Sitting of 8 June 1989

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

PRIVATE BUSINESS
ASSOCIATED BRITISH PORTS (No. 2) BILL
Order for Third Reading read.
To be read the Third time on Thursday 15 June.
ASSOCIATED BRITISH PORTS (HULL) BILL
ISLE OF WIGHT BILL
TEES (NEWPORT BRIDGE) BILL [Lords]
TYNE AND WEAR PASSENGER TRANSPORT BILL
Orders for Third Reading read.
To be read the Third time on Thursday 15 June at Seven o'clock.
BRITISH RAILWAYS (PENALTY FARES) BILL [Lords]
LONDON REGIONAL TRANSPORT (PENALTY FARES) BILL [Lords]
Orders for Consideration read.
To be considered on Thursday 15 June.
NEW SOUTHGATE CEMETERY AND CREMATORIUM LIMITED BILL
Order for Consideration read.
To be considered on Thursday 15 June at Seven o'clock.
HYTHE, KENT, MARINA BILL
LONDON UNDERGROUND (VICTORIA) BILL
BRITISH FILM INSTITUTE SOUTHBANK BILL
Orders for Second Reading read.
To be read a Second time on Thursday 15 June.

Oral Answers to Questions
  NATIONAL FINANCE

    Pay Rises
    Mr. Cohen: To ask the Chancellor of the Exchequer what information he has on the pay rises awarded to directors in the last period for which figures are available, if he will indicate the economic effect of all workers having a similar pay rise this year; and if he will make a statement.
    The Chief Secretary to the Treasury (Mr. John Major): Pay is for the parties involved to agree and it is not for the Government to intervene.
    Mr. Cohen: What a cop-out answer! How does the Chancellor justify an average increase of 23 per cent. for top directors when inflation is 8 per cent. and workers are having to accept much less than that? How does the Chief Secretary justify a 20 per cent. increase for ICI bosses, 34 per cent. for Unilever's boss, 43 per cent. for Barclay's boss, 47 per cent. for Cadbury's boss, 48 per cent. for BP's bosses, 58 per cent. for Sun Alliance bosses, 100 per cent. for Legal and General's bosses and 100 per cent. for P and O's? Is not the reason that the Conservatives and those directors have the same incestuous class interest? Regardless of the economic effect, there is Government condemnation for workers' pay rises and a free-for-all for top directors.
    Mr. Major: I am bound to say that I think that the hon. Gentleman has a rather limited view of directors. Contrary to his vivid expression, the vast majority are able, efficient and effective, and we need the best management. Notwithstanding that, I have never justified wage or salary increases that are unjustifiable, and I do not do so now. It is not, however, for me to determine what is or is not justifiable in that respect.
    Mr. Bill Walker: Does my right hon. Friend agree that there are only two resources in any company—money arid people—and that it is the way in which those resources are managed and deployed that results in profitability or loss in operation? It is only right that those who create the profits should, as a result of the shareholders' wishes, be properly remunerated.
    Mr. Major: My hon. Friend makes his point extremely clearly, but I repeat that I am not directly responsible for or concerned with the matter. Pay is a matter for those who negotiate and determine it, and it is not for the Government to intervene.

    Personal Disposable Income
    Mr. Nicholas Bennett: To ask the Chancellor of the Exchequer what was the growth of real personal disposable income for the latest full year for which figures are available.
    The Paymaster General (Mr. Peter Brooke): Real personal disposable income is estimated to have grown by 5 per cent. in 1988.
    Mr. Bennett: I thank my right hon. Friend for his reply. Can he confirm that under the Government real disposable

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    income has risen by about one third, partly as a result of the Government's tax-cutting policies, and has he any calculation of the effect on real disposable personal income if Labour's policies were put into effect?
    Mr. Brooke: My hon. Friend's first point is correct, in the context of the real take-home pay of a married man with two children who is on male average earnings. As for the second point, we know so little about Labour's policies that any observation of mine would be purely speculative—which strikes me as an appropriate adjective to apply to the policies.
    Ms. Short: Does the Minister agree that not everyone has received a 5 per cent. increase as there has been enormous inequality in its distribution? Is he aware that the worst-paid 20 per cent. in society are increasingly worse off and we are becoming a more unequal society? Does that not concern him? Does he not think that the Government ought to look at the provisions made right across Europe for some national minimum wage rather than allowing inequality to grow in Britain?
    Mr. Brooke: The hon. Lady is not well informed in the first part of her question. Perhaps she should put in a little more research in future. As to the second part of her question, that proposal is contained in the social charter, on which the Conservative party looks forward to vigorous debate.
    Mr. John Marshall: Does my right hon. Friend agree that minimum wage legislation would create unemployment in this country? Does he further agree that the percentage of gross domestic product being spent on the elderly is higher in Britain than in 10 of the other Community countries?
    Mr. Brooke: My hon. Friend is perfectly correct in both his observations.
    Dr. Marek: The Paymaster General will know that in calculating real personal disposable income, interest paid to savers is offset by mortgage interest paid to building societies. Does he accept that generally speaking the saver with £30,000 in a building society is not the same person who has to borrow £30,000 to finance the purchase of a house? Will he now admit how much real personal disposable income has been lost in the past year by the man or woman with an average mortgage?
    Mr. Brooke: The hon. Member for Wrexham (Dr. Marek) is broadly speaking correct in his surmise about the unlikelihood of coincidence. As to the second part of his question, he knows very well that the policy pursued by my right hon. Friend the Chancellor to bring down inflation is directed specifically to that aim and my right hon. Friend has said that when inflation visibly comes down, interest rates will follow.

    Personal Equity Plans
    Mr. Baldry: To ask the Chancellor of the Exchequer what estimate he has of the number of personal equity plans now in existence.
    The Chancellor of the Exchequer, (Mr. Nigel Lawson): About 450,000 personal equity plans have been taken out to date.
    Mr. Baldry: Does my right hon. Friend agree that the welcome boost to personal equity plans in this year's Budget will increase the number of people who have a personal stake in the success of British business and encourage businesses to invest further because their ability to raise equity will thus be enhanced? Given all those advantages, does my right hon. Friend not think it somewhat sad that the Labour party should oppose this year's Budget proposals to expand personal equity plans? Does that not reflect the Labour party's inherent opposition to the spread of wider share ownership and a property-owning democracy?
    Mr. Lawson: Yes, indeed. My hon. Friend is quite right. The Labour party is wholly opposed to share-owning democracy and they were opposed to property-owning democracy. Indeed, for years and years they opposed the sale of council houses to their tenants until eventually public feeling was so strong that they had to change their ways. The measure in this year's Budget will give personal equity plans a new boost. One of them—permitting new issue shares to go into personal equity plans instead of, as previously, purely cash—is an important change. I can announce today that this facility will be extended to shares issued by building societies when converting to plc status, and this includes the Abbey National.
    Mr. Cryer: If the Chancellor of the Exchequer is so committed to a share-owning democracy, will he introduce legislation to allow shareholders to determine whether a small clique of Tory sycophants in the boardroom hand over shareholders' money to the Tory party, or is he stopping short of spreading democracy to shareholders so long as the Tory party coffers are substantially swollen, like himself?
    Mr. Lawson: The hon. Member's paranoia becomes increasingly tedious. Company shareholders can, if they are dissatisfied with the management of any company, vote that management and vote those directors out of office—and that is democracy.

    Labour Statistics
    Mr. Brazier: To ask the Chancellor of the Exchequer for how many months adult unemployment has fallen continuously in the United Kingdom.
    Mr. Major: Unemployment in the United Kingdom has fallen for 33 months in succession.
    Mr. Brazier: Does my right hon. Friend agree that unemployment has fallen in every region, especially among the long-term unemployed? In the past 10 years, we have moved from above the EEC average to well below it. Does he agree that there can be no greater testimony to the performance of the Government on unemployment than the silence of the Opposition on the subject yesterday?
    Mr. Major: There was certainly a deafening silence on the Opposition Front Bench yesterday. My hon. Friend is entirely correct. The fast falls in the west midlands, Wales and Yorkshire are especially welcome. There have been remarkable reductions in long-term unemployment in every region.
    Mr. Heffer: It would have been remarkable if unemployment had not fallen, given that it had risen to such high levels under this Government since 1979. Is it

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    not clear that despite the falls in unemployment, which I do not deny for one moment, under the capitalist system unemployment comes down just as it goes up, but the Government have not achieved the lower levels of unemployment which existed under Labour? The levels are still far higher than they were when the Government took office.
    Mr. Major: The hon. Gentleman overlooks a point which is material to his concern—that there are more people in work today than there have ever been. The dramatic falls in unemployment have exceeded even the most optimistic forecasts two years ago—certainly those of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who forecast at the general election that unemployment would increase, since when it has fallen by over 1 million.
    Mr. Waller: My right hon. Friend said that unemployment had fallen especially fast in areas previously regarded as the more deprived parts of the country. Does he agree that this shows that those who talked in the past of the inevitability of the north-south divide were somewhat misguided and that the north has qualities and reservoirs of skill which should attract many people to the north?
    Mr. Major: I agree with my hon. Friend. On the many visits that I have made to the north in recent months, I have been extremely impressed by the way in which the economy is growing and by the confidence and investment in industry. It is clear that the best regional policy is the sustained economic growth that we have experienced in the past few years.
    Mr. John D. Taylor: Does the Minister expect unemployment to continue to fall for the rest of this year?
    Mr. Major: We never make predictions about unemployment. We declined to do so last year, since when it has continued to fall dramatically. As I reminded the House a moment ago when quoting the right hon. Member for Sparkbrook, predictions about unemployment are unwise.
    Mr. Andrew MacKay: As the spectre of unemployment fades as a result of the Government's economic policies, does my right hon. Friend agree that industry faces a new problem—skill shortages? Are Ministers addressing the problem to ensure that more skills are developed and fresh people brought into the labour force, including women?
    Mr. Major: That is an important point. As my hon. Friend will know from the public expenditure round last year, substantial additional resources have been made available for skill training. I hope that as industry is increasingly profitable it will devote more of its resources to training present and future workers.

    Foreign Aid
    Mr. Dalyell: To ask the Chancellor of the Exchequer if he will make a statement on the most recent discussions of the IMF on help to (a) Brazil, (b) Zaire, (c) Indonesia and (d) Nepal.
    Mr. Brooke: The discussions to which the hon. Member refers are, of course, confidential. Brazil, Zaire and Nepal
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    have drawn on IMF facilities within the past three years. Indonesia has not applied for IMF assistance in that period.
    Mr. Dalyell: What measures will the Paymaster General promote in the World Bank and the IMF to ensure that the IMF's structural readjustment programmes do not accelerate the destruction of the rain forests?
    Mr. Brooke: IMF programmes are macro-economic and do not relate directly to issues such as the environment. The environment is a matter for the World Bank. IMF programmes create conditions for economic growth which, by leading to the alleviation of poverty, would tend to reduce pressure on the environment.
    Mr. Harry Greenway: How do the IMF programmes for underdeveloped and developing countries compare with the IMF rescue operation for this country under the last Labour Government?
    Mr. Brooke: That is a slightly larger question than that asked by the hon. Member for Linlithgow (Mr. Dalyell), but there is never any harm in my hon. Friend reminding the House of conditions 12 or 13 years ago.
    Mr. Chris Smith: So far, the Government have been lukewarm, at best, in their efforts to alleviate the massive debt problems of many of the developing countries, and their reluctance to associate that with environmental concern, as shown by the answer that the right hon. Gentleman has just given, makes the position even more worrying. Can the right hon. Gentleman not see the common sense in securing environmental gains for the safety of the planet as a whole while at the same time lightening some of the crippling debt burdens of countries such as Brazil?
    Mr. Brooke: Taking the hon. Gentleman's question at face value, the Government fully support the World Bank. As to the enhanced structure adjustment facility, the United Kingdom has led the way in supporting the efforts of the poorest countries to adjust their economies. The IMF pays its way through ESAF, to which the United Kingdom has made one of the largest contributions, providing a subsidy on up to £1 billion special drawing rights of ESAF lending.

    Interest Rates
    Mr. Tom Clarke: To ask the Chancellor of the Exchequer what are the current interest rates in (a) the United Kingdom and (b) the rest of the G7.
    Mr. Lawson: Three-month money market rates in the United Kingdom currently stand at 14 per cent., compared with an average of 8·6 per cent. in the rest of the G7.
    Mr. Clarke: Given those appalling comparisons, is the Chancellor aware that the Small Business Research Trust recently conducted a survey which showed that a quarter of its members were deeply worried about the impact of interest rates on their businesses? What steps does the right hon. Gentleman intend taking to allay their fears, or can they expect things to become even worse?
    Mr. Lawson: Let me say two things in reply to the hon. Gentleman's question. First, on the fact of short-term interest rates in the United Kingdom being above the average for the rest of the G7, there is nothing new about

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    that—nothing new at all. They have been consistently higher over the past five years. During those five years, there has been a massive increase in investment of all kinds. There has been a record growth of new businesses—indeed, business and industry generally have done better than they have ever done before—so I think that the hon. Gentleman is wholly mistaken in drawing the conclusions that he does.
    On the second point, I would say to the hon. Gentleman that of course what would be far, far worse for small businesses would be to see the sort of levels of inflation that we saw under the last Labour Government, and we are determined that we shall never go back to that.
    Mr. Ian Taylor: Does my right hon. Friend agree that the speech yesterday by the right hon. and learned Member for Monklands, East (Mr. Smith) undermining the interest rate policy would have the effect of undermining the exchange rate, which would import inflation into this country? Does my right hon. Friend agree that the right hon. and learned Gentleman's policies would therefore be more inflationary?
    Mr. Lawson: Yes, indeed. It was quite clear from the debate that we had yesterday that the Labour party has no policy at all to fight inflation. The only policy it has is one to put inflation up, through massive increases in public expenditure, through increased taxes on savings, through devaluation and through lower interest rates.
    Mr. Robert Sheldon: As the Chancellor has ruled out credit controls, even of a limited kind, is it not clear that his only weapon has been ludicrously high interest rates? As this has been fed directly into the RPI, is it not also clear that wage claims are higher than they would otherwise have been, producing a further level of inflation for which the right hon. Gentleman is responsible?
    Mr. Lawson: I entirely agree with the implication in the right hon. Gentleman's question that it is absurd that we have mortgage interest payments in the RPI, unlike most other countries. The right hon. Gentleman is perfectly right about that. But as for ludicrous interest rates, the only ludicrous interest rates were the interest rates during the last Labour Government when he was a Treasury Minister, which were negative in real terms. Negative real interest rates rob the saver and do great damage to the economy. That is what we had under Labour.
    Mr. Gill: Will my right hon. Friend take this opportunity to remind the House that one cannot establish sound security on borrowed money? Will he exhort the nation to follow the Government's example in repaying debt, thereby reducing the burden of interest?
    Mr. Lawson: My hon. Friend is right. It would, indeed, be very much better in many ways if the appetite for borrowing was somewhat moderated. This is a free country—a free country—and people and companies are entitled to borrow what they wish to borrow and what they feel is prudent to borrow and I do not wish any change in that. Nevertheless, I do feel that the higher interest rates we have now might be to some extent a discouragement to borrow and an encouragement to save and, indeed, that is what we see happening at the present time.
    Mr. Beith: How can very high short-term interest rates drive inflation out of the system when they bear disproportionately on small businesses and not on the
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    larger businesses, which borrow mainly in the long term? Unless the Chancellor has some change of policy, will the position not be that smaller business will take more and more of the medicine that is not working on the system as a whole?
    Mr. Lawson: The main difference—the most important difference—between the effect of long-term interest rates—which, the hon Gentleman is quite right, are well below short-term interest rates tend to bear more heavily on consumer spending because consumer borrowing is linked to short-term interest rates whereas, as he pointed out, a great deal of investment is linked to longer-term interest rates and, therefore, the only sense of what he is saying is that the depression of the growth of demand which is necessary in his judgment should be more directed towards investment and less towards consumption. That is not something with which I agree.
    Mr. Gordon Brown: Now that mortgage rates have been 10 per cent. or above for almost all the past 10 years, now that borrowing costs are just about the highest in Europe and now, as the Chancellor confirmed yesterday, that home owners face a summer of high mortgages and rising prices, does the right hon. Gentleman still dismiss the anxieties of home owners throughout the country? Does he still repeat the advice he gave earlier that they should cut back on something else?
    Mr. Lawson: What I do say is that the 10 years to which he referred have been 10 years of unprecedented success for the British economy.

    Balance of Payments
    Mr. Martyn Jones: To ask the Chancellor of the Exchequer what was the balance of payments for the first quarter of 1989.
    The Financial Secretary to the Treasury (Mr. Norman Lamont): The current account deficit in the first quarter of 1989 is provisionally estimated at £4·4 billion.
    Mr. Jones: Is the Minister aware that only this Monday the Engineering Employers Federation predicted that in 1989 the only industry in Britain which will be in surplus with the rest of the world and which is a major metal user will be the aerospace industry?
    Mr. Bill Walker: What about whisky?
    Mr. Jones: That industry does not use metal, so far as I am aware. Does the Minister not consider that that is a major blip on the economic policies of the past 10 years?
    Mr. Lamont: It is not necessary for the current account to be in surplus in every sector. I regard projections for individual sectors as insignificant. It does not matter if we are in deficit in one sector, such as engineering. As a result of the measures that my right hon. Friend the Chancellor has taken, demand in the economy will slow down and the position on the current account will improve.
    Mr. Boswell: Has my right hon. Friend noticed that the balance of payments includes an unusually high proportion of imports of investment goods? Will they not contribute to a more efficient industrial structure in the future?
    Mr. Lamont: My hon. Friend is right. About one quarter of the value of manufactured imports between 1987 and 1988 was accounted for by consumer goods, including cars, with the remainder—fully three quarters—made up of goods for production and investment. That illustrates that, as my hon. Friend says, part of the current account deficit has been accounted for by firms tooling up for investment and higher production.
    Mr. Macdonald: Will the Financial Secretary explain why the Government have approved the recent OECD report, which shows the balance of payments deficit getting still worse next year?
    Mr. Lamont: I think that the hon. Gentleman is mistaken. The report has not been published or released, and he has no basis of saying that the Government have approved it.
    Mr. Kirkhope: Does my right hon. Friend agree that the high levels of investment in manufacturing industry and the recent high level of inward investment as a result of the attraction of the Government's economic policies will result in a much better balance of payments as we progress into the 1990s?
    Mr. Lamont: It is not just the high level of investment in manufacturing that matters but investment in the whole economy, and I am sure that the record level of investment in the whole economy is a very good thing for the long-term benefit of the economy. In that respect, my hon. Friend is right.
    Mr. John Smith: Do the Government still adhere to the forecast of a balance of payments deficit of £14 billion this year? If not, when will the Minister announce that it is going to get worse?
    Mr. Lamont: As the right hon. and learned Gentleman knows, the Government's forecasts are updated in the Autumn Statement. We still stick to the view that the current account deficit in the second half of the year will be lower than it was in the first, as was said in the Red Book, and, indeed, the figures and trends are there to show that. Export volumes in the past three months are up 1½ per cent. on the previous three and the trend is upwards, while imports are beginning to stabilise in response to the slowing down of consumer demand, which is exactly what the policies of my right hon. Friend the Chancellor were designed to achieve.

    Income Tax
    Mr. Butler: To ask the Chancellor of the Exchequer if he will make it his long-term policy to abolish income tax.
    Mr. Lawson: In my Budget last year, I set the target of reducing the basic rate of income tax to 20 per cent. as soon as it was prudent and sensible to do so. That remains the target.
    Mr. Butler: Does my right hon. Friend believe that there is some innate benefit in income tax? With strong economic growth, is it not conceivable that we could do away with the tax altogether?
    Mr. Lawson: I think that that is unlikely to occur during my time as Chancellor of the Exchequer.
    Mr. Battle: Will the Chancellor tell the House how much of the burden of taxation has shifted to indirect taxes such as VAT? How much will indirect taxation increase as he proceeds with his policy of reducing direct taxation?
    Mr. Lawson: The increases in direct taxation that have occurred during the time that I have been Chancellor of the Exchequer have been negligible—in fact, very small indeed. Nor during my time as Chancellor of the Exchequer have I increased the national insurance rates, so let us get that straight. What I will say to the hon. Gentleman is that if the policies which have been proposed by the Labour party were ever put in practice, we would see a very substantial increase in income tax at almost all levels.
    Sir William Clark: Does my right hon. Friend agree that Conservative Governments reduce income tax because they always control public expenditure wisely, whereas Labour Governments invariably increase income tax because they are profligate in their public spending?
    Mr. Lawson: My hon. Friend is right, and that is how we have been able to get income tax down and that is how we will be able to get income tax down still further in the years that lie ahead, to the great benefit of the economy as a whole and also giving individuals a wider choice of how they spend the money that they earn. As for the Labour party and their spending plans, they have yet so far still failed to answer the question put to them by the right hon. Member who was formerly running the GLC—I cannot remember his constituency at the present time—[Interruption.]—Brent, East (Mr. Livingstone)—who said very pointedly that they have not said where they are going to find the money to spend on all those programmes.

    Inflation
    Mr. Duffy: To ask the Chancellor of the Exchequer what is his estimate of the underlying rate of inflation for the British economy; and whether he will make a statement.
    Mr. Brooke: The best guide to the underlying rate of inflation is provided by the RPI excluding mortgage interest payments—[Interruption.]—
    Mr. Speaker: Order.
    Mr. Brooke—which currently stands at 5·9 per cent.
    Mr. Duffy: Why did not the right hon. Gentleman's right hon. Friend receive a more encouraging response today from sterling and the market in view of his very sturdy reaffirmation in last night's debate of his well-known and well-tried counter-inflationary policy?
    Mr. Brooke: That, if I may say so, seems to be a question more for the markets than for me. The markets have, in fact, been thoroughly calm.
    Mr. Gow: Will my right hon. Friend reaffirm his commitment to maintaining high interest rates until we abate the rate of monetary growth? Will he reaffirm the commitment of the Government to move towards stable prices at the earliest possible moment?
    Mr. Brooke: My right hon. Friend the Chancellor of the Exchequer made that wholly clear yesterday. I am delighted to echo him today.
    Mr. Nicholas Brown: Is it the Government's view that shadowing the deutschmark has helped to cause inflation in the past?
    Mr. Brooke: That question, again, goes somewhat wide of the original question that I was asked. As the hon. Gentleman has risen from the Opposition Front Bench, let me say that one of his Front Bench colleagues earlier this week said on television that inflation was higher now than when the Labour party went out of office. As the RPI was then 25 per cent. higher, and the RPI without mortgage interest payments was 50 per cent. higher, it seems to me that the Opposition Front Bench is seeking to rewrite history.

    Manufacturing Investment
    Mr. Arbuthnot: To ask the Chancellor of the Exchequer what is the latest official projection for the growth of manufacturing investment in 1989.
    Mr. Gerald Howarth: To ask the Chancellor of the Exchequer what is the latest official projection for the growth of manufacturing investment in 1989.
    Mr. Lawson: The latest DTI investment intentions survey, published in December, projected manufacturing investment in constant prices to rise by a further 11 per cent. in 1989 on a year earlier. The latest CBI "Quarterly Trends Survey", published in April, confirms this buoyant outlook.
    Mr. Arbuthnot: Is it not clear that it is the policies of the Government that have created the climate where manufacturing investment, output, profits and productivity are all increasing satisfactorily? Can my right hon. Friend say how long and to what extent that trend is likely to continue?
    Mr. Lawson: As far as I can tell my hon. Friend the prospects are very good indeed. We now have a situation in which business investment is at the highest proportion of GDP that it has ever been in our history. Company profits are high; company confidence is high. Therefore, the prospects for further investment are also excellent. As for manufacturing industry, it is interesting that during the period that I have been Chancellor of the Exchequer the average annual growth of manufacturing investment has been 9 per cent. compared with the period of the whole of the last Labour Government, which was roughly the same period of time, or a little bit less, when the growth of manufacturing investment was only 2·3 per cent.
    Mr. Howarth: While welcoming the record rate of investment in manufacturing industry that has taken place under the Conservative Government, may I tell my right hon. Friend that nowhere in the United Kingdom is there more evidence of the revitalisation of British manufacturing industry than in the west midlands where the latest quarterly report of Walsall chamber of commerce shows that no fewer than 46 per cent. of companies are revising upwards their plans for manufacturing investment this year.
    Mr. Lawson: I am particularly glad to hear that from my hon. Friend. Indeed, as a Member representing a midlands constituency myself, I am well aware of the successful economy of the midlands and the reinvigoration of the midlands and the high degree of investment that is
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    going on there. Of course, as my hon. Friend will be the first to admit, it is not something confined solely to the midlands; this is now occurring nationwide.
    Mr. Pike: Does the Chancellor recognise that his complacency hides the wide regional discrepancies between investment in manufacturing industries? Is it not a fact that, if there were more investment in our key manufacturing regions, the Government would do a lot more to improve the unemployment figures and our balance of payments? Does he recognise that investment in the north-west region—a key manufacturing region—according to the Government's latest available figures, is 38 per cent. below the 1979 level?
    Mr. Lawson: There have always been differences between different regions, and there always will be. This is not something new. But what I find extraordinary in the question asked by the hon. Gentleman, and, indeed, by most, if not all, Labour Members, is their exclusive concern with manufacturing industry and manufacturing industry's investment. Manufacturing industry and manufacturing industry's investment are indeed very important, but the whole of the rest of British industry is important too. Some time hon. Gentlemen should recognise that the other 75 per cent. of the economy does in fact exist.
    Mr. Orme: Will the Chancellor address himself to the fact that, if we are going to do anything about the balance of payments deficit, we have to manufacture to export? What has happened to our manufacturing exports over recent years? How does he explain those?
    Mr. Lawson: I am glad to say that our manufacturing exports over recent years have done extremely well. Indeed, total exports, in which manufacturing accounts for a very large part, in the last three months were 8½ per cent. in volume terms above a year ago.
    Mrs. Peacock: Does my right hon. Friend agree that investment in manufacturing industry, which is important to many of us who represent such areas, has been absolutely tremendous in recent years, especially in Yorkshire? Does he agree that that is a sign of confidence in the future economic success of the country, and that, instead of decline and dereliction, we now have many new factories and many new jobs?
    Mr. Lawson: My hon. Friend is quite right, and I know the very great concern and interest that she has always shown in business and industry in her own constituency. It is indeed a striking fact, as I pointed out a moment ago, that over the past five years manufacturing investment has been growing at the rate of 9 per cent. a year, and it is set to grow still further.
    Mr. John Smith: Can I ask the Chancellor the same question that I asked him yesterday, but which he did not answer? By how many percentage points has investment in manufacturing industry increased since 1979?
    Mr. Lawson: Investment in manufacturing industry in quantum is only slightly above what it was in 1979, but it is, of course, heading still further up. Manufacturing output has also risen very sharply indeed under this Government, unlike under the last Labour Government, when manufacturing output actually declined.

    Manufacturing Output
    Mr. Ward: To ask the Chancellor of the Exchequer what has been the annual rate of growth of manufacturing output over the last two years.
    Mr. Major: In the two years to the first quarter of this year, manufacturing output grew at an average annual rate of 7·1 per cent.
    Mr. Ward: Does my right hon. Friend agree that the news about investment in manufacturing that we have just heard is good news for tomorrow? However, the answer that he has just given indicates that the supply side boom, which the Government have been working for, is with us today.
    Mr. Major: My hon. Friend is right. The strength of manufacturing output shows clearly that the supply side changes of recent years are working. My hon. Friend will be pleased to know that the levels of investment that we have seen recently will ensure that that continues.
    Mr. Mullin: In view of the lavish claims being made about the level of manufacturing investment, will the Chancellor have another go at explaining the figures that I put to him yesterday—that according to the latest figures from the Department of Trade and Industry, manufacturing investment in the north-east stands now at 53 per cent. of what it did in 1979?
    Mr. Major: That relates to manufacturing output. In fact, manufacturing investment has risen by 14½ per cent. in the last year to a record level.

    Economic Growth
    Mr. Oppenheim: To ask the Chancellor of the Exchequer what was the rate of economic growth in the latest year for which figures are available.
    Mr. Major: Gross domestic product is estimated to have grown by 41/2 per cent. in 1988.
    Mr. Oppenheim: Is it true that, whereas a great deal of investment in manufacturing in the 1970s was directed by politicians into uneconomic enterprises or into uncommercial capacity, it is now being directed by private industry into proper jobs and proper industry? Perhaps that is why, whereas under the last Labour Government manufacturing output fell, it has risen sharply under this Government.
    Mr. Major: That is right, and it is why we are now well into the eighth successful year of sustained growth of more than 3 per cent. During the past seven years there has been a combination of strong and steady growth that has not been matched since the war.
    Mr. Campbell-Savours: Would there not be a substantial increase in growth if the Government adopted a positive policy of import substitution? Will the Minister reflect on my modest contribution to last night's debate, when I set out a scheme for private sectoral support for industry that would lead to a substantial number of jobs, cost the state very little and, to some extent, reduce the trade deficit? Will the Minister read what I said last night and, perhaps, drop me a line about it?
    Mr. Major: I always read carefully what the hon. Gentleman has said, although some of the ideas that he advanced yesterday were tried not wholly successfully in
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    earlier years. I welcome the efforts many industries are now making to provide goods to be sold at home at competitive rates as an alternative to imports. I hope that they will continue to do that.

  PRIME MINISTER

    Engagements
    Mr. Thurnham: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today.
    Mr. Thurnham: During the course of my right hon. Friend's busy day, will she find time to read Paul Twyman's excellent pamphlet entitled "1992, Crossroads for Free Enterprise"? Will she use her best endeavours to ensure that Europe takes the road of free enterprise so that we can look forward to the day when the whole of Europe, from the Atlantic to the Urals, is rid of creeping Socialism and tyrannical Communism?
    The Prime Minister: I have indeed read that pamphlet and I agree with its conclusion that we face a choice in Europe between corporatism, central control and regulation—as is supported by the Opposition—and the creation of a genuine single market in which enterprise can flourish and the energies and talents of people be set free to generate wealth and bring about further social improvement. That is the sort of Europe that the Conservative party wants and for which we shall be campaigning in the forthcoming election.
    Mr. Barron: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Barron: Will the right hon. Lady confirm that on Monday evening she will be joining me and my right hon. Friend the Leader of the Opposition in voting in favour of the televising of the proceedings of this House?
    The Prime Minister: I must disappoint the hon. Gentleman, in that I shall not be here on Monday evening. I wish to make it clear that if I were here, I should he supporting the Lord President.
    Mrs. Currie: Has my right hon. Friend noticed that the right hon. Member for Yeovil (Mr. Ashdown) is missing from the Chamber this afternoon as he has buzzed off to Hong Kong? He is not, therefore, here to ask his usual silly questions—[Interruption.]
    Ms. Short: The hon. Lady is not in order.
    Mr. Speaker: Order. It must be a question for the Prime Minister.
    Mrs. Currie: Does my right hon. Friend agree that although there is considerable sympathy with and understanding of the worries of the people of Hong Kong,

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    it would be wrong to give anyone the idea that millions of people could come and settle in this country overnight? Does not the future of the colony lie with China?
    The Prime Minister: As both my right hon. and learned Friend the Foreign Secretary and I have said, we are deeply concerned about Hong Kong and the natural feelings of its people. We have said that we are prepared to consider ways of obtaining greater flexibility under the present rules to allow an increasing number of people to come to this country under the several different limbs of the immigration rules and the British Nationality Act 1981. We shall consider that matter carefully in the coming days and, if need be, come to the House if we need additional powers.
    Mr. Nigel Griffith: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Griffiths: How does the Prime Minister justify the shameful decision of Tayside Tories to support the Nationalists where SNP means "sacking 900 people"?
    The Prime Minister: I do not think that I should get involved in that. I am sure that Tories support Tory policy.
    Miss Widdecombe: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Miss Widdecombe: Will my right hon. Friend find time in her busy schedule to visit Maidstone general hospital, which was built under the aegis of this Government after years of obvious neglect and which even now is just expanding to include a mass radiography unit? Does she agree that this is tangible proof of the Conservative commitment to the National Health Service?
    The Prime Minister: Yes, and I am delighted to hear of its success from my hon. Friend. It is an example of the improvements that are occurring throughout the country in the NHS because we are spending three times as much on the NHS as was spent under Labour. Whereas Labour cut the capital programme for hospital building, we have increased it by 40 per cent., and I am glad that my hon. Friend's constituency is a beneficiary.
    Mr. Kinnock: Is the Prime Minister aware that the chief executive of London Regional Transport says that the only way to reduce rush hour overcrowding on the Underground is substantially to increase fares so that people cannot afford to travel at those times? Does the right hon. Lady agree with those views?
    The Prime Minister: If there are requests for increased fares and they are designed to lead to increased service, of course those would be considered. I would point out that on transport matters, as on most other things, the Government have put an increasing amount to the capital spent on transport.
    Mr. Kinnock: Why does not the Prime Minister stop wriggling and simply say whether she thinks—[Interruption.]
    Mr. Speaker: Order.
    Mr. Kinnock: Will the Prime Minister say whether she thinks the ability of people to get to their work in London should be rationed by fares regulated by price?
    The Prime Minister: I thought that on a previous occasion the right hon. Gentleman had agreed with me that if one gets increased service, one should expect to have to pay for that improvement. He seems totally to have forgotten that.
    Mr. Kinnock: Can the Prime Minister explain how, if one is charging fares that stop people travelling, one is increasing service to them?
    The Prime Minister: There have been a number of proposals from London Underground for increasing the standard of service. The right hon. Gentleman, as usual, wants something pretty well free, provided that someone else pays.
    Mr. Roger King: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. King: I congratulate my right hon. Friend on her recent visit to the west midlands. Will she confirm that no Conservative Euro-candidate is opposed to our membership of the European Economic Community? What message does she have for the numerous members of the other parties in respect of their attitude to the hard Left campaign group of the Labour party?
    The Prime Minister: Yes, of course I confirm that, unlike the Labour party, all our candidates in the Euro-elections believe that Britain's future lies in the European Community. A Conservative Government led by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) had the vision to take Britain into the Community—[Interruption.]
    Mr. Speaker: Order. Interruptions waste a lot of time.
    The Prime Minister: A successor Conservative Government have made such a success of Britain's membership.
    Mr. Maginnis: Has the Prime Minister been informed by the Secretary of State for Northern Ireland that at a dinner party in Hillsborough castle, the deputy chairman of the Police Authority for Northern Ireland described the former Chief Constable—and I apologise to the House for the language—as a "black bastard", accused him of having previously kicked the—I will not use the four letter word beginning with "f"—out of Roman Catholics, and that the deputy chairman further described the police as "black thugs"? Is that the sort of behaviour the right hon. Lady expects from the deputy chairman of the Police Authority for Northern Ireland? When the right hon. Lady has verified what I have said, will she take steps to ensure that that person is removed from the authority?
    The Prime Minister: I am in no position to know whether or not the account of the hon. Gentleman is accurate. My right hon. Friend the Secretary of State for Northern Ireland says that the answer to the first part of the question is no, Sir. It is monstrous to try to repeat an

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    alleged account of a conversation under such circumstances, and I totally condemn it. The hon. Gentleman knows that we fully stand behind the police in Northern Ireland in the excellent and wonderful work that they do.
    Mr. Nicholas Winterton: Is my right hon. Friend aware that an increasing number of industries in this country are concerned about the policy of high interest and exchange rates, and that those two policies are torpedoing the very sector of the British economy which could reduce our balance of trade deficit and assist in reducing inflation? Will she look at other policies, particularly that of asking the Bank of England to request the clearing banks to place substantial deposits, which would be very beneficial for Britain's manufacturing industry?
    The Prime Minister: There are two points. As my hon. Friend is aware, increases in interest rates are not readily acceptable, but are far less damaging than a perpetual increase in inflation. Secondly, as he will also be aware because he takes much interest in industrial matters, a 1 per cent. increase in wages is about four times as damaging as a 1 percentage point increase in interest rates. There has been an increase in wages of 9 per cent. in the past year.
    Mr. Knapman: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Knapman: Has my right hon. Friend seen press reports stating that a mother of three, a Lambeth Labour councillor, has claimed £20,000 expenses in one year? Does my right hon. Friend agree that that is absurd, and a backdoor way of appointing full-time councillors?
    The Prime Minister: I have seen such reports. In the White Paper responding to the Widdicombe report, we announced our intention to introduce a flat-rate allowance to prevent councillors exploiting an attendance-based allowance system.

    Rain Forest
    Mr. Dalyell: To ask the Prime Minister if she will seek to include on the agenda of the Madrid summit, European Economic Community policy towards debt-fornature swaps in relation to conservation of the rain forest.
    The Prime Minister: I welcome the debt-for-nature swaps agreed voluntarily between commercial banks, conservation organisations and debtors, although their role is likely to remain small in relation to both developing
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    country debt and environmental problems. The agenda for the European Council has not yet been agreed, but environmental issues may well be raised.
    Mr. Dalyell: May I ask the Prime Minister a question of which I gave her Office a little notice? Does she support the European Parliament's resolution of 26 May on tropical timber products?
    The Prime Minister: I am grateful to the hon. Gentleman for giving me notice. The resolution, which is addressed to the Commission for initial consideration, deals with a number of aspects relating to trade in tropical timber. My right hon. Friends in the DTI, with their officials, are looking at its full implications.
    Mr. Bell: In relation to the Prime Minister's earlier response as to our success in the European Community—
    Mr. Speaker: Is this related to rain forests?
    Mr. Bell: In relation to rain forests and the European Economic Community, should we not have a proper social contract throughout Europe?
    The Prime Minister: It is much more practical for us to do what we do to assist the continuation of the rain forests and that is one of the reasons why we should be proud of being British.

    Engagements
    Mr. Ken Hargreaves: To ask the Prime Minister if she will list her official engagements for Thursday 8 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hargreaves: As tickets for the West German national lottery are now circulating in Britain, is it not time to consider the setting up of a national lottery here so that the proceeds of such a lottery can benefit the British people?
    The Prime Minister: As my hon. Friend knows, that question comes up from time to time, but we have never set up a national lottery. People want a national lottery for many different reasons, but I would be slow to consider setting one up because enough money already goes to gambling of one sort or another and such a lottery would be damaging for a number of local fund-raising occasions which are far more profitable.

Business of the House
3.30 pm
Mr. Frank Dobson: Will the Leader of the House tell us the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): The business for next week will be as follows:
MONDAY 12 JUNE—Until 7 o'clock, private Members' motions.
Debate on a motion to approve the report of the Select Committee on Televising of Proceedings of the House (HC 141).
Motion to take note of EC documents on insider trading. Details will be given in the Official Report.
TUESDAY 13 JUNE—Progress on remaining stages of the Local Government and Housing Bill.
Motion to take note of EC documents on broadcasting. Details will be given in the Official Report.
WEDNESDAY 14 JUNE—Conclusion of remaining stages of the Local Government and Housing Bill.
Remaining stages of the Police Officers (Central Service) Bill [Lords].
THURSDAY 15 JUNE—There will be a debate on the arts and heritage on a motion for the Adjournment of the House.
The Chairman of Ways and Means has named opposed private business for consideration at 7 o'clock.
FRIDAY 16 JUNE—Private Members' motions.
MONDAY 19 JUNE—Remaining stages of the Self-Governing Schools Etc. (Scotland) Bill.
[Monday 12 June 1989
Relevant European Community Documents

(a) 7310/87

Insider Trading

(b) 8810/88

Relevant Reports of European Legislation Committee

(a) HC 43-iii (1987–88) para 5, HC 15-xxiii (1988–89) para 1 and HC 15-xxiv (1988–89) para 1

(b) HC 15-i (1988–89) para 8, NC 15-xxiii (1988–89) para 1 and HC 15-xxiv (1988–89) para 1.

Tuesday 13 June 1989
Relevant European Community Documents

(a) 5574/88}

Broadcasting

(b) Unnumbered

Relevant Reports of European Legislation Committee

(a) HC 43-xxvi (1987–88) para 5, HC 15-xvii (1988–89) para 1 and HC 15-xxi (1988–89) para 1.

(b) HC 15-xxiv (1988–89) para 3.]

Mr. Dobson: I thank the Leader of the House for his statement.
I wish to register our strongest objection to the proposal that the Select Committee's report on the televising of the House should be debated on Monday and that only half a day should be devoted to it. It is a most important matter which affects every Member of the House and every one of them is entitled to have time to consider the report, to discuss it with colleagues and to feel assured that all points of view will be expressed in the debate.
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The Select Committee held 32 meetings and considered oral evidence and 250 written submissions, including 90 written submissions from hon. Members. Therefore, it seems peculiar that the House should be expected to deliberate and decide on the matter after just three hours of debate late one evening.
The Opposition believe—most of us anyway—that the British people are entitled to see and hear what their elected representatives are doing. In view of the Prime Minister's statement at Question Time today, can the Leader of the House confirm that there will not be any late effort by the Government to sabotage the televising of the House and that the payroll vote will be expected to support the report when he recommends it to the House on Monday? [HON. MEMBERS: "It is a free vote."] We all know what free votes are like.
On Monday, the Secretary of State for Employment will attend the Labour and Social Affairs Council of the European Community and we understand that he will be trying to undermine the European directive on health and safety in the workplace. Will the Leader of the House give us an undertaking that the House will be allowed to debate the outcome of Monday's meeting at an early date?
I come back to two standard items. First, when can we expect to have the Government's response to the Griffiths report on care in the community, and when can we expect to debate it? Secondly, when will the Secretary of State for Education end his protracted and apparently hopeless discussions on the introduction of student loans instead of student grants so that we can have the promised debate?
Finally, will we have an early opportunity to debate a possible dog registration scheme or any other practical measures to restrain uncontrolled dogs from savaging innocent passers-by? Unlike some topics that we debate in the House, it might be possible for us to do something about this problem.
Mr. Wakeham: The hon. Gentleman asked me five questions about the business for next week. I am hound to say that I am rather surprised at his tone on the first question about the debate I have arranged on the report on televising the House of Commons. The House has made a decision on the principle of holding an experiment and it does not therefore seem necessary for there to be a long debate to discuss the matter again. The question is whether this is the right procedure. He played a full and active part, for which I am extremely grateful to him, in the work of the Select Committee. The report has been made available for Members to study and it is right that we should get on and deal with it. I believe that the time that I have allocated is adequate. The House has had a full day's debate on the matter and it is now being invited to approve the report of the Select Committee. I do not think that a prolonged debate is necessary, but I will table a motion to ensure that any amendments which you, Mr. Speaker, may select can be disposed of.
I will refer the European matter concerning health and safety to my right hon. Friend the Secretary of State for Employment and perhaps we can have discussions through the usual channels.
I am well aware of the continuing interest in the Griffiths report and in the Wagner report. I can assure the hon. Gentleman that we attach great importance to this issue. As I have said before, this is a complex and sensitive area where we must give thorough consideration to all the

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options. Our deliberations are continuing and we shall bring forward our proposals in the near future. That will be the time for consideration of any further debate.
On the question of top-up loans, I will make a slightly different statement from that which I have made before. The position on student loans is that my right hon. Friend hopes to be able to report to the House fairly soon his conclusions on the administration of this scheme. The right time for any debate will be after that, but I will certainly keep the hon. Gentleman's request in mind.
With regard to dogs, I cannot promise a debate next week, but I point out to the hon. Gentleman that one of his hon. Friends will raise an Adjournment debate on the subject next Thursday to which a Minister will be responding.
Sir Philip Goodhart: As a major conference on Vietnamese boat people is to be held in Geneva next week, may we have an early statement from the Foreign Secretary on Hong Kong so that some of us can protest about the shameful proposals put forward to ship the boat people back from Hong Kong to Vietnam, a country with an appalling record on human rights and economic mismanagement?
Mr. Wakeham: I know that my hon. Friend recognises the seriousness of the problem. He is correct in saying that there will be a United Nations conference in Geneva next week, and my right hon. and learned Friend the Foreign Secretary, accompanied by the Governor of Hong Kong, will attend it. Its aim is to produce a comprehensive and durable solution to the problems of the Vietnamese boat people. We shall be pursuing immediate relief for Hong Kong's current boat people crisis both at the conference and in the coming months.
Mr. A. J. Beith: Is it not essential that we have a debate on Hong Kong soon, because in all our previous debates there was certainly no assumption that the transfer under the Sino-British agreement would be to a regime that was butchering its own citizens or to a country that might be on the verge of civil war? Surely the whole question has to be addressed afresh in the light of the circumstances.
Mr. Wakeham: I agree that a debate on Hong Kong is something to which we must address ourselves. It is a question of timing. The Foreign Affairs Committee is currently taking evidence on various matters connected with Hong Kong, and it may be that the best time for a debate is after its report is available.
Mr. Alick Buchanan-Smith: In the light of press reports this morning that the Government have decided that a price auction will be the ultimate determinant of the award of independent television franchises, can my right hon. Friend say when the House will be told what those conclusions are? Is he aware that many Conservative Members feel that, rather than having a price auction, quality has to be given the highest priority?
Mr. Wakeham: My right hon. Friend the Home Secretary will make known shortly his conclusions on that and other aspects of our recent Broadcasting White Paper. I should not want to comment further now on speculative
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press reports. My right hon. Friend is experienced enough to know that he must wait until my right hon. Friend the Home Secretary makes his statement.
Mr. Merlyn Rees: The right hon. Gentleman reminds the House that we voted in favour of an experiment in televising the proceedings of the House and that the Select Committee's scheme for that experiment is what we shall be voting about on Monday night. Will the right hon. Gentleman confirm that, six months after the beginning of that experiment, or whatever is the period, the House will have another opportunity to return to the major issue of whether its proceedings should be permanently televised? Is not Monday's debate concerned only with the experiment?
Mr. Wakeham: Absolutely. The right hon. Gentleman is right, as he so often is in respect of these matters The purpose of Monday's debate is to approve or not to approve the Select Committee's report. The decision of the House to allow the experiment will not be altered one way or the other by what happens on Monday. At the end of the experiment the House will be able to make a judgment as to what should happen in the future, presumably on a permanent basis.
Mr. Michael Latham: I am sorry to go on about this matter, but is my right hon. Friend yet in a position to say when something will be done about constituents queuing in the rain to get into this place? That matter has been discussed by the relevant Committee for a very long time. I know that there are difficulties about the other place, but they are surely not insuperable and could be overcome.
Mr. Wakeham: I agree with my hon. Friend that the matter is taking rather longer than he or I would like and that the problems ought not to be insuperable. The proposals of the Accommodation and Administration Sub-Committee are being considered by the responsible authorities and the relevant Committee of the other place. It is hoped that an initial response will be received in the near future.
Mr. Jack Ashley: Is the Leader of the House aware that 11 minutes ago, at 3.30 pm, the final report on disabled adults from the Office of Population and Censuses Surveys was published, and that it reveals shocking disparities in the services and equipment provided to the disabled, especially those who are old, deaf or blind? It is outragous that disabled people should be deprived of proper amenities. May we have a debate on that subject next week?
Mr. Wakeham: I am afraid that the answer is no, we cannot have a debate next week. The right hon. Gentleman knows where I have been for rather longer than the last 11 minutes and will appreciate that I have not had an opportunity to study the report. Of course I shall do so, and so will the Ministers responsible. The Government will make an apropriate response in due course.
Sir Michael McNair-Wilson: if I am to show myself as being at all sensitive to my postbag, I must press my right hon. Friend to reconsider his decision concerning a debate on dog registration. He will be aware that an effective scheme operates in Northern Ireland, but it seems to be peculiar to the Province. As there is so much concern about the number of stray dogs now in society, if that is the

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right word, and about the number of attacks on people recently by particular breeds of dogs, he will know that there is increased public concern also at the ending of the dog licensing scheme in the United Kingdom, except in Northern Ireland.
The dog population seems to be somewhat out of control, and, although local authorities can impose their own dog registration schemes if they wish to do so, none has. If the problem is not to reach epidemic proportions, the Government must find time for a debate to consider the whole question of dog control, whether or not a registration scheme turns out to be the right solution.
Mr. Wakeham: I acknowledge the fact that my hon. Friend has received many letters on the subject. So have I, and a number of right hon. and hon. Members sent others to me to answer. I indicated earlier that the hon. Member for Dundee, East (Mr. McAllion) has secured an Adjournment debate for next Thursday, which will provide an opportunity for him to raise points for the Minister to answer. It appears to me that, subject to your view, Mr. Speaker, some of my hon. Friend's points may also be relevant to the debates on the Local Government and Housing Bill that I announced. My hon. Friend should await the comments of my right hon. Friend the Secretary of State for the Environment and of Home Office Ministers on that subject.
Mr. Max Madden: Yesterday the Secretary of State for Health announced that a list of 200 hospitals, including hospitals in Bradford and other parts of Yorkshire, were allegedly claiming to be interested in being privatised and becoming self-governing. Will the Leader of the House urge the Secretary of State to make a statement to the House explaining why on earth he is opposed to ballots of people living in health authorities where hospitals are believed to be interested in becoming self-governing, to enable them to express their views, and also ballots of staff whose livelihood depends on the future of those hospitals? Why are the Government so eager to allow ballots on whether schools should opt out of state education and whether council estates should change their landlords, but so implacably opposed to ballots on health care and the future of NHS hospitals?
Mr. Wakeham: It seems to me that the hon. Gentleman must be rather frightened of the proposal, given the vehemence of his opposition to it. He is distorting the position substantially. The position is that 178 units around the country have expressed an interest in the proposals for self-government on a no-commitment basis. All those with an interest in the mater will have an opportunity to express their views on individual proposals before any formal application is made, and district health authorities will continue to be responsible for overall planning for health care and the needs of their resident populations.
We think it very encouraging that so many hospitals and units are interested in becoming self-governing. Doctors, nurses and managers want to explore the idea further, because the increased management freedoms will enable them to give patients a better service, while remaining fully part of the National Health Service. That seems a perfectly sensible way to proceed.
Mr. Nicholas Bennett: Will my right hon. Friend draw the attention of my right hon. Friend the Secretary of State for the Environment to the new clauses to the Local Government and Housing Bill that my hon. Friends and I have tabled which are designed to deal with councillors who owe massive amounts in rents and—and, in future, community charge—under which councillors who did not pay rent and community charge would in future be disqualified from membership of local authorities?
Mr. Wakeham: I shall certainly draw the new clauses to my right hon. Friend's attention, but I suspect that he already has them in mind and is considering an appropriate response at the right time.
Mr. Nigel Spearing: The House will be grateful to the right hon. Gentleman for making it clear that he is to put down a motion to enable any amendments selected by Mr. Speaker for Monday's debate on broadcasting of Parliament to be taken. Will he, however, extend his duties to Tuesday's debate on pan-European legislation on broadcasting? In view of the important issues raised by EEC matters, is there not a risk that an hour and a half is a little too short? Perhaps on this occasion a suspension motion would be in order.
Mr. Wakeham: The hon. Gentleman always makes his requests in a courteous and persuasive manner, and I certainly undertake to have discussions through the usual channels to establish whether such action would be in the general interests of the House.
Mr. Nicholas Winterton: I fully support the request of my hon. Friend the Member for Newbury (Sir M. McNair-Wilson) for a major debate on a dog registration scheme, but may I make the further request: that the Government come up with a decision on the Griffiths report as soon as possible? It is very difficult for those of us who take an active interest in the Health Service to consider its future, and particularly the White Paper "Working for Patients", without knowing precisely where the Government stand on the report. Moreover, the longer that the Government delay, the more psychiatric hospitals are being closed. We are selling the future. I strongly believe that we need long-stay care for a large number of people suffering from mental illness.
Mr. Wakeham: My hon. Friend adds his considerable weight to the remarks about dogs and I note carefully what he has said, although I thought that I had been reasonably forthcoming in a busy week. I fully understand my hon. Friend's desire that the Government should produce their considerations of these matters and make public their position on the Griffiths report, but he will agree that we had better get it right rather than be too hastily wrong. My hon. Friend has a reputation for expressing his views fairly vocally, and if we get it wrong we might get some stick from him.
Mr. Dick Douglas: Does the Leader of the House recall that in a previous Parliament the Select Committee on Defence twice was highly critical of the Government's decision to contract out Her Majesty's dockyards? Will he give an undertaking, either via a statement by a responsible Minister next week or on some other appropriate occasion, that we shall have some information about what exactly is happening at Rosyth?

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There are signs that Thorn EMI is to pull out and that Babcock is reshaping its corporate structure. That induces severe unhappiness in the labour force, to put it mildly, and casts doubt on the long-term commitment of those contractors to remain with the project.
Mr. Wakeham: I know the long and detailed interest that the hon. Gentleman takes in these matters, and I remember the report to which he refers. At this time of year we tend to have debates on defence. We are to debate the Army today. I would not want to stretch the hon. Gentleman's ingenuity too far by suggesting that he should bring that into the debate. However, we shall be having a debate in the near future when I am sure that the hon. Gentleman will be able to make his point. In the meantime, I shall refer the matter to my hon. Friend the Minister of State for the Armed Forces, who was listening to what the hon. Gentleman said.
Mr. Henry Bellingham: My right hon. Friend may have covered this matter in previous business questions, but he will be aware that, until recently, when an hon. Member signed an early-day motion his name appeared on the Order Paper the next day. However, now, if one signs an early-day motion that is more than a week old, it appears only every Thursday. Why has that change taken place? Does he agree that it devalues early-day motions? Cannot we return to the original system?
Mr. Wakeham: I hope that my hon. Friend will not take it amiss when I say that his question is rather like night following day. There were complaints about the existing system and suggestions that it was being abused. The Accommodation and Administration Sub-Committee looked at the matter and some new proposals have been produced. We are now trying those new proposals, and we had better see how we get along for a little longer before we start changing them again.
Mr. Win Griffiths: I am grateful to the Leader of the House for giving an assurance that we will have a debate on the European Community proposal for a framework directive on health and safety at work. Can he assure us that the debate will he held in the very near future rather than at some indefinite time?
Mr. Wakeham: I am not one to be churlish to anyone who says anything kind to me on these occasions, but it is not quite what I said in answer to the hon. Member for Holborn and St. Pancras (Mr. Dobson). I said that I would refer his question to my right hon. Friend the Secretary of State for Employment, and I did not give any undertaking.
Mr. Harry Greenway: Will my right hon. Friend reconsider his answer to my hon. Friend the Member for Newbury (Sir M. McNair-Wilson) and his refusal of a debate on dog registration? In my constituency, on the large High Lanes estate, the Post Office has three times suspended deliveries of mail because of attacks on postmen by stray dogs or dogs which are out of control. The need for a debate is urgent.
May we also have a debate on the environment, and particularly on the need to save playing fields from Socialist councils such as Ealing which is seeking to build on 17 acres of the beautiful Cayton road playing fields belonging to Ealing Green high school?
Mr. Wakeham: I wish that I could help my hon. Friend by finding time for a debate. The second issue that he raised is important, but I fear that he will have to use his considerable ingenuity to find a way of raising it.
As to my hon. Friend's first point, I cannot add to what I have said to hon. Members, except to say that in practice the problem is not so much the registration of dogs as owners of dogs being responsible for and taking proper care of their dogs. That is what lies at the heart of the trouble.
Mr. Dennis Skinner: The Leader of the House will recall that several months ago the Secretary of State for Energy declared that he would introduce amending legislation regarding the restart scheme as it applied to mineworkers. Despite several requests, the amending legislation, which will affect a considerable number of people who have been made redundant in the past 12 months, still has not been introduced. Will the right hon. Gentleman have a word with the Secretary of State for Energy to get the matter on board? If parliamentary time is not available, the Leader of the House could dump the Associated British Ports Bills and kill two birds with one stone. As that affects the Secretary of State for Employment and there is a need for co-ordination, the right hon. Member for Old Bexley and Sidcup (Mr. Heath) who has been brought back into favour by the Prime Minister, could act as an overlord to get the two Departments together to bring the legislation forward.
Mr. Wakeham: As usual, the hon. Gentleman goes in for a touch of overkill in his question. I know that, as always, he is trying to be helpful. He asked whether I would have a word with my right hon. Friend the Secretary of State for Energy, and the answer is yes.
Mr. David Winnick: No doubt strong protests will be made about the way in which a BBC crew has been roughed up by security thugs in China. However, dealing with a domestic matter, will a statement be made next week explaining why the Minister of State, Foreign and Commonwealth Office waited a week before admitting that he had lunch with a BBC correspondent from whom the story originated that the expulsion of Soviet citizens had something to do with the possible blackmailing of Labour Members of Parliament? He claims that he was misunderstood, poor chap. The Government use their propaganda and news machinery to smear their political opponents but deny the story when the going gets rough.
Mr. Wakeham: The hon. Gentleman's allegations are disgraceful. My hon. Friend the Minister of State issued a comprehensive statement on 2 June about the background to those unfounded reports. I repeat that Labour Members were not associated with the matter. If the hon. Gentleman were an honourable gentleman all the time, he would accept that assurance.
Mr. Harry Cohen: May we have a debate about the policy of higher fares on London Underground? Some hon. Members believe that it is further evidence that public transport is not safe in the Government's hands. If people are priced off the tube, the roads will be made more congested. Some hon. Members want to argue that more public investment and an integrated planned transport system is needed for London.
Mr. Wakeham: I should welcome a debate on London Transport and an opportunity for the appropriate Minister to say how much investment has been made in the Underground system—considerably more than by the Government of which he was a supporter.
Mr. D. N. Campbell-Savours: Is the Leader of the House aware that among those who are opposed to the televising of the proceedings of the House are hon. Members who would wish to compromise on the matter? Is he aware that I shall be tabling—within a matter of minutes after the right hon. Gentleman has tabled his motion—a series of amendments that deal with a compromise position, such as on the question of a dedicated channel for Select Committees and Standing Committees? Will he discuss with the parties concerned the possibility of my amendments being selected? If they are, a number of hon. Members will want to support them. I am worried that if they are not selected hon. Members will not have a chance to take a compromise view on the matter.
Mr. Wakeham: The hon. Gentleman takes himself seriously, and, even if no one else does, I try to do so. I would be unwise to comment on his amendments until I have seen them; and he would be unwise to table amendments until I have tabled the motion.
Mr. Campbell-Savours: That is what I said.
Mr. Wakeham: The hon. Gentleman is wise to take that course of action. He will recognise that the selection of amendments is a matter not for me but for Mr. Speaker.
Mr. Tam Dalyell: May I quietly ask the Leader of the House how he and his colleagues would feel if they listened to the 9 o'clock news and heard that a group of them had been subject to blackmail, unspecified, and found that, at the end of the news, no qualifications were made to that statement? May we have a statement next week on exactly what happened at the Mijanou restaurant on 25 May?
Is it by chance the same thing about which Colin Wallace was complaining, which has been well detailed in Paul Foot's serious book "Who framed Colin Wallace?" which has just been published by Macmillan? It is not a matter of loony Lefties and Colin Wallace making these allegations. The loony Lefties would include His Grace the Duke of Norfolk, who believes Wallace, and the second Earl of Stockton, who is recorded as believing him. Is it a matter of the systematic rubbishing by security services of Labour MPs? The Lord President cannot say that the statement is unfounded and disgraceful. There are facts, and I ask the Minister quietly and sensibly to respond to them.
Mr. Wakeham: I shall answer the hon. Gentleman equally quietly. He would be the first to complain if he thought that the Government were responsible for the news on the BBC at 9 o'clock at night. In a free society, the BBC must report, under its own responsibility, what it believes to be happening and stand by it. My hon. Friend the Minister of State, Foreign and Commonwealth Office has made his position absolutely clear. That is the end of it as far as he is concerned.
Mr. Bob Cryer: May we have a statement—it is overdue—next week on the capitulation by the Secretary of State for Transport in accepting the ending
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of a derogation from the weight limit of 38 tonnes for juggernauts, which was solemnly pledged to the House in 1982 in a debate on the Armitage report, and in allowing a weight limit for juggernauts which has been fixed by the Common Market at 40 tonnes as an interim move towards an overall limit of 44 tonnes, the Common Market standard? Are the Government satisfied that our roads and bridges can take 40 tonnes gross vehicle weight? Should not the Secretary of State for Transport explain to the House why the Government are spending £1 billion on improving our roads to carry more and more juggernauts, which will not be confined to any improved roads but will wander around the whole country, bringing even more disruption and oppression to traffic and to villages and towns?
Mr. Wakeham: My right hon. Friend successfully negotiated a satisfactory end date for United Kingdom derogations from the Community maximum lorry weight limits. Against a Commission proposal that our derogation should end in 1996, he insisted that we needed more time to bring sufficient of our bridges up to a suitable strength—which is part of the hon. Gentleman's point. That was a major achievement. The 40 tonnes gross limit and 11·5 tonnes drive axle limit shall not apply in the United Kingdom until 1 January 1999.
Mr. Keith Vaz: May we have a short statement early next week on the position of British citizens still in China? I have a constituent, Miss Elaine Sweeney, of Humberstone in Leicester, who is in Chengdu in Situhan province. I am grateful to the Foreign Office for the steps that it has taken to ascertain her whereabouts. She telephoned her mother this morning.
I am concerned about the arrangements that are to be made by the Foreign Office for the return of British citizens. Today I spoke to five Foreign Office officials to obtain confirmation of the arrangements for her return, but they were not in a position to tell me what was to happen. On the World Service this morning, I heard that the American Government had taken some responsibility for British citizens in that province. Does the right hon. Gentleman agree that it would be more appropriate for the Foreign Secretary to write to hon. Members with an interest in this matter to tell them when another Government are involved and to ascertain, as a matter of urgency, what arrangements can be made for the return of those British citizens?
Mr. Wakeham: The whole House will want to pay a warm tribute to the work being carried out by our ambassador and the staff of the British embassy in China, who are dealing with some very difficult problems in trying conditions, as are many journalists and reporters who are seeking to do their job there as well. I do not want to say anything other than that. However, I can say to the hon. Gentleman that the young lady about whom he is concerned is well and is booked on an aeroplane to leave the country. I hope that that is satisfactory.

Points of Order
Mr. Bob Cryer: On a point of order, Mr. Speaker. You have heard several requests for a debate about a dog registration scheme. May I draw your attention to the fact that an amendment has been tabled to the Local Government and Housing Bill, to require a dog registration scheme to be instituted by the Minister for

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Local Government by means of a statutory instrument, with a requirement for an explanation if the Minister does not provide such a scheme? In view of the widespread concern, especially after the reports of rottweilers attacking young children and old women, it would be helpful to the House if you gave careful consideration to the request for a debate in examining the selection for amendments on either Tuesday or Wednesday, when the Bill will be considered. It would be extremely helpful if you would bear the request in mind, with a view to making a selection that includes that amendment.
Mr. Speaker: I certainly give that undertaking to the hon. Gentleman.
Mr. Harry Cohen: On a point of order, Mr. Speaker. May I ask you to look at the two most recent answers to me from the Minister for Local Government about the poll tax? He begins by saying that the Government are not introducing a poll tax. You will recall that you recently described it as a poll tax yourself. May I therefore ask you to look at that? We need to have an assurance that the Government will not use that as an excuse to refuse to answer such questions.
Mr. Speaker: Every hon. Member may describe legislation in whatever way he likes. I never described it as a poll tax. I use the words laid down in the Local Government Finance Bill 1988.

The Army
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]
[Relevant documents: First Report from the Defence Committee of Session 1988–89 on the Future of the Brigade of Gurkhas (HC 68) and the Government's Reply thereto (Cm.700).]
Mr. Speaker: Before I call on the Front Bench I must point out that many right hon. and hon. Gentlemen wish to participate in this debate. I propose to put a limit on speeches of 10 minutes between 7 pm and 9 pm, but as we have had an early start, I hope that it may be possible to relax that limit. In fairness to all, I hope that those called before 7 pm will bear that limit broadly in mind.
4.7 pm
The Minister of State for the Armed Forces (Mr. Archie Hamilton): This year, we celebrated the 40th anniversary of NATO. During the past four decades, the collective strength and efforts of the Alliance have maintained peace in Europe in the face of the overwhelming military power of the Soviet Union and the Eastern bloc. This year has also seen the 10th anniversary of a Conservative Government, who have not only provided this country with secure defences, but have also played a full part in NATO's search for dialogue and co-operation in East-West relations. Thankfully, NATO's approach has now evoked a response from the Soviets.
There are welcome signs now that the Soviet leadership is moving away from its past exaggerated reliance on aggressive military power as the basis of the Soviet Union's status as a world power. We are determined to encourage and build on this new mood, but we should not be blind to the massive military strength that the Warsaw pact still retains. The recent promises of reductions in its forces are a step in the right direction, but even after the reductions announced last December are implemented, the Warsaw pact will still outnumber the West by 2·4:1 in tanks and artillery in Europe and by 1·8:1 in combat aircraft. That is a huge imbalance which is inconsistent with the requirements of any "defensive doctrine".
Mr. Martin O'Neill: Before the Minister leaves that point, will he tell us the ratios that normal military strategy requires to make no offensive attack worth while? Are we not talking about ratios of about 3:1 at least before commanders would consider that they had sufficient advantage to guarantee an offensive attack any chance of success?
Mr. Hamilton: I have certainly not heard the figure. The thing that matters is the concentration of forces for an offensive attack. That is the significant matter, and that is one of the factors that will have to be considered in the CFE talks. We must ensure that the forces that we are left with are dispersed widely enough to prevent a concentrated attack—the one thing that would undermine the security of the West.
If we are to be certain of preserving our freedom arid security, NATO needs collectively to remain able to show the Warsaw pact that it can gain no possible advantage by trying to pursue its objectives by the use of military force in Europe. The government are not prepared to abandon the policies that have kept the peace for so long. We will not abandon the nuclear element of Western defence,

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which history has shown is the only way in which the aim of preventing all forms of war in Europe—conventional and nuclear—can be achieved, and which is accepted by all members of the Alliance. The Labour party wants to throw away the policy or flexible response which has ensured that Soviet leaders have never felt tempted to use their massive military strength against a NATO country.
Our deterrent policy ensures that any aggression would involve the prospect of unacceptable losses, disproportionate to any conceivable gain. That involves having available to the Alliance a range of options so that a potential enemy is faced with a series of possibilities that cannot be predicted with certainty. Creating uncertainty in the minds of our potential enemies about how, precisely, the West would respond to aggression is one thing. Creating uncertainty in the minds of our allies about our commitment to the agreed policies of the Alliance is another. With this Government, our allies can be certain that the United Kingdom will continue to provide the full range of effective forces and a full contribution to the mutual commitments of NATO membership that are necessary for our defence and that of our allies.
The Army plays a crucial part in this country's commitment to NATO's common defence, principally through its role in the defence of Europe's central region. The centrepiece of this contribution is the British Army of the Rhine, which provides armour, infantry, artillery and air defence units—as well as regiments of Lance missiles and artillery, which are capable of firing nuclear warheads—as part of NATO's Northern Army Group. In war, it would form a fully integrated part of the forces available to NATO's Supreme Allied Commander Europe to carry out NATO's agreed strategy of forward defence and flexible response.
Over the past 10 years the Government have spent about £20 billion more on our conventional forces than would have been spent if spending had continued at the 1978–79 level—its level under the last Labour Government. Because of that we have been able to provide the forces and the equipment necessary to maintain a full contribution to this strategy, and I shall today describe some of the ways in which we shall ensure that the Army can continue to play a full part.
Mr. Tam Dalyell: As a tank-crew national service man in the British Army of the Rhine—possibly it is a residual interest—may I ask the Minister whether the complaints about BAOR accommodation that some of us have heard are founded? Some of the SS barracks which were very good when I was a national service man must surely be deteriorating.
Mr. Hamilton: I did not receive many complaints about Army barracks when I visited the Rhine Army recently. We are constantly spending money on updating and improving them, and there is no question of their being left in their pre-war state. Even though some of the accommodation is not up to the standard that we would like, we find money for improvements whenever we can.
Over this period the capability of BAOR has been increased considerably, and we are continuing to provide for extensive improvements in each of the key areas of firepower, mobility and protection.
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During the past year, a sixth regiment of Challenger I thanks has been introduced. A seventh regiment is on order, and in December last year we decided that all Challenger tanks will be retrofitted with the new Charm 120 mm main armament. The first regiment will be equipped in the early 1990s. We also intend to replace the Chieftain tank as soon as possible, and as my right hon. Friend announced on 20 December, we have given Vickers Defence Systems the opportunity to show that it can deliver Challenger 2 to specification, time and cost. The demonstration phase is due to end in September 1990. Vickers must also show that it is able to develop improved ammunition for the tank's main armament so that it can match the technical developments of the future. We also placed an order in January this year for a further batch of Challenger armoured repair and recovery vehicles which will significantly enhance the combat effectiveness of our armoured forces.
The multiple-launch rocket system will start to be deployed from next year. Three regiments' worth have been ordered. This system will increase the range and potency of the Royal Artillery, initially with a rocket which will dispense bomblets designed to attack personnel and lightly armoured targets. MLRS2, which will dispense anti-tank mines, is under consideration for the mid-1990s, and MLRS3, which will be designed to dispense terminally guided anti-armour munitions, is being developed as a multnational collaborative venture for the latter part of the 1990s. Phoenix, a remotely piloted vehicle which is nearing the end of development, will provide improved targeting information.
A new 155 mm self-propelled howitzer, due to enter service from the early 1990s to replace the Abbot self-propelled howitzer and some of our older M109 systems, will not only provide a significant improvement in the artillery's firepower but should also provide excellent value for money for the taxpayer. A decision on this will be made shortly.
We have continued to improve the equipment of the infantryman. The LAW80 man-portable anti-tank weapon has been in service since January last year. Some 90,000 SA80 rifles are now in service in two versions, the individual weapon and the light support weapon. The weapon is generally well liked and has significantly increased infantry firepower. It is much more accurate than its predecessor, it allows more ammunition to be carried for the same weight, it is more compact, and it has a higher rate of fire.
A development contract was awarded in September last year for the important TRIGAT missile project. This programme, on which we are collaborating with France and West Germany, is aimed at replacing our current anti-tank missiles with more powerful third-generation systems in the mid to late 1990s.
Deliveries of the Warrior mechanised combat vehicle, armed with the 30 mm Rarden cannon, continue. Two battalions are now complete, and two are in the process of receiving their new vehicles. In all, we have ordered 13 battalions' worth of the armoured personnel carrier version. Other versions will carry out more specialised tasks. Our initial impressions of this British-designed and built vehicle are very encouraging and it will enable the infantry to support armoured units more closely. Protection for non-armoured infantry battalions with a

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NATO role has also been greatly improved, now that deliveries of the Saxon wheeled armoured personnel carrier are complete.
Our development of the use of helicopters on the battlefield continues. Our studies have shown that both tanks and helicopters armed with anti-tank missiles have an essential role on the battlefield. Although both can destroy armour, the greater range and mobility of the attack helicopter makes it more suitable for reserve operations and swift counter-attacks. Helicopters are, however, relatively vulnerable to enemy fire and cannot provide the same ability as the tank to hold ground for long periods, or provide firepower support for dismounted infantry.
We are still considering the next generation of attack helicopter for the Army, and we have continued to improve the TOW missile on the Lynx anti-tank helicopter and to develop the ability of the helicopter to fight at night using thermal imaging and image intensification equipment.
The conversion of 24 Brigade to the air-mobile role began in April last year. An Army Air Corps regiment, equipped with anti-tank and utility Lynx and Gazelle helicopters, will be part of the brigade and will begin to form at Dishforth this year. Further support for the brigade in the short term will be provided by RAF Chinook and Puma helicopters.
To strengthen the army's ability to defend itself against the air threat on the future battlefield, we intend to replace the current Rapier system from the mid-1990s with the new, advanced Rapier 2000, which is now under development. We have also decided to form a third air defence regiment armed with the new high-velocity missile currently being developed by Short Brothers.
Mr. Dalyell: Has the Minister read the interesting autobiography by his right hon. Friend the Member for Chingford (Mr. Tebbit), in which he asserts that the Ministry of Defence was really completely unconcerned about the industrial future of Westland? I do not think that I distort it. Can we have the assurance that the Ministry of Defence is now extremely concerned about the industrial future of Westland and will gear its requirements to that industrial future?
Mr. Hamilton: It would be more accurate to say that the Ministry of Defence is most concerned about getting value for taxpayers' money. If, at the same time we can serve the British industry, that is a bonus. However, I do not believe that we are here exclusively to maintain any part of British industry. It would be a mistake for British defence manufacturers to work on that assumption. When it comes to helicopters, one of the problems is that we do not have a continuing demand for them and, therefore, Westland, if it is to have a good future, must look for export orders, as well as relying on the Ministry of Defence for orders.
Mr. John Wilkinson: Will my hon. and gallant Friend clarify in greater detail the Government's policy on helicopter procurement? When the Government are considering the anti-armour role are they looking at aircraft other than the light attack helicopter, such as the Apache and the PAH2? On the question of the transport role for the brigade at Catterick,
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is my hon. Friend considering aircraft other than the EH101 to provide troop lift in the longer term, or is the EH101 to be the aircraft to be bought?
Mr. Hamilton: When it comes to the light attack helicopter, we are indeed looking at alternatives, and the Apache is one that is under consideration. However, we must bear in mind that that is a fantastically expensive aircraft. I am sure that our consideration will be influenced by the cost of it.
As my hon. Friend knows, the difficulty with the EH101 is that although we have not reached anything like the position of having the aircraft, it is the only aircraft even in plan, of its size. Therefore, when considering carrying ability, we would have to think probably in terms of quite a different size of aircraft, if we were not to have the EH101. Certainly, our minds are open on that, too. We are hoping that the development of that aircraft will move ahead, but there are difficulties with it at present.
Sir Jim Spicer: My hon. Friend made the point, with which I am sure we would all agree, that it is incumbent on any company, including obviously, Westland, to look for export orders. However, are we not truly in a chicken and egg situation, because export orders are bound to depend on the home Government being prepared to place their faith in the manufacturer and live up to the expectations that they have accorded a company in terms of placing firm orders? Until those firm orders are placed, it is almost impossible for any manufacturer, however good its product may be, to go out into the field and say, "We have a good product," because the first question that it will be asked is, "If it is so good, why have not your Government bought it?"
Mr. Hamilton: I take that point, but I believe that my hon. Friend would also accept that one of the advantages of the link that Westland has with Sikorsky is that it has a proven aircraft that it can manufacture under licence from Sikorsky. One would hope that that would improve its export opportunities. The role that the Army fulfils at home and abroad is to protect the people of this country and our allies, and to defend the way of life that we enjoy in the West. The skill and professionalism with which the Army carries out that task is worthy of the very highest praise, and is something that impresses me at each unit and exercise that I visit.
In the United Kingdom, the Army is, of course, deployed in Northern Ireland to support the RUC in combating the men of violence, whose aim is to kill and to destroy our way of life.
At present, there are 19 major Army units in Northern Ireland, of which nine are battalions of the UDR, which carry out their task with the utmost professionalism and dedication. There was one major change in 1988—the creation of Headquarters, 3 Infantry Brigade, at Armagh which now directs Army operations in the border area and allows the other two brigade headquarters to concentrate on supporting the RUC in other areas where there is a high level of terrorist activity.
Service men face risks both on and off duty in Northern Ireland. Regrettably during 1988 a naval recruiting officer and 33 regular army and UDR soldiers, most of whom were off duty, were murdered by terrorists, and 229 injured. So far this year six soldiers have been murdered and 73 wounded. The callous attitude of the IRA was typified last year by the murder of six off-duty soldiers who

