Although 14 speakers have their names down to speak, I do not know whether anyone will say how it can be resolved. I only hope that someone will. I was struck by the annual report of Shelter, which said—and the figures are obviously not precise—that one-third of a million people are homeless. I do not know whether or not that is true. There certainly is a large number, but what is formidable is that the number appears to be increasing. I do not know why Is it that the family bond is becoming weaker? Is it that divorce is too widely indulged in? Is it that mothers go out to work and leave the house empty and dull? All these factors may play a part—I do not know.
We have to recognise that since the early 1920s Parliament has accepted responsibility for housing the people of this country. It has had great difficulty in doing so but it has continued with one fatal element. I refer to rent control. One needs only the most elementary knowledge of economics to realise that if one controls the price one does not get the commodity. It is as simple as that. Until control is taken away we will not have the requisite amount of housing. We have wandered away from it at the present time. In 1920 90 per cent. of housing was rented. Today the figure is 7 per cent. That is the influence of rent controls on houses in this country. We will not change the position until those figures are improved. I know that this is hot politics. I realise the difficulties of talking about the removal of rent controls. But sometimes the hottest political issue requires a difficult decision. It is worth remembering that.
There has been a step in this direction, particularly through the housing associations movement which

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is playing a large role in this respect. We should congratulate Sir Hugh Cubitt as leader of the movement on having done an important job. Some of the housing associations are dealing with what I might call special cases—people who might otherwise be homeless. The housing associations need our full support. Any noble Lord who cares to encourage his local housing association will be doing a valuable job.
I should like to make two suggestions. First, in certain cases housing benefit will need to be increased. In addition, we shall need to encourage outside groups to help with rented property. The noble Lord, Lord Ross, talked about resources. I agree with him but let us find resources from places other than government. The Government will always be hesitant in increasing grants. They have so many calls on their resources—health, roads and goodness knows what else. Resources can come from banks, building societies and so on, but such organisations must be able to meet their expenses. That can be done and will be done.
In Australia a certain section of the housing world deals with welfare cases. Perhaps we should have a section, whether under local authority control or otherwise, to deal specifically with welfare cases who cannot deal with themselves. I do not know whether this would be popular with the Government; I think probably not. In many cases—I shall not say all—I do not think that local authorities are the ideal organisations to handle housing. Housing is a specialist and difficult area. I am far from satisfied that it has been looked after as well and as thoroughly as it should have been.
I shall listen with much interest to the next 14 speakers, many of whom will tell us perhaps in simple words how this severe problem can be resolved.
5.49 p.m.
Baroness David: My Lords, I am afraid that I do not have the answer to the noble Earl's question. However, I want to concentrate on two aspects of homelessness: the effects on young people, especially those who are leaving care, and the effects on the education of children. I shall deal first with young people.
Less than 18 months after the end of the United Nations' International Year of Shelter for the Homeless, Britain has the fastest-growing youth homelessness problem in Western Europe. It is not the result of natural disasters, but the result of social security and housing legislation passed by this Government in the past four years. Not only has the amount of money paid to the under-25s, and especially to the under-18s, been reduced, but advance payments have also been stopped and loans have replaced grants so that money has to be repaid. Without money to put down in advance, accommodation is very difficult to come by.
Shelter estimates that more than 150,000 young people between the ages of 16 and 19 become homeless each year and do not appear in the statistics of homelessness. That is because they fall outside the protection of the Housing (Homeless Persons)
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Act 1977. They are the hidden homeless. In 1987, 53 per cent. of young people who used Centrepoint had slept rough at some stage. The figure now is 78 per cent. None of us can have failed to notice the increasing number of young people on the streets of London. In one of the wealthiest cities in the world, a whole generation of young people is growing up in poverty on the streets with very little chance of finding employment or permanent accommodation. It has been said that we are back in Victorian times in that we now give more legal protection to animals than we do to young homeless people.
I should especially like to refer to those young people leaving care at the age of 16 and 17. As the noble Lord, Lord Ross, said, 40 per cent. of young homeless people have spent some time in care. Several of us here today took part in discussions on the Children Bill when it was going through this House. We made valiant efforts then to get the legislation changed, either by amending the social security Acts or by putting statutory responsibilities on the local authorities to assist the young people until they were at least 18—although I would have preferred the age of 21. We were not successful, but I pay tribute to the noble Baroness, Lady Faithfull, for her efforts behind the scenes in persuading Mr. Moore to make some improvements—though not enough—to the Social Security Bill as it went through another place.
More important, the noble Baroness organised a visit by 12 or so young people who had been in care to this House so that we could hear at first hand of their difficulties. It was a moving occasion. They were very articulate. They explained their position and their problems. They were angry. It was not their fault that they had no homes to go to. They were upset by what had happened to their friends, some of whom in despair had taken to drugs and prostitution. At the end of the visit, one of them said, "Well, we've told you what's happened to us. What will you do for us now?"
We have an opportunity to do something for these young people this summer. We have in fact two opportunities. We are about to go into the Committee stage of the Social Security Bill and later we shall have the Local Government and Housing Bill. We must be quite sure that we amend those Bills to make things better and restore the position at least to what it was before the 1986 and 1988 Social Security Acts. We must also ensure that we alter the housing legislation so as to give local authorities and housing associations more powers and, above all, more money so that more hostels can be provided, houses in disrepair maintained and repaired, and more houses built.
As the Audit Commission said in its February 1989 review, a relatively modest reallocation of capital receipts from council house sales could, if the number of homeless households accepted remains at the current level, eliminate within three years the use of bed and breakfast hotels. It could also within four years return the number of households in temporary accommodation to the average levels which prevailed between 1970 and 1982.
I turn to the implications for education provision of homelessness, concentrating upon London where

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the situation is the most desperate. In September last there were 21,500 households classified as homeless living in temporary accommodation in the Greater London area, and there were 10,000 in the ILEA area. Unfortunately, and I suppose inevitably, the education of the children and its continuity must be the last and least consideration of the placing authorities. There is no proper system of notifying ILEA of the circumstances, the ages or the possible length of stay of families in temporary accommodation which could be two months or two years.
In 1986 57 per cent. of the homeless lived in Westminster and in Camden. But they could have come from 13 different boroughs. ILEA increased resources to cope with the 57 per cent. Two hundred and twenty five additional primary places were created that year, 495 in 1987 and 555 in 1988. That is equivalent to one new primary school per year over three years. One small primary school recorded 713 admissions during the year; its normal intake is 126. Of the 150 pupils at St. James and St. Michael's in Bayswater, 105 are homeless. One can imagine the difficulty for teachers in terms of curriculum planning and teaching techniques, particularly when 20 different languages might be spoken by the pupils and their parents. The teachers need to spend a good deal of time making the children feel welcome and secure.
To help cope with the problem, ILEA set up a homeless persons' unit, staffed by education social workers with the support of administrative staff and working with an adult education co-ordinator and a research worker. A small-scale survey by the unit revealed that of 730 school-age children in 88 hotels in Westminster 150 were without a school place and nursery provision was needed for 180.
The unit has been compiling a database of families and their children in order to monitor movements and to allow for speedier school placement and assessment of welfare benefits. The facility also means that placing boroughs need only contact one section of the authority to give information on families. That should be enormously helpful. I should like to ask the Minister what will happen to the unit when ILEA comes to an end in 1990. It is a most important resource and those working in it have a range of skills. The database which is being built up will be invaluable. I hope that the unit will remain as a unit for the whole of London and that one borough will be the lead borough. Westminster or Camden would seem to be the sensible choice as those boroughs house most homeless families. I hope that the Minister will give me an answer to that question.
What is distressing is the future that these children, having to endure this sort of life, can expect. Poverty means deprivation; but poverty and homelessness accentuate every problem—health, behaviour, play and jobs. I hope that the debate will stir the Government's conscience and that they will realise they have a lot to answer for as regards what has happened over the past 10 years. During that time the number of homeless householders accepted by
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local authorities increased from 53,110 to over 116,000; the figure has more than doubled.
5.58 p.m.
The Lord Bishop of London: My Lords, I too should like to express my appreciation for the opportunity to debate the issue of homelessness, especially in central London, provided by the noble Lord, Lord Ross of Newport. I shall not spend time emphasising the urgency and gravity of the situation because reference has already been made to that in most eloquent terms. However, I should just say that this is a problem of which I am particularly aware.
Anyone who lives in Westminster and especially anyone who has to travel about at night cannot be unaware of the situation; indeed, it presses upon one all the time. To visit day centres, especially here in the heart of London, and to go out during the night to meet those who are sleeping rough, as I have done, is to be made very conscious of the misery and distress which the problem causes.
In the severe winter of 1986–87 we opened the churches to provide shelter for the homeless. And afterwards, thanks to the support of the Lord Mayor of London, I was able to appoint a chaplain for the homeless—a very experienced man who knows about the homeless and indeed knows many of them personally. He reports to me regularly. He seeks to make the homeless aware of the resources which are available to them. But, of course, he is constantly under pressure because of the fact that accommodation is simply not available.
The leaders of the Churches have repeatedly drawn attention to the urgency of the problem and, although they have not really spoken, they have sought to ensure that their Churches initiate projects and co-operate with those initiated by others. Cardinal Hume has been most active in this respect as has the right reverend Prelate the Bishop of Southwark who has made this problem something of a speciality. He would have been here this evening had he not had a prior commitment to address a conference on homelessness.
I wish to speak of two factors which have exacerbated, and which are still exacerbating, the situation, before making one or two general points. First, there is no doubt that there has been a marked increase in the number of homeless people with personality problems who have spent time in psychiatric hospitals. The closure of some of the larger psychiatric hospitals has resulted in far more people being on the streets. They cannot fend for themselves and they often need the support of an institution. The provision of community care is limited and wholly inadequate. My evidence for saying that comes from those who care for the homeless and from the hospitals which are being closed.
As evidence of what I have just said, St. Botolph's, Aldgate, houses more than 300 people per night. The increase over the past few years, which has been marked, is attributable in large measure to the increasing number of people who have been in mental hospitals.