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were taking part in the Lisburn fun run in June, to raise money for charity, and an off-duty UDR soldier was shot down in front of his wife and children while they were on a family shopping trip.
Nor is this campaign of murder confined to Northern Ireland, as a number of incidents both in Europe and on the mainland of Great Britain since the last Army debate have shown. In Europe, one soldier and three RAF men were murdered last year in terrorist attacks. One soldier was killed in the bombing at Mill Hill. Thankfully, timely action by the security forces prevented the horrific carnage that the terrorists hoped to achieve at Tern Hill and in Gibraltar. I can assure the House that this Government take very seriously the need to maintain and, where possible, enhance the security of the Armed Forces and we shall continue to be vigilant.
Mr. Jonathan Sayeed: Will my hon. Friend take this opportunity to congratulate the American ambassador Mr. Catto on his condemnation of the IRA and the clear message that he sent back to the United States not to support Noraid and help those murderers?
Mr. Hamilton: I shall certainly do as my hon. Friend asks. There has been encouraging support both from the Reagan Administration and, subsequently, the new Administration in condemning the activities of Noraid and in making the point to the American people that they are supporting a terrorist organisation and that nothing is served by doing that.
The resurgence of terrorist activity in 1988 has highlighted once again the outstanding dedication and courage of our service men and women in the face of dangerous and testing circumstances. There are no short-term solutions and the fight against terrorism will be a long one. However, last year the Army, with the assistance of both the Royal Navy and the RAF, achieved a number of notable successes in support of the RUC. More than 500 weapons, 100,000 rounds of ammunition and nine tonnes of explosives were seized by the security forces in 1988. Some 205 bombs were made safe through the extraordinary bravery and skill of our bomb disposal teams. There can be no doubt that those achievements have saved the lives of many civilians and service men who would otherwise have been added to the number already murdered by the terrorists.
In their futile campaign of murder, the terrorists have also brought imprisonment and death upon themselves. In Northern Ireland 127 people were convicted last year of serious terrorist offences. In addition, eight terrorists in Northern Ireland paid for their murderous activities with their lives—five when they were intercepted in the act by the security forces and three who killed themselves with their own bombs. Another terrorist was killed in February this year by a bomb that he was attempting to attach to a former workmate's car.
Those deaths, and the repeated murder of civilians by terrorists in Northern Ireland, illustrate all too clearly the bankruptcy of the terrorists who, after 20 years, have nothing constructive to offer, even to those from both communities whom they falsely claim to represent. The men of violence scar many lives with tragedy, not only those they murder and maim, but the families of their victims. They offer nothing but destruction and despair to
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the communities of Northern Ireland. No one has the right in a democratic society to put aside the law or to use murder when they fail with the ballot box.
It is regrettable that it is clear that the IRA still retains large quantities of sophisticated arms and ammunition, and still intends to carry out a major campaign of violence and intimidation. As long as is necessary, therefore, the Army will continue to play its part in the vital task of maintaining the rule of law. Hon. Members on both sides of the House are keen to have the soldiers off the streets again; it is only the terrorists who keep them there.
I come to other matters and to other ways in which the Army is planning to meet the changing circumstances of the future.
Mr. Eric S. Heller: I am not arguing with the Minister in any way over his remarks about terrorism, but before making those remarks he said that the role of the Army was to defend our way of life. Will he define that more clearly? What does he mean by "our way of life"? If he means the right to have free elections, to have freedom of speech, the right to demonstrate, the right to have a free press, to have free trade unions which have the right to strike, to have control over the armed forces and the police by the civil authorities and so on, I would have no argument with him.
The Prime Minister, however, tends to talk about freedom as though it meant freedom for the capitalist system. For her, apparently, it means nothing else. Certain people in Europe are simply putting forward a social document which seems to be hardly Socialist in character. But the Prime Minister gets all upset and says, "We do not want that Socialism here".
Mr. Julian Brazier: People were being killed while a Labour Government were in power, not just while we have been in power—
Mr. Heffer: If the hon. Gentleman will keep his damn mouth shut, I will try to make my point.
Hon. Members: Order.
Mr. Speaker: Order. The hon. Member is making an intervention. It must not be a speech.
Mr. Heffer: If the hon. Member for Canterbury (Mr. Brazier) will stop making a sedentary intervention in my intervention, I will be able to make my point.
Will the Minister define precisely what "our way of life" means to the Government, especially as the Tories seem to be making it almost impossible for workers to take strike action at any time and under any circumstances?
Mr. Hamilton: I should have thought that the main freedom being defended by the armed forces of the nation was the freedom to elect the Government that the people want. If life is as abhorrent to people as the hon. Gentleman makes out, they will decide that it is time for a change of Government. I do not see that as being remotely likely. Indeed, if the Labour party continues to be seen to support continual obstructive strikes across the country, the chances of us remaining in power indefinitely are very good indeed.
As the House will be aware, the Secretary of State announced on 22 May the Government's plans for the future of the Brigade of Gurkhas. Those plans make it clear that, despite the loss of their current main role in Hong Kong in 1997, there is a worthwhile and viable

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future for these fine fighting men in the British Army, based on a viable brigade structure that would comprise about 4,000 personnel, serving in discrete units which will preserve their distinctive identity and traditions.
It is clear from some of the reactions to my right hon. Friend's announcement that a number of people have missed the point that we are talking about a decision which will not have full effect for another eight years. There will be no reductions in numbers overnight. Indeed, the earliest that any changes could start to he made is in 1992, and it will not be necessary to take decisions about that until well into next year.
The House will recognise that it would be neither prudent nor practicable to be categoric at this stage about the precise number of troops that will be in the brigade after 1997 or, as so much will depend on circumstances at the time, their exact roles or deployments. The Government have, however, given a clear demonstration of their commitment to the Gurkhas by giving them such an assurance about their future so far ahead.
We have also made it clear that a brigade of about 4,000 is open to review in the light of circumstances, including whether the Gurkhas could help to overcome any more general manpower shortages in the Army resulting from adverse demographic trends. When the first decisions on numbers become necessary, we should also be much clearer about the precise effects that demographic changes will have on the Army as a whole.
The Government believe it would be wrong to see the retention of the Gurkhas purely as a solution for demographic problems, with the implication that, if those problems disappear, so will the Gurkhas. The Government's plans are founded on the assumption that, regardless of demographly, we shall, on the basis of the information available at present, wish to retain a significant Gurkha force with roles within the mainstream of the Army's defence commitments. It is on that assumption that the figure of about 4,000 announced by right hon. Friend is based.
Mr. A. E. P. Duffy: Will the Army meet its recruitment target this year?
Mr. Hamilton: It will not meet its recruitment target this year and, on the whole, the trend gets worse as we progress.
Mr. O'Neill: I am not sure whether the House should welcome what the Minister said about the Gurkhas. Is he in any way moving away from the Secretary of State's statement of 28 May, or is he merely dressing it up in a different form?
Mr. Hamilton: I am merely elaborating on my right hon. Friend's statement. He said that there would be about 4,000 in the Brigade of Gurkhas and that is what I am saying. I am also saying, as has my right hon. Friend, that we will look at whether any extra people, above the 4,000 will be needed in terms of the demographic trends. All the signs show that they will be.
Mr. Sayeed: If, as proposed, we reduce each battalion to three companies rather than four, how will the Gurkhas deal with wartime attrition?
Mr. Hamilton: At the moment there are four companies in the battalions based in Hong Kong because of the heavy task which they have to perform. Therefore, they are at a
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much higher level of strength than a British battalion over here. We reduced the number of companies from four to three purely because those in Hong Kong have much higher demands placed upon them.
But of course, the House would expect me to say all this. So perhaps I could quote from a letter to the The Times published on 31 May from Field Marshal Lord Bramall, who as well as being a distinguished former Chief of the Defence Staff is President of the Gurkha Association. In it he said:
"The Government's statement was a positive, helpful and sensible one. In the place of uncertainty the Government was planning firmly for the Brigade of Gurkhas to have a worthwhile and viable role after 1997, and to do so at a basic strength of a four-battalion group, instead of the existing five, and with all the Gurkha regiments intact."
He went on:
"I believe the Government has kept faith with the hillmen of Nepal who, for over 170 years, have rallied to the support of this country, however adverse the circumstances or gloomy the forecasts; and who, in large numbers, have laid down their lives with the utmost gallantry for our security and our future."
There is little further that I can add other than warmly to endorse that eloquent tribute to the Gurkhas. The Gurkhas are rightly renowned for their traditional infantry skills, but they are also very adaptable. They have an assured future as part of the British Army and I am sure that they will meet every new challenge that they will have to face in the future.
I have mentioned the potential effects of demographic changes, and I would like to dwell a little on this problem, which the Army, in common with all large employers will increasingly have to face. The Army is a very major employer of young people, recruiting over 20,000 each year. In future, the Army will be competing for a sizeable share of a reducing resource at a time when employment prospects for young people are forecast to expand. We expect that by 1994 the number of young men aged between 15 and 19 will reduce by some 20 per cent.
In response to this problem the Army commissioned a major study into the problems of Army manpower supply in the years ahead known as MARILYN. I have today placed an abridged version of this report in the Library of the House. The study explores a range of possibilities and will underpin much of our future work on this subject. It is not itself a statement of Government policy and not all the proposals identified will necessarily be implemented.
Mr. Menzies Campbell: Why was not the abridged version of the report placed in the Library before today to give hon. Members the opportunity to look at it, consider its terms and, I hope, make rather more constructive contributions to today's debate?
Mr. Hamilton: I apologise to the hon. and learned Gentleman if he has not had enough time to look at the report. There was some work to do on abridging the original version, and we wanted to get the report into the Library before the debate took place. I am sorry that that could not have been done earlier.
Mr. O'Neill: Who was responsible?
Mr. Hamilton: A number of people asked me for an abridged version of MARILYN and I was able to send them a copy before the debate.
Mr. O'Neill: That was selective.
Mr. Hamilton: It was selective according to the numbers asked for.
We are now aiming to tackle the problem on two broad fronts—by improving recruitment and retention. Retention is important in providing continuity of experience and expertise, and in ensuring that we get the best return possible on our recruiting and training investment. Officer premature voluntary release, although more or less stable over the last two years or so, is running at about 650 a year, and soldier PVR is now about 3 per cent. These figures certainly do not amount to a stampede but they are higher than we should like.
Towards the end of last year, therefore, we provided around £1 million extra for the Army recruitment budget, with the aim of carrying out a couple of pilot television advertising campaigns in the regions. Those have proved very successful, increasing inquiries by 150 per cent. in those areas where the commercial was run. In March this year we launched a major television campaign, the first for eight years. Extra funding of almost £5 million will be provided to the recruiters this year, which will be spent on more television and other advertising as well as an up-to-date management information system to ensure that our efforts are properly and effectively targeted.
We have also looked closely at the way in which the Army runs its recruitment effort to remove unnecessary wastage and to encourage a more flexible and imaginative approach. For example, we shall be looking to boost officer entry by encouraging late entrants and reinstating reservists in specialist areas.
With soldier recruitment, I know that there has been speculation about whether we are planning to reduce our entry standards. In previous years we have been able to be very selective and take only the best—those who considerably exceeded our minimum requirements. We shall no longer have that luxury and so we are intending to spend more time in the early stages of training. We have, for example, instituted a physical development course for those who fail the entry fitness test. Over 250 have attended the course since last August, and most have passed into basic training. It is interesting to note that their wastage rate has been no higher than other recruits.
We need to turn as many inquirers as possible into applicants and as many applicants as possible into trained recruits. Everyone in the chain of command is being made aware of the problem and the need for them to make a personal contribution to reducing wastage and improving retention.
It is clearly important that we have a remuneration package which enables us to attract and retain the officers and soldiers that we need, but people do not leave the Army solely because of pay. Job satisfaction, worries about a second career, family pressures and a number of other factors play a part. I can assure thae House tht we are looking at all those areas.
Hon. Members will be aware that we are looking at the scope for widening the opportunities open to women in the Army. Although we do not envisage changing the long-standing policy of not employing women in direct combat roles, we believe that a significant additional number—I envisage that being well into four figures rather than three—of valuable and challenging jobs can be made available to women.
The House is also aware of our position on recruitment from the ethnic minorities. We have made clear our disappointment over the rate of applications from black
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and Asian youngsters, who represent only 1·25 per cent. of our Army recruits. That is something that we must correct and we look forward to the results of the consultancy study that we have commissioned which will help us decide how to target our recruitment efforts to best effect.
In short, we do not underestimate the scale of the problem and the potential difficulties that we face, and those are being tackled now. There is much that we can do to help ourselves by identifying management practices appropriate to changed circumstances. The demographic trough will not go away, but I intend to ensure that the Army will be able to respond to it in a well balanced and sensible way.
Of course, we cannot consider the future of the British Army without taking into account developments in the international arena and, in particular, the conventional arms negotiations taking place in Vienna.
My right hon. and learned Friend the Foreign Secretary set out the Western aims for those talks in March when he introduced the NATO proposal—in essence, a major reduction, to equal levels, in the key armoured forces essential for large-scale aggression and surprise attack. The recent NATO summit was able to extend that and, in addition, to propose reductions in aircraft, helicopters and manpower—a direct and speedy response to expressed Eastern concerns.
The opportunity is there now for progress towards an agreement. The timetable suggested by President Bush is an ambitious one, and represents a challenge to which everyone, not least Mr. Gorbachev, can respond. The negotiations have got off to a good start, and there is a greater degree of agreement on objectives and goals than emerged over many years in the mutual and balanced force reduction talks. The agenda, I might add, is a Western one, and the Soviets, here as elsewhere, are responding to Western initiatives and ideas. Of course, when Mr. Gorbachev claims that he is tabling a "bold new initiative" our media are liable to take him at his word and forget that we are seeing Western proposals being played back to us.
I am convinced that the Soviet response emanated from a realisation in Moscow that NATO was not prepared to be cowed or browbeaten by threats and that the Western Alliance remained cohesive and strong whilst forging ahead in advanced defence technology. Our steadfast adherence to sensible policies is now bearing fruit in the radical developments in East-West relations.
That commitment to strong defences in NATO was confirmed at the recent summit in Brussels. NATO also confirmed the continuing need for land, sea and air-based nuclear systems in Europe, including ground-based missiles; the rejection of a third zero in SNF negotiations in the clear statement that any negotiation should only lead to partial reductions in short range nuclear systems, and the unanimous view that negotiations on SNF should not commence until agreement on CFE has been reached and implementation is under way; and that there should be no implementation of reductions in short-range nuclear systems until conventional force reductions agreed under CFE have been completed. It was indeed an important summit, establishing a firm basis on which the Alliance can move forward.
Contrary to gloomy prognostications from the commentators, NATO emerged with a united and forceful view of its policies and vision. I recommend to hon. Members the full and unequivocal exposition in the comprehensive concept of the realities of Alliance security

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which Opposition Members seem neither to understand nor to accept. That concept was fully endorsed by all our NATO allies.
Those same allies will be pretty depressed if they have bothered to read the latest policy statement on defence from the Labour party. They will learn that the Labour party rejects the NATO strategy of flexible response and wants to see the end of short-range nuclear systems altogether. The Labour party intends to stand alone in Europe and reject the cornerstone of NATO defence policy that has kept the peace in Europe for so long and has forced the Soviets to the negotiating table.
Mr. Frank Cook: Is the Minister suggesting that France supports the doctrine of flexible response when he says that Britain is alone in rejecting it? Can he be serious?
Mr. Hamilton: I did not say that Britain stands alone; I said that the Labour party stands alone in rejecting flexible response as the keystone to the defence of the NATO Alliance. The French adhere to flexible response. They may not be military members of NATO, but they adhere to the concept of flexible response which is being rejected by the Labour party.
Mr. Heffer: Conservative Members complain about people standing alone in relation to Europe, but the Prime Minister constantly tells us that she is standing alone on issue after issue. I do not complain about that. If she thinks that that is the correct thing to do, she has every right to do that. If the Labour party is standing alone and standing up for something for once, I shall be delighted.
Mr. Hamilton: The hon. Gentleman may well be delighted, but my right hon. Friend the Prime Minister was delighted with the outcome of the summit talks and with the fact that we reached an agreement that was shared by all our NATO allies.
Mr. Brazier: My hon. Friend has given way many times and I thank him for doing so again. For the benefit of the hon. Member for Stockton, North (Mr. Cook) and for Liverpool, Walton (Mr. Heffer), will my hon. Friend confirm that France not only supports the doctrine of flexible response but has just modernised its own short-range land-based weapon system with Hades?
Mr. Hamilton: I was making that clear to Opposition Members. France is very much a believer in flexible response and believes that we should not rely solely on ballistic missiles but should have a number of nuclear systems with which to reverse any attacks that we might receive.
But, of course, it is not only flexible response that is rejected by Labour. So is Britain's independent nuclear deterrent which, as our allies have once again explicitly stressed at the summit, contributes to the overall deterrence strategy of the Alliance.
We have heard much recently from the right hon. Member for Islwyn (Mr. Kinnock) to the effect that he has rejected unilateral disarmament as Labour policy, but has he? The only thing that has changed in the Opposition's policy is that where before Labour would give away Britain's nuclear weapons now they will negotiate away our deterrent.
If a Labour Government were ever elected by the people of this country two things could be guaranteed.
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First, the many CND members of the Labour party in this House would lobby furiously to see Britain's nuclear deterrent negotiated away. Secondly, President Gorbachev would be over here as soon as he decently could offering perhaps two or three times as many Soviet warheads in return for Trident—and the Labour party is committed to deal. As a result, Britain would lose all its nuclear weapons and the Soviets would be left with thousands. That may not be unilateral disarmament but the result is the same.
We live in an unpredictable world. Although no one can disinvent nuclear weapons, the Labour party is prepared to see Britain stripped of her independent nuclear deterrent. Labour's defence policy will be no less dangerous in the next election than it was in the last; it will undermine the NATO Alliance and threaten the security of these islands.
The British people realise this and that is why Labour has no more chance of winning the next election than it did the last.
4.50 pm
Mr. Martin O'Neill: The predictable format of the Minister of State's speech was followed almost to the letter: the 40 years of peace through NATO, the quick reference to the sterling work of the armed forces, to which we all subscribe, a little bit about morale, a bit about fighting terrorism and then a bash at the Labour party at the end—very much the usual stuff.
It is regrettable that it has taken so long for this debate to be held. Normally these debates are over if not by the end of the year at least by the end of January. While we have looking over our shoulder, as it were, the White Paper on the estimates, it would be unhelpful for us today to stray too far into that. I am quite happy to discuss at the appropriate time the relevant parts of the Labour party's defence white paper, which will be a green paper, of course, until it goes to our conference. But that is certainly not our purpose today.
My one regret is that this speech is not being made by my hon. Friend the Member for Knowsley, South (Mr. Hughes), who is sadly not with us today because he has recently had an operation and is still in hospital. I am sure that friends and colleagues hope, as I do, that he will make a speedy recovery.
I associate myself with the tributes paid by the Minister to the Army for the contribution that it makes to the defence of these islands, the role that it carries out in Europe and the work that it does in places such as Belize and Hong Kong. There are many examples of the kind of work done by our troops, very often in discreet and community-spirited ways. The Minister has already referred to the callous and heartless killing of soldiers who were participating in a fun run for charity last year. It is that kind of work that many of our young men actively participate in for the benefit of the community far beyond the 9 to 5 hours that many people seem to associate with work in many areas. Our young men are a credit to their regiments and to the youth of this country as a whole.
The most important contribution that the Army makes, however, is to NATO and above all to the British Army of the Rhine, including those troops in the United Kingdom who are deployed ready to be transferred to the continent at any time of crisis. Certainly in the last 10 days of the run-up to the NATO summit and the subsequent Government retreat, these questions of the size of our

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armed forces have once again come under the scrutiny of the press, as I hope that they will today and in the weeks ahead come under that of the House. It will take some time for us all to appreciate the complexity of the comprehensive concept and the implications of the summit communiqué.
I was fortunate enough to be in Rome on Monday to hear Ambassador Lodogar and Ambassador Dobrynin talk about some of the difficulties which the summit will throw up, and the task of definition which the allies have set themselves over the summer is a very important one. We recognise that until 7 September it will not be possible to answer a number of the questions that we shall be asking today, but in this debate we shall raise some questions which the Minister should try to address in winding up. We want to know the implications for the British Army of the Rhine and for the other allied forces of the cuts which President Bush has announced with regard to United States forces. I do not think that it would be correct for us to say at this time that we should join the French in being counted in because I believe that the different arrangements which the French have with the Alliance are such that this would add an undue complication. We want to get cuts and we want to get them quickly.
Hon. Members who participate in these debates know that over the months and years I have been arguing that we should have been far more positive in response to some of the Gorbachev initiatives—so-called initiatives, because in many instances they were elaborate public relations exercises which looked very good and promised a great deal but were dependent upon a response which, sadly, was not forthcoming until President Bush's belated, I think, but highly welcome statement prior to the summit. We can see from the initial response from the Soviet Union that there are considerable grounds for optimism but at the same time certain uncertainties which we have to look at.
I hope that we can move quickly on this and that the September deadline can be met. It might be interesting if, in winding up, the Minister could share with the House some of the thinking. For example, the Prime Minister was adamant on Tuesday that no British Tornados would be involved in any of the cuts. On the other hand, if we set aside the Prime Minister's prejudices for the moment and look at the question of helicopters, will these be included? If so, will it be the Army's helicopters or the RAF's? Will the Army and the RAF still have joint control over helicopters? This is an old argument which always crops up. I notice in today's Jane's that the Australians have now grasped the nettle and taken away the choppers from the RAAF and that these are now solely under the control of the Army. I believe that in an Army debate of this nature this question should be addressed.
We have had a lengthy and rather depressing disquisition by the Minister on the various types of helicopters. I have listened to hon. Members on both sides of the House talking about the future of helicopter procurement and there seems to be a characteristic indifference by the Ministry of Defence to the industrial implications of a confused policy of procurement. We have to recognise that, if we are to sustain a manufacturing base in this country for any kind of helicopter, it is the
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responsibility of the Government, as the main customer of those manufacturers, to create the circumstances in which exports can be obtained. As has been heard from the Government Benches, the weakest possible case that one can put to a foreign customer is to start by saying that our Government have yet to make up their mind what they want.
In one defence debate after another and in one Army debate after another a succession of Ministers—usually a different one each time, but the script is always the same—have said that they have not yet made up their minds what to do. We need far stronger assurances as to the intentions regarding this part of our manufacturing base, because we are running out of time. We must not forget that, come 1992, whoever is in the European Parliament and whoever is at the Government Dispatch Box, we need to ensure that we have a place in the manufacturing of helicopters. If we do not get it right quickly, we shall be considerably weaker when the appropriate section of the Single European Act comes into play—and defence procurement is one feature of the new arrangements.
As to the implications of the summit, traditionally we have heard that the argument for short-range nuclear forces in Europe is twofold. The first is that they bridge the conventional gap between the Warsaw Pact and NATO, and that because of the willingness of the Soviet and eastern European Governments to spend vast amounts of money on defence, those Governments were able to build up sizeable comparative advantages over the West in certain areas of conventional defence. As democratically-elected Governments in the West were not always as committed as British Labour or Conservative Governments have been to support defence expenditure, and have not supported the Alliance in the way that they should, they have hidden behind short-range nuclear forces.
If there is a positive response to President Bush's initiative, and if by 1992–93 the parity or below parity that we seek is achieved, one of the fundamental arguments for SNF forces in Europe—the gap to which I referred—will be removed.
The second argument for SNF has been inelegantly but precisely put—that the Americans are not prepared to have troops here if there is no nuclear guarantee. When we go to NATO, we hear the phrase, "No nukes, no troops." The Germans are still not satisfied, but their time may have been bought by the allies, at least in respect of the German short-range question. However, the problem will not go away. If Chancellor Kohl is returned to power, it will only be with the support of the Free Democrats, which means the presence also of Foreign Minister Genscher in the Cabinet. If he is in the Cabinet, there will be arguments in favour of the albeit step-by-step removal SNF. Genscher, ever the populist, and looking over his shoulder at the narrow margin between his political existence and non-existence under the German electoral system, will make continued calls for the removal of short-range nuclear forces. If the host country for the majority of SNF is not prepared to allow them, I cannot see the Alliance standing by last year's communiqué.
Since the Brussels summit last March, the situation has changed from one of discussing modernising Lance to debating the continued deployment of existing SNF, and to discussing those forces' possible removal in two or three years' time, subject to other developments. The confidence

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with which the Americans view the prospects of a positive Soviet response to the Bush initiative suggests that that item will be on the agenda fairly quickly.
Although SNF will not be removed until 1992–93, discussions could take place by the end of next year. If agreement is reached on definitions and a deal is settled within six to 12 months, implementation will proceed, according to President Bush's remarks, as speedily as possible. If implementation continues apace, there will be considerable pressure in Germany to comply not least because there will be elections to the Bundestag in December 1990. From the point of view of Genscher and Kohl, there could be no better preparation for those elections than for them to be able to tell their electorate, "We are discussing the dismantling of short-range nuclear forces."
The British Government should not kid themselves as to the length of time that SNF will remain in Europe and the Prime Minister still be walking in step. People decided to leave that unfortunate and unpleasant topic to one side for a little while so that they could get out of Brussels last week as quickly and as safely as they could, but the Minister would be wrong to imagine that a flexible response will remain in its present form.
We also have an interest in the threat posed by SNF to the 55,000 British troops in the central region. Another element is the anxiety expressed to me last year by the German Foreign Minister, and acknowledged by the German Defence Minister, that SNF is no longer regarded as a viable political weapon. Germany sees it as quite possible that the force to space ratio argument to which the Minister referred will apply and that the commanders in the field—to whom the Prime Minister referred on Tuesday as being the people who must make fast decisions—will be left to decide whether or not to use nuclear weapons when confronted by a sudden invasion. Neither the Prime Minister nor the Minister may appreciate that argument, but many right hon. and hon. Members in all parts of the House do.
Mr. Michael Mates: The hon. Gentleman is right about German anxiety, but he mentions only our short-range nuclear weapons and our modernisation plans. We have 88 systems, and I can tell the hon. Gentleman that every one of the commanders in the British and American armies of the Rhine is much more worried about the 1,200 already modified Soviet short-range nuclear weapons. Is the hon. Gentleman not worried about them too?
Mr. O'Neill: Yes, and that is exactly the point I am trying to make. If and until our modernisation programme proceeds, that disparity between our forces and the overwhelming superiority of the Soviets will continue for a considerable length of time. It is thus in our interests to start negotiating for the removal of SNF as quickly as possible. It is argued repeatedly that we should negotiate only from a position of strength, but we cannot afford to wait until we can do that.
Mr. Mates: So Labour would have us give up our short-range nuclear forces?
Mr. O'Neill: No, not give them up but talk about dismantling them—we should recognise that to do so would be to our advantage and that of the German people. There is a consensus across the political spectrum in the
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Federal Republic that that action should be taken. That consensus is recognised by the American President, whose support for the present coalition stems from his wish not to see it out of power, because he would then have to deal with a coalition led by Social Democrats with which the Labour party would have considerable sympathy, as would a number of other Governments in the NATO Alliance. The Minister over-eggs the pudding when he suggests that everyone who signed the Brussels communiqué did so in a spirit of complete unanimity. I know of one right hon. Lady who signed it but who does not agree with every jot, dot and comma of it—and no right hon. or hon. Member believes that she does.
I believe that the flexible response strategy of the Alliance is out of date and should be changed, but that can be done only through serious discussion within the Alliance and disarmament talks of a kind that we can throw our weight behind. What worries me at present is that, although the Americans and the Germans are committed to the comprehensive concept and the implementation of the changed arrangement proposals in the summit communiqué, I have yet to see any clear and frank support from the Prime Minister, who was most unconvincing at the Dispatch Box on Tuesday.
The Prime Minister has said that she will have nothing to do with a sizeable or meaningful contribution to the initiative which probably above all else makes the package attractive to the Soviet Union—the inclusion of aircraft in the proposals. It is a mark of the statesmanship of President Bush that he identified that initiative as a breakthrough that would win over the Soviets, who had asked for it, and he should be given credit for that. The Prime Minister's response has been characteristically grudging and curmudgeonly, and it is fortunate indeed that the other 15 members of the Alliance are bringing good sense to the issue.
The Minister has not had much time to read the fine print of the communiqué, but it would be useful for us to have some idea of the Government's thinking about dual capability and what systems might be considered suitable candidates. Perhaps, for instance, he could give us his views on the 155 mm and 203 mm systems, which I certainly consider suitable.
There are tremendous grounds for optimism on both sides of the European divide—for instance, the election results in Poland, the encouraging developments in Hungary and, indeed, the Soviet Union itself, where the degree of openness in debate has surpassed even that experienced by Conservative Members at their annual party conferences. We have observed disagreements and we have seen the Soviet President being attacked, which is no bad thing.
I realise that in a number of other countries we shall have to wait a considerable time for the progress that is due. In Romania, "Socialism in one country" has been supplanted by "Socialism in one family". Czechoslovakia is perhaps a sleeping giant that has yet to turn. We have considerable grounds for hope in East Germany, but realisation of that hope is still some way away.
Mr. Wilkinson: Does the hon. Gentleman consider the 58 deaths and 500 injured in Uzbekistan, the gassing of 20 in Tbilisi and the unrest in Armenia, which has also caused deaths, a hopeful sign? Or does it suggest to him that the Soviet Union is prepared, if necessary, to use armed force within its own republics and might even do so outside?
Mr. O'Neill: It is true that a great deal remains to be done to improve the situation in the Soviet Union. It is encouraging, however, that at least some of the excesses—I do not say all—have been followed by speedy repudiation by the authorities and the arraignment of those responsible. That has happened in Georgia, although we do not know yet what is happening in Uzbekistan. I do not deny that the state of affairs in the Soviet Union is still patchy. It is very difficult to emerge in a short time from 70 years of tyranny. It is also difficult for a centralised empire to handle the ethnic problems that have emerged in some areas.
It is certainly encouraging that the Soviet Union now recognises that it is spending too much on defence. When I was there earlier in the year, I talked to some economists who said, "We used to think that we spent about 10 or 11 per cent. of our gross domestic product on defence, but we know that the CIA believed that it was more like 15 per cent; we now think that it is about 23 per cent., but we are not sure, and we would like to see the CIA's databases, which are probably more accurate than ours." Soviet expenditure on defence presents such a confused picture that attempts to cut that expenditure, although laudable, may take much longer than we would like. Nevertheless, the Soviets are endeavouring to make changes and we must give them every possible encouragement. President Bush has taken a worthwhile step along that road.
Mr. Sayeed: I accept that the economic argument has helped the Soviet Union to change its mind about building up its weapon systems. Would the hon. Gentleman agree, however, that the reason the Soviets have come to the negotiating table is that the NATO allies have remained firm? Had this country and others followed Labour party policy on cruise missiles, the Soviet Union would never have bothered to negotiate at all.
Mr. O'Neill: That is speculative in the extreme. [Interruption.] I am trying to answer the hon. Gentleman's question. The remarks of the hon. Member for Canterbury (Mr. Brazier) are rarely helpful, and in this case they are simply a nuisance.
The Soviet attitude to talks on short-range and long-range nuclear weapons has been transformed by the arrival of Mikhail Gorbachev and the relationship that he established with Ronald Reagan. That is the single fact that we can identify. Whether the movements within Europe, and indeed the United States, against the deployment of cruise and Pershing missiles and the arms race as it was then developing have been an important factor must be left to historians, but I believe that they have. The hon. Member for Bristol East (Mr. Sayeed) does not, but I think that we must agree to disagree. I do not intend to enter into an elaborate point-scoring exercise.
It is not to the Soviet Union or to the Warsaw pact but to China that I now wish to look, with some trepidation. We in Britain have a unique responsibility to Hong Kong, but what the Minister said about the Gurkhas does not strike me as particularly satisfactory. He seems to have said nothing more than the Secretary of State said in his recent statement announcing a 50 per cent. cut in the brigade. That is not reassuring.
In the past decade, we have learned to our cost that when wrong signals are given out to particular countries at the wrong time we pay dearly, as we did in the Falklands. Until we can obtain far better guarantees of the intentions
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of the People's Republic of China for the people of Hong Kong after 1997 we should not talk about cutting the Gurkhas or withdrawing troops. I believe that hon. Members on both sides of the House will wish to argue that case today.
I thought that the Minister was going to say that in the light of changing circumstances the figure of 4,000 might be raised, but he meandered around the question and never reached a conclusion. If we are told in the Minister's winding-up speech that the Secretary of State's announcement is to be put on hold, many of us will be, if not satisfied, at least reassured of the strength of the Government's intent.
Members of the Select Committee will speak for themselves, but paragraph 305 of the Select Committee report states that there are
"no grounds for concluding that a cut in the number of Gurkha infantry battalions is justified."
They were speaking not just from their hearts—this is a matter of tremendous emotion for many people in Britain but—also from their heads, after many months of well-researched work. The Secretary of State apparently found that work immensely helpful when he spoke on 22 May, but he did not pay very much attention to it. The British Army requires the Gurkhas not only for demographic reasons but because they represent a contribution to the armed forces that still has a place in the British Army. It is worth while for us to continue to support the state of Nepal by continuing to entrust the Gurkhas with the tasks that they have carried out with such distinction and valour for such a long time. We should not consider reducing our commitment to Hong Kong in any way at this time, least of all our commitment in the form of the Gurkhas.
The Minister has spoken about the security of mainland army bases where the experiences of this summer have been particularly distressing. I recognise that the Ministry has responded in a flexible and, one hopes, effective way and that the cessation of these attacks for the moment at least—that is all that we can ever say—is a tribute to the renewed and increased vigilance of our forces, and we welcome the arrangements that have been made. Car numbering may also have made a difference. Perhaps when the Minister replies to the debate he will give us some news of what has happened in that respect.
The increased threat outside Northern Ireland does not quite shape up with the Government's plans for the MOD police force. We understand that the MOD police force may well be cut in order to save money. In the past 10 years the force has been increased, but that was almost entirely due to greater demand as a result of the increased size of anti-nuclear demonstrations. While the MOD accountants see considerable opportunities to save money by substituting private security guards, those security guards have no constabulary powers of arrest, no right to bear arms where appropriate and no training in their use.
The MOD police force has a creditable record and there is considerable concern about the proposed changes to policing arrangements at the Colchester garrison. Military commanders are concerned about security and civilian police officers are worried about their capacity to take on the responsibilities of the MOD police at Colchester given the financial restraints under which the civilian police must operate. The MOD finally dropped the proposals in the face of considerable opposition. May we be assured that this bright idea will not re-emerge in other garrison towns

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and that the increased activities of terrorists on the United Kingdom mainland will be countered by the increased commitment of resources, equipment and personnel to the safety of the bases? We need to ensure that financial reasons will not be advanced for any changes in security. We pay tribute to the way in which the Secretary of State and his Ministers responded to the events of last year, but we should like to think that such vigilance will be maintained, as we know that it will, and that the MOD police will not be involved in any cost-cutting exercises.
In regard to the Government raising funds, I should like briefly to mention Royal Ordnance, the supplier to the armed forces, and the sale of Royal Ordnance land. It appears that the care and attention that the MOD is giving to these matters is less than it should be. The Enfield site was valued at £3·5 million and subsequently sold for between £300 million and £400 million. That suggests that the MOD is not getting the value for money that many of us assumed the Government would have been anxious to achieve.
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. Tim Sainsbury): The hon. Gentleman misled the House—inadvertently, I hope—when he said that it was subsequently sold for £300 million. The site to which he referred has not been sold, has no planning permission and has had no development carried out upon it.
Mr. O'Neill: We shall have to explore that later. I understand that British Aerospace will be selling the land very soon for something in the order of the sum that I mentioned. On a number of occasions the Minister has told us that he has experience in these matters, but his experience seems to have involved a different type of land sale as these sales appear to represent a particularly bad deal for the MOD and for the nation. Perhaps I am using the word "sale" wrongly, but the proposed sale to which I am referring at the price that I mentioned represents nothing less than a complete abdication of the Government's responsibility to the taxpayer.
The Minister referred at some length to the MARILYN report, which I have read about in the press. I believe that it has now been circulated to a select few Members of Parliament and that today, as an afterthought, a copy was placed in the Library. I understand that not even the Chairman of the Select Committee has received a copy, so its circulation must be extremely restricted. A number of right hon. and hon. Members take an interest in these matters and would have regarded it as a courtesy to be told that a copy of the report was available in the Library.
Had it been placed in the Vote Office, we would have seen quite clearly when it came out, but putting it in the Library almost as an afterthought is not the best way of securing all-party support for what may be a worthwhile and politically uncontentious issue. Such clumsiness is increasingly characteristic of the Ministry and was apparent in the announcement of a statement on the Gurkhas on a Monday on a one-line Whip when many members of the Select Committee, who had spent a great deal of time working on the issue, were not in the House and did not know about it. Normally, as a courtesy, I receive word about such statements in advance. The fact that I was not here and a colleague was able to handle it was not a problem for me, but for individual members of
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a Select Committee who put in a great deal of time on a voluntary basis to be treated in such a disrespectful way by the Ministry was nothing short of shocking.
Perhaps the indifference of the Secretary of State is demonstrated by the fact that he is not here today to support his own Department. I do not blame him for not listening to me because I understand his discomfort at some of the things that I have to say, but it is a matter of courtesy to the House and to his own Department that the Secretary of State should take the trouble to be here and to speak on these matters, or at least to let right hon. and hon. Members know that there are good reasons why he is not here. Had he done so, it would not have been necessary for me to raise the matter in the way that I have.
Mr. Archie Hamilton: My right hon. Friend the Secretary of State is in Brussels having discussions with other Defence Ministers. He is sorry that he is unable to be present.
Mr. O'Neill: I accept that as an excuse, or reason. If an agriculture Minister visits Brussels, statements are always made, but if NATO holds a meeting about earth-shatteringly important matters, the chances of getting a statement from the Trappist Secretary of State for Defence are almost zero.
The Minister has usefully expressed the Government's concern about recruitment, which will be a problem in the 1990s. We recognise the demographic changes that are occurring in the country and much will have to be done to attract people from sections of the community who so far have shown little interest in joining the Army. We appreciate the Government's concern about recruiting more people from ethnic minority communities. We are along way away from ethnic minorities being represented in the Army in the numbers that the size of their communities requires. We shall have to watch this issue closely because it is as important for community relations as it is for the defence of this country.
Mr. Harry Cohen: My hon. Friend makes a good point about ethnic minorities in the armed forces. Surely it is wrong for the Government to refuse to monitor ethnic minorities in the armed forces when those minorities are simply not getting the promotions to which they are entitled. The Government should be checking that and doing something about it.
Mr. O'Neill: We have discussed this in a number of debates, in which my hon. Friend participated on behalf of his constituents. A case can be made for more scrutiny and greater monitoring. We must be assured that ethnic minorities will be attracted to the armed forces and that they will regard it as a worthwhile commitment with which they can identify.
It would be helpful if the Under-Secretary of State for the Armed Forces said something about the success of the initiatives that his predecessor took in relation to bullying. He made great play of this issue in a debate last year, and it is important that hon. Members should be updated about the concerns that the former Under-Secretary of State expressed.
The House's treatment of the armed forces is somewhat sketchy. One-day debates are often too short and unsatisfactory. Labour Members have always complained that the time lag between debates is too long.
Mr. Archie Hamilton: A two-day debate for the Army.
Mr. O'Neill: The Minister laughs and says, "A two day debate for the Army." Hon. Members should be allowed more than five days' debate on the Army, which is one of the biggest recipients of public expenditure. The Prime Minister recognises that it is one of the most important responsibilities of the state. Given that she does not recognise much as being the responsibility of the state, hon. Members should be allowed more than 10 or 11 chances to discuss the Army at Question Time and five days of debate. Regrettably, these debates occur as and when the Government have the time or nothing better to debate.
Mr. Sainsbury: What about a debate in Opposition time?
Mr. O'Neill: The Minister is well aware that Opposition time is already restricted enough. If the Government believe that the defence of the country and the time that hon. Members spend debating it are important, many hon. Members believe that more time should be allowed.
There are a number of possible developments in the defence of our country. This is an opportunity for all hon. Members to express guarded optimism for the future, but that optimism depends to an extent on what happens abroad. Our optimism for the future is mainly due to the fact that our armed forces, especially the Army, make a sizeable contribution, which we all support and believe benefits the people who serve in it and the country. I am therefore happy to participate in the debate.
5.35 pm
Mr. Michael Mates: If the hon. Member for Clackmannan (Mr. O'Neill) thinks that these debates are too short, he could oblige us by speaking for slightly less than 45 minutes. We would also get better evidence of the keenness of the Opposition if more than five Labour Members were present.
It is impossible at times not to feel a twinge of sympathy for the hon. Member for Clackmannan as he struggles to square the circle of Labour defence policy, especially when he came to the difficult passage in his speech about nuclear forces. A skilled professional acrobat can walk a tight wire and an even more skilled one can walk a slack wire. However, he canot walk a tight wire if, half way across, it drops 3 ft, which is what happens every time the Labour party tries to put together a nuclear policy that is coherent, honest and acceptable to Labour Members. When the hon. Member for Clackmannan was saying "We shall not scrap short-range nuclear forces," Labour Members behind him were shaking their heads in disapproval. When the hon. Gentleman mentioned the German concern, he did not want to address the enormous Russian superiority. I do not want to follow the hon. Gentleman, whose speech would have been better made in a defence debate rather than one on the Army, which he mentioned only peremptorily.
When the Select Committee on Defence visited the Army over the past year it found it in good heart and professional, working well and offering a service of which we can be justifiably proud. We visited British elements of battalions and troops and staff in the far east. We visited the United Kingdom land forces headquarters in Wilton and I visited many other units. Most important of all, we visited our forces in Northern Ireland. I endorse everything that the Minister and the hon. Member for
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Clackmannan said about how well they are doing. It is a paradox that the worse the conditions for soldiers, the higher their morale and the harder they work for a cause for which they have been professionally trained and which they believe is right. I am sure that they have the support of all hon. Members.
Never before have we concentrated as much on one section of the Army as we have this year on the Gurkhas. Most of the Committee's working time was devoted to them and they caused it to produce the longest and most thorough report in its history. It is an exceedingly comprehensive report and I am grateful not only to my colleagues for the work that they put into it but to the Committee staff, who worked hard on our behalf, assembling all the facts to produce it. I hope that it is as helpful to the House as the Government said that it was to them.
It was slightly disappointing that such a comprehensive report was met with such an uncomprehensive Government reply. I can understand the Government's difficulty about the time scale involved and their not wanting to commit themselves to a state of affairs that may apply in 1997. The Government made two announcements. The first, which was most welcome, was of a firm and definite future for the Gurkhas in the Army after 1997, and everyone welcomes that. Secondly, they produced a figure that amounted to more than a 50 per cent. cut. It would have been helpful to know the thinking behind it, rather than to have the vagueness that surrounded the response and the statement by the Secretary of State.
It was helpful that, during his statement, my right hon. Friend the Secretary of State elaborated in reply to a question by me and said that it was a minimum figure, which was negotiable upwards but was unlikely to go down. I am glad that my hon. Friend the Minister of State has confirmed that. Having considered the subject so closely, we will not leave it alone. We are pleased that my right hon. Friend the Secretary of State will come before the Committee on 26 June, when we hope that we can persuade him to flesh out the thinking behind his decision, to say how he envisages the figure being achieved and to give a more detailed response to some parts of the report.
I could talk at length about the report and elaborate on it, but I see at least five members of my Committee waiting to catch your eye, Madam Deputy Speaker. I do not want to abuse the fact that you were kind enough to allow me to catch your eye first, so I will not take the House through the whole report. I should like to refer, in the context of the Gurkhas, to one serious subject to which both Front Bench speakers have alluded—the future manpower problem. The Committee covered that aspect closely.
It is axiomatic that, if we have 8,500 well-trained, loyal, well-motivated troops, our requirements for them—albeit in 10 years' time—must take account of what our needs are likely to be. When running an Army of a size that will meet the commitments of the Ministry of Defence and the Government, without fat in the system—presumably, that has been removed during the past few years—we must look first at current manpower levels and problems and then at the projections.
My hon. Friend the Minister was honest in expressing concern about the present position and how it could develop. If he had wanted to put it in exact words, he could have done little better that to turn to our report, especially the part that deals with the establishment and strength of the Army, in paragraph 129 onwards. The Committee

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measured the shortfall according to the Ministry's figures, but they are now out of date. The latest recruitment figures which the Ministry produced in a press release on 2 March revealed a slightly worse position than the one on which we reported. We said:
"If this shortfall reflects a worsening trend, there is cause for concern."
Ministry officials who spoke to us acceded to that point.
The Committee went on to look at shortages of infantry. It said:
"The infantry constitutes nearly one-third of the Army's manpower. It is here that the gap between strength and establishment is most acute, and is expected to be about 5 per cent. by 1 April 1989."
The 1·5 per cent. shortage in the forces as a whole has been concentrated into a shortage of 5 per cent. in the infantry. It is from the infantry that the reserve of manpower in Hong Kong will become available when we pull out.
Although we welcome the Ministry's assurances, I hope that it will address more urgently the problem of future recruitment. The MARILYN assessment—manning and recruitment in the lean years of the nineties—is realistic. The recruiting drive that is under way may be successful, but it would be a sanguine person who, given the demographic problems and changes in attitudes to our armed forces, thought that by simply spending money on television recruiting campaigns we will make good the shortfall. I do not believe that anyone in the Ministry of Defence really thinks that. We must get the message across more clearly.
When I look around the Benches I see few Members of Parliament who have had a direct connection with the services, because we are 28 years from the ending of national service. In recruiting 16 to 18 year-olds, we are for the first time recruiting from families where the father has had no military experience—he has not been called upon to do his national service. Until four or five years ago, there was always someone in the family who had served. There was always a photograph on some sideboard of the service man, however much he hated his service while doing it. When those people finished their service, they were proud that they had contributed to our country. That element is missing from every part of family life.
The Ministry of Defence would do well to try a different recruiting approach from the one that assumes that everyone knows what military service is about, what it means and what it has meant in terms of the way that our society has been built up. There is no question but that there has been a sea of change. When one goes round one's constituency talking to people, one finds that it is now the early middle-aged people who have no concept of what service life means. That starts the prospect of a recurrence of the kind of divorce between the military and civilian communities that we had at the end of the 1930s, when there had been a similarly long period during which people had not experienced service life at first hand. I hope that the Government will consider producing a more general, less macho approach to the services. Much of a service man's life is spent on the ordinary facet of service to the community—he has to fight only if the politicians' policies fail, and under the Government that is less and less likely to happen.
I want to make a brief remark about the community charge as it affects the services. Before the Whips shiver, let me say that I am not fighting any old battle—I want to raise a different aspect.
Mr. Frank Cook: A tactical withdrawal.
Mr. Mates: The hon. Gentleman knows me better than that.
There is a real problem which I want to address and on which I hope to be given some elucidation by the Ministry of Defence. The Government have decided that service men were to be treated in the same way as their civilian counterparts. That is not the right answer, because service men are different. I hope that the Ministry fought his corner hard to get them treated differently. The sensible solution would have been to make service men pay an average community charge. That could be easily done.
I am not arguing that service men should not bear the same responsibility as their counterparts, but it is not right, and is sometimes downright unfair, that a service man should be subject to the community charge payable in the area to which the services—mainly the Army—sends him. He can be posted suddenly from a low-rated area to a high-rated area through no choice of his. He can show no democratic reaction. The argument used to support the community charge is that one can vote people out, but the service man can play no part in the way in which local democracy works. He just has to lump it.
The Ministry has an equalising mechanism whereby a service man can be relieved of part of the burden of a particularly severe charge. I hope that, on looking at the anomalies that will be thrown up, and that are starting to be thrown up in Scotland, the Ministry will return to what must be the right solution—a standard community charge for every soldier, sailor and airman, and their dependants, wherever they are.
A particular problem is already arising and I want the Ministry to consider it. More and more married soldiers and officers have bought their own houses, encouraged by us. When they end their service, they do not have to start at the bottom of the property ladder, and that is right and proper. Having encouraged them to do that, we then, for perfectly good military reasons, uproot them from Hampshire and send them to Scotland or Yorkshire. That must be. Because they want to keep the family unit together, they take quarters. They will then, in many cases, be liable to pay a double community charge by being charged at their home and then being told that because they are living in quarters in Catterick, that is their major residence. They will have to pay two charges because they will be liable for the charge in their own homes—
Mr. Frank Cook: The hon. Gentleman would be as well.
Mr. Mates: That is true, but I can go where I choose. The services are different from everyone else. Other disciplined forces, such as the police forces, the ambulance forces, nurses and doctors, can say that they will not go to Yorkshire, for example, if they think that the community charge there is too high. Service men cannot say that, so they are a different and unique case and must be treated as such. It must be unfair for a soldier to buy a house wherever he thinks he will spend his post-service life and then be penalised doubly under the community charge because of a posting. If the service demands him to move, it should compensate him for it.
I hope that that problem will be considered and that we shall receive a comprehensive answer, although I realise

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that we shall not do so today. It is a problem that will bring the community charge into disrepute vis-a-vis the services if we are not careful.
I want to speak briefly about the Falkland Islands and our defence commitments there. I am not going to argue about why or how we are there; what is important is that we are there defending the Falklands. As a result of the considerable expense that the Government have put into the Falklands and the considerable drain on the defence budget at present as a result of the forces and assets there, the Falkland Islands have become rich, especially through the fishing licences that they are able to grant. They have become rich to the extent that income from fishing licences has risen from £650,000 in 1986 to £16 million in 1988. Would it not be right to ask the Falkland Islands Government to make some contribution to our defence costs out of that great wealth?
There is a precedent for that in Hong Kong. We have a defence agreement with the Hong Kong Government because our forces are committed there very much in the interest of Hong Kong's success as a free enterprise society. The same can be said about the Falkland Islands. They are able to receive that great income only because of the great time, effort and expense put, rightly, into defending them. Given how hard-pressed our defence budget is at present and how hard-pressed it will continue to be, it would not be unfair to ask the Falkland Islands Government to make a contribution to our defence costs. I hope that the Government will do that.
5.52 pm
Mr. A. E. P. Duffy: I hope that the House will bear with me if I speak both in the light of the Statement on Defence Estimates for 1989 and in the context of recent momentous events. The defence White Paper addresses the role and equipment of the armed forces including the Army, in chapter three. It deals in its opening chapters with the recent and significant developments that must be in all our minds, such as the challenge of arms control. However, I hope that none of us will overlook NATO's 40th anniversary. In the treatment of arms control in chapter two, I can detect the welcome hand of Sir Michael Quinlan, permanent Under-Secretary at the Ministry of Defence. No one more experienced, more authoritative or more eloquent could have been called upon to perform this exacting and sensitive task.
It is hard for many of us to remember what Europe was like in 1949—exhausted and discouraged, with its economies in ruins. That was 40 years ago. Everyone born in north America and western Europe since then has been brought up under the strength of NATO's sheltering wings. Our vitality has revived and our common defence has been assured. That is no coincidence.
From the beginning, NATO was more than a security system. It provided the means of expression of a common purpose and a common vision. It established a community of values which bound together a growing number of nations in north America and western Europe. I am proud to say that I attended its anniversary ceremony in Brussels in April. Let us wish NATO in its 40th year many peaceful and happy returns of the day. In the immortal words of the great Sophie Tucker, might we not also say of NATO,
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"Life begins at forty"? All of us wonder about the next role for NATO. I believe that it will have, not simply another lease of life, but a more meaningful one.
We are debating the Army at a time of growing optimism throughout the world, with the intermediate nuclear forces treaty and the opening of the Vienna negotiations. I am proud to say that I visited Vienna last month. I visited at least half of the arms control national delegations and I can testify to the new climate there. Unlike the mood at the time of the mutual balanced force reductions there is a sense of optimism, purpose and a determination not to get bogged down. We are going places in Vienna. I am confident that we shall get results and some people are now talking about results as early as a year hence—that is, the preliminary results, not the implementation. Is this not exciting, because clearly we are on the verge of a new chapter in the difficult history of East-West relations?
I found the Soviet arms control delegation just as anxious to get results as the United States delegation and our own. I went from one to the other and back again. However, it would be wrong to think that all has changed for the good in eastern Europe as a result of Mr. Gorbachev's policies. Many human rights problems remain, so as we go forward Alliance cohesion will prove critical if we are to shape a more promising world. We cannot possibly imagine that recent developments have changed everything. The Soviet Union will remain a heavily over-armed society. Without a secure Alliance defence, it could be increasingly tempted to believe that it has the risk-free option of using force or threatening to use force against us.
Intentions are not the same as capabilities and intentions can change overnight, at little cost. They have done so frequently in modern Soviet history. Furthermore, not all capability categories were covered by Mr. Gorbachev in his United Nations speech last December. He covered battlefield firepower, but not manoeuvrability—that is availability, readiness and deployment—air defence, air attack, combined forces, mobilisation and reinforcement.
Let us consider military industrial capacity, whatever the consumer constraints in the Soviet Union. Can the Minister confirm reports that Soviet tank production levels are actually rising? I am thinking of the FST1 and the T80. Yet at the same time Mr. Gorbachev calls for a reduction in tank deployment. Whatever may be true of justice, it is not true of peace that
"It droppeth as the gentle rain from heaven".
We must work for it, with a stout heart and a cool nerve. Within the Alliance, we must work for peace together. Unity and determination must be our watchwords.
Last week the NATO summit demonstrated that there is much on which the Alliance agrees. It agrees that the Alliance continues to provide a framework of stability and that within that framework the 16 free European and north American nations should work together to pursue the Harmel guidelines. It also agrees that true security in Europe continues to require the presence of United States forces, both nuclear and conventional. However, beyond that we run into real difficulties—not new, but real, difficulties.
What level of forces do we require for deterrence? What type of nuclear forces do we need and where should they be deployed so that the risks, as well as the proven benefits, are fairly distributed? To what levels can we safely reduce,

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and what would such adjustments imply for forward defence and flexible response? That is one kind of difficulty, which does not concern Opposition Members or the House exclusively; it is broadly based throughout the Alliance.
Another difficulty has to do with how we can make sense of the changes taking place in the Soviet Union and eastern Europe. The North Atlantic Assembly believes—I know that my colleagues on both sides of the House will know that what I am saying is well founded—that parliamentarians, unconstrained by necessary adherence to formal Government positions, can bring a fresh perspective to NATO's deliberations, blending an understanding of, and concern for, military aspects of NATO's plans with a knowledge of the underlying reality of public opinion.
That is where we come in. No one is better placed to speak about public opinion than we are, and it is on the change. All parties represented in the North Atlantic Assembly are determined to question and confront even the most sacrosanct and sensitive elements of current NATO policy.
On the other hand, we also believe that the Western Alliance must test to the full the promises of current Soviet rhetoric. If the Soviets continue to invest heavily in military capability, that must say something about their long-term intentions towards us. As long as the Soviet Union's security and foreign policies are not subject to democratic control, NATO must keep up its guard. No defence means no détente, which, in turn, means no lasting change for the better.
The estimates show that spending is set to rise marginally. The increase is less than the rate of inflation and hence amounts to a real cut. Most concern today, therefore, will focus on the details of how the money is to be spent and how it will affect the Army. Real spending on equipment will be cut by perhaps 10 per cent., and this is the year when the uncuttable spending on Trident is near its all-time high, so conventional equipment will suffer badly.
No service will avoid going without some things that are needed. Some procurement programmes will be extended, which costs money in the long term. The White Paper does not tell Members of Parliament—never mind the voters—what they need to know. How will the equipment cuts be managed and how much will individual items of equipment cost? The White Paper does not say much about what is being done to deal with the manpower crisis to which the Minister admitted in his opening speech. That is crucial in present conditions. Are some combat units operating under strength for example?
The White Paper confirms that the Army will get its seventh regiment of Challenger tanks. But the Army also has a vital need for modern artillery and anti-tank weaponry. It is good news that the Army is to start to deploy MLRS—the multi-launch rocket system—next year, but when will the collaborative family of third generation anti-tank missile systems—TRIGAT—come into service? The Minister also confirmed that the improved Westland Lynx Mark 7 anti-tank helicopter is now being deployed in support of 1(BR) Corps in West Germany. But when will it receive infra-red TOW roof sight modules, secure radios and Ferranti AWARE radar warning receivers?
Evidence of overstretch can also be found elsewhere in the Alliance. Increases in defence spending by all our allies
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are unlikely because of budgetary pressures. The need will grow for more cost-effective equipment procurement, more support for the European procurement group, IEPG, more efficient deployment of resources to improve the teeth-to-tail ratio, better use of reserves and more practical co-operation between allies—that is, an examination of appropriate roles, risks and responsibilities in the Alliance, not only in the NATO area but in other vital theatres such as the Gulf. Henceforth, all of us in the Alliance will have to think smarter, not richer.
There are other lessons of the past to be remembered and stringent conditions for our success that cannot conveniently be wished away. I refer again to strong defence. A strong defence is as necessary—perhaps more so—in times of movement such as we have witnessed, sadly, on the other side of the world in recent days as in times when the status quo prevails.
United, the Western Alliance will determine events. Having rebuilt western Europe and assured the strength and cohesion of the West, NATO can fulfil its second great historic task—to facilitate peaceful change in the East. I envisage a second and more meaningful lease of life for NATO. It is the best institutional device that could be created to fulfil a number of necessary functions: first, to co-ordinate joint verification; secondly, to monitor East and West compliance; and, thirdly, to provide sanctions for violations. If NATO did not exist, we would need to invent it. There is nothing available to us that can work so effectively for East-West reconciliation and ultimately the ending of the painful and grotesque division of Europe.
6.8 pm
Dame Janet Fookes: I wish to deal with only one theme tonight because I am aware of your injunction, Mr. Speaker, at the outset of the debate, that we should bear in mind the fact that others wish to speak. You, Sir, addressed your remarks to hon. Gentlemen; I like to feel that that was because you felt that a lady would not need such an injunction.
Both the Minister and the Opposition Front Bench spokesman touched on my theme, which relates to the future manpower requirements of the Army, bearing in mind the alarming trend in the number of young people which will become evident by the mid-1990s. The Minister said that by 1994 there would be 20 per cent. fewer 15 to 19-year-olds coming forward. Already concern is being expressed about recruitment in the Army and the problem likely to get worse unless urgent steps are taken. After all, it is not only the Army that is looking for bright young people—it is the Royal Navy, the Royal Air Force, the police and, of course, industry and the professions. I suspect that there will be something of a rat race and that we shall need more than attractive television advertisements to recruit.
I noted with pleasure the Minister's reference to making greater use of women in the armed services, particularly in the Army. I was not altogether surprised to hear him say that it was still not the intention to change the long-standing convention and rule that women should not be used in direct combat. I hope that my hon. Friend may consider the matter and perhaps come to modify his views in later years. It seems to me that in every sphere women are now treated on equal terms with men and it is a pity that they should not be given more encouragement in the Army. It will be an interesting race between the Army and

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the Church of England. We shall have to wait and see which can hold out longest against admitting women to its innermost portals. More seriously, I think that we shall need to look closely at the role of women and make a greater role for them in the coming years.
If recruitment techniques are important, so also is retention. That brings me to the main burden of my remarks—the question of retaining those who have already been persuaded to enter the Army. The statistics are not favourable. My understanding is that over the past five years the early loss of trained personnel has increased by some 70 per cent. When one thinks of the wastage that that represents in public funds and of the wastage to the Army in losing those who have most to offer, it is most worrying.
What are the reasons? In my view, one of the outstanding reasons as it affects the Army is the concern and discontent felt about housing arrangements. It affects all the armed services, but the Army bears a disproportionate amount of the burden—far more than the Royal Navy and more than the RAF. It springs from the nature of Army service. At any one time, more than half our Army personnel are away from mainland Britain, and even when they are in Britain they may be widely dispersed, far away from their natural homes.
Reference has already been made to the encouragement by the Ministry of Defence for people in the services to own their own homes. That is put forward as an admirable aim, as no doubt in many ways it is, but I do not believe that sufficient thought has been given to the peculiar difficulties which arise for Army personnel. Because they are so often away from home, they are obliged to be in quarters for which they have to pay. If they cannot live in their own homes, they have to let them—assuming that they can find suitable tenants who will pay up and look after the property.
I know from my membership of the council of the Soldiers' Sailors' and Airmen's Families Association that innumerable horror stories are circulating about difficult tenants. What is more, the tenancies have to be managed, and often the agents take 15 to 20 per cent. of the rent. So the unfortunate soldier is squeezed between paying for his quarters on the one hand and all the difficulties of letting a property on the other.
The alternative—not buying at all—means that on leaving the service, whether prematurely or at the end of a full term of service, the soldier has the major problem of seeking to buy a home. When one thinks of the increase in property prices over the years, one realises that there is no way in which a service man can get easily into the market. It is not surprising, therefore, that under persuasion from wives and families generally a great many promising young men are leaving the service early.
I have here a letter from the controller of SSAFA, Major-General Charles Grey, who wrote to me as an MP and as a member of the governing council of SSAFA because SSAFA sees at first hand the difficulties which arise. I quote briefly from his letter:
"As you may know, SSAFA has about 6,000 volunteers in its UK network. They cover every town and village in the country and provide trained caseworker support for Service and ex-Service families in need, or difficulty of any description. These local workers have been representing
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increasingly strongly about the number of homeless ex-Service families in their areas, particularly from the Army."
He also refers to the network of services, professional and voluntary, retained by SSAFA overseas and adds:
"We are now regularly faced with evidence of a widespread sense of apprehension and insecurity—particularly among Army families. This is directly attributable to their perceived housing difficulties."
Later he says:
"Service manning is not our problem; but no one in close touch with every variety of Service family, as we are, can doubt that vast sums spent on training are being wasted for want of the comparatively small investment necessary to allow families a sense of future housing security."
That is the problem. What of the solution? I have worked closely with my hon. Friend the Member for Canterbury (Mr. Brazier)—I hope, Mr. Speaker, that he will catch your eye later in the debate—who has been instrumental in bringing forward an excellent scheme. He has even proposed a new clause for the Finance Bill as the proposed scheme has tax implications. Briefly, it is an armed forces house purchase savings scheme. It seeks to allow various savings institutions, such as building societies, banks and insurance companies, to take part in a savings scheme through which a service man could save money with the same tax incentives as people in civilian life, so that at the end of the day he will have sufficient money to enable him to buy a house. The rental portion of his accommodation charges would be treated as an interest payment and the relief that he would get on that would he paid to the institution, presumably on a monthly basis. He could also add voluntary savings which would attract the same tax relief as is given to a civilian buying a house.
That proposal seems eminently sensible, and far better than trying to devise elaborate schemes to support service men buying their own houses too early when it does not make sense for them to do so. I hope that I am pushing at an open door in relation to my right hon. and hon. Friends in the Ministry of Defence, but I am concerned about my right hon. and hon. Friends at the Treasury, who are not noted for their immediate espousal of imaginative schemes which in some way affect taxation—they have to be made to see that there is a real problem in retaining manpower in the services and that while they may be saving a small amount in immediate taxation, the millions that are being wasted on people who leave the services too early have to be set against that. So far as I can see, the Treasury is not fond of sums of that kind because they do not fit into its rigid thinking. I urge my right hon. and hon. Friends in the Ministry of Defence to make the strongest possible representations to Treasury Ministers to ensure that they understand the wider implications and not just the narrow concepts so beloved of that Department of State.
I hope that my hon. Friend the Parliamentary Under-Secretary of State for the Armed Forces will deal with that subject in his reply to the debate and that he will give us a word of encouragement. If there is one thing that could be done to retain much-needed Army personnel at a time of increasingly shrinking numbers of young people, that proposal would do a great deal to solve the problem. I commend it to the House and to the Government.
6.18 pm
Mr. Menzies Campbell: I am sure that I speak for many hon. Members when I say that we find ourselves totally in accord with the thoughtful and perceptive observations of the hon. Member for Plymouth, Drake (Dame J. Fookes).
In support of what was said by the hon. member for Hampshire, east (Mr. Mates), may I draw to the attention of Ministers the difficulties that the community charge is creating for serving men and women in the three armed services? I have a constituent who is a private in a Scottish regiment. He has chosen to buy his own house in my constituency, but he has recently been posted to a Scottish barracks. He pays a personal community charge in the district to which he has been posted but, because he has his own house which is unoccupied, he has to pay a standard community charge, that having been expressed in Scotland as a multiplier of two. That means that from the income of a private he pays three community charges.
That appears to be an extraordinary burden to put on someone who has to go where he is sent and who has taken the entirely responsible and, as I am sure the House would agree, reasonable step of buying his own home. I hope that that is a matter that the Treasury and the Ministry of Defence will look at with far greater sympathy and understanding than has necessarily been displayed in such matters up to now.
I shall say a word or two about the events of the past week, which have bulked to a certain extent in the speeches we have already heard. I am well aware that loyalty is at a premium on the Government Benches, but I am sure that even the Prime Minister's most exuberant supporters would find it difficult to consider that her conduct of events in the immediate period up to the 40th anniversary celebrations of NATO should be regarded as a model for others to follow or, indeed, for her to follow on some future occasion.
The strength of any alliance depends on the unity of its members and on the unity of its purpose. In the case of an alliance of democratic countries, having as its central purpose the preservation of democratic values, it appears all the more necessary that there should be tolerance and understanding amongst its members. Negotiating with one's allies as if they were one's enemies is hardly likely to cement an alliance. It may be emotionally satisfying, and even politically self-justifying, but it is much more likely to lead to decisions which represent the least common denominator rather than the highest common factor.
Nor in an alliance as diverse as NATO is such an alliance to be easily preserved if there is no sensitivity amongst its members about the domestic political circumstances of each other. Just as the British Army makes a substantial contribution of the highest quality to the military effort of NATO, so too should the British Government be willing to make a similar contribution to the joint political effort of the Alliance. I doubt very much that Chancellor Kohl, never mind Mr. Genscher, felt that our Prime Minister's attitude in the period immediately prior to Brussels was one that took account of the interests of Federal Germany or, indeed, the interests of NATO. We maintain such units of the British Army as we do in Federal Germany for the purposes of the Alliance. Anything that diminishes the strength of the Alliance, potentially or actually, diminishes the effectiveness of our military contribution.
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Nor are we able now to ignore the geography of Europe and its history. Germany sits at its centre able to look east or west for expansion. In the past, such expansion took a physical form and a military one, but the strength of Federal Germany, at least today, lies in its economic capacity. It is little wonder then that President Bush pays attention to Chancellor Kohl's concerns. With the United States of America's balance of payments and budget deficits, he has little alternative. Defending a weakening dollar against a strengthening deutschmark requires a sensitivity to the political circumstances of federal Germany.
In the vacuum caused by the abnormally long running-in period of the Bush Administration, the United Kingdom had a remarkable opportunity to be a bridge between Europe and the United States. We did not take that chance; rather we used the time to take up positions from which ultimately we had to depart, even on the most optimistic Government interpretation of the comprehensive concept.
I believe that the whole House would join in applauding the initiative taken by Mr. Bush. It is an initiative that can justifiably be described as bold and imaginative, because, quite apart from its own intrinsic merit, it had the effect of putting to the test the statements and the offers previously made by Mr. Gorbachev. The initiative underlined that the key to arms reductions at any level in Europe is parity in conventional forces. That is self-evident from the terms of paragraph 48 of the comprehensive concept. However, there is an old rule of interpretation of documents, which is that one should always read them as a whole and not paragraph by paragraph or sentence by sentence. When one looks at the relationship between paragraph 48 and paragraph 49—the paragraph that provides that no decision about the follow-on to Lance will be taken until 1992—it is not difficult to comprehend that, if what is proposed in paragraph 48 has come to pass, or is even reasonably within grasp, there must be great doubt that there will be a political will in the United States to proceed with a follow-on to Lance. Paragraph 48, therefore, is not the end of the story. Indeed, it contains within it, when read with paragraph 49, the mechanism for its own obsolescence.
If the Bush initiative leads to a reduction in the number of United States troops stationed in western Europe, that inevitably will mean that in Europe we may have to assume, relatively, a larger responsibility for our own defence in the provision of conventional forces. That must have implications for all the armed services, but particularly the Army, and especially in the light of the demographic trends which have already been mentioned. Those trends work against the Army as much as they work against any other form of employment.
When the debate began, I like others, was minded to say that I was awaiting with interest the publication of the Government study on manpower, the MARILYN exercise, but we learned, almost as soon as the debate began, that an abridged version had been placed in the Library. I understand from members of the Select Committee that the abridged version has been available to some of them for several weeks. I believe, putting the matter no higher than this, that it is unfortunate that those of us who have an interest in these matters were not given an opportunity to make some study of that document in

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advance of the debate. Apart from anything else, it would have helped us to make comments or observations which, if not any wiser, should at least have been better informed.
Mr. Archie Hamilton: I should put the hon. and learned Gentleman right on that matter. The Select Committee was given an abridged version of the MARILYN report, but that was a classified version. It is the unclassified version that is now in the Library.
Mr. Campbell: I accept the Minister's explanation, although I note that it did not come with an apology. I still think that it is unfortunate that those of us who have an interest in these matters were not able to be better informed before the debate began.
Those manpower difficulties make it all the more difficult to understand the Government's failure to accept in their entirety the conclusions of the Defence Committee on the future of the Gurkhas. The Minister said something about the Gurkhas when he opened the debate. However, although what he said may have been slightly different in tone, it was no different in substance from what was said when the announcement was made some weeks ago. It is notable to remind ourselves that the Defence Committee argued for the same number of men and for no reduction in the number of Gurkha battalions. The Government's proposal is to reduce the number of troops by half and to reduce the number of battalions from five to four.
Apart from any moral obligation, which quite a number of hon. Members feel we have towards the Gurkhas, the manpower demands of the Army—as the
Chairman of the Defence Committee trenchantly pointed out—should surely dictate acceptance of the Defence Committee's entire recommendations. I add the rider, which to some extent has already been anticipated by the hon. Member for Clackmannan (Mr. O'Neill), that recent events in Hong Kong, where the Gurkhas are stationed for certain specific tasks, should be the subject of careful analysis to establish clearly whether the decision—which, if not taken, has at least been proposed—is one to which the Government should adhere in the light of circumstances which may clearly be subject to radical change.
There appears to be some evidence that recruitment may be easier in areas of the United Kingdom where there is a traditional geographical link with particular regiments. I am sorry that the Secretary of State is not here today because I wanted to remind him of his notable participation in the campaign to save the Argyll and Sutherland Highlanders, a regiment based at Stirling castle, of which he was a distinguished officer who saw active service. The regiment had a particular link with Stirling and the surrounding countryside. I hope that the Government will take account, in what I hope will be a sophisticated approach to the recruitment problem, of the fact that such local loyalty frequently can be a much more effective recruiting sergeant than simply giving opportunities to those interested in the Army to be assigned to a regiment with which they have neither family nor geographical ties.
I wish briefly to deal with two matters to which some reference has already been made. The first is the position of ethnic minorities within the armed forces. It would be folly to pretend that that issue could be easily resolved, but
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it must be the case that admission to a particular regiment, however distinguished, and promotion within the Army should depend on ability and nothing else. Not only must that be the policy of the Ministry of Defence; it must be the reality. The House looks to the Minister to give us some reassurance on that matter.
With regard to the Territorial Army, if the demographic trends persist, that branch of the services will have to assume greater burdens. I hope that the Government will act to make membership of the TA as attractice as possible, not least to those who opt for early retirement from the armed services. I do not believe that the issue is necessarily simply one of money; it probably lies in a proper recognition of the role of the TA and the provision of up-to-date equipment and proper opportunities for training.
I do not expect the Minister to tell us this evening of the progress of the demonstration phase of the Challenger 2 project, but he knows that a number of hon. Members believe that the effect of the decision of 20 December 1988 was to put Vickers on probation. We await the results of the demonstration phase with great interest. It might be of some help if the Minister could say when he expects to be in a position to give the House some information; or are we to wait until the whole of the demonstration phase has been completed?
Like other hon. Members, I have been extensively lobbied by the companies bidding for the contract to supply 5,000 four-tonne trucks to the Army over the next few years. They have been generous with their briefings and modest with their hospitality. It is as well that they have not sought to transpose those adjectives. All the companies make persuasive cases. Those of us who do not have access to the results of the assessment tests, or who have no particular expertise, are undoubtedly at a great disadvantage.
I accept that a whole range of factors must be taken into account—the buy-back scheme, for example, that has been proposed by one of those competing for the contract; the proposal of another to make a large investment at Irvine, which lies close to the boundary of the Secretary of State's constituency—who would no doubt deal with that matter with his usual objectivity; others who make high claims for the United Kingdom content of the vehicles to be produced; others who emphasise the costs and others the ability of their company to fulfil the contract if awarded, thereby seeking to draw unfair comparisons with other companies. I suggest that the criteria to be adopted should be that the product chosen must be the best for the job. Financial considerations are important, but the Government should not be seduced by them into accepting a tender for a vehicle which, on capability grounds alone, they would not accept.
The men and women of the British Army are heirs to a long and valuable tradition. Their professionalism is recognised wherever they go. They can be called upon at any time to fight in dangerous conditions and they keep the peace in difficult and dangerous circumstances in Northern Ireland. They are often called upon when public services either decline or are unable to discharge their responsibilities. Those men and women deserve our commendation; they also deserve our practical support.
6.35 pm
Mr. John Wilkinson: Exactly three weeks ago, almost to the hour, I was struggling to get on an aeroplane to take me out of Shanghai to Hong Kong in what was clearly a rapidly deteriorating situation. I was told that flights were fully booked until the middle of this month. I did manage to get out of Shanghai, and I am conscious of the extreme stress of those who, in the worsening crisis of the past few days, must have faced a real emergency in trying to get out with their families and whatever belongings they could take.
On 22 May I was with the Gurkhas on the borders of Hong Kong. It was the day my right hon. Friend the Secretary of State made his statement about the future of the brigade. My tour of China had been with the defence committee of the Western European Union, and had begun with a unit of the People's Liberation Army just outside Peking, although soldiers were not yet very much in evidence in the city. The students were much in evidence, as they were in Xi'an and Shanghai.
I do not wish to be too anecdotal, but when I reached Hong Kong I was struck by the optimism of the Brigade of Gurkhas and the strong feeling among its officers that the bottom figure of 4,000 quoted by my right hon. Friend would never be reached and that the Crown would have at least as much need of the brigade, probably in numbers almost up to its present strength, as far ahead as could be foreseen. Of course, the unit most under threat is the 2nd Battalion of the 2nd Gurkhas, but I was told that it had been under similar threat before and had twice escaped disbandment in recent years.
If we study what has happened in China in recent days, and if we coolly and rationally re-examine our policy towards Hong Kong, I am sure that we would all accept that it would be wise to heed the warning of the hon. Member for Clackmannan (Mr. O'Neill) and not pursue the policy announced just as though nothing had happened.
The roles of the Gurkhas in Hong Kong—the 48th Brigade—include the maintenance of British sovereignty to 30 June 1997; support of the civil authorities and the Royal Hong Kong Police in the maintenance and stability of security; training for limited war operations; assistance to the civil community in the event of natural or other disaster; and the prevention of illegal immigration to Hong Kong. In 1987, no fewer than 22,000 illegal immigrants were arrested at the borders of Hong Kong.
The scale and dimension of the problem of the Vietnamese boat people has afflicted Hong Kong to a growing extent in recent weeks. Her Majesty's Government claim that this immigration problem is merely the result of economic pressures. Nearly all refugees in history have come, at least in part, to take the terrible decision to leave their homes as a result of economic pressures. We must also bear in mind the fact that the Government of the People's Republic of Vietnam have not condemned the action of the People's Liberation Army in brutally crushing the students and other freedom-loving people. Therefore, I should have thought that, at least in part, the motivation of the boat people was to escape a politically unacceptable regime.
We hope that sense will prevail and that peace will be re-established in the People's Republic of China. If it is not, there is the threat of a major immigration problem on the frontiers of Hong Kong. Undoubtedly, if that
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movement of people were to persist into the future the Gurkhas would be very much needed. All the security forces involved in the apprehension of illegal immigrants would be required. The plans of Her Majesty's Government call from 1991 for the disbandment of the Royal Hong Kong Regiment, the Volunteers, who play an important part in the policing of the border. I hope that the timescale within which their disbandment is envisaged will also be re-examined.
I trust also that the Government—in view of the circumstances that have manifested themselves so horrifically in the People's Republic—will review their policy on the issue of British passports with the right of abode in the United Kingdom for ex-members of the Royal Hong Kong Regiment who, as former servants of the Crown, must prima facie view with considerable apprehension their future in Hong Kong under the sovereignty of the People's Republic after July 1997.
Another aspect of the plans of Her Majesty's Government is the withdrawal of the first of the Gurkha battalion of 48 Brigade from Hong Kong in 1992. You, Mr. Speaker, will have recollections of partition in India in 1947. You may still have been serving in the Indian Army in those dark days of mid-August 1947. The lesson of the past few days must be that it would be extremely unwise of the British authorities in Hong Kong to diminish the forces of the Crown available to support the civil power and police the frontier before the handover of power. Nature abhors a vacuum, and at a time of political uncertainty the vacuum created by the diminution of physical power could have alarming consequences.
On Sunday 21 May, my wife and I marched in Hong Kong with a huge and, at that time, apprehensive but not yet angry crowd of 500,000 people demonstrating peacefully in favour of the demands of the students and other freedom-loving people in the People's Republic. I felt then that the demonstrations in China could only end in tears. My other strong feeling at the conclusion of that march—it was the biggest demonstration ever in the colony's history—was that the peaceful manifestation of deep feeling on behalf of Chinese people in Hong Kong in favour of the aspirations of fellow Chinamen in the People's Republic could quickly turn to deep bitterness and to nasty anti-British kinds of riot.
Since then, sad to say, there have been some riots in Hong Kong but—thank goodness—they have not got out of control. Any diminution in the British military presence in Hong Kong too soon, however, could be extremely dangerous because in the last resort that presence is needed as an aid to the civil power.
Something else leads me to question the Government's decision, so far in advance of the handover of power in Hong Kong in 1997, to make at least outline decisions about the future of the Brigade of Gurkhas. The point was well outlined by the Chairman of our Select Committee, my hon. Friend the Member for Hampshire, East (Mr. Mates). The so-called demographic trough is now extremely alarming. We have a shortfall of about 5 per cent. in the infantry and the very nadir of the demographic trough will occur when the rundown of the Brigade of Gurkhas is due to start.
Traditionally, 80 per cent. of Army recruits are taken from the 16-to-19 age range. That has been the consistent pattern. Of that age range within the population as a whole, in the last decade the Army has on average recruited 0–8 per cent. By 1993, the number of 16-year-olds

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in the population will have dropped from the present 400,000 to 332,000, and in 1995 the low point for that age bracket will be reached. If the Army in the mid-1990s is still to obtain 80 per cent. of its recruits from that age bracket and maintain the target of recruiting it has set of 20,000 per year, the proportion of males recruited will have to go up from 0·8 to 1·2 per cent. per annum. Throughout the last decade, except in 1980, the figure has hardly ever exceeded 0·8 per cent. That is why it is rash for the Government even to suggest such a large reduction in the Brigade of Gurkhas.
Events in China have brought home to us the age-old lesson that the unexpected always happens. Not long ago we were looking to China and thinking that a magnificent reformist programme would transform the economy, that we could enjoy arms sales, have military exchanges perhaps and have a healthier relationship to our mutual good. Those hopes have been dashed and, undoubtedly, there are security policy remifications for the region—not least for Hong Kong.
There are also lessons for areas of potential instability nearer home. In an earlier intervention, I cited the ethnic unrest in Armenia, Uzbekistan and Georgia. We do not know how that pattern of ethnic unrest will develop. It could certainly lead to desperate Communist leaderships using force to suppress the national aspirations and, possible the aspirations for liberty and democracy within the countries of eastern Europe and the Soviet empire in Europe. If that were to occur, the instability could overspill and pose a threat to our security. Therefore, we should have at least the flexibility which a sensible manpower policy in our Army would allow.
In the past, we have been able substantially to increase the numbers in the Brigade of Gurkhas. In future, by closing the depot at Dharan in eastern Nepal, it will be made much harder. That is the kind of pettifogging, mean economy which absolutely baffles me. The Ministry of Defence wastes hundreds of millions of pounds of taxpayers' money without seeming to bat an eyelid, appearing to suggest that it is merely £1 billion down the drain on the Nimrod airborne early warning system. The Foxhunter radar, the alarm and anti-radiation missile, EH101, the command and control system for the type 23 have all overrun on cost. The number of examples is stupendous and horrifying. However, for an institution such as the depot of the Brigade of Gurkhas in Nepal, which costs £4 million per year to run and where the British military hospital carries out invaluable work for the local community at costs of only £2·5 million a year to run, the Government cannot find the money.
The Government have a disregard for the effect on the local community and the loyalty of the people of Nepal, particularly eastern Nepal, who have given sterling service to the Crown, which I find staggering. It could just be that the optimism of those officers in Hong Kong on Monday 22 May will prove justified. Events may turn out so that we need more Gurkhas than we think, and we may even conceivably need more than the 8,000 which are in the Brigade of Gurkhas now. If that is so, it will be difficult to achieve the necessary expansion without the depot at Dahran.
In case there are any fallacious ideas floating around that Gurkhas cannot cope with the sophisticated
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equipment on the central front in Europe, if the average squaddie in Glasgow, Liverpool, Newcastle or London manages to cope with basic infantry skills and jump out of the back of an armoured personnel carrier I do not think that Gurkhas will find it any more difficult. As my right hon. Friend said,
"The Gurkhas are not only extremely good soldiers who fought extremely well in many different conditions and theatres, but are clearly very adaptable. I have no doubt that they can cope with any task that they are given."—[Official Report, 22 May 1989; Vol. 153, c. 1092.]
I hope that Her Majesty's Government will respond accordingly.
6.54 pm
Mr. Frank Cook: I could not rise and catch your eye, Mr. Speaker, at a more appropriate moment, because I want to crave the indulgence of the Chamber and start where the hon. Member for Ruislip-Northwood (Mr. Wilkinson) left off. I wish to refer to the record of that statement and the questions of that day. You and hon. Members who were present will recall that I said:
"The Secretary of State will recall that at the time of press speculation and comment when the Select Committee was considering the Gurkha's future, one school of thought of questionable origin was that the Gurkhas may be suitable for one type of warfare but not for another. I refer not to Northern Ireland but to their role in high tech, modern rapid response situations. The suggestion made in the media was that perhaps the Gurkhas do not think quickly enough. Will the right hon. Gentleman put that argument to bed once and for all and counter it, here and now?"—[Official Report, 22 May 1989; Vol. 153, c. 691.]
Thank heavens, the Secretary of State did so and graciously thanked me for the opportunity. Furthermore, outside the Chamber in the corridor by the Tea Room, he expressed particular thanks for my having given him the opportunity.
However, the very next day in a newspaper, the despicable opinions to which I referred were attributed to me personally without any reference to the fact that I pleaded with the Secretary of State to counter and dispel them. In addition, the said edition of The Times of 23 May edited in similar fashion the response of the Secretary of State. I do not mind an element of spite creeping into reports from time to time, but when it is quite so selective, judicious and partisan, I object to it. I hope that hon. Members will not mind if I correct the record today. Perhaps that newspaper will have the decency to tell its readership tomorrow, if only because it might correct the opinions expressed in some of the mail which I have received, which has been particularly critical of the wrongly attributed opinion.
To remove any doubt, not only myself, but colleagues within the parliamentary Labour party and those whom I have met on my military visits, have the highest regard for the ability, loyalty, allegiance, fighting and peace-serving qualities of the Gurkhas. It is despicable for newspapermen to allow their spite to boil over in such an uncontrollable way.
Much has been made tonight of the Select Committee report on the Gurkhas. The Gurkha units have always proved to be effective in a military sense and efficacious in a cost-saving sense. There is no doubt about that. At this time, when brigade commanders are being encouraged to

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count their pennies carefully and control their own budgets, I should remind the House that the Gurkha units are competitive in that way.
Before we come to a definite decision on the future of the Gurkhas, leaving aside for the moment the proposals on paper, we should remember that we are talking about, not necessarily a "cheap" form of providing for defence, because that is the wrong word, but a cost-effective form. The Gurkhas can be used in most effective roles, not only in Hong Kong but throughout the spheres of influence in which we play a defensive role.
Mr. Mates: I could not agree more with the hon. Gentleman. The Gurkhas are cost-effective not merely in the way that he described, but because they join the service for a full 15-year term. Therefore, the return on investment and the level of experience grows in each Gurkha battalion. That is in sharp distinction to the recruitment of the British Army, where the average length of service is only five years.
Mr. Cook: The hon. and gallant Member for Hampshire, East (Mr. Mates) terrifies the life out of me. I cannot allow this agreement to go too far. He steals the words from my mouth, but he says them with a great deal more elegance than I could. I thank him for his intervention. He is absolutely right.
I exhort the Minister to be careful before making any decision on the future of those Gurkha units because nothing could be worse than removing such effective combat units from our store.
Reference has also been made to NATO and its changing ideas and outlook. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy), the President of the North Atlantic Assembly, dealt with that in detail. I want to draw hon. Members' attention to some of the views expressed a fortnight ago at the spring session by the spokesperson for NIAG. For those who do not know what that stands for I shall quote its spokesperson. He said:
"The acronym stands for NATO Industrial Advisory Group, and the NIAG is one of the six main groups reporting directly to the Conference of National Armaments Directors … It is composed of delegations of industrialists from each of the NATO nations except Luxembourg and Iceland".
Therefore, it is truly representative.
The spokesperson for NIAG said:
"all of NIAG's efforts are multi-national and collaborative … we would find ourselves being forced into collaborative programmes by the irresistible force of economics … no nation … can any longer afford to produce, by itself, all of the defence equipment that it needs … Just think of the number of programmes … which are being kept alive for political reasons only … The political life machine is going to have to be turned off, and 'political' programmes allowed to die … We must face the fact that, for the foreseeable future, the military budgets of NATO nations, at the very best, will be maintained at the zero growth level and, more realistically they are headed down … the trend is very definitely toward fewer programmes … not even the US can afford by itself to produce everything it needs … The military of the various countries are going to be forced to rationalise their requirements so that, hopefully, those weapons that are produced will be produced in larger quantities and unit costs can be reduced … the days have gone when the answer could be found within Europe alone. In the interest not only of affordability but of ensuring that the products that are built are the very best that technology can provide, the industrial collaboration has got to be transatlantic".
The unasked question is not merely where do we get our arms, but how do we get them. The Government tell us that we must have competition in order to obtain
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weaponry at the cheapest unit cost. Yet now, NIAG's logic tells us that we must reduce competition in order to reduce unit costs.
Questioned on those matters at the Dispatch Box earlier, the Minister said that he would ensure that the British taxpayer received value for money. How far will that value for money go if we are to have collaborative projects which span the Atlantic? If we engage in collaborative programmes with the American arms producers, to what extent will we be required to fund research and development? I am sure that the Minister will refer to this later if he takes up this line of challenge that I am throwing out.
Will that collaboration be of the kind that we were offered with Trident when the agreement was broken? The House will recall that we were promised that Trident would be maintained in this country, but now it will not. We were told that Trident would be our property, but now we find that we have joined a Trident library from which we can make withdrawals for refurbishments when necessary. I offer those thoughts to the Minister and I am sure that he will refer to them later.
Let me deal briefly with other changes that have taken place in NATO to which the President of the North Atlantic Assembly referred. There have been changes in outlook on the representation of the Armed Forces. Britain relies on the pay review board but other countries have other systems. Germany, the Benelux countries, Holland and Denmark, allow forms of trade unions. I use that term because I cannot think of a different word in the English language which will clearly describe what I am referring to. Those unions have come together to form Euro-Mil—the European military. They are staffed by responsible people.
The sergeant-major representing Euro-Mil at Antalya in Turkey this year was a Christain Democrat of fairly Right-wing political persuasion. He spoke persuasively of the need to establish a dialogue between serving men and women and the Ministries of Defence in their respective countries, and, indeed, across the NATO Alliance.
The hon. Member for Wealden (Sir G. Johnson Smith) will confirm that representatives of Euro-Mil will be meeting officers of the military committee before the next plenary session in Rome in October. That shows a fair degree of responsibility and maturity. Those people are responsible, experienced and a source of pride for us. They are worthy allies. Why do not we accord our serving men and women the same kind of respect and the same opportunity to present their anxieties and needs in terms of pay and conditions instead of their having to go through the pay review board procedure or expecting us to speak on their behalf on the five meagre occasions that we get each calendar year?
Mr. Mates: Only one Opposition Member is present on each occasion.
Mr. Cook: That may be a further reason for allowing our serving men and women a more formal and structured way in which to represent their needs. I offer that to the House for serious consideration, not for frivolous comment.
Changes are not only taking place in the North Atlantic Alliance but in the Warsaw pact, as has been referred to tonight. The North Atlantic Assembly has acknowledged

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that by meeting representatives of the Hungarian and Polish Governments for discussions and they will be invited to the Rome plenary session.
I can do no better than to finish with my concluding remarks to this year's plenary session. I drew attention to the fact that in 40 years much has changed within the Alliance and the Warsaw pact. If we are serious we must assess those changes clinically. We must declare our assessment honestly and adjust our policies cautiously and collectively. Above all, we must conduct our consideration courageously and with candour. We must make the most clinical threat assessment. Does the threat still exist, if it ever did? If it does, from which direction does it come, what form does it take, can it be countered and at what cost? Only when we have done this can we perhaps discuss sensibly the issues of burden sharing.
Mikhail Gorbachev extends to us the hand of warmer friendship. If we grasp that hand we grasp the hand of the Soviet people. If we reject or inhibit his gestures we fuel those elements in the Soviet Union which seek already to obstruct or reverse the moves towards glasnost and perestroika. We must encourage change carefully and with patience. We must welcome change magnanimously and without vindictiveness. Most of all, where necessary, we must be prepared to make changes ourselves.
Several Hon. Members rose——
Mr. Speaker: Order. At the start of this debate I said that I would impose a 10-minute limit on speeches between 7 and 9 o'clock, but I think I would now be justified in relaxing that limit. If hon. Members will not speak for more than 12 minutes each, all those who wish to participate in this debate will be called.
7.10 pm
Sir Jim Spicer: I am delighted to hear your latest words, Mr. Speaker, but I promise you that I will keep to within my 10 minutes.
First, I pay a very warm tribute to my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), who put very cogently indeed and in words that I am sure we would all endorse the reasons why the Brigade of Gurkhas should remain at the higher figure. In saying that, he stressed—and it needs to be stressed—that he was talking in terms of possible aid to the civil power in Hong Kong and he was not, as the Opposition Front-Bench spokesman, the hon. Member for Clackmannan (Mr. O'Neill), and also the spokesman for the Social and Liberal Democrats, the hon. and learned Member for Fife, North-East (Mr. Campbell), tried to highlight, suggesting that there might be some relationship between events in China and the retention of the Gurkhas at full strength. I know that that was not the intention, but he spelt it out in total detail. We are on dangerous ground if we start talking about the Brigade of Gurkhas being retained at 8,000 against a possible confrontation with the People's Republic of China.
Demography is a word that is very much in vogue and as we move towards the 1990s it will behove every person in this country to pay much more attention to it. Recruitment to the Civil Service and the Health Service,
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but, above all, as has been made quite clear by every speaker so far, the armed forces will become very difficult indeed.
In every board room, and I hope in the Ministry of Defence as well, two items must be at the top of the agenda at all times. The first is: how can we attract new recruits and hold them? In that context I pay tribute to my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) for her speech tonight, because she highlighted one way in which we can stem the haemorrage of soldiers from our armed services. I also pay tribute to my hon. Friend the Member for Canterbury (Mr. Brazier) because it is at his instigation that we have a proposed new clause in the Financee Bill on an armed forces home purchase savings scheme. That could do a tremendous amount, and no one in the Ministry of Defence should walk away from the battle that must take place with the Treasury if we are to get a scheme such as that passed by the whole House. I would add that it has the support already of 119 Members.
That is the first question: how do we find recruits and hold them? The second is: what more can we do to make the most efficient use of our human resources when they are bound to be at a premium?
It will come as no surprise to my hon. Friend the Minister that I propose to move on and talk about the role of the helicopter on the battlefield. No one can doubt the totally defensive nature of our forces in Germany, but it must be right to question whether the present balance of equipment of those forces is the most cost-effective in terms both of the use of available manpower and of defence capability. In my view, the time is long past for making a decision. We have to go down the road of making available to our armed forces, particularly the Army, a much larger number of helicopters.
In that context, I was delighted to hear the intervention this afternoon which made it clear that the time is equally long past for us to see the end of divided control of battlefield helicopters. They should all be in the hands of the Army, not shared with the RAF.
Why do all our Western allies place so much more faith in the role of helicopters within their armed forces than we do? The figures speak for themselves. The French have about 600 battlefield helicopters, the Germans have about 800 and the United States have 8,600. I fully accept that the latter is a false figure because of the size of our armed forces when compared with those of the United States, but even if they are brought down to the same level the United States figure is 1,700 helicopters against a total figure for the United Kingdom of 380. That is quite shameful.
All the other armed forces within the Alliance have accepted the helicopter as a battle-winning factor because it is the one piece of equipment which provides real mobility, particularly on a battlefield which has become increasingly hostile and confused.
Also, anyone who has served in the armed forces must know that the helicopter is a force multiplier. The smaller the force deployed, the greater the importance of the helicopter because it can move the resources and fire power about the battlefield to meet the threat. Having a small but highly efficient and mobile Army, we need a strong helicopter force, and far more than many of the other armies in the NATO Alliance.
Sir Geoffrey Johnson Smith: I have been following my hon. Friend's argument most carefully and I

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warmly support it. Does he agree that it is not only in respect of the central front of the threat that we have traditionally supposed has come from the Soviet Union—and there is still a long way to go yet—but that one of the advantages of the helicopter for a country with forces of the size that we have is that it enables us to have greater mobility and adaptability for any out-of-area responsibilities that we might be called upon to fulfil?
Sir Jim Spicer: I am grateful to my hon. Friend, who has great experience in these matters, and I very much agree with him. I am going on to develop my argument and to say exactly how the other NATO allies deal with this problem and how they have built up forces which can be used on the main front but also in connection with the out-of-area concept.
It is this concept and need which have led the United States, France, Germany and the Warsaw pact countries to equip whole divisions and brigades with helicopters as their prime movers. In general terms, the French have an air mobile division, the Germans have three Luftlande brigades, and the United States has fully equipped combat aviation brigades. In stark contrast to this picture, we have just one air mobile brigade which we all know is in the process of being formed but is woefully short of helicopters and will remain so into the foreseeable future.
I am critical of this because there is not much point in having a air mobile brigade if it does not have the true air mobility to allow it to operate effectively.
In this overall scene, inevitably within the armed services battles and frictions develop and inevitably there is a battle about the tank versus the helicopter. It is a totally unnecessary battle because it should have been fought and done with already.
Some people within the Ministry of Defence and the Army should change their thinking. They should think of the helicopter no longer as a helicopter but as a low-flying tank. If they think of it as a low-flying tank, we shall ultimately reach the stage when the gallant soldiers in our armoured regiments will willingly move on a step and use the helicopter in the way that the tank was used in the past, with all the same logistical back-up but helicopter-borne as well. Although one or two right hon. and hon. Members dissent, the tank soldier is adaptable and could move to such a role.
Mr. Mates: Certainly tanks are as adaptable as the cavalry has always been, but to equate a helicopter with a low-flying tank is perhaps as odd as equating a tank with a grounded helicopter. They are totally different vehicles needing totally different tactical deployment, and they do totally different jobs.
Sir Jim Spicer: My hon. Friend and I are both aware of that. I have usually operated from an aircraft wearing a parachute, but I understand the difference between a tank and a helicopter. It is possible for the helicopter to replace a tank on the ground in an anti-tank role and with increase in mobility on the battlefield.
Do my hon. Friend the Minister and his military advisers accept the general view that we are lagging behind all our NATO allies and the Warsaw pact in the use of helicopters? Will he give an undertaking to re-examine, now or in the near future the role of the helicopter in our defence forces and, following such a review, bring our helicopter strength more closely into line with that of our NATO allies and the Warsaw pact forces?
7.21 pm
Mr. John Cartwright: Like other right hon. and hon. Members who have participated in the debate, I shall concentrate my remarks on the problems of demography and on the issue of the Brigade of Gurkhas. Before doing so, I wish to mention an issue that has caused considerable sadness to many of my constituents in Woolwich. I refer to the decision to transfer the headquarters of the directorate-general of defence quality assurance to Teesside.
My first point is that it has taken an incredible amount of time to reach that decision. In the early 1980s, a great deal of money and effort was invested in planning the reorganisation of the Woolwich arsenal site, including more than £300,000 on the design of a new headquarters building for the directorate-general. Early in 1984, rationalisation was proposed and detailed studies undertaken.
On 19 November 1986, the hon. Member for Epsom and Ewell (Mr. Hamilton) was kind enough to write to tell me that the Secretary of State did not want to make a decision until sites outside south-east England had been considered, and that yet another detailed study was to be undertaken. The hon. Member for Epsom and Ewell commented, perhaps optimistically, that that study would defer a decision about the arsenal for another six months, but the decision was not announced until March 1989—almost two and a half years later.
The only argument made for transferring the directorate-general to Teesside was that that offered the best prospect of overcoming shortages of specialist staff, but at the end of February 1989 staffing levels did not show any dramatic shortage. There were 1,135 in post against a ceiling of 1,250. While it is true that there was a shortage of 52 staff in professional and technical grades, that situation is no worse than in many other Ministry of Defence establishments.
The Government have not produced any evidence to show that professional and technical staff will be easier to find in Teesside than in south-east London. They only point to higher levels of unemployment in Teesside, in the hope that vacancies will be filled.
The financial savings from the transfer will be minimal. On the basis of MOD assessments, the Teesside option will bring an overall saving of £10 million over 25 years by comparison with the concentration on the Woolwich arsenal west site. However, that calculation ignores the substantial sums spent at Woolwich arsenal over the past 10 years—£22 million on maintenance, repairs and improvements, and all of which will now go down the drain. Several million pounds were spent since 1985–86 on housing directorate-general units moved to Woolwich from other locations. That is another example of the way in which the Ministry wastes money, when forward thinking would have prevented it being spent in such a profligate way.
I cannot help but think that the Ministry of Defence's major concern is the value of the 94 acres of riverside land in Woolwich that will be released by the move. I am sure that that factor in the equation weighs more heavily than any other. The move will deal a considerable blow to an area that has now lost virtually all its industrial jobs and has a long history of service to the country's armed forces. The arsenal, which will close permanently in 1993, dates back to 1671, and was predated by Henry VIII's dockyard,

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which was established in Woolwich in 1515. When the arsenal is moved in 1993, that link will be broken—but I hope that thought will be given to ensuring that the historic buildings remaining will feature in a lasting tribute to the contribution that the people of Woolwich made to the armed services over hundreds of years.
I turn to the demographic trough, and I am surprised that the Government have been caught unawares by it. It cannot be regarded as a sudden or unexpected problem. The downward trend in the birth rate has been in evidence since the early 1970s. The low point of the trough has been known since 1978. It was known that it would create problems for the armed forces, and that matter was referred to in the Defence Estimates statement in 1980 and in 1981. However, that was followed by total silence, until this year.
I can at least claim that I referred to that issue in a number of previous Army debates, in 1983, 1984, and 1987. But on none of those occasions did the Minister replying consider that the demographic trough was a serious enough matter even to be mentioned in his winding-up speech. I did rather better in 1988 when in a debate on the Army I again referred to the demographic trough and scored a bullseye. On that occasion, the Under-Secretary of State for the Armed Forces acknowledged the problem and that I was right to draw attention to it, but added that
"we are convinced that our policy of fair pay, and of fair conditions and allowances … should ensure that we keep ahead of the game and cope with the demographic trend and the small number of youngsters available to join the armed forces."—[Official Report, 26 January 1988; Vol. 126, c. 254.]
Given that shattering degree of complacency even as recently as January 1988, it is hardly surprising that measures to improve both recruitment and retention were not set in train much earlier. It is still strange that we have not seen the results of the MARILYN study until now, 10 years after the problem first became evident and nine years after the first reference to it in a defence White Paper. I appreciate the complexity of the problems and understand that they need studying carefully, but no one can accuse the Ministry of Defence of intemperate haste.
Other right hon. and hon. Members have mentioned the problems arising from the demographic trough and I shall not cover the same ground, but I emphasise that the 16 to 19-year-old group is declining, and that the reducing numbers available to the Army will reduce further if the Government are successful in encouraging more 16 to 19-year-olds to enter further and higher education.
For the forces, the problem is here now. The MOD set out to recruit 22,000 service men in 1988–89 and anticipated a shortfall of 2,000. The outcome was a good deal worse. The strength of the Army was expected to decline to 1·5 per cent., or by 2,000 people below establishment by 1 April 1989, but the number appears to be nearer 3,000. The Chairman of the Defence Committee reminded the House that the situation is much worse in the infantry, where the shortfall is around 5 per cent. and worsening.
The Government's proposal to improve retention is entirely sensible: clearly pay and allowances must keep pace with those in outside employment. I would argue, however, that it is equally important to ensure that the quality of life for service personnel keeps pace with that of
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civilians, and that will be an expensive operation at a time when manpower, as opposed to the cost of equipment, is taking a growing share of the defence budget.
The recruitment of ethnic minorities is also absolutely right in principle, and I am glad that there is now a degree of monitoring, but it is not likely to produce dramatic results. To establish the same proportion of ethnic minorities in the armed forces as exists in the population as a whole would mean only 800 or so more recruits. Similarly, it is right that we should give women more interesting, exciting and perhaps demanding opportunities, but we should not ignore the fact that the fall in the number of young women in the population mirrors the fall in the number of young men, and the Army will face severe competition from civilian employers in attempting to attract the required quality of recruit.
Like other speakers, I hope that the MARILYN exercise and the Government steps resulting from it will bear fruit. Against the background of increasing competition for scarce manpower, however, I believe that the Army must run very fast to stand still. That is why I find it so hard to understand the Government's decision on the future of the Gurkhas.
I felt that the Government's response to the Select Committee report was extraordinarily sketchy. It contains some vague references to squadrons of engineers, signals and transport, without explaining what "squadrons" means in terms of numbers. That seems to imply a substantial cut in the number of Gurkhas employed in those specialist fields. The Committee went to some trouble to point out the folly of losing high-quality, experienced and motivated engineers and technicians whose skills are in such short supply.
The Government recognised that recruitment would inevitably become more difficult as a result of demographic changes, but did not say whether they accepted the Committee's interpretation of the forecast figures. If they accept that interpretation, it is hard to see how they can justify proposing a cut of more than 50 per cent. in the Brigade of Gurkhas. If they do not accept it, it would be interesting to know on what basis the cut was suggested.
Paragraph 17 of the Government's response leaves open a loophole in saying:
"demographic difficulties could lead to increased numbers of Gurkhas being retained."
Surely, however, we are entitled to ask when the decision is likely to be made. The Minister accepted today that recruitment targets were not being met and that the position was worsening. How much will it worsen before a decision is made? Is the number to be 4,000, 4,500, 5,000 or what?
The response talks of progressive restructuring of the brigade over several years. Again, we are surely entitled to ask what that means. Does it mean natural wastage or redundancy, and what will the costs be? Far from removing uncertainty, the response creates more uncertainty. It gives the impression that we regard the Gurkhas as a reservoir and feel that we can turn the tap on or off to suit our convenience. If we can manage with 4,000 we will; if we need more, we will simply take more. That is not the right way to approach people who have provided us with such dedicated service.
Every speaker who has mentioned the Gurkhas has commented on the extraordinary value for money that they give to the British Army. The Chairman of the Select

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Committee underlined the point about retention when he reminded us that 95 per cent. of Gurkha soldiers serve at least 15 years, whereas the average length of service for a British soldier is about five years. We make a tremendous effort to keep people in the British Army, while we find it extremely difficult to persuade Gurkhas to leave. Surely that makes the point about their effectiveness.
All of us who had the honour, privilege and pleasure of taking part in the Select Committee inquiry and who came to the problem for the first time were struck by the adaptability, dedication and enthusiasm of the young men who have come forward in such large numbers from the hills of Nepal to serve with the Brigade of Gurkhas. They represent a priceless asset to the British Army. The Government seem incredibly short-sighted in seeking, in the face of all the evidence, to reduce Gurkha numbers so sharply. I hope very much that they will think again, and will do so very quickly.
7.34 pm
Mr. Robert Boscawen: My hon. Friend the Member for Dorset, West (Sir. J. Spicer) spoke with considerable knowledge and practical experience about the helicopter needs of the forces in Europe. I wish to mention only one feature of the speech by my hon. Friend the Minister of State which rather disturbed me, on the question of Westland. In answer to an intervention, he said—rightly, in my view—that the best approach to the aerospace industry was the commercial, competitive approach. What worried me was that he did not share the enthusiasm shown by his right hon. Friend the Secretary of State when he spoke in my constituency about the development of the vital EH101 collaborative project. The Government have expressed enthusiasm about proceeding with the project, and I trust that they will give the orders in future. I hope that in his winding-up speech my hon. Friend will convince us that the Government are still enthusiastic about a project that is so vital to the future of Westland and to a great many constituents.
I did not wish to talk about the general NATO position. I was, however, struck strongly by the wise comments that we have come to expect from the robust speeches of the hon. Member for Sheffield, Attercliffe (Mr. Duffy). He said what all Conservative Members believe—that intentions are very different from capability. We would be very unwise to trust entirely to intentions before we see the capabilities of the Soviet bloc actually change, and to change our doctrine of flexible response in advance.
The reason for the existence of that doctrine, and the reason it is such an enormous advance, is that we would have no such doctrine and no means of applying it if we were left with the massive response of the strategic deterrent only in the last resort. I hope that the Opposition realise that, and will think long and hard before returning us to the previous position.
Lastly, I wish to raise two or three points that have been mentioned by hon. Members on both sides of the House and are worrying many of our constituents and have been drawn to my attention on numerous occasions about the problem of recruiting and retaining trained men in our services. They are twin problems, but they run absolutely together. However much we improve and spend on recruiting programmes, we shall not be able to recruit
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people when they see the people who are there already leaving in large numbers because they do not like the conditions.
Unlike some Opposition Members, I think that my right hon. and hon. Friends in the Ministry of Defence are well aware of the demographic complications and have been aware of them for some time. They are acting on ways to retain service men. So far so good, but what about the rest of the Government machine? That is what worries me. Have other Departments really got the message that they have to make changes in service men's housing, particularly in the means by which service men, especially those who have been in the forces for some time, are able to purchase their own homes?
It is 40 years or more since I was involved in various forms of soldiering but one thing has never changed and is as true today as it was then. I refer to the acuity and speed with which service men learn and understand what conditions are like for their contemporaries and friends in civilian occupations and homes. They are quick to compare, and when the gap gets too wide they seriously consider leaving. My right hon. and hon. Friends in all Government Departments have to take that into account. If they are to retain fully and expensively trained manpower in our services, they must ensure that the gap between conditions in the services and outside is not so wide as to push those already in the services out into civilian life.
My colleagues have mentioned the problem of the community charge. It is time that the Government gave us a full explanation of exactly how the community charge will affect service men in England and Wales. There are ugly rumours about what is happening in Scotland. Already service men in England foresee that they will have to pay a good deal more than they now pay in rates and they feel that is not fair. One of the main purposes of the community charge is to make local authorities more accountable. But if a service man does not stay in his barracks for more than a year or two, how can he use that accountability and vote against the local authority that has increased his community charge? Will service men have to pay a flat rate community charge? If it has been announced I am not aware of it, but I believe that the sooner my right hon. and hon. Friends announce the way that the community charge will work for service men the better.
It was fortunate and bad luck that, as so often happens the announcement on the future of the Gurkha regiment had to be made only a few weeks before the terrible atrocities were committed in Peking. However, one has to recognise that the good thing about the Government announcement in my view—I have many connections with the Gurkhas, going back a long time—was that they are to be a part of the British Army in future. That secures the future of the Brigade of Gurkhas for a very long time ahead, although their numbers may be fewer. That was a major plus and should be welcomed and the Government should be given credit for that.
The lesson that we have always had to learn is that, if we cut our commitments, we shall have to look at the size of the forces needed for those reduced commitments. That is what I believe the Government were trying to do, having stated that inevitably our commitments to Hong Kong will reduce and there will have to be some cut in the number of in our forces. Nevertheless, the situation has changed and undoubtedly the Government are now in an exceedingly difficult position as a result of the atrocities last weekend

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in China in determining the exact requirements in future. I notice that my hon. Friend made it quite clear that we are talking about what will happen at least 10 years hence, and has allowed for a great deal of flexibility, Therefore, I am not quite as concerned as other hon. Members.
We must not forget the lessons brought home to us so vividly in the Falklands campaign a few years ago when the wrong signal was given by the Government of which I was then a junior member, in announcing the withdrawal of the Endurance from the Falkland Islands. With the best will in the world the announcement at the time had not taken into account what might happen in Argentina. We should be aware of that lesson about sending a false signal in the proposals that have been made for the Gurkha regiment.
7.47 pm
Mr. Tam Dalyell: I wish to raise two related issues—first, justice for an ex-soldier and, secondly, the operation of military intelligence.
A month ago The Scotsman newspaper reviews editor asked me to review a book called, "Who Framed Colin Wallace?" by Paul Foot, published by Macmillan. I therefore read the book extremely carefully. It reinforced the impression that I had formed some two years ago when Colin Wallace and his friend Major Fred Holroyd spoke to me for three hours in the House. I started sceptically but came to believe that they were telling the truth.
Before any Minister observes that Paul Foot is a loony lefty or makes some unfortunate comment on my own judgment in these matters, let me say that among those who have gone on record as believing Colin Wallace are His Grace the Duke of Norfolk, the Second Earl of Stockton, the publisher and Macmillan's grandson, Herbert Asquith's grand-daughter Laura Grimond, Anthony Cavendish, a friend of Sir Maurice Oldfield, the hon. and learned Member for Montgomery (Mr. Carlile), and my hon. Friend the Member for Brent, East (Mr. Livingstone) who has done a great deal of work on the subject.
Basically, Wallace's troubles began in Northern Ireland when he began asking two awkward questions of the Army authorities. The first was, why, when we know it is happening, do we let young boys be sexually abused at the Kincora boys home?
The second question was, why do we allow Army-related intelligence services to harrass politicians? This was long before the world had heard of Peter Wright; it is the reason why Wallace was thrown out of Northern Ireland, and then harassed.
I want to ask some specific questions of the Ministry of Defence. Page 9 of Foot's book says:
"Looking back on his three years at Lisburn, Tony Yarnold"—
who was a lieutenant-colonel—
"has nothing but praise and admiration for Colin Wallace. 'Let's face it, Colin was the linchpin of the whole operation. He was terrific—way ahead of us all in his knowledge, his skill with the press and his readiness for work. Everyone wanted him all the time, and somehow he was always available.'".
That is what Lieutenant-Colonel Yarnold is alleged to have said. Does the Ministry of Defence accept that view and is it on their records?
I asked the Minister whether Paul Foot on page 14 of his book accurately quotes the head of public relations on
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information policy, Peter Broderick, who took over as head of Northern Ireland Army Information in 1973. As I am constrained by time, the Ministry of Defence can read from the paragraph beginning
"The Army by this time (1970)"
and the next paragraph starting "Consequently". The third paragraph says:
"Colin Wallace at first became a pawn in this game. Though on the staff of public relations, he was used by Information Policy as their outlet to the press. He also had a knowledge of the Irish situation which was totally unique in the headquarters and surpassed even that of most of the Intelligence Branch. As time progressed, he was not only the main briefer for the press, but also the adviser on Irish matters to the whole Headquarters and—because of his personal talents—contributed much creative thought to the Information Policy Unit. In order to do his job, he had constant and free access to information of the highest classification and extreme sensitivity."
That was, allegedly, Peter Broderick's statement to the Civil Service appeals board in October 1975. I ask the Ministry of Defence to let me know by letter whether that coincides with its records.
Page 18 says:
"Peter Broderick's official report has a revealing sentence: `He [Colin] acted resolutely and to effect against anyone—Republican or Loyalist—who was destroying his country.' "
That was Broderick's statement to the Civil Service appeal board in October 1975. Does the Ministry of Defence accept that?
Page 259 states:
"The third allegation in the paragraph pooh-poohed Colin's claims that he had three times been recommended for decorations, with the single sentence: 'there is no record of this'.
There was, however, a record of it. Tony Staughton"— who was a well-respected major in the army—
"head of the MOD Information Office in 1982, told me"— that is, Foot—
"on the telephone and in interview that he had twice recommended Colin for the MBE and was so certain he would get it that he went out and bought champagne to celebrate it. He wrote this down in a letter of recommendation of Colin to Arun District Council: 'I twice recommended him for an award for his exceptional services, and felt it was most unfair that he was not so recognised.' Colin was recommended a third time for the honour by Peter Broderick, Staughton's successor."
Are those comments and those made on page 260 by Tony Yarnold true?
Is the long "TARA" memorandum beginning on page 96 at "Reference A" and finishing
"I would recommend therefore:—

(a) We make one final attempt to get the RUC to investigate the matter or at least discuss the matter with the RUC.

(b) We obtain very clear and unambiguous authority from London to proceed with a press disclosure"

in Ministry of Defence records?
I am not in a hurry, but I ask for a letter within a reasonable time about this matter.
Is the episode of the lost pistol, outlined on page 125, accepted by the Ministry of Defence?
What was Colin Wallace's crime? I believe that it was breaking ranks about revealing wrongdoing.
That is related to what happened this week in relation to what I can only describe as the rubbishing of Labour Members of Parliament. Today's Daily Mirror says,
"What a source!
Waldegrave makes a meal of smear story.
FACT: The lunch—at London's exclusive Mijanou restaurant, near Victoria—was brought forward by Mr. Waldegrave's office for that day."

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Was it brought forward? And why? I believe, and I say this with care and the full knowledge of the House, that someone within Government must answer whether the Minister of State, Foreign and Commonwealth Office was briefed on blackmail and Labour Members by the security forces.
On 1 June 1989, the Daily Mirror printed the following article for 4 million people to read:
"Control over MPs—homosexual and other blackmail.'"
This is followed by the names of four "Heathite" Tories, and four Labour politicians.
Another note says:
"'Former KGB agent—prostitute's links with Labour MPs in London. Cover up by the Home Secretary.'
Colin Wallace tells me this week: 'We would pass these lies on to journalists with the authority of the intelligence services. The aim was to damage the Labour Party, and the Heath wing of the Tory party.
The very right-wing people who ran intelligence thought that all these politicians were a menace.'"
I should like a comment on that from the Government.
It is no good hon. Members looking sceptical because Labour Members had to put up with this opening of the nine o'clock news on 25 May:
"Mike in vision. The British case against the Soviet spies—Russian diplomats were involved with Middle East terrorists, and trying to blackmail Labour MPs."
I do not like this juxtaposing of Middle East terrorists and blackmailing of Labour Members. The nine o'clock news continued:
"Good evening. Senior British sources have been explaining WHY eleven Soviet diplomats and journalists are being expelled: HOW the tit-for-tat spy row with Moscow started. They accused the Russians of involvement with Libyan and Iranian terrorists, and trying to blackmail MPs."
Again, some explanation must be given of this juxtaposing of Labour Members with a situation that never developed and which never stood up. John Sergeant's report says:
"The BBC have now learnt more details of the allegations made by British counter intelligence".
Details from whom?
"It's alleged that Labour MPs were targets for possible blackmail threats. It's also alleged that the agents were involved with Iran and Libya."
Before taking such a report from a lunchtime conversation with a Minister of State, Foreign and Commonwealth Office, who is not in the Cabinet, the BBC should have checked. And the BBC did. Yes, I understand that Mr. Checkland and Margaret Douglas have said that the BBC did indeed check. Did they check with the intelligence agencies? One of them at least we know is permanently represented, possibly, even still after Brigadier Stonham, in the BBC building. Some explanation must be offered in relation to that detail and checking.
They certainly ought to take account of how the programme finished. It said:
"Senior British sources have been giving reasons for the expulsion of Russian spies: they were believed to be involved with Middle-Eastern terrorists and blackmailing Labour MPs."
No qualification was given, and my wife and I and others who saw it that night were very shaken and hurt by it.
Some explanation is due because it seems that we have returned to all that Wallace and Foot were writing about or have written about in relation to the 1970s. Foot's book deserves an extremely detailed response. Many of my colleagues in the parliamentary Labour party are extremely angry, continually, about the blackmail story. I
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believe—I take this responsibility upon myself and do not put it on my colleagues—that it originated with elements of the security services.
Just who did frame Colin Wallace? If Foot's book is wrong, there must be some riposte and explanation. Detail must be given because I have named some of those who believe that Colin Wallace is telling the truth.
Just who originated the notion of Labour MPs being blackmailed? It did not come out of thin air.
I hope that the Minister at least can give some assurances in relation to his Department, the Army.
I realise that junior Ministers cannot speak for wider intelligence services, which nevertheless come under this vote.
8 pm
Mr. Churchill: The hon. Member for Linlithgow (Mr. Dalyell) will not be surprised if I do not follow him into the somewhat abstruse byways along which he has been perambulating.
I pay tribute to the forces of the Crown for the admirable way in which they fulfil the vital and necessary tasks assigned to them in the defence of Britain's and NATO's interests around the world—nowhere more than in Northern Ireland. I especially commend the men and women of the Ulster Defence Regiment, who have been subjected to relentless and cowardly attack in their homes while going about their civilian occupations and even many years after they have left the service and are in their retirement. The House owes all of them its gratitude.
I am very concerned about the desperate situation faced by service men, especially those in the Army, when trying to buy a home, particularly in the south or south-east of England, and the lack which has become apparent in recent years of any satisfactory scheme to enable them to do so. I warmly endorse the proposals of my hon. Friend the Member for Canterbury (Mr. Brazier) to provide an armed forces house purchase savings scheme. I strongly urge my right hon. Friend the Chancellor of the Exchequer to back this overdue scheme, which is provided for in amendments to the Finance Bill, which is now being considered.
I draw the attention of the House to the letter which my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) quoted and which, no doubt, other hon. Members have received. Major-General Charles Grey, the controller of SSAFA, said:
"It is becoming an increasingly common habit amongst soldiers to leave the Service just as they are entering their most valuable period, at about the age of 25, so that they can emulate their civilian contemporaries, who are at that stage entering the housing market."
The present situation is unfair not just to those serving in the Army. It is clear that it is un-cost-effective, too. This problem must be addressed.
Having had the privilege with the Defence Select Committee of seeing at first hand the Gurkhas in their various postings—in Hong Kong, Brunei, Nepal and here at home, at Church Crookham—I wish to devote my remarks to their future. Those remarkable fighting men from the hill tribes of Nepal have served the British Crown and nation for 174 years, since 1815, with the utmost distinction. In the first world war, 200,000 volunteered; 20,000 died. In the second world war, a quarter of a million volunteered; 9,000 died and a further 23,000 were wounded. Since the first world war, Gurkhas have won 13

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Victoria Crosses, the most recent in 1965, and a further 13 have been won by British officers of the brigade. After that exemplary record of service, a question mark now hangs over their future following the United Kingdom's decision to hand over Hong Kong to the People's Republic of China in 1997.
In recent years, the principal employment and role of the Gurkhas have been the defence and border security of Hong Kong, and it is clear that that role is coming to an end. The Gurkhas' skills as riflemen and jungle fighters are legendary, but for me it was an eye-opener to see the incredible flexibility of the Gurkha soldier. I shall illustrate this by drawing attention to the first report of the House of Commons Defence Select Committee, "The Future of the Brigade of Gurkhas". In part VIII, paragraph 171, the Committee says:
"A number of Gurkhas are parachute trained, and the battalion stationed in the UK is part of 5 Airborne Brigade. Judging by the way Gurkhas take to parachuting—in a typical recent P Company course 2 out of 27 Gurkhas failed, whereas the British failure rate is normally about 50 per cent."
Paragraph 175 states:
"The Queen's Gurkha Signals already carry out many tasks similar to those of British Signals regiments, and could adapt to new ones as required. In this respect, it is worth noting the gradings achieved by Gurkha signallers on Royal Signals Training Brigade courses from 1982 to 1987."
I shall not spell out the details, but the evidence showed that 67 per cent. of the Gurkhas scored grade A or B whereas only 23 per cent. of the rest of the British Army managed those scores. Let no one say that the Gurkhas are incapable of matching themselves to the exacting role required in the European theatre on the central front.
We have watched with horror the unfolding events in the People's Republic of China. Our hearts go out to the students of Peking and the civilians of China who, unarmed and peacefully, were asking no more than to build freedom and democracy in their land. Their courage in the face of ruthless and indiscriminate use of military power has commanded our admiration. As one who has had the unpleasant task of reporting wars of three continents, I pay tribute to the courage of Miss Kate Adie of the BBC and other war correspondents reporting from the front line in China.
Faced as we are with the chronic actual or potential instability of the Communist tyrannies as they stagger haltingly towards a measure of liberalisation, we are entitled to ask: is this the moment to talk of halving the strength of the Brigade of Gurkhas from over 8,000 to 4,000?
Not just China is susceptible to such instability as it tries to move towards a more liberal regime. It is not impossible by any means in the coming months that one could see similar horrors repeated within the Soviet Union, possibly in the Baltic republics of Latvia, Lithuania or Estonia, and possibly they could happen in the Soviet republics themselves, such as Georgia or the Ukraine.
There is no question but that we are now in a period which, on the one hand, has never been more hopeful in my entire lifetime and the lifetime of my generation brought up in the post-war years, because for the first time we have a constructive dialogue between East and West, with genuine warmth. One sees the determination of Mr. Gorbachev to progress to constructive disarmament and to achieve a balance of power: we must all most warmly welcome that.
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On the other hand, it would be a grave mistake if we did not see the enormous stresses and strains taking place within the Soviet and Chinese societies as they try to take off the cooking pot a lid that has been kept so firmly in place for 40 years or more. There is a great danger that one could see the upsurge of nationalism in one of the many parts of the Soviet empire and that could lead to ruthless repression, not necessarily by Mr. Gorbachev, but if he did not have the courage of those who have previously held power and who have been pushed to one side for the moment during this period of detente, he and the present regime might he pushed aside, so the tanks might be sent in to repress disorder.
I find it very unfortunate that we should be considering halving the strength of the Brigade of Ghurkas at this time, not only from the point of view of the world situation, but from the point of view of our worries about the demographic trough. Already the Army is 7,000 under strength and plunging ever deeper into deficit.
If my right hon. Friend the Secretary of State does not intend to impose redundancies on the Gurkhas in 1997, one can presume only that it is intended to begin a rundown in recruitment for the brigade in the near future. I must ask my hon. Friend the Under-Secretary of State for the Armed Forces to be frank with the House about the intentions of the Ministry of Defence in that regard. When is it intended to start the rundown to achieve the figure of 4,000 by 1997? Is it really wise to run down the Gurkhas at all through the early and mid-1990s when they may be required more than ever to provide stability in Hong Kong and to cope with the disorders that may arise, possibly on a massive scale, as the hand-over approaches?
I have no doubt that the Government are in danger of making a great mistake in their decision to halve the strength of the Gurkhas. That decision has been made without adequate reference to the impact on a loyal ally of halving the resources flowing to the hill tribes of Nepal, without adequate regard to the manpower crisis faced by the British Army as we plunge into the democratic trough and without proper consideration of the new instability in China and elsewhere in the world. The decision has certainly been taken without adequate consideration of the superb cost-effectiveness of the Gurkhas who, as has been pointed out, serve a minimum of 15 years, compared to an average of five years for the rest of the Army.
I seriously urge my right hon. Friend the Secretary of State for Defence and the Government to reconsider this seriously mistaken decision and to reprieve the Brigade of Gurkhas at its present level of strength.
8.14 pm
Mr. Bruce George: I hope that what I say will not be used against me in my party, but I must confess to having agreed with virtually everything said by the hon. Member for Davyhulme (Mr. Churchill). I agreed with him especially on what he said about the Gurkhas and I hope that the Government, if they are sensitive, will appreciate that virtually every speaker from all parties has condemned their decision on the Gurkhas. If this House means anything, and if the Select Committee system means anything, I hope that the Government and the Ministry of Defence will not ride roughshod over the views of so many hon. Members, who have been urging them to reconsider their decision to halve the size of the Brigade of Gurkhas.

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The hon. Member for Davyhulme also spoke about the enormous changes taking place in the Soviet Union. Once one opens a Pandora's box, it is difficult to close it, although the Chinese appear to have done so successfully—in their terms. If I may digress slightly, I want to follow the hon. Member for Somerton and Frome (Mr. Boscawen) who pointed out the Government's poor timing over Endurance and the announcement on the Gurkhas. I would add another example of bad timing. I saw a wonderful picture in the latest self-congratulatory document produced by Tory central office showing a smiling Prime Minister talking to a certain leader from the People's Republic of China, Mr. Deng. Perhaps the person who included that picture wants to be disciplined by Tory central office.
It is important when one views the momentous changes in the Soviet Union and eastern Europe not to say, as some in my party have said, that the cold war is over, that disarmament has broken out and that we must now throw caution to the winds and join in the spirit begun by President Gorbachev. I am sceptical of that view, as I am of the view that, because President Gorbachev is not completely in control of things, we should do little because his good work will be overthrown and we could be left in an equally bad situation. As a good moderate, I believe that there is a point equidistant from those two extremes. One must take advantage of the initiatives emanating from the Soviet Union, one must loudly proclaim the initiatives being made by our side of the negotiating fence and one should proceed with a degree of caution recognising that, should circumstances change, one would need to have the flexibility to reverse any changes we might have made. We should be neither over-pessimistic nor over-euphoric.
In the old days—that is, two or three years ago—national security decision making in Government was fairly simple. There were problems in getting defence budgets through and problems within NATO, but as there was a definable adversary, resources and unity largely secured eventually. Now the rules of the game have changed. Relations between countries in NATO are changing. Relationships between countries in the Warsaw pact are changing, as are relationships between the respective alliances. That requires a great deal of intelligence and rationality within the Alliance of 16 nations which, by definition, permits decisions to be made slowly and as a result of a great deal of compromise. I hope that we are on the right track and I personally welcome considerably the leadership shown, eventually, by the United States and the successful visit of President Bush to Brussels.
The question we have to ask is whether the Soviet Union has changed. Does it threaten us, or has that threat diminished? How serious is President Gorbachev, and how serious are his numerous initiatives? It is difficult to make a final judgment, but his unilateral cuts announced initially in December at the United Nations and the consequent cuts by his allies in the non-Soviet Warsaw pact countries are militarily quite significant. It is true that there was a public relations element and that to some extent the Soviet Union and its allies were scrapping aircraft and tanks that should anyway have been scrapped. Nevertheless, we should not be too dismissive of Mr. Gorbachev's gesture because it has some military significance. Many have said that it has given NATO an extra week or 10 days' warning time. I think that we should say, "Fine, we agree with what
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you have done, as far as it goes. We shall wish to verify it but we congratulate you, nevertheless, on what you have done so far."
I wonder whether we should have been a little more smart in our own attitude to public relations. Let us be honest about it: in the past three or four years virtually all NATO Governments have unilaterally announced cuts that make the cuts announced by the Soviet Union and its allies seem almost marginal. Look at the cuts announced here. In the next few years our defence expenditure is to fall to 3·9 per cent. of gross domestic product. That is quite incredible. I urge Conservative Members, when addressing CND meetings, to tell them enthusiastically how structural disarmament has proceeded under them at a great pace in the past two or three years.
A recent authoritative American document, "Report on Allied Contributions to the Common Defence", shows the growth in defence spending in each NATO country. Britain emerges well—or badly, depending on one's perspective. Those who favour high defence expenditure will feel that the Government emerge badly as there are only four countries in NATO whose annual spending on defence has increased less over a 10-year period than that of the British Government. We are making what are virtually unilateral cuts and all our allies are doing the same. Perhaps in the propaganda game and to persuade public opinion we should have been more prepared to say that unilateral cuts are not the sole prerogative of the Soviet Union—that we have done our bit and made our contribution and that we should not feel embarrassed or left behind by the initiatives taken by Mr. Gorbachev.
I return to my main theme: is Mr. Gorbachev serious? He has made some dramatic changes in defence spending. He recently announced that 15 per cent. of GDP was devoted to defence in the Soviet Union. That is four times the amount to which the Soviet Union has previously admitted. Furthermore, he virtually admitted that that was not all—that it was merely the budget of the Ministry of Defence and did not include research and development and all sorts of other items.
When I was in eastern Europe recently I met a chief of general staff. I said to him, "You have recently announced cuts in defence expenditure, but from what base liner He said, "We do not know." How can we take seriously all the claims that defence expenditure is being cut? Nevertheless, I think that the Soviet Union has made a good start on defence expenditure.
Has doctrine changed? I believe that it has been changing, and was probably changing even before Gorbachev came to power. I feel strongly that the initiatives originally derived from Andropov and that when he died Gorbachev was chosen to implement the reforms. Military doctrine had begun changing a few years before. But before we accept that its military doctrine has become completely defensive and that it aims for a "reasonable sufficiency", we must ask the Soviet Union about it and exchange views on it. That process has begun. We must improve confidence-building measures and observing exercises. We must look, too, at Soviet training patterns. One good way of finding out whether the Soviet Union's doctrine has changed is to watch how it trains and exercises its armed forces. However, it is difficult to change training and exercising practice suddenly. A change in doctrine involves a change in training, equipment and strategy, and that is difficult to effect swiftly.

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Dramatic changes are emerging—not just in the Soviet Union but in eastern Europe. A few weeks ago I travelled to Budapest from Vienna—by train as it happens, because I was paying my own fare. I said to someone in my compartment, "Now that we are passing the border between Austria and Hungary, have a look at the iron curtain." The train slowed down, and I looked, but I could not see it. It had gone. A few days before I had visited the national headquarters of Solidarity in Warsaw. Two months earlier, the organisation was still banned, yet here it was fighting parliamentary elections. That is a staggering example of how things have changed in eastern Europe —at least in some countries in eastern Europe. We must take advantage of circumstances. We must be neither over-optimistic nor over-cautious.
This is an important debate for me. It is the first for nine or 10 years in which the views that I have expressed have not been too far removed from those of my party. I am delighted to be able to speak in those circumstances. I recall reading about those who supported President Roosevelt. After he was chosen at a convention, everybody was for him. His organisers therefore distinguished between his supporters by adding an asterisk after the names of those who had supported him before the convention.
I have been a multilaterist for many years. I would say to my hon. Friends, "Welcome back." It has been a lonely nine years. The Minister expressed clear irritation at the fact that the Labour party will not be quite such a push over as it has been in the past two elections. If we can succeed in getting our policies through the party conference, it will be much more difficult to castigate the Labour party as an aberration.
A few weeks ago I was criticised in the House for expressing my disappointment that consensus had disappeared. I have no sense of shame in saying that I believe, as many do, that politics should cease at the water's edge. We should devise security policies with which all political parties and most of the population sympathise. I hope that we are going some way towards re-establishing a sort of consensus, if not an absolute consensus, on security so that the issue of defence can be removed in part from the cut and thrust of the political arena.
Mr. Churchill: Can the hon. Gentleman explain to the public at large how someone—not the hon. Member—can proclaim himself to be a multilaterist and yet retain membership of CND?
Mr. George: My time is almost up and I shall not follow the hon. Gentleman down that road.
I was serving on the Select Committee on Defence when it investigated security in military installations, and I have an obsession with the reform of the private security industry.
Royal Ordnance, which is owned by British Aerospace, has decided to throw out the Ministry of Defence police at its plant in Westcott near Aylesbury and replace them with its own private guarding force. I can think of nothing more stupid. The brochures produced by the Westcott plant—on which I shall not elaborate—show what is produced there. What is produced would be of enormous benefit to a potential terrorist. I fear what may happen once the Ministry of Defence police are removed. They are well
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trained and well led. They have access to arms and they have back-up from Bicester nearby. They have a tradition of service in defending our military installations. They are to be replaced by largely untrained people with not so much as a truncheon between them. Bearing in mind the sensitive nature of what is produced at Westcott, this is a stupid, stupid decision.
The company has been less than honest with the Thames Valley police and with the Ministry of Defence. I hope that, bearing in mind my remarks and the information that I propose to convey to them, the Government will call in British Aerospace and the management at Westcott and review and change the decision. If the decision is not changed, the guarding force that will be employed will not be up the task. No one has been recruited yet. Will people be recruited from an area of low unemployment? It is a stupid decision. We cannot play games with the security of national assets. I hope that even at this late juncture the Ministry of Defence will seek to retain the MOD police. The Ministry will be applauded if it intervenes and achieves that objective.
8.29 pm
Mr. Neil Thorne: It is a great pleasure to take part in the Army debate, particularly as I have been associated with the Anglo-Nepalese all-party parliamentary group for the last 10 years, first as secretary and now as chairman. I was delighted when my colleagues on the Select Committee on Defence agreed that we should consider the future of the Gurkhas. That was an innovation because the majority of Select Committee reports are about actions that have been taken by Government rather than recommendations to Government as to what action should be taken.
I regret, therefore, that the Secretary of State, for whom I have the highest regard, could not be more positive when he made his recent statement on the future of the Gurkhas to the House. I appreciate that he was talking about the position post-1997. Of course, it is difficult for any politician to bind himself or a successor that far ahead. Nevertheless, I took some comfort from his remarks because I interpreted them to indicate that the 4,000 that he mentioned was the basic minimum, below which the Government would not go.
1 should like to think that, because of the demographic trough about which we have heard so much in this debate, and for other reasons, we may find that post-1997 we shall require more Gurkhas rather than fewer. I hope that by that time we shall be thinking in terms of 10,000 Gurkhas. We know that there are 30 competitors for every Gurkha place. That means that the quality of the troops that we obtain from Nepal is extremely high.
It has already been mentioned that we have had a relationship with the Gurkhas since 1815. Next year is the 175th anniversary. The service that we have been given has been unstinting, and we should be profoundly grateful for it. Therefore, the aid that we give to Nepal is really paying back in a small way what we have taken from the country in its manhood over those many years. I look upon aid to Nepal in a different light from aid to any other country for the very good reason that we are paying for services rendered. It would be a tragedy if we were to give the impression that we did not intend to carry on doing that.
We must ask a number of questions of the Secretary of State about the future of the Gurkhas. In the past the

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Gurkhas have been considered to carry their own reserves because they have had four companies. Is it intended that British reservists will in future provide that element? Will we be looking perhaps to the Territorial Army to give that support? That would certainly be an innovation. If the Government propose to cut numbers, they must state fairly soon whether they intend to do that entirely by natural wastage or whether they propose redundancies. If there are to be redundancies, on what basis would they be made and how would redundancy affect pensions?
At the moment there is a permanent cadre of British officers. Four infantry battalions of a smaller size would have a significant effect upon that. Can we be assured that there will be sufficient left to sustain an appealing career structure for the remaining officers? I remind my hon. Friend that Gurkha officers have been a source of the leadership of the British Army for many years and that they have been able to maintain a very high profile.
One of the bases of Gurkha service is the family permission whereby the Gurkha soldier above a rank of staff sergeant can have his family with him at all times. Below that rank the soldier is accompanied by his family for a certain proportion of his service. That is important to the Gurkha soldier because he tries to manage his affairs in such a way that the birth of his children takes place during the period when he has family permission and has the benefit of using hospitals run by the British forces. The future of family permission must be made clear.
We would also like to know where in the United Kingdom the brigade is to he based. I hope that we shall soon have information about that. Will the training depot be situated in the United Kingdom when there is a move from Hong Kong? That is another important question to which we need an answer.
Dharan has been referred to already. It is a source of great sadness to me that, a year before the Select Committee went to Nepal to make its report, a decision had been taken and announced that Dharan was virtually to be abandoned. Some backtracking has taken place since, but in my view the decision was wrong because we make a valuable contribution to the infrastructure of that region of Nepal. Anyone who has been to that part of the world will be aware of the position. I cannot imagine that any politician who had been there could have made such a decision. I feel certain that the decision was taken blind because I do not think that there would have been such a decision otherwise.
I hope that my hon. Friend can assure me that the welfare facilities, and the personnel and stores transiting facility will continue there, as well as the agricultural resettlement training, which is very important to the economy of Nepal. There is a very good agricultural school and a building trades school there for retired soldiers whose future is in question. We must have answers about their future and about the financing of the hospital once the British military hospital closes. We need an assurance about long-term funding.
Hon. Members on both sides of the House have been concerned about the future of Hong Kong after the British leave in 1997. My hon. Friend should consider whether it would be possible to reassure the people of Hong Kong by coming to an arrangement whereby the Chinese Government fund a residual presence of Gurkha soldiers in Hong Kong, over at least part of the 50-year guaranteed period post-1997. We have such an arrangement in Brunei whereby the troops still serve under the British Crown. If
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the Chinese are serious about their guarantees to the people of Hong Kong, I cannot see why a similar arrangement could not be entered into with China I am sure that that would give a great deal of reassurance to the people of Hong Kong that their future was not likely to be turned upside down by the presence of Chinese forces behaving as they have so recently in Peking.
A completely different point of great concern to me is the future of battlefield communications. In the past we have been extremely well served by battlefield communications in the British Army, which has a reputation second to none in the world. One reason is that we can communicate on the battlefield so expertly at all levels. In order to do that, we have relied upon a number of companies in this country bringing forward their expertise.
One of those companies was founded in my constituency—the Plessey company. At present, the Plessey company is under the considerable cloud of a possible takeover from a predator, which is partly foreign, Siemens, and partly from home, GEC. There is no way under these conditions that the Plessey company can continue to carry out its extensive research and development programme efficiently, on which it spends some 22 per cent. of its turnover, this being about twice as high as any competing company. I fear that, if this state of affairs is allowed to continue and that company is subjected to that kind of pressure much longer, we shall not retain our edge over other troops in the battlefield.
I believe that it is in the national interest, and national security in particular, for the Ministry of Defence to say that, if the conditions that were laid down by the Monopolies and Mergers Commission cannot be carried out to the letter, it has a duty to the country to announce that quickly and remove the cloud as soon as possible. The staff of the MMC are not security cleared so they cannot be told exactly what is going on in research and development.
I congratulate my hon. Friend the Member for Canterbury (Mr. Brazier) on so steadfastly pursuing his home ownership scheme. Undoubtedly that is one of the keys to recruiting and retaining Army personnel. I hope that the Ministry of Defence can get the message over to the Treasury that we must be more flexible and we must take bold decisions before it is too late.
I remind my hon. Friend the Minister that the Territorial Army is a key issue in the defence scenario. I spoke in a debate a few days ago concerning the TA, and I referred specifically to the need for the TA messes to be the best possible clubs in every area in which they are present. If that is not done, we cannot expect to train and retain the personnel that we need. Will the Minister assure me that that matter is receiving his attention? We should ensure that this is the case not only for 36 Signal Regiment which is to have a new headquarters built in my constituency during the next few months, but for all others throughout the country. They must all have excellent recreational facilities for Territorial soldier at all levels.
I hope that my hon. Friend can answer at least some of those questions tonight.
8.42 pm
Mr. Harry Cohen: I am pleased to speak after the hon. Member for Ilford, South (Mr. Thorne), as I did on Tuesday night on his Redbridge market Bill. After that debate, our former colleague Matthew Parris in his

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excellent article in The Times described the hon. Gentleman as the "monocled Colonel Thorne, OBE, TD". It is thus absolutely fitting that he should be speaking in this Army debate.
This could be a very wide-ranging debate. A number of issues have not so far been touched upon, for example, forces' widows who are treated abominably by the Government. Indeed, women in other countries have to go round with begging bowls collecting money to support their sisters in this country. That is a scandal. Another example is the ex-service men who have been exposed to radiation. The Government are dragging their feet and refusing to give proper compensation to the victims or their families. Indeed, we have hardly touched upon the Government sell-off of the Royal Ordnance factories, which was a planned £100-million-plus rip-off of public assets for which the Government were responsible and which they are now trying to cover up. Those are other important issues, to which we shall return.
This is a debate on the Army, and I pay tribute to all those individuals who perform their tasks effectively and efficiently. It is the policies that are imposed upon them and which they are forced to implement that are too often wrong. It is the Government's fault, especially in the field of nuclear and conventional weapons.
There was an excellent cartoon in Tribune showing a couple of men walking past two billboards. The first billboard said, "Gorbachev's new arms cuts" and the second said, "Mrs. Thatcher's new nuclear weapon". One guy turned to the other and said, "She will be telling us next that we need these nuclear weapons to defend ourselves against disarmament." That is the situation we are in.
There has been a whole list of defence initiatives from President Gorbachev. The INF agreement is a great tribute to his will in getting a reduction in a range of nuclear weapons—some 4 per cent. of the world's nuclear weapons. Other initiatives are his unilateral cut in conventional weapons, and his action to try to cut back and remove chemical weapons. Russia has announced the first factory to crunch and destroy chemical weapons, which is an important new factor.
President Gorbachev has put into practice the concept of asymmetries. It is time that the West joined in that concept and made some asymmetrical cuts, too. As a result of those initiatives, the Soviet threat, which so many of us thought was a myth in any event, has diminished, certainly in the public mind. It is now down to single percentages. It is only the Conservatives who live in a bygone age, who still cling to that cold war notion of the Soviet threat. The reason for President Gorbachev's initiatives is, of course, economic—perestroika. He wants to bring money to his own people instead of wasting it on military and nuclear costs.
Another reason is the risk of accident. President Gorbachev has the experience of Chernobyl and he knows that there will be more nuclear accidents in the nuclear arms race to create weapons. He knows, too, the danger that lies in their use. Indeed, the Pentagon produced a report—
Mr. Mates: Will the hon. Gentleman give way?
Mr. Cohen: No, I shall not give way.
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The Pentagon produced a report, "Discriminate Deterrence", which talks about using nuclear weapons in a limited way against some Third-world countries.
Then there is the danger of proliferation. In the past few weeks we have seen, for example, that India has its new intermediate range weapons, AGNI, which could have a nuclear capability. Indeed, the Prime Minister, in her discussions with President Bush, talked to him about the United States providing nuclear weapons in Argentina. Such a proliferation poses a great threat. President Gorbachev has recognised that threat and that has prompted the promotion of his initiatives. Those are reasons for us, too, to run down our nuclear weapons in the context of the arms race.
President Gorbachev's latest proposals should be considered by the House. His proposal of 1.35 million troops on each side within six years should receive a positive response from the Government. So, too, should the common ceiling in tanks, artillery and armed troop carriers, combat aircraft and helicopters. President Gorbachev has suggested a three-stage proposal with elimination in two to three years of asymmetries and reductions to equal collective ceilings—10 to 15 per cent. lower than the lowest level possessed by either alliance. The Government should also consider President Gorbachev's proposals for cuts of 25 per cent. on each side and the establishment of a purely defensive conventional arms posture.
Then, of course, there is the proposal for the thinning out of the front line in Europe. That, of course is directly counter and opposite to NATO's backward strategy of so-called forward defence, which is a much better strategy.
Another proposal which has not been touched on by any Minister or anyone in the West is that the Soviets have offered to remove their entire nuclear ammunition from their allies if the United States does the same. Yet that has not even been referred to by NATO. There are opportunities to pick up those initiatives and to obtain parallel reductions in both nuclear and conventional forces.
The proposals made by President Bush must be viewed against those initiatives. His offer to cut United States troops in Europe by 30,000 to 275,000 is very welcome, but it ignores a couple of factors. It ignores all European armies, which I believe should also be substantially reduced. It also does not take account of America's increasing number of nuclear weapons in Europe, such as those at Upper Heyford, where a direct increase in the number of F111s is planned.
NATO adopted the comprehensive concept, and the Prime Minister quoted from it on Tuesday. Paragraph 27 states:
"The Allies' sub-strategic nuclear forces are not designed to compensate for conventional imbalances."
Paragraph 44 states:
"But the sub-strategic nuclear forces deployed by member countries of the Alliance are not principally a counter to similar systems operated by members of the WTO."
What are they for, if they are not to counter conventional imbalances or nuclear forces? What are they for, other than to be kept, come what may, despite there being no cause to keep them? It would be difficult to be more provocative towards other countries.
The NATO communique states about dual-capability aircraft that it will

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"include reductions by each side to equal ceilings at the level of 15 per cent. below current Alliance holdings of helicopters and of all land-based combat aircraft in the Atlantic-to-the-Urals zone."
That is very welcome, but the Prime Minister has now said that Britain's dual-capability aircraft will not be included in the discussions. That makes NATO's commitment rather hollow.
The comprehensive concept ignores France. Tucked away in an footnote on page 4, the NATO communiqué states:
"France takes this opportunity to recall that, since the mandate for the Vienna negotiations excludes nuclear weapons, it retains complete freedom of judgment and decision regarding the resources contributing to the implementation of its independent nuclear deterrent strategy."
France is saying that it is out of the discussions. NATO certainly is not coming to terms with Gorbachev's initiatives, let alone matching them.
The summit was an enormous defeat for the Prime Minister. It was a blow to her modernisation, block negotiation stance. The replacement for Lance has probably been delayed indefinitely and negotiations will commence on strategic nuclear forces. The Prime Minister is not a multilateralist. When a Conservative Member said during Question Time that the Government were the true multilateralists, the right hon. Lady was embarrassed. She does not want to get rid of nuclear weapons—she favours using the INF agreement to re-arm. She wants modernisation and a new arms race. She is out of date, irrelevant and dangerous. She is also two-faced—she smiles with President Gorbachev, but there is great hostility and opposition beneath the smiles.
The Gorbachev initiative provides a great opportunity to rid Europe of nuclear weapons and to reduce conventional forces. There could be stability at a much lower level of arms. Britain could play its role by getting out of the nuclear arms race, which would release resources from warfare to welfare and for the needs of mankind throughout the world. We need to get rid of the Tory nuclear-wild Government before Britain can play its proper role.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. Three hon. Members are still seeking to catch my eye. I understand that Front Bench spokesmen hope to begin their replies at 9.25 pm. I hope that hon. Members will pay regard to the arithmetic.
8.54 pm
Mr. Norman Miscampbell: I am sure that there will be no difficulty in all three hon. Members contributing to the debate in the time available.
I wish to follow the splendid speech of my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) and discuss not overall Army responsibilities or materials supply, but the most pressing matter of how we are to man the equipment in future years. There is a vital need for the Army to retain its personnel and to recruit those needed to man our defence forces. The Minister's speech clearly recognised the problem. It has certainly been recognised by every unit that I have visited during the past year and a half, and there were quite a number of them. We recognise, not only the demographic decline but the
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inevitable civilian competition from those who want to employ the very people that the Army needs, such as specialists and personnel of intelligence and initiative.
The manning of missiles and tanks depends on retaining the personnel. To achieve that, we must provide the soldier with a good career—and that means not just satisfying the soldier, but satisfying his wife and children so that they will want him to stay in the Army. The foundation of that satisfaction must be the knowledge that, after whatever length of service, the soldier will have a happy resettlement—to use current economic jargon, a soft landing. To achieve that a number of issues must be tackled. A better degree of training both for the soldier and his wife is required. Of course, SSAFA helps with training and others also lend a hand. The soldier and his wife need to learn the skills to allow them to set up home in civilian life with a great more ease than is currently the case.
In home postings, especially in the south of England, it is relatively easy for wives to get jobs, but a great deal of hardship occurs in away-from-home postings. I saw this clearly when I visited Holywood in Northern Ireland, where a regiment had gone for two years. The wives had followed their husbands and found that there was no work there for them. Wives with skills who had had good jobs in Aldershot found themselves offered the most menial tasks on the Down coast, and of course they found that disconcerting.
Something must be done to help the wife who must give up her job to follow her husband, and we want wives to accompany their husbands. I cannot see why, for those who have been in employment, some unemployment benefit could not be payable when they move overseas or to Ireland. Nor do I understand why, alone among those who serve the state, we ask them to pay for accommodation overseas. Perhaps we should consider—the Navy appears to be doing this with great success—initiating the custom of periodic bonuses for those who stay on as their service progresses.
I am anxious to keep my remarks short and will leave out much of what I would otherwise have said. I must, however, refer to the problem of housing and the growing feeling of discontent among people as they progress through their service lives and feel that they will riot be able to get a home when they come out. My hon. Friend the Member for Canterbury (Mr. Brazier) made a number of suggestions. Those and similar proposals have been made time and again, but tonight I have time only to commend them.
As one who has not given a vestige of support to the community charge from beginning to end, for Scotland or anywhere else, I feel that what we propose for the Army by way of the community charge needs thinking through. When a regiment is told that at the appropriate time it will move to inner London on guard duty, its reception to that news must be like the sepoys' reception in the middle of the last century to being given greasy cartridges, which they did not like. I do not know what a soldier will do when told that he is to go into Westminster where, whatever is said, the community charge will be £500 to £600 a head. How will soldiers pay that, and why should they pay it? I need say no more about homelessness or the community charge.
We spend enormous sums retraining people, and we lose those who are trained at enormous cost. Any rational application of economics and cost-effectiveness must show

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that a tiny proportion of money spent on making life better for those who are already in the services would pay handsomely.
It is a question of making the wives feel not just that their men are contented husbands. We want them to continue to want to help them remain contented. In that way they will be content to be the wives, and families, of soldiers. Unless we tackle the matter in that spirit we shall have losses, and they will be inexcusable.
9.2 pm
Dr. Alan Glyn: I wish at the outset to thank the Minister for at last allowing the rebuilding of Victoria barracks, Windsor, for which I have been pressing for eight years. My hon. Friend the Member for Kettering (Mr. Freeman) was good enough to come with me to see the site and, following that, the Under-Secretary of State for the Armed Forces announced in a written reply that he had given
"Approval to proceed with the rebuilding of Victoria barracks on the site of the old barracks at Windsor",—[Official Report, 18 May 1989; Vol. 153, c. 274.]
That has given great satisfaction not only to the Household Division but to the colonel of the regiment, Her Majesty.
Paragraph 46 of the Defence estimates gives an excellent analysis of the disparity that exists between ourselves and the Warsaw pact. Even if satellites such as Hungary and Poland split off, the Warsaw pact will have enormous superiority. So we must continue with our policy of having a flexible response and we must retain the nuclear capacity. Who knows what may happen? What happened in Peking could happen in Red square.
We must face the problems of the demographic trough, combined with the possible loss of 35,000 United States troops. Somehow we must fill that gap. Our special relationship with America still exists. Even so, the removal of 35,000 troops presents a problem with which we must deal.
That will be done by ensuring that we recruit enough people, and to do that we must offer them the right terms of service, always remembering that we are competing with industry, espcially in technology. Unlike other countries, we do not have a system of national service. I suggest that we must find an alternative, and perhaps we should press employers to make it compulsory—with, of course, sufficient allowances being provided—for people to do service. They could become Territorials or former Regulars could retrain at frequent intervals, so enabling us to have a strong reserve.
I was impressed by the suggestion of my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) for the further use of women in the services, which would give even more flexibility. We shall still need the Gurkhas.
The Defence Estimates show that the volunteer services have risen from 73,000 to 90,000 but that is still not enough. I must also refer to the important issue of the SSAFA letter, which was mentioned by my hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell). It was written by General Grey, whom I telephoned to discuss the matter. The issue was also raised by my hon. Friend the Member for Canterbury (Mr. Brazier). We must recognise what the SSAFA letter says. I am sure that all hon. Members would agree with that.
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Chemical weapons are the most dangerous of all because they are so difficult verify, even by satellite. The comparison between our openness and that of the Russians is well illustrated in paragraph 226 of the Defence Estimates. The imbalance which would result from the proposals of the Soviet Union is insufficient. As the Prime Minister said when she reported on the NATO summit, short-range missiles must remain until the Soviet Union has carried out its arms reduction policies. West Germany objects to short-range missiles but they would land in East Germany, the home of the Soviet allies. We should not relax our grip or drop our guard.
I am convinced that if we continue to negotiate in a strong and tough way we shall be able to achieve a settlement with the Soviet Union. We should always remember that policies could change if Gorbachev were beaten and the same were to happen in Russia as has occurred in China. We must always watch these points, be on our defence and ensure that we are never below the strength of Russia, which can pull hidden troops from the Urals. Let us always remember to negotiate from strength to obtain the security we need.
9.7 pm
Mr. Julian Brazier: I am most grateful to hon. Members for speeding up their speeches to fit me in, and to Ministers for compressing their speeches. I thank my hon. Friend the Member for Plymouth, Drake (Dame J. Fookes) and my seven other colleagues who spoke in support of my armed forces house purchase savings scheme.
I have been encouraged by the constructive discussions that I have had with the Secretary of State and my hon. Friend the Member for Romford (Mr. Neubert) on the subject. Both have shown considerable flexibility of mind in the solutions which they are willing to look at.
Of the householders in this country, 63 per cent. are home owners. All householders with mortgages are entitled to tax subsidies in the form of mortgage interest relief. A further 28 per cent. of households are either council or housing association tenants and, through their rent payments, they can, if they choose, attract a different form of subsidy: an accumulating discount on the purchase of that property. Sadly, the Army and parts of the Royal Air Force are shut out of that system and are firmly in the other 9 per cent. Comparatively few soldiers—the last figure I saw was 26 per cent.—own houses. Those who do have serious difficulties of the sort already covered by my colleagues.
I wish to stress one simple point, and read out some of the letters which I have received to illustrate it. The solution to the Army's house purchase problems does not lie with encouraging soldiers to buy houses while serving. Unlike the Navy, and part of the Royal Air Force, whose families are comparatively static, about half the Army's families are outside mainland Britain and the rest are extremely mobile. House ownership for a serving soldier does not mean home ownership or owner-occupation, but rather the absolute nonsense of trying to run two households with all the problems that being an absentee landlord entails.
Mr. O'Neill: Does the hon. Gentleman know whether service men living in service accommodation can acquire credits which could be used if, for example, they bought a council house allocated to them after they left the service?
Mr. Brazier: I am delighted to confirm that the hon. Gentleman is right. Should a service man subsequently obtain a council house, thanks to my hon. Friend the Member for Elmet (Mr. Batiste) those credits can be taken into account. However, the difficulty is that that very measure has resulted in councils being even more reluctant to allocate council houses. In many cases service men simply cannot get them at all, especially if they do not have children.
The message is simply that the solution to the Army's housing problem does not lie in encouraging people to become involved in buying houses during their service. The purchase of a house should be at or near the end of their service.
At the moment a soldier has no alternative, and I wish to read out a number of letters to illustrate the problem. The first comes from a flight lieutenant from one of the branches of the Royal Air Force, which has a similar problem. He said:
"While stationed in England I bought my own house. It is the only property I own. On being posted to Germany I rented my house and moved into married quarters at a cost of £180 a month. Almost half of the monthly rent I am receiving for the house goes in expenses—rates, agent's fees, insurance etc. This means that I am £75 a month short after paying my married quarters rent. Yet the law does not allow the married quarters rent to be offset against the let house so that the whole of the net income on that house is treated as though it is profit, meaning a still further loss of £26 a month."
Of all those who have written to me, that man is the best off because he has a letting arrangement which works.
The Federation of Army Wives has sent me a long brief with case after case of lettings that have turned into disaster. I quote just one. A major with three children was posted to BAOR. His tenant cleared out owing rent, electricity bills, telephone bills. He left the house in a dreadful state. The major travelled back to the United Kingdom at his own expense, decided to cut his losses and sell. He is now not able to enter the housing market again.
The next letter comes from a serving officer, who wrote:
"I have shown this paper to the six military serving members of my staff and to some of the retired ones. All with one voice have said 'If only a scheme like this had been in operation when I got married.'"
The crucial sentence comes at the end of his letter.
"Anything would be better than the present moral blackmail to follow the drum and accept the very real problems of letting one's own property."
That is the nub of the problem. Officer and soldier are faced with the moral blackmail of either having to buy a house and go down the hideous route of trying to run two households with all the hassles and problems that tenants bring, which in most cases they resolve by leaving the Army, or to do nothing at all and end up homeless.
All those cases concern officers. Comparatively few NCOs even try to buy at the moment. Let me quote a letter from the wife of one:
"My husband is an NCO in the Army and I am stationed in London. As we have no children at the moment and I am earning a good salary in London, we decided the time is right for us to purchase a flat."
Then news of the posting came, along with all the problems that have been referred to—the loss of the wife's job, and so on. She ends the rather sad story by saying:
"It is because of my feeling of being penalised because of my husband being in the Army and our subsequent loss of our flat that I felt that I had to write to you and applaud your fight on our behalf. I only hope that we, along with many other families in the armed forces, will benefit from your campaign."
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The last letter that I wish to quote is particularly sad. It comes from a lady I know whose husband is a major and would have been classified as a high flier. He has all the right credits to go up to very senior service in the Army. The extract is this:
"Some years ago we managed to get a foothold on the property market and now struggle to maintain a mortgage while paying for a married quarter. We have a mortgage of £40,000"—
comparatively small; they got in before the latest rise in prices—
"but unlike many other service families we suffered the inevitable problems of letting. For a period of six months we received no rent and for a further six months we had a tenant who did not pay and who stole or damaged so much that we incurred yet more expense. We then had one year of trouble-free letting but of course we had to pay agent's fees and tax on the rent received then."
She goes on to make the same point as has just been made about wives. She ends by saying:
"If a scheme like yours were to be introduced this year we would be able to sell our home, put the money into it and we could then stay on in the Army."
Then comes the saddest sentence of all:
"Sadly, the Army is an anachronism; it looks as if we will no longer be able to afford to subsidise it."
My hon. Friend the Member for Drake quoted a statistic from a brief that went round earlier which showed that premature voluntary release had risen by 70 per cent. in the Army in five years. In reply to a parliamentary question a few days ago, I discovered that in the latest quarter of this year, taking it back six years now, the figures having just become available, it has risen by 140 per cent. between the first quarter of 1983 and the first quarter of 1989.
We cannot go on saying to our soldiers that their alternatives are to do nothing and be homeless or get involved in this hopeless arrangement. We cannot keep people much past the age of 25 in the Regular Army and the age profile of the Army reflects that.
My hon. Friend has been most flexible and willing to listen to my suggestions and I know that he and his officials have worked extremely hard in this matter. I will end by giving him a shopping list of items which it seems to me are essential to make any scheme work—there is no reason why he should take my proposal off the shelf. There are four. The first is the easiest of them because since the Budget it is available already. It must be a fully tax-exempted scheme as a house is fully tax-exempted. The new PEP scheme in the Budget is fully tax-exempt; no tax of any sort is paid on money generated within the scheme.
The other three items are new. The second is that it is very important that a soldier going into this scheme, which is in lieu of a house—and he is only shut out from buying a house because he is in the Army—should be able to get the equivalent of mortgage interest tax relief, a benefit for which the 63 per cent. who are home owners are eligible if they have mortgages. It is in lieu also of accumulated discount on a council house.
The third is that he must get some return out of his existing housing payment. Most of these are single-income families and the difficulties in getting work for wives in some parts of England have been referred to. There are hardly any jobs for wives abroad. They are the only category of public servant, indeed almost the only category of people of any sort, who are made to pay accommodation charges when they are abroad.