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The second point I want to make concerns hostels. Hostels have played, and still play, a significant part in meeting the needs of the homeless; but the numbers are declining. In 1976, for example, the Church Army had eight hostels in London—five for men and three for women. There are now four—one for men and three for women. The requirement for improved standards, which is laudable and proper, has been accompained by a reduction in grants and resources. The position of the hostels will be seriously affected by the replacement of the board and lodging allowance with a mixture of housing benefit and income support. That will have an especial effect on the under-25s who are significant users of hostels. The Church, and Church-supported organisations, have tried, and are trying, to help, but as the need increases so does the demand upon us.
What I have said so far relates largely to those who are on the streets, but, as has already been pointed out, they constitute a minority. There is an unrecognised and hidden homeless population within our country and in this city. They provide the larger element. It includes those who are sharing accommodation involuntarily; those who are squatting; and those who are living in wholly inadequate properties, such as garages. They must also be counted among the homeless. The only solution for them is the provision of low-cost housing. There is no alternative. If that is left merely to private sources, it is bound to reflect the market rent which will put it out of reach of the very people who are in such need.
I do not believe that I am abnormally stupid. I have tried to equip myself by understanding the housing legislation. I find it extraordinarily difficult. Not only do I find it difficult, but when I read the provisions I am reminded of someone tinkering with a car by giving it a new coat of paint or new wheel rims when it needs a new engine. I feel desperate about that. What is to be done, as the noble Lord asked earlier? A major shift of policy is needed. I agree with the London Boroughs Association which put forward two proposals—the relaxing of controls on the spending of capital and the targeting of capital allocations. If a real effort were made in that direction, it could significantly change the situation.
I am not sure whether this point has been made, but the homeless are not all feckless or desiring a nomadic life. That point must be pressed home strongly. Perhaps I may give an account of one man. It comes from my chaplain for the homeless. Four weeks ago he met a young man in his early thirties from the islands of Scotland who had come to London to seek work. The man was a qualified chef. He had acquired from an agency a job working in a hotel in central London but the money was so poor that he could not afford to pay in advance for suitable accommodation and feed himself at the same time. He was saving his first week's money until he was paid his second week's money so as to be able to acquire the accommodation that he needed. In the meantime, he was sleeping in a cardboard box in the Waterloo area.
In the minute that remains I wish to say one more thing. I do not believe that homelessness is merely
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the result of the policy of this or any other government. The greatest cause, mentioned in all the papers that I have read, is disputes with relatives and within the family. That presents a challenge to the Churches. While it is right for us to be concerned with housing policy, we can only involve ourselves with a clear conscience if we also seek to apply the gospel we profess to the problem of family life and personal relationships, preparation for marriage, reconciliation in the case of divorce, and guidance on the upbringing of children.
The noble Lord, Lord Ross of Newport, referred to the significant number of those in their late teens and early twenties who are homeless and who had been in care as children. While we continue to work with housing associations, hostels, and places such as Centrepoint and to make known the needs in the community, the Church must be concerned to foster true family life and the right relationships which must underpin it.
6.7 p.m.
The Viscount of Falkland: My Lords, I should like to devote the short time allotted to me to the homeless who sleep rough. A high proportion of the homeless in London live rough. As most of your Lordships know—if you do not I can show you—if you go to the South Bank and along the Embankment you will see that a number of the older homeless who live rough have chronic or severe alcohol problems. That is not a new development. I understand that it has always been the case. When homelessness in London became a noticeable problem it was discovered that most people who slept rough did so because they had an alcohol problem. That has changed recently, and in particular during the past five years, with the unhappy growth of the number of young people who have become homeless. The situation is reversing itself. A large proportion of the homeless who live rough are likely to become chronically alcoholic through exposure to the lifestyle of those who live rough rather than living rough because they have those problems in the first place.
There is an additional problem among young people which is extremely worrying. When they form part of this living-rough culture, more often than not they mix alcohol with drugs. It is difficult to treat someone who has mixed drink with drugs—if he or she is lucky enough to be treated before something dreadful happens—in a detoxification centre or hospital.
There is a hard core of older people who live under bridges or on the Embankment in boxes. Two reports came out in the 1980s. They told us that there was a hard core of about 10,000 people in this country living rough, who, if not chronically alcoholic, were habitual drunkenness offenders. Of course, drunkenness in itself is not a criminal offence, provided that one gets drunk in one's own home. It is not something which I recommend to your Lordships. Drunkenness becomes an offence when it takes place in a public area. I suppose that it is logical that most people who fall foul of the law should be members of the homeless community, particularly in London. It is that problem which I

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wish to address because I do not think we in this country have addressed it in quite the positive way it has been addressed in America, Canada and other English-speaking countries where similar problems prevail.
When in the 19th century the problem of habitual drunkenness had to be tackled, the state created a number of offences. I believe that in the 1870s it became illegal under statute to be drunk and incapable; it became illegal to be drunk and disorderly; and, curiously, drunk in charge of cattle. Obviously, with the passing of time the approach of the state had to be changed. With the overcrowding of prisons the state came to believe that it would be better to separate habitual drunkenness offenders and put them in what were then known as reformatories. They were a primitive type of detoxification centre and, because they were so primitive, they were not very successful and were thus abandoned.
On top of that, there was a new approach of the law, which was to hand out severe sentences. Again that was not effective. Perhaps I may concertina history in this way: we have reached the position today where such is the load of work on the police and such is the expense, as it is viewed by the Government, that any attempt to deal with habitual drunkenness offenders by treating them has largely been abandoned. There has been funding of centres by voluntary agencies and also private sources, but those centres are all too few to deal with people who are constantly in and out of trouble.
One of the most startling aspects of this is that every year there are between 20 and 30 deaths in police cells as a result of drunkenness. Nothing sinister happens in the police station, the drunk is taken in because he is a danger to himself or to others. He is taken into the police station, which is very crowded, he is hurried along to a police cell where, more often than not, if he is in a severe state he develops health problems. He is liable to choke or to have other problems which cause death in many cases.
The police are extremely embarrassed by this and would like to move the treatment of drunks away. The police have to keep them in overnight and then caution them the following day, which does not help with somebody who is an habitual offender. All that happens is that he goes out, gets drunk again, comes back and becomes a tedious, dirty, often noisy and unpleasant nuisance for the police to deal with. They do not like dealing with habitual drunks.
However, if there were some alternative place to which the police could take them to be treated, not only to be put through a course of detoxification but to receive counselling as well, I feel, as I hope your Lordships feel, that there is a good possibility that lives might be saved and some people might be sent out on to the streets with a chance of reforming their behaviour. Perhaps it is too hopeful to expect that, but that alternative is better than the present state where many hundreds, if not thousands, of people in London are constantly in trouble with the law. The law, in the shape of the police, does not know what to do with them apart from slamming them
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into a police cell if it is absolutely necessary, and cautioning them, or, unusually, getting them into one of the Salvation Army homes or into an area where they can be dealt with differently.
That is the sombre story I have to tell. I daresay all noble Lords were aware of it already. I hope that the Minister agrees that the situation is very sad and it is unnecessary for a country with our standard of living to support this kind of tragedy on our streets, particularly in London. In the early 1980s—and I do not suppose that things have changed enormously—it was assessed that lp on a pint of beer would fund hundreds of detoxification centres, should the Government be minded to deal with the problem in that way. The provision of proper medical care and counselling might encourage more people to come forward voluntarily for care and help. That would be a productive step, rather than the cautioning which I have just laboriously described to your Lordships. I do not believe that the system is productive, and in many ways it is destructive. I hope that the Minister will take that on board.
6.15 p.m.
The Earl of Longford: My Lords, the noble Earl, Lord Caithness, has won the respect of the House by his skilful and gallant defence of many awkward positions in recent years. But this time I am afraid he has something quite indefensible in front of him. The Government are very proud of their record over the past 10 years. We are told that an unexampled prosperity has now come to our country through their extraordinarily enlightened efforts. We read in the papers that some eminent man—no doubt much respected—has recently had his salary doubled. All that is a lovely picture. But here we have the homeless: their number has been doubled. This gentleman's salary has doubled but the number of homeless has doubled in the 10 years of Conservative rule; there are rather more than twice as many homeless as before. I only hope that the noble Earl will not try to defend the situation but just for once throw away his brief and say, "kaput" or something of that kind. Not that that is very likely, but it would be the most attractive course.
I shall not deal with the causes of homelessness; they were well brought out by the noble Lord, Lord Ross, and other speakers. No doubt a completely new approach to housing policy is the only solution, but I must deal with the consequences for the treatment of the homeless in the few minutes available to me. The debate in February on social matters generally was opened by the noble Baroness, Lady Turner. In it I mentioned five steps taken by the Government which have damaged the homeless and I shall now mention them very quickly and pass on: first, the board and lodging regulations in 1985; secondly, the social security upper limit for bed and breakfast; thirdly, the decision to pay supplementary benefit, now called income support, two weeks in arrears; fourthly, the benefit cuts to the under 25 year-olds; and, fifthly, the youth training scheme for the 16 to 18 year-olds which was introduced with little concern for the young people involved.