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The fourth is a detailed but important item. It is very important that there is no upper limit on contributions to the scheme. Obviously there is an upper limit on tax relief but, just as civilians when they buy a house group together what bits of capital and income they can raise, so people should be able to put whatever capital they want to into this nest egg to accumulate in this tax-free environment, subject to the same tax exemption limits as their civilian counterparts have on mortgage interest relief.
We owe it to all the members of our armed forces to enable them to have a secure housing future. The MOD has shown imagination in the schemes that it has brought forward in encouraging those members of the armed forces who can be owner-occupiers, the Navy and part of the Royal Air Force by making it possible for them to do so, but I must leave my hon. Friend with the thought that such measures are a complete and utter mistake for the Army. They are not only a waste of money but a delusion leading people down the wrong route. We must instead provide our soldiers with an alternative so that those with 22 years' service do not need to write to me again saying that they are on a five or 10-year waiting list for a council house when they would almost certainly be owner-occupiers otherwise.
I commend those thoughts to my hon. Friend the Minister.
9.19 pm
Sir Geoffrey Johnson Smith: I will utter just one or two sentences. I wish to place on record that my hon. Friend the Member for Canterbury (Mr. Brazier) has widespread support on the Conservative Benches for his remarks, and I know from the nodding heads of Opposition Members that they support him too. I am sure that my hon. Friend's comments were listened to with great respect by my hon. Friend the Minister.
9.20 pm
Mr. O'Neill: With the leave of the House, I may say that tonight's debate has been wide-ranging in some respects but has featured several recurring themes. The subject of the Brigade of Gurkhas was raised in almost every contribution except the last two. It is rare in defence debates for there to be a consensus, but it is the unanimous wish of right hon. and hon. Members in all parts of the House to retain the Gurkhas at their present level of strength.
Tonight's debate would have occurred regardless of what happened in Peking, but recent events in the People's Republic of China have given it an extra edge. It is significant that senior Members such as the hon. Member for Somerton and Frome (Mr. Boscawen)—who does not make regular speeches in Army debates, partly because of his many years of service in the Whips' Office—forcefully made the point that we all remember what happened when the signal went to withdraw the Endurance. The hon. Member for Somerton and Frome made that point in a straightforward way but most graphically.
I do not envisage Hong Kong being another Falklands but I do not want to take any risks. The presence of the Gurkhas in Hong Kong sends signals not only to those outside the colony but to those living there, which is of
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equal importance. We owe them a substantial responsibility. Just because Hong Kong is far away and its culture is different from ours does not mean that our responsibilities there will begin to end some time around 1997 if circumstances are not as we should like them to be.
I ask the Government to take on board the fact that every right hon. and hon. Member who has spoken on that subject is of one mind. The Minister of State for the Armed Forces somewhat disingenuously commented at the beginning of the debate that he is trying to shift with the situation, to try to point up the possibility that his right hon. Friend the Secretary of State for Defence will think again. The House is asking the Secretary of State to think again, and when he reads Hansard he will discover time and again that right hon. and hon. Members are not happy with what has been said. I am sure that that view is held in all parts of the House.
It is significant that the only person who could be prayed in aid of the Government's view is Field Marshal Lord Bramall, in his letter to The Times. However, during the course of the evening I have been able to find something else said by Lord Bramall which may be of interest to the House. It appears that Lord Bramall can be prayed in aid by a number of people, and certainly I have tremendous respect for his judgment and views.
In last year's debate on the Defence Estimates in another place, Lord Bramall referred to the £20 billion that the Government spent on conventional defence since 1979, which was also mentioned in the Minister's speech today. Lord Bramall commented:
"The Government can be proud that as a result of seven years of sustained growth between 1979 and 1986, induced both by the Falklands campaign and by the Government's adherence to the NATO 3 per cent. growth target (an intention, I have to say, which was first announced, as the noble Lord. Lord Mulley, will know, by the last Labour Government)".
He continued:
"The Government would always want to see themselves as strong on defence. Indeed, they have done much, first to get forces' pay on a proper basis—and here I give credit to the noble Lord, Lord Mulley, who started the process when he was Secretary of State."—[Official Report, House of Lords, 12 July 1988; Vol. 499, c. 727–8.]
I do not want to start an exchange of "Oh no you didn't—Oh yes we did." I am merely trying to put the record straight. The Minister of State has been in the House for long enough, and has been connected with the Ministry of Defence for long enough as a Whip, a junior Minister and a Minister of State, not to insult the intelligence of the House with obviously misleading items of information to the effect that the increase in the Government's conventional spending is wholly attributable to decisions made by them. Many were set in train long before the present Government came to office. [Interruption.] The Minister is careful enough to say from a sedentary position that he did not say that, but that is what he meant to convey, as anyone with half a brain would have worked out when he said it. I wanted to use the right quotation, and I consider evidence from someone of Lord Bramall's seniority more than worth praying in aid.
In his speech on the Estimates last year, Lord Bramall drew attention to the deep-seated anxieties shared by many people about aspects of procurement. I will confine my remarks on that subject to one or two points that have arisen in today's debate. Everyone was relieved, I think, at the decision to go for a British tank, and no one disputes that the arrangement with Vickers is probably the most

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sensible option. We shall be buying a tank that is not yet in operation in our own or any other army—it is often forgotten that the Americans and Germans do not have such tanks in service yet and that we are going through the process of testing and trying them.
This summer once again sees the Canadian army competition, and I am not sure that it was sensible to arrange for the British not to be present. I may be wrong, but I was under the impression that British Army teams would not be competing this year. The Minister nods to confirm that. I think that that is regrettable. In my view, our armed forces can only benefit from such participation. That they will not do so well because their kit is not what it might be is a matter for speculation. As they lost a place a couple of years ago, I would expect them to try their damnedest to make the impact that their professionalism requires. I ask the Minister to think again, and to let us know the Ministry's current view.
Will the Minister also tell us why we are not replacing the Milan anti-tank missile, as the French and Germans are replacing its counterparts in the 1990s? We also seem to be slipping behind the French and Germans in battlefield air defence. For every two main battle tanks that we have, there is one air defence system, but for every two that the Germans have there are 1.5 air defence systems—that is to say, 50 per cent. more—while the French have almost one air defence system for every tank. I realise that what I have said is open to criticism on the grounds of over-simplification; nevertheless, the authors of Jane's "Battlefield Air Defence" were concerned about the matter, and I feel that it is legitimate to raise it in a debate of this nature.
Another aspect of procurement has not been mentioned today, perhaps because one or two hon. Members who have made it their hobby horse are not present. There is still a good deal of anxiety in the House about the demountable rack offloading and pickup system, known as DROPS. BAOR requires trucks capable of loading and off-loading supplies in the field. We know of the complaints about the equipment which was lent to the MOD and the problems in getting them investigated. The Comptroller and Auditor General has looked into the matter, but he has been hampered by the fact that it appears that the National Audit Office does not have the right technical advice to reach a judgment, so the matter has still not been settled. There is a strong case for looking very closely at DROPS and for there to be a proper statement in the House at some stage.
We have discussed Ptarmigan and raised the need for effective communications for BAOR, particularly as the amount of information that needs to be distributed on the modern battlfield is increasing rapidly. The Ptarmigan tactical communications network is supposed to fulfil those requirements, but there have been reports that the system does not have the capacity to meet the Army's future needs. The introduction of BATES, the battlefield artillery target engagement system, and ADCIS, the air defence command information system, will substantially increase the demands that will be made on Ptarmigan.
It was originally planned to purchase 32 mobile trunk nodes, but in the end only 26 were acquired and there is substantial doubt as to whether that will be sufficient. Just a few weeks ago in Jane's Defence Weekly a communications commander called for the number to be restored to 32. Certainly the Ministry should look at a number of matters relating to Ptarmigan.
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It may be that all the answers on procurement are not available tonight, but I understand that before the summer we shall be debating the Estimates. I should like to think that when we debate more detailed matters of procurement, the Minister will be able to give the House more information. If he can give us some information tonight, so much the better, and if he cares to write to me I shall be happy to receive his letters. I give notice that we shall be returning to these detailed matters in the Estimates debate relating to procurement for the Army and particularly BAOR. It is legitimate that we raise the matter tonight and receive some information.
A number of interesting points have been raised. My hon. Friend the Member for Walsall, South (Mr. George) expressed concern about the security arrangements for Westcott and his longstanding concern about MOD security. He deserves an answer. The speech by my hon. Friend the Member for Linlithgow (Mr. Dalyell) requires a substantial reply. The House will benefit, perhaps not this evening but certainly in future, from a substantial answer to those serious questions. If the Minister chooses not to put them on record but to write, I know that my hon. Friend would like to hear from him as quickly as possible and I should like to see the replies.
My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) made an extremely thoughtful speech. I know that he could not be here for the wind-up and he has apologised. My hon. Friend takes his duties as President of the NATO Assembly very seriously. He raised a number of serious questions and made a useful contribution to the debate. He raised serious issues about the problems of joint procurement and collaboration and co-operation within NATO. We are all grateful to him for his remarks and I hope that the Minister will be able to meet many of his requests.
He raised one point of response to the speech by the Minister of State. Perhaps the Minister could tell us whether the new MLRS sytems will be purely conventional or whether they will be dual-capable and whether they will use nuclear shells or merely conventional shells. That information will be of some assistance when we come to assimilate the significance of the communique produced last week in Brussels.
The hon. Member for Ilford, South (Mr. Thorne) made passing reference to the bid for Plessey. The silence of the Ministry of Defence about the bid has been almost deafening, although its previous position about the takeover of Plessey was well known and its representations were a matter of public debate. A clear statement will have to be made soon giving the Ministry of Defence's view, as it is critical to consideration of the bid.
A number of issues have been raised, and I have touched on only some of them. I and other hon. Members believe that President Bush's offer and NATO's response to it merit consideration. We shall doubtless return to the subject in the summer and autumn. Understandably, we have been discussing more basic and fundamental issues, but consideration of the Gurkhas enabled us to debate demographic trends and future recruitment.
Many useful contributions have been made about pay and rations and Army life. At times, we tend to leave these matters to bodies such as the pay review board. It is desirable that such issues are removed from the political arena and left to a group of experts, so that neither one side nor the other deals with the cash element. It has emerged from the debate that there are serious potential

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social problems under the surface among the armed forces. They are emerging because of the dramatic changes that have recently occurred in the property market.
From my own constituency experience, I am aware that non-commissioned officers and men in the ranks do not experience some of the difficulties that have been alluded to in obtaining council accommodation. It may be that I deal with a Labour authority which has bigger housing stocks and that in other parts of the country, where housing stocks are smaller, the problem assumes different significance. There is worry among all ranks about accommodation.
The hon. Member for Canterbury (Mr. Brazier), whom I am wont to criticise and bash whenever I can, for once is right. I have not looked at the fine print of the amendments to the Finance Bill that he has tabled. I am not trying to damn him with faint praise, but I appreciate the vigour with which he is pursuing the matter. Like the Gurkhas issue, there is no division across the Floor of the House about the principle of this. We may disagree about the fine details, but they can be ironed out, which is what the House, at its best, is supposed to do.
We have had a useful debate. Some issues have not been considered as closely as they might have been. My hon. Friend the Member for Walsall, South is coming out of the cold, or other people in our party are coming out of the cold—I am not sure which, and I will not say one way or the other. There has been an uncharacteristic degree of unanimity among Labour Members and broad agreement across the Floor of the House on a number of issues. The Government would be well advised to pay close attention to what has been said because it is not party advantage that is at stake but the good name of the Army, the morale of the men and women who serve in it and, ultimately, the defence of this country. I urge the Government to think seriously about what hon. Members have said today.
9.39 pm
The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Michael Neubert): As a veteran of no fewer than two single service debates since taking up my post, I have been struck again by the diversity and authority of the contributions by hon. Members on both sides of the House. I shall try to respond to as many points as I can in the time left available to me, but the House will understand that I shall also want to make some comments of my own.
My hon. Friend the Minister of State for the Armed Forces spoke of the encouraging signs of change in the Soviet Union, but not all news that comes from the East is encouraging. While a massive military capability exists in the Soviet Union, the West must retain the wherewithal to deter aggression. The Government will continue to ensure that this remains so. To succeed, we must maintain the support of the British public and recognise the debt owed to those men and women in our armed forces. For that reason, I am particularly pleased that tribute has been paid on both sides of the House to their sterling work.
We welcome the Bush proposals at the recent NATO Alliance summit and we now await the response of the East. As always, there is much detailed work to be done within NATO and it is too early to assess the implications for the United Kingdom in general and for BAOR in
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particular. It is worth pointing out that reductions envisaged for NATO are small compared with those being sought from the Warsaw pact to remove the existing large conventional superiority. I am afraid that I must disappoint the hon. Member for Clackmannan (Mr. O'Neill) in giving that response at this early stage in the development of arms control.
We do, however, share in the triumph that we believe the NATO summit represented. I regretted, but was not surprised by, the rather sour comments made by the hon. and learned Member for Fife, North-East (Mr. Campbell) on the part played by our Prime Minister in those negotiations. It may be that by his choice of party and policy he has condemned himself to a role of spokesman that is about as effective as trying to light a match in a force 10 gale. He naturally resents the dominant role that my right hon. Friend the Prime Minister plays in world councils. We are prepared to pay tribute to the part that Britain has played in reaching this advantageous arrangement, which has taken the initiative in arms control for the first time for some months.
The Army continues to play key roles in the defence of the United Kingdom and in the forward defence of the European mainland. In addition, it continues to provide vital assistance to the forces of law and order—against the men and women of violence in Northern Ireland—as well as assistance to communities and Governments all over the world. This year has seen the Army in action in all these guises and the House is right to applaud them. From the jungles of Belize to the streets of Northern Ireland, our service men and women serve with great distinction and professionalism.
In this latter context, the hon. Member for Clackmannan asked about measures taken to counter the terrorist threat. He was good enough to acknowledge that the Government have in hand extensive new work to improve the security of service establishments. In this, the Ministry of Defence police will continue to play their part. This does not mean that every civilian-guarding task requires its specialist skills, but I can assure the House, especially the hon. Member for Walsall, South (Mr. George), that any adjustments to the size of the force will have full regard for its value in the security context. In addition, the Army is continually refining and improving the organisational and operational arrangements to support the RUC in Northern Ireland. These have been successful and, together with measures taken by my right hon. Friend the Secretary of State for Northern Ireland, have frustrated the IRA in any attempts to make greater use of the large quantities of arms and ammunition that it possesses.
I should like to dwell on some of the more newsworthy activities in which the Army has taken part over the past 12 months which illustrate the variety of tasks that the service may be called upon to perform. I shall give examples of the Army in action which may be unexpected to the public at least, if not to Parliament. In Nepal, British military staff treated almost 900 casualties and carried out more than 300 operations in the wake of the earthquake there last August. Following hurricane Gilbert in Jamaica in September, Royal Engineers from the Belize garrison carried out much-needed repair on hospitals and children's homes. In Vanuatu, another team of sappers is working to repair cyclone damage under the auspices of the Overseas Development Administration.

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Closer to home, and perhaps the most difficult and distressing work carried out this year, was at the sites of the tragedies at Lockerbie and Kegworth. Up to 500 service men were present at Lockerbie on any one day, and some 8,000 man days of service assistance were provided. Some of the work was especially harrowing and those involved deserve the highest praise.
The army responded to many other calls for assistance, such as in the clearance of unexploded ordnance. Some 200 calls were answered in Great Britain, involving, for example, several world war 2 German 500 lb bombs. Those at Stanford-le-Hope and near Billingsgate fish market in London required the evacuation of large numbers of local residents.
Assistance was also given to the Home Office in the past year in manning temporary prisons at Alma Dettingen barracks and Rollestone camp. The soldiers involved demonstrated very well the sheer adaptability of the modern service man.
Perhaps the most under-rated of all the Army's commitments is the contribution it makes to the various international peace-keeping forces. For many years, we have provided contingents for the United Nations force in Cyprus and the multinational force of observers in the Sinai. Our garrison in Cyprus has provided support for the United Nations there and for United Nations forces in Lebanon, that terribly troubled country. Most recently, we have provided the signals staff for the United Nations transition assistance group in Namibia. Despite serving in conditions of virtual turmoil in this case, British personnel are highly regarded for the work they have done.
It has become clear that one of the main issues exercising the House—and that can be judged by the contributions of many of my hon. Friends and other hon. Members—is the question of the Gurkhas. My hon. Friend the Member for Davyhulme (Mr. Churchill), in particular, spoke feelingly and forcefully about that. I hope that tomorrow, hon. Members will reread what my hon. Friend the Minister of State for the Armed Forces had to say at the beginning of the debate about the Gurkhas. The hon. Member for Clackmannan raised the question of the future of the Brigade of Gurkhas and the current position in China. The Government are well aware of our security obligations to Hong Kong.
My hon. Friend the Minister of State for the Armed Forces made it clear that no reductions in Gurkhas would be made before 1992 and that no decision on the matter need be taken until well into next year. Surely that is the way to look at the statements made by my right hon. Friend the Secretary of State in the House about the future of the Gurkhas. As he himself said, the figure of 4,000 is a minimum. Surely what is significant—this is a point to which insufficient importance has been given tonight—is that the brigade structure will remain and all the Gurkha regiments will be intact. If that is encouraging to the President of the Gurkha Association, my hon. Friends and other hon. Members might also take encouragement from it. We are talking of some years ahead, not next month or next year. A commitment has been given not only to 4,000 men, but to the brigade structure of the Gurkhas. Surely that should be some reassurance to my hon. Friends and others tonight.
My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) spoke about the Vietnamese boat people—another tragic problem which has intensified in recent weeks. We are seeking to assist in a number of ways in
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Hong Kong. Troops of the Hong Kong garrison have already erected several temporary tented holding camps for the boat people. We are providing stocks of tents, water and water purification equipment, which are being used to help to set up these facilities. Troops are currently building a large tented camp to house Vietnamese boat people at Sek Kong military airfield.
Another issue mentioned in a number of speeches, notably that of my hon. Friend the Member for Dorset, West (Sir J. Spicer) was the question of helicopters I repeat that the Government fully recognise the importance of helicopters on the battlefield. As my hon. Friend the Minister of State for the Armed Forces said in his opening speech, our development of this capability continues. I shall not repeat my hon. Friend's remarks about our existing plans for improvement. The key point is that we should ensure that the balance of systems is for the destruction of armour is maintained. Helicopters and tanks both have a role to play, as we and our allies recognise.
I agree that helicopters are of considerable use out of area but, as with other equipment, our priority must be to meet NATO requirements while building in the flexibility necessary for out-of-area operations where appropriate.
The command and control of helicopters has recently been studied by the Ministry of Defence and it has been concluded that no significant changes should be made to the current arrangements.
My hon. Friend the Member for Dorset, West described helicopters as "low-flying tanks". As the House knows, one of my responsibilities is for low-flying training, so the concept of low-flying tanks did not immediately fill me with enthusiasm, in that context at least.
Mr. Cohen: The Minister referred to command and control and said that he did not think that there was any need to change the arrangements for the communications system. One problem is that the system cannot distinguish between friend and foe. Does not the Minister think that that makes it worth altering?
Mr. Neubert: I think that the hon. Gentleman is on another point. It might be better for him and the House if I moved on to my next subject, which is training.
To maintain the level of professionalism that we have all come to expect from the British Army it is necessary that training is as effective and realistic as possible; exercises are vital in that respect. In 1988 Exercise Iron Hammer, which took place in Lower Saxony, involved 3 Armoured Division together with some 3,300 regular arid Territorial Army personnel from the United Kingdom.
In the United Kingdom there was a series of military home defence exercises in the autumn. These tested our preparation to defend ports, airfields and other facilities, essential to our ability to sustaining war on the continental mainland, and the exercises involved not only Regulars from all three services, but Regular reserves, the TA and the Home Service Force.
In the United Kingdom, the Army needs large areas of land for training. We are determined to ensure that the size of the defence estate is kept to the minimum necessary to support the armed forces and, where possible, we take steps to rationalise our holdings and to dispose of land that is no longer essential to our purposes. Nevertheless, our current holdings cannot satisfy fully the training needs

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of the Army and we must continue to acquire additional land for training, usually by extending existing training areas.
Why do we need the land? All soldiers require the use of small arms ranges and local training areas within easy reach of their barracks, and large areas of land are needed for exercising whole units or groups of units. Modern weapons require larger danger areas than before to accommodate their greater range and power and new tactics for increasingly mobile units demand wider areas of land over which to conduct realistic manoeuvres.
We are assessing carefully the scope for using computer weapon simulation techniques but, although the introduction of weapon simulators can help to develop individual military skills and reduce some of the pressures on training land, they can never replace the need for training in the field in conditions resembling those that might be encountered in war. Moreover, simulators do not remove the need for soldiers to handle and fire the real weapons that they would use in battle.
In his opening speech, my hon. Friend described the positive response that the Army was making to the challenge posed by the demographic trough—a recurring theme of today's debate. I make no apology, therefore, for returning to the subject. The Army is by far the most manpower-intensive of the three services, employing roughly as many as the other two put together. The message that I should like to leave with the House—especially my hon. Friend the Member for Hampshire, East (Mr. Mates)—is that we are not planning to fail. We need to ensure that resources are deployed to maximum efficiency in order to meet the manpower challenges of the next decade and beyond.
In deference to my hon. Friend the Member for Plymouth Drake (Dame J. Fookes) perhaps I should add the word "womanpower". We take seriously the wider role of women in the armed forces. We noted my hon. Friend's reference to women being assigned to combat roles in the Church of England. Being Conservatives on this as on other matters, we hope that that was not her bid for a bishopric—although, if it came to it, I think that she would make a very good bishop.
Pay and conditions of service play a vital part in ensuring that sufficient manpower of the right quality can be recruited and retained. The Government accepted in full the recommendations of the Armed Forces Pay Review Body both in 1988 and 1989. We also announced during last year major changes to the allowances paid to members of the armed forces, designed to ensure that they are up to date, cost effective and appropriate to the needs of service life. The policy is to encourage accompanied service, and the package of allowances, of which I will say more in a moment, reflects that policy.
Turbulence is an inescapable feature of army life. But this can on occasion conflict with family responsibilities. In an era when so many women, including Army wives, quite rightly expect to pursue careers of their own, there can be difficulties. We have devoted quite a lot of time recently to thinking how we can accommodate this change in expectations.
That brings me to the major topic of housing that was mentioned by so many of my hon. Friends, and in
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particular by my hon. Friend the Member for Canterbury (Mr. Brazier) who has made it very much his personal campaign.
Difficult choices can arise for the individual who will naturally want his family with him but who will also, like his civilian counterpart, want to become a home owner. We recognised these difficulties in last year's review of armed forces allowances when we introduced the home owner's relocation package.
Under these arrangements, a service man living in his own house who decides to move home when posted to a new station some distance away is reimbursed the cost of estate agent's and legal fees up to a maximum, at present, of £2,500. In addition, he will be entitled to removal at public expense and to receive disturbance allowance. Equally, those who prefer not to relocate their home but elect to let their houses and move into married quarters are entitled to financial help with the costs of tenancy arrangements. These changes represent significant improvements to the conditions of service of the service man and woman.
We also offer surplus married quarters for sale to service men at a 30 per cent. discount. This has proved popular and since the scheme's inception in 1983, nearly 2,000 married quarters have been sold under these arrangements and a further 440 sales are in the pipeline. Clearly there is a finite number of surplus married quarters that can become available but we shall continue as long as possible to identify and release surplus quarters for disposal in this way.
The Army has also been considering other ways in which it can assist its personnel to enter the housing market. At the beginning of the year, we launched the buy, let and settle options which have been developed by private companies in conjunction with the Army and are designed to meet the specific needs of Army personnel. Under these schemes, service men will be offered a comprehensive package which will include help with finding a suitable property arranging mortgages and, when appropriate, making arrangements for property management and tenancy agreements. While these schemes do not necessarily meet everyone's requirements, they do, nevertheless, offer a useful and welcome service, particularly to the service man stationed abroad.
We have also been giving serious consideration to the establishment of a scheme to house ex-service men through the medium of housing associations in order to address the difficulties arising from the contraction of council housing stock to which reference has been made. We are currently looking at two sites in the south of England which might be suitable for a trial scheme, and are obtaining external advice on how such a trial might be taken forward.
My hon. Friend the Member for Canterbury and others have made suggestions as to how the current position might be improved. As my hon. Friend said, we have had discussions with him. My right hon. Friend the Secretary of State has played an enthusiastic part in those discussions and we have been considering a number of different measures. We are attracted to a scheme in which service men, who are not home owners because of the mobility required of them by their service career, might benefit from a saving scheme linked to the eventual purchase of a property. But there are a number of detailed considerations and a great deal of work to be undertaken before a scheme of this kind can be established.

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From what I have said, I hope the House will agree that there is a considerable degree of assistance already provided to assist Army personnel with their housing requirements. We shall continue to examine ways in which we can provide further assistance in this area.
Mr. Dalyell: Will the Minister write to those hon. Members whose comments he has not answered?
Mr. Neubert: Of course, I shall hope to write to all hon. Members whose points have not been answered in my closing speech.
I shall return to the theme of recruitment and retention, which has played such an important part in the debate, and talk about the Army career. With the clock ticking against me, I can only allow myself the very shortest time in which to do this. I would say, however, and I am sure that I would be joined in this by all hon. Members, that life in the Army remains a fine career. We commend it to young men and women now and through the 1990s.
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Abortion (Carlisle Baby Case)
Motion made and Question proposed, That this House do now adjourn.—[Mr. Heathcoat-Amory.]
10.6 pm
Miss Ann Widdecombe: I am most grateful for the opportunity to raise this issue tonight. I thank you, Mr. Speaker, for selecting this debate on the topic of the Carlisle baby. The case has been raised in questions to various Ministers and also as part of the general abortion debate, but it raises so many issues of national importance, affecting all regional and district health authorities and hospitals where abortions are carried out, that it really deserves a debate of its own.
I have given my hon. Friend the Minister notice of the principal questions that I intend to raise in the hope that many of those hitherto unanswered questions will be answered, and that certain things that went on in Carlisle will finally come out into the light of day.
In raising the issue, I have confined myself to the material contained in affidavits, sworn properly before a solicitor, information given to the priest, the chaplain of Carlisle city general hospital, and certain press coverage that has gone unchallenged.
Nevertheless, I recognise that not all hon. Members share my concern about the events in Carlisle in July 1987. I offered my hon. Friend the Member for Berkshire, East (Mr. MacKay), who I know to be entirely honourable and who would therefore have confined his time appropriately, the opportunity, if he wished, to intervene in the debate, but, alack, this place is as empty of himself as the arguments of the pro-abortionists on the subject are of reason and merit.
In summary, on 21 July 1987, a woman was admitted to Carlisle city general hospital, 21 weeks pregnant, for an abortion. No injection was used to ensure that the child would be born dead, and the method used was the prostaglandin method. In the event, the child was born alive. She lived for three hours, during the course of which she was baptised by one of the nurses. She was left gasping on a kidney dish. No ventilation or incubation equipment was available. Two nurses were left to cope with the situation alone without proper supervision. When the child died, no death certificate was issued, and no birth certificate has ever been issued.
The mother did not find out for six months that the child had lived. When eventually the facts came to light, through the good offices of a Catholic priest, a police file was prepared on the case that led the coroner in Carlisle to recommend that it was in the public interest that an inquest should be held. Normally it is routine that an inquest would follow, but on this occasion it did not.
The case raises a large number of questions, both about the compliance of our hospitals—in the NHS and the private licensed clinics—with the Infant Life (Preservation) Act 1929 and about the conduct of late abortions in general.
The 1929 Act states:
"any person who, with intent to destroy the life of a child capable of being born alive, by any wilful act causes a child to die before it has an existence independent of the mother, shall be guilty of … child destruction".
That is any child capable of being born alive—and the Carlisle baby was born alive.
That same Act states that at 28 weeks there
"shall be prima facie proof

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that the child will be capable of being born alive. It does not say "before 28 weeks there is no proof". It simply gives absolute protection after 28 weeks. If anyone has reason to assume that a child before that time is capable of being born alive, to procure its death is an act of child destruction. That is made very clear under the 1929 Act, and it is clear in the Abortion Act 1967 that nothing in it negates the provisions of the 1929 Act.
We are faced with a very strange situation. A piece of law states that it is child destruction to kill a child before it has an independent existence from its mother if it is capable of being born alive. Yet widely practised in the private clinics is the diabolical method of D and E in which the child is dismembered alive, without anaesthetic, in the womb. Is my hon. Friend the Minister really satisfied that our NHS hospitals and the private clinics that he must license are complying with the law? In the NHS hospitals, where that diabolical method is not practised, an injection of urea or saline is given to a child before abortion by the prostaglandin method. How does ensuring that the child is born dead possibly comply with the 1929 Act? As we now know that children can survive independently of the mother as early as 24 and possibly 23 weeks, what possible reason can there be for allowing any abortions after those weeks if the 1929 Act is to be complied with? That has been generally recognised.
We have another complaint, because not only is it permissible to kill those children in hospitals, despite the 1929 Act, but, just to make a sop in the direction of complying with the Act, there is a set of regulations. They were enunciated by the then Secretary of State, Mrs Barbara Castle, on 21 October 1975, when she said:
"In the National Health Service the Select Committee's recommendation that terminations after the twentieth week of pregnancy"—
the Carlisle baby was 21 weeks—
"should be carried out only in hospitals possessing appropriate facilities, including resuscitation equipment, have been accepted, and discussions have been held with regional medical officers who will be responsible for the implementation of the recommendations."—[0fficial Report, 21 October 1975; Vol. 898, c. 245.]
Furthermore, in approving private clinics the Secretary of State demands that they have ventilation and incubation if they are to carry out terminations after the 20th week; demands that there should be staff instructed in their use and available to use them; demands that arrangements be made for the child to be taken to the nearest special baby care unit. I am sure that we do not expect less from the NHS than we expect from the private sector. I ask my hon. Friend the Minister whether at any time the East Cumbria health authority gave notice to him, or to any of his predecessors, that it could not comply with the conditions set out in 1975 and re-enacted ever since.
Was my hon. Friend under the impression that Carlisle city general hospital could comply with those regulations? If he was not, what steps has he taken to ensure that other hospitals, in other areas, that have not had the horror of this case and therefore have not come to public notice, can comply with those simple provisions about ventilation, incubation and trained staff?
Why were two nurses left unsupervised? Why were no instructions given by the consultant who had authorised and, indeed, started the abortion? Why was their only telephone contact with a junior doctor who was on duty
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that night? What was done by senior medical staff in Carlisle city general hospital that night? Is all that normal procedure at Carlisle? Is it normal for nurses to be left unsupervised to cope with very complicated and unexpected cases? If so, is that also done elsewhere? Is my hon. Friend aware that the junior doctor on duty that night did not wish to participate in abortions? Wherefore the workings of the conscience clause?
I come now to the cruellest point of all. It appears that the diagnosis was possibly wrong. The abortion was carried out under section 1(1)(b) of the 1967 Act, which states that abortion is permissible where "there is a substantial risk that if the child were born it would suffer from such physical or mental abnormalities as to be seriously handicapped."
In this case the diagnosis was that the father had a mild form—and it was mild—of Ehlers Danlos syndrome, which the child in turn had only a 50 per cent. chance of inheriting and which ranges from a very minor disability to being quite serious in some forms. Can that be described as a substantial risk? If the Minister had to take a bet on such odds, would he think it likely that the odds were in favour of the child coming out handicapped? No proper analysis was made of whether that diagnosis was right or wrong.
We come to the aftermath of the Carlisle case and to what I can only describe as a massive cover-up. There was a police investigation and a recommendation for an inquest. It is not my hon. Friend's responsibility to approve inquests, but may I ask him to say in how many other instances of death in an NHS hospital where a coroner has recommended an inquest has that recommendation been turned down? How often does that happen?
Is there or is there not a law which says that live births shall be registered? Why was the Carlisle baby not registered'? Why, when it had lived for three hours—wanted, normal and baptised—was there no death certificate? Why was the mother not offered the option of a funeral, which is offered even in the case of stillborn babies, let alone those who have lived'? Why was not the mother told of the true situation for six months? Why was it left to a priest to bring the matter into the light of day, and why was the priest's contract not renewed? Is it true, as the nurses have stated, that their union advised them to keep quiet and not to take any legal action?
Will the Minister admit that a thorough overhaul of procedures is needed and that what happened in Carlisle that night brings credit to nobody and that the regional health authority must answer properly for its implementation of the ventilation and incubation requirements'? Will he also agree, chillingly, that there was a similar case in 1983, alas not the subject of so much publicity?
When that little light was extinguished in Carlisle, a great darkness fell on the NHS, on its civilisation and on its compliance with basic law. Does the Minister agree that for a live, wanted, normal, baptised child to live for three hours on a kidney dish—not even in a warm cot and not in its mother's arms—not in an incubator but on a kidney dish, is a disgrace? Will he join me in regretting that the case was not resolved in the light of day?
I now make a statement of fact and I do not make it threateningly. I have not tonight named any of the staff involved, the chairman of the regional health authority, the hospital administrator or anybody else, not even under privilege, but if a similar case occurs again in any part of

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the country a considerable body of parliamentary opinion will insist that that case is solved in the light of day, even if it means coming up with names and personal identities in the House.
I summarise my questions to the Minister and I would like him to answer all of them. I hope that I have left him sufficient time in which to do that. How does killing a child before birth tie in with the Infant Life (Preservation) Act 1929? What is the point of insisting that ventilation equipment shall be available if the child is allowed to be killed? Will the Minister consider outlawing completely the barbaric D and E method? Does he expect the NHS to match the standards that he lays down for private hospitals? Did East Cumbria ever indicate that it could not comply with the regulations and, if not, why was ventilation not available that night? Why were two nurses left alone unsupervised? In how many other instances of death on NHS premises has a recommended inquest been refused? Why was there no birth certificate? Why was there no death certificate?
Does the Minister agree that there was a cover-up and, if he does, what disciplinary action was taken, and if none was taken, what steps will be taken to ensure that this never occurs again? Why was the mother not told for six months that the child had lived? Why was the priest's contract not renewed? Is the Minister satisfied that the abortion complied with section 4 of the 1967 Act, and does he agree that that section is widely abused and that this is only one instance of it? What steps has he taken to revise the regulations or to re-emphasise them, in the light of the Carlisle case, to all regional health authorities? Why was there no option of a funeral?
I hope that the Minister will answer those questions. They all need answering. If they are not answered, this issue will be properly raised again in the House.
10.10 pm
Mr. Ken Hargreaves: I am grateful to my hon. Friend the Member for Maidstone (Miss Widdecombe) for allowing me to make a brief contribution to the debate. We should be grateful to her for raising this important case and to the Minister for being here for the Adjournment debate this evening. I believe he has replied to every Adjournment debate this week, and I am grateful to him.
The Carlisle baby case is disturbing, as the facts outlined by my hon. Friend the Member for Maidstone have brought home to us. On Tuesday, the Under-Secretary of State for Health said:
"The Abortion Act has to be read alongside the Infant Life (Preservation) Act 1929, whose basic purpose is to protect the life of the unborn child, except where termination of pregnancy is necessary to save the life of the mother."—[Official Report, 6 June 1989; Vol. 154, c. 206.]
That did not happen in this case. There was no protection for the child under the Infant Life (Preservation) Act. It was not only capable of being born alive, but was actually born alive. There is no doubt about that. However, there was no prosecution, and not even an inquest.
Nobody comes out of the case well. The hospital authorities, the Home Office, and the health authority do not. The Church does not because it could have done more to ensure that the chaplain was reinstated. Many people have a lot to answer for. We intend to continue to press this case until we have satisfactory answers.
10.12 pm
Mr. David Amess: I entirely endorse the comments of my hon. Friend the Member for Maidstone (Miss Widdecombe) and I admire her tenacity on this issue and all her supportive remarks about abortion.
In December, I and a number of colleagues raised, at Home Office questions, the Carlisle baby case and my hon. Friend the Under-Secretary for the Home Department was frank in his replies. He said:
"There has been only one conviction for child destruction in the past ten years."
He continued:
"There is quite clear and compelling evidence that the rebuttable presumption should arise not at 28 weeks but at 24 weeks,"—[Official Report, 15 December 1988, Vol. 143; c. 1074.]
I recently asked my hon. Friend the Minister a number of questions about abortion and I shall not detain the House with his answers today. He was frank and the number of late abortions carried out make one sad, particularly the fact that an abortion was carried out on a 10-year-old.
In an Adjournment debate in 1986, I raised the issue of abortions in private clinics. I am not happy with the procedures carried out. I do not expect my hon. Friend to respond tonight, but I hope that in due course he will write to tell me what advice his officials give to private clinics.
Is it a wonder that we face social problems and that life has become cheap when the number of abortions carried out in the United Kingdom is so high? I certainly hope, as would the majority of hon. Members, that well within the lifetime of this Parliament we shall have a clear opportunity to vote on the stage at which abortions can be carried out in this country. I very much hope that we shall vote to reduce the legal limit and that the Infant Life (Preservation) Act will no longer be the nonsense which it so clearly is today.
10.19 pm
The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): My hon. Friend the Member for Maidstone (Miss Widdecombe) was fortunate to secure this Adjournment debate tonight. I think that she described the case as distressing and sad, and I agree with her. Her contribution to the debate and those of my hon. Friends the Members for Hyndburn (Mr. Hargreaves) and for Basildon (Mr. Amess) were illuminating and important.
In the 11 minutes left I can answer but a few of the points raised, but I shall study the reports of this debate. My hon. Friend raised a number of issues and was kind enough to give me an outline of the points that she intended to raise. I hope that she will bear with me and accept an answer in correspondence to many of the points that she raised. Likewise, I shall write to my other hon. Friends.
The debate has centred on the Carlisle baby case—a termination of pregnancy on grounds of likely serious physical handicap which took place in Carlisle hospital in July 1987. I am anxious to demonstrate to the House that this case has been closely examined by the health authority and by the Department of Health, and also, as regards the matter of an inquest, by the Home Office. But in doing this I have to bear in mind two different matters. The first is that of patient confidentiality. Termination of pregnancy is for the women concerned inevitably stressful and it is

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therefore clearly important that the usual standards of confidentiality should be adhered to with particular rigour. The second is the question of possible legal proceedings on behalf of the women. I am advised that this question is still outstanding and I have therefore to bear this closely in mind in what I say briefly tonight.
When the various concerns about the case became apparent the East Cumbria health authority set up an internal committee of inquiry which included an independent gynaecologist, and produced conclusions and recommendations. The committee concluded that the termination of pregnancy was properly performed within the requirements of the Abortion Act but that there was some disregard of the patient's right to confidentiality and lapses in communication at and after the event. Its report, which identifies the staff involved and gives details about the patient's circumstances, is confidential. In the light of the committee's findings and recommendations the authority has tightened its procedures in various ways to ensure that they are in line with best practices. Written guidance to both medical and nursing staff has been strengthened and staff have been reminded that all information relating to patients must be kept confidential.
My hon. Friend asked first about resuscitation equipment and the 1975 Select Committee report. The Committee's recommendation that termination after the twentieth week of pregnancy should be carried out only in hospitals possessing appropriate facilities was accepted and in the NHS responsibility for its implementation has been the responsibility of regional medical officers. The Committee's recommendation was discussed with RMOs in September 1975. They said that there would be no difficulty in implementing the recommendation.
In March 1983 RMOs were reminded that the Department wanted to ensure that all NHS gynaecological staff who undertook late abortions were aware of the requirement that resuscitation equipment should be available. The RMOs felt that this requirement was sufficiently well known and observed by NHS consultant gynaecologists, and saw no need for the Department to issue particular guidance on the subject. In the Carlisle baby case the position is that if a decision had been made by the doctor concerned to resuscitate the foetus the necessary equipment was available on site and would have been on the scene within a matter of a very few minutes.
My hon. Friend asked about the Infant Life (Preservation) Act 1929 which makes it an offence to destroy the life of a child which is capable of being born alive. In any particular case it is a matter for the clinical judgment of the individual doctor whether a foetus, at any age, is capable of being born alive. Doctors are properly mindful of the requirements of the Act and do not carry out an abortion, by any method, when they consider that a child is capable of being born alive. As for the method used to perform an abortion, that too is a matter for the clinical judgment of the doctor involved having regard to all the circumstances of the particular case.
I am sure that my hon. Friend will agree that we should not put ourselves in the position of clinicians, making a judgment about whether a child is capable of being born alive. It is for the courts to make a determination given the circumstances of a particular case and I would not wish to go further than that.
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My hon. Friend asked about the supervision by the nursing staff and specifically about the nursing staff present at the termination. They were not alone and they were not unsupervised. Two nurses were caring for the woman under the supervision of a sister. The doctor was called on delivery and attended quickly. He decided not to attempt to resuscitate the foetus and informed nursing staff to that effect. That was entirely a matter for his clinical judgment.
The question of deaths on National Health Service premises where a recommendation for an inquest is turned down, is a matter for my right hon. Friend the Home Secretary and I will see that my hon. Friend's comments are brought to his attention.
My hon. Friend asked me why the baby's birth was not registered. The Births and Deaths Registration Act 1953 requires that any child born alive shall be registered and if the child subsequently dies the death also falls to be registered. Where more than 12 months have transpired since a birth or a death the registrar general's authority is required for the registration. In considering any such application for registration after 12 months the registrar general needs to be satisfied that a registerable live birth or death has occurred. I understand that no such application has been made in this case.
My hon. Friend asked why the mother was not told for six months that the baby had lived. The doctor made a clinical judgment that this was not a live birth. In the circumstances staff decided to say nothing to the mother after the doctor made his decision.
My hon. Friend asked about policy on burial arrangements. At the time to which these events refer it was the health authority's general policy to offer ordinary burial for stillbirths but not for terminations of pregnancy. This policy has now been extended to cover situations in which the foetus is over 20 weeks' gestation and guidelines have been issued to staff that burial of the foetus should be offered to the mother in these circumstances.
As regards the incineration of the foetus, this was the health authority's normal practice at the time, but, as I have already said, the procedure has now been changed. In cases over 20 weeks' gestation the foetus is now retained for 48 hours to allow for a request for burial.
My hon. Friend asked about the priest's contract. As she knows, the Department of Health does not intervene in the decisions of statutorily independent health authorities as they relate to questions of employment of individuals, and it would not therefore be appropriate for me to comment.
My hon. Friend asks for an assurance that the lessons from the Carlisle baby case will be learned. It is clear that this was in many ways an exceptional case. It attracted considerable publicity and has been closely studied in the Department, culminating in correspondence between the Minister for Health and the chairman of the authority, who assured us that the lessons of this very sad episode have been fully learned. The Department will also take close account of this case in its future administration of the Abortion Act 1967.
My hon. Friend implied that the diagnosis of handicap in this case was wrong. This is a misunderstanding of the position under the Abortion Act 1967. The Act requires that in cases such as this doctors should give an opinion, in good faith, that there is a substantial risk that if the child were born it would suffer from such physical or mental abnormalities as to be seriously handicapped. This is a

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matter of clinical judgment and I have no reason to believe that the Abortion Act is not being properly observed on that point.
I have gone into some detail, as far as the requirements of confidentiality and possible legal action allow, about the facts of the particular case which has given rise to concern. I hope that hon. Members will accept my assurances and those of the Minister for Health, who has also looked into this matter, and of the Home Office that this case has in its various aspects been closely studied. On the general question of late abortions, my Department will continue to ensure that the law and practice on this extremely difficult subject are administered as closely as possible. This is of course entirely without prejudice to any changes in the law on abortion which Parliament may see fit to adopt in the future and which it would not be right for me to discuss in any detail in this Adjournment Debate. I am, however, grateful to my hon. Friend for giving me the opportunity to set out the position.
On the general question of abortions, let alone late abortions, it has of course been long-standing practice in the House for Members to be able to express their own personal views on this issue. As regards that general policy, the Government have been consistent and, like my
468
hon. Friend, I find this case extremely distressing and sad. Whatever my own personal feelings, I see it as my duty tonight and in future correspondence with my hon. Friend to answer the facts of the case so as better to inform not only my hon. Friend but all hon. Members. In answering those questions of fact, one's own personal views or opinions concerning the issues that have been raised are in no way implied.
I undertake to write at length and to answer as comprehensively as possible the points raised by my hon. Friend.
Miss Widdecombe: With the leave of the House, Mr. Speaker, may I thank my hon. Friend for his very comprehensive reply to a long series of questions? I am grateful to him. Throughout his reply ran the theme that a live child does not have rights so long as it is the product of an abortion. To take the burial question, it was a live child; it should have been registered; it should have had a death certificate. Merely because it was the product of an abortion does not mean that it had fewer rights than a child born prematurely.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

NATIONAL FINANCE

  Public Debt
  Mr. Allan Stewart
  To ask the Chancellor of the Exchequer what is his estimate of the proportion of the public debt which will have been repaid in the three years to 1989–90.

  Mr. Neil Hamilton
  To ask the Chancellor of the Exchequer what is his estimate of the proportion of the public debt which will have been repaid in the three years to 1989–90.

  Mr. Ian Taylor
  To ask the Chancellor of the Exchequer what is his estimate of the proportion of the public debt which will have been repaid in the three years to 1989–90.

  Mr. Major
  It is estimated that roughly one sixth of net public sector debt will have been repaid in the three years to 1989–90.

  Company Cars
  Mr. Riddick
  To ask the Chancellor of the Exchequer how many tax-payers will be affected by the increased company-car tax rates(a) in total and (h) those driving more than 18,000 business miles per annum.

  Mr. Norman Lamont
  The increase in company car scale charges for 1989–90 will affect about 1·4 million car drivers, of which about 0·3 million drive more than 18,000 business miles per year.

  Income Tax
  Mr. Hind
  To ask the Chancellor of the Exchequer what would he the increased income tax payable by a married man on average earnings if the basic rate of income tax were restored to 33 per cent.

  Mr. Ian Bruce
  To ask the Chancellor of the Exchequer what would be the increased income tax payable by a married man on average earnings if the basic rate of income tax were restored to 33 per cent.

  Mr. Greg Knight
  To ask the Chancellor of the Exchequer what would be the increased income tax payable by a married man on average earnings if the basic rate of income tax were restored to 33 per cent.

  Mr. Norman Lamont
  If the basic rate of income tax were increased to 33 per cent. a married man on average male earnings would pay an additional £15·12 per week in income tax in 1989–90.

  Mr. Brandon-Bravo
  To ask the Chancellor of the Exchequer if he will make a statement setting out the Government's objective for the basic rate of income tax.
  196
  Mr. David Shaw
  To ask the Chancellor of the Exchequer if he will make a statement setting out the Government's objective for the basic rate of income tax.

  Mr. Gwilym Jones
  To ask the Chancellor of the Exchequer if he will make a statement setting out the Government's objective for the basic rate of income tax.

  Mr. Norman Lamont
  It remains the Government's aim, as my right hon. Friend announced in his 1988 Budget Statement, to reduce the basic rate of income tax to 20p in the pound as soon as it is prudent and sensible to do so.

  Mr. John Greenway
  To ask the Chancellor of the Exchequer what changes were made in the basic rate of income tax from 1974 to 1979; and what changes have been made since 1979.

  Mr. Franks
  To ask the Chancellor of the Exchequer what changes were made in the basic rate of income tax from 1974 to 1979; and what changes have been made since 1979.

  118. Miss Widdecombe: To ask the Chancellor of the Exchequer what changes were made in the basic rate of income tax from 1974 to 1979; and what changes have been made since 1979.

  Mr. Norman Lamont
  Information is given in the table.

  Year

  Basic rate of income lax per cent.

  1974–75

  33

  1975–76 to 1976–77

  35

  1977–78

  34

  1978–79

  33

  1979–80 to 1985–86

  30

  1986–87

  29

  1987–88

  27

  1988–89 to 1989–90

  25

  Mr. Page
  To ask the Chancellor of the Exchequer what was the highest marginal rate of tax on income paid during the period 1974 to 1979; and what is the equivalent rate in 1989–90.

  Mrs. Currie
  To ask the Chancellor of the Exchequer what was the highest marginal rate of tax on income paid during the period 1974 to 1979; and what is the equivalent rate in 1989–90.

  Mr. Mans
  To ask the Chancellor of the Exchequer what was the highest marginal rate of tax on income paid during the period 1974 to 1979; and what is the equivalent rate in 1989–90.

  Mr. Norman Lamont
  In each of the years 1974–75 to 1978–79 the highest marginal rate of income tax was 83 per cent. on earned income and 98 per cent. on investment income. For 1989–90 the highest marginal rate of income tax is 40 per cent.

  Mr. Hunter
  To ask the Chancellor of the Exchequer what proportion of total income tax revenue was paid by higher rate taxpayers in 1978–79; and what proportion was paid by them in 1988–89.

  Mr. Norman Lamont
  In 1978–79 higher rate taxpayers were liable to pay 20 per cent. of total income tax due. By 1988–89 their share had increased to 32 per cent.

  Labour Statistics
  Mr. Couchman
  To ask the Chancellor of the Exchequer by how much employment in the United Kingdom has risen since 1983.

  Mr. Charles Wardle
  To ask the Chancellor of the Exchequer by how much employment in the United Kingdom has risen since 1983.

  Mr. Summerson
  To ask the Chancellor of the Exchequer by how much employment in the United Kingdom has risen since 1983.

  Mr. Cash
  To ask the Chancellor of the Exchequer by how much employment in the United Kingdom has risen since 1983.

  Mr. Major
  Total employment in the United Kingdom has increased by 2,951,000 since March 1983.

  Mr. Stevens
  To ask the Chancellor of the Exchequer how many people are now registered as self-employed; and what was the comparable figure in 1979.

  Mr. Andrew Mitchell
  To ask the Chancellor of the Exchequer how many people are now registered as self-employed; and what was the comparable figure in 1979.

  Mr. Major
  In December 1988 3,048,000 people were self-employed in the United Kingdom compared with 1,906,000 in June 1979, an increase of 60 per cent.

  Mr. Thorne
  To ask the Chancellor of the Exchequer for how many months adult unemployment has fallen continuously in the United Kingdom.

  Mr. Major
  Unemployment in the United Kingdom has fallen for 33 months in succession.

  Manufacturing Output
  Mrs. Peacock
  To ask the Chancellor of the Exchequer what has been the annual rate of growth of manufacturing output over the last two years.

  Mr. William Powell
  To ask the Chancellor of the Exchequer what has been the annual rate of growth of manufacturing output over the last two years.

  Mr. Major
  In the two years to the first quarter of this year, manufacturing output grew at an average annual rate of 7·1 per cent.

  Manufacturing Investment
  Mr. Mills
  To ask the Chancellor of the Exchequer what is the latest official projection for the growth of manufacturing investment in 1989.

  Mr. Major
  I refer my hon. Friend to the reply my right hon. Friend the Chancellor of the Exchequer gave earlier today to my hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot).

  Mr. Hoyle
  To ask the Exchequer what was the level of manufacturing investment in the United Kingdom in 1979 and 1988.

  Mr. Lewis
  To ask the Chancellor of the Exchequer what was the level of manufacturing investment in the United Kingdom in 1979 and 1988.
  198
  Mr. Loyden
  To ask the Chancellor of the Exchequer what was the level of manufacturing investment in the United Kingdom in 1979 and 1988.

  Mr. Major
  The level of manufacturing investment in the United Kingdom in 1985 prices was £11,157 million in 1979 and £11,586 million in 1988.

  Corporation Tax
  Mr. Gill
  To ask the Chancellor of the Exchequer what proportion of the total amount raised by corporation tax came from private companies, and what was the amount for the most recently available fiscal year.

  Mr. Norman Lamont
  I regret that information is not available about the amount of corporation tax paid by private companies. Broadly speaking, the largest 1,000 companies and building societies account for roughly three quarters of the corporation tax collected. The estimated total yield for 1988–89 was £18·4 billion.

  Excise Duties
  Dr. Godman
  To ask the Chancellor of the Exchequer what is the estimated reduction in inflation caused by a decision not to index excise duties.

  Mr. Brooke
  The estimated reduction in inflation in 1989–90 is around half a per cent.

  Mr. Dunnachie
  To ask the Chancellor of the Exchequer what is the estimated reduction in inflation caused by a decision not to index excise duties.

  Mr. Doran
  To ask the Chancellor of the Exchequer what is the estimated reduction in inflation caused by a decision not to index excise duties.

  Mr. Graham
  To ask the Chancellor of the Exchequer what is the estimated reduction in inflation caused by a decision not to index excise duties.

  Mr. Lilley
  Indexation of excise duties would have increased the RPI by nearly half a per cent.

  Investment (GDP)
  Mr. Turner
  To ask the Chancellor of the Exchequer how many countries in the EEC spend a greater proportion of their gross domestic product on investment than the United Kingdom.

  Mr. Morley
  To ask the Chancellor of the Exchequer how many countries in the European Economic Community spend a greater proportion of their gross domestic product on investment than the United Kingdom.

  Mr. Buckley
  To ask the Chancellor of the Exchequer how many countries in the European Economic Community spend a greater proportion of their gross domestic product on investment than the United Kingdom.

  Mr. Meale
  To ask the Chancellor of the Exchequer how many countries in the European Economic Community spend a greater proportion of their gross domestic product on investment than the United Kingdom.
  199
  Mr. Brooke
  On the basis of estimates for 1987, eight.

  Balance of Payments
  Mr. Wall
  To ask the Chancellor of the Exchequer if he will forecast the balance of payments in each year until 1992.

  Ms. Abbott
  To ask the Chancellor of the Exchequer if he will forecast the balance of payments in each year until 1992.

  Mr. O'Brien
  To ask the Chancellor of the Exchequer if he will forecast the balance of payments in each year until 1992.

  Mrs. Mahon
  To ask the Chancellor of the Exchequer if he will forecast the balance of payments in each year until 1992.

  Mr. Major
  The Financial Statement and Budget Report for 1989–90 provides a forecast for the current account of the balance of payments for 1989 and the first half of 1990. Forecasts for later years are not published.

  Mr. Win Griffiths
  To ask the Chancellor of the Exchequer what was the balance of payments for the first quarter of 1989.

  Mr. Flynn
  To ask the Chancellor of the Exchequer what was the balance of payments for the first quarter of 1989.

  Mr. Major
  I refer the hon. Members to the reply my right hon. Friend the Financial Secretary gave earlier today to the hon. Member for Clwyd, South-West (Mr. Jones).

  Mr. Gareth Wardell
  To ask the Chancellor of the Exchequer what is his latest forecast for the United Kingdom balance of payments for 1989.

  Dr. Kim Howells
  To ask the Chancellor of the Exchequer what is his latest forecast for the United Kingdom balance of payments for 1989.

  Mr. Rogers
  To ask the Chancellor of the Exchequer what is his latest forecast for the United Kingdom balance of payments for 1989.

  Mr. Major
  I refer the hon. Members to the reply I gave to the hon. Member for Cardiff, West (Mr. Morgan) on 6 June.

  Tax Harmonisation
  Mr. Ted Garrett
  To ask the Chancellor of the Exchequer what recent submissions he has received on the tax harmonisation.

  Mr. Clelland
  To ask the Chancellor of the Exchequer, what recent submissions he has received on tax harmonisation.

  Mr. Cummings
  To ask the Chancellor of the Exchequer what recent submissions he has received on tax harmonisation.

  Mr. Lilley
  My ministerial colleagues and I have received a number of submissions from a variety of sources.

  Foreign Investment
  Mr. Battle
  To ask the Chancellor of the Exchequer what was the net flow of foreign direct and portfolio investment into the United Kingdom in 1988.

  Mr. Major
  Direct and portfolio investment in the United Kingdom by overseas residents (net of disinvestment) is provisionally estimated at £11.2 billion in 1988.

  Workplace Nurseries
  Mr. Martlew
  To ask the Chancellor of the Exchequer if he will make a statement on his policy in relation to the tax on workplace nurseries.

  Mr. Jack Thompson
  To ask the Chancellor of the Exchequer if he will make a statement on his policy in relation to the tax on workplace nurseries.

  Mr. Steinberg
  To ask the Chancellor of the Exchequer if he will make a statement on his policy in relation to the tax on workplace nurseries.

  Mr. Norman Lamont
  There is no special tax on workplace nurseries. A subsidised place in a workplace nursery is a benefit in kind and benefits in kind are subject to income tax.

  Mr. Vaz
  To ask the Chancellor of the Exchequer if he will make a statement on his policy towards the tax treatment of workplace nurseries.

  Mr. Norman Lamont
  In principle, employees should pay income tax on the whole of their earnings whether received in cash or in kind. A subsidised place in a workplace nursery is a benefit in kind and any subsidy is a proper subject for tax.

  Government Debt
  Mr. Gow
  To ask the Chancellor of the Exchequer what is the latest estimate of the interest payable on Government debt during the current financial year, and what was the comparable figure, adjusted for inflation, for the year ended 31 March 1979.

  Mr. Utley
  The latest forecast of general Government gross debt interest payments in 1989–90 is 17.1 billion as published in the 1989 Financial Statement and Budget Report. In 1987–88 prices, general Government gross debt interest is £15·1 billion in both 1978–79 and 1989–90. As a percentage of GDP, general Government gross debt interests is 41/4 per cent. in 1978–79 and 31/4 per cent. in 1989–90.

  Interest Rates
  Mr. Cryer
  To ask the Chancellor of the Exchequer if he will make a statement on the impact of current level of interest rates on the development of manufacturing industry.

  Mr. Major
  Manufacturing investment reached a record level in 1988 and the outlook is for continued strong growth.

  Mr. Knox
  To ask the Chancellor of the Exchequer if he will make a statement about the current level of interest rates.
  201
  Mr. Lilley
  Bank base rates are 14 per cent.

  Mr. Darling
  To ask the Chancellor of the Exchequer what are the current interest rates in(a) the United Kingdom, and (b) the rest of the G7.

  Mr. Lilley
  I refer the hon. Member to the answer my right hon. Friend the Chancellor gave earlier today to the hon. Member for Monklands, West (Mr. Clarke).

  Mr. Tony Lloyd
  To ask the Chancellor of the Exchequer what is his policy in respect of establishing stable interest rates.

  Mr. Lilley
  Interest rates are set at the appropriate level to maintain downward pressure on inflation.

  Tax and Prices Index
  Mr. Nigel Griffiths
  To ask the Chancellor of the Exchequer what is the most recent estimate for the tax and prices index.

  Mr. Bell
  To ask the Chancellor of the Exchequer what is the most recent estimate for the tax and prices index.

  Mr. McAllion
  To ask the Chancellor of the Exchequer what is the most recent estimate for the tax and prices index.

  Mr. Brooke
  The tax and prices index increased by 8.3 per cent. over the year to April.

  Directors (Salaries)
  Mr. George Howarth
  To ask the Chancellor of the Exchequer what was the average salary increase amongst the highest paid directors of the biggest 50 companies in the last year.

  Mr. Bradley
  To ask the Chancellor of the Exchequer what was the average salary increase amongst the highest paid directors of the biggest 50 companies in the last year.

  Mr. Nellist
  To ask the Chancellor of the Exchequer what was the average salary increase amongst the highest paid directors of the biggest 50 companies in the last year.

  Mr. McCartney
  To ask the Chancellor of the Exchequer what was the average salary increase amongst the highest paid directors of the biggest 50 companies in the last year.

  Mr. Brooke
  Pay is for the parties involved to agree and it is not for the Government to intervene.

  Mr. Tony Banks
  To ask the Chancellor of the Exchequer what is the estimated yield to the Exchequer in 1989–90 from income tax from company directors' emoluments.

  Mr. Norman Lamont
  The income tax liability on company directors' emoluments is estimated to have been about £3 billion in 1985–86. Estimates for later years are not yet available.

  Business Start-ups
  Mr. Burt
  To ask the Chancellor of the Exchequer what is his latest estimate of the number of business start-ups in 1988–89.
  202
  Dr. Twinn
  To ask the Chancellor of the Exchequer what is his latest estimate of the number of business start-ups in 1988–89.

  Dr. Goodson-Wickes
  To ask the Chancellor of the Exchequer what is his latest estimate of the number of business start-ups in 1988–89.

  Mr. Major
  In the calendar year 1987, the latest for which figures have been published by the Department of Employment, the net increase in the number of businesses registered for VAT was 45,000, an average of nearly 900 a week. Indications are that the rate of increase since 1987 has been even faster, and may have amounted to over 1,300 per week. The figures for 1988 will be available later in the summer.

  Government Expenditure
  Mr. David Evans
  To ask the Chancellor of the Exchequer what was the amount of central Government expenditure in 1988–89 expressed as a percentage of money gross domestic product; and what were the comparable figures for the previous five years.

  Mr. Major
  The latest available information on the percentage of money GDP at market prices accounted for by central Government expenditure is given in the table. The central Government figures on which the percentages are based exclude privatisation proceeds and grants to local authorities but include debt interest payments.

  Per cent.

  1983–84

  34·00

  1984–85

  34·50

  1985–86

  33·50

  1986–87

  33·00

  1987–88

  31·25

  11988–89

  2900

  1 April-December only.

  Mr. David Davis
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure as a share of gross domestic product since 1982–83.

  Mr. Jacques Arnold
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure as a share of gross domestic product since 1982–83.

  Mr. Redwood
  To ask the Chancellor of the Exchequer what has been the fall in general Government expenditure as a share of gross domestic product since 1982–83.

  Mr. Major
  The 1989 Financial Statement and Budget Report gave a figure of 391/2 per cent. for the ratio of general Government expenditure (excluding privatisation proceeds) to gross domestic product in 1988–89. The corresponding figure for 1982–83 was 461/4 per cent.

  Inflation
  Mr. Matthew Taylor
  To ask the Chancellor of the Exchequer what was the rate of inflation in the last month for which figures are available; and what was the rate of inflation in West Germany, France, Italy and the Netherlands in the last month for which figures are available.
  203
  Mr. Lilley
  The current 12-month inflation rates for the countries in question are given in the weekly OECD publication "Current Economic Indicators", a copy of which is available in the House of Commons Library.

  Mr. McAvoy
  To ask the Chancellor of the Exchequer what is the current inflation rate in the United Kingdom; and what it was one year ago.

  Mr. McLeish
  To ask the Chancellor of the Exchequer what is the current inflation rate in the United Kingdom; and what it was one year ago.

  Mr. McFall
  To ask the Chancellor of the Exchequer what is the current inflation rate in the United Kingdom; and what it was one year ago.

  Mr. Lilley
  I refer the hon. Members to the reply I gave to the hon. Member for Western Isles (Mr. Macdonald) on 6 June.

  Mr. Ashley
  To ask the Chancellor of the Exchequer what is the present level of inflation.

  Mr. Lawson
  I refer the hon. Member to the reply given by my hon. Friend the Economic Secretary to the hon. Member for Western Isles (Mr. Macdonald) on 6 June.

  North Sea Oil
  Mr. Flannery
  To ask the Chancellor of the Exchequer what is the total amount of money received by the Exchequer from North sea oil since May 1979.

  Mr. Major
  Total tax revenues and royalties to United Kingdom oil and gas production over the fiscal years 1979–80 to 1988–89 are estimated at £65·2 billion. Receipts from the gas levy over the same period amounted to a further £3·8 billion. Further details are contained in the report by the Secretary of State for Energy to Parliament of April 1989 (the Brown Book).

  Public Expenditure Survey
  Mr. Worthington
  To ask the Chancellor of the Exchequer what are his priorities in the forthcoming public expenditure survey.

  Dr. Moonie
  To ask the Chancellor of the Exchequer what are his priorities in the forthcoming public expenditure survey.

  Dr. Reid
  To ask the Chancellor of the Exchequer what are his priorities in the forthcoming public expenditure survey.

  Mr. Major
  The public expenditure survey will be carried out within the framework of the Government's objective for public expenditure. This is to maintain a downward trend over the medium term in the ratio of general Government expenditure to GDP.

  Balanced Budget
  Mr. Patnick
  To ask the Chancellor of the Exchequer when, on present trends, a balanced Budget will be achieved; and when was the last occasion a balanced Budget was achieved.

  Mr. Major
  The Government intend to move gradually from the present surplus towards a balanced budget over 204
  the medium term. The PSBR has been in surplus in each of the last two years, something achieved in only one previous year since the beginning of the 1950s. In all other years, the PSBR has been in deficit.

  Balance of Trade (Manufactures)
  Mr. Fatchett
  To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufactures in 1989.

  Mr. Barron
  To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufactures in 1989.

  Mr. Vaz
  To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufactures in 1989.

  Mr. Allen McKay
  To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufactures in 1989.

  Mr. Major
  The Financial Statement and Budget Report for 1989–90 shows a forecast deficit for trade in manufactures in 1989 of £151/2 billion.

  Rateable Values
  Mr. Rooker
  To ask the Chancellor of the Exchequer when he expects the Inland Revenue valuation officer to be able to inform businesses of the new rateable values following re-valuation.

  Mr. Norman Lamont
  Inland Revenue valuation officers are to complete the revaluation and send each charging authority a copy of the proposed list for its area by 31 December 1989. The authority is then to deposit the copy at its principal office and give notice of its availability for public inspection. The list comes into force from 1 April 1990.

  Personal Disposable Income
  Sir Fergus Montgomery
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income for the latest full year for which figures are available.

  Mr. Waller
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income for the latest full year for which figures are available.

  Mr. Marlow
  To ask the Chancellor of the Exchequer what was the growth of real personal disposable income for the latest full year for which figures are available.

  Mr. Norman Lamont
  Real personal disposable income is estimated to have grown by 5 per cent. in 1988.

  Business Investment
  Mr. Quentin Davies
  To ask the Chancellor of the Exchequer what was the share of gross domestic product represented by business investment in 1988.

  Mr. Michael Brown
  To ask the Chancellor of the Exchequer what was the share of gross domestic product represented by business investment in 1988.
  205
  Mr. Major
  Business investment as a share of GDP was 14.6 per cent. in 1988, the highest level recorded.

  Poverty
  Mr. Henderson
  To ask the Chancellor of the Exchequer when he last met representatives of the Low Pay Unit to discuss the numbers of people in poverty.

  Ms. Mowlam
  To ask the Chancellor of the Exchequer when he last met representatives of the Low Pay Unit to discuss the numbers of people in poverty.

  Ms. Quin
  To ask the Chancellor of the Exchequer when he last met representatives of the Low Pay Unit to discuss the numbers of people in poverty.

  Mr. Major
  My right hon. Friend has not met representatives of the Low Pay Unit recently.

  Credit Cards
  Dr. Michael Clark
  To ask the Chancellor of the Exchequer when he last met representatives of the credit card companies; and what subjects were discussed.

  Mr. Lilley
  My right hon. Friend often meets representatives of financial insitutions to discuss a variety of issues.

  Gross Domestic Product
  Mr. Hanley
  To ask the Chancellor of the Exchequer what was the growth of gross domestic product in 1987 and 1988.

  Mr. Andy Stewart
  To ask the Chancellor of the Exchequer what was the growth of gross domestic product in 1987 and 1988.

  Mr. Major
  Gross domestic product is estimated to have grown by 41/2 per cent. in both 1987 and 1988.

  Governor of the Bank of England
  Mr. Cousins
  To ask the Chancellor of the Exchequer when he next expects to meet the Governor of the Bank of England; and what matters he proposes to discuss.

  Mr. Illsley
  To ask the Chancellor of the Exchequer what was discussed when he last met the Governor of the Bank of England.

  Mr. Hinchliffe
  To ask the Chancellor of the Exchequer what was discussed when he last met the Governor of the Bank of England.

  Mr. Caborn
  To ask the Chancellor of the Exchequer what was discussed when he last met the Governor of the Bank of England.

  Mr. Lilley
  My right hon. Friend meets the Governor from time to time to discuss a variety of matters.

  International Debt
  Mr. Skinner
  To ask the Chancellor of the Exchequer when he next intends to meet other Finance Ministers to discuss international debt; and if he will make a statement.
  206
  Mr. Lilley
  My right hon. Friend the Chancellor of the Exchequer met other Finance Ministers on June 1 in the ministerial Council of the OECD. International debt was discussed among other issues.

  Balance of Trade
  Ms. Walley
  To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in visible goods in 1989.

  Mr. Major
  I refer the hon. Member to the reply I gave to the hon. Member for Stretford (Mr. Lloyd) on 6 June.

  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer what importance he attaches to the balance of trade(a) with the rest of the EEC and (b) with the rest of the world; and what account he takes of the EEC deficit when framing his economic policies.

  Mr. Major
  The overall current account is one indicator among many that are assessed within the framework of the Government's financial strategy. Movements in trade balances with individual economies or groups of economies will reflect, among other developments, changes in the United Kingdom's commercial and trading arrangements with them.

  Value Added Tax
  Ms. Armstrong
  To ask the Chancellor of the Exchequer what proportion of gross earnings a one-earner family with two children on average earnings pays in value added tax in(a) 1979 and (b) now.

  Mr. Ronnie Campbell
  To ask the Chancellor of the Exchequer what proportion of gross earnings a one-earner family with two children on average earnings pays in value added tax in(a) 1979 and (b) now.

  Mr. Lilley
  I refer the hon. Member to the reply given by my right hon. Friend the Financial Secretary to the hon. Member for Edinburgh. South (Mr. Griffiths) on 6 June.

  Higher Rate Taxpayers
  Mr. Boswell
  To ask the Chancellor of the Exchequer what proportion of total income tax revenue was paid by higher rate taxpayers in 1978–79; and what proportion was paid by them in 1988–89.

  Mr. Andrew MacKay
  To ask the Chancellor of the Exchequer what proportion of total income tax revenue was paid by higher rate taxpayers in 1978–79; and what proportion was paid by them in 1988–89.

  Mr. Paice
  To ask the Chancellor of the Exchequer what proportion of total income tax revenue was paid by higher rate taxpayers in 1978–79; and what proportion was paid by them in 1988–89.

  Mr. Norman Lamont
  In 1978–79 higher rate taxpayers were liable to pay 20 per cent. of total income tax due. By 1988–89 their share had increased to 32 per cent.

  Output Statistics
  Mr. Janman
  To ask the Chancellor of the Exchequer what are his latest figures for output per hour worked in the United Kingdom.
  207
  Mr. Major
  The April 1989 edition of the "Economic Progress Report" presented estimates by a leading academic which show that output per hour worked in the United Kingdom economy as a whole in 1986 was about 50 per cent. higher than in Japan and only 5 per cent. lower than Germany.

  Tax Reform
  Mr. Devlin
  To ask the Chancellor of the Exchequer if he will make a statement setting out Government policy on tax reform.

  Mr. Carrington
  To ask the Chancellor of the Exchequer if he will make a statement setting out Government policy on tax reform.

  Mr. Norman Lamont
  The Government's programme of tax reform has sought to create a climate in which businesses can thrive and individual initiative and risk-taking are rewarded. A major objective has been to leave people more of their own money, so that they can choose for themselves what to do with it. In particular the Government have reduced marginal tax rates so that an extra pound of earnings or profits is really worth having. We have reduced the basic rate of income tax from 33 to 25 per cent. and set a target of 20 per cent. Business taxation has been radically restructured, leaving the main United Kingdom corporation tax rate at 35 per cent., one of the lowest in the industrialised world. Five major taxes have been abolished completely.

  We have also tried to ensure that, as a general rule, people's choices are distorted by the tax system as little as reasonably possible. In general, the aim is to charge lower rates on a broader base; thereby improving incentives and reducing distortions. However, the Government has also been prepared, when it is sensible, to promote well-targeted tax reliefs which will help to make the economy work better. Other important objectives have been to provide a fair deal for married women and to simplify the tax system.

  Bank Rate
  Mr. Mullin
  To ask the Chancellor of the Exchequer what was the bank rate on(a) 8 June 1988 and (b) 8 June 1989.

  Mr. Lilley
  The bank base rates stood at 81 per cent. on 8 June 1988 and 14 per cent. on 8 June 1989.

  European Monetary System
  Mr. Beith
  To ask the Chancellor of the Exchequer what recent representations he has received on his policy on the European monetary system.

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

  Mr. Denzil Davies
  To ask the Chancellor of the Exchequer what are the major disadvantages he has identified of including the pound sterling in the exhange rate mechanism of the European monetary system.

  Mr. Lawson
  I refer the right hon. Member to the speech I made to the Royal Institute of International Affairs on 25 January.

  Married Man's Allowance
  Mr. Wood
  To ask the Chancellor of the Exchequer what recent consideration he has given to phasing out the married man's tax allowance.

  Mr. Lamont
  When independent taxation begins in April 1990 the present structure of income tax allowances will be replaced by the personal allowance and the married couple's allowance. A husband and wife will each have their own personal allowance and the new system will continue to recognise marriage through the married couple's allowance. This will be given in the first instance to the husband. The personal allowance and the married couple's allowance will together be equivalent to the present married man's allowance.

  Group of Seven
  Mr. Patrick Thompson
  To ask the Chancellor of the Exchequer when he next intends to meet his counterparts in the Group of Seven finance Ministers; and what matters he intends to discuss.

  Mr. Lilley
  At the economic summit in Paris in July.

  Delors Report
  Mr. Simon Hughes
  To ask the Chancellor of the Exchequer what representations he has received on his response to the Delors committee report on economic and monetary union in the European Community.

  Mr. Lilley
  My right hon. Friend has received a number of representations on the Government's response to the Delors committee report.

  Overseas Assets
  Mr. Curry
  To ask the Chancellor of the Exchequer what are the latest figures for the identified stock of United Kingdom net overseas assets; and what these represent as a share of gross domestic product.

  Mr. Major
  An estimate of the value of the stock of United Kingdom overseas assets identified at end-1988 will be included in the Pink Book in August. The latest estimate is of the order of £115 billion to £120 billion, which represents about one quarter of money GDP.

  Payroll Giving
  Mr. Hoyle
  To ask the Chancellor of the Exchequer what steps are being taken to ensure that organisations funded by the Treasury introduce chargeable payroll deductions for charities.

  Mr. Brooke
  There are no plans to change the present practice of deducting donations to charities free of charge.

  Indirect Taxation (EC Proposals)
  Mr. Vaz
  To ask the Chancellor of the Exchequer if he will make a statement about the European Commission's proposals for indirect taxation and the related issue of the definition of foodstuffs.

  Mr. Lilley
  I refer the hon. Member to the answer I gave to my hon. Friend the Member for Southend, East Mi. Taylor) on 23 May 1989 at column 440. The Commission has yet to define "foodstuffs" for the purposes of its proposals.

  EEC (Net Contribution)
  Mr. Teddy Taylor
  To ask the Chancellor of the Exchequer what estimate he has made of the net contribution to the European Economic Community in the calendar year 1989.