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Those matters remain on the record; they are very damaging steps. Since then, other steps have been taken. On the whole, according to those whom I trust who are closest to the scene, those steps are damaging and I am told that there may be more in the autumn which will also be damaging. I shall not dwell on details during my few minutes; I wish to ask your Lordships to consider a more fundamental approach of the present Government to these matters—not the spiritual approach mentioned by the right reverend Prelate. I shall not rise to that, but deal at any rate with the fundamental political approach.
Last Friday I was reading with the utmost interest an article by Professor Brian Griffiths who is head of Mrs. Thatcher's policy unit. So far as I can see, he is the supreme adviser. I know that she is a lady of extraordinary independence of mind and will not be dictated to by anybody. However, in so far as she has a guru, I gather that it is this gentleman, Professor Brian Griffiths. It is worth studying the man since he might throw some light on what our ruler—or perhaps I should say rulers—are thinking.
I am sure that Professor Griffiths is a devout Christian. We can all concede that to him, but his Christianity does not work out in quite the same way as mine, or possibly that of the right reverend Prelate. At any rate, he lays down seven commandments which ought to be followed in his policy, and poverty comes fourth, I need hardly say after private property. The Professor says that the community should seek to relieve poverty rather than to pursue equality. On the face of it, that is quite a sound, conventional, conservative way of putting the matter. What is troublesome is that Mrs. Thatcher—who presumably is advised by this gentleman—has now disparaged the whole idea of poverty. She treats it as something with a rather embarrassing label. An article in The Times stated:
"The Prime Minister has too much respect for ordinary people to belittle those receiving income support or to denigrate children in such families by using labels like 'poverty' ".
Coupled with the statements of Mr. Moore, the Secretary of State for Social Security, who apparently claims that poverty has, to all intents and purposes, been abolished, we realise that Professor Brian Griffiths' idea of tackling poverty is not that of other Christians. So, we are faced with a Government who view matters in this light. They put private enterprise, private property, capital accumulation and other such things first. At least Professor Brian Griffiths would give poverty some credibility in placing it in fourth position as regards issues of contemporary importance. However, it has now been conjured out of existence.
Professor Ruth Lister put it rather well in an article in the Independent on Friday, She stated:
"The effects of poverty on people and their families will continue regardless of the words we use to describe it".
So it is really a sick joke and an insult to the homeless to talk as if poverty did not exist. I shall not take up more than a few more moments of your Lordships' time. However, I have expressed my own way of looking at this problem. As I have said, perhaps too often, I started the New Horizon Youth Centre for young people. That centre now receives
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about 3,000 people a year. It is situated bang in the centre of London. Therefore, I have been close to the scene we are discussing today. However, I am now merely a patron of that centre, and I do not pretend to run that organisation.
The position of homeless people has been described by previous speakers and will be described by speakers to come. If one sees the position of these people, one should feel nothing but human sympathy and compassion. In my eyes it is atrocious that today the whole subject can be talked out by a reference to poverty as an embarrassing concept.
I am afraid that whatever the virtues of the Government over the past 10 years—it would be ridiculous to pretend there had been no virtues—on this particular issue their record is thoroughly and fundamentally wicked.
6.22 p.m.
Baroness Faithfull: My Lords, we are indebted to the noble Lord, Lord Ross of New port, for bringing before your Lordships' House the problem of homelessness, which has increased and is increasing at a most alarming rate. I wish also to congratulate my noble friend the Minister on being so apparently bright and alive when one considers the late night that he had last night on the Electricity Bill in your Lordships' House——
The Minister of State, Department of the Environment (The Earl of Caithness): The Water Bill!
Baroness Faithfull: I beg the House's pardon. If it was the Water Bill, it must have been even worse, or perhaps it amounted to the same thing.
The Motion of the noble Lord, Lord Ross, calls attention to homelessness, particularly in London. However, he also mentioned the situation countrywide. I wish to make two points in my brief speech. I wish to point out what is going on in Oxford county, which has five districts. My information comes from the Cherwell Housing Trust, which has a low political profile and which seeks to provide housing at affordable rents and low cost ownership.
The annual figure for families who are officially homeless, as was mentioned by the noble Lord, Lord Ross, has increased over the past 10 years from 57,000 to 116,000 and perhaps to a quarter of a million people. The situation nationwide is reflected in Oxford county. I must point out that Oxford is a fairly wealthy county. It offers good work prospects. Therefore, it is surprising that the problem of homelessness is so extensive in that county. One must take that into account.
I agree with the right reverend Prelate that perhaps the homeless problem would be less acute if fewer family breakdowns occurred. However, as many of us know, a good family will remain a good family, but many good families are unable to remain as families because affordable accommodation does not exist for them. I agree with the right reverend Prelate, but I also believe that homelessness causes problems for families.
I wish to make a serious, if original, plea to my noble friend the Minister, who we know is a caring

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person and who is willing to listen to and to meet people. Will he allow me to gather together 15 organisations which deal with the homeless and bring them here so they can meet him and his fellow Ministers informally? I should like them to meet Mr. Scott of the Department of Social Security, Mr. Mellor of the Department of Health, the noble Lord, Lord Young, of the Department of Trade and Industry and Mrs. Rumbold of the Department of Education and Science. For good measure, I should like them to meet a representative from the Treasury. I realise that Sir Humphrey in the series "Yes, Minister" would not approve of that. I wonder whether the Minister's advisers would approve.
If the Ministers I have mentioned met these organisations together they would appreciate that overlaps and gaps occur in our social policies with regard to housing. If the Ministers were to meet the people whom the noble Lord, Lord Ross, and other Peers have met this week, they would realise that many ministries are involved in this problem and there are gaps and overspending. They would realise that one ministry is robbing Peter to pay Paul, and that a co-ordinated policy throughout the country, particularly in the realm of housing, does not exist.
I mention the example of the Department of Health. Children are now being accepted into care on a voluntary basis due to homelessness. I am not talking about those being taken into care because of delinquency or the breakdown of families. The British Medical Association in its report entitled Homeless Families and their Health indicates the problems of access to primary health care for homeless families. That problem must provide a hidden cost for the health service.
Bed and breakfast accommodation is a socially horrendous method of housing the homeless. Families are having to live in one room and to share facilities such as kitchens. That must have cost effects as regards the health of these families. Furthermore, community care cannot be developed. The noble Earl, Lord Longford, mentioned the problem of mental patients being discharged from hospitals in this connection.
For the Department of Social Security, bed and breakfast is a costly way of caring for people. Had the Government spent the money that they have spent on bed and breakfast on building low-cost accommodation, the necesary accommodation would exist and people would not be living in such appalling conditions in bed and breakfast accommodation.
As regards the Department of Employment, I dare to suggest that, but for the lack of low-cost rented accommodation, more people would be in work. As has been mentioned, information has been received from Centrepoint which suggests that the young cannot obtain a job if they have no accommodation. However, they cannot obtain accommodation if they do not have a job. It is a vicious circle. Who is to solve the problem? Therefore, the Department of Employment is losing out because of the lack of accommodation.
The Home Office is also losing out because homelessness, as has been pointed out, is causing
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many men to take to the bottle. I think I would take to the bottle in similar circumstances. Homelessness can lead to crime, drugs, AIDS and prostitution. As regards the Department of Education, the noble Baroness, Lady David, pointed out how children are losing out in the realm of education if they come from homeless families.
I suggest that, if my noble friend the Minister were willing to arrange, or to allow me to arrange, an informal meeting of the various organisations able to provide the information with all the Ministers concerned (including the Treasury), perhaps between them they could work out a co-ordinated policy and establish where money could be saved. In the first instance, Ministers would learn from those working at the grass roots who know what the problems are. Secondly, it is possible that they might be able to explain to those working in the realm of homelessness why they have adopted the policies that they have.
I know that that is a most extraordinary step to recommend. I doubt whether it has ever been done, although I must say that the Prime Minister met a group of people working with families and children. If my noble friend felt able to arrange a similar meeting, I believe that that would be appreciated and we might be able to work out a co-ordinated policy for our country.
6.30 p.m.
Lord Cocks of Hartcliffe: My Lords, I am grateful to the noble Lord, Lord Ross of Newport, for this further opportunity to discuss this important subject. His homelessness Bill of 1977 was very much a trail blazer.
On this subject it is extremely easy to lay a political cane on the Government's anatomy. But this is a problem which cannot be solved simply by setting housing targets for the number of fresh starts, builds and so on, because there are variables beyond the control of any government. It is not possible to legislate against marital break up or the antagonism between relatives to which the right reverend Prelate referred.
In response to the invitation of the noble Earl, Lord Selkirk, for somebody to produce an idea which might assist, I should like to put forward one which I have already floated in your Lordships' Chamber. I did so during a debate on homelessness initiated by my noble friend Lord Dean of Beswick and it was also the subject of an amendment which I moved to the Housing Bill in July 1988. This idea was reasonably well received in most quarters of the House at the time. It concerns higher education and the fact that students, most of whom come from the middle and upper classes, are paid by society to study away from home, which thus exacerbates the problem of housing in this country.
In 1985–86 in England and Wales only 6 per cent. of university students studied from their parental or marital home. The figure for polytechnics was 25 per cent. Therefore the enormous burden of accommodating those students is placed on society. The universities and polytechnics together control