  Mr. Brooke
  The Government's latest estimate of the United Kingdom's net contribution to the Community budget in 1989 is £1,966 million, which was published in the "Statement on the 1989 Community Budget", Cm 680, in April this year.

  Net Overseas Assets
  Mr. Yeo
  To ask the Chancellor of the Exchequer what are the latest figures for the identified stock of United Kingdom net overseas assets; and what these represent as a share of gross domestic product.

  Mr. Major
  An estimate of the value of the stock of United Kingdom net overseas assets identified at end-1988 will be included in the Pink Book in August. The latest estimate is of the order of £115 billion to £120 billion, which represents about one quarter of money GDP.

  Gross Domestic Product (Business Investment)
  Mr. Watts
  To ask the Chancellor of the Exchequer what was the share of gross domestic product represented by business investment in 1988.

  Mr. Major
  Business investment as a share of GDP was 14.6 per cent. in 1988, the highest level recorded.

  Mr. Strang
  To ask the Chancellor of the Exchequer whether he has made any study of the likely effect of a further increase in interest rates on the level of manufacturing investments in the current year.

  Mr. Major
  Developments in the economy are constantly monitored. Manufacturing investment is growing strongly and the outlook remains good.

  Civil Servants
  Mr. Baldry
  To ask the Chancellor of the Exchequer what plans he has further to improve the skills and professionalism of civil servants.

  Mr. Brooke
  Her Majesty's Treasury is today issuing guidance to Departments on improved personnel management arrangements for two key groups, information technology staff and purchasing and supply staff. In future, most entrants to these groups will be recruited for these specific areas of work, and developed and promoted primarily on the basis of their specialised skills rather than those required for general administration. To meet their needs for specialised expertise, Departments will have the facility to recruit staff at more senior levels on a permanent basis. They will also be able to recruit, if required, on a short-term basis. There will be a greater emphasis on professional training and development for both groups. I am confident that the new arrangements will allow Departments to develop rounded professional expertise and thus further improve value for money in their IT and purchasing work.

  Premium Bonds
  Mr. Jack
  To ask the Chancellor of the Exchequer if he will list in the Official Report the value of and percentage
  210
  of premium savings bonds sales made in denominations of £10, £20, £30, £40, £50, £60, £70, £80, £90 and £100 for each of the last five years.

  Mr. Lilley
  [holding answer 25 May 1989]: Premium savings bonds are no longer issued in denominations of £60, £70, £80 or £90. The estimated value and percentage of premium savings bond sales made in denominations of £10, £20, £30, £40, £50 and £100 for the financial years 1984–85, 1985–86, 1986–87, 1987–88 and 1988–89 are shown in the attached table.

  Ending March

  1985

  1986

  1987

  1988

  1989

  £10

  £ million

  10·3

  11·0

  10·3

  10·1

  9·8

  Percentage of total value of sales

  5·0

  5·9

  4·8

  3·4

  3·2

  £20

  £ million

  1·3

  2·3

  3·1

  3·4

  3·6

  Percentage of total value of sales

  0·6

  1·2

  1·5

  1·1

  1·2

  £30

  £ million

  1·5

  1·9

  2·2

  2·3

  2·4

  Percentage of total value of sales

  0·7

  1·0

  1·0

  0·8

  0·8

  £40

  £ million

  1·4

  1·6

  1·7

  1·8

  2·0

  Percentage of total value of sales

  0·7

  0·8

  0·8

  0·6

  0·6

  £50

  £ million

  11·8

  13·3

  14·4

  14·8

  16·2

  Percentage of total value of sales

  5·7

  7·2

  6·7

  5·0

  5·2

  £100

  £ million

  17·3

  16·0

  16·5

  17·1

  17·5

  Percentage of total value of sales

  8·3

  8·7

  7·6

  5·8

  5·6

HEALTH

  Births
  Mr. Wigley
  To ask the Secretary of State for Health what information he has as to how many sets of(a) twins, (b) triplets, (c) quadruplets, (d) quintuplets and (e) sextuplets were born in England and Wales in 1988; and what was the total number of maternities in that year.

  Mr. Freeman
  In 1988, there were 689,153 maternities in England and Wales. These included:

  Number

  Twins

  7,452

  Triplets

  157

  Quadruplets

  12

  Quintuplets

  1

  Sextuplets or over

  0

  Total number of maternities with multiple births

  7,622

  Schoolchildren's Diets
  Mr. Norris
  To ask the Secretary of State for Health when he expects to publish the final report on the survey of schoolchildren's diets undertaken in 1983.
  211
  Mr. Mellor
  The report "The Diets of British Schoolchildren" from the chief medical officer's committee on medical aspects of food policy (COMA), giving the final results of the 1983 survey of schoolchildren's diets, is being published today. I welcome this highly detailed scientific document which confirms the findings that we published in the 1986 preliminary report of the survey and copies have been placed in the Library.

  The information in these reports has been and continues to be an invaluable guide for the preparation of the health education messages that our children need if they are to benefit from a healthy diet. It shows beyond doubt that although our schoolchildren in all social classes were well nourished and thriving as never before, they ate far too much fat and that many of the older children, especially the girls, needed more detailed advice about their choice of foods and about spending their lunch money more wisely. The Government are continuing to encourage local education authorities and the Health Education Authority in their efforts to inform children and parents about healthy eating and to persuade them to choose a healthy diet.

  Dog Attacks
  Mr. Alfred Morris
  To ask the Secretary of State for Health what recent information he has on the approximate annual cost to the National Health Service of serious attacks on children and others by dogs; and if he will make a statement.

  Mr. Freeman
  None. No information is collected centrally.

  Automated Cleaning Processes
  Mr. Gould
  To ask the Secretary of State for Health what information he has on the use by district health authorities of automated cleaning processes which emit considerable quantities of CFCs; and what steps are being taken to find alternatives.

  Mr. Freeman
  A minority of DHAs use automated cleaning and drying equipment in their sterile supplies departments for use prior to sterilisation of surgical equipment. Some of the older equipment will emit levels of CFCs within the statutory limit for operator safety and newer equipment involves solvent reclamation systems which considerably reduce the CFC emission levels. The three United Kingdom manufacturers of such equipment are all in the process of seeking alternative processes.

  Health Service Pay
  Mr. Hoyle
  To ask the Secretary of State for Health if he will publish details of the new package on pay and structure offered on 16 May to staff side representatives of Committee E; and what this will mean for operating department assistants.

  Mr. Mellor
  [holding answer 7 June 1989]: Details of the proposals, including the effect on operating department assistants, are contained in the professional and technical staffs B Whitley council documents PTB/J320. A copy has been placed in the Library.

SOCIAL SECURITY

  Income Support
  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security how many men aged 70 to 75 years receive income support; and what is this figure as a proportion of the total number of men aged 70 to 75 years.

  Mr. Peter Lloyd
  The latest estimate is that there are some 82,000 men aged 70 to 74 (inclusive) dependent on income support. This represents 9 per cent. of all men in this age group.

  Loans and Grants
  Mr. Allen
  To ask the Secretary of State for Social Security what was the total value of(a) applications and payments for (i) budgetary loans, (ii) cash loans (iii) community care grants from the social fund for the 1988–89 financial year expressed in money terms and as a percentage of the available budget in respect of Department of Social Security offices covering the Nottingham, North constituency.

  Mr. Fatchett
  To ask the Secretary of State for Social Security if he will list for each Leeds social security office the funds allocated in 1988–89, and in 1989–90 for social fund(a) loans and (b) grants and the total expenditure in 1988–89 for (i) loans and (ii) grants.

  Mr. Peter Lloyd
  The information requested can be obtained from the Library.

  However, social fund data for March 1989 are not yet available as a check of the figures has revealed some inaccuracies which have resulted from a new method of calculating the month end balances. The necessary adjustments are being made and the tables will be placed in the Library shortly.

  In addition, the value of applications processed during December 1988 remains unavailable because of an earlier computer malfunction.

  Attendance Allowance Board
  Mr. Frank Field
  To ask the Secretary of State for Social Security on what dates in the current year the attendance allowance board has met.

  Mr. Scott
  The requested information is as follows:

  Attendance Allowance Board

  Dates of meetings in 1989 (to 6 June 1989)

  10 January 19891

  30 March 19891

  17 January 19891

  4 April 19891

  24 January 19891

  11 April 19891

  31 January 19891

  20 April 19891

  7 February 19891

  25 April 19891 (am)

  14 February 19891

  25 April 19892 (pm)

  16 February 19891

  27 April 19891

  21 February 19891

  4 May 19891

  23 February 19891

  9 May 19891

  28 February 19892

  16 May 19891

  7 March 19891

  23 May 19891

  14 March 19891

  6 June 19891

  21 March 19891

  1 "Small board" case work meeting attended by the chairman or deputy chairman and two other members.

  2 Formal meeting of the full attendance allowance board.

  Visual Handicap
  Mr. Favell
  To ask the Secretary of State for Social Security when he will be able to publish the report of the working group on inter-agency collaboration on visual handicap.

  Mr. Scott
  I am pleased to announce that this report, which was commissioned in 1987 by the then Minister for the Disabled, is now available in book form (through Her Majesty's Stationery Office). Versions in braille, large print and on tape are available from the Department of Health. I am very grateful to the members of the working group, and I hope that the report will be carefully studied by all involved in statutory and voluntary services to visually handicapped people. I know that the detailed recom-mendations will be carefully considered by Ministers in the Department of Health and the Welsh Office.

  Disability
  Mr. Ashley
  To ask the Secretary of State for Social Security on what date he plans to publish the fourth report from the Office of Population Censuses and Surveys on disability.

  Mr. Scott
  [holding answer 7 June 1989]: The Office of Population Censuses and Surveys has today published the fourth report on the findings of the surveys of disability in Great Britain carried out between 1985 and 1988. The report covers all the remaining aspects of circumstances of disabled adults which were not included in reports I and 2, which were published last year. It provides information on a wide range of topics, including the use of services; equipment and adaptations; mobility and transport; employment; social and leisure activities; and, for those in private households, the informal help and care received. For those in communal establishments, some aspects of residents' finances are described.

  The large quantity of detailed and complex information contained in the report has been provided by disabled people themselves or their carers. It therefore reflects their own perception of their activities and experiences, including the type of services they receive and the disability equipment they use.

  Taken together, the OPCS reports will provide the most comprehensive and detailed information ever collected about the circumstances of disabled people in this country.

  We welcome comments on this report, as we have on the three already published.

HOME DEPARTMENT

  Spain (Secretary of State's Visit)
  Mr. Dalyell
  To ask the Secretary of State for the Home Department if he will make a statement on the follow-up action resulting from his visit to Spain, to discuss matters of mutual concern.

  Mr. Hurd
  I announced on 17 May the outcome of the meetings of European Community Immigration Ministers and Trevi Ministers, which I attended in Madrid on 12 May, in reply to a question from my hon. Friend the Member for Portsmouth, South (Mr. Martin) at column 208. Suitable steps are being taken to give effect to these decisions.

  Dogs
  Mr. Spearing
  To ask the Secretary of State for the Home Department what recent representations he has received concerning legislation for control of dogs; what replies he has sent; and what action he proposes to take.

  Mr. Alfred Morris
  To ask the Secretary of State for the Home Department if there is any action he will be taking in response to the increasingly frequent reports of serious attacks on children and others by dogs; and if he will make a statement.

  Mr. David Young
  To ask the Secretary of State for the Home Department what immediate action he is taking to deal with attacks by Rottweilers on people and animals.

  Mr. Dunnachie
  To ask the Secretary of State for the Home Department (1) if he will introduce measures to ensure that dogs with inborn aggressive tendencies must wear muzzles when in public places;

  (2) if he will introduce measures to ensure that all dogs must be kept on a lead when in public places.

  Mr. Alfred Morris
  To ask the Secretary of State for the Home Department if there is any action he will be taking in response to the increasingly frequent reports of serious attacks on children and others by dogs; if he intends to use the statutory powers that may alleviate the problem; and if he will make a statement.

  Mr. Douglas Hogg
  We have received about 55 representations and are examining the possibility of strengthening the legislation on dangerous dogs.

  Mr. David Young
  To ask the Secretary of State for the Home Department if he will ban Rottweilers as domestic pets or from being held on domestic premises.

  Mr. Douglas Hogg
  I am not persuaded that a ban would be the right answer, but we are examining the possibility of strengthening the legislation on dangerous dogs.

  Mr. David Young
  To ask the Secretary of State for the Home Department (1) if he will make it his policy to ban Rottweilers and other dogs bred for fighting from being kept in domestic premises or as domestic pets, without the express permission of the police;

  (2) what action he intends to take to deal with the problem of violent dogs and the environmental problems caused by neglected dogs.

  Mr. Douglas Hogg
  [holding answer 6 June 1989]: The Government are examining the possibility of strengthening the legislation on dangerous dogs.

  Terrestrial Broadcasting Transmission Networks (Study)
  Sir Geoffrey Johnson Smith
  To ask the Secretary of State for the Home Department if he will publish the study of privatisation options for the terrestrial broadcasting transmission networks which his Department commissioned from Price Waterhouse.

  Mr. Hurd
  I have today placed a copy of this report in the Library. Further copies are available from HMSO bookshops at a cost of £3·95.

  War Criminals
  Mr. Winnick
  To ask the Secretary of State for the Home Department when he now expects to make a statement on the position of those persons in the United Kingdom who are alleged to have committed Nazi war crimes.

  Mr. John Patten
  I refer the hon. Member for the answer given to him on 11 May. I understand that the inquiry still expects to report this month.

  Crime (Essex)
  Mr. Janman
  To ask the Secretary of State for the Home Department what steps he is taking in relation to crime in Essex; and if he will make a statement.

  Mr. John Patten
  I refer my hon. Friend to the reply that I gave to a question from my hon. Friend the Member for Harlow (Mr. Hayes) on 11 May at column 539.

  Deportation Orders
  Mr. Darling
  To ask the Secretary of State for the Home Department how many deportation orders were signed by immigration officers in each of the last five years; and how many of those were signed by officers at inspector level or above in each month since August 1988.

  Mr. Renton
  [holding answer 6 June 1989]: Deportation orders are always signed by Ministers, normally by my right hon. Friend the Home Secretary.

  In the five years from 1984–88, the numbers of notices of intention to deport under section 3(5)(a) of the Immigration Act 1971, against which there is a right of appeal to the independent appellate authorities, signed by members of the immigration and nationality department were as follows:

  Number

  1984

  2,278

  1985

  1,578

  1986

  661

  1987

  794

  1988

  1,751

  Information about the number of notices of intention to deport signed by an immigration officer in this period on the authority of a responsible official in the deportation section of IND is not readily available and could be provided only at disproportionate cost.

  Since 1 August 1988, notices of intention to deport under section 3(5)(a) may be authorised by a member of the immigration service at not less than inspector level. The number so authorised (and signed by an immigration officer) since 1988 is as follows:

  Number

  1988

  August

  82

  September

  114

  October

  121

  November

  208

  December

  159

  1989

  January

  226

  February

  224

  216

  Number

  March

  252

  April

  171

THE ARTS

  Horniman Museum and Library
  Mr. Fraser
  To ask the Minister for the Arts if he will publish a timetable for establishing the independence of the Horniman museum and library in Forest Hill.

  Mr. Luce
  It is intended that the museum will be governed by an independent charitable trust following the abolition of the Inner London education authority. The necessary steps are being taken to put in place as quickly as possible an appropriate charitable trust framework for the museum.

ENVIRONMENT

  Rates
  Mr. Andrew Bowden
  To ask the Secretary of State for the Environment what is the average domestic rates bill in England and Wales for 1989–90 of people in receipt of income support.

  Mr. Gummer
  The information requested is not available.

  Housing Action Trusts
  Ms. Harman
  To ask the Secretary of State for the Environment (1) how and when he intends to conduct a ballot of the tenants of the Gloucester grove and North Peckham estates in Southwark in relation to a housing action trust;

  (2) whether the housing action trust ballot will be on the basis of one vote per tenancy;

  (3) who will be entitled to cast the vote in a housing action trust ballot when the tenancy is in joint names.

  Mr. Trippier
  I refer the hon. Member to the replies that I gave to her on 30 January(Official Report, columns 20 and 30) and to the hon. Member for Norwood on 24 May (Official Report, column 592).

  Ms. Harman
  To ask the Secretary of State for the Environment how many tenants in Southwark, living on the Gloucester grove and North Peckham estates proposed for the setting up of housing action trusts, were interviewed by the consultants Peat Marwick McLintock in preparing their report on the suitability of these estates for housing action trusts.

  Mr. Trippier
  The consultants' report acknowledges that they were unable to interview more than a small proportion of tenants living on the North Peckham and Gloucester grove estates. Nevertheless, they held in-depth interviews with 31 tenants and a similar number of people closely connected with the estates, and they used a variety of published sources to produce a good report of housing conditions in the area, with recommendations for improvements. Tenants and tenants associations on both estates are discussing the reports with the consultants as part of the current consultation exercise.
  217
  Ms. Harman
  To ask the Secretary of State for the Environment if he will give an estimate of the amount of Government support necessary for improvements to the Gloucester grove and North Peckham estates along the lines of those recommended by the consultants in their report on the suitability of these estates for housing action trusts.

  Mr. Trippier
  The consultants produced an illustrative scheme for costing purposes which estimated the costs of improving the Southwark housing action trust area at around £112 million. We have allocated substantial resources to the housing action trust programme and are committed to pay for the improvements to be carried out by housing action trusts. The amount of resources for any particular trust will depend on the programme of work, to be decided in consultation with residents.

  Ms. Harman
  To ask the Secretary of State for the Environment if he will make a statement on the future of existing and planned estate action schemes for the Gloucester grove and North Peckham estates in Southwark.

  Mr. Trippier
  Southwark council has received previous estate action allocations amounting to some £3·75 million for the Gloucester grove and North Peckham estates. The council bid unsuccessfully for Estate Action support towards housing and environmental improvements there in 1989–90, but their request for Estate Action support for the conversion of garages into local estate offices is being considered by the Department.

  If Southwark submits Estate Action bids for the Gloucester grove and North Peckham estates in future years, their applications, like all Estate Action bids, will be assessed on their merits.

  Ms. Harman
  To ask the Secretary of State for the Environment what estimates he has received of the cost of rehabilitation of Gloucester grove and North Peckham estates from his consultants on housing action trusts.

  Mr. Trippier
  The consultants produced an illustrative scheme for costing purposes which estimated the costs of improving the Southwark Housing Action Trust area at around £112 million—£68 million for North Peckham and £44 million for Gloucester grove. Local residents are now being consulted about the proposals for their estates.

  Ms. Harman
  To ask the Secretary of State for the Environment what has been the(a) total cost of monies paid to consultants and (b) the cost to his Department in relation to proposed housing action trusts for the Gloucester grove and North Peckham estates in Southwark.

  Mr. Trippier
  We expect that the costs in relation to the proposed Southwark housing action trust will amount to around £192,000, including VAT, when all bills have been paid. This figure covers consultants' fees and other costs involved in producing reports and leaflets about the proposals, but excludes consultants' fees under the current consultation exercise. The cost of this contract will remain commercially confidential until it has been completed.

  Ms. Harman
  To ask the Secretary of State for the Environment whether he intends to implement the consultants' conclusion that more money needs to be invested in the areas designated for housing action trusts in Southwark.
  218
  Mr. Trippier
  We have accepted our consultants advice that substantial resources should be allocated to a housing action trust in Southwark and have made public expenditure provision accordingly.

  Genetically Manipulated Organisms
  Mr. Janman
  To ask the Secretary of State for the Environment what proposals he has for additional legislation on the intentional release of genetically manipulated organisms.

  Mrs. Virginia Bottomley
  The Department of the Environment together with the Welsh and Scottish Offices, have today published a consultation paper on proposals for additional legislation on the intentional release of genetically manipulated organisms. Copies have been placed in the Libraries of both Houses.

  Existing legislation provides comprehensive protection for the safety of persons against such organisms, but does not provide complete coverage for the environment. The aim is to have a parallel system to protect the environment and so ensure an adequate framework against which biotechnology can be properly developed and its full economic potential realised.

  We are proposing to augment the existing legislation to provide a comprehensive system for environmental protection with four main elements:
  a general duty of care to protect the environment on those releasing GMOs;
  notification to Ministers by those proposing to release GMOs;
  authorisation by Ministers of proposed releases;
  appropriate enforcement of the provisions;

  Interested organisations and individuals are invited to send their views to the Department by 25 August 1989.

  Community Charge
  Mr. Blunkett
  To ask the Secretary of State for the Environment (1) if he will publish his best estimates of the numbers of staff involved in(a) the production and distribution of the Minister for Local Government's articles on the community charge, and (b) the direct contact made with local newspapers in connection with these articles;

  (2) if he will publish his best estimates of the total cost of (a) the production and distribution of the Minister for Local Government's articles on the community charge, and (b) the direct contact made with local newspapers in connection with those articles.

  Mr. Gummer
  [holding answer 6 June 1989]: As is customary with ministerial articles, several officials made suggestions or contributions. Information officers in London and each of the seven regions helped to contact local newspapers. In all cases, these activities constituted only a small part of the duties of the officials concerned. The precise costs are therefore not readily identifiable.

TRANSPORT

  Computer Reservation Systems
  Mr. Colvin
  To ask the Secretary of State for Transport (1) what are the principal differences between the codes of conduct for computer reservation systems prepared by the European Civil Aviation Conference and the European Commission;
  219
  (2) what plans he has for extending the scope of the EEC code of conduct for computer reservation systems to cover non-scheduled passenger air services;

  (3) what steps he will be taking to reconcile the two codes of conduct for computer reservation systems prepared by the European Civil Aviation Conference and the European Commission;

  (4) when he expects to see agreement on the EEC code of conduct for computer reservation systems; and if he will make a statement on the timetable for its introduction.

  Mr. Peter Bottomley
  A regulation governing the operation of computerised reservation systems (CRSs) within the European Community was adopted by the Council of Ministers on 5 June 1989. It will come into force on 1 August, subject to certain transitional arrangements for CRSs already established in the Community.

  This regulation constitutes binding and directly applicable Community law and therefore takes precedence over the ECAC code of conduct within the member states of the Community. The two codes are consistent in all essential respects. The Community code contains enforcement provisions and lays down additional requirements concerning the disclosure of personal information, displays which are not comprehensive and the provision of a display based on arrival times.

  The Council of Ministers invited the Commission to examine the need for a regulation governing CRSs used for non-scheduled passenger air services and for air freight and to bring forward any necessary proposals by 31 December 1990 at the latest.

  Highway Investment (North-West)
  Mr. Pike
  To ask the Secretary of State for Transport if he has yet had time to study the report "Highway Investment Needs Review: North West Region".

  Mr. Peter Bottomley
  Yes. The massive increase in trunk roads spending announced on 18 May largely meets the needs identified in the report.

  Severn Crossing
  Mr. Stern
  To ask the Secretary of State for Transport what representations he has received in respect of the proposed revisions to the routes of the link roads to the second Severn crossing.

  Mr. Peter Bottomley
  No formal representations have been received although further information has been sought.

  Public exhibitions of approach roads will be held shortly. They will be well publicised and the public will be invited to comment.

PRIME MINISTER

  Economy
  Sir Hugh Rossi
  To ask the Prime Minister if she has received recent representations regarding the state of the economy.

  Mr. Cash
  To ask the Prime Minister if she has received recent representations regarding the state of the economy.
  220
  Mr. Matins
  To ask the Prime Minister if she has received recent representations regarding the state of the economy.

  The Prime Minister
  I have received a number of such representations. Thanks to the policies that we have pursued for the past 10 years, and will continue to pursue, the economy is performing very well.

  Low Moor, Bradford
  Mr. Cryer
  To ask the Prime Minister when she next expects to pay an official visit to Low Moor in Bradford.

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

  EEC (Trade)
  Mr. Austin Mitchell
  To ask the Prime Minister whether she will make it her policy that Her Majesty's Government will veto any proposals by the European Economic Community in the health, education, housing and social security field except insofar as this is necessary to remove impediments to trade.

  The Prime Minister
  The Government will continue to examine carefully all proposals for Community legislation to ensure that they are necessary to achieve the objectives of the Treaty of Rome as amended by the Single European Act and that they are appropriate to the Community's competence.

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

  Mr. Pike
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

  Mr. Grocott
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

  Mr. Robert G. Hughes
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

  Mr. David Shaw
  To ask the Prime Minister if she will list her official engagements for Thursday 8 June.

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

SCOTLAND

  Community Charge
  Mr. Sillars
  To ask the Secretary of State for Scotland what guidelines he has issued to regional councils about registration for poll tax purposes of Royal Navy ratings who are stationed outwith Scotland.

  Mr. Lang
  None. It is for community charges registration officers to decide in the light of all the facts and
  221
  circumstances relating to individual cases where a person, including a Royal Navy rating, is solely or mainly resident in their area and thus liable to be registered there for community charge purposes. I understand that, in the interests of achieving a measure of consistency in the treatment of service personnel, community charges registration officers have agreed with the Ministry of Defence working arrangements for their registration. However, this does not affect any individual's right of appeal against any registration decision.

  Skill Shortages
  Mr. McLeish
  To ask the Secretary of State for Scotland if he will give details of reports commissioned by his Department on (i) skill shortages and (ii) skill shortages and the anticipated impact of 1992 on sections of Scottish industry.

  Mr. Lang
  [holding answer 19 May 1989]: My Department is associated with a study commissioned by the SDA which will identify the commercial opportunities and challenges for firms in Scotland arising from the 1992 proposals.

  As regards skill shortages, the Department does keep the labour market situation under review. Although no specific studies of skill shortages have been commissioned recently, a report was published last year (December 1988) on new entrants to the labour market in Scotland in the 1990s. In addition the Training Agency in Scotland conducts regular surveys of Scottish industry as part of the routine process of local labour market information gathering which collect, among other things, information on skill shortages. More specifically the Training Agency in Scotland in conjunction with the SDA has recently completed a report (April 1989) on skill shortages on the engineering and oil industries in Tayside.

WALES

  Health Research
  Mr. Barry Jones
  To ask the Secretary of State for Wales how much of his health budget is spent on research in Wales as a percentage and as a cash sum; and if he will make a statement.

  Mr. Grist
  [holding answer 25 May 1989]: The 1989–90 health and personal social services research and development budget of my right hon. Friend the Secretary of State for Health, which includes projects for England and Wales, has been increased to £19·02 million. Expenditure by my Department in 1989–90 will exceed £1 million and amount to approximately 0·08 per cent. of provision for the National Health Service in Wales.

FOREIGN AND COMMONWEALTH AFFAIRS

  Hong Kong (Refugees)
  Mr. Alfred Morris
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the refugee problem in Hong Kong.

  Mr. Eggar
  There are now some 41,000 Vietnamese boat people in Hong Kong. Over 12,000 have arrived in the past month. The Government are doing everything 222
  possible to help the Hong Kong authorities to cope with the influx. We are working for a successful outcome to the international conference on indo-Chinese refugees in Geneva on 13–14 June and for a comprehensive and durable solution to the problem.

  Mexico (Illicit Drugs)
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has received about measures being taken by the Government of Mexico to combat the illicit drugs problem.

  Mr. Eggar
  During my recent visit to Mexico I was impressed with the commitment of the new Government of President Salinas to the fight against drugs. Despite economic constraints, the Mexican Government are devoting increasing resources to drug interdiction and eradication. The recent arrest of an alleged major drug trafficker and the government drive to root out corruption are indications of their resolve.

  China (British Nationals)
  Mr. Kirkhope
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department is taking to protect British nationals in China in the light of recent events; and if he will make a statement.

  Mr. Eggar
  Our paramount concern at the present time is the safety and well-being of British nationals. Everything that can be done is being done and these efforts will continue until we know that all British nationals who wish to leave China have done so. Her Majesty's embassy in Peking and Consulate-General in Shanghai are, however, working under extremely difficult conditions. The embassy has assisted in arrangements for the evacuation by commercial means of several hundred students, businessmen and others with whom they have been in contact. It is important to emphasise that all airports are open and international commercial flights are operating normally.

  We understand the deep anxiety of relatives of Britons in China. Firm information may not always be available or indeed possible to obtain. We are in touch with the Association of British Travel Agents (ABTA) about group tours that may still be in China. Inquiries should be made to the consular emergency unit in the Foreign and Commonwealth Office—Telephone No.: 01–270 2700—which opened on 7 June 1989.

ENERGY

  Carbon Dioxide
  Mr. Flynn
  To ask the Secretary of State for Energy if, during the Downing street seminar on 26 April on the greenhouse effect and energy policy options, any representations were made on the contribution to CO2 pollution made in the processing cycle for nuclear fuel.

  Mr. Parkinson
  No; the contribution to CO2 pollution from the processing cycle of nuclear fuel is very small and depends on the sources of energy supply used to run the individual processes involved.

  Mr. Alan W. Williams
  To ask the Secretary of State for Energy, pursuant to his reply to the hon. Member for
  223
  Clwyd, South-West (Mr. Jones), Official Report, 15 May, column 105, what assessment the Government have made of the possibility of reducing carbon dioxide emissions from the use of oil and gas.

  Mr. Michael Spicer
  Carbon dioxide emissions are an inevitable consequence of the use of any particular fuel containing carbon, although the CO2 release per unit of useful energy varies according to the fuel and the design of the installation. Studies are planned to investigate the possibilities of removing CO2 from flue gas, but these are aimed more at large coal-firing plant which produce more CO2 per unit generated than do gas and oil fired plant.

  Cost-effective energy efficiency measures which lead to fuel saving, rather than substitution, can of course reduce CO2 emissions from any fuel source.

  Magnox Power Stations
  Mr. Cohen
  To ask the Secretary of State for Energy if the Central Electricity Generating Board still retains the original construction plans for each individual magnox-type nuclear power station; and if he will make a statement.

  Mr. Michael Spicer
  I am advised that the CEGB has retained the construction plans for all of its magnox stations.

  Agricultural Crops
  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy what steps the Government have taken and intend to take to utilise agricultural crops to substitute for fossil fuels in industries.

  Mr. Michael Spicer
  Fuels derived from agricultural crops are covered by the Biofuels programme, the broad aim of which was described in Energy Paper No. 55 "Renewable Energy in the UK: The Way Forward".

  This programme is intended to encourage the widespread commecial exploitation of biofuels by first identifying and then demonstrating where they can be both economically competitive and environmentally acceptable.

  Specific agricultural crops which have been investigated within the biofuels research, development and demonstration programme include:
  Straw. The development and evaluation of low cost systems for processing and burning baled straw, followed by demonstration of the best systems;
  Energy forestry plantations, both coppice and single stem crops. The assessment of likely yields, costs and returns resulting from the establishment of short rotation energy forestry plantation; the investigation of mechanical energy forestry; studies of its environmental impact.

  Oscillating Water Columns
  Mr. Malcolm Bruce
  To ask the Secretary of State for Energy what steps the Government are taking to investigate and promote the use of oscillating water columns for electricity generation, and how much money has been spent on this area to date.

  Mr. Michael Spicer
  A major element of the Department of Energy's programme of research and development into small scale wave energy is the development of an oscillating water column—Wells turbine shoreline rock gully device invented by Queen's224
  University, Belfast. At a cost of £308,000 my Department has funded research and construction of an experimental prototype on the island of Islay. I announced to the House on 23 March that the next phase of the project, to in stall an air driven power turbine and generator, will now proceed, subject to contract, on the basis of the data acquired so far.

AGRICULTURE, FISHERIES AND FOOD

  Fur Farming
  Mr. Vaz
  To ask the Minister of Agriculture, Fisheries and Food if he intends to set up an independent inquiry into the conditions under which fox and mink are farmed for their fur.

  Mr. Donald Thompson
  No. The Farm Animal Welfare Council is an independent body which has only recently concluded an examination of fur farming and published a statement about it.

  Dolphins
  Mr. Alan W. Williams
  To ask the Minister of Agriculture, Fisheries and Food if he will give an estimate of the number of dolphins around Britain's coasts and their estimated numbers for any year from 1959 onwards for which figures are available.

  Mrs. Virginia Bottomley
  I have been asked to reply.

  It is not at present possible to give reliable estimates of the numbers of small cetacean species, including dolphins, even for relatively small areas of coastal waters. Useful information has been derived from records of strandings and from the voluntary sightings scheme run by the United Kingdom cetacean group of the Mammals Society. Further projects are being considered by the relevant Departments and agencies.

  Food Irradiation
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will place a copy of his working party's report into control framework and safeguards for food irradiation in the Library.

  Mr. Ryder
  A copy will be placed in the Library as soon as it is published.

  Rabies
  Mr. David Young
  To ask the Minister of Agriculture, Fisheries and Food what proposals he has to monitor the canine population for rabies.

  Mr. Donald Thompson
  It is not possible to test an animal for the presence of the disease before clinical signs appear. The disease is in any case not present in the United Kingdom.

  Straw
  Mr. Malcolm Bruce
  To ask the Minister of Agriculture, Fisheries and Food what quantity of straw is(a) burnt, (b) buried and (c) used to supply materials required for paper making and hardboard on average in each year.
  225
  Mr. Ryder
  My Department's annual sample straw survey indicates the following breakdown for England and Wales:

  Percentage of hectarage

  1983

  1984

  1985

  1986

  1987

  1988

  Burned in field percentage

  37·7

  36·7

  27·7

  27·1

  27·2

  23·8

  Incorporated or cultivated percentage

  1·8

  7·1

  10·4

  12·4

  17·6

  17·6

  Baled and removed percentage

  60·5

  56·2

  61·9

  60·5

  55·2

  58·6

  Total area ('000 hectares)

  3,367·8

  3,431·9

  3,414·6

  3,416·9

  3,336·5

  3,305·4

  No significant quantities of straw are currently used for paper making, but an estimated 1 per cent. of the total has been used for hardboard manufacture in recent years.

  Desiccated Liver Powder
  Mr. Gould
  To ask the Minister of Agriculture, Fisheries and Food if he will designate desiccated liver powder as a food product rather than a pharmaceutical product, so that it requires a health check.

  Mr. Donald Thompson
  No. However, when the Imported Food Regulations 1984 are reviewed we will ensure that there is no room for doubt about the need for a health mark on imported desiccated liver except where consignments are solely for use in a licensed medicinal product.

  Veterinary Surgeons
  Mr. Paice
  To ask the Minister of Agriculture, Fisheries and Food what action he is proposing to take to consider the supply and demand for veterinary surgeons, particularly in the light of the Riley report.

  Mr. MacGregor
  [pursuant to his reply, 11 April]: On behalf of United Kingdom Agriculture Ministers and my right hon. Friend the Secretary of State for Education and Science I have appointed Dr. E. S. Page, MA, BSc as chairman of a committee to review veterinary manpower needs and demand for veterinary education. Professor K. J. Thomson, MSc Lond., MS Iowa, MA (Agric. Econ) and Mr. B. D. Hoskin, BVM & S, MRCVS, have been appointed as members of this committee.

  The terms of reference of the committee are:

  To assess:

  (a) the need for veterinary manpower in the UK, both for the public service and the private sector; and

  (b) the demand for veterinary education from home and overseas students;

  and, in the light of this, to consider and make recommendations on:

  (c) how any increased manpower requirement might he met having regard to constraints on public funding and to the potential funding from the UFC and other sources;

  (d) what future arrangements should be developed to assess the demand for veterinary manpower and determine the number of student places.

  The Universities Funding Council has decided to postpone consideration of the Riley report until the review is complete.

TRADE AND INDUSTRY

  Balance of Trade (West Germany)
  Mr. Alan W. Williams
  To ask the Chancellor of the Duchy of Lancaster what was the United Kingdom's balance of trade with West Germany in 1979 and 1988.
  226
  Mr. Ron Davies
  To ask the Chancellor of the Duchy of Lancaster what was the United Kingdom's balance of trade with West Germany in 1979 and 1988.

  Mr. Boateng
  To ask the Chancellor of the Duchy of Lancaster what was the United Kingdom's balance of trade with West Germany in 1979 and 1988.

  Mr. Alan Clark
  The crude balance of trade with West Germany in 1979 was £1,566 million in deficit and in 1988 was, provisionally, £8,145 million in deficit.

  Alcoholic Drinks
  Mr. Sims
  To ask the Chancellor of the Duchy of Lancaster following the Greek Government's removal of the regulatory and other discriminatory taxes on spirits as scheduled on 1 January, what subsequent action Her Majesty's Government have taken to press for the elimination of the remaining discrimination against, inter alia, Scotch whisky as compared with ouzo and brandy.

  Mr. Alan Clark
  The European Commission's infringement proceedings against the Greek Government are still in progress in the European Court of Justice and, as before, we are keeping a close watch on developments. In addition the Government took steps earlier this year to re-register with Greek authorities the United Kingdom's continued concern about VAT discrimination against, inter alia, whisky along with the United Kingdom's general dissatisfaction with the current taxation structure applied to spirituous beverages in Greece.

  Mr. Sims
  To ask the Chancellor of the Duchy of Lancaster what was the outcome of the recent talks in Lisbon between the European Community Commission and the Portuguese Government concerning the discrimination in rates of alcohol tax and value added tax on spirits; and what further steps Her Majesty's Government are taking to press for the removal of the discrimination.

  Mr. Alan Clark
  At Her Majesty's Government's request infraction proceedings have been initiated against the Portuguese by the Commission who are still awaiting a formal response. As a result of talks held in November between the Portuguese authorities and Commission services, however, the Portuguese have taken steps to equalise tax on all alcohol, both imported and domestically produced, at 500 escudos per litre.

  Mr. Sims
  To ask the Chancellor of the Duchy of Lancaster whether the Italian Government's proposed requirement with effect from 1 July for all bottled alcoholic beverages include on their label an anti-litter statement and identification of the container's raw material is compatible with the European Community Commission proposal currently under discussion which would prescribe two mandatory European Community symbols
  227
  for refillable and recyclable beverage containers, respectively; if he will seek suspension or postponement of the requirement for United Kingdom alcoholic beverages exports to Italy pending agreement on the European Community directive; and if he will make a statement.

  Mr. Alan Clark
  If introduced, the Italian Government's requirement would pre-empt the discussions which are currently taking place between member states and the Commission on the Commission's proposed amendment to the Beverage Containers Directive EC 185/339, which would require labelling as to material, recyclability and refillability. I understand that Italy has declared its intention formally to notify the Commission of the proposed new law. My Department is keeping in touch with the Commission to ensure that the notification procedure, which would allow member states' observations during a standstill period, is gone through before the law can be introduced. The United Kingdom's position is that new national legislation in this area is inappropriate while discussions are continuing on a Community regime.

  Manufactures
  Mr. Austin Mitchell
  To ask the Chancellor of the Duchy of Lancaster whether he will publish in the Official Report, a table showing for the years 1970 to date for the European Economic Community 12 and for the rest of the world, imports and exports of manufactures less erratics, at current and at 1988 prices, together with an index of relative export prices based on 1970 - 100.

  Mr. Alan Clark
  Taking the EC and the rest of the world as two blocks, and disregarding intra trade within them, EC exports may be considered equal to the rest of the world's imports and vice versa. Similarly relative export prices of EC to the rest of the world will be equivalent to EC's export prices relative to import prices. Because figures for a consistent configuration of the EC are not readily available for the period, a volume index is provided rather than a constant price series. It is not practical to identify and exclude erratic items for these trading blocks.

  The available figures are as follows:

  EC trade in manufactures1 with rest of world

  Value2

  Volume3 (1980 - 100)

  Terms of trade4

  Exports

  Imports

  Exports

  Imports

  (1980 - 100)

  1970

  46·9

  26·5

  n/a

  n/a

  n/a

  1971

  51·5

  26·9

  n/a

  n/a

  n/a

  1972

  55·3

  29·3

  n/a

  n/a

  n/a

  1973

  67·2

  37·7

  n/a

  n/a

  n/a

  1974

  94·8

  49·6

  n/a

  n/a

  n/a

  1975

  101·8

  49·3

  n/a

  n/a

  n/a

  1976

  118·6

  64·4

  n/a

  n/a

  n/a

  1977

  137·4

  72·6

  n/a

  n/a

  n/a

  1978

  145·6

  82·8

  n/a

  n/a

  n/a

  1979

  158·7

  98·7

  99·8

  93·2

  98·6

  1980

  180·7

  118·3

  100·0

  100·0

  100·0

  1981

  205·6

  120·7

  106·7

  97·2

  97·0

  1982

  222·2

  130·5

  104·1

  96·4

  98·4

  1983

  234·9

  144·8

  102·3

  99·2

  98·1

  1984

  272·8

  174·9

  110·6

  108·1

  95·2

  1985

  299·9

  182·7

  115·6

  111·1

  94·8

  1986

  277·9

  185·7

  107·5

  120·2

  100·4

  1987

  275·9

  198·6

  104·5

  131·1

  103·6

  n/a Not available.

  1 SITC 5–8.

  2 Billions of European Currency Units; 1970–84 EC 10, 1985

  228

  onwards EC 12.

  3 1979–80 EC9, 1981–1985 EC 10, 1986 onwards EC 12.

  4 EC export unit value as percentage of EC import unit value; 1979–80 EC9, 1981–1985 EC10, 1986 onwards EC12.

  Source: Eurostat.

  Buses
  Mr. Hanley
  To ask the Chancellor of the Duchy of Lancaster when the Monopolies and Mergers Commission report on Ulsterbus Ltd. and Citybus Ltd. will be published.

  Mr. Maude
  The report is published today. The Commission concluded that Ulsterbus and Citybus ran a very efficient operation in spite of the severe problems presented by civil disorder.

  The Commission say that the companies have had to cope with a high level of civil disorder which has presented many severe problems, not least the destruction of over 1,100 buses since 1969 and many more damaged. Nevertheless, they found an efficient, low-cost, lean organisation with short chains of command, supported by loyal, hard-working and frequently courageous staff.

  They also found that there was little scope for the companies to reduce costs without affecting the quality of service provided and that:

  (a) manpower and vehicles were efficiently used and maintenance procedures were effective;

  (b) methods of determining the nature, amount and timing of capital expenditure would benefit from the use of systematic appraisal techniques and of whole-life costing;

  (c) further studies and experimentation were needed to refine the relationship between fares and costs; and

  (d) the companies' efforts to take more account of the impact of quality of service on demand and to make greater use of minibuses were worthy of support.

  They also make recommendations on the financial framework and management information systems, comment on the competition from the Black Taxis and discuss the question of fares evasion.

  In terms of priorities for action they first endorse and make recommendations about implementing the companies' new market-led approach and its emphasis on the needs of the customer and, secondly, recommend a clear financial framework in line with the 1978 White Paper on nationalised industries.

  The Commission found that neither company was pursuing a course of conduct which operated against the public interest. They were more than impressed by the dedication of the companies' staff at all levels to maintaining their services to the public in the face of severe harassment.

  Ulsterbus Limited and Citybus Limited will be producing a preliminary response to the Commission's findings within 3–4 months, in the light of which my right hon. Friend the Secretary of State for Northern Ireland will make a statement.

  Imports
  Mr. Teddy Taylor
  To ask the Chancellor of the Duchy of Lancaster what amount of imports came to the United Kingdom in 1988 for each £100 of exports; and what was the comparable figure in 1970.

  Mr. Alan Clark
  Imports into the United Kingdom in 1988 were estimated to be £126 for each £100 of exports on a balance of payments basis. The comparable figure for 1970 was £100.

  Balance of Trade (EEC)
  Mr. Teddy Taylor
  To ask the Chancellor of the Duchy of Lancaster what estimate he has made of the balance of trade with the EEC in 1989; and if he will make a statement.

  Mr. Alan Clark
  My Department has made no estimate of the 1989 United Kingdom trade balance with the rest of the European Community.

  Alcoholic Drinks
  Sir Anthony Grant
  To ask the Chancellor of the Duchy of Lancaster what representations he has received from regional and local brewers about the consequences of the Monopolies and Mergers Commission report on the supply of beer; and if he will make a statement.

  Mr. Maude
  I am aware that there has been considerable speculation in recent weeks about the discussions taking place with the Brewers Society and other interested parties.

  The principal concern, both of the M MC and the Government, is the dominant market position of the national brewers, who account for 75 per cent. of United Kingdom beer production, 74 per cent. of the brewer-owned tied estate, and 86 per cent. of loan ties. We have no intention of introducing measures which might adversely affect the competitive position of regional and local brewers. Their continued success is vital to achieving the objective of a freer market with wider choice which was behind the MMC's recommendations.

  The MMC's principal proposal, which we are still considering, was to limit pub ownership to a maximum of 2,000—a proposal which of its nature applies only to the national brewers. I can say that our intention is that certain measures, in particular the requirement to allow tenants to choose a cask conditioned guest beer; the abolition of the tie on low alcohol and non alcoholic beers, ciders, wines and spirits and soft drinks; and any measures to reduce local monopoly, should apply to the national brewers but not to other brewers.

  There is general agreement that greater security should be provided for tenants. There appears to be a consensus that while it would be appropriate to amend the Landlord and Tenant Act 1954 to remove the present exception for licensed premises, it would not be right to go further and require additional provisions for tenants' protection in a mandatory brewers code of practice.

DEFENCE

  Federal Republic of Germany
  Mr. Greg Knight
  To ask the Secretary of State for Defence if he will outline the United Kingdom military contribution to the defence of the Federal Republic of Germany.

  Mr. Archie Hamilton
  The British Army of the Rhine and RAF Germany are important parts of the overall United Kingdom contribution to NATO and they have an essential role to play in the defence of the European mainland. Full details of their composition and roles are contained in the 1989 Statement on the Defence Estimates (Com. 675-I).

  Nuclear Submarines
  Mr. John Evans
  To ask the Secretary of State for Defence what is the most serious accident that has taken place in or near dock in British waters of a British or American nuclear-powered submarine.

  Mr. Archie Hamilton
  Comprehensive records of accidents involving nuclear submarines since the start of the nuclear submarine programme are not readily available. The most serious accident in terms of harm resulting to people is believed to be the death of a Royal Navy officer who fell from HMS Dreadnought while in dock at Chatham in 1976. There has never been any accident involving a Royal Navy submarine which has led to a radiological hazard to service personnel or members of the public.

  The United States would be obliged under a bilateral agreement to inform Her Majesty's Government immediately in the event of an accident involving the reactor of a nuclear-powered warship visiting the United Kingdom; no such accident has been reported to us.

  Radiation
  Mr. Lewis
  To ask the Secretary of State for Defence what further radiation checks have been carried out on Royal Navy sailors and personnel exposed to nuclear weapons and reactors; and what were the findings.

  Mr. Archie Hamilton
  Medical records of all naval personnel are analysed annually, and any health trends are identified. There have been no special surveys to determine whether there is any evidence of medical disorders arising from exposure of Royal Navy nuclear submarine personnel to radiation. However, routine medical surveillance is carried out for those Royal Naval personnel designated as radiation workers in accordance with the Ionising Radiations Regulations 1985.

  Radiation dose records are kept for RN radiation workers, and statistics of doses received were published in the replies I gave to the hon. Member for St. Helens, North (Mr. Evans) on 20 March at columns 477–8 and on 2 May at columns 61–2 this year.

  Regular radiation surveys are carried out on board nuclear-powered submarines to ensure that personnel not designated as radiation workers do not receive any significant radiation doses.

  Lance Missiles
  Mr. Andrew F. Bennett
  To ask the Secretary of State for Defence when the North Atlantic Treaty Organisation first deployed the short-range nuclear Lance MGM-52C missile in West Germany.

  Mr. Archie Hamilton
  NATO first deployed the Lance missile system in West Germany in 1972.

  Plessey Takeover
  Mr. Churchill
  To ask the Secretary of State for Defence how he proposes to ensure continued competition for defence-related research and development work between the wholly-owned laboratories of GEC and those in which they will have a 50 per cent. share following the acquisition of the Plessey Company by GEC Siemens.

  Mr. Sainsbury
  If the merger were to proceed, the Ministry of Defence would expect to retain competition
  231
  for research contracts and would involve GEC, GEC/Siemens and other companies, whenever it was appropriate.

  Mr. Churchill
  To ask the Secretary of State for Defence what measures are being taken by his Department to safeguard the national interest in the event that, following their acquisition of the company, GEC and Siemens will jointly own Plessey's research and technology facilities.

  Mr. Sainsbury
  The Monopolies and Mergers Commission report accepted that if the merger were to go ahead it would be necessary for GEC and Siemens to give certain undertakings to meet the requirements of national security. These are currently under negotiation. Because of their nature, they were not made public in the M MC report and I cannot elaborate further.

  Mr. Thorne
  To ask the Secretary of State for Defence what measures he proposes to ensure that competition continues for the supply to the United Kingdom of the JTIDs system in the event that GEC and Siemens succeed in acquiring the Plessey Company.

  Mr. Sainsbury
  The Monopolies and Mergers Commission recommended that GEC and Siemens should undertake to ensure that access to the technology and the licences for production of JTIDS equipment be available on terms satisfactory to the MOD, to competing companies designated by the MOD. Negotiations are continuing to secure such an undertaking.

  Mr. Thorne
  To ask the Secretary of State for Defence what measures he proposes to ensure that national security is safeguarded when JTIDS information is more widely disseminated in order to maintain competition for the supply of the system to the United Kingdom.

  Mr. Sainsbury
  There are well established procedures for safeguarding national security when sensitive classified information is released to companies. These procedures will, of course, apply in this case.

  Mr. Thorne
  To ask the Secretary of State for Defence (I) what safeguards are being sought from GEC for the supply to the United Kingdom of the JTIDS system in the event that GEC and Siemens succeed in acquiring the Plessey Company;

  (2) what safeguards are being sought from GEC/ Siemens for the supply to the United Kingdom of the JTIDS system in the event that GEC and Siemens succeed in acquiring the Plessey Company;

  (3) what safeguards are being sought from Siemens for the supply to the United Kingdom of the JTIDS system in the event that GEC and Siemens succeed in acquiring the Plessey Company.

  Mr. Sainsbury
  The Monopolies and Mergers Commission recommended that GEC and Siemens should undertake to ensure that access to the technology and the licences for production of JTIDS equipment be made available on terms acceptable to the MOD. An undertaking is being sought from GEC and Siemens to this end. Negotiations are continuing and it would be inappropriate to comment further.

  Bristol Channel (Survey)
  Mr. Stern
  To ask the Secretary of State for Defence when the hydrographic surveys of the outer Bristol 232
  channel between Ilfracombe and the Gower peninsula were carried out; whether those surveys showed changes in sedimentation patterns in the estuary since the previous surveys of 1965 to 1972; what hydrographic surveys were conducted in 1988; what hydrographic surveys are being conducted in 1989; and when it is intended that the inner Bristol channel should be re-surveyed.

  Mr. Sainsbury
  The latest hydrographic survey of the area between the Gower peninsula and Ilfracombe was carried out between September 1987 and June 1988 by HMS Beagle. This survey did not show any major change in the general form of the seabed since the previous survey, which dates mainly from 1949.

  No additional survey was conducted in this area in 1988. In 1989 work is in hand to survey the area between Port Talbot and Porthcawl by HMS Fawn. In addition, a contract has been placed by the Ministry of Defence for a further survey of an area along the southern coast of the Bristol channel from Lynmouth to Watchet and thence extending northeastward to the approaches to Cardiff and Newport. This work will complete the re-survey of the Bristol channel from the Gower peninsula to Newport with the exception of a small area in the approaches to Bridgwater. The remaining areas of the Bristol Channel are the responsibility of the port authorities of Bridgwater, Bristol, Cardiff and Newport.

  Tornado Aircraft
  Mr. Stern
  To ask the Secretary of State for Defence if he will make a statement on the extent to which the effectiveness of the Tornado in European defence is enhanced by its nuclear weapons capability.

  Mr. Archie Hamilton
  Dual-capable Tornado aircraft constitute a vital component in NATO's theatre nuclear force posture in Europe.

  Armed Forces Personnel (Other Paid Employment)
  Mr. Hinchliffe
  To ask the Secretary of State for Defence what is his policy towards serving members of the armed forces also being engaged in other paid employment.

  Mr. Neubert
  In accordance with Queen's Regulations a member of the regular forces may not, without Ministry of Defence approval, accept any continuous employment of profit during his full-time service. This includes carrying on a profession, engaging in trade or acceptance of any form of profitable employment with a corporation, company, partnership etc. Subject to certain conditions and the approval of his commanding officer, a member of the regular forces may accept temporary employment during normal leave or part-time employment during off-duty hours.

  Nuclear Weapons
  Mr. Speller
  To ask the Secretary of State for Defence if he will list those countries in addition to the United States of America, Union of Soviet Socialist Republics, China, France and the United Kingdom which he assesses as having a nuclear weapon capacity, a ballistic weapons delivery capacity or both nuclear capacity and ballistic delivery capacity.

  Mr. Waldegrave
  I have been asked to reply.
  233
  No other country has declared itself to have a nuclear weapon capacity, although certain other countries may have the technological capability to produce nuclear weapons. We strongly support the principle of nonproliferation of nuclear weapons, and as a depositary power, we work actively for the widest adherence to the nuclear non-proliferation treaty. It is not possible to draw up a precise list of countries possessing a ballistic weapon delivery capacity, since different weapons programmes are
  234
  at different stages. However, the spread of ballistic missiles is a subject of increasing concern. The problem is widespread and as a founder member of the missile technology control regime (MTCR) the United Kingdom urges all countries to adopt the guidelines formulated by the seven governments to control the transfer of equipment and technology which could make a contribution to any missile system capable of delivering a nuclear weapon.

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

Bus Operators: London Airport Charges
Baroness Burton of Coventry Baroness Burton of Coventry asked Her Majesty's Government:
Whether they have been informed by the Director General of Fair Trading of the decision reached by the Office of Fair Trading on the proposed plans by the British Airports Authority plc to increase charges to bus operators taking passengers to London's main airports, and if they will amplify their Answer of 15th March (Official Report, cols. 228–9).
Viscount Davidson: My Lords, the Office of Fair Trading is continuing its inquiries. It would be wrong for me to speculate on possible outcomes.
Baroness Burton of Coventry: My Lords, I feel sure that the Minister will agree that the Answer supplied to him today hardly provides the amplification asked for in the Question. Can he tell the House whether I am correct in believing that a decision is imminent? If so, can he say whether it will include not only the bus charges matter but also whether a reference should be made to the Monopolies and Mergers Commission, as mentioned by the noble Lord, Lord Brabazon, on 15th March at col. 228 of the Official Report, and which would come under the heading of competition and monopoly arising from other matters being looked into by the Office of Fair Trading?
Viscount Davidson: My Lords, I wish to say how pleased noble Lords are to see the noble Baroness in her usual place after her unfortunate accident.
Noble Lords: Hear, hear.
Viscount Davidson: My Lords, clearly it has not taken the wind out of her sails! I cannot say when a decision will be made. It is entirely in the hands of the Office of Fair Trading. It can investigate cases under the 1973 or 1980 Acts and refer them to the Monopolies and Mergers Commission if it believes that anti-competitive practices are being carried out or a monopoly situation exists. The Monopolies and Mergers Commission can then decide whether practices are against public interest.
Baroness Burton of Coventry: My Lords, the Minister and the House are very kind but not half as pleased as I shall be when I receive a good Answer! Can the Minister ensure that the British Airports Authority looks at what has been said today? Perhaps I may repeat a Question which I asked on 15th
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March. Do the Government approve of the monopolistic way in which the British Airports Authority exercises its position, especially since privatisation?
Viscount Davidson: My Lords, I have a copy of the Official Report of 15th March. However, all I could do would be to repeat my noble friend's Answer to that Question. I am sure that the chairman of British Airports Authority will read the report of today's exchanges. I wish that I could give the noble Baroness a better Answer but I am afraid that I cannot.
Lord Underhill: My Lords, does the noble Viscount recall that when the noble Baroness—and I join in welcoming her return—asked the Question of 15th March I also asked about the responsibilities of the CAA under the Airports Act 1986? I was informed that the CAA had not made any representations to the Office of Fair Trading, as has been done by the Bus and Coach Council. Can the noble Viscount say why the CAA, which has a responsibility for the airports and the passengers as well as the bus operators, has not made representations on the issue?
Viscount Davidson: My Lords, I understand that the CAA is awaiting the decision of the Office of Fair Trading in case its regulatory functions under the Airports Act 1986 need to be brought into play.
Lord Monson: My Lords, does the noble Viscount agree that, when compared with the fares for similar bus journeys from airports to the centre of other European capital cities, the bus fares from Heathrow Airport to the centre of London are among the highest in Europe?
Viscount Davidson: My Lords, that is one of the reasons why the Office of Fair Trading is looking into the matter.

Interest Rates: Effect on Home Buyers
3.5 p.m.
Lord Dean of Beswick Lord Dean of Beswick asked Her Majesty's Government:
Whether, in order to reduce the present hardship being experienced by owner-occupiers, they intend to announce a cut in the Bank Lending Rate; and, if so, when.
Lord Strathclyde: My Lords, the Government never speculate on future movements in interest rates, but everyone has far more to fear from a resurgence of inflation than from a period of high interest rates.
Lord Dean of Beswick: My Lords, is the Minister not aware that there is a substantial increase in the number of mortgage foreclosures and that people are losing their homes because of their inability to meet the heavy interest payments? Is he also aware that the number is escalating dramatically? Are the Government prepared to let the present situation continue and do nothing to help those who are the victims of their policies?
Lord Strathclyde: My Lords, inflation is a far greater problem than high interest rates. My information is that only one-fifth of 1 per cent. of all loans result in repossession. Indeed the number of repossessions between the first half of 1988 and the second half showed a reduction of 34·7 per cent.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that, however hard are the present rates of interest on mortgage borrowers—as all noble Lords will appreciate—it would be harder on them and the rest of us if inflation were allowed to get out of hand?
Lord Strathclyde: My Lords, my noble friend is right. The Government regret any hardship caused to mortgage borrowers. However, as we have said, inflation is a far greater problem.
Lord Tordoff: My Lords, is the noble Lord not aware that not only do we have high interest rates but also increasing inflation?
Lord Strathclyde: My Lords, that is a short-term phenomenon. In the second half of this year inflation will fall back.
Lord Stoddard of Swindon: My Lords, is the noble Lord aware that, according to the credit figures which were announced earlier this week, high interest rates are not working? Does he agree that they merely put up costs to businesses and owner occupiers? Will he now urge his right honourable friend to adopt further measures of credit control including the deposit by the banks of special deposits with the Bank of England?
Lord Strathclyde: My Lords, credit controls do not work. The economy is slowing down. We have seen house prices falling considerably in certain areas. Retail sales have dropped since last summer. MO has slowed down considerably and is coming within the target area.
Lord Bruce-Gardyne: My Lords, does my noble friend agree that noble Lords opposite are being a little ungenerous about the matter? Is it not the case that, because of its differentially severe effect on the areas in the South-East with high mortgages, the present correct policy of high interest rates is doing more to narrow the so-called "north-south divide" than all the regional policies of all the governments since the war? Should not the Opposition be grateful for that?
Lord Strathclyde: My Lords, that is a most interesting argument and I am sure that noble Lords opposite have taken it on board.
Lord Mellish: My Lords, will the Minister understand that while nearly everyone supports the principle of a property-owning democracy, it becomes immoral when a young married couple sign a contract which says that a certain amount of interest will be repaid and are then told—for reasons unknown to them and not understood by them—that the interest rates have gone up and then gone up
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again? I know of one instance where the mortgage repayments have become absolutely appalling.
Lord Strathclyde: My Lords, all mortgage borrowers are aware that interest rates can go up as well as down. Also, building societies offer certain budget plans where increases or falls only take place once a year.
Lord Mason of Barnsley: My Lords, can the Minister tell the House what is one-fifth of 1 per cent. of repossessions? What are the figures?
Lord Strathclyde: My Lords, out of a total of 7·5 million loans, in the period from July to December 1988 there were 6,380 repossessions.
Lord Bruce of Donington: My Lords, further to what my noble friend said, is the noble Lord aware that on an annual basis there were some 20,000 repossessions in 1988, which is nine times the number in 1978–79? Can the noble Lord give the House an assurance that those property owners will not be squeezed by a further increase in interest rates in order to sustain, among other things, the overseas value of the pound?
Lord Strathclyde: My Lords, the noble Lord knows perfectly well that I cannot give him that assurance. However, as regards repossession, according to the Building Societies Assocation the main causes of mortgage problems are matrimonial, unemployment and financial mismanagement difficulties. The Government have been able to help with unemployment and will no doubt turn their efforts to the other two problems in the near future.
Lord Dean of Beswick: My Lords, is the Minister not aware that the figure for the Government's housebuilding programme this year shows a serious downward turn? Is that not because of the high interest rates? Bearing in mind that the Minister sat and listened to yesterday's debate on the homeless, does he not believe that it showed there is little prospect of helping people in that terrible situation?
Lord Strathclyde: My Lords, from what I gathered of the debate yesterday, in most parts of the country there are more houses than there are people to live in them. There are certain areas where there is a substantial problem. My noble friend Lord Caithness said that he was very sympathetic to that and that he was looking further into the problem as a whole.

Hong Kong Ivory Trade
3.12 p.m.
Lord Bethell Lord Bethell asked Her Majesty's Government:
Whether they propose to take steps to stamp out the ivory trade in Hong Kong.
The Minister of State, Foreign and Commonwealth Office (Lord Glenarthur): My Lords, we are in close touch with the Hong Kong authorities about this matter. They take very seriously their responsibilities

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as a party to the Convention on International Trade in Endangered Species (CITES). In the light of calls for action to stop the global trade in ivory totally, they are now urgently reviewing their position.
Lord Bethell: My Lords, I am grateful to my noble friend for that reply. However, is he aware that last year 264 tonnes of raw ivory were imported into Hong Kong? Does he agree with me that it is extremely likely that a large proportion of that raw ivory was poached through illegal killing in Africa? Does he not agree that it would now be appropriate for the Hong Kong Government to impose a total ban on the import of new ivory into that territory alongside the ban to be imposed by the United Kingdom and other European Community countries? Will the Government encourage the Hong Kong Government to impose such a ban?
Lord Glenarthur: My Lords, I am in no doubt whatever that the Hong Kong Government are fully aware of the strength of feeling upon this issue. It is essentially a matter for them because they enjoy a high degree of autonomy on matters of that sort. However, as party to the convention and by virtue of the extension of the United Kingdom's ratification, Hong Kong is required to implement the same controls as all other parties to the convention.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the people of this country have been appalled by the reports of this brutal trade? Can he be more specific as to what Her Majesty's Government propose to do, particularly in relation to the Hong Kong trade? Are they proposing to convey an instruction, which they have a power to do under statute, to the Government of Hong Kong on that subject? In view of the statement made by the noble Lord, Lord Bethell, that in any event half of the trade is black market, are the Government proposing any specific action on that?
Lord Glenarthur: My Lords, as I said in my original Answer, that is something which the Hong Kong Government are reviewing with urgency in the light of the concerns which the noble Lord and others throughout the country have expressed about this horrible trade. On the basis of that review, the Hong Kong Government will decide what to do and we shall be very interested in that decision.
Lord Northfield: My Lords, can the noble Lord say whether much of this ivory is reaching Hong Kong and elsewhere through the United Arab Emirates, one of the worst places in the world for the selling of poached ivory? If that is the case are the Government also putting pressure on the government there to stop their trade?
Lord Glenarthur: My Lords, yes. Certainly there is concern about trafficking in ivory through the United Arab Emirates and we have repeatedly urged the government there to tighten controls on the trade. We have also helped international organisations and interest groups to express their concerns to the UAE authorities.
The Viscount of Falkland: My Lords, does the Minister not agree that the enormous reductions of the great elephant herds in Kenya over the past 10 years is a matter of world concern? Since we have strong relations with Kenya, would it not be possible for Her Majesty's Government to put pressure upon the Kenyan Government? There is no doubt that many people in high places in that country have enriched themselves through that shocking trade which is the source of supply for much of the ivory sold in Hong Kong and other places.
Lord Glenarthur: My Lords, I am sure that that is something which we should like to see achieved. However, we are straying somewhat from Hong Kong.
Lord Stanley of Alderley: My Lords, I believe that I am right in saying that during the slave trade Her Majesty's ships could stop slavers to search for slaves. Does my noble friend know whether Her Majesty's ships are allowed to stop ships which they think have illegal ivory on board?
Lord Glenarthur: My Lords, I am bound to say that I do not know the answer to that particular point. Perhaps that is something which I can also look into.
Viscount Massereene and Ferrard: My Lords, regarding elephants, as we in this country started most of the game parks in Africa could we not help by training their gamekeepers—I do not know if that is the right word? Could we not provide money to provide more staff to defeat the poachers?
Lord Glenarthur: My Lords, any idea is worth exploring when one considers that the number of African elephants has fallen from approximately 2·3 million in 1970 to about 700,000 today. What my noble friend Lord Caithness is trying to do in Brussels today is to ensure that African elephants are put on to the Appendix 1 side of the convention of which I spoke. We sincerely hope that that will meet my noble friend's concerns.
The Viscount of Falkland: My Lords, will the Minister agree that the monthly wage of what is in fact a game warden—if I can help the noble Viscount—is around 60 or 70 Kenyan shillings per month and that that kind of wage hardly induces him to resist the approaches of people involved in this terrible trade?
Lord Glenarthur: My Lords, I well understand the force of feeling but we are straying very widely from the Question on the Order Paper. That relates specifically to Hong Kong and the end use of the product which is of concern to us.

Events in China: Implications for Hong Kong
3.20 p.m.
Lord Wyatt of Weeford Lord Wyatt of Weeford asked Her Majesty's Government:
What are their reactions to recent events in China and the possible effect of those events on the handover of Hong Kong to China in 1997.
Lord Glenarthur: My Lords, I made clear our shock and outrage at the recent events in China when I repeated my right honourable and learned friend's Statement to the House on 6th June. Our concern is all the greater because of our responsibility to Hong Kong. Our commitment to a secure, stable and prosperous future for the territory is as strong as ever. We look to China to stand by her obligations under the joint declaration in the same way.
Lord Wyatt of Weeford: My Lords, in view of the announcement of increased flexibility for issuing passports to Hong Kong subjects, will the Government bear in mind that it is not sufficient merely to give them to top civil servants but also to those who are the top of commerce and industry in the territory? If that is not done the whole of Hong Kong will collapse long before 1997.
Will the Minister further take on board the remarks made by the Governor of Hong Kong this morning on the BBC that the number of people who would take up passports if they were freely available has been greatly exaggerated by Her Majesty's Government? There would be very little danger of any large number coming to this country if there was an emergency right of abode, with passports issued for that purpose in good time. Will the Minister also confirm that there is to be full democracy in Hong Kong before it is handed over to China in 1997?
Lord Glenarthur: My Lords, I am acutely aware of the concerns expressed both in Hong Kong and elsewhere about the matters relating to right of abode in the United Kingdom and to which the noble Lord has given voice on many occasions. Recently I expressed our deep understanding and sympathy for the people of Hong Kong at what for them must be a very worrying time indeed. None of the force of that is lost on me or any of my right honourable friends.
The fact is that we are considering carefully, and with the sympathy which the noble Lord would expect of us, what can be done to meet the sort of concerns he expresses and which are voiced by the people of Hong Kong. The Governor of Hong Kong is over here at the moment and talks are taking place. I do not think that the noble Lord would expect me to go further at the moment.
As regards democracy, over the past few months there have been differing views in Hong Kong about the rate of progress towards democracy. In the light of what has happened in the past few days in Peking, those arguments also are not lost on us.
Lord Cledwyn of Penrhos: My Lords, can the noble Lord be a little more specific? The Prime Minister herself has said that the Government intend—and I quote her words—to exercise more flexibility in applying the 1981 Act to Hong Kong residents. Can the noble Lord elaborate on that and say what categories the Government have in mind?
As regards democracy, to which the Minister just referred, is he aware that last month the Hong Kong Legislative Council voted unanimously that one-half of the members of that council should be subject to direct elections by 1997? Can the Minister say whether the Government regard that favourably?
Lord Glenarthur: My Lords, I am afraid I cannot go further on the matter of categories other than to say that all categories will be considered in the light of the concerns expressed and the comments of my right honourable friend the Prime Minister to which the noble Lord referred. It is too early to say what the answer may be because discussions are going on even today.
In regard to representative government, I am of course aware of what was said in LegCO recently and we shall have to keep our eye on the situation which has resulted from the developments in China. Again, it is too early to say precisely what the decision will be but the force of the arguments is not lost on us.
Lord Cledwyn of Penrhos: My Lords, is it not true that the Government regard as having priority those classes with large capital assets?
Lord Glenarthur: My Lords, as I said, all categories—that includes the entire range of people in Hong Kong—will have to be considered in this way. That is what is presently being done and is one of the reasons why the Governor is over here. However, I am not in a position to go further at the moment.
Lord Kennet: My Lords, can the Minister go further on the question of the introduction of democracy to Hong Kong? Do the Government remember that from these Benches for three or four years we have been saying that we believed that the speed decided upon by the Government would not be fast enough? In view of the fact that the noble Lord has said that the Government will not ignore recent evidence and will keep their eye on the situation, may we hope that the noble Lord will be able to come back to this House before the Summer Recess and inform us about an acceleration in the proposed introduction of democracy?
Lord Glenarthur: My Lords, we have always sought to achieve continuity over 1997 and to ensure that what is established before that date will continue to flourish after the transfer of sovereignty; that is why we have worked for a basic law which carries forward the changes we plan to make before 1997. I am sure that the people of Hong Kong fully understand that. However, as I said recently, under the present circumstances we could not ignore a clear call from the community for a faster pace of development than that hitherto envisaged.
Lord MacLehose of Beoch: My Lords, what the Minister said about greater flexibility in administration of the British Nationality Act is extremely welcome. I understand that this will take some time to work out while consideration is going through. However, does the Minister know that many applications for British citizenship under Section 4(5) of the British Nationality Act by Crown servants in Hong Kong have been rejected? I am told that the figure is over 700. As these people are vital for the future of Hong Kong, does not the Minister agree that it would be an extremely good thing if these applications were now reconsidered? Will the Minister speak to his right honourable friend in that sense?
Lord Glenarthur: My Lords, I am well aware of that view and I am grateful to the noble Lord for once more putting it forward. Yes, I am aware of the criticisms from Hong Kong and elsewhere about the very few civil servants who have been granted citizenship under Section 4(5). Again, that is something which falls into the generality of categories, though it has a particular significance of its own which will be considered, as I have described.
Lord Mishcon: My Lords, so that there is no misunderstanding, will the Minister make clear in regard to the words of the noble Lord, Lord Wyatt, in his supplementary question, that it is hoped that the Government will extend flexibility not only to top civil servants but also to top industrialists and commercial people? Will the noble Lord make very clear that flexibility will extend to those who have shown loyalty to this country by their services and who also may have held their British citizenship for a very long time?
Lord Glenarthur: My Lords, with respect to the noble Lord, I think that it is important not to dwell on any particular category of individual at the moment. The fact is that all aspects are being looked at. It is a particularly difficult time to make instant judgments. The matter must be looked at thoroughly for the benefit of all the people whom noble Lords and others are keen to see protected.
The Earl of Bessborough: My Lords, perhaps I may ask a fairly closely related question of which I gave my noble friend notice. Although perhaps not as momentous as the future of Hong Kong, nonetheless it has important Chinese overtones. What is the attitude of the Government towards Chinese students in this country who, in the normal course of events, are shortly due to return to China? In the circumstances, does my noble friend think it might be possible to give them the option of asking for an extension of their stay in this country until the situation in their own part of the People's Republic of China has settled down?
Lord Glenarthur: My Lords, I am grateful to my noble friend for giving me notice of that question. I can assure him that we shall look sympathetically at any application by Chinese nationals to remain here until the situation in China becomes clearer. No Chinese nationals already living here will be required
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to leave the United Kingdom while the situation remains in its present uncertain state.
Lord Bonham-Carter: My Lords, I should like to ask the noble Lord to go a little further in interpreting the word "flexibility", by which the Prime Minister must have meant something. Would it not be fair to ask the Minister to convey to his right honourable friends the feelings in this House that it would be a travesty of justice, humanity and decency if "flexibility" were interpreted to mean only those who could pay, and if it did not include within its terms those who had earned inclusion by public service, intellectual distinction—by saintliness, even—and by industrial skills? Money itself should not be the sole criterion by which humanity can be served.
Lord Glenarthur: My Lords, that is of course a very important consideration. I believe that it points up many of the difficulties in trying to reach a satisfactory answer to this problem. I shall convey the remarks that have been made this afternoon to my right honourable friend's attention.
Viscount St. Davids: My Lords, can the noble Lord tell the House what the Government intend to do as regards the many Portuguese passports which are now being sold in nearby Macau? Is the Minister aware that the Chinese in Hong Kong and Macau are very closely related by family and that these passports will enable them to come here, but will not enable them to move on to Canada and other places?
Lord Glenarthur: My Lords, I am aware of that fact. I am also aware of the fact that the arrangements that have been made in this country and in Portugal as regards their nationals in Macau and ours in Hong Kong varied enormously and differently over the years. That is why we have reached the position that we are in now.
Lord Molloy: My Lords, perhaps I may ask the Minister whether other governments which also have nationals in Hong Kong have because of recent events in China sought discussions with Her Majesty's Government.
Lord Glenarthur: My Lords, as regards other nationals, I am not aware of any discussions, but I shall certainly bear that in mind.

Business
3.31 p.m.
Viscount Davidson: My Lords, it may be for the convenience of the House if I announce that the Report stage of the Water Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Committee stage of the Control of Smoke Pollution Bill will be taken.

Statute Law (Repeals) Bill [H.L.]
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to promote the reform of the statute law by the repeal, in accordance with the recommendations of the Law Commission and the Scottish Law Commission, of certain enactments which (except in so far as their effect is preserved) are no longer of practical utility, and to make other provision in connection with the repeal of those enactments. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

International Westminster Bank Bill
Read a second time, and committed to an Unopposed Bill Committee.
Hayle Harbour Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Brunei (Appeals) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Antarctic Minerals Bill [H.L.]
Lord Glenarthur: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Glenarthur.)
Lord Cledwyn of Penrhos: My Lords, I do not propose to make a speech at this stage, but I wish to raise one important point with the Government before we complete our scrutiny of the Bill. I wish to ask the noble Lord, Lord Glenarthur, what is the Government's response to the news that Australia has decided not to subscribe to the convention? Can the Minister tell me whether this will have a detrimental effect on the Antarctic Treaty system and on international regulations on mineral activities in the region? Can the Minister further tell us whether the Australians are proposing an alternative method of regulation?
Lord Glenarthur: My Lords, I am aware of the concerns that have been expressed about the Australian decision. I can tell the noble Lord that, on 22nd May, the Australian Government announced that they would not sign the convention because they are not satisfied that the convention will adequately protect the Antarctic environment. That was an unexpected turn of events and it leaves the Government to some extent uneasy about the
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future of the Antarctic Treaty system as the means which we prefer for keeping the peace in the Antarctic, which was very much the theme of our discussions at Second Reading.
Our unease arises from the fact that, for as long as the Australians maintain their opposition to the convention, any of the states which participated in the meeting in Wellington in June of last year at which the convention was adopted, can conclude that the convention will not enter into force in a timely manner. Any state which did so would free itself of the commitment reflected in the Final Act at the Wellington meeting to urge its nationals to refrain from Antarctic mineral resource activities. What would follow would be unregulated activity, with all the consequences for the environment and the peace of the Antarctic to which I have referred.
We do not believe that any of the states which took part in the long and difficult negotiation of the convention will necessarily take such a decision soon or indeed lightly. But future events which we obviously cannot foresee—such as a shortage of minerals caused by political problems elsewhere in the world—may change perspectives and national interests. It would be foolhardy not to recognise that the risk of a breakdown in the voluntary moratorium exists. Neither do we believe that the Australian Government do not themselves recognise the increase in this risk that their decision has caused by putting a question mark over the timely entry into force of the convention.
Clearly, we shall want to discuss this in depth during the forthcoming visit of the Australian Prime Minister to this country. Meanwhile, it would be wrong of me to pre-empt those discussions. In answer to the question whether it is still in British interests to continue with this Bill and what we have set out to do, I believe that it is definitely in Britain's interest to enact this legislation and to be in a position to ratify the convention, in which we firmly believe. The primary British interest in Antarctica lies in ensuring that the peace is maintained and that peaceful activity in the Antarctic has the minimum environmental impact. I am sure that such policies will command support from all Members of your Lordships' House. I hope that that answers the noble Lord's concern.
Lord Cledwyn of Penrhos: My Lords, I am very much obliged to the noble Lord for his important and constructive response to my question. I do not believe that we can pursue the matter further at this stage in this House, but we are of course aware that the Bill is going to another place.
On Question, Bill read a third time; an amendment (privilege) made; Bill passed, and sent to the Commons.

Parking Bill
Read a third time, and passed, and returned to the Commons amended.