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more than 190,000 bed spaces and yet they can accommodate only half their registered students. The remainder compete with the homeless and the badly housed in the private rented sector. Moreover, the students' accommodation is then left free for some 20 weeks a year during the extensive vacations.
There are two steps which could be taken by higher education to help with this problem. First, I should like to see universities and polytechnics change their admission policies to take more home-based students. I believe that the arguments which are constantly put forward against that suggestion are spurious. If one takes the example of Scotland, in Glasgow more than 50 per cent. of students live at home during their studies and in Strathclyde more than 70 per cent. Yet nobody would suggest for a moment that the quality of higher education in Scotland is in any way inferior as a result.
Although this debate is linked to the problem of homelessness in London, perhaps in view of my association with the docklands development corporation I might draw on two examples from our local Bristol evening press. On 22nd May there was a very large headline, "Homelessness—a nation's shame", over an article which dealt with the National Housing Forum report. In the same edition here was another headline:
"Student leaders fear rent rise shock".
The article describes the worries of students in the university halls of residence that they might be faced with another rent increase. It reads:
"the price of accommodation for its 2,300 students living at nine different sites".
If those nine different sites were released for the homeless and badly housed in Bristol, what a difference those 2,300 places would make.
If the universities and polytechnics are not prepared to relax their admission policies to make a contribution to solving the problem, let them at least consider throwing open the halls of residence during the vacation to give sanctuary to homeless families. Instead of trying to drum up conferences and offering holidays to academics from other universities at cut price rates, they would be making a valuable contribution to society. Families which at the moment are driven from pillar to post in bed and breakfast accommodation would at least for some time be able to live in decent, dignified surroundings where they would be able to begin to rehabilitate themselves and build up their values.
Unfortunately the people who listen to this argument and are in a position to do something about the problem—those we loosely call the opinion formers in our society—are by and large themselves successful products of the system. Therefore it is extremely difficult to get anyone to look at the question objectively. However, I believe that if action were taken along these lines those in our society who are most gifted and able would be making a very marginal sacrifice of choice in order to help the most disadvantaged.
6.37 p.m.
Lord Winstanley: My Lords, we should all be deeply grateful to my noble friend Lord Ross of
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Newport for his comprehensive and masterly outline of this distressing subject. In addition, we should all be deeply ashamed for having to debate homelessness at all in so-called affluent Britain. We are constantly told that Britain now ranks among the world's leading nations—economically, politically, even industrially. So far as concerns housing in general and homelessness in particular we are not now even a second-rate nation. That is a scandal for which all of us must bear some responsibility.
As spokesman for noble Lords on these Benches on health, in my eight minutes I shall focus in the main on the consequences of homelessness. If I allow myself time I shall squeeze in a few words about our ludicrous, unjust and chaotic housing benefit system.
A home, and preferably a settled home, is crucial to health. A well housed nation is likely to be a healthy nation, but a badly housed nation is certain—not likely, but certain—to be an unhealthy nation. It is not for the first time that I have said that in your Lordships' House. I said it in my maiden speech more than 13 years ago. I am certainly not the first person to have linked bad housing with bad health. In fact it was Florence Nightingale who first went on record with that connection. Her words have since been reinforced by a wealth of scientific evidence: in particular, the report of Sir Douglas Black on inequalities in health, and more recently, the joint report referred to by the noble Baroness, Lady Faithfull, of the Health Visitors' Association and the General Medical Services Committee—which is the body which represents all general practitioners working in the National Health Service—on access to primary health care by homeless families. That is an admirable report and I commend it to all noble Lords and hope that Ministers will study it with very great care. I shall quote from some of its observations on the health of homeless families, many of whom are in bed-and-breakfast hotel accommodation in London.
On page 12 the report states:
"Children suffer physically, emotionally and educationally, showing a high incidence of depression, disturbed sleep, poor eating, overactivity, bedwetting and soiling, toilet training problems, temper, tantrums and aggression. Research in Bayswater found that up to 40 per cent. of children in bed and breakfast accommodation had behavioural problems. Overcrowded bedrooms and lack of play-space affect development and delay the acquisition of motor skills and the development of speech".
The report found that:
"Children find it hard to do homework".
Incidentally, many children never go to school at all.
The report went on:
"Infectious diseases are common and easily spread. Diarrhoea and vomiting are common because of poor water supply and shared sanitation. Children often have upper respiratory tract infections because of overcrowding, dampness and the need to vacate the hotels by day. Other viral infections (such as the infectious diseases of children) spread rapidly, yet the uptake of immunisation is low. Infestation with scabies, lice, fleas, bedbugs and mice is common…A survey of multi-occupied dwellings found that 38 per cent lacked a satisfactory means of escape from fire, 33 per cent needed major repairs, 28 per cent lacked proper amenities, 23 per cent had unsatisfactory management, and 16 per cent were overcrowded".

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The report shows clearly:
"The high incidence of reported accidents in bed and breakfast accommodation . . . Unprotected fires, and kettles and gas rings on the floor, cause burns and scalds. Electrical equipment is often old and worn. Unsafe and steep stairs without banister rails or stair-gates and the lack of provision of (or space for) cots, encourage falls. Many studies have shown that accidents are more frequent when the mother is under stress or depressed".
That point was clearly made by the right reverend Prelate the Bishop of London. The report continues:
"There is also concern about the risk of non-accidental injuries resulting from family stress, and many children living in hotels on the social services 'At Risk' register".
That is not purely anecdotal information. These are not purely the kinds of situation that I might claim to have witnessed in my medical experience. These are facts gleaned by health visitors and general practitioners working at the sharp end of medicine. As the right reverend Prelate said, it is not only the physical health, but also the mental, psychological and emotional health of the homeless that is endangered.
In a recent television programme Mr. Tebbit suggested that many of the homeless would be drop-outs or layabouts in any society, whatever provisions were made. I accept that that suggestion may be true of some, but, in all seriousness, if we allow children and young people to remain homeless for years, they will all be damaged for life and they will make Mr. Tebbit's gloomy words come true.
The report is directed primarily to access to primary health care for the homeless. It shows that access is virtually non-existent for many of those people except in the case of special arrangements such as those made by Dr. Stone and his colleagues in Bayswater. Dr. Stone is the son of our colleague the late Lord Stone whom many of us remember with great affection. In general, we find that homeless families cannot get on to a general practitioner's list. Few of the children are immunised so there is a risk to us all of a diphtheria epidemic, poliomyelitis or other illnesses that are controlled by immunisation. In his reorganisation of general practice Mr. Clarke should do something to provide positive incentives to general practitioners to take on homeless families.
This is an admirable report from which I differ on only one minor point. Having mentioned that, I should say what it is. It is Recommendation 6.2 which states:
"Homeless families should ideally be temporarily rehoused within their own localities".
I am sure that that is true for most, but it is not true for one particular group with whom I am concerned as president of Gingerbread, a post that I took over from the noble and learned Lord, Lord Gardiner. Gingerbread does a great deal to care for single parent families, many of whom are homeless as a result of violence within the family. It is clear that some of those women need accommodation not within but outside their own locality. I am glad to see that the legislation that my noble friend Lord Ross of Newport was able to put on the statute book in another place clearly provides for that. It provides for the obvious need for women who seek refuge or escape from violence within the family to be
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rehoused with their children outside their own locality rather than within it.
As other noble Lords have said, the overwhelming need to deal with the problem of homelessness is for affordable, rented accommodation. However, the Government appear to be preoccupied merely with increasing the percentage of owner-occupiers. At the Institute of Housing Conference in June 1986, Mr. Nicholas Ridley said:
"If rents were set at market levels and there were a large number of landlords, both public and private with a large number of properties, then a market could emerge which could clear itself at a competitive price".
If we merely abolish rent controls and do nothing else, we are likely merely to redistribute the limited existing stock of rented accommodation to those with greater market power while other tenants end up even more poorly housed than they are today.
The need to be able to pay rent brings us to the question of benefits. I have not left myself time to go into the details of housing benefit or the failure of the transitional arrangements which came into force with the new social security system in April. I shall merely state what we would do and what we think the Government should do now. As a nation, we should adopt a housing allowance which would not be needs-related at all, but paid as of right to all householders, like child benefits or old age pensions, with the tax system amended so that the Exchequer could recover the cost where the allowance was not needed. Whatever the system of income support, no part of that cost should fall on the locality. It should be borne by the community at large through an income support subsidy from the Exchequer. That puts the issue on a parallel with health; it is just as important as health. Everyone should qualify for a housing allowance. It should then be removed by the tax system from those who do not need it. That is the system towards which we must most certainly move.
I shall conclude merely by saying that homelessness destroys the mental and physical health of our population. It contributes to crime and to the breakdown of the social fabric of our society and leaves its victims scarred for life. We should no longer tolerate a situation that condemns hundreds of thousands of our fellow citizens to live in circumstances that should not be accepted in an advanced industrial society.
6.47 p.m.
Lord Blease: My Lords, when I spoke in the debate on homelessness in January 1988, I dealt specifically with the crucial issues of homelessness in Northern Ireland. Sadly, I must say this evening that none of those issues has yet eased. If anything, the problems of homelessness in Northern Ireland have increased and the issues have become even more acute. A commissioned study reported earlier this year that by 1992 over 10,000 families will be annually designated as homeless in Northern Ireland, but only 4,000 of them will qualify for accommodation under the provisions of the Northern Ireland Housing Order 1988.
By any civilised standard for housing, those Northern Ireland figures could be described as

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horrific. However, from what has been said in the debate today, the homelessness figures for the whole of the United Kingdom can be deemed appalling. The numbers and conditions of the homeless in central London are especially horrific. I do not therefore intend this evening to make a special plea for the position of Northern Ireland. As has already been said, homelessness throughout the whole of the United Kingdom is to be deplored. It is a blight upon the economic development of the nation. It is a disgrace to a nation that calls itself civilised.
The figures for housing conditions are well known to the Government, to Ministers and to the departments responsible. Although intrigued by what the noble Baroness, Lady Faithfull, said—I hope that she will bring those points to the attention of those who make the decisions—I believe that Ministers are well aware of the position that obtains. Face to face contact with those who are suffering homelessness and the results of homelessness may bring some action, and that is what we require. Indeed we know the ramifications of homelessness and what it means. Now we need to act.
There have been several reports issued recently by competent researchers concerning housing and homelessness in Northern Ireland. We have heard today of challenging documents that have been circulated. There is an excellent, practical document on homelessness from the National Housing and Town Planning Council. There is also the joint report by the Health Visitors' Association and the General Medical Services Committee entitled, Homeless Familes and Their Health, which has already been mentioned by the noble Lord, Lord Winstanley.
However, in case it may be thought that those interested in, and influential representative organisations concerned with, these reports may form part of some pressure group or a party political lobby, perhaps we should look at a report by the Audit Commission published in Feburary this year on housing the homeless. It is a strong indictment of the lack of will shown by the Government to deal with the issues of homelessness. The report makes recommendations about the action that should be undertaken by local authorities and that needed to be taken by central government. On page 2 it reads:
"But all these measures together will still leave a sizeable problem in a few authorities. In those authorities with the severest problems of homelessness, investment is required in homes at prices affordable by the homeless if the gap between the number of eligible applicants and the availability of lettings is to be bridged. This investment need not be channelled through local authorities but, to be effective, it must result in an increase in the number of properties available to local authority housing departments for homeless households. A relatively modest adjustment of priorities could, however, make a major impact on the most socially damaging aspects of the problem".
At page 54 of the report the Audit Commission states:
"There is a strong case for taking greater account of homelessness in the allocation of capital resources by central government to local authorities".
Those are the findings of the Audit Commission, an organisation often cited and supported by the Government when criticising local authorities and displaying their zeal for efficiency. When he replies to this debate, perhaps the noble Earl, Lord
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Caithness, will indicate the Government's response to the Audit Commission's report, in particular the recommendations for action by central government.
What we need is a massive capital investment in new public authority housing. Having said that I must admit that it will not completely remedy the problems of homelessness. In calling for that physical response to the problem we must not lose sight of the fact that homelessness has other social dimensions. Help must be more than the offer of accommodation and more even than the offer of financial assistance. It can often be seen that the incapacities which prevent homeless single people finding their own accommodation will also serve to prevent them retaining accommodation when it is found for them. That applies in particular to people who become institutionalised in hospitals as well as to psychiatric patients and young single persons who become alienated from their parents. It is not enough to offer housing to such people. They must be offered direct, personal help which will meet their special needs. Such homeless people have special needs and problems which will not go away. We must adopt a positive multi-agency approach towards helping them.
This will mean active co-operation between voluntary groups, housing associations, social services and housing departments in offering resettlement and counselling services. It will mean making "care in the community" a reality and not leaving it as a pious wish or using it as a political ploy. Indeed it should become not "care in the community" but "care by the community".
Time does not allow me to explain some of the thoughts that I have had about meeting particular issues in a practical way. But to be homeless and friendless is an awful human situation. Bricks and mortar do not make homes. As a civilised community we need to promote policies and measures for home making as well as for home-building. Health, homes and family life are much more fundamental than political issues about the economy, the balance of payments and the bank rate, although I fully accept that those are issues that cannot be ignored. There are moral aspects to government policies and the politics of civilised living.
I conclude with a quotation from the publication Homeless Families and Their Health, which I have already mentioned:
"Solving the plight of homeless families is not just about efficient access to primary health care. Each of us has a human and moral responsibility … The homeless make up a group that is poorer than the poor; all of us need to help them. We are convinced that a house is much more than a simple roof over one's head. The place where a person creates and lives out his or her life also serves to found, in some way, that person's deepest identity and his or her relations with others".
I believe that the Government need to take action. I shall listen carefully to the Minister's reply.
6.56 p.m.
Viscount Brentford: My Lords, I too should like to thank the noble Lord, Lord Ross of Newport, for introducing this debate today. It is an important subject because it reveals an increasing problem in

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our country. I should like to see the Government pay the same degree of attention to the problem of homelessness as they have done so successfully to the problem of unemployment. I should like to find the numbers of homeless people reduced proportionately to the reduction in the numbers of unemployed in this country.
As other speakers have said, we need to keep distinct the two separate issues. There are those who are in bed and breakfast accommodation and in hospitals and those who are living rough or, as noble Lords know very well, what is called "skippering". I hope that in their forthcoming report the Government will not, as the press have suggested, revise the term "homeless" and substitute the word "roofless". That would involve only the second category that I have mentioned. I believe that the problems of both categories are important and need to be always before us.
I should like to mention three causes of homelessness, although the three are not exhaustive. They have all been mentioned before. First, there are family problems, family breakdown and the debt problem in this country. I see from Social Trends 1989 that this category of reasons for homelessness covers 73 per cent., which is a very high proportion. I fully endorse what the right reverend Prelate the Bishop of London said about the need for the Churches to look carefully at the problem of homelessness. Therein lies a spiritual and humanitarian task into which I believe we could be putting more effort. It is something which I feel is very important.
Family breakdown is also an issue which, for economic reasons, the Government need to consider a great deal more carefully. Family breakdown causes the Government to spend a great deal more money than they otherwise would have to do. It makes economic sense for the Government to pay more attention to the help that could be given to prevent the breakdown of family life. They need to look at this question more urgently. I have asked for a typical reason why somebody is homeless and have been given the answer, "Well, mum has taken into the home the third boyfriend in the last two years. The boyfriend doesn't like me; so I've got to go, haven't I?" So that young person becomes homeless.
The second fact I should like to comment on is the closure of mental hospitals, which has already been mentioned. This is encouraging a lot of people who cannot cope with working, finding a home and paying for it, to live rough. May I ask my noble friend the Minister whether any consideration has been given to refurbishing any of these mental hospitals and turning them into bed and breakfast institutions to provide a roof for those who are without? I believe that this would be a practical step that the Government could take to help the present problem.
The third fact, which has again been mentioned, is the forthcoming community charge. Is my noble friend the Minister aware that the charities who look after the homeless are nervous at an impending increase in the number of homeless, if only because
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of the exception that, quite rightly, is given from the community charge to those who are homeless?
There are three points relating to hostels on which I should like to comment as regards this issue of homelessness. The first is the compulsion on the managers of hostels today to reduce the number of beds available for the homeless. When we hear about the doubling of the numbers of homeless, this seems to me to be one of the most illogical and stupid bureaucratic steps being taken today. I have unearthed two reasons for this reduction in hostel beds.
First, when I and my wife visited this morning a direct access hostel just south of the river, I found that the environment and health authority has told those in charge that they must reduce their beds by a third because the beds are situated too close to each other to conform with modern regulations. Do your Lordships think that an individual would find it preferable to have to sleep rough to sleeping in a bed that a bureaucrat says is three inches too close to another bed? This is bureaucratic nonsense. Will my noble friend the Minister please look at this issue and arrange for these regulations to be amended?
The other reason for this reduction in the number of hostel beds is that local authorities are refusing to authorise an economic size of unit when a hostel is being built or restored. There seem to be two reasons for this. One is that they do not actually want any hostels because without them they will not have to pay the maintenance grants. The second is because there is a social theory around that small is beautiful. That sounds great. I can subscribe to that. But when it means that hostel beds have to go, I do not subscribe to that theory. Salvation Army bed-space numbers have been reduced by a half over the past two years. I call that a crying shame. Again this is a question that needs to be looked at. There is a right balance here, and I believe that local authorities do not have the right balance today.
The second point on which I should like to comment concerns the long-stay residents in these direct access hostels. In the one I visited today one-quarter of the beds were occupied by long-stay residents. "Why?" I asked. "Because no one wants them. No one will have them." I believe that it is the job of the local authority to provide for long-stay residents and not these hostels. That again is a question that needs to be examined, because I believe that the local authorities are not fulfilling what is required of them.
My final comment concerns the new financial provisions. I do not profess to understand them. I am sure that I have not one-tenth of the intellectual ability of the right reverend Prelate, who finds them difficult, so I should like to make one or two simple statements so that all of us may understand them. I understand that today an individual is paid his maintenance weekly in arrears. If he stays for several weeks in a hostel and, say, his pay clay is Monday, and he actually leaves his hostel on the Friday, there will be no remuneration for the hostel for that Monday to Friday. This is one reason, out of a number, why hostels are to an increasing extent largely going unpaid today.

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My noble friend the Minister will no doubt have in his file the Salvation Army's response of 2nd June to the Social Services Committee of another place. From this he will see that the Salvation Army is expecting a deficit of £1.4 million in the current year on its own hostels. If it takes into account the additional space that it operates, this figure will be increased to £2.5 million. The Salvation Army cannot continue like this. If the Government do not meet the commitment that the noble Earl's right honourable friend the Minister has given that the hostels will be fully repaid, then hostel beds are going to have to close.
However, there is still worse to come. Under the new regulations which will come into effect this autumn an individual will have to go to three places instead of, as at present, one to collect his weekly money. He will have to go to the social security department in one place, to another for his housing benefit and to a third for the top-up grant. There is a great fear around in the country that this will mean even less money being collected by individuals and going to the hostels. I hope that my noble friend the Minister will pay attention to some of these problems that are particularly prevalent in London today.
7.6 p.m.
Lord Pitt of Hampstead: My Lords, I too should like to thank the noble Lord, Lord Ross of Newport, for initiating this debate. I should like to stress that the number of people accepted by the authorities as homeless is the highest ever. That point needs to be stressed. In addition, there has been a rapid increase in people who are not usually even counted in these figures. I talk about the visible homeless; the people we see sleeping on the street. They are not included in these figures. Furthermore, there are what I call the invisible homeless who have to live unwillingly in other people's homes instead of having their own home.
The funny thing is that there is now an opportunity for the Government to bring forward proposals to reverse this problem and to end the widespread suffering that it is causing. I say that because the Government's homelessness review has been on the way for quite some time, and many reports will be published and considered during the period of this review.
The noble Lord, Lord Ross of Newport, mentioned two, both of which I want to underline. He dealt with the reports from Shelter and SHAC which stressed that the most important cause of homelessness is that homeless people cannot afford the cost of rents or mortgage payments in the private market. That was endorsed by the Audit Commission. In its report the Audit Commission stressed that we need more permanent housing at prices that those who are now homeless can afford. It went on to call for sufficient investment in homes at prices affordable by the homeless to ensure an increase in the number of properties available to local authority housing departments for allocation to homeless families.
Both those reports stressed the particular point of providing houses that are affordable. It seems to
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me that the Government have an opportunity to announce—I would hope that they could do so tonight although I doubt whether they will, but I hope they will annouce it soon—that, as a result of the review, they will attack the root of this problem and allow the investment and subsidy that will provide the housing required at a genuinely affordable price, because that is the point. It is not only that we must have the houses that are required but that they must be at an affordable price, because that is where the rub is.
I think that the Government can also bring forward and support measures in the Social Security Bill—with which we are going to be dealing soon in committee—and perhaps elsewhere to reverse the cuts in benefits which have led to increases in homelessness, especially among young people. They can remedy the plight of homeless families in bed and breakfast hotels, who have now had money for food taken away from them. I dealt with that during a previous debate on the Social Security Bill. Some of those people are nearly starving.
There is also the problem of the health of people in bed and breakfast accommodation. The condition of their health gives cause for concern. I am saved from having to go into that because the noble Lord, Lord Winstanley, dealt with it admirably. It is a point of the utmost importance. The report he mentioned was also mentioned by the noble Baroness, Baroness Faithfull. It was produced by the HVA and the general medical services committee of the BMA, and made several recommendations. I hope that the Government will regard the health of people in bed and breakfast accommodation as a matter of priority and set about doing something about it.
Bed and breakfast accommodation, as has already been said, is the most unsatisfactory and expensive way of dealing with homelessness. It is very much cheaper to build houses. That has been said in this House many times, but we do not seem to get anywhere with it. Again, I am hoping that the Minister will indicate that the Government are moving in that direction. The local authorities already have capital receipts with which to build houses, but what is required is permission from the Government to do it. The Government should support them because they need additional support for such building.
The Government will deny it, but they are having a battle with local authorities. This battle has been causing hardship to many people on different fronts. It is part of the cause of the problem we are discussing today, but it is also part of the Government's problem about community care. I have no doubt in my mind that the suggestion by Griffiths that local authorities should be responsible for community care is what is preventing the Government from acting on it. I want to make a plea to the Government to stop the battle with local authorities. The Government and the local authority must co-operate together in what they are doing. They must work for the benefit of the people of the country because that is the job of central government and local government in its own localities.