Water Bill
3.38 p.m.
The Earl of Arran: My Lords, on behalf of my noble friend Lord Caithness, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(The Earl of Arran.)
On Question, Motion agreed to.
Clause 7 [General duties with respect to water supply and sewerage services]:
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh) moved Amendment No. 48:
Page 7, line 19, at end insert—
("( ) to ensure that the interests of every such person are further protected as respects benefits that could be secured for them by the application in a particular manner of any of the proceeds of a disposal (whether before, on or after the transfer date) of any of that company's protected land or of any interest or right in or over any of that land;").
The noble Lord said: My Lords, in moving Amendment No. 48, I propose to speak also to Amendments Nos. 75, 100, 101, 102, 139, 140, 160 and 161. For the purpose of clarification, I propose to move Amendment No. 48 and speak to it. Then the noble Lord, Lord McIntosh of Haringey, will move Amendment No. 48A. The other amendments will follow on from there and, with the leave of the House, I propose to respond to them at the end of the discussion. I shall take a little time in moving Amendment No. 48 and speaking to the other government amendments because they are of an important and substantial nature.
The government amendments grouped with Amendment No. 48 have two main purposes: to ensure that the special environmental quality of water authority land can be indefinitely protected, and to ensure that the customers of the appointed water and sewerage undertakers share the benefits of any disposals of surplus land.
It is a distinctive feature of this privatisation that the water authorities have very extensive landholdings—more than 430,000 acres, of which some 180,000 acres are in national parks and areas of outstanding natural beauty. The amendments are designed to allay various concerns about the future of this land. We have listened carefully to all that has been said, both by noble Lords at Second Reading and in Committee, and by conservation and other bodies outside this House. I should like to give the House a full explanation of this group of amendments, which will I believe provide a full answer to the concerns which have been expressed.
It may be helpful if I first describe the effect of each of the government amendments in the group. Amendment No. 48 would impose an additional duty on the Secretary of State and the Director General of Water Services to ensure that the interests of customers are protected in the application of proceeds from disposals of protected land. Protected land is defined in Amendment No. 161, and includes all the land transferred to WS plcs under Schedule
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2 schemes, and the land held by statutory water companies at any time in the financial year current on the transfer date. It also includes any land which may be held in future by an appointed company for purposes connected with its functions, including any land transferred by Schedule 5 schemes. Amendment No. 160 ensures that the creation of interests or rights over land—for example, leaseholds—is caught by the new provisions, and also the surrender or termination of any interest, as for example where the appointed company has a leasehold and surrenders it.
Amendment No. 75 provides that the management of all land held by appointed companies will be subject to the duties in Clause 8, whether or not the land is being used for functions connected with the carrying out of the functions of a water or sewerage undertaker. Amendments Nos. 100, 101 and 102 will make it possible to entrench certain conditions of appointment relating to disposals of land, so that they cannot be changed except by agreement of the Secretary of State, the director and the company holding the appointment. Amendment No. 139 deletes subsections (7) and (8) in Clause 150, which impose a consent requirement on the disposal of compulsorily acquired land, but these provisions are reintroduced in the new clause which would be inserted by Amendment No. 140.
The new clause is the central piece of machinery of this group of amendments. Companies holding appointments under the Act will be able to dispose of their protected land and interests or rights in that land only with the consent of the Secretary of State or in accordance with a general authorisation given by him. There is a consent requirement for the NRA as well, but this applies only to compulsorily acquired land.
The consent mechanism serves three purposes. First, it will enable the Secretary of State to require that the Crichel Down rules are observed when there are disposals of land which was compulsorily acquired. It is intended that a general authorisation will be issued to each undertaker and to the NRA requiring disposals to be made in accordance with the Crichel Down rules. The rules are designed to protect the interest of the former owners of land. They require that when any land which was acquired by compulsory purchase is to be sold, it should be offered first to the person from whom it was acquired. The rules apply to all agricultural land acquired since 1935, and to other land acquired within 25 years before the date when it becomes available for disposal. Disposals to former owners under these arrangements will be at a price reflecting current market value, as determined by the district valuer.
The second purpose of the consent provisions relates to the new duty concerning the proceeds from land disposals in Amendment No. 48. The intention is to enable customers to benefit from the net receipts from future disposals of land, while preserving incentives for land to be released or developed. It is essential that the arrangements ensure that customers are not prejudiced by two stage disposals via sister companies, with the sister company realising all of the development gains. This is where

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the consent mechanism in Amendment No. 140 plays a part.
My right honourable friend the Secretary of State intends to give the Director General of Water Services a role in disposals, through a consent procedure which will be constructed to allow as much self-policing as possible. There will in effect be three categories of disposal: In the first, directors of appointed companies will be able to provide the director with a certificate that the disposal is an arm's length disposal, with no continuing interest in the land by the appointed company or any related company, and that the best price reasonably obtainable has been obtained.
Where such a certificate cannot be provided but the disposal is below a certain threshold fixed in relation to the value or area of the land concerned, the company will need a certificate from an independent valuer approved by the director that the best price has been obtained. The independent valuer will report in particular on any prospect that the value of the land may be enhanced by a future planning permission.
In the third category involving disposals above the threshold which are not arm's length disposals a specific consent will be needed. As a last resort the director would be able to block inappropriate disposals at less than the best consideration reasonably obtainable, especially where sister companies are involved. In order to avoid unnecessary complications and to ensure the availability of key assets on transfer of appointment, the general consent procedure will require directors to certify that assets are redundant before they are sold.
The consent requirements are designed to make sure that the best price is realised by the appointed company. There will be conditions of appointment determining how that value is to be taken into account in price control, so that customers share the benefit of proceeds. The intention is to set a target amount for disposals when the RPI plus K price control formula is first set. This will be discussed with each authority and company, but it is proposed that it should reflect 100 per cent. of the open market value of identified surplus sites. Where actual receipts vary from the forecast amount—and because of the difficulty of predicting the enhancement of value that may arise on certain sites as a result of new planning permissions it is likely that out-turn will exceed the initial forecast—a further adjustment of K will be made reflecting 50 per cent. of the excess of shortfall.
Before proceeds are divided between customers and shareholders allowance will be made for transaction costs, and for costs which are necessary in order to release the land, in so far as these are not already taken into account in K. In order to pick up and deal with any transitional problems the amendments apply to disposals by water companies during the financial year current on the transfer date. Companies will therefore have an incentive to dispose of their surplus land, and to the extent that they can improve on the value of land by obtaining planning permission or selling with clawback
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conditions that operate in the event of a future planning permission, the improvements of value will be shared fifty-fifty between customer and shareholder.
The third purpose of the consent mechanism is to enable the Secretary of State to impose special requirements when there are disposals of land of particular environmental quality. The essential elements are as follows. Within the national parks, areas of outstanding natural beauty, the Broads, and such other areas as the Secretary of State by order designates, special environmental controls will apply to any disposal of land. For any such disposal the Secretary of State's consent will be required, and in deciding whether to give that consent he is to be bound by the Clause 8 duties to further conservation, have regard for access, and so on.
Within these areas there is to be a range of special conditions which he can impose on any disposal. It is intended that he be able to require that the land be offered in the first instance to a conservation body approved for this purpose by the Countryside Commission. He can also require, as a condition of any disposal, that management agreements can be entered into with the relevant park authority or local authority to the satisfaction of the commission. Finally, he can require covenants for the protection of particular features of the land.
The consent procedures will give the Secretary of State a means of ensuring that the special environmental quality of water authority land can be indefinitely protected. Again, we shall look to a general authorisation procedure, including the Countryside Commission, which will minimise bureaucracy and simply filter out the limited number of cases where special controls on environmental grounds are likely to be necessary.
Those arrangements are an addition to the powerful framework of environmental duties which is already provided in Clauses 8 to 10 of the Bill. These set out statutory requirements on conservation and public amenity which go beyond requirements for any other industry, whether in the public or the private sector. That must be right, for no other industry has land holdings of comparable scale and significance; and no other industry's operations have such a deep and pervasive influence on the environment.
It is a tribute to this framework that so many have asked what is to happen to the land should it pass outside it. There is genuine concern that the companies, perhaps subject to commercial pressures, will sell land of great environmental importance in circumstances which could jeopardise its future conservation and the amenity it affords the public. There is concern also that they might be tempted to pass land to subsidiary companies outside the scope of the Clause 8 duties. The Government have weighed carefully the importance and the reality of these concerns.
It remains the Government's view that in most circumstances the planning system will cope with any risks. But at the end of the day, we have to give due weight to two special considerations. The first is that much water authority land is of quite

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exceptional beauty and environmental quality. In strict logic that is no reason to treat it differently. Extreme cases make bad law. But Thirlmere, High Peak, the Elan Valley and the others are special. And it is right for the Government and this House to require a degree of confidence as to their future security which might not be considered necessary in other areas.
The second is the recognition that, as a consequence of past exercise of their special conservation and amenity duties, water authorities have done more in respect of conservation and amenity than ordinary planning and conservation legislation could secure. Special conservation measures have been undertaken; arrangements entered into with local naturalists trusts and amenity groups; wider public access has been allowed; traditional agricultural and forestry practices have been preserved which are outside the scope of the planning system. These special features, voluntarily entered into, deserve protection.
The risks the amendments guard against may in practice be relatively small. It is the Government's view that, in practice, the great majority of water authority land is likely to have to be retained by the companies for performance of their functions. But while the risks are small, they are risks which in the Government's view should not be run. And it is for this reason that the Government believe that special provisions are appropriate.
We have had no shortage of suggestions as to what those provisions should be. I refer to two in particular. There has first been the proposal, put forward in particular by the noble Lord, Lord Greenway, that disposals should be brought within the scope of the Clause 8 duties, and that no disposal should prejudice the purposes of that clause. We are indebted for the suggestion, and indeed we are adopting features of it. But on its own it may not be sufficient, because the transfer of property rights is a particularly difficult area to leave subject only to duties which are bound to be widely drawn.
There is then the proposal of the noble Lord, Lord Gibson, to rely in particular on a right of first refusal for conservation bodies in the event of sale. We welcomed this proposal also, but it is our view that it could be of limited effectiveness on its own and that it needs to be seen as one of a number of options to address very varying situations.
The merit of the approach adopted in the amendments is its scope and flexibility. Often no controls on disposals, even in national parks and areas of outstanding natural beauty, will be necessary. But sometimes the land will be of such special character that long-term protective ownership by a conservation body may well prove to be the appropriate option. At the other extreme, there may only be one particular feature of a site that requires protection and in these cases a covenant is the appropriate way forward.
Whatever the choice of mechanism, the Secretary of State in making his decision will be bound in deciding which course of action to take in a particular case by the terms of the Clause 8 duties, which are
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applied to disposals in national parks, the Broads or other designated land, by subsection (7) of the new clause.
On this basis we believe that the new provisions are sufficiently widely and tightly drawn to secure that the special environmental importance of much of the water and land which will pass to the successor companies can be fully and securely protected—and protected indefinitely—in the wider public interest. I commend these amendments to the House. I beg to move.
4 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved, as an amendment to Amendment No. 48, Amendment No. 48A:
Line 4, leave out ("application in a particular manner of any") and insert ("distribution to them").
The noble Lord said: My Lords, in moving Amendment No. 48A I should like to pay tribute to the clarity with which the noble Lord, Lord Hesketh, introduced this complex group of amendments. I should also like to follow up his point on procedure by saying that in introducing this amendment I think it would be appropriate for me to do as he has done and speak to all the amendments that I have tabled to the Government's amendments. I shall speak also to the substance of Amendment No. 48, so that we cover the whole range of the debate. As I understand it, the debate will then be open to any noble Lords who wish to speak, including those who have tabled amendments of their own to government amendments which have been grouped together and which have been spoken to by the Minister.
I have no doubt that the Minister will then wish to respond, especially to Amendment No. 48A, and I shall wind up the debate on that amendment by speaking only to that amendment and not to any others. I hope that that procedure will bring as much clarity as possible into the debate, because clearly from the necessary and admirable length of the Minister's speech the issues are complex, as indeed are the issues raised by the various amendments to government amendments which have been tabled.
I shall deal first with the range of amendments which have been tabled to later government amendments and then return to Amendment No. 48A at the end of my speech. I do so because they are somewhat different. Amendment No. 48A is substantially concerned with the financial effect of the Government's proposals and indeed as to whether there is any identifiable financial effect, identifiable provision or identifiable financial benefit to consumers, as they have claimed. The remaining amendments are mainly concerned with environmental matters rather than with the financial protection of consumers. I think it appropriate therefore that I should deal with them first.
Amendments Nos. 48B, 140A and 161A are concerned with the Government's choice of the word "protected" to describe land which is to be covered by these amendments. The trouble with the word "protected" is that such land is not really protected. All that happens is that it is eligible for consideration by the Secretary of State as to whether consent

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should be given and as to what conditions should be imposed upon the disposal.
The Secretary of State may well conclude—or a Secretary of State may well conclude—that such land is eligible for sale rather than for protection. Further, the Secretary of State may well conclude that such land is eligible for sale without protective conditions. In those circumstances it seems that there is an Orwellian touch in using the word "protected" and that it would be preferable, as we do in these three amendments, to use the more accurate word "eligible" to describe the land which is covered.
Amendment No. 140B brings us back to the point referred to by the Minister about conditions on a sale. Unfortunately, Amendment No. 140 (the new clause) provides only that the Secretary of State or the Minister of Agriculture may put conditions on a sale. It does not bind the Secretary of State to include conditions, except to the extent that he considers them appropriate. Amendments Nos. 140C and 140D are consequential. It is not enough to say that the Secretary of State would have to act reasonably if he failed to impose conditions. We cannot conceive of any significant case in which conditions ought not to be imposed upon a sale if the sale is to be allowed to go through at all. Therefore, we prefer that it should be a duty on the Secretary of State and the Minister rather than a power.
Amendment No. 140E seeks to ensure that conditions will be imposed to carry over the Clause 8 obligation on environment and recreation to the new owners of the land. As the Government's amendment stands at the moment, the Secretary of State has a discretion to require covenants of the new owner, but if there are to be conditions protecting the environment—and with the description that the Minister has given of the coverage of national park land, areas of outstanding natural beauty land and Broads land it is clear that in virtually every case there will have to be duties on the new owners and thus the Secretary of State ought not just to have a discretion to require covenants—there should be a requirement to have covenants.
Amendment No. 140F is a significant amendment. It points to a grave omission in the Government's proposals. As the government amendments stand, there is not only no provision for public consultation about land deals which will take place and which the Secretary of State and the Minister will be considering; there is not even a provision for notification to the public. In other words, the whole thing could go through between the Secretary of State, the water supply or sewerage plcs and the new owners without the public ever being told that it is going to happen. We would finish up wih secret land deals, something against which the House has set its face in almost every piece of legislation concerned with land, and especially public land, for many years.
The Government have made an astonishing omission. It is out of keeping with the spirit of much recent legislation and with the Government's own proclaimed support for open government. We believe that it is especially important that Amendment No. 140F, which provides in two new
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subsections for consultation and notification procedures, is a vital protection for the public and a vital complement to the efforts which the Government are proposing to make with a view to protecting the public.
Amendment No. 140H is similar to a point made in Amendment No. 140G, tabled by my noble friend Lady Birk, who will no doubt be speaking to that amendment shortly. There are potential conditions set out in subsection (5) of Amendment No. 140, but our point is that they should be included as a condition of every sale so that there would be no possibility of sales going ahead without the land being made available for purchase by suitable bodies such as the National Trust.
I welcome what the Minister said about proposals made by the noble Lords, Lord Greenway and Lord Gibson. He was right when he said that they would not, of themselves, have gone far enough to protect the public interest. In that respect, his own proposals do not go as far as the original proposals of the noble Lord, Lord Gibson, made on behalf of the National Trust. There should be some degree of further protection, which is what we propose in Amendent No. 140H.
Amendment No. 140J follows closely on that point, because it requires that any land made available to a body such as the National Trust should be made available at a price determined by the district valuer. That, again, is a curious omission from the Government's proposals. I am not suggesting that it is sinister. The price should not be set by the purchaser or any other party. It should be set by the district valuer. That was the provision made in the amendment tabled in Committee by the noble Lord, Lord Gibson. It is one which should not have been omitted from the Government's amendments.
Amendments Nos. 140K and 141A remove the curious condition whereby the undertaker may be required either to consult the Countryside Commission or to enter into management agreements or covenants, or both. Surely, there should be a mandatory consultation procedure with the Countryside Commission, or, as other amendments tabled by my noble friends suggest, with other relevant bodies. There should be no possibility of management agreements or covenants supplanting consultations with the Countryside Commission.
Passing over other amendments tabled by my noble friends, I move now to Amendment No. 143A, which removes a restriction—again, an incomprehensible restriction—on the power of the Secretary of State, in subsection (6) of the new clause, to lay down bindng covenants on issues such as freedom of access to the management of lands. At the moment, the subsection applies only to land which is in a national park, an area of outstanding natural beauty or the Broads. There is a whole class of land which may or may not be designated by the Secretary of State—we have no assurance that it will be—which is attractive land and is of recreational value, and where access should be freely available to the public. The Secretary of State not only has no

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duty to enforce access; he has no power to enforce access. Our amendment would give him that power, which is sadly lacking from the Governemnt's amendment.
Amendment No. 143C follows the same point as Amendment No. 143D because it covers covenants on freedom of access. It reflects the wording which the Government have already accepted and put into Clause 8. Again, it does not seem to make sense to us that concessions on freedom of access which have been made in Clause 8 should not be repeated when land is being sold to new owners rather than kept in the ownership of the water supply and sewerage undertakers. The principle behind all these amendments should be that the protection which is given by ownership by the water and sewerage undertakings should extend indefinitely, as the Minister said in his opening speech, to the new owners of the land which has been disposed of.
Amendment No. 143F extends to a new owner the range of coverage which the Secretary of State can make to include environment and recreation. The government amendment does not go far enough on that point.
The next group of amendments tabled in my name comes after Government Amendment No. 161. We are testing the scope of the definition of protected land which has been put into Amendment No. 161 by the Government. We want an assurance that all land owned by water authorities will be covered by the scope of those provisions. If it is right that the Secretary of State should have power to control the disposal of land assets and to impose covenants and make restrictions, then surely he should do so over any land, because initially those are all public assets and their disposal is presumably because they are surplus to operational requirements.
We return to the fundamental point that we have been making throughout the Bill's consideration: that the Bill should be about water privatisation; it should not be about the privatisation of land which happens to be owned by the water authorities and which is surplus to their requirements.
I apologise for having taken up so much time in explaining these subsequent amendments, but it is clear that when the Government choose to introduce a series of complex amendments at the Report stage of a Bill in the second Chamber there is not very much we can do except to treat the matter seriously, as though it had been in the Bill right from the very beginning and as though we had the opportunity to debate it fully. If I have detained the House for that purpose on Report stage, I can only apologise.
I return to Amendment No. 48A, the specific amendment which I rose to move at the beginning. It seeks to expose the fundamental defect—I am now talking about the financial defect rather than specific environmental defects—in the Government's proposal. Let us agree from the outset that these amendments are a serious attempt to move in the right direction. They are a serious attempt to provide protection for the environment and for customers in the event of disposal of surplus land by water authorities. But they are not as serious an attempt
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as the Government have been claiming. They are certainly by no means as serious an attempt as has been claimed in the press release issued by Mr. Michael Howard, the Minister of State for Water, when the amendments were first tabled. In his press release Mr. Howard indicated that 50 per cent. of the value of the proceeds of the sale would be made available to the customers. That figure of 50 per cent. does not appear anywhere in the amendments; it is left to the Director General of Water Services who is appointed by the Government. That 50 per cent. has no security whatever, either from this or from any other Secretary of State. It could be made 1 per cent. or 99 per cent.
The only fair thing to do is to do what we have done here—that is, to say that all the proceeds of the sale of the surplus land which is public land should be made available to the customers. If the Government are not prepared to agree to that amendment then one must draw the conclusion that they simply do not mean to protect the customers adequately and to avoid windfall profits to the shareholders from the disposal of surplus land.
The second thing missing from the amendments—although the Minister referred to it in his opening speech—is land transferred to subsidiary companies. There has been a lot of debate about security for the environment and for customers in relation to land transferred by the water supply plcs to subsidiary companies. Clearly if the water supply plcs are able to get round any of the other provisions and protections of the Bill simply by transferring to subsidiary companies, then those protections are a sham. But as I understand it, in opening the debate on these amendments the Minister said that the protection would not cover transferred land and that the Government's view was that the planning system would cope with the problems that arose. They cannot have it both ways. Either the planning system will cope anyway, in which case none of these amendments is necessary—it is obvious that we do not believe that for a moment—or the planning system cannot cope as regards land which has not been transferred, in which case there is no reason whatever to assume that it will cope for land which has been transferred.
So on those two vital aspects—the proportion of the money which is to go to customers and the coverage of transferred land—the amendments are silent. The Minister of State says things, the Parliamentary Secretary may say things now from the Government Front Bench in this Chamber, but the Bill and the amendments do not say so. It is not good enough.
I had prepared a complicated analysis of the financial considerations involved here but I listened with care to what the Minister said. Some of what he said about the calculation of the proceeds and how they should be assessed sounded interesting and I think I could cut out some part of that discussion from my speech. As I understand it, in the initial assessment of K before the first figure for K—which noble Lords will recall is the basis on which water prices and sewerage prices have to be set—the Minister said that there would be a target figure for disposals of 100 per cent. of the open market value

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of identified sites. That is helpful because it seems to deal with the problem that there might have been in a conflict between the deemed value and the actual value.
Then the Minister is proposing an adjustment to follow that of 50 per cent. of the surplus or shortfall. Since K is proposed to continue for a period of 10 years, is that adjustment for surplus or shortfall to be introduced immediately, in other words into the next year's K or will it be delayed until the end of the 10-year period? The Minister went on to give some more detail about the consents and conditions. I think that in discussing the other amendments I have made it clear how unsatisfactory those are.
I feel that I should summarise our position on the Government amendments by saying that they have exposed a Catch 22 situation as far as concerns the protection of the consumer and the environment. If the proceeds of the sales are to be included in K—as they appear to be—then the Government are accepting that there is a real risk of a continuing threat to the environment which has to be dealt with by these special measures. If it is not to be included in K, then the shareholders are set to receive a quite unjustified windfall gain, especially when there are sales of unprotected land within the Government's definition.
However, well-meaning the amendments may be, the analysis that I have made (at unfortunate length) means that the protection which the public requires and which the Minister claims from the amendments is not actually achieved by them. It is necessary for us to consider the amendments in detail. If the public is to be protected it will be necessary for very substantial changes to be made to this set of Government amendments. I beg to move.
4.15 p.m.
Baroness Birk: My Lords, the amendments standing in my name to the new Government clause fall into two groups. I shall try to be as brief as I can in dealing with them. I was extremely sorry not to have been present at the Committee stage. I am very grateful to my noble friends Lord McIntosh of Haringey and Lord Graham of Edmonton who moved the amendments on my behalf.
The amendments are all concerned with the heritage, archaeology and conservation. They fall into two groups. Amendments Nos. 140L, 141B and 146A concern the general applicability of the clause to the manmade heritage. Amendment No. 144B concerns the addition of specifically archaeological and historic designations. I think the Minister had so much on his mind and so many papers under his arm that he probably did not register that I am not moving Amendment No. 144C which refers to land sensitivity under an agricultural Act. After consideration, I thought that that was taking it rather wide. Nevertheless I hope that the thought behind the amendment will obtain.
Amendments Nos. 140L, 141B and 146A all seek to ensure that this new clause applies to our manmade heritage as well as to our natural heritage. Subsection (7) of this proposed new clause
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encompasses the provisions of Clause 8 which specify the conservation duties of all the bodies concerned. These duties include the protection and conservation of building sites and other objects of archaeological, architectural or historic interest. Those provisions must be covered therefore by this new clause, and yet there is no mention of them.
In general terms that is rectified by Amendment No. 146A which seeks to insert a new subsection making the provisions apply to buildings and objects of interest, as well as to land. It should be noted that this extension has been carefully restricted to those items of archaeological, architectural or historic interest. Among the assets currently belonging to some water authorities, such as Thames Water, there are major collections of prehistoric and later artefacts, engineering drawings and machinery. These provisions controlling disposal should also apply to all of those things. They will have no other statutory protection unless something is written on to the face of the Bill in that way. Although some provision is made in the code of practice regarding the disposal of objects, it does not provide any control over the process as is envisaged in this new clause, and it does not in any case apply to buildings. Therefore it is essential that protection should be inserted into this new clause.
The inclusion of the Government's statutory adviser on heritage, as dealt with in Amendment No. 140L, the Historic Buildings and Monuments Commission for England, has been provided for in order to ensure that consultations concerning the disposal of items relating to manmade heritage take place with a relevant statutory body. The Countryside Commission may have an overall remit for areas of outstanding natural beauty and national parks, but it does not have a remit for advising on the management of buildings and archaeological sites. These are the specific concern of English Heritage.
Section 17 of the Ancient Monuments and Archaeological Areas Act 1979 provides for management agreements. These are also very relevant to the disposal of archaeological sites. They apply to scheduled ancient monuments and other sites. That is encompassed by Amendment No. 141B.
I shall now turn briefly to Amendments Nos. 144A, 144B and 144C. These amendments seek to extend the range of designated areas to which this new clause applies to those specifically designated as being of archaeological, architectural or historic interest. It is an anomaly that under the new clause as it stands, provisions for obtaining statutory advice and entering into management agreements may apply to land which has general scenic value, but would not necessarily apply to sites of very considerable conservation value outside the general areas of scenic value. That such controls should apply to areas of outstanding natural beauty and national parks is very welcome. However, as the new clause applies to all disposals, it would be wrong to let it go through without consultations with statutory bodies and the provision of management agreements. At the moment, those apply only to landscape designations.

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In practice, much of the detailed practicalities of managing specific areas of land relate to conserving heritage or wildlife, whether or not they happen to be within the areas of outstanding natural beauty or national parks. The provision for the Secretary of State to designate areas by statutory instrument is a welcome one. However, it offers no clear guidance on how the specific interest of manmade heritage might be dealt with. Therefore, my Amendment No. 144B seeks to deal with that. It is not a substitute for including a specific relevant statutory designation, but nevertheless it represents a welcome provision in the hope that it may offer for safeguarding sensitive areas which are not already designated.
Finally, I come to Amendment No. 140G. I must apologise because, in its present form, the amendment contains some slight errors. I do not think that they alter the meaning of the amendment, but they make it defective. I have advised the Minister and the department of the errors. However, the objective of the amendment, which I think is quite clear, is to ensure that the various possible options for conditions to be applied to land, buildings or objects being disposed of, are always considered.
This amendment does not go as far as Amendment No. 140H which stands in the name of my noble friend Lord McIntosh. My noble friend has kindly agreed to withdraw that amendment in favour of the amendment to which I am now speaking. My amendment does not commit the Secretary of State to apply conditions in every case. However, it imposes a duty on the Secretary of State or the Minister to consider the various conditions. As it stands, the proposed new clause does not ensure that each case will be considered in the light of all the possible conservation interests and conditions, as my amendment suggests. I must apologise for the number of amendments I am speaking to and for their length. However, they seek to balance in the new clause our manmade heritage with the natural environment. The natural environment is, in many ways, fairly well covered in the new clause as it stands. I beg to move.
Baroness White: My Lords, I have the greatest sympathy with the amendments to which my noble friend has just spoken. However, did my noble friend Lady Birk or my noble friend Lord McIntosh of Haringey agree to the grouping which is before the House? It seems to me that to group these amendments in this way is a very unsatisfactory method of debating difficult issues. As a modest Back-Bencher, I cannot help thinking that it is very difficult for us to follow the arguments in the way in which the Government apparently wish them to be considered. Unfortunately, the noble Lord the Leader of the House is not in his place. I wish he were, as I should like to address my remarks directly to him. These amendments were only available to us recently. To the best of my belief, the grouping was only publicly available today. I consider that it is an abuse of the procedures of the House to proceed with a debate of this importance in this manner.
Lord Renton: My Lords, with great respect I support——
Lord McIntosh of Haringey: My Lords, the noble Baroness was speaking before my noble friend sat down.
Baroness Birk: My Lords, my noble friend Lady White put a question to me and my noble friend Lord McIntosh. I agree entirely with what my noble friend has said. I hope that my noble friend who is leading on this Bill will also comment on this. The alternative would have been to have received answers to every group of amendments. I do not know whether the Government will comment on that. We, and I imagine my noble friend Lady Nicol, have tried to keep the groups together. I do not know what the answer is to this problem. I think it is more a question for the Government than for us. When we were shown the groupings by the Government, we tried to do our best to give them some logical sense.
Lord Renton: My Lords, I wish, first, to deal with the matter which has been so rightly raised by the noble Baroness, Lady White. We are being asked to consider, I estimate, 39 amendments, or amendments to amendments, covering a very wide field. I think it is for consideration by the Procedure Committee of this House, which I hope will take note of what we have been saying, that there are advantages in the procedure used in another place when a new clause or a new set of provisions is being tabled which had not been considered in Committee. In those circumstances there is a procedure called re-committal which enables virtually a Second Reading debate to take place on the general principles involved in either the new clause or the new group of amendments.
That would have been of immense advantage on this occasion. We could then have taken separately the various amendments and new clauses and the amendments to the amendments as they arise, as is done at Committee stage. However, under our procedure, although we are speaking to 39 amendments, nearly all of us are allowed only one speech. The movers of amendments to the amendments will be allowed to reply and my noble friend Lord Hesketh, not only allowed, but expected to reply at the end of what may be a long debate. I do not envy him the task that lies before him. I am sure that we shall do all that we can to make it simple rather than difficult.
I greatly admired the way in which the noble Lord, Lord McIntosh, approached this matter. He did not complain, as the noble Baroness, Lady White, and I have complained. He took things as they are, made the best of them, made his case of substance and, like my noble friend on the Front Bench, spoke with clarity. But I am not able enough to follow what has been said either by my noble friend or by the noble Lord, Lord McIntosh, and at the same time take a useful note for the purpose of the debate.
I see that the Opposition Chief Whip is present. He has a responsibility to help in these matters; he is a member of the Procedure Committee. I hope

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that as a result of this debate we shall consider whether, for an occasion such as this, the procedure is right. Perhaps I may now move on to the substance of the amendments.
4.30 p.m.
Lord McIntosh of Haringey: My Lords, before the noble Lord proceeds to the substance of the amendments, perhaps I may say a word or two about the procedural aspects, having nothing at all to do with the fact that he has addressed his two kind remarks to me and two unkind remarks to himself.
I appreciate the difficulty to which my noble friend Lady White and the noble Lord, Lord Renton, have drawn attention. I must point out for the purposes of this discussion that the grouping of the Government amendments was proposed by the Government. We do not feel that it is for us to suggest changes to the Government's grouping of their own amendments. We feel free to group our own amendments in the way which best assists debate in the House, but not Government amendments. Therefore, once the Government had taken the decision to take all their amendments together—one can see some argument for that in the sense that they form a coherent, if inadequate, whole—then our amendments had to be grouped together with the government amendments. We had no choice in the matter.
I very much agree with the noble Lord's suggestion about recommittal to Committee. I should have argued for it. However, the trouble with this Bill is that everything is scattered all the way through it. These amendments occur everywhere between Clause 7 and Clause 187. One would have had to recommit the whole Bill in order to deal with this group of amendments. The structural engineering of the Bill is grossly inadequate for the purposes of sensible debate in your Lordships' House. The words of the noble Lord, Lord Renton, have made that clear.
Lord Renton: My Lords, I commend the magnanimous nobility displayed by the noble Lord, Lord McIntosh. I am sure that the Government are grateful to him. Perhaps they will be very grateful on some other occasions, too.
I return to the substance of the amendments. So far as concerns the broad terms and purpose of the amendments I welcome them, as I am sure do my noble friends on this side of the House. They result to a considerable extent—although my noble friend Lord Hesketh did not say so—from representations which we made at Second Reading and Committee stage. I too am grateful, as was the noble Lord, Lord McIntosh, for the valiant attempt by my noble friend Lord Hesketh to explain the meaning, purpose and effect of the amendments. I welcome the broad purpose.
I refer first to the principle one, the new clause at Amendment No. 140. As far as it is expressed it seems to be commendable. However, there was one matter to which my noble friend Lord Hesketh referred which I greatly welcome. That is that land which is to be sold should be offered to the person
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from whom it is to be acquired. That is a commendable principle, first enshrined at Crichel Down. Alas, if I may digress for one moment, the Forestry Commission is not following that principle, and perhaps representations could be made to the commission to do so. This would achieve consistent government policy with regard to water authority land and Forestry Commission land. Having welcomed the statement of my noble friend, I wonder whether, when winding up the debate, he could tell us whereabouts in the new clause in Amendment No. 140, or elsewhere, that principle is to be stated. At the moment I cannot find where it is stated in the new clause.
I refer next to the amendments moved by the noble Lord, Lord McIntosh, to the very first amendment, Amendment No. 48, which is the one we are discussing. He made two points about that amendment. One is a fairly narrow point—that instead of using the word "protected" we should use the word "eligible". Quite frankly, there is not much in that, but there is an argument in favour of saying that "eligible" might be the better word. However, I keep an open mind on that.
The noble Lord raised a point of much greater substance and consequence when he said, with regard to the proceeds, that we should tie the Secretary of State and all those concerned to distributing the proceeds to the consumers. That is as I understand it. My noble friend Lord Hesketh said in his opening speech that it is intended that they should be divided fifty-fifty; that is to say, 50 per cent. of the proceeds of sale would go to the consumers, presumably in reduced water charges, and 50 per cent. would go to the people who are selling the land. I think that the Government are right on that. After all, they are acquiring and will have paid consideration for, in effect, property which is being sold. I think that they should be entitled to at least 50 per cent. of the proceeds of that property. I hope that the Government will not move from that principle. I am sure that it is right.
The noble Baroness, Lady Birk, made an interesting speech about her amendments to the new clause. I believe it is very important that, somehow or other, ancient monuments and listed buildings should be treated specially in this context. I am sure that she is right. However, technically, I think that we may find—and my noble friend Lord Hesketh will no doubt say in reply—that the existing legislation would be enough to achieve that object. If it is not, no doubt my noble friend will say so.
Of course, each of us could make a speech of half an hour or more about this great mass of nearly 40 amendments, but, realising that I must speak now or forever hold my peace in the course of the debate, I think that I had perhaps better sit down.
Lord Ross of Newport: My Lords, as the noble Lord has commented on quite a number of amendments, will he comment on Amendment No. 140F? Surely he agrees that it is desperately important that, where sales are to take place, some notification of the application by the water authorities to the Secretary of State to be given permission to sell should at least be advertised.
Lord Renton: My Lords, I am sorry, but I have not followed the noble Lord because he spoke rather faster than my mind works. I did not catch the number of the amendment to which he referred.
Lord Ross of Newport: My Lords, I was referring to Amendment No. 140F. I apologise; as an auctioneer, I am always selling 150 lots an hour. That amendment relates to the advertising of the intention to apply to the Secretary of State for permission to sell. Surely it should appear somewhere that an application is being made by the water authorities to the Secretary of State. I should have thought that the noble Lord would have agreed with that amendment.
Lord Renton: My Lords, I do not think that we should write into primary legislation every single bit of administrative procedure that will be carried out, but the noble Lord makes a fair point. I doubt whether we need to write that sort of thing into every Act of Parliament.
4.45 p.m.
Baroness Nicol: My Lords, at this stage, I should like to introduce the amendments which appear in my name and those of the noble Lords, Lord Moran, Lord Norrie and Lord Addington. If the debate is to continue, we shall value the comments of noble Lords on those amendments.
I very much sympathise with the point made by my noble friend Lady White and by the noble Lord, Lord Renton. I grumbled rather seriously about the grouping, but I was persuaded that it should go forward. However, if the House takes a decision on Amendment No. 48A or indeed on Amendment No. 48 at the end of the debate, will that decision be considered binding on the rest of these amendments? I had intended to say—I shall say it now—that, depending on the outcome of this afternoon's debate, I reserve the right to come back again when my amendment is finally called, which I understand will be on Tuesday. I shall then raise any points that still need clarification or an answer at that time. I believe that that approach is procedurally acceptable and I give notice that that is my intention.
There are so many different kinds of amendments. It may well be that many of those amendments will find favour with noble Lords this afternoon. Obviously, others will not. We shall have them all lumped together and lose the opportunity to put them individually.
However, I shall proceed with the material as we have it. I want to confine my remarks to the amendments to be inserted after new Clause 150. The new clause goes some way towards meeting the objections that were raised earlier by what I may call the National Trust amendment, but there are still quite a number of questions outstanding and some omissions to be explored. My amendments—Amendments Nos. 141 to 146—seek to repair some of the omissions.
Amendments No. 141 would add the Nature Conservancy Council to the Countryside Commission as a potential consultee if the
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characteristics of the land being proposed for disposal made it appropriate. I agree with my noble friend Lord McIntosh when he said that, in the case of conservation bodies and others, it should not be a case of "either/or". There should always be a view from either the Countryside Commission or the Nature Conservancy Council.
There are many sites of special scientific interest in the lands covered by the Government's new clause. Involvement of the Nature Conservancy Council is therefore very important. It will become even more important if my Amendment No. 144 is accepted.
Perhaps I may point out that the new Government amendment still leaves two-thirds of the water authority land—312,000 acres—unprotected. Amendments Nos. 142 and 143 are consequential on Amendment No. 141 and I shall not give them any time.
Turning now to Amendment No. 144, although the provisions of Amendment No. 140 are welcome—as I said earlier—they do not go far enough. The new clause applies only to water authority land in national parks, the Norfolk and Suffolk Broads and areas of outstanding natural beauty; that is, primarily in the upland areas of England and Wales. It does not apply to lowland areas with the exception of the Broads and some lowland AONBs. In particular, it excludes all sites of special scientific interest currently owned by the water authorities, and there are many of them. Many of them are of national and international importance for nature conservation.
By offering to help to protect the upland areas owned by the new water companies, the Government have in a sense given a green light to the exploitation of lowland areas. Indeed, they have admitted that. A Minister in another place, Mr. Michael Howard, announced the measures and outlined the new provisions on 31st May. In his press release, a copy of which I have here, he said:
"But, outside the national parks and areas of outstanding natural beauty and particularly in urban areas, some of the water industry's surplus land may have valuable development potential".
That seems like an invitation to look at the remaining lowland land for development.
The Government's new proposals clearly acknowledge that much water authority land is of high environmental and landscape value and that there is a need to protect it against inappropriate use or development. On several occasions, the Minister has tried to assure Parliament that additional measures are not required for the protection of areas that have been notified as sites of special scientific interest as they are already protected. The Minister must know that that is not the case. The SSSI provisions of the Wildlife and Countryside Act 1981 do not prohibit damaging operations; rather, they require landowners to consult the Nature Conservancy Council which has no power to prohibit damaging activity.
The same consultation mechanism has recently been introduced in Clause 9 of the Bill to apply to water authority land in national parks and, in that respect, to put them on a par with SSSIs. That being

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the case, why do the additional measures now tabled by the Government apply only to land in national parks and AONBs? Are they more vulnerable or more valuable?
The SSSI network and planning system will not provide adequate safeguards against inappropriate exploitation of water authority land. In its annual report for 1987–88, the Nature Conservancy Council reported 114 cases of damage to SSSIs; 12 of those cases were caused by operations that were granted planning permission.
I do not wish to weary the House with too long a speech this afternoon, so I shall give just two examples. Hyde Heath in Dorset was notified as an SSSI for its range of rare plants and animals, including sand lizards, smooth snakes and club moss. It was partly destroyed 18 months ago by sand and gravel extraction. Approximately two years ago, Warmwell Heath, also a Dorset SSSI, suffered permanent damage following the construction of sewage works commissioned by the Wessex Water Authority. It is therefore quite obvious how important it is that SSSIs should be included in the new provisions.
Much of the land particularly at risk from likely disposal includes areas adjacent to lowland reservoirs. Evidence of commercialisation, using water space as a major investment attraction, can be seen at Rutland in Leicestershire where timeshare flats have been built on private land next to the Anglian Water Authority reservoir. Planning applications around Rutland Water in recent years have included proposals for golf courses and hotels. It is increased development of that kind which causes the greatest dismay to conservation bodies.
I submit that without the inclusion of SSSIs in the Government's proposed new clause, many lowland areas will be vulnerable to damage. Acceptance of the simple measure that I have proposed will fully complement the Government's intentions to help protect land of conservation value. That is why I am so sorry that this particular amendment has had to be included with so many others of a different nature. Amendments Nos. 145 and 146 are consequential upon Amendment No. 144.
The Lord Privy Seal (Lord Belstead): My Lords, the Opposition Front Bench asked me to confirm that we on this side of the House have heard and approve of what the noble Baroness said; namely, that she has a particular amendment which is part of this grouping but that she would very probably put it to a vote later on in the proceedings of the Report stage of this Bill. That is the noble Baroness's right. As the rubric at the top of the piece of paper which most of us have received states:
"Although every effort is made to secure agreement to these groupings, they remain informal and not binding".
Lord Norrie: My Lords, I join with the noble Baroness, Lady Nicol, in very warmly welcoming the Government's amendments on arrangements for the disposal of land in national parks and areas of outstanding natural beauty. I also welcome the Minister's indication that the clause has been drafted
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so that it can and will be applied more widely to land other than national parks and AONBs.
However, there is one category of designated land which it concerns me deeply to see left out of the clause and which has been alluded to by the noble Baroness, Lady Nicol; namely, sites of special scientific interest (SSSIs). SSSIs enjoy similar legislative status to that of the national parks and AONBs and it therefore seems something of an anomaly that they should be omitted. There is no doubt in my mind that SSSIs are likely to be under pressure from water company development and other activites. Indeed many of them lie in lowland areas where development pressures are strongest.
My fear is that my noble friend the Minister will find himself deluged with requests to apply the provisions of this clause to SSSIs each time that one comes under threat. Would it not be better to anticipate those circumstances by including SSSIs in this clause and involving in the process the Nature Conservancy Council, which is the Government's own body responsible for SSSI notification, just as the Minister has already involved the Countryside Commission in the new clause to be inserted by Amendment No. 140?
We know, and have heard numerous examples of it during the debates on the Bill in Committee, that the planning system does not provide adequate protection for SSSIs. The annual report of the Nature Conservancy Council each year cites a number of cases where SSSIs have been damaged by activities for which planning permission has been granted. For the year ending March 1988, for example, such cases amounted to eight sites suffering long-term damage and seven sites suffering partial damage.
The Wildlife and Countryside Act states:
"It is a reasonable excuse in any event for a person to carry out an operation if—

(a) the operation was authorised by a planning permission granted on an application under Part III of the Town and Country Planning Act 1971 or Part III of the Town and Country Planning (Scotland) Act 1972".

In a nutshell this means that as soon as planning permission is granted, SSSI protection falls.
I know from my own experience how serious these losses can be. Not 20 miles from where I live in Berkshire there is an SSSI known as the Blackwater Valley, where the River Blackwater runs north from Blackwater near Camberley towards. Reading. A survey conducted in 1986 by the local county trust revealed that this wet meadow was the largest and richest site for wildlife in the whole of the Blackwater Valley, containing a diversity of uncommon plants, including spotted orchids and heath spotted orchids, and insects such as the rare seed weaver and rove beetle. They were certainly commonplace in that area. Now 50 acres of that 100-acre site have gone straight out of the window because planning permission has been granted for a hypermarket—a joint venture of Tesco and Marks & Spencer—which as I speak, is well on its way to being constructed. Does not that prove that no SSSI is sacrosanct? It is precisely the kind of situation where covenants on the land, as provided in the Government's amendment, could have prevented such inappropriate development.

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If the lowland SSSIs which are currently owned by the water authorities are to be safeguarded against inappropriate commercialisation, it is essential that SSSIs are included in the Government's new clause. The conservationists are not against development of water authority land but they are against uncontrolled development. I have been advised that the Nature Conservancy Council has made formal representations to the Department of the Environment requesting that SSSIs be included.
If I were the Minister responsible for administering the proposed new arrangements I should have sleepless nights worrying about my in-tray being piled high with requests to protect SSSIs as they become threatened. If the Minister cannot accept Amendment No. 144 as it stands, I hope that he will consider bringing forward an acceptable amendment at Third Reading.
The Earl of Onslow: My Lords, I yield to few Members of your Lordships' House in my concern for the environment, and I do not accept that the general protections for SSSIs as enacted in the Wildlife and Countryside Act 1981 (of fond memory in your Lordships' House) are adequate. It strikes me that it is inappropriate to give extra protection to one set of SSSIs just because they have devolved from Thames Water or the Scunthorpe and Middlewich Canal Company or whatever as opposed to the general run of the mill of SSSIs. I believe that such action will involve us in legislative trouble.
My noble friend Lord Norrie recounted the sad story of Tesco ruining an SSSI around Blackwater on the Surrey Hampshire borders. That is a fault in the general legislation which I suggest cannot be rectified by applying in one particular case one particular set of criteria. That will get us into the most unholy muddle. SSSI protection throughout the country is not adequate. In my view that is one completely valid point. However, to single out certain small parcels of land which through historical accident have belonged to one set of owners will lead to even greater muddle than we have at the moment.
Lord Moran: My Lords, I welcome very much the Government's Amendment No. 140 which is in line with what I ventured to suggest when I spoke at Second Reading. I put my name to the group of amendments moved so capably by the noble Baroness, Lady Nicol, primarily because I believe that SSSIs should be included with the other two categories that the Government have designated: national parks and areas of outstanding natural beauty.
I think in particular of areas in Wales. In introducing the government amendments the Minister himself mentioned the Elan Valley. My understanding is that the Elan Valley is made up of several very important SSSIs but it is not in a national park and is not, I believe, an area of outstanding natural beauty. It is owned by Welsh Water, with common grazing rights, and it contains four important reservoirs. It is of national importance on account of a number of very rare breeding birds that it harbours such as the red kite and the merlin. It is very important that such an area
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should receive the protection which the Government have quite rightly given to special areas under this group of amendments.
Another example in Wales is the Llandegfedd Reservoir near Pontypool. That can hold 2,000 widgeon or mallards in winter. Welsh Water has acknowledged the importance of the reservoir for birds and does not allow sailing and fishing from November to February because of the birds. It has set up a special committee, which includes the RSPB, to manage the fine balance that is required to maintain the nature conservation interest of the site while still allowing recreational use.
That balance has been maintained so far while Welsh Water is a public body. However, one must ask oneself whether it will continue when there is a plc whose overriding duty is to make profits for shareholders. That is the kind of area—and there are a number of others in Wales in that category—about which one must be concerned.
I should like to commend the arrangements made by Welsh Water. It has made an agreement with the National Parks Authority to protect 7,000 acres in the forest Fawr region for the next 25 years. I hope that such arrangements can be extended to other parts of Wales. I feel it is important that SSSIs should be included in the protection arrangements provided by the Government. I hope that they will agree to this.
5 p.m.
Lord Addington: My Lords, I too should like to speak to Amendment No. 141. The evidence that we have already heard indicates that many areas of the land currently owned by water authorities could be vulnerable to commercial exploitation, which may well result in damage to the environment.
The Government's new clause recognises that surplus water authority land is worthy of additional protective measures. This is to be welcomed. However, the Government's new proposals are something of a sop to conservationists and Parliament alike. The amendment promoted by the noble Baroness, Lady Nicol, and supported very strongly by these Benches, would require only a minor addition to the Government's new measures. This would present a considerable improvement to the Bill.
By adding sites of special scientific interest to the protective mechanism now being proposed by the Government, the land most likely to come under threat of increased commercialisation will enjoy the additional safeguards that it rightly deserves and judging from the evidence from all sides of the House urgently requires.
The Minister knows that the land most likely to be developed to benefit shareholders will be land that is close to or even within urban areas. A number of redundant reservoirs have already become the focus of property speculators, in London in particular. This is primarily as a result of the main London link reservoir coming on stream, which means that many of the old reservoirs are no longer required for water production. Sites at risk include Walthamstow and Chingford reservoirs, both of

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which are SSSIs. Walthamstow reservoir contains one of the top five heronries in Britain and supports nationally important numbers of wild birds, including a winter cormorant roost. It is also worthy of note that not only are these birds under threat but also the ecosystem that supports them would undoubtedly be under threat. Considerations about the environment go further than what we can see in the water and around it. Water quality is involved in the nature of conservation. As these sites are becoming surplus to requirements it is certainly no good to rely on the existing SSSI procedures.
The Government are naturally anxious that blanket prohibitions on the future use of surplus water authority land does not effectively block development potential and thus damage any future flotation by putting off investors. I submit that adding SSSIs to the new measures will not have any untoward effect on flotation since the new measures merely provide a new mechanism that will remain within the total control of the Secretary of State.
Subsection (5) of the new clause states:
"The conditions of a consent or authorisation for the purposes of this section may"—
and I emphasise that—
"include"—
and it lists measures including covenants and management agreements. In other words, the Secretary of State will be given permissive powers to apply various conditions on land disposals. Including SSSIs in this new clause will not prohibit comercialisation. Rather, their inclusion will permit controlled disposals and development with the ability to protect land of conservation value in perpetuity.
Baroness Lockwood: My Lords, this is a very difficult debate. It seems now to have concentrated on Amendment No. 141 in the name of my noble friend Lady Nicol and others. I should like to support what has been said on this amendment. It seems that there is an omission from government Amendment No. 140. However, I wish to support two of the amendments put forward by my noble friend Lord McIntosh of Haringey.
Amendment No. 140B places a positive duty on the Secretary of State in this whole area. It makes the provision compulsory for the Secretary of State by inserting "shall" instead of "may". In the context of this Bill it is important to have that clearly laid down.
I wish also to support Amendment No. 140F. It lays upon the Secretary of State a duty to give notice where an application for consent or authorisation for transference of land takes place. Many of the voluntary organisations—in this context in particular the Ramblers' Association—are very concerned about access to footpaths. In certain areas they are in the process of negotiating with the water authorities for such access. For example, in Nidderdale negotiations are taking place with the Yorkshire Water Authority. Access has not yet been determined but other interest is being expressed about use of the land surrounding the reservoirs
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there. Organisations such as the Ramblers' Association may be completely unaware of the fact that transference of land is taking place unless there is publication of the fact and it is in a position to make representation to the Secretary of State. I am sure that other voluntary bodies which will have similar interests will want to ensure that they have the opportunity, first, to be aware that the transfer of an area of land is under consideration; and, secondly, to put forward their point of view so that it can be included in the terms on which the land is being sold. I therefore support these amendments very strongly.
Lord Chorley: My Lords, I should like to speak principally to Amendment No. 140 which is, one might say, the centrepiece of this raft of amendments. As one of those who strongly supported the amendment of the noble Lord, Lord Gibson—or perhaps one might say the National Trust's amendment—on the sale of surplus land at the Committee stage, I think it right to acknowledge that the noble Earl the Minister has done what he said he would do. He has listened to the argument and has come back with a new clause which, coupled with other amendments, especially that dealing with the definitions of functional and non-functional land, deals in very large measure with the problems we raised in Committee. Certainly both the National Trust, and, I think I can say also, the CPRE, welcome these amendments. Indeed one could go further for, in many respects, the amendments we are now discussing are wider, more comprehensive and more flexible than our original proposals. That is good.
Let me be quite clear. I am not welcoming the Government's amendments on the basis that half a loaf is better than no loaf at all; the loaf that we are now discussing is a better loaf. Nevertheless, even a better loaf is capable of improvement and I should like to make three points, which I shall do quite briefly. Some have already been touched upon.
First, the Secretary of State will now have wide discretionary powers. That is good. I do not object to that at all. But we need some public understanding of the criteria that he will adopt in exercising them. For my part, I believe that this is best done outside the legislation. One area concerns land lying outside the national parks or areas of outstanding natural beauty status—what I might loosely call Elan Valley-type situations of which there are a number. We need some public clarity on what the Secretary of State's criteria will be.
The second point has already been touched upon to some extent. Areas of special scientific interest are not included in the same way as national parks. This seems to be a weakness. I should have thought that it made administrative sense, creating less future hassle, to have included them. Before taking a final view I should like to hear what the Government have to say. At the moment. I am bound to say that I am minded to support the amendment of the noble Baroness, Lady Nicol.
Thirdly, as regards the sale of surplus; lands, so far as I can see the clause does not really deal with the valuation principles and the question of development benefit. I am bound to say that I have

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become somewhat confused. Much of what is said does not appear in the legislation; I do not know where we are. I suspect that we shall have to come back to it later on.
Finally, the effectiveness of the proposed arrangements will depend on the attitude of future Secretaries of State. We need to recognise that. I do not particularly object. I have a good deal of sympathy for most of the amendments of the noble Lord, Lord McIntosh—in particular, for the clear and reasonable way in which he proposed them. I shall be minded to support quite a number of them.
Baroness White: My Lords, I wish briefly to add my support to the expressions of concern and interest dealt with by my noble friend Lady Nicol in her amendment and its consequentials. It seems only right and proper to anyone concerned with conservation that SSSIs should be brought within the overview of the Secretary of State, and that this should be regarded as an obligation whatever his ultimate decision may prove to be. But at the moment there is nothing in the Bill, so far as I understand it, to cover the situation whereby, in the circumstances we are dealing with in this grouping, such sites, including national nature reserves—not just local sites of scientific interest—might be disposed of without being adequately considered.
One of my main concerns is Amendment No. 140F proposed by my noble friend Lord McIntosh. It seems essential that there should be public indication that these transactions are taking place and that the Secretary of State should not come to final conclusions as to what conditions he proposes without having given an opportunity for representations by various public bodies and even individual citizens in certain situations, I cannot think that it is good public policy not to make provision, within a reasonable time limit, for representations to be considered. After all, planning applications have to be considered. It seems that decisions taken under the discretions given in the Bill to the Secretary of State are, in certain circumstances, every bit as important.
There should be provision on the face of the Bill for some method of public notificiation that these transactions are proposed and for the Secretary of State to consider what conditions, if any, he wishes to put forward. I hope very much that we shall have a satisfactory reply from the Minister.
5.15 p.m.
Lord Ross of Newport: My Lords, as I intervened earlier, I should also like to say a few words on Amendment No. 140F and the requirement, which I consider absolutely essential, that water authorities should make public their intention to seek permission to sell land. I do not necessarily support the actual wording of Amendment No. 140F, because the obligation should be put on the companies themselves. When they are seeking permission, they should be obliged to place a suitable advertisement in the London Gazette or in local newspapers in locations where the land lies. I see no reasonn why that should not be done. It would be disastrous if
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not done; there would be accusations of deals behind closed doors. It is essential that bodies like the National Trust, the Ramblers' Association and so on should at least know about an application for land to be disposed of. To learn of it after the decision has been made seems totally wrong.
I tried to get the noble Lord, Lord Renton, on the board, because he is listened to with much respect on both sides of this House. I hope that he agrees with me. As a lawyer—I am not—he will know that charities have to advertise when they are selling and ask for extra bids. That seems appalling. Having agreed a price they advertise that they have agreed to sell at x thousand pounds, unless someone comes forward in the next 21 days. That seems to be gazumping; but it has to be done.
I congratulate the Government very much on their new clause in Amendment No. 140 which is an enormous step forward. But it would be totally wrong not to include this necessity to make known publicly before decisions are made that it is the intention of the boards of plcs to sell some of this highly regarded land. I hope very much, if we cannot get a concession out of the Government, Members on the other side will agree that we should divide the House on that issue.
Viscount Bridgeman: My Lords, may I speak to Amendment No. 140F, and the remarks of the noble Lord, Lord Chorley, about the sale of surplus land? I understand that the intention at present is that this will be at district valuation reflecting market values. I am concerned that the purpose of the element of this scheme will be defeated if it proves too costly to acquire the lands. Will my noble friend the Minister give an indication of any financial assistance which may be forthcoming to help mitigate this problem?
Lord Hesketh: My Lords, by leave of the House, it may assist if I now respond to the substantial and many points that have been made during the debate, and in particular to the amendments which have been tabled to this group of Government amendments. Amendment No. 48A proposed by the noble Lord, Lord McIntosh, requires that 100 per cent. of the proceeds of disposals goes to the customers. The effect of the Government's amendments is to ensure that a fair share of the proceeds from the disposals of land goes to customers, while leaving the companies with an incentive to make efficient use of land, to make every effort to dispose of land which is surplus, and to secure that the customer benefits from the best obtainable price.
Amendment No.48A, in the name of the noble Lord, Lord McIntosh, would require 100 per cent. of the proceeds to go to the customers. I invite the House to recall and consider an observation made by my noble friend Lord Nugent on the second day of the Committee stage. He said that the statutory water company model would give the best safeguard against the development of water authority land holdings because the method of regulation gives no incentive to develop land and in practice it means that statutory water companies seldom have developed land.

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I suggest that there are two lessons to be drawn from that observation: first, that the system of regulation, which leaves none of the proceeds from the disposal with the company, will not in practice succeed in maximising benefits to the customer because, as my noble friend rightly said, there will be no incentive. Secondly, it would be a pity and a waste to rely on economic disincentives to produce necessary environmental protections. That would throw the baby out with the bath water.
There is no reason why water companies should sit on idle land of no particular environmental merit because they have no incentive to dispose of it. These amendments are designed to give them an incentive to get the maximum benefit for their customers from their surplus land, subject to appropriate and necessary protections for land of special environmental quality.
Under the arrangements that I have described, somewhat more than 50 per cent. of the value of proceeds will go to the customer, because K will be set in a way which assumes a certain flow of income from disposals, and takes account of 100 per cent. of the open market value of sites which are likely to become surplus. When companies realise more than the forecast flow of receipts—for example, by securing planning permissions which increase the value of land—it is proposed that the net surplus be shared equally between customers and shareholders. Similarly, it is envisaged that 50 per cent. of any material shortfall would be reflected in an increase in K. The details will be finalised after discussion with the industry, but the essential point to be made in response to the noble Lord's amendment is that it is not in the customer's interest for their share of the benefit of proceeds to be 100 per cent. because that would destroy the incentive for the company to maximise receipts and benefit both shareholders and customers.
The noble Lord expressed specific worries about which I hope I can offer some reassurance. The arrangements which deal with disposals to sister companies will be covered by the consent procedures which I have described. They are designed to deal with the potential loopholes which concern him. The reflection of a forecast of expected receipts in K will start from the first year of price control. Essential details, such as the fifty-fifty division of any excess or shortfall of actual receipts in relation to shortfall, will be set out in the initial appointment issued by the Secretary of State. There is provision as I have described to entrench such points in the appointment so that they can be changed only by agreement. I appreciate that this is a complicated issue but I hope that the noble Lord will be reassured when he reads what I have said. I hope that I have covered at least some of his concern.
It may be for the convenience of the House if I deal next with Amendments Nos. 48B and 161A and D, tabled by the noble Lord, Lord McIntosh. These change the term "protected land" to "eligible land", which is I think entirely a matter of nomenclature. I have to say that I much prefer the word "protected", which gives a much more accurate description of
974
the purpose of these amendments than the word "eligible".
All the land transferred to the successor companies by the schemes of transfer is included in the definition. The provisions as to treatment of receipts for the disposal of that land apply to all disposals. The environmental powers apply more selectively in the manner that I have described. The definition of "protected land" is comprehensive. The only significant exception is land which may be acquired in future by appointed companies which is not used for their water and sewerage functions.
Amendments Nos. 16IB and C apply the new provisions to predecessors of appointed companies, and have the effect of making the provisions reach back in time. We believe this to be unnecessary. The water authorities have no incentive to evade the provisions by selling off land in the short interval before the transfer date while they remain in the public sector. They cannot benefit their future shareholders by so doing. Any receipts from disposals before the transfer date would be subject to Treasury requirements and would normally be applied to the reduction of NLF debt, which is in any case to be extinguished before flotation. The government amendments therefore apply to land held by successor companies from the transfer date.
My noble friend Lord Renton asked where the Crichel Down rules were to be found on the face of the Bill. The current expression of the Crichel Down rules is not in primary legislation but in a government circular, No. 1884, issued by the Department of the Environment. The means of applying the rules of the circular to relevant disposals, which is precedented—for example, under the Gas Act—is to issue a general authorisation to disposals under the general consent requirement introduced in this case by Amendment No. 140 requiring companies to follow the rules. I hope my noble friend will agree that that is a sensible way of applying the rules without cluttering the statute.
I turn to amendments tabled by various noble Lords to Amendment No. 140. They amount to the following. All proposed disposals shall be advertised in the London Gazette (Amendment No. 140F). Where a first refusal offer is to be made to a conservation body it shall be a district valuer's valuation (Amendment No. 140J). The environmental aspects of the amendment shall be extended to sites of special scientific interest and lowland areas, historic buildings, ancient monuments, environmentally sensitive areas, and so on. Those would be the effects of Amendments Nos. HOG and 141B, 141 to 146 and 144A and B, but no longer Amendment No. 144C, as the noble Baroness, Lady Birk, pointed out; also, that the Clause 8 duties shall govern disposals generally (Amendment No. 140E). Generally, they remove the Secretary of State's discretion so that he shall be required to apply the protective consultation which we propose he may apply; that is Amendments Nos. HOB, C, D, H, 143C and E. I hope that I shall be able to cover all the points raised in relation to those amendments in this important and lengthy debate.
Amendment No. 140F would require the Secretary of State, wherever he receives an application for

975
disposal consent—however small, even if of little or no environmental significance—to advertise it in the London Gazette. This is surely a recipe for bureaucratic inertia which would serve little purpose. It must be for the Secretary of State, advised as necessary by the Countryside Commission, to satisfy himself as to whether any special environmental or amenity considerations are served by a particular sale. The Countryside Commission will no doubt consult if necessary. Performance of the Secretary of State's Clause 8 duties will in any case require him to take whatever soundings or advice are appropriate to satisfy himself on this question.
Advertisement in the Gazette or local papers may be appropriate for major development proposals, but it will surely be a quite unreasonable extension of those arrangements to impose them in cases where what is at stake is simply a change in ownership. I refer to the point made by my noble friend Lord Renton, who supported the Government on this matter.
The first refusal sales are to be at the district valuer's valuation. Amendment No. 140J, tabled by the noble Lord, Lord McIntosh, proposes that in the case of land first offered to a conservation body the price should be a district valuer's valuation, and I take it at current use rather than a market value. This may be unsound. Anything less than market value raises the possibility of the privileged purchaser changing the use or disposing of some parts of land he acquired and securing a windfall gain. But in any case, in a high proportion of cases, particularly open moorland and countryside, market value and current use value are likely to be effectively the same.
Lord McIntosh of Haringey: My Lords, will the Minister permit me to intervene? Surely, where there is a difference between market value and existing use value the Secretary of State has powers to impose adequate covenant to secure a windfall profit.
Lord Hesketh: My Lords, that is correct up to a point. However, in a way the noble Lord's comments negate his amendment to some extent because of the powers that he has described the Secretary of State as having.
5.30 p.m.
Lord McIntosh of Haringey: My Lords, on the contrary; we have amendments down which force the Secretary of State to impose covenants. At the moment the Minister's covenant provision is not adequate. If he will agree to my amendment which enforces covenants, I will agree to his argument about existing use value.
Lord Hesketh: My Lords, I am just coming to that. Any market valuation will be constrained not only by the conservation and amenity duties of the vendor but by the restrictive covenants or any other conditions of the sale which may be required by the Secretary of State. We are going into familiar country regarding the words "may" or "shall", but the noble
976
Lord, Lord McIntosh, will understand why we on this side prefer the word "may".
On Amendments Nos. 144 to 146, the noble Baroness, Lady Nicol, argued most forcefully for her amendments and said that the government amendments will not protect lowland areas or SSSIs.
The basic consent requirement applies to all land transferred to the WS plcs from water authorities under Schedule 2 schemes of transfers, and to other land they may acquire in future. So too does the power to require that land is offered at market value to a conservation body. Moreover, there is power by order to extend the protection application in national parks and areas of outstanding natural beauty to other areas of countryside of exceptional environmental importance, to the extent that the same considerations arose as in those designated areas. This could include lowland areas of exceptional importance.
I recognise that we have not clarified on the face of the amendment the circumstances to which that order-making power might be relevant, and that it is a point to which we may have to ask the House to return at Third Reading. But in principle relevant lowland areas of exceptional importance could be covered. We believe it will be only very rarely that the current powers will be needed, for environmental protection purposes, outside national parks and areas of outstanding natural beauty, but they are there in reserve if necessary.
As regards the SSSI's, it is not appropriate to apply all the provisions of the clause automatically to them. I pray in aid in support of the Government the very cogent point made by my noble friend Lord Onslow on creating two classes of SSSI. The fact is that there are already in SSSI legislation arrangements addressed to a comparable protective purpose which it would be wholly inappropriate to cut across. But that does not rule out areas of land which are SSSIs being designated for the purposes of this clause in the light of the exceptional and particular circumstances. But, again, we find it difficult to envisage circumstances arising not already covered by existing planning or conservation legislation. On that basis, we do not believe Amendments Nos. 144 to 146 are necessary.
The related Amendments Nos. 141 to 143, would bring the Nature Conservancy Council into the automatic consultation process. This proposal is of course linked with the proposal for automatic coverage of SSSIs, to which I have just responded. I should add that we expect the Countryside Commission to consult with the NCC wherever that is necessary because there are specific interests within the NCC's sphere of responsibility. The reason for making the Countryside Commission primarily responsible is because of its statutory duties in relation to the national parks and AONBs covered by the environmental elements of this new clause.
Perhaps I may not turn to Amendments Nos. 140G, 14IB, 144A, 144B and 146A, standing in the name of the noble Baroness, Lady Birk. Their effect is to extend to ancient monuments and listed buildings the same special provisions which the new

977
clause would make generally within national parks and areas of outstanding natural beauty. We do not believe that that is appropriate. The special legislation protecting ancient monuments is very detailed and specific and applicable to small local sites. It is in no way compatible with the broad national park and AONB designations which tend to raise a wide range of special issues not covered by special protective legilsation. The fact is that the water authorities, in respect of ancient monuments or historic buildings, have not undertaken protective measures which could be at risk in the event of sale. The ordinary legislation is here. We believe that that is fully sufficient and that there is no case for the special elaboration of disposal controls in the way proposed. With that assurance, I hope that the noble Baroness may feel that it is not necessary to press her amendment.
Amendment No. 140E would appear to us to have the effect of requiring that the Clause 8 conservation and amenity duties should apply to all disposals. It is fair and reasonable that they should do so in the case of the special environmental areas—the national parks and AONBs. But to apply the Clause 8 duties elsewhere, in particular in disposals in urban areas, would have the effect of prejudicing unduly the reasonable development of surplus urban land for housing, employment and other needs. Of course conservation considerations will be relevant in these cases, and the planning system and conservation legislation will ensure they are duly taken into account. But to impose the extra obligations of Clause 8 would in our view seriously unbalance the particularly complex decisions which have to be made in such cases.
Perhaps I may turn finally to the Amendments Nos. 140B, 140C, HOD, 140H, 143C and 143E of the noble Lord, Lord McIntosh of Haringey. The essence of those amendments is to take away the discretion built into the Government's proposals and require the Secretary of State to impose the relevant conditions rather than leave him the discretion to do so. The amendments are wholly unacceptable to the Government. The fact is that the regulatory powers in the new clause are very wide indeed, and because of that we feel that their use should be discretionary. If the House wishes to make this application in any circumstances obligatory, the Government would feel it inescapable that the scope of the powers would have to be very greatly restricted. We believe that more would be lost than gained by that.
However, underlying these amendments there may be the inevitable doubt as to how future Secretaries of State can be trusted to exercise their consent power reasonably and on the intended basis. However, no Secretary of State is above the law, and if the government amendments are accepted it will be the legal obligation of the Secretary of State to exercise his discretion in relevant cases so as to further conservation, to put land to the best use for recreation and to achieve the purposes of Clause 8.
Therefore, I commend the government amendments to the House in the fullest confidence that they may provide a means to secure indefinitely the protection and public enjoyment of land of very
978
special value to this nation and to the cause of nature conservation which the authorities have themselves over the year done so much to protect and conserve for the nation. They also provide an appropriate and effective means for ensuring that the proceeds from the sale of the land will be fairly divided between the customers and the shareholders. I apologise if I have taken a considerable period of time in attempting to answer the points raised in the amendments which have been so graciously put forward this afternoon.
Baroness White: My Lords, before the Minister concludes his most lucid speech, for which we are all very grateful—he could have gone on longer for some of us to explain other matters which have been raised—will he comment on his remarks on the very wide discretion which the Government plainly wish to reserve to successive Secretaries of State? Does he not recognise that with such a wide area of discretion in the hands of the Secretary of State there is all the more need to inform the public of the situations over which the Secretary of State is exercising that discretion before he comes to a final decision?
If the Minister does not care for the proposal in Amendment No. 140F, to which some of us spoke, that there should be a notice in the London Gazette because he says that de minimis that is quite unnecessary and absurd, does he not agree that there should be some arrangement for public notice before a final decision is taken at the discretion of the Secretary of State?
Lord Hesketh: My Lords, with the leave of the House, I am grateful to the noble Baroness for her intervention. I apologise for not having made clear the Government's view. The obligations on the Secretary of State and the duties imposed on him will, we believe, result in the discretion being applied in an entirely successful and suitable manner.
Lord McIntosh of Haringey: My Lords, I said at the outset that when I replied on Amendment No. 48A I would not go over the whole ground of the other amendments. I am confirmed in that by the helpful statement from the Leader of the House, who reminded us that these groupings are not binding and that I, my noble friends and other noble Lords who have tabled amendments to later clauses—other than Clause 48—will have an opportunity to have them further debated and even decided upon at a later stage, though I am sure noble Lords will use that power with discretion and with concern for the proper procedures of the House.
Clearly it has been helpful for the Minister to reply to all the amendments but, as the noble Lord, Lord Renton, said earlier, if we had been able to recommit them so that comments could be made after the Minister's observations, clearly it is right that we should be able to return to the matter at a later stage.
Lord Renton: Due to a slip of the tongue the noble Lord referred to Clause 48 when he meant Amendment No. 48.
Lord McIntosh of Haringey: Iapologise to the House; I did indeed mean Amendment No. 48. Perhaps I may then restrict my remarks to Amendment No. 48.
We have what might be called the Government's last-ditch defence of their proposals. When their back is truly against the wall they fall back on the argument that, however unreasonable the legislation may be, the Secretary of State cannot behave unreasonably because he is subject to the common law and subject to judicial review. That simply is not good enough. What we are looking at is the legislation before the House, not at the ultimate control that the courts may have over unreasonable Secretaries of State.
It is not good enough for the Minister to say, "Trust me", as he did in effect in response to my amendment. We do not trust him. We do not trust him and we do not trust any Minister, because we do not trust any government. We are here to enact legislation and not to engage in trust either with individuals or groups of individuals.
The Minister told the House, for example, that the regulatory powers in these clauses are very wide indeed. He can say that again; they certainly are. Any responsible House ought to be resisting legislation in which the regulatory powers are so wide that they cannot be defined properly or cannot be enforced because they would have to be restricted if they were. The Minister says that details will be finalised after discussion with the industry. That is saying "Trust me" as well, is it not? He is, in effect, saying that Parliament is not good enough to know; that it is only the industry which is worthy of the ability to negotiate with the Government and that we in Parliament do not have the right to lay down what that negotiation will be.
No, these clauses are not good enough. They require Parliament at a late stage in the consideration of the Bill to take matters on trust. They require us to take on trust the idea not stated anywhere in legislation, not stated anywhere in these clauses, that 50 per cent. of the proceeds of certain sales under certain circumstances will be for the benefit of consumers. I have no good reason to trust this Minister, this Secretary of State, and still less good reason to trust any future Minister or future Secretary of State of whatever party. On that basis I think it is proper that I should take the opinion of the House on Amendment No. 48A.
5.44 p.m.
On Question, Whether the said amendment (No. 48A) to Amendment No. 48 shall be agreed to?
Their Lordships divided: Contents, 78; Not-Contents, 110.

DIVISION NO. 1

CONTENTS

Addington, L. [Teller.]

Birk, B.

Airedale, L.

Blackstone, B.

Amherst, E.

Bonham-Carter, L.

Ampthill, L.

Boston of Faversham, L.

Attlee, E.

Bottomley, L.

Aylestone, L.

Briginshaw, L.

980

Bruce of Donington, L.

Longford, E.

CaUaghan of Cardiff, L.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

McIntosh of Haringey, L.

McNair, L.

Cledwyn of Penrhos, L.

Monson, L.

Cocks of Hartcliffe, L.

Mountevans, L.

David, B.

Mulley, L.

Dean of Beswick, L.

Nicol, B.

Donaldson of Kingsbridge, L.

Northfield, L.

Dormand of Easington, L.

O'Neill of the Maine, L.

Elwyn-Jones, L.

Peston, L.

Ewart-Biggs, B.

Phillips, B.

Ezra, L.

Pitt of Hampstead, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L. [Teller.]

Gallacher, L.

Galpern, L.

Rea, L.

Gladwyn, L.

Rochester, L.

Graham of Edmonton, L.

Ross of Newport, L.

Gregson, L.

Scanlon, L.

Hampton, L.

Seear, B.

Hanworth, V.

Sefton of Garston, L.

Harris of Greenwich, L.

Serota, B.

Hatch of Lusby, L.

Shepherd, L.

Hayter, L.

Stallard, L.

Houghton of Sowerby, L.

Stedman, B.

Hunt, L.

Stoddart of Swindon, L.

Irvine of Lairg, L.

Taylor of Gryfe, L.

Irving of Dartford, L.

Tordoff, L.

Jacques, L.

Underhill, L.

Jeger, B.

Wallace of Coslany, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Kilmarnock, L.

Winchilsea and Nottingham, E.

Lloyd of Kilgerran, L.

Lockwood, B.

NOT-CONTENTS

Aldington, L.

Hesketh, L.

Arran, E.

Hives, L.

Balfour, E.

Hooper, B.

Belstead, L.

Hylton-Foster, B.

Bessborough, E.

Joseph, L.

Birdwood, L.

Killearn, L.

Blatch, B.

Kimball, L.

Boyd-Carpenter, L.

Kitchener, E.

Braye, B.

Knutsford, V.

Bridgeman, V.

Lauderdale,E.

Brookes, L.

Layton, L.

Brougham and Vaux, L.

Long, V. [Teller.]

Buccleuch and Queensberry, D.

Mackay of Clashfern, L.

Macleod of Borve, B.

Caldecote, V.

Manton, L.

Carnock, L.

Margadale, L.

Carr of Hadley, L.

Marley, L.

Clitheroe, L.

Masham of Ilton, B.

Colnbrook, L.

Massereene and Ferrard, V.

Constantine of Stanmore, L.

Maude of Stratford-upon-Avon, L.

Cork and Orrery, E.

Cottesloe, L.

Merrivale, L.

Craigavon, V.

Mersey, V.

Craigmyle, L.

Milverton, L.

Crickhowell, L.

Montgomery of Alamein, V.

Cullen of Ashbourne, L.

Morris, L.

Dacre of Glanton, L.

Munster, E.

Davidson, V. [Teller.]

Murton of Lindisfarne, L.

Dilhorne, V.

Norfolk, D.

Dundee, E.

Norrie, L.

Eden of Winton, L.

Nugent of Guildford, L.

Erroll, E.

Onslow, E.

Faithfull, B.

Orkney, E.

Fortescue, E.

Orr-Ewing, L.

Fraser of Carmyllie, L.

Oxfuird, V.

Gardner of Parkes, B.

Pender, L.

Geddes, L.

Portsmouth, E.

Gisborough, L.

Prior, L.

Glenarthur, L.

Rankeillour, L.

Greenway, L.

Reay, L.

Hailsham of Saint Marylebone, L.

Rees, L.

Renton, L.

Halsbury, E.

Rochdale, V.

Henley, L.

Rodney, L.

981

Romney, E.

Swinfen, L.

St. John of Fawsley, L.

Thomas of Gwydir, L.

Saltoun of Abernethy, Ly.

Thomas of Swynnerton, L.

Sanderson of Bowden, L.

Torrington, V.

Skelmersdale, L.

Trafford, L.

Slim, V.

Trefgarne, L.

Somers, L.

Trumpington, B.

Strathclyde, L.

Tryon, L.

Strathcona and Mount Royal, L.

Ullswater, V.

Vaux of Harrowden, L.

Strathspey, L.

Whitelaw, V.

Sudeley, L.

Windlesham, L.

Swansea, L.

Wynford, L.