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I hope that the battles between central and local government on issues which seriously affect ordinary people will stop and that we shall have co-operation instead of endless battles. I hope we shall hear that the Government will be moving in this direction. I hope also that the Government will promise to amend the Act introduced by the noble Lord, Lord Ross, to extend the categories because we must now move on. I hope also that the Government will accept the suggestion that some people have made of allowing homeless people the right of appeal to the courts when the local authority has rejected them on the grounds of being intentionally homeless. I hope that any future legislation will restrict the interpretation of the phrase "intentionally homeless" because it is being misused by many authorities to overcome having to look after certain homeless people.
I hope that as a result of the debate we shall be moving forward. I hope that when the Minister replies he will tell us that he has accepted the offer made by his noble friend Lady Faithfull.
7.14 p.m.
Lord Henniker: My Lords, like everyone else, I want to thank my noble friend Lord Ross for giving us a chance to talk about this important subject. I also want to apologise that I came into the Chamber after he had started speaking, but I hope I shall be excused on the grounds that I had to attend a meeting arranged long ago to try to think of ways in which we can deal with the problem of homelessness. I do not apologise for straying off the subject of the debate in my remarks because I want to speak almost exclusively about the problems in rural areas in which I am much involved.
I do not make any apology, because many people look on areas such as my own county as a paradise where such problems do not arise. In many ways it is a paradise, but in my county of Suffolk homelessness is becoming the biggest social problem and the most urgent. It is urgent because, as the noble Lord, Lord Winstanley, said, homelessness, like poverty, is a trap. When someone gets into it, it alters their whole way of life and it is very difficult to get out of.
It is also true to say that the problem of the rural areas is relevant to the problems of the inner cities, because homelessness in the inner cities does not happen by a process of spontaneous combustion. People who are homeless in rural areas are lured to London by the fact that they cannot find anywhere to live in the countryside, so they come to chance their arm. Those who, like me, have worked in Tower Hamlets will realise that many people who come to the end of their home-having possibilities come in from all over the country and end up there.
In my county we have been having a revolution over the past five years, with electrification of the railways, large-scale immigration and enormous rises in house prices. In many ways we have been lucky in that we almost have unemployment down to what is regarded as a normal level. People are mostly in employment, but there has been little trickle-down
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of wealth in most of the rural areas. Most wages are still tied to the agricultural wage. That means that people cannot afford a mortgage or to buy a house, the price of which has gone up in five years from £20,000 to £80,000, and even at this moment of stagnation, to £100,000.
I read the other day that Ipswich, which one would not think is in an afflicted part of the country, is the second worst urban area for homelessness. I was looking at some of the figures. They are in fact only for those who are registered. We believe that there are large numbers of unregistered people who sleep on the floor in friends' houses and who move from place to place. Possibly they are on their way eventually to London. I looked at those figures and I am told that every day there are 160 families on the list for rehousing in Ipswich. Last year only 14 families were rehoused. Bury St. Edmunds, which appears a dreaming cathedral city, has had an increase in the past two years of 25 per cent. in homelessness, and 53 per cent. of those on the register are looking for rehousing. Even in the most rural districts the increase over two years of the percentages of those who are homeless varies between 45 and 35 per cent. Everywhere there is a considerable increase, of over 10 per cent.
I want to support what the noble Lord, Lord Pitt, said. Our local authorities are imaginative, public spirited and hardworking. I believe that they feel desperate at the moment that they can do so little. There has not been enough investment in improving houses and there has been a tremendous fall nationwide in the number of completed buildings, from about 100,000 to 15,000 during the last 12 years. They are anxious to help to solve the problem but they are bewildered by demands and uncertainty as to what will be possible. Over the next 10 years we need about 42,000 houses—an underestimate considering the swing toward the East.
I am chairman of our local housing association, which was told that it would be one of the main instruments in providing affordable rented housing. It has been in existence for four years and has completed one scheme of six bungalows. Although the situation has been better over the past few months, building will take a long time. We have made a deep study of what people want and need. We know that many villages want housing, but we cannot provide it. We now have four new schemes on the starting line.
I do not know the solutions, but probably they lie in simplification. Wherever the association turns there appears to be doctrinal and bureaucratic barriers against getting a move on. The rural areas are not in the same situation as London, although they are seen as being so. I have always been in favour of the right to buy, but, however small, every house in a rural area appears to be attractive and commands a high price. The situation should be made more flexible.
Free market principles are applied, even with generous landowners—both public and private, and the Church—who are prepared to make land available cheaply. The association is often ruled out because it must calculate the cost as though it were free market. The local authorities are not involved

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and they feel uninvolved. They must be given a greater role to play.
As regards bureaucracy, the planners are uncertain often until the matter can be tested in the court. That leads to problems of delay and worry. We must be more flexible. The housing corporation does its best. However, it has timetables and cash flow problems which put new timetables on the housing associations. It is like a game of snakes and ladders; if you do not reach the right point at the right moment, you are down at the bottom of the ladder and must start again. There are ways in which the system should be simplified.
Finally, I echo the noble Lord, Lord Pitt, in saying that we must not allow the fight between local authorities and central government to interfere with the solution to this terrible problem. It is becoming a really terrible problem and we must do all that we can.
7.23 p.m.
Baroness Seear: My Lords, I should like to thank my noble friend Lord Ross not only for introducing the debate but also for the work that he has carried out over the years in this House and in another place in respect of housing and homelessness.
In a recent circular Shelter claims that in London bed and breakfast accommodation costs £14,400 per family per year. However, the comparable figure for building a home with repayment over the years is £8,500. Those figures show two facts: first, that putting people in bed and breakfast accommodation—even if it were satisfactory in other ways, which plainly it is not—is a ridiculously uneconomic way of dealing with the problem and should be phased out as fast as possible; and secondly, that even with economic building at a relatively cheap rate it will be impossible to build at a price which the lower income groups have a hope of paying. In this country we have never been able to build a housing market for the lower income groups and there is no reason to suppose that we are seeing our way out of the problem at the present time.
It boils down to the fact that the Government can forget about market forces as regards housing for lower income groups. They must begin to think of it as a problem to be handled on the basis of sensible economic intervention. As regards economic and social terms, if only the Government would get over its "short-termism" and look more at the consequences of what they are doing, and still more at the consequences of what they are not doing, they would realise that money spent in this way is money very well invested.
I accept the fact that in some ways many people in this country are much better off than they were 10 years ago. I do not expect to hear any applause from the Left for saying that, but it is the case. However, at the same time we have a variety of hideous and increasingly serious social problems. I believe that in one way or another they are all connected with the problem of homelessness, although that is by no manner of means the sole cause.
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To take the least important factor first, we are an increasingly dirty country. When one walks around any of our towns, not only the inner cities, one sees that parts of them are filthy. We are worried about our levels of illiteracy, especially when considering competition with other countries. We are worried about rising crime rates. I have been burgled twice during the past six months—my score is now 17—and so it goes on. The rising crime rate is of considerable concern to people.
We are also worried about family breakdowns. The right reverend Prelate referred to these as a cause of homelessness. But bad housing is also a cause of family breakdowns. It is a circular argument. On a few occasions during my life I have had to share a kitchen and bathroom with someone I did not much like. It takes one almost to the point of manslaughter. Ask any woman what it is like to share such facilities and one will realise the urgency about housing in relation to decent social behaviour. Under such circumstances decent social behaviour breaks down to a surprising degree.
For once will the Government not behave like book-keepers thinking as always about what the accounts will look like at the end of the week? Instead will they think long term about the effect of putting a decent amount of money into housing in order to check the evil consequences of homelessness? Although not exclusively, that is particularly important for 16 to 18 year-olds. If they are forced on to the streets we shall get dirt and squalor; increased unemployment and unemployability; an increasing number of people without skills; and an increasing number of AIDS cases. There will also be more family breakdowns as people who have lived in such a way refuse to take on the responsibility of having families and holding them together in what is regarded as a civilised and decent manner.
There is no way in which the Government can overcome the problem unless they are prepared to find the money. That is a long-term investment which will pay off. I have talked about the rise in criminality. The noble Earl knows very well that it costs £300 a week to keep a person in prison. If a person was saved from going to prison and the money put into housing it would be better used all round.
I beg the Government to accept the fact that the problem is of the greatest urgency. I should like to follow the noble Lords, Lord Pitt and Lord Henniker, in saying that we must cut the cackle at the centre and not carry on with absurd conflicting government departments. We must recognise that there are many able, concerned, competent local authorities which should be given the resources—which are their own but which have been locked away so they are not allowed to use them—so that they can be allowed to get on with the job. In that way we shall reduce homelessness and its hideous associated problems.
The Lord Bishop of London: Before the noble Baroness sits down——
7.30 p.m.
Lord Dean of Beswick: My Lords, I am sorry that I cannot give way to the right reverend Prelate but