Resolved in the negative, and amendment to the amendment disgreed to accordingly.
5.52 p.m.
[Amendment No. 48B not moved.]
On Question, Amendment No. 48 agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 48C:
Page 7, line 19, at end insert—
("( ) to ensure that the interests of every such person are protected in respect of substantial increased charges which could be passed on to them by the application in a particular manner of provisions in any appointment for adjustments in such charges by reason of new statutory obligations or other unforeseen factors.").
The noble Lord said: My Lords, I hope that the House will not be confused by the numbering. This amendment is not an amendment to Amendment No. 48. It is a separate amendment to Clause 7. Perhaps I may first apologise to the House for having four and-a-half lines of text without a single comma. I have two defences. The first is that the Government have six-and-a-half lines of text without a single comma in Amendment No. 50. Secondly, the alternative that I seriously considered and which caused some white faces in the Public Bill Office, was the entire model appointment as an extra schedule to the Bill which would have meant 65 pages of text. That would have required substantial amendment in order to debate it properly.
The reason why it is necessary to deal with the matter in this way is that a vital part of the financial basis of privatisation is, like so many other matters, not being put before Parliament. Negotiations are taking place behind closed doors as regards the way in which water charges to customers will be determined. Noble Lords who have taken part, or who have been present during consideration of the Bill, will know that the formula appears to be one of RPI plus K in which there are specific circumstances when water companies may increase their prices by more than the retail prices index. Very properly, that has been the subject of considerable debate.
What has not been the subject of effective debate because it is not on the face of the Bill is what is far too politely called cost pass through. That means in effect that the water supply and the sewerage plcs may be allowed to pass on to consumers virtually any unexpected additional costs whether they arise from a change in purity and quality standards, from natural disasters, from their own incompetence and inefficiency or from any other factor. However plausible the RPI plus K formula has been made—it has not been made plausible at all to the House
982
because it has not been explained here—any veneer of plausibility is taken away by the provision that is not being put to your Lordships concerning cost pass through.
Cost pass through means, "If anything goes wrong the customer pays: the shareholders never pay under any circumstances". I apologise for having such a long amendment without commas. Amendment No. 50 is helpful for reasons other than the elegance, or the incomparable inelegance, of its language. The amendment provides that the Secretary of State has the power,
"to ensure that the interests of the customers and potential customers of any company are protected … in particular, the interests of those who are disabled or of pensionable age".
When we come to deal with the matter I shall be welcoming that amendment, as I know my noble friend Lord Carter would if he were able to be here. Once the position has been established and it is possible, and recognised to be so, for the Secretary of State to take into account the interests of a particular group of customers, there is no logical reason why the same protection could not be applied to all customers. That is what our Amendment No. 48C provides.
As the Bill stands it is simply not the case that the interests of customers are treated with equal seriousness to the interests of the undertakers. When the matter was debated at Committee stage the Government specifically said that they could not do it. They said that it would be unworkable if the duty to secure profitability and the proper provision of services were downgraded to equal effect with the interest of the customers. So we have not repeated that. We have not tried to say that they should be treated equally. We have said that where an undertaker requests an upward revision in the value of K—in other words when he requests to take advantage of the cost pass through provisions—he should not have an automatic right to do so.
I can think of three cases where it would be patently wrong for an undertaker to be able to pass on the costs of unexpected additional expenditure to its customers. The first is where the undertaker, through his own negligence or for whatever reason, has failed to provide a satisfactory water supply or sewerage service and has also failed to remedy the defects in his own service. He should not be able to pass on the costs of remedying the defects to the customer. The shareholders who have been responsible for the defective service should at the very least share in the cost of putting things right. Cost pass through means that they do not have to share because the customers pay it all.
The second example concerns the fault of a third party where there has been spillage into the water system which causes a defect that has to be put right at considerable expense. The Camelford and Southern Water Authority case is a very good, recent and expensive example. Cost pass through means that the customers pay all the cost. I thought that under capitalism this should not be the case because risks of a capitalist enterprise should not be passed on automatically to the customer. If a water company has a complaint against a third party it should sue that third party in the courts in order to recover the

983
cost. Otherwise it is not automatically the case that the customer should pay for everything that goes wrong.
My third example concerns short-term costs. All kinds of additional and unexpected costs which water suppliers may well incur ought not to be passed on to the customer. They ought to be taken into account in the normal to and fro of business profitability and business financing. Yet the cost pass through works only in one direction. It works to the benefit of the shareholder and to the detriment of the water and sewerage customer.
If we take the cost pass through procedure at face value—we have no basis other than the model instrument of appointment for examining it; there is nothing on the face of the Bill—the Government are in effect proposing that the water and sewerage undertakers shall have all risk elements taken away from their operations. They are to be protected from any risk by, in the first place, a combination of a distorted calculation of K and, in the second place, a cost pass through fall-back position. Yet they will be able to make monopoly profits as natural monopolists at the expense of the customer and at the expense originally of the taxpayer who owned the assets. They will not have the risk element, which under capitalist theory ought to apply, for justifying profits.
We do not know where the negotiations are on the model instrument of appointment. We have not been told. Parliament will never be consulted formally on the model instrument of appointment and it will certainly not be consulted before the Bill becomes law. Therefore we must make some effort to see to it that the interests of customers, if not given equal weight with the interests of the water and sewerage undertakers, are at least given better weight than they are given at the moment. The cards are heavily stacked against the consumer and in favour of the shareholders. This amendment does not go as far as the amendments we put forward in Committee. It represents a modest but real attempt to redress the balance in favour of the water and sewerage customers. I commend it to the House. I beg to move.
6 p.m.
Lord Trafford: My Lords, I seem to have a sense of déjà vu in that we went through a good deal of this matter in Committee. In the three examples and in the argument put forward by the noble Lord, Lord McIntosh, he appears to have overlooked subsection (2) and subsection (3)(a), which seem to cover all his points. He referred to a water supplier or undertaker who failed to carry out his duties as a result of his own negligence. It is not the purpose of pass through that it should be recoverable from the customer in third party failure. If there were a third party failure it would be the duty of the water undertaker to sue that third party and not recover it from the customer. This would be the natural practice in any other business. The water undertaker would not be carrying out his duty according to Clause 7(2)(a),
"as respects every area".
984
That would not be happening. Therefore this cannot be the purpose.
It is also true of certain of the short-term costs that he mentioned. To a large extent, therefore, this amendment is based on a considerable misunderstanding of the provision that the duties of the water or sewerage undertaker should be properly carried out. The duties described in the example given by the noble Lord would be duties not properly carried out. It is a considerable protection to suggest that that is how they should function. It is not true to say that this is a system by which all risks are removed. This is not the purpose of the pass through. All risks would not be removed.
I cannot support the amendment, first, because the customer question is covered; secondly, because the duties are defined as having to be carried out properly; and, thirdly, all the examples and arguments given against it would be covered under those terms.
Lord Renton: My Lords, when starting to move the amendment the noble Lord, Lord McIntosh, graciously conceded that in his opinion it was not very well drafted. I think that it is, strange as it may seem. Short sentences and full stops are well regarded in legal drafting, including statutory drafting. Long sentences and commas are not well regarded. This is inevitably and unavoidably a longish sentence. However, I do not see how it could be made much shorter or that there would be any advantage in having a full stop and turning it into two sentences. From the purely drafting point of view I should have thought that the noble Lord was criticising his drafting unnecessarily.
What about the substance? I agree with my noble friend Lord Trafford, but I would go further. This is a clever clause because, as my noble friend has already pointed out, under subsection (2) there is a duty to finance the proper carrying out of the functions of the undertakers but at the same time the interests of the consumers are quite well protected. Subsection (3)(a) starts with the words:
"to ensure that the interests of every person who is a customer or potential customer … are protected as respects the fixing and recovery",
of charges. There is no undue preference and no undue discrimination. That is a useful quotation. Subsection (3)(b) states:
"to ensure that the interests of every such person are also protected as respects the other terms on which any services are provided by that company in the course of the carrying out of the functions of a water undertaker or sewerage undertaker and as respects the quality of those services".
It mentions quality as well. With that protection already in the Bill, the noble Lord's amendment does not carry the protection any further. But unlike the protection that is already there it is inconsistent with the duty to finance the proper carrying out of the functions. On both of those grounds I am sorry to say that I find myself in disagreement with the noble Lord.
Lord Hesketh: My Lords, I am sure that Mark Twain would have approved of the way in which the amendment of the noble Lord, Lord McIntosh, was

985
put down in terms of whether or not it had commas or full stops. He said to his publisher that he had left those on a separate sheet of paper.
The amendment would add an additional duty to the general duties of the Secretary of State and the Director General of Water Services under Clause 7 as to the manner in which they are to exercise their regulatory powers, in particular under Chapter I of Part II of the Bill. The new duty would require those powers to be used in the manner best calculated to ensure that the interests of customers of the water and sewerage undertakers are protected in respect of substantial increased charges which could be passed on to them, as a result of new statutory obligations or other unforeseen factors, under the terms of conditions of appointment.
The amendment is here clearly intended to refer to the provisions in Condition B of the model instrument of appointment which would provide for the undertaker to apply to the director general for a change to the adjustment factor K in the formula which limits increases in charges to no more than the change in the retail prices index plus K. The adjustment factor K is a number which will be inserted initially in the conditions of appointment of individual undertakers by the Secretary of State. It will be subject to periodic review by the director general after 10 years, or after five years if he or the undertaker so wish. It will also be subject to interim adjustment between periodic reviews under the so-called "cost pass through" arrangements which I have referred to and to which the amendment relates.
We believe that the amendment is rather misleading in referring to substantial increased charges being passed on to customers. The intention is to provide for the material additional costs of complying with new legal requirements to be reflected in K; and to allow the director general to consider what change should be made to K where undertakers are subject to external changes in circumstance, for which they are not responsible, which have a substantial adverse effect on the appointed business.
The amendment once again reflects the noble Lord's different and mistaken view of the primary duty, set out in subsection (2) of the clause, to secure that the functions of an undertaker are properly carried out. As he well knows by this stage of discussion of the Bill, we see securing the ability of the undertakers to finance the proper carrying out of their functions, also covered by subsection (2), as part and parcel of a single primary duty. As one of the secondary duties, subject only to this requirement to ensure that services are properly provided, customers' interest in the level of charges is also to be protected.
We believe that the model instrument of appointment gives correct expression to those duties in the cost pass through provisions, and it is entirely right that it should do so. If new provisions could be loaded onto the undertakers without compensating adjustment in the level of charges, they could find it significantly more expensive to raise finance. It would be counter-productive to try to provide
986
otherwise. Similarly, if circumstances beyond the undertakers' control had always to be financed by shareholders, the cost of finance would again be higher. That is not to say that shareholders should face a risk-free environment, nor does the model condition provide for one. It provides for the director general to consider what change should be made to the charges limit.
We believe that the amendment is not necessary to provide protection as to the level of charges. That duty already exists, as my noble friend Lord Renton pointed out, in Clause 7(3)(a). The amendment falsely relies upon the view that the functions can be properly discharged without protecting the ability to raise finance. As I have already described, that approach can only lead to higher charges, or more seriously, an undermining of the ability to provide adequate services.
The noble Lord, Lord McIntosh, is once again suggesting that there is a duty under Clause 7 to secure profitability of companies. There is no such duty. As my noble friend Lord Caithness made patently clear on Tuesday evening, only efficient companies will be profitable. The duty in Clause 7 is concerned with the true return on capital employed, and not with dividends.
If standards are to be improved, we have repeatedly acknowledged that there will have to be increases in prices. We believe that the noble Lord wishes that fact to go away. I urge the House to reject the amendment.
Lord McIntosh of Haringey: My Lords, what always amazes me is the extent to which lawyers in particular are happy to rely upon words like "properly" and "reasonably" to carry with them not just clauses but virtually whole Bills. This is the most important clause in the Bill. In subsection (2) it says that the duty of the Secretary of State and the director is to secure—as the noble Lords, Lord Renton and Lord Trafford, reminded us—that the functions of the undertakers are properly carried out.
On that aspect the noble Lord, Lord Trafford—and this makes me distrust doctors as well as lawyers now—would have us believe that all is well and that because the undertakers have to carry out such duties properly the interests of consumers are therefore adequately protected. That is very comparable to the argument that a reasonable return on capital does not have to be defined because ultimately it can be defined in the courts. If that were the case, and if the words "properly" and "reasonably" had such overwhelming significance—as appears to be suggested—we might just as well not have a Bill. Let us just say that the Secretary of State shall do reasonably what he thinks proper and have done with it. Let us then not have 200 pages and £20-worth of the Bill in order to debate the issue.
The noble Lord, Lord Trafford, referred to subsection (3), as did the Minister. This deals with the protection of the interests of consumers. However, neither of them reminded the House that subsection (3) is subject to subsection (2). It is in

987
subsection (2) that the overriding responsibility to secure,
"the proper carrying out of the functions"—
whatever that may mean—and to secure the reasonable return on capital is contained. Therefore the interests of consumers are without doubt subordinate to the interests of the water undertakers and their shareholders. That is the truth of the matter; it is not helped by placing such reliance upon the words "properly" and "reasonably".
The Minister sought to claim that the amendment was actually misleading in that it used the word "charges" rather than the word "costs". I do not think that customers will be very appreciative of the difference between the two words. So far as they are concerned, charges will be in pounds sterling and costs will be reflected in charges, which are in pounds sterling. Therefore it does not matter very much which of the two stages of the process you put on the face of the Bill: the point is that under all circumstances the customer pays whether or not the undertaker is doing his job properly.
That is the defect of the Bill and that, above all, is the defect of the one-sided cost pass through provision in the model instrument of appointment. Unless we take out the one-sidedness of that provision, and unless we provide some additional protection for customers, we are simply not doing our job, which is to protect water and sewerage customers, who are so deeply and closely affected by the provisions of the Bill. In the circumstances, I think it right to pursue the amendment and to seek the opinion of the House.
6.17 p.m.
On Question, Whether the said amendment (No. 48C) shall be agreed to?
Their Lordships divided: Contents, 52; Not-Contents. 92.

DIVISION NO. 2

CONTENTS

Addington, L. [Teller.]

Longford, E.

Airedale, L.

Lovell-Davis, L.

Attlee, E.

McIntosh of Haringey, L.

Aylestone, L.

McNair, L.

Barnett, L.

Monson, L.

Birk, B.

Mountevans, L.

Boston of Faversham, L.

Nicol, B.

Cledwyn of Penrhos, L.

Northfield, L.

Cocks of Hartcliffe, L.

O'Neill of the Maine, L.

David, B.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Donaldson of Kingsbridge, L.

Ponsonby of Shulbrede, L. [Teller.]

Ewart-Biggs, B.

Ezra, L.

Rathcreedan, L.

Falkender, B.

Rochester, L.

Gallacher, L.

Scanlon, L.

Galpern, L.

Serota, B.

Gladwyn, L.

Stedman, B.

Graham of Edmonton, L.

Stoddart of Swindon, L.

Hampton, L.

Taylor of Gryfe, L.

Hatch of Lusby, L.

Tordoff, L.

Hayter, L.

UnderhiU, L.

Irving of Dartford, L.

Wallace of Coslany, L.

Jenkins of Putney, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Lloyd of Kilgerran, L.

Winchilsea and Nottingham, E.

Lockwood, B.

988

NOT-CONTENTS

Arran, E.

Macleod of Borve, B.

Balfour, E.

Margadale, L.

Beaverbrook, L.

Marley, L.

Belstead, L.

Marshall of Leeds, L.

Blatch, B.

Massereene and Ferrard, V.

Boyd-Carpenter, L.

Maude of Stratford-upon-Avon, L.

Braye, B.

Bridgeman, V.

Merrivale, L.

Brookes, L.

Mersey, V.

Brougham and Vaux, L.

Montgomery of Alamein, V.

Buccleuch and Queensberry, D.

Morris, L.

Munster, E.

Carnock, L.

Murton of Lindisfarne, L.

Clitheroe, L.

Napier and Ettrick, L.

Colnbrook, L.

Nelson, E.

Colwyn, L.

Norfolk, D.

Constantine of Stanmore, L.

Norrie, L.

Cottesloe, L.

Nugent of Guildford, L.

Craigavon, V.

Onslow, E.

Craigmyle, L.

Orkney, E.

Crickhowell, L.

Oxfuird, V.

Cullen of Ashbourne, L.

Pender, L.

Dacre of Glanton, L.

Portsmouth, E.

Davidson, V. [Teller.]

Rankeillour, L.

Dilhorne, V.

Reay, L.

Dudley, E.

Rees, L.

Dundee, E.

Renton, L.

Eden of Winton, L.

Rochdale, V.

Ferrers, E.

Rodney, L.

Fraser of Carmyllie, L.

St. Aldwyn, E.

Gardner of Parkes, B.

Saltoun of Abernethy, Ly.

Geddes, L.

Sanderson of Bowden, L.

Gisborough, L.

Skelmersdale, L.

Glenarthur, L.

Strathclyde, L.

Greenway, L.

Strathcona and Mount Royal, L.

Hailsham of Saint Marylebone, L.

Sudeley, L.

Halsbury, E.

Swansea, L.

Henley, L.

Teviot, L.

Hesketh, L.

Thomas of Swynnerton, L.

Hives, L.

Torrington, V.

Hooper, B.

Trafford, L.

Hylton-Foster, B.

Trefgarne, L.

Joseph, L.

Trumpington, B.

Killearn, L.

Ullswater, V.

Kitchener, E.

Vaux of Harrowden, L.

Knutsford, V.

Windlesham, L.

Long, V. [Teller.]

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 49 not moved.]
6.25 p.m.
The Earl of Arran The Earl of Arran moved Amendment No. 50:
Page 7, line 25, at end insert—
("( ) In performing his duty under subsection (3) above, so far as it requires him to do anything in the manner which he considers is best calculated to ensure that the interests of the customers and potential customers of any company are protected as respects the quality of any services provided by that company in the course of the carrying out of the functions of a water undertaker or sewerage undertaker, the Secretary of State or, as the case may be, the Director shall take into account, in particular, the interests of those who are disabled or of pensionable age.").
The noble Earl said: My Lords, the amendment would require my right honourable friend the Secretary of State for the Environment and the director general, in the exercise of their duty to protect customers under Clause 7, to take into account the particular interests of those who are disabled or of pensionable age in respect of the quality of any services provided by a company in

989
the course of carrying out the functions of a water or sewerage undertaker.
My noble friend Lord Hesketh gave an undertaking to the noble Lord, Lord Carter, in Committee that we would consider an amendment which would protect the interests of the elderly and the disabled in respect of the quality of services provided and consistent with the precedent set in the legislation concerning other utilities. In the light of that earlier undertaking I am now pleased to commend this amendment to your Lordships. I beg to move.
Lord McIntosh of Haringey: My Lords, I am doubly grateful to the noble Earl; first, because the amendment that he has moved gives us a form of words which we could use in Amendment No. 48C, which gained the approval of the noble Lord, Lord Renton; and, secondly, I speak on behalf of my noble friend Lord Carter, and thank the Minister for what I am sure he will consider to be a real improvement gained as a result of the pressure which he exerted in Committee. I know he is sorry that he was unable to collaborate with the Government in the formulation of the amendment and that he is unable to be in the House today to welcome the amendment. I share his gratitude to the Government for the amendment and I am happy to support it.
On Question, amendment agreed to.
Lord Addington Lord Addington moved Amendment No. 51:
Page 7, line 32, leave out ("particular").
The noble Lord said: My Lords, the effect of the amendment is to achieve balance between different interests when considering NRA decisions. The inclusion of the word "particular" in Clause 7(5) weighs the balance in favour of the undertaker. If there is an imbalance, we are effectively countenancing an element of prejudgment of any given issue, thus ruling out a balanced and accurate judgment. On those grounds, the amendment should be considered with all due respect and sincerity. It is designed to give an element of balance to the Bill. I beg to move.
Lord Hesketh: My Lords, Amendment No. 51 would remove from the NRA the duty, in carrying out its functions, to have particular regard to the plcs' own statutory duties as regards water supply and sewage disposal.
I happily acknowledge that that duty does, to some extent, put water and sewerage undertakers in a privileged position in relation to the way that the NRA carries out its functions; but that seems to me absolutely essential. The water supply and sewerage businesses are essential to the health and well-being of every one of us. The ability of the water and sewerage undertakers to fulfil their statutory functions in accordance with the rigorous duties that will be imposed on them by this Bill will be vitally dependent upon the NRA in a number of important areas. For instance, the NRA will issue the abstraction licenses that the utilities will need to abstract water from rivers for water supply purposes.
990
Similarly, the NRA will issue the discharge consents to enable the plc to discharge the effluent from its sewage treatment works.
Given the importance of water supply and sewerage, it is surely right that the NRA should be required to have particular regard to them. In many cases, the safe and uninterrupted supply of drinking water and disposal of sewage will rightly override other considerations, however important. There is nothing new in the provision. Section 103 of the Water Resources Act 1963 imposed a precisely similar duty on river authorities vis-à-vis statutory water undertakers. That did not represent unfair protection of private interests then, any more than Clause 7(5) does now. However, I must stress that the wording of this duty does not prevent the NRA taking the view, in any particular instance, that some other consideration—an environmental issue or the prevention of flooding—is more important than the statutory duties imposed on the water and sewerage undertakers.
In such circumstances, the NRA would need to demonstrate that it had carefully considered the implications for the undertakers before exercising its powers in any particular case. I must therefore ask your Lordships to reject the amendment. To omit the word "particular" would fail to give sufficient weight to the immediate day-to-day importance to all of us of the water supply and sewerage functions.
Lord Addington: My Lords, having heard what the noble Lord has said I am reassured to a certain extent that enough weight will be given to interests other than those of the undertakers. I am nevertheless wary of the fact that greater emphasis is still given to them and that the element of balance is therefore not totally represented. However, at this stage I am not prepared to press the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
6.30 p.m.
Clause 8 [General environmental and recreational duties]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 52:
Page 7, line 46, leave out from ("body") to end of line 48.
The noble Lord said: My Lords, in moving Amendment No. 52 I wish also to speak to Amendments Nos. 53, 54, 58 and 59. My noble friend Lady Birk will speak to Amendment No. 55. The purpose of my amendments is to attempt to get rid of some of the unnecessary and weakening verbiage which exists in the early part of Clause 8. It is a very important clause concerned with environmental and recreational duties. The problem with it and its introduction is that it is restricts the duties of the Secretary of State, the Minister, the director and the water and sewerage undertakings to cases where proposals are before them relating to the functions of the water and sewerage undertakings.
Amendment No. 52 would take out the phrase about,
"formulating or considering any proposals relating to the functions of any relevant body".
Amendment No. 53 would take out a complicated phrase which qualifies the duties of the Secretary of State and the director. Instead of the Bill saying,
"so far as may be consistent with the purposes of any enactment relating to the functions of that body".
we suggest, I believe, much more simply, the wording,
"in accordance with the requirements of this Act and of any enactment".
Amendment No. 54 takes out the phrase:
"with respect to the proposals".
Amendments Nos. 58 and 59 do very much the same thing, the latter being a consequential amendment.
We spent a great deal of time on Clause 8 in Committee and I certainly do not propose to go over all or even many of the arguments which took place. Some improvements were made to the wording of the clause and there is scope for much further improvement. There is however a substantive weakness. The clause relies on the formulation and consideration of proposals relating to the functions of the relevant body. The protection of the environment and of recreational facilities should not depend on proposals. That protection should exist at all times; it should not be qualified.
I am not sure whether it is unnecessary or dangerous (or, as the Government like to say when talking about Opposition amendments, whether it is both unnecessary and dangerous) to retain these phrases. I know that they complicate the Bill and introduce a quite unnecessary concept of a proposal which is never adequately defined. I know that they give rise to what seems to me an entirely justified mistrust of whether the Government are sincere and unequivocal in their commitment to the environment and recreational duties proposed in the clause. It is for those reasons that I beg to move the amendment.
Lord Trafford: My Lords, I have only one quick point to make, especially as I know that the noble Lord, Lord McIntosh, trusts neither doctors nor lawyers. The amendments that he proposes so tighten the activities which can be carried on that we run the risk that the undertakers would only be able to do those things which conserve the environment, flora and fauna and so forth. I understand the point of the amendments. But, surely, there is a risk of the wording being so tight that it becomes self-defeating. For that reason I have some reservations about the amendments.
Lord Hesketh: My Lords, the amendments concern the conservation duties in Clause 8(1). Those duties relate to the functions of the relevant bodies. They are to be exercised consistent with the purposes of any enactment relating to the function of those bodies. Such provisions necessarily appear in the corresponding section of the Water Act 1973. Amendments Nos. 52 to 54 would mean that any powers exercisable by the new companies, no matter where they were, would have to be exercised for the furtherance of conservation. Amendment No. 55 which deals with the historic buildings element of the clause——
Baroness Birk: My Lords, I apologise to the noble Lord, I do not know how to put the situation right. I thought that the Minister was replying to Amendments Nos. 52 to 54, after which I should deal with Amendment No. 55. I realise now that he is dealing with the whole group. Perhaps he would allow me to say a few words now on Amendment No. 55.
Lord Hesketh: My Lords, I am at fault. I leapt to the Dispatch Box with undue vigour. I apologise profusely to the noble Baroness and await her remarks.
Baroness Birk: I thank the noble Lord very much. We appear to be in competition as to who is more wrong. I feel that the fault is mine, but never mind. We return to the desirability of protecting the heritage, a matter which arose at the Committee stage. It was touched on quite considerably this afternoon when we were discussing Amendment No. 140 but I am sorry to say that I felt very little joy from the outcome. The Minister's response as regards the man-made environment, the heritage, was most upsetting and disappointing.
The phrase,
"to have regard to the desirability of protecting",
keeps on coming through not only in this but other legislation. It is not only an inelegant phrase; it is inexact and should find no place in legislation. It does not do what we wish it to do as regards protecting the types of objects, such as structures and buildings, with which we are concerned.
The phrase,
"so to exercise any power conferred on him or it as to further the protection of",
accords, as I am sure the Minister is aware, with what appears in Clause 8. It provides the same protection for the built heritage, the buildings and objects of archaeological, architectural or historic interest, as that given earlier in the clause to the enhancement of the natural beauty and to conservation. I should have thought that the Minister would look kindly on this proposal. It evens out matters out with a greater degree both of interest and approval. We accept that protection cannot always be an overriding and all consuming duty. The Minister pointed that out in Committee. However, he also said in Committee:
"Protection of historic features is an important objective to which we require the water industry always to have regard".—[Official Report, 8/5/89; col. 446.]
I take that to mean that it is accepted by the Government that as far as is humanly possible the water industry should have the same regard to historic features as anybody else. Therefore, I do not see the reason for turning this provision down.
When the Minister spoke to Amendment No. 140 he seemed to give the impression that there were not many archaeological objects, structures or buildings that needed conservation. However, that is not the case. To give just one example, Thames Water is in possession of a great many extremely valuable and unique objects, and also has archives. The water industry is quite a large owner of a great many of

993
the things we are trying to protect. I cannot see why there should be so much resistance to placing a duty on it to protect these things.
At the moment the duty to protect our man-made heritage is less strong than the duty to protect wildlife. However, our man-made heritage is not a dynamic regenerating system but a finite and non-renewable resource. Any damage or destruction that occurs now will remain for all time. Archaeological sites cannot repair themselves in the way that ecosystems, albeit perhaps over a very long time, can. There must therefore be at least as strong an obligation to plan carefully as regards our man-made heritage, and to do as little damage as possible. My noble friend Lady Nicol and the Peers who have put their names down to her amendments have taken great care to ensure that the man-made heritage has the same protection and is subjected to the same careful conservation as wildlife and the landscape.
This amendment does not seem to me in any way to conflict with the objectives that were spelt out by the Minister in Committee. In fact, I think it supports those objectives. I hope that now that this provision has been completely redrafted and inserted in a different place, the Minister will at least give us some encouragement. If the amendment needs any form of redrafting, we would be quite agreeable to that. It is the substance of the matter with which I am concerned.
Baroness Blatch: My Lords, Clause 8 already lays a duty on the undertakers to:
"have regard to the desirability of protecting buildings or other objects of archaeological, architectural or historic interest".
The amendment, as set out, places an absolute duty on the undertaker to protect any object, however insignificant. I think it is absolutely essential that a balance is struck between the undertaker getting on with its proper duties and having regard to the desirability of protecting such objects. I believe the balance as set out in the Bill is right. The duty is there to protect certain objects. However, if, for example, when pipe-laying some objects have to be disturbed and perhaps even damaged but they are totally insignificant in the sense of being of any interest to any historical society, there should not be a duty on the water undertaker to protect them.
6.45 p.m.
Lord Hesketh: My Lords, these amendments concern the conservation duties in Clause 8(1) and the duties related to the functions of the relevant bodies, and provide that those duties are to be exercised consistently with the purposes of any enactment relating to the functions of those bodies. Such provisions necessarily appear in the corresponding section of the Water Act 1973, as I said earlier in my false commencement of replying to these amendments.
Amendments Nos. 52 to 54 would mean that any powers exercisable by the new companies, no matter what they were, would have to be exercised for the furtherance of conservation.
994
Amendment No. 55, which deals with the historic buildings element of the clause, would have the effect of tightening the duties by deleting the words:
"have regard to the desirability of protecting".
It would require the exercise of powers of the relevant bodies directly for furthering the protection of historic buildings. Similarly, Amendments Nos. 55 and 59 achieve the same effect in relation to the duty to take account of the beauty and the amenity of urban and rural areas by requiring that the relevant bodies' powers be used directly for their promotion.
I shall deal first with Amendments Nos. 52 to 54. The formulation proposed is not one that the Government consider desirable. The reference to formulation and consideration of proposals is in our view a helpful one because it gives the duties something specific on which to bite, and will direct attention clearly at decision-making by both the relevant bodies and the Secretary of State and director. Moreover, in eliminating any reference to functions—the most relevant consideration for conservation—the amendment goes too wide. The new companies may from time to time do some things which cannot reasonably be construed as part of their functions and which it would be unreasonable to constrain to the furtherance of conservation.
But, while we cannot adopt the terms, we have already accepted the key substance. We accept that there may be circumstances, although we think they are narrow and unlikely, where the companies could undermine the purposes of the legislation by declaring land surplus to their functional requirements.
Much concern has been expressed that the general effect of the duties could be undermined in this way. That is something we want to avoid. Earlier this afternoon we discussed Amendment No. 75 in the context of the land group. That amendment will secure this provision by extending the duty to cover proposals in respect of the management of land, whether it is functional or non-functional. I hope that the House will accept that it is sensible to do this in relation to the aims of Amendments Nos. 52 to 54.
As regards the tightening of the terms of the historic buildings and landscape duties by Amendments Nos. 55, 58 and 59, we believe that what is proposed is not practical. The amendments would, for instance, require the Secretary of State and the companies to exercise their powers so as to promote natural beauty and amenity and to further the protection of historic buildings. These obligations are to be totally unqualified. They are not to be performed only so far as is consistent with their main water supply and sewerage functions. They are not to be performed only so far as is reasonably practical having regard to cost or other considerations. There are no qualifications of these kinds.
The obligation is simply this: in supplying water and disposing of sewage, the undertakings are to do that—regardless of all other considerations—which furthers protection of landscape and historic buildings. Indeed it is arguable that the duty is so

995
tight that the companies would be able to undertake only those water supply and sewerage functions which actually promoted conservation. We believe this is not reasonable. Its effect is to subvert the whole purpose of the legislation. Instead of, as now, the companies being required to have due regard to historic buildings and landscapes in performing their functions, the protection of those landscapes and buildings could override water supply and sewerage functions. We believe that such subordination is simply not appropriate.
We have to strike difficult balances. We have to reconcile conflicting objectives. We have to recognise that, while historic buildings and landscapes are valuable objectives, they cannot and must not be ones to which all other considerations are subordinated. We believe that the Bill as drafted preserves these essential balances. I suggest to the House that it is important that we ensure that they can continue. It is in those circumstances that I hope the Opposition will not feel it necessary to press these amendments.
Lord McIntosh of Haringey: My Lords, I am grateful to the Minister for that explanation. He will not be surprised to hear that I do not find it particularly reassuring. The problem, as I have said, with the drafting of the Bill is not only that it is exceedingly complex but also that it relies on the concept of proposals. The proposals are brought forward by the undertakers. In other words, nothing can happen except on the initiative of the water or sewerage undertakers. That is what is unsatisfactory. I listened carefully to the noble Lord, Lord Trafford, on this point and he did not convince me either. I remind him that Jack Cade said, "Let's kill all the lawyers first". We might move on to the doctors after that.
To return briefly to Amendment No. 53, that relates to a point where the drafting of the Bill causes me the utmost puzzlement. The Bill reads:
"so far as may be consistent with the purposes of any enactment relating to the functions of that body and, in the case of the Secretary of State and the Director, with their duties under section 7 above".
Why do we have to go such a long way round the houses, particularly as when we talk about the Secretary of State and the director we are talking about this Bill? Why can we not just say, as Amendment No. 53 does:
"in accordance with the requirements of this Act"?
It is not particularly restrictive. It removes unnecessary confusion and what may be, although I have not been convinced that it is, an unnecessary, justifiable source of mistrust about the Government's intentions in regard to Clause 8.
However, as the Minister has said, the issue is complex and the balance to be struck is difficult. It may be that even now we have not got the wording of our amendments right. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 53 to 55 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 56:
Page 8, line 9, leave out ("buildings or other") and insert ("and conserving buildings, sites and").
The noble Lord said: My Lords, in moving Amendment No. 56 I should like to speak also to Amendment No. 60 in my own name and Nos. 57 and 61 in the name of my noble friend Lord Howie of Troon, who is unable to be with us this evening and sends his apologies. The amendments follow very closely debates which took place on the definition of buildings and other places where objects of archaeological, architectural or historic interest might be found. The Minister conceded at Committee stage that the word "building" was not adequate to the intention, which I think we all shared, as to the protection that is required.
I am very glad that it has been possible for the department to come up with the drafting changes which are included in Amendments Nos. 56 and 60 which give effect to that intention. I understand that that wording is acceptable to the Government. I am very happy to move Amendments Nos. 56 and 60 on that basis.
Amendments Nos. 57 and 61 are put forward by my noble friend Lord Howie, who is a civil engineer and who took part in the debates on the Copyright Bill on a comparable issue. In the debates on the Copyright Bill he pointed out that neither buildings nor sites covered some of the major artefacts of the water industry. One could not very well describe an aqueduct, for example, either as a building or as a site. When he pointed out that fact in relation to the Copyright Bill the Minister responsible acknowledged that he had a point and the phrase "fixed structures" was added into the Copyright Bill. He argues—I think that he has a very good point here—that if that is appropriate for the Copyright Bill then it is appropriate here.
I hope that in accepting Amendments Nos. 58 and 60 the Government will give serious consideration to the point made by my noble friend in Amendments Nos. 57 and 61. I beg to move.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, I understand that in line 2 of Amendment No. 56 the word is "conserve" and not "concerning". Is that agreed?
Lord McIntosh of Haringey: My Lords, that should be Amendment No. 57 and not Amendment No. 56. What my noble friend meant was conserving buildings, sites and fixed structures.
The Deputy Speaker: My Lords, I apologise, but my brief gave it as Amendment No. 56.
Lord Hesketh: My Lords, the Government are happy to support the amendments standing in the name of the noble Lord, Lord McIntosh, and which flow from points he put to the House at Committee stage. We regard the insertion of the word "conserving" as helpful in that it goes wider than the reference in existing legislation to "protecting". Equally, the reference to sites makes clear that the

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scope of the duty extends to ancient monuments and industrial remains.
If the amendments are accepted the formulation "buildings, sites and objects" will cover all matters which the duty in Clause 8(1)(b) should cover. We are able to support the amendment because the language is in suitably simple and embracing terms and avoids technical terms not precedented in legislation elsewhere. Having said that, it appears to us to achieve in full the comprehensive coverage of aspects of archaeological, historical or architectural interests which the House seeks.
Turning to Amendments Nos. 57 and 61, standing in the name of the noble Lord, Lord Howie of Troon, these would import the concept of fixed structures to the duty. It is certainly our intention that dams, pumping engines of historic interest and so forth should be covered by the duty. We are not certain whether the formulation proposed in Amendments Nos. 57 and 61 is necessarily the right one but, if the noble Lord, Lord McIntosh, is content, I shall undertake to consider the point and come back with a suitable form of words at Third Reading if the formulation as amended at Report is not adequate.
We certainly support Amendments Nos. 56 and 60, to which I hope the House will agree.
Lord McIntosh of Haringey: My Lords, I am most grateful on behalf of myself and my noble friend Lord Howie for the consideration which the Minister has undertaken to give to the phrase "fixed structures". In his examples he did not repeat the example of aqueduct which I gave. He might also like to take that into account.
I am also grateful for the support he has given to Amendments Nos. 56 and 60. Indeed, his extravagant support for the wording is only tempered by the knowledge that I had already acknowledged the assistance of the department in producing the wording. What he is doing is praising himself and his own officials. He is perfectly entitled to do so. They are good amendments. I commend them to the House.
On Question, amendment agreed to.
[Amendment No. 57 not moved.]
Baroness Birk Baroness Birk moved Amendment No. 57A;
Page 8, line 10, after ("interest") insert ("including ancient monuments, machinery, portable antiquities and documents").
The noble Baroness said: My Lords, this amendment returns to the same theme and deals with ancient monuments, machinery and other portable antiquities and documents. Again, we are concerned that these should be saved.
The inclusion of the sites of buildings and objects which has been accepted clarifies to some extent the range of items covered. There still remains scope for making the Bill more explicit than it is at present. As I understand it, it is the Government's intention that all those items should be included because they are specified in the code of practice. However, as we are aware, inclusion in a code of practice is not the same as inclusion in the statute. We believe it is essential that the Bill should be as clear as possible
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rather than it being left to a code which is not directly enforceable and has no long-term standing.
The terms used have been carefully chosen. The term "ancient monument" is defined in the National Heritage Act 1983, the Act which gave birth to what we now call English Heritage. "Machinery" is included here as it does not specifically fall within the scope of "ancient monument" but is a very important example of the ancient objects which we are trying to preserve as far as possible in this country. It specifically cannot be included in the listing of a building. "Portable antiquities and documents" represent further categories of "object" of which the present water authorities—as I have mentioned previously—have important collections, many of which relate to the development of the water industry itself and are therefore worthy of being kept and looked after without any extra work or necessary expense for the Government.
The amendment does not seek to alter the Government's intentions. It is designed to make the Bill clearer and more explicit and to incorporate into it primary matters of principle at present not covered in the code of practice. If, as on an earlier amendment, the Government had put forward and accepted "fixed structures" as well as "sites" and everything else, it would be difficult to argue against "portable antiquities", objects and—most importantly—"machinery", which is so often left out and is not included in the definition of an ancient monument. Some people think that it is included, but I can assure the Minister that it is not. That is why it is important to have it on its own. I beg to move.
The Earl of Arran: My Lords, I hope that the noble Baroness will forgive me for asking, but is she moving all the other amendments in the group that starts with Amendment No. 57A?
Baroness Birk: My Lords, I shall speak to Amendment No. 58A. That is a rather different amendment, but I am perfectly happy to speak to it. These are all slightly different amendments. I think that I should prefer to divide them.
The Earl of Arran: My Lords, I thank the noble Baroness for giving way. I understand what she says, but the amendments are all grouped together on the list.
7 p.m.
Baroness Birk: My Lords, I understand that very well, but, after all that we have heard about grouping earlier this afternoon, I should have thought that it would be a great relief and that everyone would be pleased to consider these matters singly instead of their being grouped. I am prepared to go on so long as I can be assured that the amendments will be dealt with separately. In that case, I shall continue.
I originally hesitated because the next amendment—Amendment No. 58A—is entirely different. It is a very important one and does not give rise to the points that we have repeated several times. The objective of the amendment is to make it clear that the duties towards conservation imply

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a positive attempt to restrict damage to vulnerable habitats, heritage features and landscapes and, where damage is unavoidable, to take such remedial action as is appropriate. I think that the Minister will understand why I divided the amendments.
The phrase "to take into account" provides no specific standards of procedure for safeguarding conservation interests. As I am sure the Minister is well aware, the amendment is in line with the objectives of environmental assessment and reflects the wording of paragraph 3(d) of the schedule to the Land Drainage Improvement Works (Assessment of Environmental Effects) Regulations 1988. I do not think that one could do better than copy that all over again. The Government are already committed to the principle that the overall objectives of environmental assessment should be met even where formal environmental assessments are not required. The amendment would help to achieve that aim.
In Committee, the noble Lord, Lord Hesketh, agreed to consider the concepts and terms which may provide a most positive and helpful expression of both historic building and landscape duties which were presented in this and other amendments at the time. I wonder whether we may know the results of his deliberations. If he accepts the amendment, we need not go into any further explanation. That would be perfectly acceptable to us and we should not need him to explain the matter any further. But, as he said that he would look into the matter and as this is a limitation of damage amendment, it is in rather a different position from the others.
The objective of Amendment No. 62C is to ensure that due consideration is given to public access to the man-made heritage. This is again an entirely different subject. That is the problem of the grouping. There is considerable public interest in the heritage and it is important for recreation, education and cultural enrichment. The present water authorities currently own a wide range of cultural assets in terms of ancient monuments, buildings, water supply mechanism, industrial machinery, portable antiquities and documents. Any or all of those may be of interest to the general public.
The issue of access has generally been considered in respect of land for recreation. It is also desirable in that context that there should be access to important collections of historic artefacts and buildings, whether for enjoyment or for serious scholarly study. The heritage deserves equal standing with wildlife and amenity interests in this matter. I remind the Minister that the importance of the whole question of access, whether to museums, galleries or the objects that are of value to the country, is on the increase all the time. More and more people want to see things and visit our museums and their outside archaeological collections. The amendment simply seeks to ensure that consideration is given to the question of public access to the man-made environment.
I am still a little worried because these are all separate subjects, but I am sure that the Minister has carefully noted that fact and has the amendments before him. The objective of Amendment No. 70A is to ensure that the implications for the heritage of
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activities connected with inland waters are covered. The protection of the man-made heritage is a primary duty in Clause 8(1) and yet is not included here despite specific requirements comparable with those relating to landscape amenity and nature conservation.
Four aspects must be highlighted. First, many inland waters and associated buildings and structures, especially on canals, are of considerable historic interest, and a major relic of the industrial revolution—a cultural and economic heritage in which Britain led the world. Secondly, many rivers, especially the Thames, have produced thousands of artefacts, most significantly the majority of prehistoric weapons in Britain. Those were deliberately deposited as sacrificial offerings and are exceptionally well preserved. Thirdly, several archaeological sites are being eroded by rivers. Fourthly, of particular importance are water-logged structures and artefacts whose exceptional preservation relies on a high water table and whose destruction can be triggered within weeks by drainage. Such sites are among Britain's rarest, best preserved and most fragile archaeological remains.
Those aspects represent four specific reasons for the amendments. Inland waters and areas subject to drainage preserve special heritage which, in the case of organic materials, is particularly precious and vulnerable. The functions of the National Rivers Authority impinge on that particularly distinctive and vulnerable heritage. Because of the threats posed by drainage, English Heritage has, to its credit, funded a major programme of surveys over the last few years to identify and record the existence of sites in major wetland areas. These areas have been selected as having the highest priority for survey because of the quality and fragility of the archaeological deposits within them. I think that the current undertaking of English Heritage speaks for itself in pinpointing the value of such sites.
Turning to Amendment No. 78A, the objective is to give equal weight to the man-made heritage which potentially is equally as affected as the natural environment. Subsection (2)(a) refers to:
"land in relation to which . . . section 8 above has effect".
Since that clause includes buildings, sites or other objects of archaeological, architectural or historic interest and these occur on land within national parks and the Broads, they must logically be included where the interest of such land under Clause 8 is specified.
The amendment is simply for clarification. I am sure we all agree that whatever goes into a statute should be as clear as possible and beyond any danger of causing confusion. Although it is hard to tell, given the frequency with which the Government do not include references to it, we believe that it is accepted that the man-made heritage should be given equal, not to mention integrated, consideration with the natural environment and landscape. This is a question of balance. I am not trying in any way to give an edge to the man-made environment over the natural environment but to ensure that there is adequate protection for it. That is the concern of the amendments. I have come to the end of my

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comments on the amendments in that group. I beg to move.
Baroness Blatch: My Lords, it is difficult to argue—indeed, I do not wish to do so—with the need to protect flora, fauna and objects of archaeological and architectural interest. However, taking all these amendments together, it would be difficult to argue other than that the water authority should now shut up shop and go home. They make it nearly impossible for them to carry out their normal duties.
I believe that it is right for the Bill, and the Act when it comes into force, to put upon the water companies a duty to protect all those interests. However, I think it is unreasonable to make an absolute duty to protect absolutely everything, whether it is of significant or insignificant interest. For example, in Amendment No. 70A as it stands the duty laid upon them makes it almost impossible for them to function. Is the noble Baroness asking the water companies to conserve all buildings, sites and other objects of archaeological and architectural interest that rely upon a high water table and that may be affected? If for one reason or another that water table is reduced, either through drought conditions or even perhaps from over-abstraction because the companies have a duty to provide water to domestic and non-domestic users and there happens to be some damage, is the water company not only to be responsible for the restoration of any damage but for all time must conserve those buildings and sites?
I think that that lays an impossible duty on the water companies and I therefore ask my noble friend where possible to produce the strongest possible wording to make sure that a duty is laid upon the water companies to have reasonable regard for all those interests but not an absolute duty to conserve them for all time.
7.15 p.m.
The Earl of Arran: My Lords, I am sure that we are very grateful for the clear and concise explanation of the amendments in this group to which the noble Baroness, Lady Birk, has spoken. I hope to be equally clear and concise in stating the Government's reaction and attitude to them.
With regard to Amendment No. 57A our view is that a reference to "including ancient monuments, machinery, portable antiquities" is an unnecessary elaboration of the provision, as we indicated in our response to Amendments Nos. 56 and 60. We believe that the reference to buildings, sites and objects satisfactorily covers all those without going into the specific detail which can cast doubt on the generality of the provision. Therefore we believe that the formulation proposed, as I have said, is over-elaborate and best avoided.
Turning to Amendment No. 70A, this would add to the NRA's general promotional duties in Clause 8(4) a duty to promote conservation of antiquities and remains dependent upon a high water table. We understand the concern here, but there must be
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limits to the duties and obligations that we place on the new authority. That was a point brought out by my noble friend Lady Blatch. In this case the duty is unnecessary and will add little to the obligations already falling upon the authority by virtue of the duties already given to it. It will have general responsibilities in respect of water resources and abstractions, and hence of the water table, and it will have an obligation to have regard for the conservation of objects of archaeological and historic interest.
Our conclusion is that the combination of those two factors already meets the concerns of the noble Baroness, Lady Birk, so far as it is reasonable and practicable to do so and that to add a general promotional duty in this area would be an unnecessary and undesirable over-elaboration of the legislation.
I turn now to Amendment No. 62C, which would extend the duty to have regard to the desirability of preserving public access to cover access to archaeological or historic buildings, sites or other objects. We have been giving careful thought to this proposal. On balance, our conclusion is that this would be a reasonable and sensible extension to the clause. We do not think the wording is quite right, but subject to that we would be willing to bring forward an amendment to the effect desired at Third Reading.
Finally, on historic buildings I turn to Amendment No. 78A which in Clause 9 seeks to insert a notification procedure in respect of historic features into the provision dealing with national parks and sites of special interest. I have to say that insertion of that reference in the provision would be wholly out of place and frankly would complicate and confuse the clause. General legislation dealing with historic buildings is already full and effective, and we can see no sufficient case for seeking to insert special provision for them here. We feel that it would be both unnecessary and incongruous.
Amendment No. 58A takes us into the general duty in Clause 8(1)(c) to take account of the effects of proposals on the urban and rural environment and proposes to amend this specifically to refer to the need to avoid, remedy or reduce any adverse consequences of proposals. We already have in Clause 8(1)(a) and 8(1)(b) explicit duties on the relevant bodies to further conservation of landscapes, flora and fauna and buildings, and in these circumstances the elaboration proposed for subsection (1)(c) would, we believe, be quite redundant.
In the circumstances, we believe that the amendments in this group are not necessary, except for Amendment No. 62C which we believe is sound and we are prepared to consider it in detail with a view to an amendment at Third Reading.
As regards the other amendments, I hope that I have been sufficiently persuasive to enable the noble Baroness to withdraw them.
Baroness Birk: My Lords, I thank the noble Earl and should like to respond first to the good news. I am most grateful to him for accepting Amendment

1003
No. 62C and I am happy that it should be redrafted, if necessary, so long as the phrase "with regard to the desirability of is not used. I should be pleased if the Government could avoid that. I think that this is an important amendment and we appreciate the concession.
I do not think that the Minister would expect me to agree with his objections to the other amendments. On Amendment No. 58A, the main point is that, as the precedent has already been set, there seems to be no need for any objection to including the provisions in the same way as for the environmental assessment, land drainage improvement works and so on. I have quoted the noble Lord, Lord Hesketh. What he said seemed to be very sympathetic to such an amendment. I shall not press it. I believe that the Government are wrong.
On Amendment No. 70A, the noble Baroness, Lady Blatch, thought that to insist on something so inclusive would be too pressurising. However, as I said on Amendment No. 55, we accept that it cannot always be an overriding or consuming duty to protect the man-made heritage. There must be a balance of public interest. We are concerned that that balance is right and does not work against the man-made heritage as it so often does, because there are comparatively few people interested enough in the issue to do anything about it. People are on the whole much more interested in what I call the green issues—the nature parks, the areas of outstanding beauty—as I am also. They are highly important. Nevertheless some of us have continually to speak up for such issues as the preservation of archaeological artefacts, which are irreplaceable. On the other hand, it is not suggested that everything has to be kept exactly as it is, because that is impossible.
Baroness Blatch: My Lords, with the permission of the House, if the noble Baroness will allow me to intervene. I was not arguing against the desire to protect these buildings. However, Amendment No. 70A seems to put a duty on the water companies, whether or not they are working on these sites or buildings, to conserve them. I think that that is unreasonable.
Baroness Birk: My Lords I tabled the amendment because the archaeologists are worried not just about the conservation of the building sites, and so on, but the in situ organic archaeological deposits and artefacts dependent for their survival on a high water table. All these items must be possible to be saved and must be worth saving. There is nothing absolute about this amendment any more than any of the others that I have moved. That is no reason for turning it down. The danger of losing some of these highly valuable organic materials is very great. However, the Minister seemed rather reluctant to accept the amendment. Therefore, for the time being, I shall not move it.
On Amendment No. 78A, the same arguments prevail. It is put forward simply for clarification. We are trying to achieve equality between the man-made heritage and the natural heritage. The same arguments seem to have been given in reply to this
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as to the other amendments. Since I am repeating my arguments in reply, there is a point at which we have to draw the discussion, if temporarily, to a close. I shall therefore not move that amendment either.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, does the noble Baroness wish to withdraw Amendment No. 57A?
Baroness Birk: My Lords, yes, and I shall not move the other amendments, including Amendment No. 62C, in the hope that the Government will come back with something on that.
Amendment, by leave, withdrawn.
[Amendments Nos. 58, 58A and 59 not moved.]
The Deputy Speaker: My Lords, does the noble Baroness move Amendment No. 60?
Baroness Birk: My Lords, with great respect, that amendment comes in a different grouping. It is all very confusing.
The Deputy Speaker: My Lords, I must put the amendments in the order that they come.
Baroness Birk Baroness Birk moved Amendment No. 60:
Page 8, line 13, after ("buildings") insert (", sites").
On Question, amendment agreed to.
The Deputy Speaker: My Lords, perhaps I may say that Amendments Nos. 60 and 61 are alternatives. I understood that the Government were prepared to accept Amendment No. 60. Therefore Amendment No. 61 as an alternative should, I suggest, not be moved.
[Amendment No. 61 not moved.]
The Deputy Speaker: My Lords, is Amendment No. 62 moved?
The Earl of Arran: My Lords, your Lordships may agree that this is a suitable moment at which to break for dinner. I suggest that we return to further consideration on Report at 8.30 p.m. In the meantime I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Control of Smoke Pollution Bill
7.29 p.m.
The Earl of Portsmouth: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Portsmouth.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD HAYTER in the Chair.]
Clause 1 agreed to.
Clause 2 [Extension of offence of emitting dark smoke from industrial or trade premises]:
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Tordoff: I should like to speak on the Question of whether Clause 2 shall stand part of the Bill, and I apologise for slightly causing confusion on this issue. I understand it is the intention that I should speak on Clause 2 stand part, and we will come to the noble Earl's amendments to the Long Title at the end of our discussions.
I hesitate to intervene at this stage, partly because I did not speak at Second Reading and partly because it may be that I shall give the noble Earl some worry that I am going to damage his Bill. Let me assure him that it is no intention of mine in any way to hurt this Bill, which we totally support from these Benches. But I want to take the opportunity to deal with some matters that have been brought to my attention on information which was received by me after the Second Reading, and this is the only way that I can raise them.
There are those who are not satisfied that Clause 2 goes far enough in dealing merely with dark smoke. There is a problem relating to chipboard factories which has been drawn to my attention by the good people of Hexham. I regret, incidentally, that I was not able to give the noble Lord, Lord Rippon, notice of the fact that I was going to speak about this, because he might have felt that he had a constituency interest.
As noble Lords will know, Hexham is a small country town in Northumberland and it is claimed that the chipboard factory there produces for 24 hours, every day and night, plumes of what is, on the face of it, steam which hangs over the river valley. It also produces a blue haze and a brown haze. This factory is producing chipboard and there are two or three other chipboard factories in the country also producing this material, using wood chips, as one might imagine, as well as phenolic resins of one sort or another—formaldehyde, pheno-formaldehyde, melamine and other resins for bonding these chipboards. Although these substances are not excessively toxic in the amounts that are beng put into the atmosphere, nevertheless they can be extremely irritating and they do not seem to be caught under the provisions of this very excellent Bill.
As I said, this problem is not confined to Hexham. There are cases reported in Scotland and I quote from the Sunday Post, which I understand is a Scottish newspaper, of 19th February, which states:
"People living in the shadow of two giant chipboard manufacturing plants in Scotland endure polluting fumes and dust 24 hours a day. Their local Environmental Health Department are powerless to act. All because of a loophole in proposed Government legislation".
One must take this with a certain amount of scepticism, coming from the public prints, but there is obvious concern here. The article goes on to say:
"Wood fibre and fine sawdust pour from the plant chimneys daily. When the prevailing wind takes the emission over the village, cars and pavements are covered in a fine powder and a heavier, woolly substance . . . The Sunday Post has received
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identical complaints from residents living near [a plant] in Irvine".
There is also a plant on the Welsh border which is causing similar worries.
I understand that it is possible that there are proposals in the pipeline for local authorities to be given greater powers than they have at the moment to deal with this nuisance, but at the moment, according to information I have received, there is no specific legislation available to control emissions from chipboard factories.
The existence of this excellent Bill has raised people's expectations that something might be done at this stage. I am asking the Government to offer some reassurance to the good people of Hexham and other places either that something can be done very quickly or that thare will be legislation coming forward at an early stage to offset this nuisance.
Lord Hesketh: The noble Lord referred to air pollution from chipboard manufacturing plants. These plants are currently subject to control under the Public Health Acts. Local authorities are responsible for the control of any emission that constitutes a statutory nuisance, although it is also open to the local people to complain of a statutory nuisance direct to a magistates' court.
As the noble Lord quite correctly pointed out, my department issued two consultation papers in 1986 and 1988, both of which are in the Library of the House. They included a proposal that air emissions from certain processes, including some timber processing plant, should be controlled by local authorities under a system akin to that currently operated by Her Majesty's Inspectorate of Pollution. It is proposed to bring forward legislation to give local authorities these new powers during the course of this Parliament, and it is likely that this factory in Hexham will be among the processes scheduled for local authority control under the new system. I hope that those words will give some confidence to the good citizens of Hexham.
Lord Tordoff: I am most grateful to the Minister for that reply. I am sure that it will give great comfort to the people of Hexham and similar places. I am delighted to have such a satisfactory reply and certainly I shall not seek to impede the progress of the Bill for one minute more.
Clause 2 agreed to.
Clause 3 agreed to.
In the Title:
The Earl of Portsmouth The Earl of Portsmouth moved Amendments Nos. 1 and 2:
Line 1, leave out ("repeal") and insert ("amend").
Line 1, leave out ("to amend").
The noble Earl said: I should like the leave of the Committee, if that is necessary, to move both of these amendments on the Marshalled List together. This Bill was introduced in another place on 21st December 1988. The Long Title tabled at that time was:
"Control of Smoke Pollution … a Bill … to repeal section 16(1)(a) of the Clean Air Act 1956 and to amend: section 1 of the Clean Air Act 1968".
After introduction, parliamentary counsel produced a first draft of the Bill. At that stage it was realised that Clause 1 went further than the proposal contained in the Government's December 1986 consultation paper on air pollution control. The consultation paper proposed that non-dark smoke emissions in areas not subject to smoke control should come under the ambit of the statutory nuisance provisions of the Public Health Acts. The effect of repealing Section 16(1)(a) would be to extend statutory nuisance to cover non-dark smoke emissions both outside and within smoke control areas.
So as not to depart from the consultation paper proposal, which was widely welcomed, Clause 1 was drafted so that non-dark smoke emitted from the chimney of a private dwelling within a smoke control area would remain exempted from the statutory nuisance provisions. This was achieved by retaining part of Section 16(1)(a). Thus Section 16(1)(a) required amendment but not repeal. The result of this was that Clause 1 of the Bill provided for amendment, whereas the Long Title given in the First Reading referred to "repeal".
The purpose of the amendments is to align the Long Title with the drafting of Clause 1. Clause 1 provides for the amendment of Section 16(1)(a) of the Clean Air Act 1956. The Long Title refers to the repeal of Section 16(1)(a). It should read:
"amend Section 16(1)(a) of the Clean Air Act 1956 and Section 1 of the Clean Air Act 1968".
The amendments in no way alter the substance of the Bill. I beg to move.
Lord Hesketh: The improvements in air quality achieved as a result of the Clean Air Acts are well known. We tend sometimes to forget these major achievements when concentrating on some of the new air pollution problems that have emerged. This Bill offers two small but important changes to these Acts and has our full support.
Non-dark smoke emitted from the chimneys of private dwellings can be a nuisance. It is right that there should be a statutory mechanism for tackling such nuisances wherever they occur, not just in those parts of the country covered by smoke control orders—albeit that these orders cover two-thirds of all urban premises. In extending the current definition of "statutory nuisance" to include non-dark smoke emissions from private dwellings outside smoke control areas, Clause 1 achieves this extension of control and is to be welcomed.
There are already controls in the Clean Air Acts over dark smoke emitted from industrial premises. The provisions in Clause 2 will strengthen these controls by closing two loopholes which have hindered effective enforcement by local authorities. It will hamper those who deliberately flout the law for quick profit without heed to the often serious loss of amenity suffered by those living nearby.
Turning to the two amendments, my noble friend has explained that no changes of substance are proposed. The purpose is to make two small changes to the Long Title of the Bill so that it accurately
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reflects the provisions in Clause 1. In welcoming Clause 1, it follows that these two uncontroversial amendments also have our full support and I commend them to the Committee.
On Question, amendments agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with amendments.
The Earl of Arran: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.34 to 8.30 p.m.]

Water Bill
Consideration of amendments on Report resumed on Clause 8.
Lord Gallacher Lord Gallacher moved Amendment No. 62:
Page 8, line 16, leave out from ("body") to ("for") in line 19 and insert ("to preserve and make available").
The noble Lord said: My Lords, I shall also speak to Amendments Nos. 62A and 63. However, I am not speaking to Amendment No. 62B. Clause 8 concerns the general environmental and recreational duties of the Secretary of State, the Minister and the director. As such it is a very important part of the Bill. Indeed, considerable stress was placed upon its importance by the Government at Second Reading and in Committee.
Subsection (2) of Clause 8 has the appearance of being positive until one reads in detail paragraphs (a) and (b). One is left in no doubt that in terms of real power or the placing of a real duty on the Secretary of State, the Minister and director, the clause is inescapably weak. The purpose of these amendments is to try to strengthen it in respect of rights of access for the public to land after privatisation.
The question of water undertakers having a firm duty to preserve existing public freedom of access to land is one which we discussed at an earlier stage of the Bill. At that time we were disappointed at the Government's insistence that that duty must remain a duty,
"to have regard to the desirability"
of protecting access. That does not seem to us to be as fair or as positive as it might be. The purpose of the amendment is to firm up the wording if possible and to persuade the Government that that can be done without any great loss or detriment to operational activity by the plcs.
The public has since 1973 enjoyed fairly extensive access to the half million acres which the 10 regional water authorities currently own. Although in one or two instances that access is not as good as it might be, the asset is very valuable from the point of view of the public who have access to recreation which we feel should be preserved and which we are anxious to see preserved even after privatisation.
When one considers that much of this land passed in 1973 to regional water authorities from local

1009
authorities without payment under the Act of that year, the public's desire to maintain access is in our opinion both understandable and justified. Indeed, Section 20 of the 1973 Act obliged regional water authorities to open their land to the public and, as I say, in the main regional water authorities have honoured that undertaking. We are perfectly satisfied that if the right of access can be preserved, it will be to the benefit of the public at large and to the benefit of amenity in general.
We are concerned that if paragraphs (a) and (b) are enacted in their present form, there may be a disposition on the part of the water authority plcs to seek to curtail in some way the right of access and the Minister may not feel under any serious obligation, given the wording,
"to have regard to the desirability"
to maintain access in the way we consider it should be done.
There is also the view of the farming lobby. We are well aware that farmers differ in their attitude towards allowing the public access to land. In the main most farmers are happy enough to see the public there, always provided that they behave responsibly. However, a minority of farmers, if they sense that the protection under this Bill is weaker than it might be, may be less keen on giving access and may seek to restrict it. That, in our view, is a further reason for firming up paragraphs (a) and (b) in the manner suggested in these amendments.
During previous discussion I understand that the Government said that they genuinely intended to protect access but that they were frightened of incorporating words into the Bill which would not allow access restrictions when there were authentic operational reasons for such restrictions. If that is the position, we feel that it would be possible even at this late stage to draft the Bill in such a way as to permit restrictions for legitimate operational purposes. If, however, the Government are not taking the position that it is impossible to recognise the effective maintenance of access with operational requirements, we feel that they should drop their objections and permit the strengthening of the Bill in the manner we suggest in Amendment No. 62 and the consequential amendments. For that reason, I beg to move.
The Deputy Speaker: My Lords, I have to point out that if this amendment is agreed to, I cannot call Amendment No. 62A.
Lord Hesketh: My Lords, Amendments Nos. 62, 62A, and 63 would require the relevant bodies to preserve and make available public access rather than have regard to it. I recognise that there is concern that after privatisation the undertakers may restrict such access. I must reiterate to the House that there is no basis for such fears. Nothing the authorities have said or done indicates they will act in this way. Given the nature of most of the land in question—upland, rural areas—there would surely be little advantage to them in it. Since 1974 they have taken down the fences. As they have indicated, they have no intention of erecting them again.
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So let me summarise what the position will be in respect of public access after privatisation. First, dedicated rights of way will of course be unaffected. Secondly arrangements established under private legislation will also continue. And by an amendment to the Bill in another place the Government have specifically denied themselves any right to vary or amend such legislation in consequence of the enactment of the Bill. Thirdly, in any case where access may form part of a management agreement with a national park authority, such agreements continue under successor owners unless there is express provision otherwise.
So the only area of uncertainty we are left with is concessionary access granted at the discretion of the water authority. But the fact is that Clause 8 provides a sound basis for continuation of policies of the water authorities by their successors. By an amendment in another place we have put beyond doubt that the duties in Clause 8(2) embrace all freedom of access, including concessionary arrangements and the right to roam.
It has, I recognise, been suggested that the terms of the duty are not strong. On the contrary, we believe they will be fully effective. Under this duty, and having regard to what authorities have in the past done in pursuit of it, there will be little scope for the undertakers seriously to alter their predecessors' policies in this area. The code of practice reinforces this. It requires a positive approach from undertakers towards public access. It incorporates a presumption that policies for opening up land of high amenity value for rambling and quiet countryside pursuits will continue. It refers to arrangements, including consultation, for establishing the current pattern of access rights—formal and informal. The duties, interpreted in the light of the code, will of course be enforceable by the Secretary of State.
What by contrast would be the effect of these amendments? The companies are not, as now, to have regard to the desirability of preserving access. They are to preserve it, full stop. At a stroke long-established discretionary arrangements are made mandatory. Yet in most cases they will have been established on a discretionary basis for good reason: because operational considerations may require them to be withdrawn; because for a few years, now and then, authorities may need to restrict access to conserve vegetation; perhaps, indeed, because—on reservoir banks for instance—there may be safety considerations and the company does not necessarily want to accept the risks involved. Whereas they purport simply to preserve public access by freezing existing discretionary arrangements, they would extend it in a arbitrary and unrealistic way.
What we have in the Bill and code now is the better course. It will be effective in securing that the general public access policies of the water authorities are maintained without setting in concrete particular discretionary arrangements which were always intended, for good reason, to have a necessary measure of flexibility. Much as the Government are committed to conservation and public access, we

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really could not accept these amendments; nor, I believe, should this House.
Lord Gallacher: My Lords, the Minister will not be surprised to learn that we on this side of the House are somewhat disappointed with the case he has stated. The Minister has perhaps great complacency—if that is not too strong a word—about how matters will shake down once the water companies become plcs. We have never been able to reconcile ourselves to the fact that a plc, whatever trade or industry in which it is engaged, has a primary duty to its shareholders.
Although we recognise that in this Bill the Government, in consideration of the fact that they are conveying a statutory monopoly of one of our most precious commodities to private enterprise, have endeavoured seriously to write protection for consumers into the Bill, we are not entirely satisfied that that protection as it stands in Clause 8(2)(a) and (b) is as strong as it could or should be. While we do not wish to set protection in concrete, as the Minister suggests, we feel that there is nothing in the Bill as it stands to prevent water plcs from attempting to restrict access. Above all, in the wording of the subsection there is no duty on the Secretary of State, the Minister of Agriculture and the director, to act positively in the way that we feel they should be obliged to do if our worst fears are in any way realised.
As regards restriction of access for temporary periods for operational reasons about which the Minister has spoken, I feel that I dealt fairly with that in my submission. There would be no objection, on our part or, indeed, on the part of those people who wish to use the facilities they currently enjoy, to restrictions on access of that kind. It is well understood in all walks of life and therefore suitable amendments could be made to the Bill to provide for such contingencies.
Nevertheless, it is obvious from the spirited nature of the noble Lord's reply that there is no joy to be had on this issue this evening. I interpret "spirited" more by the speed with which the reply to the amendment was read rather than the conviction underlying the reply. However, in view of that spirited reply we can see that there is at present no way of persuading the Minister even to look at this matter before Third Reading. We are not as assured as he is that all will be well in the future. Nevertheless, the firm words that the Minister did use, which we acknowledge, are on the record. Although we would rather have them in the Bill, nevertheless they are there. They may give comfort and succour to those people who, we hope, will not be denied access in the years ahead. With those remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 62A to 62C and 63 not moved.]
8.45 p.m.
Baroness Blatch Baroness Blatch moved Amendment No. 64:
Page 8, line 33, leave out ("land associated with water") and insert ("the water environment").
The noble Baroness said: My Lords, I move this amendment on behalf of my noble friend Lord Cranbrook who apologises for not being present as he is engaged elsewhere.
Your Lordships may be relieved to hear that I do not intend to rehearse all the detailed points made by my noble friend in Committee. However, it would seem not only from my noble friend but also from my noble friend the Minister, the noble Lord, Lord Norrie, and the noble Baroness, Lady David, that there is concern about a definition of this clause. Therefore, I ask my noble friend to give some consideration to the words set out in Amendment No. 76 which attempt to define land associated with such waters. I hope that my noble friend is able to say that Amendment No. 76 goes a long way towards making this definition more specific. I beg to move.
Lord Norrie: My Lords, I speak to Amendment No. 70. The purpose of the amendment is to maintain continuity of drafting in subsection (4). The amendment will ensure that the NRA has the conservation duties that the Government described in Committee. I refer particularly to the debate in Committee on 23rd May on what were then Clauses 121 and 122 and amendments moved by my noble friend Lord Renton.
The continuation of the conservation duties held by the water authorities under the Wildlife and Countryside Act 1981 is essential and this amendment ensures that there will be no weakening of those duties upon privatisation. Clause 8(4) describes the duties of the NRA with respect to the promotion of conservation and recreation. Subsection (4)(a) refers to conservation of natural beauty and amenities. Subsection (4)(b) refers to conservation of flora and fauna. However, the conservation of flora and fauna is confined to that which is dependent on an aquatic environment whereas subsection (4)(a) refers to water and associated land. Subsection (4)(c), relating to recreation, also refers to such waters and land.
The amendment would ensure that subsection (4)(b) is brought into line with the rest of this subsection. There is no reason for flora and fauna to be given less protection than landscape or recreation.
Baroness White: My Lords, in the absence of my noble friend Lady David perhaps I may be permitted to say a few words on this amendment. It is a matter of considerable concern that we should have a more satisfactory definition of the protection being offered for flora and fauna. The noble Baroness, Lady Blatch, indicated that the noble Earl, Lord Cranbrook, has done his best to provide a definition although whether the Government can accept it in precisely that form remains to be seen. Nevertheless it is important that flora and fauna should not be restricted to absolute dependence upon water.
In recent years there has been a great deal of work done on research into river corridors; that is, the land adjacent to inland waters. The attention of the House should be drawn to that. In England and Wales we have about 40,000 kilometres of river which is registered for classification for water

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quality. In addition, of course, there are a number of smaller tributaries which are not so registered. They provide, in particular, very important habitats for bird life.
One cannot say of birds that they are absolutely dependent on the water, because they are not aquatic creatures. But they are very dependent for their habitat on the river corridors. In Wales we have carried out a very interesting study of the River Teifi. It is one of the most important areas of research undertaken in this field. There was a co-operative study undertaken by the University of Wales's Institute of Science and Technology; the Welsh Water Authority; the Royal Society for the Protection of Birds; the Otter Haven Project and the Nature Conservance Council, with administrative assistance from Powys County Council. In other words it was a major co-operative effort.
It proved without doubt the importance for wildlife, for both flora and fauna, of protecting the adjacent land. It is not simply a matter of concerning oneself with the water. It is quite clear that the definition that the noble Earl, Lord Cranbrook, has suggested is intended to meet the very strong feeling among biologists and zoologists who are concerned with flora and fauna. One should not differentiate in the way that the Bill as now drafted does between the other uses of the riparian areas and the protection in such areas of the flora and fauna. These factors are covered by the amendments of my noble friend Lady David and the noble Lord, Lord Norrie.
I hope very much that the Government will address their mind to this particular problem, whether or not they accept the wording of this amendment, and make certain that they do not unduly restrict the reference in the Bill to the protection of flora and fauna.
Lord Hesketh: My Lords, this group of amendments applies to the recreation duty of the NRA, the undertakers and the drainage boards under Clause 8(3) and to the NRA's duty under Clause 8(4) generally to promote recreation and conservation. I wish to address first Amendments Nos. 64,65,69,72 and 76 tabled by my noble friend Lord Cranbrook. Clause 8(3) and (4) are drafted to apply the recreation and conservation duties they contain to water and land associated with water. These amendments will substitute "land associated with water" for the term "water environment". This term has been defined by Amendment No. 76.
The phrase "land associated with water" is taken directly from the Water Act 1973. It may seem somewhat vague but it has proved in practice to cover all the lands in respect of which it would be appropriate for the duties in Clause 8(3) and (4) to apply. I do not recall any complaints about it, but the term "water environment" as defined in Amendment No. 76 is not only untested in practice, but may be defective in theory. To take an abvious example, it would catch underground mines from which water was pumped into a river. I doubt whether such mines have much potential for recreation or conservation. For these reasons I suggest that these amendments be rejected.
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I turn now to Amendment No. 70, tabled by my noble friend Lord Norrie and the noble Baroness, Lady David. This amendment applies only to Clause 8(4) and the NRA's general duty contained therein to promote the conservation of flora and fauna which are dependent on the acquatic environment. This amendment will substitute "such waters and land" for the expression "an aquatic environment". The key point is that in accepting this amendment it could take the NRA's responsibilities into the protection of fauna—badgers might be an example—which are living on land associated with water though not dependent on it. It is possible that it would lead to an unreasonable extension of the NRA's role into matters on which it will have no particular expertise. That is why we recommend that the amendment should be resisted.
I now come to Amendment No. 68, standing in the name of my noble friend Lord Caithness, which extends the NRA's duty in Clause 8(4) generally to promote the conservation and enhancement of natural beauty and the amenity of inland waters so that it covers coastal waters as well. Having just recommended your Lordships to turn down the amendments regarding the water environment tabled by my noble friend Lord Cranbrook, I am pleased to point out that Amendment No. 68, which I recommend to the House, is based on the comments that he made in Committee when he pointed out that the duty in respect of promoting the conservation and enhancement of natural beauty and amenity applied only in respect of inland waters and thus gave the NRA no adequate powers as regards water around the coast.
By contrast, the duty in respect of conservation of flora and fauna refers more generally to the aquatic environment. We accept that there is inconsistency here. More importantly, the Bill should not preclude the NRA from taking action, if it considers it to be necessary, for the conservation and the enhancement of waters around the coast as much as those inland. That is the purpose of Amendment No. 68. I should add that we believe it is unlikely, for the foreseeable future at least, that the NRA will seek occasion to make much use of these powers in respect of waters around the coast. It will of course have to exercise diligent control of discharges to such waters and to monitor as necessary in relation to them. But its wider promotional power should be there for use if it is required. On that basis I hope that the House will be able to support Amendment No. 68.
Baroness Blatch: My Lords, I thank the Minister for that reply. Amendment No. 68 certainly does expand and make a little clearer the definition of associated waters. I cannot speak for my noble friend Lord Cranbrook. I suspect that he will wish to read what the Minister said. I also accept the technical defect that one is not speaking of underground mines. I believe that there is scope for some thought between now and Third Reading for us all to think about a form of words that will catch and encompass all the interests of this group of amendments. I shall not press the amendment and therefore I beg leave to withdraw it.
Baroness White: My Lords, can the noble Lord say where he places the kingfisher, for example? To some extent it is dependent on an aquatic environment, but it does not live underwater.
Lord Hesketh: My Lords, by leave of the House, the noble Baroness certainly has the advantage over me as regards the kingfisher except that I know it chooses a very steep bank in order to avoid a rat getting into its nest.
Amendment, by leave, withdrawn.
[Amendment No. 65 not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 66:
Page 8, line 36, at end insert—
("(3A) The Secretary of State, the Minister, and the Director shall have the duty so to exercise their powers under this Part as may best secure the fulfilment by any relevant body of its duties under subsection (3) above.").
The noble Lord said: My Lords, this amendment perforce accepts the definition of "land associated with water" but this is still with reference to Clause 8(3), where we are not satisfied that the restriction of the environmental duty to the Secretary of State is going to achieve the objectives. We feel that the Secretary of State should have a duty to ensure that the water undertakings have the recreational obligations themselves rather than the Secretary of State having the direct duty. Ministers will recall that this was raised in Committee and that there was an agreement that the suggestion would be looked at. It went no further than that and I will not claim that there was any commitment.
We looked at the possibility of ensuring that the plcs are not exempt from recreation and amenity duties by including reference to their duties in the code of practice. The problem with the code of practice is that, unless it is mandatory, we need a new subsection of the kind that we propose in Amendment No. 66. It is clearly important that the creation of the plcs should not be seen as a way of getting around leisure, recreation and amenity obligations. We are aware that the Government, for reasons that have been set out at length, are not going to make the code of practice mandatory. Failing that, it seems that an amendment of this kind is necessary. I remind the Government that they said that they would consider adding the duty to the code even though it is not to be mandatory. If they will indicate that that is to be done it might be helpful in enabling us to consider whether we need to press the amendment. I beg to move.
9 p.m.
Lord Hesketh: My Lords, Clause 8(3) provides that relevant bodies—the NRA, the undertakers and the internal drainage boards—shall be under a duty to put the water and associated land to the best use for recreation. The purpose of this amendment is to place upon the Secretary of State, the Minister and the director an obligation to exercise their own powers under Part I of the Bill in the way that best secures fulfilment by the relevant bodies of their duties.
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We are satisfied that this amendment is not appropriate. The relevant powers in Part I will be the appointment of the NRA, of the director general and of the customer services committees, the general duties in Clause 7 and the environmental duties. It would surely be inappropriate that such powers should be exercised so as to best secure recreational objectives. The option which was best in recreational terms could well be wholly inappropriate in terms of all the other obligations and considerations which the Secretary of State and director general must weigh. Further, to have the Secretary of State exercise his general environmental and conservation duties elsewhere in Clause 8 in the manner which best served recreation would surely be wrong and would completely unbalance this part of the legislation to the severe detriment of conservation.
Even if powers were more widely construed to include these elsewhere in the Bill the same argument would hold. We cannot require the Secretary of State and director to do what is best for recreation when this may be at the expense of all the other obligations and duties upon them. I believe I can nevertheless offer the noble Lord some reassurance on his underlying concern. The most relevant powers of the Secretary of State are his enforcement powers in Part II of the Bill. And he will have to use them in a way which secures that the statutory obligations of the companies—including the recreation duties—are properly secured. In this way recreational duties are placed upon the Secretary of State to the extent that is appropriate.
I hope that the noble Lord will to some extent be reassured by these comments and will feel that he does not have to press the amendment to a Division.
Lord McIntosh of Haringey: My Lords, I find that reply curious in one respect and incomplete in another. I find it curious in the sense that it would never have occurred to me that the words "best secure" to which the Minister paid such attention should weaken other aspects of the obligations of the Secretary of State. Best securing the fulfilment of the duties under subsection (3) does not mean that it comes before any other obligation. We have a difference in the meaning of words. Under those circumstances it is probably best, if I may use that word, if I take the matter away, think about it and see whether the Government would wish to think about it as well.
I asked a specific question about the codes of practice. I wonder whether the Minister can help me on that point before finally I make up my mind. When we were considering this matter in Committee the Government said at col. 481 of the Official Report of 8th May that they would consider adding this duty to the codes of practice. I wonder whether that has been done in the draft codes of practice or whether it is being actively proposed that it should be done.
Lord Hesketh: My Lords, with the leave of the House, I can partially answer that question. We are endeavouring to do so in the codes of practice.
Lord McIntosh of Haringey: My Lords, let us hope that they are "best" endeavours. Without best endeavours I am not convinced that we shall get the result that we all desire. Perhaps the Minister would be good enough to let me know in good time before Third Reading whether his endeavours are likely to reach fruition. I can then decide whether I need to return to this matter at that stage. I am sure that with his usual courtesy he will do so. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 67:
Page 8, line 38, leave out ("to such extent as it considers desirable").
The noble Lord said: My Lords, this amendment removes from the duties of the NRA under Clause 8(4) another example of what we consider are weasel words. Under that subsection the authority has duties generally to promote the conservation of areas of natural beauty, and of flora and fauna, and the use of waters and land for recreational purposes. The problem is that all these duties are to be undertaken,
"to such extent as it considers desirable".
The wording of the subsection suggests that in practice the activity will be little more than a power for the authority to undertake these activities. The qualification "generally" already imports a reservation as to whether or not the duties would actually be enforceable and the inclusion of the wording as to desirability would effectively remove the subsection from any element of judicial review. The creation of quangos, which are effectively beyond the reach of the administrative law in respect of their duties, is surely an undesirable development.
The amendment reflects earlier attempts to tighten up the duty. As Amendment No. 117, it was tabled for the Committee stage by my noble friend Lord McIntosh, the noble Lords, Lord Ross and Lord Norrie, and my noble friend Lady Birk. The debate was overshadowed by the promise of the noble Earl, Lord Caithness, to bring forward the amendment which has been debated today. However, the Minister replied at cols. 435–6 to the effect that the NRA would be playing a supporting role to riparian owners, navigation authorities, voluntary bodies and so on. In his view those words reflected the secondary nature of the NRA's role.
In the first place, this interpretation may be contested. If it is intended that the NRA should have a secondary role it might be better if Clause 8(4) actually said so. There is nothing in the words,
"to such extent as it considers desirable",
to suggest that its activities will necessarily fill the gap left by other organisations' activities. On the contrary, it would seem better for the NRA to have a generalised duty which clearly can take up any areas left undone by other organisations. For that reason the removal of the words would somewhat strengthen the duty.
The Minister's reply suggested that removal of the words would make the duty too strong. The operative word in the subsection is "promote". The authority is not being given a duty to undertake these functions
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but to promote them. In other words, to the extent that it can encourage other bodies to do the work it will do so; but where it cannot do so, it has a duty to try to secure that improvements are achieved, if necessary by undertaking the work itself.
It is suggested that the re-writing of Clause 8(4) to reflect that back-up and promotional function would be an improvement on the present wording. If the Government are prepared to accept that principle, no doubt they may wish to take the wording away to see whether they can produce something which fits in with that general approach. I beg to move.
The Earl of Arran: My Lords, I wonder whether I may try to put over the Government's view on this amendment. Clause 8(4) is an important new provision, and I should remind the House of the Government's intentions. It removes in respect of the NRA two significant constraints on the present water authorities in relation to conservation works and recreation provision.
In the first place, water authorities can at present only undertake works for the improvement or enhancement of rivers to the extent that such works form part of, or are ancillary to, the performance of one of their main functions. As we emphasised in Committee, we believe this is an unreasonable restraint. It is important that there should be a body able to take steps to conserve and enhance the river environment. Often of course such activities will fall to riparian owners or local planning authorities, but the NRA should not be inhibited by lack of powers from playing its part. We would not expect use of the powers to be substantial in the next few years: necessarily most environmental work by the NRA will be part of its drainage, water resources or pollution control functions. Nonetheless, the power is an important one.
With recreation the position is similar. There are already a number of co-ordinating or promotional bodies, such as regional councils for sport and recreation and local authorities. The NRA will not want to usurp their contributions. At the same time it must not be limited in its recreation provision to putting its own rights over water to recreational use. It should, for example, be able to help manage effective recreational uses of rivers where there is no navigation authority or give support to local voluntary bodies to do this. And there must be a body which, irrespective of its other regulatory functions, is able to take a clear overall view of the development of recreation on rivers where this is needed. Again it should not be expected that the NRA will make dramatic use of these powers in the short term. But it is important that from the start it should have the powers to promote recreational uses when it sees clear need and there is no other body well placed to assist.
Against this background, it follows that we do not believe that the qualification,
"to such extent as it considers desirable",
should be deleted. Recreation opportunities on rivers will continue to be provided primarily by riparian owners; and there are other promotional and co-ordinating bodies the role of which should