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I am short of time now if I let the Minister rise at the appropriate time. I believe that it would be rather unfair if the person replying for the Opposition did not have his allocated time.
I should like to express my appreciation to the noble Lord, Lord Ross, for initiating this debate. However, in listening to it I almost had a feeling of déjà vu—in colloquial terms, here we go again. Since I have been in your Lordships' House no facet of housing has taken up more of our time and received more support from all corners of the House than the plight of the homeless. However, we do not seem to be able to get across to the Government what has been happening or to get them to deal with the situation with the urgency that they should. I shall not go into details but I have been given figures by noble Lords who have spoken in the debate which show that over the past 10 years homelessness has doubled, and those figures do not include the people who sleep rough and who are not registered. I believe that that figure is in the thousands.
The debate on the Order Paper concerns London. Your Lordships may recall that some months ago I asked a Question on the problem of homelessness in London. Figures were produced by a non-political organisation, a Church organisation dealing with the problem, which showed that there were 10,000 people sleeping rough in London who were not registered homeless. It also predicted that if the present trend continued, by the turn of the century there would be 30,000 people and mostly young people, sleeping rough in London. In fact, it termed it as the "New York dimension".
In his excellent speech the right reverend Prelate referred briefly to a point which has not been taken on board. He talked about a particularly bad winter two or three years ago. We have been blessed this past winter with one of the mildest in living memory. But if the forthcoming one is the opposite and we suffer a severe winter what will be the consequences? People will die of hypothermia on the streets of London. Who will care for those homeless people as the cold overtakes them? In London we shall be faced with a disaster that the authorities will be unable to cope with because they are already overburdened and underfunded. I do not know what will happen in that situation.
I have copious reports which I shall not read. They are from a variety of organisations showing the concern of people over this facet of housing and homelessness. There is a report from the London Boroughs Association, the National Housing Forum, Shelter, the Housing Institute and the Association of District Councils. All those bodies have issued reports which show in varying degrees the problem of homelessness. They all finally come to the same conclusion as the Policy Institute Studies Group reached some time ago. I accept that a building programme will not totally solve the housing problem. However, it is fundamentally agreed by everybody, including Members of your Lordships' House in a debate on the most reverend Primate's report, Faith in the City, that unless there is a massive increase in a public house-building programme the situation will continue to deteriorate.
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I believe that that is undeniable. As other noble Lords have said, local authorities should be allowed access to more of their funds to deal with the situation and to put an enhanced housing programme into being. We hear about the hundreds of thousands of houses which are empty. I believe that if the authorities were allowed access to the funds, the situation would be resolved.
I now come to the Minister himself. He will recall that less than 12 months ago when we were in the final stages of debating the Housing Act he was pressed on the question of homelessness. His view was that the legislation would open up the private sector, which would mean that there would be more houses for rent. At that time rents were quoted of £150. I asked him whether, if a homeless person negotiated a private tenancy of £150 a week, the Government would help with that. Eventually I concluded that he said they would. I should now like to ask him a specific question. Is there any evidence yet that homeless people have taken advantage of, if the advantage is there, negotiating a private sector house for rent and being funded for the market rent being asked? If that has not happened, the whole exercise has been a waste of time, as I and other Members of your Lordships' House said it would be.
The noble Baroness, Lady Seear, among others, referred to the enormous cost of bed and breakfast accommodation. The funds spent on bed and breakfast should be released into the public sector, not only to local authorities. I believe that housing associations can also provide housing for rent, and they do that very well and get on with the job if they have the resources to do so. However, nothing of the sort is happening. We appear to be a debating Chamber which makes very good points, and everybody says the case is overwhelmingly proved, but the Government are not delivering the goods.
My noble friend Lady David surprised me when she talked about the number of school children in London living in hotel accommodation in a single room with the rest of their family. Let nobody say that that is a good start in life. It has been proved conclusively that with bad housing almost certainly goes bad education. I believe that that is a perfect example.
A previous speaker—I believe it was the noble Earl, Lord Longford—referred to the Minister as compassionate. I have used that term in the past and I congratulated him when he was made a Minister with special responsibility for housing during the final stages of the Housing Act. However, his lustre is wearing rather thin in view of what the Government are not allowing him to do. I urge him, if he wishes to retain his reputation of being a compassionate and caring man, to plead with the Government to make available resources in the public housing sector on the same dimensions as Mr. Paul Channon has announced for a road building and improvement programme. If the Government are not prepared to do that, we can only draw the conclusion that they are more interested and concerned with cars than people who may die next winter of hypothermia on the streets of London. I hope that he can persuade his colleagues this time

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to do something about this terrible and increasing problem.
7.38 p.m.
The Earl of Caithness: My Lords, I am very grateful to the noble Lord, Lord Ross, for initiating this debate and to all your Lordships who have taken part. I am afraid that I shall have to gallop because we are short of time. As your Lordships will know the matter of homelessness is a particular concern of mine. It has been consistently on my desk since I took over the housing portfolio. What particularly interests me today is the emphasis laid by so many of your Lordships on the need to build houses and yet many of your Lordships who spoke in favour of that are also in favour of the very societies and organisations that have objected so consistently to any proposal for development of new housing. It only serves to confirm, if we did not know it already, that this is a complex problem and a set of problems for homelessness that lacks any simple solution. There is no magic wand to wave.
We all share a concern about the kind of issues and problems that have been discussed. Homelessness is, rightly, an issue of parliamentary and public concern. It is an issue in today's society which requires a response from all parts of our society.
Your Lordships may be aware that the Government's concern is such that we have been undertaking a thorough review of the legislation introduced by the noble Lord, Lord Ross, and on which he commented. Our review is not yet complete. I make no apologies for the time we are quite properly taking to look at these issues and to identify appropriate solutions, in the light of a series of important and useful independent reports. As my noble friend Lady Faithfull reminded us, there is more than one department involved. I have carefully noted what has been said today and I hope to be able to let your Lordships know soon the outcome of our review.
We are faced with a changing situation on homelessness. Back in 1977, the noble Lord, Lord Ross, and his supporters in all parts of Parliament did not envisage the numbers of homeless acceptances we have today and the extensive use of bed and breakfast accommodation. I feel sure he accepts that the Act he saw through in another place is under some stress and strain from the demands of today.
It may be helpful if I comment on the nature of the figures which have informed much of today's debate. As your Lordships will know, my department publishes figures quarterly which are obtained from returns given by local authorities. The information covers a broad range of matters including, for example, the numbers of applicants under the Act, and acceptances; the numbers considered not to be homeless; the categories of people accepted by local authorities, showing for example the numbers of people in the different groups of "priority need" as specified in the Act; and the numbers given help and advice rather than accommodation. This is not a complete list, but it will be clear that there is no single or simple figure to illustrate the scale or degree
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of the homelessness problem, or to indicate the success of local authorities in tackling it. Indeed, I have to tell the noble Earl, Lord Longford, that the one figure most commonly quoted today, and the one he used—that of the number of households accepted as homeless by local authorities—is not a reliable measure of the size of the problem. It is not a record of the number of people without a roof over their heads—it is a record of the numbers provided with somewhere to live.
Noble Lords are quite right to point out that we must be concerned at the increase in this number. We agree, and that is a major reason for our current review; but I do not think that the number of homeless acceptances quoted here today is in itself evidence either that the framework of legislation is inadequate or that local authorities' performance is ineffective. Indeed, the reverse may be the case.
I should say one thing more about these statistics. They do not tell the whole story in another respect—they do not encompass all those people in our society who are in need of help and shelter. The noble Lord, Lord Ross, will I know agree that the Act is now what it was intended to be; that is, a longstop mechanism, designed to deal with the most urgent of cases. The legislation therefore requires local authorities to judge whether people are in certain defined categories of priority need and the homelessness figures that we publish reflect this important feature of the Act.
This debate has a particular reference to London and we must accept that there are distinctive London features of the problem. The noble Viscount, Lord Falkland, reminded us that one of them perhaps is the number of homeless people sleeping rough in the capital. Of course, there have always been such people in London and they can also be found on the streets of the other major cities of the Western world, but that is no comfort to me. The estimates of numbers vary widely, but perhaps the consensus of them suggests between 2,000 and 3,000 in this city. I look forward to the results of the recent survey mounted by the Salvation Army. I remind your Lordships that there are over 4,000 emergency beds in London provided by the DSS resettlement units and by voluntary organisations. Unfortunately many of those people who sleep rough do not use these facilities.
We must accept that, in examining these problems and issues, we are facing the consequences of a long-term decline in an effective market in rented housing. The homeless acceptances are the acute symptoms of this long-standing problem. This country has the highest proportion of its population dependent on state provision of housing of any country in the Western world. Thirty per cent. of our housing stock is in municipal ownership. We have therefore placed substantial reliance on bureaucratic decisions to get the right dwellings provided in the right places, and to get the right tenants into them.
At the same time, we have run down the private provision of housing for rent to an insignificant 8·5 per cent. of the national housing stock; so local authorities have an effective monopoly in many areas of the country. Anyone who needs a home of

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his or her own, and cannot afford to buy, is forced to rely upon the local council's system of housing allocations.
Indeed, rented housing is the only area of our everyday national life where we have still a rationing system operated by bureaucracy. Is it surprising, therefore, that we have a supply of rented housing that is neither appropriate nor adequate, and that access to it for people is difficult and usually involves queueing? As your Lordships know, it is a vital part of the Government's housing strategy to revive the private rented sector and radically increase its contribution to our housing needs. But until our new policies have their effect, the local authority sector must continue to cater for most people who need rented housing.
Since those accepted by local authorities as homeless under the Act must be those with the highest priority housing needs, it is not surprising that they are getting a rising proportion of new council lettings—from 20 per cent. to 31 per cent. in the last five years, with higher proportions in parts of London. This is an inevitable trend, and also the right one. It shows that subsidised public housing is increasingly made available to those with the greatest needs.
It is worth noting that overall we do not have a shortage of housing in this country but in certain areas, like London, we do. Due to changing social and employment patterns, reduced numbers in individual households, greater longevity and high divorce rates, the normal demands for housing are accentuated and problems created.
The noble Lord, Lord Henniker, reminded us that the problems are not confined to London. However, I was surprised that he did not mention the changes announced in the Budget by my right honourable friend the Chancellor of the Exchequer on the release of land at less than market value or the planning and housing changes announced by my right honourable friend the Secretary of State, my honourable friend the Minister for Housing and Planning, and myself. We have to come to grips with these problems.
There is action that central government can take to stimulate the provision of low-cost housing. We have taken a number of important steps to stimulate new provision in the private rented sector. I know that my noble friend Lord Selkirk welcomes that. We recognise that there is a continuing need to help the provision of further, subsidised rented housing for people on low incomes. In future, the main providers will be housing associations, and the noble Lord, Lord Pitt, will be delighted to hear that the Government plan to more than double the resources for new housing for rent at affordable levels within the next three years. The new mixed funding rules will ensure that private finance is drawn in to supplement public investment. The housing corporation's programme makes clear that providing for the homeless will be a major priority for the housing association movement from now on.
In advance of the conclusions of our review, we have taken other specific steps within our overall housing policy. Cash incentive schemes have been introduced, with appropriate resources, to help free
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additional vacancies, especially in London where these imaginative schemes were pioneered. The Estate Action programme has been expanded by 36 per cent. and these further extra resources will help bring empty properties on estates back into use to help the homeless. In the current year London boroughs will benefit from an additional £32 million of Estate Action resources.
The noble Lord, Lord Blease, and others, mentioned the Audit Commission report. The noble Lord quoted selectively from it. However, central government alone cannot solve this problem and we should not lose sight of the local authorities' responsibilities. The 1985 Act gives responsibility to local authorities for assessing homeless applicants and then helping accommodate those they judge to be within the criteria of the statute. The sense of this is that councils are in the best position to assess individual cases and then to provide for them.
Some local authorities perform well within the terms of the Act and more widely—and I congratulate them—but others have the potential and the need to do more. Most important of all—the noble Lord, Lord Ross, was right to stress this—it is vital that they make optimum use of their stock. The story of housing management in London and elsewhere is, sadly, not entirely a good one.
It is vitally important to reinstate void properties wherever this can be achieved economically; to remove squatters; to relet properties more quickly and ensure that under-occupation is kept to a minimum; and to collect rent arrears, which are scandalously high in some boroughs. The noble Lord, Lord Winstanley, was right to mention the importance of repairs. The English house condition survey shows an improvement over its recent five-year review, but I accept that there is more to do. These may seem very obvious steps to your Lordships, but I can assure you that they are ones that remain vital initiatives to take in some parts of London. By "vital" I mean vital to the homeless. I must also urge London boroughs to use and develop the cash incentive schemes to which I have already referred.
For local authorities, it will be important to distribute resources better in future according to need. The proposed new capital control system embodied in the Local Government and Housing Bill shortly to come before your Lordships will meet this purpose. But it is important to stress that we have already taken significant steps to redress the deficiencies of the existing system. In the past 18 months, for example, the Government made available an additional £74 million specifically to help authorities in areas of homelessness under pressure to secure more rented accommodation. And over 50 per cent. of these additional resources went to London.
I accept that it will continue to be necessary to use temporary accommodation for the homeless, particularly while they are being assessed. But bed and breakfast hotels should be a last resort. The noble Baroness, Lady Seear, is right. They represent bad housing practice and bad value for money. A good deal of the evidence in recent reports shows the wide differences in the way authorities interpret

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and implement their duties under the 1985 Act, and the speed at which they do so. Why can Greenwich meet its obligations without recourse to bed and breakfast accommodation for the homeless while neighbouring Lambeth makes use of such accommodation to a wholly disproportionate extent?
I have spoken about the role of local authorities and central government in tackling homelessness. The noble Earl, Lord Longford, mentioned the article by Professor Griffiths. I cannot quote what I wanted from it because I have not got time. Professor Griffiths rightly stressed the importance of the Churches in helping to maintain the permanent values of families and schools and the whole unity that we so desperately seek. It was the right reverend Prelate the Bishop of London who reminded us of the voluntary sector and of the role of the Churches that are of course on the very front line.
They can and do give vital help and support to those in housing distress in the capital. The Churches and voluntary bodies run hostels and advice services; they provide some overnight accommodation and food for needy people. These are vital functions, part of the traditional role in society and in the capital of the voluntary movement. People and society will continue to need such help, which is direct, street-level, immediate, caring. It must expand and I am sure that the Churches will wish to play an increasing role.
The Government provide grant aid through various channels. Hostels receive capital and revenue support. Under Section 73 of the Housing Act 1985 we give grant aid of £700,000 to some 20 voluntary organisations for advice and other services to the homeless. We are looking at this programme and its effectiveness as part of our current review. My noble friend Lord Brentford asked me to look at the regulations concerning hostels which he says are responsible for reducing the number of bed spaces. Of course I shall, but I know that he would be one of the first to chastise the Government if there was an unfortunate accident in a hostel due to overcrowding. As regards the community charge, I remind him that we exempted such hostels as those of the Salvation Army. That was widely welcomed, even, I think, by my noble friend.
Some noble Lords have mentioned the support given to young people in the capital. In paying my tribute to this vital, sympathetic help, let me add an important comment which the noble Lord, Lord Cocks of Hartcliffe, mentioned. Young people and their parents need to be aware of the serious implications of leaving home without somewhere to live or a job which gives them a realistic prospect of finding suitable accommodation. It is in the role of counsellor and adviser that both the Churches and the voluntary sector can and do make a real contribution highlighting the likely difficulties of securing accommodation, helping to find housing and supporting young people in the difficult and emotional task of making contact once again with their families.
With young children of my own, I so agree with the noble Baroness, Lady David, that education is
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vital. The Department of Education and Science is discussing the future of the unit that she mentioned with ILEA and the boroughs and looking for appropriate arrangements. I shall pass on to my right honourable friend how she sees its future.
The noble Lord, Lord Ross, quoted the figure of 40 per cent. of the homeless being discharged from care. The Government have recognised the difficulties faced by this group of youngsters. My right honourable friend the Secretary of State for Social Security announced on 13th March improvements in benefit for youngsters who are forced to live independently.
The noble Lord, Lord Dean of Beswick, raised the question of housing benefit. I repeat the commitment that I gave him before. Housing benefit will meet market rents unless the costs are unreasonably extravagant for the individual circumstances.
I began these remarks by referring to the complexity of the issues and the lack of simplicity in solutions. I believe that this debate today has underlined both points. That is why the Government undertook their review of the homeless legislation and it is also why they are treating it seriously and with care and attention to detail to bring about lasting change for the better.
This debate has mirrored some of the ebb and flow of thinking within government in recent months. I can assure your Lordships that all these contributions represent timely additions to the weight of evidence that we have gathered in the course of our review. Homelessness is an issue which confronts and concerns us all. It is placing burdens on our cities and their local authorities. Many of the remedies and resources needed are already available; and many councils are implementing and using them. It remains essential to make the fullest use of our housing stock and I must urge authorities, particularly in London, to give this the highest priority. Unnecessary delays and empty properties are an offence to the homeless people that the authorities have a duty to serve.
My noble friend Lord Selkirk said that homelessness has been the Achilles' heel of housing policy. I do not believe that the noble Lord, Lord Dean of Beswick, will agree with the right reverend Prelate that all we are doing is tinkering with existing policies. We have given them a new engine, and only by ridding ourselves of the old Achilles' heel is there the best hope for the homeless, and that lies in the full and effective implementation of the Government's new housing strategy. That is our goal and intention in co-operation with other agencies and authorities involved. We must all work together to relieve and reduce the problems so eloquently discussed by your Lordships in this important debate today.
Lord Ross of Newport: My Lords, I thank the Minister for his very detailed response. I am sure that he will be the first to admit that he has left a number of questions unanswered, but nevertheless we understand what is going on. We hope very much that this debate will strengthen his hand in his department. As the Minister for Housing, he has an onerous responsibility, and we recognise that. It is a

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tremendous job and we believe that he has fights on his hands in the department to hold is own. We wish him well. I hope that he will listen to the words of the noble Baroness, Lady Faithfull, and to some of the people whom she would like to bring along. If she cannot persuade the Treasury and others to listen to them, at least I hope that he will.
I also suggest that he might go to Glasgow, where I believe the city council has been very successful. I am assured that there is no one there in bed and breakfast accommodation. It may be that more money goes into Scotland than into England. I believe that a little more goes into Wales. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Employment Bill
Brought from the Commons, read a first time, and to be printed.
House adjourned at one minute before eight o'clock.

  AIDS SUFFERERS: HOUSING
  AIDS SUFFERERS: HOUSING
  WATER AUTHORITIES: FINANCIAL RESERVES
  WATER AUTHORITIES: FINANCIAL RESERVES
  EC TRANSPORT MINISTERS' MEETING
  EC TRANSPORT MINISTERS' MEETING
  LONDON UNDERGROUND: CRIME STATISTICS
  LONDON UNDERGROUND: CRIME STATISTICS
  TA: APPLICATIONS BY EX-REGULAR OFFICERS
  TA: APPLICATIONS BY EX-REGULAR OFFICERS
  TRIDENT PROGRAMME
  TRIDENT PROGRAMME
  ETHIOPIA: HUMAN RIGHTS
  ETHIOPIA: HUMAN RIGHTS
  MOZAMBIQUE
  MOZAMBIQUE
  NHS POLICY BOARD: MEMBERSHIP
  NHS POLICY BOARD: MEMBERSHIP
  FINANCIAL, ETC., INTERESTS OF PEERS: DECLARATION
  FINANCIAL, ETC., INTERESTS OF PEERS: DECLARATION