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not be usurped. The NRA's task should be supportive: when things need to be done to facilitate recreational uses of rivers, and there is no other body better placed to do them, it is right that some obligation should fall upon the NRA. But it is the NRA which is itself in the best position to judge this.
I suggest that,
"to such extent as it considers desirable",
precisely expresses this position and should be retained. An unqualified duty is not necessary and would be beyond what the NRA could discharge. The NRA is enabled by this clause to act in relevant circumstances, and, as we have consistently argued, we believe that it would be wrong to go beyond this. It is in the light of those considerations that I hope that the noble Lord will agree to withdraw the amendment.
Lord Graham of Edmonton: My Lords, it is my intention to withdraw the amendment, but listening to the Minister I must say that it all sounds grand, clear and precise: a body is required to be able to "take a clear overall view". In this amendment, as in many others, we are not doubting the Government's intentions or integrity with words but the interpretation which could be placed upon them. However, the amendment has provided the Minister with a further opportunity to defend his corner in respect of the intentions of the Bill and the limited powers that this subsection which we were seeking to remove provides.
I am grateful to the Minister because it is quite clear that he has taken the point most seriously. Moreover, it may be that on reading what he has said those in this House and others outside will accept that we have received the best response that we can get. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 68:
Page 8, line 41, after ("inland") insert ("and coastal").
On Question, amendment agreed to.
[Amendment No. 69 not moved.]
Lord Norrie Lord Norrie moved Amendment No. 70:
Page 8, line 43, leave out ("an aquatic environment") and insert ("such waters and land").
The noble Lord said: My Lords, my noble friend the Minister has already replied to the amendment. The amendment ensures that Clause 8(4)(b) is brought into line with the rest of the subsection. There can surely be no reason for flora and fauna to be given less protection than the landscape or recreation. I was not happy with my noble friend's reply. It is surely essential that the NRA should be able to deal with those issues. It is the obvious body to do so. My noble friend Lord Caithness said so in Committee in response to a debate on Clauses Nos. 121 and 122, as they then were. He said:
"that duty is placed on the NRA by Clause 8(4). I draw that clause to the attention of the Committee. It makes it very clear that it is a duty on the NRA to promote conservation with respect to both inland waters, and to the land associated with them".—[Official Report, 23/5/89; col. 277.]
On close examination of Clause 8(4) it is clear that while conservation of natural beauty and amenity with respect to water and land is dealt with, in respect of flora and fauna the aquatic environment only is mentioned. There is no mention of associated land with respect to the conservation of flora and fauna. I therefore ask my noble friend the Minister to reconsider the wording of Clause 8(4)(b). I beg to move.
9.15 p.m.
Baroness David: My Lords, I support the amendment. It would fit in with what has been accepted in the rest of the clause. I hope that the Minister will look upon it favourably. I do not know what the noble Lord, Lord Norrie, will do. It seems to me a sensible amendment which will fit in with what has already been accepted.
Lord Hesketh: My Lords, with the leave of the House, I have already replied to the amendment. There is nothing I can usefully add to what I have already said.
Lord Norrie: My Lords, I shall have to consider what my noble friend has said. I shall read Hansard and I may find that I shall have to return to the subject. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 70A to 72 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 73:
Page 8, line 45, at end insert—
("(4A) Any proposals by, or in relation to, a body or person to which subsection (1) above refers shall, where they relate to a land management plan, be made subject to the requirement that the person concerned shall undertake consultation with each local authority in the area to which the plan relates and shall have regard to the results of such consultation in relation to recreational or environmental matters.").
The noble Lord said: My Lords, the purpose of the amendment is to ensure that local authorities have an opportunity to protect the interests of the local community before land is disposed of. The amendment is a response to comments made by the Minister in Committee on Amendment No.103A. That amendment sought consultation with local authorities in the case of the disposal of or change of use of water land where that would have environmental or recreational implications.
The Minister considered the amendment to be too wide and pointed to existing planning procedures. It is in that spirit that the amendment is a narrower proposal which is of interest to those authorities that have been working with water authorities to improve recreational and environmental provision. Where there is an existing land management plan covering such activities there should be a consultation requirement.
The land holdings of many water authorities offer both local inhabitants and those living further afield unique opportunities to enjoy leisure facilities. The most obvious opportunities relate to the use of water for the full range of water sports, while the land in the catchment areas is an important recreational

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resource for those who wish to get away from it all. Consequently, when planning for the needs of a local community the local authority recognises that certain land owned by water undertakings forms part of the leisure resources of an area. That being so, the need for other land to be brought into recreational use is sometimes seen as unnecessary. Therefore—this is the gravamen of our argument—to remove land from recreational use without consultation could mean a sudden and unacceptable loss of a publicly used resource which might not be compensated for in the locality. The local authority should consider whether the loss of that resource is acceptable and, if not, what action it might take.
The same argument applies where land is of value as a habitat for wildlife. In the case of a disposal it would be helpful if the Government could undertake to insert a consultative provision in the new land sales agreement with the specific purpose of creating a conservation duty with local authorities in the case of sales of land covered by such management plans. I beg to move.
The Earl of Arran: My Lords, Clauses 8 and 9 already impose formidable duties on the new companies in respect of the conservation and recreational use of their land. The question is whether it is sensible to extend those obligations still further with a consultation duty which goes beyond what attaches to any other bodies.
We do not believe that it would be. We suggest that the Bill and associated code already provide all that is necessary. In the first place, in those areas where special environmental considerations arise—in the national parks and SSSIs—the Bill in Clause 9 already provides a special consultation procedure.
Secondly, within the code of practice we make clear the need elsewhere to consult widely on environmental and recreational matters, and we have already included some references to consultation with local authorities. We recognise, in the light of what the noble Lord, Lord Graham has said, that we may not have said enough in the code. Be that as it may; the code is the place to say it.
We do not think it is necessary or appropriate to load this additional statutory consultation duty on the companies. But we recognise that, at least when they have large land holdings of environmental and amenity significance, they should take local authority views into account in their land use management planning. While a good deal of flexibility should be left in the way this is achieved, we shall undertake to pursue this thought in the code and elaborate the guidelines there, taking full account of the points which the noble Lord, Lord Graham, has made. On that basis I hope he will feel that his purpose is substantially achieved and that he need not press this amendment.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for saying that he will be able to elaborate on the thoughts that I have expressed when he examines what should be laid
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down in the code of practice. He placed very heavy stress upon the existing provisions, particularly those for land with special environmental protection needs.
I think that the Minister understands that we are concerned with land which is the subject of a management agreement and plan. I hope that when the Minister has had further thoughts he will accept that there are recreational land uses which form part of a total local authority scheme. They may very well not fall within the need to be protected or specially looked at, but if the land were to be disposed of without consultation, it could be distressing to local people and the local council. Its overall recreational plan could be disturbed. We are not saying that the council should have power to stop it. But if our amendment were carried it would have to be consulted, and if it objected to the proposal it would have the opportunity of further discussions.
However, I feel that the Minister's remarks are along the lines of what I wanted, which is that further thought will be given to the matter. It may be that something will appear in the code of practice which will cover the point. I am grateful to the Minister and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Lord Airedale): My Lords, in calling Amendment No. 73A I have to say that if it were to be agreed to I could not call Amendment No. 74.
Lord McIntosh of Haringeymoved Amendment No. 73A:
Page 9, line 1, leave out subsection (6).
The noble Lord said: My Lords, in moving Amendment No. 73A, I wish also to speak to Amendment No. 74. In view of what the Deputy Speaker has said, clearly I shall have to think of these as being alternatives. I moved Amendment No. 73 out of the kindness of my heart because the Government got themselves into an impossible position in considering this amendment. Amendment No. 74 reflects, I hope directly, a point made by the noble Lord, Lord Renton, in Committee.
First, I shall deal with Amendment No. 73A. Clause 8(6) states:
"Nothing in this section or the following provisions of this Act shall require recreational facilities made available by a relevant body to be made available free of charge".
In proposing the deletion of this subsection, we asked ourselves what it could possibly mean, and what force it could possibly have. The noble Earl, Lord Caithness, said on an earlier occasion that the subsection was of a "purely declaratory nature". What is a subsection of a purely declaratory nature doing in a Bill of this kind? Either it means something, in which case it should be argued properly rather than the Government telling us it is purely declaratory, or it means nothing, in which case it should be taken out of the Bill.
We have given the Government an opportunity to put matters right by tabling this amendment again.

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I hope that they can now acknowledge that to have a subsection which is of a purely declaratory nature is nonsense in legislation and that the subsection should not be there. On the assumption that they will be sticky about this and will try to get round the pure logic of my argument, I have brought forward an alternative in Amendment No. 74. That amendment takes up the point made by the noble Lord, Lord Renton, in Committee. I paraphrase the argument that he presented at col. 493 of Hansard. The noble Lord said that there was something to be said for an amendment which safeguarded existing facilities where they were free of charge. Amendment No. 74 qualifies subsection (6) by stating:
"except where such facilities were available free of charge at midnight on 8th June 1989".
In other words, this is not retrospective legislation. There is still time in the next two-and-a-half hours for the water authorities to impose charges, if they are quick off the mark.
I am being totally serious about this matter. If they do not impose charges in that two-and-a-half hours, where there is free access for recreational purposes, that access should remain free of charge. I think everyone is agreed on that. I hope that the Government will recognise the absurdity of a purely declaratory subsection and will accept Amendment No. 73A. Failing that, I hope they will agree with the point made in Committee which was supported, as I understand it, by the noble Lord, Lord Renton. I further hope that the Government will agree, at the very least, that Amendment No. 74 should be agreed to. I beg to move.
Lord Renton: My Lords, in view of what the noble Lord has said in reminding me of what I said in Committee, I must say that I feel bound to regret the leaving out of subsection (6). But I think that something on the lines of Amendment No. 74 is highly desirable. I suggested an alternative at the Committee stage, and I very much hope that we shall obtain from my noble friend a sympathetic reply indicating either that the Government accept Amendment No. 74 or that they will deal with the matter in some other agreeable way on Third Reading.
Lord McIntosh of Haringey: My Lords, before the noble Lord sits down, I must say that I much respect his views on the framing of legislation. Will he be willing to share his views on a subsection which is of a purely declaratory nature, which is what we were told subsection (6) was?
Lord Renton: My Lords, normally I would agree that purely declaratory legislation should not clutter up the statute book. There is a bit of it here and there in this Bill.
On the other hand, we have a new situation which we have never had before of companies with the dual purpose of providing a public service and doing so by means of making profits. I think that it might not be a bad thing to make it abundantly plain that it is better to keep subsection (6) but to add something to it, either on the lines of Amendment No. 74 or of what I suggested at Committee stage,
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which will ensure that there is no back peddling; in other words, that facilities which the public had enjoyed previously for recreation on the waterways shall be enjoyed in future.
9.30 p.m.
Lord Trafford: My Lords, I share many of the sentiments expressed by my noble friend Lord Renton, with two reservations. The first is a purely practical one, namely that facilities change. What may be appropriate at the present time may not fall into a development which takes place subsequently, after the water companies have taken over. It would concern me if the proposal was put on the face of the Bill in this way or if the subsection was left out; in other words if either of the alternatives in Amendments Nos. 73A or 74 was adopted. It could restrict plans or operations which might be introduced for recreational purposes—I am not talking about profit or the delivery of the service but simply about recreational and other facilities.
The second point is that anything that is inhibiting worries me. The deletion of subsection (6) could be inhibiting. However, I do not disagree totally and I understand the spirit in which the amendment is moved. I am not sure that the wording is right, but I understand the reason for putting in a restriction on imposing a charge where none was made previously. However, it worries me both on the practical grounds of being restrictive of further development and because it might interfere with any other recreational plans, whether made in conjunction with the local authority as suggested in relation to the previous amendment or from the point of view of the plcs themselves.
Lord Hesketh: My Lords, the effect of Amendment No. 73A would be to delete subsection (6) of Clause 8 which makes clear that nothing in the Bill requires recreational facilities to be made available free of charge.
Amendment No. 74 would set in statute a prohibition on the new companies charging for any recreational provision which is free at midnight tonight. As explained in the House in Committee, Clause 8(6), which Amendment No. 73A seeks to delete, is no more than a technical provision which is necessary for the sake of clarification. It holds no hidden threats, no matter how much the noble Lord, Lord McIntosh, may chortle in my direction when I tell him that. It in no way encourages further charging for recreational provision. Its concerns are reflected in the next amendment.
Turning now to Amendment No. 74, this addresses in undesirably rigid form concerns which we believe do not have foundation. Many things in life are not wholly free, and that includes access to water authority land and receational facilities in the sense that there are costs in terms of supervision, management, maintenance and, we believe, in the future in the most important way of all, as my noble friend Lord Trafford pointed out, development of facilities.
At some point someone is going to have to pay for those costs, particularly in the latter example, either

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those who directly enjoy the facilities or the public at large through water charges. The balance which is at present struck is that, where specialised facilities are provided, the water authority normally charges the going rate for the use of them. Elsewhere, where it is simply a matter of access for informal recreation, no charge is made. That is the position which can be expected to obtain after privatisation. As we have said many times before, it is impracticable to levy charges for access to the open countryside, mountains and moorland, and the companies have said that they have no intention or wish to try. So far as reasonable, it will still be open to the companies to recover the general costs of performing their recreational duties from their general charges.
So why is there such alarm and the demand for freedom at midnight, even if there are three and a half hours left, to establish further charges?
Noble Lords: Two and a half hours!
Lord Hesketh: My Lords, I beg to the forgiveness of the House; there are indeed two and a half hours left. We suggest that there is no good purpose. Authorities are already charging the market rate for their specialised facilities and the market would in future stop them going further, for informal recreation charges would be impractical and, as will be clear from what I have said, there is no need for them to be imposed anyway.
But what would be the effect of this amendment? It would merely impose unreasonable limitations on the circumstances in which a company can recover its costs directly from those who benefit. What happens where a company invests to improve a facility at present provided free? What happens if maintenance costs substantially increase? Are the companies to be prevented from concluding that the time has come to attribute costs more closely to those who receive the benefits rather than to their customers at large? I say "those who receive the benefits" because, as we live in an ever more specialised leisured age, facilities will be custom designed for many greater numbers of groups but fewer numbers of people who wish to have specialised facilities.
This amendment takes a sledge-hammer to the proverbial nut. The prospect of companies seeking to charge for access to the open countryside is remote. Seeking to block off even that remote possibility by this amendment will introduce distortion and disadvantages out of proportion to the benefit—if any at all—that it would secure. For those reasons I hope that the proposer, the noble Lord, Lord McIntosh, will not want to press the amendment.
Lord McIntosh of Haringey: My Lords, that is nonsense, and the Minister must know that it is nonsense. So far as concerns Amendment No. 73A, the noble Earl, Lord Caithness, said that the subsection was of a purely declaratory nature which did not alter the effect of the Bill. Those were his words. There should not be in legislation subsections which do not alter the effect of the Bill. Otherwise, one might go around putting in the words "for the
1026
avoidance of doubt" in every other line. It is patently nonsense to have a whole subsection which does not alter the effect of the Bill. I am astonished that the Government should not take the opportunity to put right something that was revealed to be nonsense at the Committee stage.
I believe that there has been some distortion about what Amendment No. 74 says. Of coarse, the noble Lord, Lord Trafford, is correct to say that there can be change, but where there is change such facilities will not have been available at midnight on 8th June 1989. They will be created after 8th June. No one denies that one has to make charges for the use of car parks, landing stages, sometimes for access roads and for all sorts of other facilities, whether on land or water, which are made available for recreational purposes. But, if those charges are not made now, they are presumably not made for a good reason. If they do not exist now, nothing in Amendment No. 74 will stop them being charged for in the future because they will be new facilities which are not covered by the amendment and will not therefore be covered by the Bill.
I am sorry to say that in my opinion the Minister's confidence in the altruism of the water authorities and water companies is sadly misplaced. If a water company has as an objective to maximise its profitability and its rate of return on capital and it finds that it is spending money for recreational purposes and that it has land on which it could charge for recreational use, whether or not such a charge has been made in the past, it will do so. If they think that they are on to a good thing, nothing will stop them from introducing charges for the first time.
Of course, as the Minister says, they cannot in fact charge for access to great tracts of moorland which have never been charged for before because the cost of fencing would be more than the return from the admission charge. But there are many other cases of land or water where they could charge for access but where water authorities have not done so because they have been in the public sector and have had some sense of public service. That sense of public service will no longer be present because the companies will not be in the public sector and the temptation to introduce totally new charges for access to land for recreational and amenity purposes will be not only great but consistent with the objective set out in their own articles of association.
I firmly believe that the Minister ought certainly to think again about Amendment No. 74 even if he is not willing to reconsider Amendment No. 73A. I gladly give way to the noble Lord.
Lord Trafford: My Lords, I am most obliged to the noble Lord. I think he did not quite answer the point that I for one have raised in pointing out that there is a grey area around these matters. Off the top of my head I can give one example. Let us suppose that there is a rather low-grade car park in a field for which no charge is made. It is sited alongside a reservoir where swimming, or whatever, is allowed to develop. If that car park is upgraded and a facility is put alongside, it may be difficult to say whether a charge should be made. It is indeed the same car

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park that it was previously but now the area has been covered with tarmac and is no longer a field.
One moves into a grey area in deciding whether or not a charge should be made even with the amendment to which the noble Lord has just spoken. This is the kind of problem which gives me some concern about such a provision.
Lord McIntosh of Haringey: My Lords, I am certainly not influenced by that example. If money is spent to improve a facility, one is in effect providing a new facility which did not exist, and the amendment would not cover that provision. I cannot believe that there is any difficulty. If we are going into textual analysis at such a level we shall find ourselves spending 40 days rather than four days on Report.
I firmly believe that the Minister ought to come up with something better than he has done so far. After all, at Committee stage the noble Earl, Lord Caithness, said that he would go away and brood upon this issue. I am not quite sure what he meant by "brood" but he must have meant that he saw something there which deserved further consideration. Before I finally make up my mind on this amendment, perhaps I may just ask whether there is any possible response which could lead to an agreed solution rather than to confrontation on this matter.
Lord Hesketh: My Lords, with the leave of the House, I should like to extend the point made by my noble friend Lord Trafford and give an example of more expense which lies in the grey area which I know that the noble Lord, Lord McIntosh, is convinced does not exist. Suppose that a water ski ramp, which cost a considerable sum of money, was erected. It was used by a very small number of people, but the usage increased and it now has to be replaced. At the time that it was built, say 15 years ago, there were very few people using the lake on which it was used but now there is a far greater level of demand. Is it unreasonable that a very small group of individuals should particularly benefit under the proposals made by the noble Lord, Lord McIntosh? I accept the point that he has put to me. I feel that something would be gained if he would understand the point that not only I but also my noble friend Lord Trafford have made that the position is not quite so clear cut as he seems to think.
Lord McIntosh of Haringey: My Lords, I think that the Minister could go an inch or two further than that. First of all, his example does not affect the case at all. A new water ski ramp is a new facility and could be charged for. But if the Minister is saying that the wording of the amendment is defective but that its purpose—namely, to avoid new charges for existing facilities without change—does command further consideration, then I shall very happily withdraw the amendment.
However, I did not hear him say that. In criticising the wording he appeared to be criticising the purpose of the amendment. Is he in fact saying that it is the
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wording of the amendment which is causing him concern?
Lord Hesketh: My Lords, the Government's position is this. The situation is not so black and white as the noble Lord, Lord McIntosh, feels in justifying his amendment. That is why we are resisting it.
Lord McIntosh of Haringey: My Lords, I am disappointed. I thought that it was not a matter for confrontation. I should have thought that we could find a way to achieve what so many of us want. I believe that the wording is sound and that the argument about the grey area has no validity. I am confirmed in that view by the fact that the Minister has failed to criticise the wording. He has simply criticised the objective, which I feel as strongly as ever is important. I shall therefore seek the opinion of the House on the amendment.
9.46 p.m.
On Question, Whether the said amendment (No. 73A) shall be agreed to?
Their Lordships divided: Contents, 12; Not-Contents, 25.

DIVISION NO. 3

CONTENTS

Addington, L. [Teller.]

Hampton, L.

Airedale, L.

McIntosh of Haringey, L.

Birk, B.

Pitt of Hampstead, L.

Cocks of Hartcliffe, L.

Renton, L.

Dean of Beswick, L.

Ross of Newport, L.

Graham of Edmonton, L. [Teller.]

White, B.

NOT-CONTENTS

Ailesbury, M.

Hesketh, L.

Arran, E.

Hooper, B.

Balfour, E.

Knutsford, V.

Belstead, L.

Norrie, L.

Blatch, B.

Portsmouth, E.

Brougham and Vaux, L.

Rochdale, V.

Carnock, L.

Sanderson of Bowden, L.

Craigmyle, L.

Skelmersdale, L.

Davidson, V. [Teller.]

Trafford, L.

Faithfull, B.

Trefgarne, L.

Fraser of Carmyllie, L.

Trumpington, B.

Gardner of Parkes, B.

Wynford, L.

Henley, L. [Teller.]

Resolved in the negative, and amendment disagreed to accordingly.
9.54 p.m.
[Amendment No. 74 not moved.]
Lord Hesketh Lord Hesketh moved Amendment No. 75:
Page 9, line 5, at end insert ("; and references in this section to a water undertaker or sewerage undertaker or to the functions of such an undertaker shall be construed as if those functions included the management, by the company holding an appointment as such an undertaker, of any land for the time being held by that company for any purpose whatever (whether connected with the carrying out of the functions of a water undertaker or sewerage undertaker or not).").
On Question, amendment agreed to.
[Amendment No. 76 not moved.]
Lord Ross of Newport Lord Ross of Newport moved Amendment No. 77:
After Clause 8, insert the following new clause:
("Rights of access and recreation.
.—(1) The public shall be entitled at all times to enjoy free of charge a right of access and recreation on any land held by the Authority or a water undertaker or a sewerage undertaker that does not form part of their operational land or is within the curtilage of a dwelling house, subject to any byelaws that may be made to regulate the exercise of that right.
(2) Nothing in subsection (1) above shall prevent the Authority or a water undertaker or sewerage undertaker from making a reasonable charge for the use of landing stages, jetties or car parking facilities that they have provided or for the maintenance of which they are responsible.

(3) For the purposes of this section—

(a) 'operational land' shall have the same meaning as that provided in section 222 of the Town and Country Planning Act 1971;

(b) where land or an interest in land subject to the rights conferred by this section is transferred to another person that person shall be treated as the Authority or a water undertaker or sewerage undertaker.").

The noble Lord said: My Lords, I return to the subject upon which the House has just voted: namely, the question of public rights of access. We do not apologise to the Minister for the fact that this is the same new clause we tabled in Committee. We had a slight barney with him about the reply given on that occasion regarding the definition of "operational land".
I believe that Clause 8(6) invites future plcs to make charges and I ask the Minister to reconsider whether the subsection should stay in the Bill. The amendment is an attempt to ensure that free right of access across moorland and so forth remains and is written into the Bill because it comes within the definition of "operational land".
In Committee the Minister gave a truncated reply in which he quoted the definition of "operational land" that appears in Section 222 of the Town and Country Planning Act 1971. However, he gave only half of the definition and that is why we have raised the matter again tonight. On 8th May, the Minister said:
"The definition includes within operational land not only land being used for carrying on the undertaking but also land in which an interest is held for that purpose".—[Official Report, 8/5/89; col. 495.]
The Minister went on to justify that as meaning that catchment lands would be excluded from the scope of the provision. Catchment lands are the moorland and heathlands around the area set aside for catching the water. However, he gave the Committee only half the definition contained in Section 222. The section continues—I shall say this as carefully as I can—that such land must not be land,
"which, in respect of its nature and situation, is comparable rather with land in general than with land which is used, or in which interests are held, for the purpose of the carrying on of the statutory undertakings".
That is a bit of a mouthful. I have read it hundreds of times. I am told that it has been interpreted by the courts. They have said that whether land is comparable with land in general or land on which an undertaking is carried out is a question of fact but that catchment lands are far more likely to be considered to be comparable with land in general,
1030
such as rough pasture, woodland, etc., than land used for the purpose of carrying on the undertaking of sewage treatment plants, pumping stations, etc. That is the argument.
I return to the argument which has taken place over the past few minutes. We are trying to find a way in which we can ensure that access to open land now available to the general public is not suddenly fenced and charged for. Everyone accepts that recreational facilities, the provision of jetties, water skiing and so forth should be charged for. However, many ramblers and others are concerned that a water plc owning land running along a major footpath will suddenly put up fences and start to charge because of the cost of maintaining a footpath. It would be a backward step if that were to happen. I live along Offa's Dyke which is widely used and we know that other footpaths are being over-used and that damage is being caused.
In Committee we tried to say that the situation could be covered under the definition of "operational land". We believe that the answer which the Minister gave on that occasion was truncated and not correct and we ask him to think again. I beg to move.
Lord Renton: My Lords, I do not see how my noble friend can accept the amendment. Its purposes are fairly laudable but it would cause a tremendous breach of the law of trespass of England and Wales. It is sweeping. It goes much too far. Even the Ramblers' Association, with its desire to have a great deal of access to land for the purpose of following footpaths and so on, does not say that the law of trespass should be completely ignored where there is no right of way at all. Quite frankly, I do not believe that this is acceptable.
10 p.m.
The Earl of Balfour: My Lords, I totally disapprove of this amendment because on my reading of it it would place a farmer who is renting land in an almost impossible position. I must draw your Lordships' attention to the third last line, which slates:
"transferred to another person".
So far as I can see in reading this wording very carefully, that would allow people to have a football match in the middle of a wheatfield if they felt like it. I could not disagree more with this amendment.
Lord Hesketh: My Lords, we have already today considered public access to water industry land and the House may feel that there is little more now that needs to be said. However, my noble friends Lord Renton and Lord Balfour pointed out that there is quite a lot more which can be said on this amendment. For my part, I will not rehearse arguments which we have already extensively pursued but will concentrate on only one critical feature to which, in relation to this amendment, we have already referred.

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This amendment would provide for the public access, free of charge, to all the undertaker's land which is neither operational nor a house or garden. The essential feature is the qualification that the rights are to apply only in respect of non-operational land, as defined by Section 222 of the Town and Country Planning Act 1971. I must reiterate to the House that in our view the use of that definition has the effect of narrowing the scope of the right provided by this amendment so greatly as to render it of almost no effect.
The definition includes within operational land not only land being used for carrying on the undertaking but also land in which an interest is held for that purpose. The effect of this is that probably all the catchment lands, the most relevant land from the point of view of public access, would fall outside the scope of the provision. Indeed, it is arguable that the right would apply no more widely than to the small amount of surplus land on the Land Register.
No doubt that is not what the proposers intended, but it is the reality. That precisely illustrates one of the reasons why the Government prefer to rely on flexible and discretionary arrangements, backed by general duties, than to draw tight legal boundaries in circumstances where this is fraught with difficulty.
However, further to that, my noble friend Lord Renton pointed out very clearly that this goes to the heart of the law of trespass and that is a matter which cannot be discounted lightly. My noble friend Lord Balfour gave the illuminating example of a game of football being played in the middle of a field of standing wheat. We cannot accept this amendment and I hope that the noble Lord, Lord Ross of Newport, will feel fit to withdraw it.
Lord Ross of Newport: My Lords, I am certainly not suggesting that we start playing football in a field of wheat. I used to farm myself and I should not have been very happy with that situation. I did not read that into this amendment, but other people have done so. The noble Lord, Lord Renton, shot me down on this amendment but he supported my last amendment. I noted that with pleasure and delight. I think that there is something which the Government should consider. Although I accept immediately that my amendment is defective, there is something to be looked at again and something should be done before we complete Third Reading. I hope the Government will do that. There have been pleas from both sides of the House on that point. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Environmental duties with respect to sites of special interest]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 78:
Page 9, line 32, after ("body") insert ("or to the National Park Authority or Broads Authority").
The noble Lord said: My Lords, I should like to speak also to Amendment No. 79. We are now on
1032
Clause 9, which deals with environmental duties with regard to sites of special interest. These amendments are concerned particularly with the issue of damage to sites of special interest. Noble Lords will be aware that many of these sites, and many of the sites in the ownership of the water authorities, are extremely vulnerable to damage. Some of it may be perfectly well-meaning damage arising because too many people want to have access to the sites, and some of it may be less well-meaning damage by the owners of the sites who put in inappropriate development, cause damage by neglect or in various ways damage the special interest of the sites.
In Committee the Government moved an amendment to produce a notification procedure by the national park authority or the Broads authority for sites of special beauty. The amendment stated that the undertaker would be required to consult them before undertaking works. We welcomed that amendment. It was an improvement. However, it is still defective in one particular respect. The undertaker—that is, the owner of the site—has the decision on what work is damaging, and that decision is final. Therefore, we propose in these amendments that the national park authority or the Broads authority should have the right to trigger the consultation by saying that the works proposed or carried out are damaging. In order that we do not produce deadlock by these amendments, if there is no agreement about what is damaging then the matter can be referred to the Secretary of State for adjudication.
As I have said, these are sites where the habitats of flora and fauna may be at risk; archaeological remains may be at risk, and some of the damage may be caused, even if unwittingly, by the undertakers. It is only right that, if that damage is identified by the national park authority or the Broads authority and there is no agreement, there should be a mechanism whereby the consultation procedure and the correction procedure is put in hand and it should not be dependent simply on the undertakers. I hope that the Government feel that this continues the worthy line of thought that they had in their Amendment No. 130 in Committee, that it complements that amendment, that it makes the amendment more effective and that it will be acceptable to them and to the House. I beg to move.
Lord Hesketh: My Lords, Clause 9 as presently drafted requires "relevant bodies"—that is the National Rivers Authority, water and sewerage undertakers, and internal drainage boards—to consult the Nature Conservancy Council, or the national park or Broads authorities, before doing anything which the relevant bodies think might cause damage to sites notified to them by the council or the authorities as being of environmental importance.
Amendment No. 78 would require the relevant bodies to consult the authorities before doing anything which they consider might cause damage to environmentally sensitive sites. The effect of this amendment would be to require the relevant bodies to inform the park and Broads authorities before doing anything at all in, or near, a sensitive site, so

1033
that the authorities could then decide for themselves whether they should be consulted. Clearly this amendment could result in the authorities being deluged with information about the activities of the relevant bodies; and equally clearly much of this information would probably be of no interest to the authorities.
However, this amendment should be rejected not only because it would result in the time and resources of the relevant bodies and the authorities being wasted, but also because experience has shown that the provisions in Clause 9 as drafted will work effectively and efficiently. Under Section 22 of the Water Act 1973 the water authorities only have to consult the Nature Conservancy Council about works and operations which the water authorities consider might damage environmentally important sites. This system has proved successful in practice. I may perhaps remind the House here that the 1973 Act has nothing in it about consulting the park and Broads authorities. This is of course something provided for the first time by this clause.
Amendment No. 79 is designed to allow the park and Broads authorities to request the Secretary of State to prohibit the relevant bodies from doing things which the authorities feel might damage environmentally sensitive areas and sites. Clearly this amendment, if accepted, would need to be supplemented by other amendments specifying time-limits within which the authorities must refer matters to the Secretary of State and within which he must reach a decision etc. But there is no reason to accept this amendment.
In carrying out their functions relevant bodies are governed by the conservation duty in Clause 8. They therefore cannot ride roughshod over conservation interests. They will be fettered by their conservation duty in exactly the same way as the water authorities are fettered by their conservation duty under the 1973 Act, and just as there has never been any need for something along the lines of this amendment to regulate the water authorities, so too there is no need for it in respect of the relevant bodies. That is why we resist these amendments.
Lord McIntosh of Haringey: My Lords, I find it curious that the Minister should be so confident of his arguments in support that he feels it possible to give such an uncompromising response. I did not move the amendment in that way but in the spirit of the Government's own amendment at Committee stage. If the Minister had been right and the conservation duties under Clause 8 had been of sufficient power to make these provisions in Clause 9 unnecessary, Amendment No. 130 itself would have been unnecessary. The fact that the Government brought forward the amendment and provided for this notification procedure is clear evidence that they recognise that the procedure is not sufficient. They have provided for a notification procedure which is an improvement on the previous provisions of the Bill.
It is irrational for the Government to provide this notification procedure and then to deny the power to the national park authority or Broads authority, which are, after all, the bodies most expert in
1034
assessing the potential damage to sites of special interest, and to leave the ultimate decision to the undertaker. I accept that if Amendment No. 79 is carried there may well be further amendments requiring time limits and for the Secretary of State to give his decision in one way or another. On that basis and that basis alone, I shall not press this amendment.
I feel that the Minister, on reflection and having read the debate, may feel that the amendment moved at Report stage was inadequate and that the matter deserves further consideration. Perhaps he may also reflect and consider that the point made is not a trivial one. I am certainly not impressed with the argument that either the authorities or the Secretary of State are likely to be deluged with unnecessary and time-wasting complaints. Nothing in these amendments would require the national park authority or Broads authority to pursue complaints that they did not feel were worth while. The amendments provide that the experts—namely, the national park authority and the Broads authority—should have the power to trigger the notification procedure. For the life of me I cannot see why the Government are being so obstinate in this matter. Because of the technical defects in the amendment, but only for that reason, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 78A and 79 not moved.]
Lord Addington Lord Addington moved Amendment No. 80:
Page 9, line 38, at end insert—
("(3A) Where the Nature Conservancy Council objects to any works, operations or activities of which they are notified pursuant to subsection (3) above, the relevant body shall be deemed to be the owner or occupier of the land for the purposes of section 28(5) of the Wildlife and Countryside Act 1981 and paragraph (a) of subsection (8) of that section (exemption for operations authorised by planning permission) shall not apply in such a case.").
The noble Lord said: My Lords, the reason for this amendment is to take out exemption for works authorised by planning permission. Many operations by undertakers or other bodies will be authorised by the general development order, given the potential damage caused by these works to SSSIs.
The amendment seeks to ensure that SSSIs are not damaged by planning permission work. Some damage is caused by works carried out by water authorities. If the Government are really committed to the green approach they will approve the amendment. The original amendment moved in Committee was objected to on the grounds that it did not fit into the Wildlife and Countryside Act 1981. This amendment is recast to take account of that system. It would ensure that works by the relevant bodies in an SSSI would have to follow the same approval system as that of any owner or occupier of the land. I beg to move.
10.15 p.m.
Lord Renton: My Lords, this is an extraordinarily unusual amendment. It would introduce a legal fiction that the relevant bodies—the water or sewerage undertakers—shall be deemed to be the owner or the occupier of land simply by the Nature

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Conservancy Council lodging an objection to works of which it has been notified, whether or not the land was owned by the water or sewerage undertaker. We should be very careful at all times about legal fictions. They are not good things. They can have misleading results and interfere unfairly with people's rights. I hope that my noble friends on the Front Bench will resist the amendment.
Lord Hesketh: My Lords, the effect of the amendment would be that if the Nature Conservancy Council objected to an operation which a relevant body—the NRA, an undertaker or a drainage board—planned to carry out and if the reason for the council's objection was that the operation would harm a site of special scientific interest, the relevant body, if it carried out that operation, would be guilty of an offence under Section 28 of the Wildlife and Countryside Act 1981 unless it had given the council four months' notice of its intention to go ahead with the operation and the notice had expired, or unless some other condition had been fulfilled; for example, the council had given its written consent to the operation or the operation had been executed immediately because of an emergency.
This amendment would lay a relevant body open to a £1,000 fine if it failed to give the NCC four months' notice before carrying out operations to which the council had objected because of their effect on an SSSI. If the relevant body owned or occupied the site concerned this amendment would do nothing at all because the offence provision in Section 48 of the Wildlife and Countryside Act automatically applies to all owners and occupiers.
The requirement contained in this clause to consult the council is modelled on that in Section 22 of the Water Act 1973, and just as Section 22 is not supplemented by any offence provision so too there is no need for an offence provision here. This is because the relevant bodies will, like the water authorities, have a statutory duty to further conservation. This duty will ensure that their consultations with the council are not meaningless. If the council objects to an operation, and the relevant body concerned goes ahead regardless, the body may well be in breach of its conservation duty. If that happens the Secretary of State will be entitled to take action against the body and his powers go far beyond the threat of a £1,000 fine and extend to the full enforcement powers of the Bill.
I am grateful for the intervention of my noble friend Lord Renton, who is unhappy about authorities being deemed on someone else's property. For the reasons I have given and for the reason given by my noble friend Lord Renton I hope that the noble Lord, Lord Addington, will consider it possible to withdraw his amendment.
Lord Addington: My Lords, having listened to what the Minister and the noble Lord, Lord Renton, have said, I have come to the conclusion that the amendment is not as effective as it should have been and I am therefore prepared to withdraw it. However, the issue behind it of giving greater protection to SSSIs is one that the Government
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should consider very seriously. I hope that all the good intentions will be carried through. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 [Codes of practice with respect to environmental and recreational duties]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 81:
Page 10, line 4, leave out from beginning to ("approve") in line 5 and insert ("The relevant Minister may by order").
The noble Lord said: My Lords, in moving this amendment I should like to speak also to Amendments Nos. 82, 83, 85, 87, 88, 91 and 93. However, I must say that the issue is nothing like as complex or laborious as it may seem from the number of amendments concerned. This amendment has been tabled following exchanges in Committee on Amendment No. 136 when noble Lords on all sides of the Chamber expressed support for the idea that codes of practice, which are the subject of Clause 10 with which we are now concerned, should apply to the National Rivers Authority as well as to the undertakers.
The idea received support in Committee from the noble Viscount, Lord Caldecote, and also—I hope I have the correct column number for him—from the noble Lord, Lord Renton, at col. 525 on 8th May. I am sorry to keep on forcing the noble Lord to refer to his copy of Hansard, but quite often he says helpful things and I cannot resist using them when he does so.
The amendments all have the same effect. They would all make the code of practice with respect to environmental and recreational duties apply to the National Rivers Authority as well as to the undertakers. It is a simple issue. It is not one on which I believe there ought to be a great deal of political controversy. I think that the Government in the many moves which they have made as regards Part I of the Bill have indicated their sympathy with the extension of codes of practice. I hope therefore that they will feel that this extension is not one with which they could quarrel and that they may therefore be able to support the amendments. I beg to move.
The Earl of Arran: My Lords, we accept the logic of the noble Lord's amendment. The functions of the bodies are closely related and many of the practices relevant to one body will be relevant to the others.
In Committee we took the view, however, that amendment was not necessary because the code could be applied to the NRA by directions. We now consider this to be a less satisfactory approach than bringing the NRA within Clause 10 in the way the noble Lord proposes. In the circumstances, therefore, we are ready to give his proposal our full support.
Lord McIntosh of Haringey: My Lords, I am most grateful to the noble Earl. I am, however, a little startled to find my wording and my intentions approved. Perhaps I may ask him before I finally proceed on the matter whether he will support the other amendments to which I spoke.
The Earl of Arran: The answer is yes.
Lord McIntosh of Haringey: I am most grateful. On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 82:
Page 10, line 5, leave out ("Secretary of State") and insert ("relevant Minister").
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 83:
Page 10, line 7, after ("guidance") insert ("to the Authority or").
On Question, amendment agreed to.
Lord Norrie Lord Norrie moved Amendment No. 84:
Page 10, line 7, leave out ("water undertakers and sewerage undertakers") and insert ("the relevant bodies").
The noble Lord said: My Lords, the purpose of Amendments Nos. 84 and 86 is to clarify the scope of the code or codes of practice. While the Secretary of State has power under Clause 145 to give directions to the NRA, including codes of practice, it is odd that this provision is not mentioned in the clause specifically dealing with codes of practice.
Clause 10 clearly lays down the powers to provide codes of practice for the private water companies. It would also help if the NRA was included in that provision since the Government have repeatedly stated that it is their intention to provide a code of practice for the NRA.
The amendments are purely for clarification and emphasise a point upon which there was considerable agreement on all sides of the Committee. I understand the Government's reasons for saying that the powers already exist, but a clause that deals specifically with codes of practice should mention relevant bodies and not just water and sewerage undertakers; otherwise it is misleading as to whether the codes of practice are intended for all the relevant bodies. While there may be such an intention, it is important that in a long and complex Bill the detail is clearly identifiable. That is what the amendments seek to achieve. I beg to move.
Lord Renton: My Lords, I wish to support the amendment moved by my noble friend Lord Norrie. This is a Bill in which there is a great deal of overlapping between different parts. If we are going to overlap, it is best that we overlap consistently. My noble friend's amendments would enable that to happen.
The Earl of Arran: My Lords, in response to the previous amendment I made it clear that the Government fully accepted the arguments for extending the scope of the code to the NRA. This further amendment would seek to extend it a little further to cover all relevant bodies; that is, taking in the internal drainage boards.
I am bound to accept that the argument that we have accepted in the case of the NRA—that the code
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should apply in a simple direct manner subject to the duties—has weight here also. We can see some merit in the amendment on that basis, but we regret that we are unable to accept the amendment for one fundamental reason. IDBs are self-governing statutory bodies, but the nature of Clause 10 and the relevance of the code of practice relies upon the existence of powers of regulation by relevant Ministers over the bodies in question. Those are available in the case of the companies and the NRA, but they are not similarly available in the case of IDBs.
We cannot therefore accommodate the amendment within Clause 10, but, having said that, IDBs are subject to the Clause 8 duties and must perform them. They also support and voluntarily apply the current conservation guidelines for drainage authorities which are substantially embodied in the drainage section of the code. In those circumstances, nothing is in practice lost by not bringing them directly within the terms of Clause 10—a course which, for the reasons that I have explained, we do not believe is open. In the circumstances, I hope that the proposers will not feel it necessary to press the amendment.
Lord Norrie: My Lords, I thank my noble friend for his reply. He has said a great deal which needs to be digested. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 85:
Page 10, line 10, after ("by") insert ("the Authority or").
On Question, amendment agreed to.
[Amendment No. 86 not moved.]
Baroness Birk Baroness Birk moved Amendment No. 86A:
Page 10, line 13, at end insert—
("( ) The relevant bodies shall—

(a) draw up and publish policies and procedures for fulfilling their duties under sections 8 and 9 above and for implementing any Code of Practice as for the time being approved under sections 8, 9 and 10 of this Act.

(b) publish a description of the measures taken during the previous year to fulfil their duties under sections 8, 9 and 10 of this Act.

( ) It shall be the duty of the Secretary of State to review the performance of the relevant bodies in fulfilling their duties under sections 8, 9 and 10 of this Act at intervals not greater than five years.").
The noble Baroness said: My Lords, the object of the amendment is to ensure that all relevant bodies are publicly accountable when fulfilling their duties under Clause 8, and to help ensure that those duties are enforced. We have considered the points which were raised in Committee in relation to the amendment that we then moved and the points made in reply by the noble Lord, Lord Hesketh. Its wording has therefore been altered. The noble Lord acknowledged that that was an important consideration (Official Report, 8th May 1989, cols. 528 and 529) and that it was important that the

1039
body should report publicly on its performance. However, in his view there were two objections to the amendment. The first was that,
"While it may be appropriate to require reporting on performance of the duties, it is not similarly appropriate in relation to the practices recommended in the code".
I think that this objection rather misunderstood the amendment. It requires publication of policies and procedures in relation to the code, but not reporting of performance in relation to it. As the noble Lord, Lord Hesketh, said, the code is wide ranging; hence it is desirable that the bodies explain how they are to implement it. The reporting of performance is, as it was in the original amendment, entirely related to the primary duties set out in Clause 8.
The second objection was that it was inappropriate to require a special annual report concerning performance of these duties when any number of other such reports might be equally desirable on other subjects. We accept much of what was said in this regard and have therefore reworded the amendment to require the bodies to describe their performance in an annual publication. This, we believe, gives the flexibility of choice in the vehicle of publication which the Minister wanted, while still requiring a public statement.
I believe that the amendment overcomes the Government's objections to the earlier one. The Government have sought to incorporate in the code of practice, not in the Bill, an important matter of principle relating to the mechanics of public accountability of the new bodies. This principle should be enshrined in statute and not just in the code.
Policies and procedures for fulfilling environmental duties and implementing the code of practice will therefore be published. The performance of those duties will be published annually so that it can be measured against the published intentions of the bodies. Their performance should be regularly reviewed by the Secretary of State, who is answerable to Parliament for enforcing the duties. By this means, Parliament and the public are assured of a clear mechanism by which the performance of these duties can be scrutinised. I beg to move.
10.30 p.m.
The Earl of Arran: My Lords, as we acknowledged in Committee, this amendment raises an important issue and draws to our attention an important consideration. As we say in the code of practice, it is important that the bodies should report regularly and publicly on their performance in these areas. The question is whether the particular statutory arrangements proposed here are appropriate. We do not believe that they are.
We have, first of all, one specific reservation. While it may be appropriate to require reporting on performance of the duties, it is not similarly appropriate in relation to the practices recommended in the code. The code gives a wide range of detailed advice and guidance and it is
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inherently difficult to report on performance of advice and guidance because of its essential character. This therefore is one element on which we dissent from the proposal.
More generally, I doubt whether statutory reporting, prescribed in legislation, is appropriate. The duties in Clauses 8 and 9 inform and condition every aspect of the performance of the undertakers' functions, and it is inherently difficult to report on these features independently of any annual report on the performance of the functions themselves. The conclusion to which we are therefore drawn is that a statutory requirement in these terms could prove unduly rigid and inappropriate.
Furthermore, the amendments raise the question why, if there is to be a separate statutory reporting requirement in respect of these duties, there is not one also in respect of all the other statutory duties imposed on the companies in the Bill. But while for these reasons we doubt that the amendment is the right course to follow, we recognise that this is a matter which is at present inadequately covered in the draft code. We are looking again at that, and we shall want to consider whether there are features of this amendment which we could suitably incorporate in the revision of the code.
To that extent, we will be happy to take on board the underlying point of this amendment. But I am bound to say that we believe that guidance in the code is the right mechanism to employ. We believe the bodies concerned should be allowed flexibility as to the form, scope and timing of any reporting. So we recognise the importance of the points which the noble Baroness, Lady Birk, makes, and we will endeavour so far as is reasonably practicable, through the code, to meet them. But for the reasons I have given, we do not believe that adopting the amendment as it stands would be the right way to proceed.
I hope therefore that, in view of what I have said, the noble Baroness will accept that her concerns are already suitably covered and that she will agree to withdraw this amendment.
Baroness Birk: My Lords, I thank the Minister for that reply. However, I am a little perplexed because when his noble friend replied to a somewhat similar amendment in Committee—I explained how it differed from this amendment, and how I felt this amendment was better—the words used on that occasion were exactly the same as those used today. The words used were:
"To that extent we will be happy to take on board the underlying point of this amendment. But I am bound to say that we believe that guidance in the code is the right mechanism to employ. We believe the bodies concerned should be allowed greater flexibility … We recognise that this is a fine balance of judgment, and I hope that on reflection".—[Official Report, 8/5/89; col. 529.]
In other words, we do not seem to have moved an inch since the Committee stage. We have not been told that, following the amendment moved in Committee, the Government have now decided that they will incorporate A, B, C or D in the code. We have not been given anything harder on which to deliberate. We are still given words that are paved

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with good intentions. However, those good intentions seem to be stuck in a rut too, because even the wording is still the same. The Government have not even replied to us in a slightly different way. At least my amendment is a different amendment from the one which my noble friend Lord Graham of Edmonton moved on 8th May. It is becoming rather boring to discuss this if we are always to receive the same answer.
The point is that we want to ensure that adequate monitoring will take place. We believe it should be incorporated, or certainly mentioned, in the statute. We also want to see a substantial provision in the code of practice. At the moment there is nothing at all. I shall be interested to hear the Minister explain how the Government are going to proceed next; or is the record going to go on and on and round and round?
The Earl of Arran: My Lords, we may have used the same words. However, that shows that we have not changed our thinking on this. The point is that the code at the present moment is still being re-examined and revised.
Lord Tordoff: My Lords, will the noble Earl beg the leave of the House?
The Earl of Arran: My Lords, I apologise to the noble Lord, Lord Tordoff. I should indeed have sought the leave of the House, and I now do so. I shall just repeat that the code of practice is being re-examined and revised. As I said when responding to the amendment, the worries and concerns that the noble Baroness has expressed are being taken on board.
Baroness Birk: My Lords, the provision has now been taken on board twice, so perhaps at a later stage of the Bill we will hear what is being done about this matter, or hear what the Government propose to put in the code. Once the Bill is passed and becomes law, it will be very difficult to do anything at all about this. We must obtain something more than a vague promise.
The Earl of Arran: My Lords, with the leave of the House, I am not in a position to give the precise date by which the revision of the code will be completed. However, I am in a position to say that the code is currently being re-examined and revised, and many of the points that have been made this evening have been taken on board.
Baroness Birk: My Lords, in that case I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 87:
Page 10, line 17, leave out ("shall") and insert ("and the Minister shall each be under a duty to").
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 88:
Page 10, line 19, leave out ("under the following provisions of this Act in relation to") and insert ("by virtue of this Act in relation to the Authority or").
On Question, amendment agreed to.
Lord Greenway Lord Greenway moved Amendment No. 89:
Page 10, line 21, at end insert—
("( ) The power of the Secretary of State to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: My Lords, in Committee I moved an amendment designed to strengthen the important environmental code of practice by making it subject to parliamentary scrutiny by means of the negative resolution procedure. At the time I received support from all sides of the House although some noble Lords, including the noble Lord, Lord Ross of Newport, favoured the affirmative resolution. Reading between the lines, I believe that the noble Earl, Lord Caithness, indicated that that would have been too time-consuming.
The noble Earl said, however, that he would look at the matter again since when he has been good enough to write to me. I now bring forward this new amendment designed to secure the same end, albeit with slightly different wording. I hope that it finds favour with the Government. I beg to move.
The Earl of Arran: My Lords, if it is indeed the feeling of your Lordships that negative resolution would, as the noble Lord, Lord Greenway, suggests, be appropriate it will receive our full support.
Lord Greenway: My Lords, I am most grateful for this concession, which I know will be very much welcomed by the boating interests. I believe that it will help to give the code greater authority, and I commend the amendment to the House.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 90:
Page 10, line 21, at end insert—
("(2A) Any code of practice made or approved under this section shall make provision for such procedures relating to consultation between relevant bodies, as referred to in section 8(7) above, and such bodies including conservation and recreation organisations and local authorities as the Secretary of State considers appropriate, and the code shall specify the circumstances in relation to which such procedures are to be undertaken.").
The noble Lord said: My Lords, the purpose of the amendment is to give responsible groups and local authorities an acknowledged statutory right to be consulted on matters which affect the local environment and recreational issues. As the House is aware, the code of practice acknowledges that in the development of a management plan and in the identification of good practice consultation is essential. However, it is less than specific in identifying the organisations with which consultations should take place. Because of the

1043
planning role of local authorities and since they need to consider how the lives of local residents will be affected by land use changes, the local authorities should be included in the list of consultees.
I simply remind the Minister that the Government agreed, at col. 491 of Hansard for 8th May, to look at whether the drafting of the code of practice could be amended to reflect a duty to consult on the carrying out of Clause 8 duties by undertakers. This amendment is tabled in order that we can hear from the Minister what has happened since the previous stage. I beg to move.
The Earl of Arran: My Lords, we recognise that consultation is an essential element of the full discharge of the relevant bodies' environmental duties. The draft code already makes this clear and states that regular liaison and consultation should be established. The code already meets the concern of the first part of the amendment. As for the circumstances in which the consultation should take place, this is precisely what the main body of the code establishes.
The code continually makes reference to the undertakers and the NRA consulting with appropriate conservation and recreation bodies in the performance of their various functions and operations which are considered by the code. Clearly, then, this amendment is unnecessary.
However, there is possibly room for strengthening the wording of this aspect of the code and detailing in full the organisations which the relevant bodies should consult. We are at present considering this as we begin to finalise the text following our own consultation with the many conservation and recreation bodies on the text of the draft code. I can offer the noble Lord our assurance that his concerns expressed in this amendment will be fully met in the code. I trust that on that basis he will not wish to press the amendment.
10.45 p.m.
Lord Graham of Edmonton: My Lords, that is the best offer that I shall get tonight. I realise that the hour is late. I am grateful for small mercies and for the Minister's words. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 91:
Page 10, line 23, leave out ("Secretary of State") and insert ("relevant Minister").
On Question, amendment agreed to.
The Earl of Arran The Earl of Arran moved Amendment No. 92:
Page 10, line 26, after ("Council") insert (", the Sports Council for Wales").
The noble Earl said: My Lords, I move this amendment on behalf of my noble friend Lord Caithness. Its purpose is to add the Sports Council for Wales to the list of consultees which the Secretary of State must consult before making an order under Clause 10.
At the Committee stage of the Bill the Sports Council was added to the list of consultees because of its key role in sporting matters. The Sports Council for Wales is an independent corporate body which has powers similar to the powers of the Sports Council but in relation to Wales. One of its functions is to advise government departments on matters relating to its powers. The codes that may be approved under Clause 10 will be relevant to those powers. I beg to move.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 93:
Page 10, line 28, at end insert—

("( ) In this section "the relevant Minister" means—

(a) in relation to the Authority, the Secretary of State or the Minister; and

(b) in relation to a water undertaker or sewerage undertaker, the Secretary of State.").

On Question, amendment agreed to.
Clause 11 [Appointment of Undertakers]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 93A:
Page 10, line 36, after ("may") insert ("in the first instance").
The noble Lord said: My Lords, in moving this amendment, I shall also speak to Amendment No. 93B. With this amendment we move to Part II of the Bill, after nearly two days of Report stage dealing with fewer than 10 pages, although including a certain amount of schedule material.
This, like a number of other amendments that I have proposed this evening, follows discussion at the Committee stage in which the noble Lord, Lord Renton, participated. I am sorry to see that he is no longer with us. I have no doubt that the Government will be sorry to see that. However, at the Committee stage on Amendment No. 148ZA, he was active in pointing out that there was confusion in the drafting of Clause 11(1). I remind the House that it is concerned with the appointment of undertakers.
It was not sufficiently clear from the drafting of Clause 11(1) that the Secretary of State should make the initial appointment and that the director should make subsequent appointments and variations in line with a general authorisation given by the Secretary of State. In other words, what is still defective in Clause 11(1) is the fact that it does not square with the provisions of Clause 11(4). In drafting the two amendments we have taken the words of the noble Lord, Lord Renton, at col. 565 of Hansard. I hope that the Government will feel that this is a helpful drafting amendment and that they will be able to recommend that the House should agree to it. I beg to move.
Lord Hesketh: My Lords, Clause 11 provides for the appointment of undertakers to be made by the Secretary of State, or with his consent, or in accordance with a general authorisation given by the Secretary of State to the director. The intention of these amendments is to set out in subsection (1) that

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the Secretary of State is to be responsible for making the initial appointments of water and sewerage undertakers and that subsequent appointments must be made by the director.
The wording of the proposed amendment draws closely upon the wording suggested by my noble friend Lord Renton which my noble friend Lord Caithness undertook to take away and draw to the attention of our advisers.
The wording of the clause as it stands has been carefully reconsidered and I can assure your Lordships that it allows the Government to achieve their objective; namely, that the Secretary of State will make the first appointments and will then authorise the director to make subsequent appointments.
I think it may be helpful to your Lordships to mention that the clause distinguishes between power and duty. Subsection (1) provides the power for the Secretary of State to make appointments or to consent to the director making appointments and is subject to the provisions which follow it in that clause. Subsection (4) provides that it is the duty of the Secretary of State to make the initial appointments of the statutory water companies as water undertakers for their areas and of the successor companies as water and sewerage undertakers.
Subsection (4) also makes it the Secretary of State's duty to secure that there are companies holding appointments at all times for all of England and Wales. The amendment would have the effect of precluding the Secretary of State from making further appointments. Our intention is that future appointments will be made by the director because in our view and, if I remember correctly, that of my noble friend Lord Renton we consider that he will be the best qualified person. But it would be inappropriate to confine the Secretary of State's power completely in that way. There will always be a Secretary of State able to make appointments but there may be circumstances when there is no director general.
I hope this explanation will persuade the noble Lord to withdraw his amendment.
Lord McIntosh of Haringey: My Lords, I thank the Minister for that reply. Certainly I should not wish to do anything which created a new conflict between subsections (1) and (4). I shall have to consider carefully the effect of the distinction that he makes (which is not new to us) between the duty on the Secretary of State and the power of the Secretary of State, and think about its effect on the drafting of the amendment. In anticipation of that I think it best that I should ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 93B and 93C not moved.]
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 93D:
Page 11, line 51, at end insert—
("(5A) Any Code of Practice relating to an undertaker appointed under this section shall be included as a condition in the instrument of appointment of that undertaker, and the
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inclusion of such a code in any instrument of appointment shall be by Order of the Secretary of State subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: With this amendment we are pushing at a door which to some extent was opened by the Government at Committee stage. It will be recalled that we argued that so far as possible all the codes of practice incumbent on the undertakers should be given statutory force, and in response to that the Government agreed that the: disconnections code and the leakages code should be included in the licence awarded to the undertakers.
First of all we should like to take this opportunity of seeking an assurance from the Government not only that the leakages code and the disconnections code will be in the licences but also that as much as possible of the general code and the environmental code will be in them. It would be helpful to have an indication of where the drafting of the licences stands in that respect.
We are also proposing that there should be a parliamentary process whereby the codes are formally included in the instrument of appointment by means of a negative resolution. I am conscious that there may not be many precedents for a procedure of that kind. It is not common for instruments of appointment to be subject to parliamentary procedures, even the negative resolution procedure that we now propose. However, for two reasons I want to push at this door which has been partly opened.
First, can the Minister tell the House how far he anticipates that the Government may continue to be involved in the codes of practice and what opportunity there may be for Parliament to consider whether there should be changes in codes of practice over a period of time? After all, codes of practice and the conditions in which they operate change and it is appropriate that they should be varied. I should not wish to propose anything which made it difficult to change them but I do wish to propose that Parliament should have an opportunity to consider major changes at suitable intervals.
My second question seeks to establish the process by which the change might be undertaken. For example, there might be disagreement between the parties concerned about an amendment to the code. Who is the ultimate court of appeal in this matter? How shall we ensure that, when there are disagreements and when the codes of practice need revising, a Minister accountable to Parliament will be the ultimate arbiter of what the code should contain, as indeed he is when the code is first established?
I do not think that these are revolutionary amendments. They follow a line of thinking that has already been accepted by Government. I hope that these amendments will enable the Government to enlighten us further about their thinking on these matters. I beg to move.
Lord Hesketh: My Lords, the effect of this amendment would be to include in Clause 11—which provides for the making of appointments—a requirement that any relevant code of practice should be incorporated in the

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conditions of appointment and that such an inclusion should be made by an order subject to negative resolution. Codes of practice would then be enforceable under the Bill.
It would be inappropriate to write into the conditions of appointment the full details of all the various codes of practice relating to undertakers and thereby make each and every breach of any aspect of these codes directly enforceable by the director general. To do so would be to conflict with their nature as codes of practice since these are documents that should offer guidance rather than imposing rigid requirements. If this is the course that the noble Lord wishes to follow, the more appropriate course of action would be to argue for these to be written into primary or secondary legislation. It is in keeping with their status as codes of practice that we have provided in Clause 10 that contraventions of codes of practice on environmental and recreational duties shall not of themselves give rise to any criminal or civil liability which should be taken into account by the Secretary of State in deciding when and how he should exercise his enforcement powers.
In the case of the disconnection code of practice, it is the principles of the procedure to be followed before a domestic customer can be disconnected which are written into the licence adopted by the undertaker, not the complete code itself. It is therefore only for breaches of these principles that the director general can take enforcement action. Unlike the main principles of the disconnection codes, customer leakages codes are not of an appropriate nature to include in the licence. The environmental code will be open to negative resolution procedure under Clause 10 as amended tonight. With these remarks, I hope that the noble Lord will feel able to withdraw his amendment.
Lord McIntosh of Haringey: My Lords, I am disappointed with that reply. I thought that our thinking was close enough to that of the Government to enable us to make some progress on this matter, as we did at Committee stage. However, I shall have to read carefully what the Minister has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 93E:
Page 11, line 51, at end insert—
("(5A) A water or sewerage undertaker appointed under this section shall include in any annual report a statement of the extent to which it has fulfilled its duties under section 8 above and shall, before an appointment is made, furnish the Secretary of State with a statement of the extent to which its activities in the previous financial year would have fulfilled the requirements of that section if they had been duties at that time applying to the company.").
The noble Lord said: This is rather similar to the amendment moved by my noble friend Lady Birk some time ago. We want some procedure for monitoring and reporting on the fulfilment of the obligations under Clause 11, as my noble friend did with Clause 8.
If this amendment is agreed to, before an appointment is made, the undertaker will give the Secretary of State a statement of how—because these are ongoing bodies which have been in existence before—its activities would have conformed with Clause 8 in the previous year. It is rather like an application for an independent television franchise. If one is going to put up a plausible case for obtaining an independent television franchise, one has to be able to argue that one's past record is satisfactory. That might mean the past record of the individuals concerned. It might be the past record of the company making the franchise application. In the case of the water undertakings, they will all have been water authorities in the past. They will have had an opportunity to fulfil environmental and recreational duties. We are asking that they should make a statement of how they have done so in terms of Clause 8. That is the best formulation of environmental and recreational obligations that we have available.
If it is not to be done in this way, I must ask the Minister what form of screening on environmental grounds he will apply, and whether he will give any thought to how the undertakings which propose to take up licences should show that they are responsible in environmental and recreational matters. I beg to move.
The Earl of Arran: My Lords, Amendment No. 93E deals with the question of reporting on the fulfilment of the Clause 8 duties. In addition to companies being required to report in their annual report on the performance of their Clause 8 duties, they would also have to report to the Secretary of State on how their activities in the previous year would have complied with the duties before they receive any appointment as an undertaker.
As the noble Lord, Lord McIntosh of Haringey, has said, we have already dealt with the matter of reporting on the fulfilment of the Clause 8 duties in considering an amendment to Clause 10. I shall not repeat it again, so in dealing with this amendment I can be brief.
Clearly, the ability of any prospective undertakers to meet the statutory duties in Clause 8 is one of the matters that the Secretary of State and the director would have to have regard to in making any appointment. It is not necessary or appropriate to require the special reporting mechanism before any such appointment is decided upon. In making appointments, the Secretary of State will be bound by the general duty in Clause 7 which requires him to secure that the franchises of water and sewerage undertakers are properly carried out. In this way, he will have to appoint undertakers who will act in the responsible way that the noble Lord, Lord McIntosh, desires. Therefore, I hope that in the light of what I have said the concerns of the noble Lord are already covered.
Lord McIntosh of Haringey: My Lords, that is not what Clause 7 says. Maybe it should say that, but it does not. What it says is that they have to fulfil their functions properly and to make a reasonable rate of return on capital. It does not say that they should

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act in the responsible way that the noble Lord, Lord McIntosh, requires. Maybe we will have to put down an amendment to that effect in order to achieve the objective.
I do not think that is a satisfactory answer. It may well be something that we shall have to come back to again, because the initial appointment is clearly critical to the subsequent prospect of the undertakers taking seriously their environmental and recreational duties, and if the initial appointment is defective the subsequent procedures are likely to be defective as well. But in view of the hour, I think it more appropriate that I should beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 93F:
Page 12, line 7, at end insert—
("(6A) Before terminating the appointment of a company holding an appointment under this Chapter, or varying the area to which it relates, the Secretary of State or the Director shall serve notice of his intention to do so on any local authority acting as a sewerage agent for that company where its duties under that arrangement relate to a different area than that covered by the authority itself.").
The noble Lord said: My Lords, this amendment follows Amendment No. 151A at Committee stage, in which my noble friend asked for notices of termination or variation of appointments of undertakers to be notified to local authorities which were sewerage agents in the area concerned. The Government believed that the amendments were unnecessary, given the requirements in Clause 13 for the Secretary of State or the director to inform local authorities affected by replacement appointments or by variations.
At that stage the noble Lord, Lord Hesketh, undertook at col. 599 of the Official Report to consider the position of a local authority which had an agency in a different area from that covered by its own boundaries. This amendment is drafted with such a requirement in mind, and it would be useful if the Minister could tell us what further consideration has been given to this matter since the last stage. I beg to move.
The Earl of Arran: My Lords, Clause 13 is drafted to ensure that all local authorities are notified as authorities about variations or appointments which affect their areas. We accept that there is a need to ensure that all local authorities are notified, even though they may not be the agents for their particular areas. It is not the purpose of the clause that authorities should be notified by virtue of any responsibility which they may have as sewerage agents.
In practice the obligation to notify local authorities, as authorities, of variations to the sewerage appointment in their areas will normally act as notification to them as sewerage agents. The only occasion on which it would not do so would be
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if the local authority was acting as an agent outside its area. It is this case which the amendment addresses.
I must point out to your Lordships that it is only on the coming into effect of this Bill that local authorities will be empowered to act as sewerage agents outside their areas. To do so they will have to reach an arrangement with a sewerage undertaker. Surely, notification of matters which might concern them is a natural provision for a prospective agent to wish to see incorporated in a new arrangement. This is a matter which the undertaker and agent should decide between themselves and not a matter which should be imposed by legislation. An additional objection is that the amendment puts a duty on the Secretary of State or director to notify an agent. Are we also to impose a duty on the director to notify all the sewerage undertakers' contractors and suppliers?
We believe that this amendment is undesirable and unnecessary. I hope that the noble Lord will see fit to withdraw it.
Lord Graham of Edmonton: My Lords, I do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 12 [Restrictions on making replacement appointments]:
Lord Hesketh Lord Hesketh moved Amendment No. 94:
Page 13, line 9, at end insert—
("( ) It shall be the duty of the Secretary of State or, as the case may be, of the Director, in making an appointment or variation to which this section applies and, where he makes such an appointment or variation, in determining what provision is to be made with respect to the fixing by the new appointee of—

(a) charges in respect of services provided in the course of the carrying out of the functions of a water undertaker or sewerage undertaker; and

(b) amounts of any other description which such an undertaker is authorised by or under any enactment to require any person to pay,

to ensure, so far as may be consistent with his duties under Part I of this Act, that the interests of the members and creditors of the existing appointee are not unfairly prejudiced as respects the terms on which the new appointee could accept transfers of property, rights and liabilities from the existing appointee.").
The noble Lord said: My Lords, Amendments Nos. 94, 97, 103 and 106A are government amendments of a technical nature. I beg to move.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendments Nos. 95 and 96:
Page 13, line 17, leave out ("are") and insert ("consist in a building or part of a building which is").
Page 13, line 23, leave out ("are") and insert ("consist in a building or part of a building which is").
The noble Lord said: My Lords, again these are government amendments of a technical nature. I beg to move them en bloc.
On Question, amendments agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 97:
Page 13, line 33, at end insert—

(" "new appointee", in relation to an appointment or variation to which this section applies, means the company which by virtue of the appointment or variation becomes the water undertaker or sewerage undertaker for the whole or any part of an existing area;").

On Question, amendment agreed to.
Clause 14 [Conditions of appointment]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 97A:
Page 15, line 4, after ("above") insert—
("(c) conditions requiring the payment of compensation by the appointed company to any person affected by a breach to which this paragraph applies of any condition provided for in paragraphs (a) and (b) above, the amount of such compensation and the breaches in relation to which compensation may be payable being determined by or under the conditions.").
The noble Lord said: My Lords, this is an important issue. The amendment returns to the issues raised in Amendments Nos. 158A, 158B and 158D in Committee. Compensation was sought for consumers over breaches of appointment conditions. The House will recall that on that occasion the noble and learned Lord, Lord Brightman, supported the amendments and the noble Lord, Lord Harmar-Nicholls, expressed himself as being dissatisfied with the Minister's reply (col. 612 of the Official Report). There was particular concern about the effect on the "small man" of the failure of water plc services.
In their reply the Government appeared to be arguing that enforcement was more important than compensation. It is not entirely clear why both enforcement and compensation might not be appropriate. That is except for the obvious implications, namely, that enforcement is left in the hands of the Secretary of State while compensation would be a matter of a right for the consumer.
Amendment No. 97A is a lesser variant of the second amendment put forward in Committee. It would require the appointment conditions to reflect the compensation system, the amount of such compensation and the breaches to which it related to be determined under the licence itself. In other words, the amendment sets out the principle without constraining the director or the Secretary of State in negotiating the licence with the companies as to precisely which conditions should be subject to the compensation arrangements.
Since the last stage, the National Consumer Council has drawn my attention to its reactions to the reply then given by the Minister. I should like to indicate to the House some of the things which it has said:
"Compensation for breaches of these service standards are clearly important to consumers who take time off work to keep appointments, and to provide an incentive to the water plcs to improve their standards of service. It is anomalous that the government does not consider consumers to be equally deserving of compensation when there have been breaches of conditions of the licence or water quality standards, which may have been equally or more inconvenient, worrying or unpleasant than a delay in responding to a complaint".
It goes on to give a very good illustration of that. In its letter it states:
"The knowledge, for example, that consumers' washing will not be stained with brown water in the future is satisfying, but does not help with the immediate problem of baskets of streaked washing. Alternatively companies who disconnect consumers for non-payment of their bills without a court order will be in breach of the conditions of their appointment and subject to enforcement proceedings under Clause 20. This amendment would allow the Secretary of State to set up a system of compensation for consumers affected by such illegal disconnections".
Those are the words of the National Consumer Council. I am sure that had other Members of your Lordships' House been here, they would have spoken in support of this amendment. I beg to move.
Lord Hesketh: My Lords, the effect of Amendment No. 97A would be to provide under the conditions of appointment for automatic compensation to be paid by the undertakers to any person affected by breaches of the other conditions of appointment. We believe that the automatic entitlement to a payment or credit provided for in the guaranteed standards scheme will help to avoid the frustration customers at present experience because they cannot obtain any compensation for inconvenience caused in the cases covered by the scheme. This is an important new customer safeguard which has been welcomed by the National Consumer Council and other consumer organisations. We believe that it would be quite wrong to expand what has to be an easy to operate "no quibble" scheme to cover the complexity of the conditions of appointment and it is in no way a substitute for the right of civil redress. I hope that this reasoning will persuade the noble Lord to withdraw the amendment.
Lord Graham of Edmonton: My Lords, is the Minister saying that the purport of what I have suggested, which is the automatic right, is already covered in some other way under the guarantee scheme? I am always willing to acknowledge that he and his advisers can see more in the words on paper than we see—and I say that in no cavalier fashion. I am always grateful to have my attention drawn to the fact that what I believe I want is not necessary. Is the Minister telling me that what I want in this amendment is not necessary because it is achieved in some other way by another method?
Lord Hesketh: My Lords, with the leave of the House, I am sure that the noble Lord remembers the interesting exchange which we had on this matter in Committee. The point which I should like to reiterate to him is that the new guaranteed standards scheme is something which does not exist. It is a major step forward. We believe that he asks for a step forward beyond that. We should learn to walk before we can run, if I may put it in that way.
Lord Graham of Edmonton: My Lords, I am all for taking the necessary steps. The fact that I might be trying to take two at once could mean that I come a cropper. I do not believe that that would be an elegant posture in which to conclude today's proceedings at this time of night. Therefore, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord Hesketh Lord Hesketh moved Amendment No. 98:
Page 15, line 36, at end insert—
("(3A) Subsection (3B) below applies in relation to the appointment of any company under this Chapter in pursuance of section 1 l(4)(a) above where provision is contained in that appointment by virtue of subsection (2) or (3) above for postponing the determination of, or of any of the terms of, the conditions of the appointment with respect to the fixing by the company of—

(a) charges in respect of any services provided by that company in the course of the carrying out of the functions of a water undertaker; or

(b) amounts of any other description which such an undertaker is authorised by or under any enactment to require any person to pay,

until a time after the transfer date and before the end of the financial year current on that date.
(3B) Where this subsection applies in relation to a company's appointment, the conditions or terms mentioned in subsection (3A) above shall not be determined in accordance with the provision so mentioned unless—

(a) notice of the proposed determination has been served on the company;

(b) the company has been allowed a period of at least twenty-eight days from the date of service of the notice for making representations or objections with respect to the proposed determination; and

(c) the Secretary of State has considered any such representations or objections which have been duly made and are not withdrawn.").

The noble Lord said: My Lords, in moving this amendment I speak also to Amendment No. 99. Clause 14 describes conditions which may be included in a company's conditions of appointment. These two amendments are concerned with the possibility that the conditions of appointment may be incomplete at transfer date. I beg to move.
Lord Brougham and Vaux: My Lords, I shall not detain the House for more than a moment or two but had my noble friend Lord Elliott or Morpeth been able to attend at this late hour he would have wished to comment on the amendment on behalf of the Water Companies Association. Therefore, I have been asked to say a brief word on his behalf.
My noble friend the Minister will be aware of the discussions currently taking place between his department and the Water Companies Association about the progress of setting Ks for the statutory water companies. I shall be grateful if he can confirm that this amendment in no way intends to prejudice those discussions.
Lord Hesketh: My Lords, with the leave of the House I can certainly give my noble friend the assurance that he requires.
On Question, amendment agreed to.
Lord Hesketh Lord Hesketh moved Amendment No. 99:
Page 16, line 14, at end insert—
("( ) Where an instrument of appointment has been served under subsection (3) of section 11 above on any company, the coming into force of the appointment for the purposes specified in subsection (2) of that section shall not be affected by any contravention of the requirements of this Act with respect to the provision contained by way of conditions of appointment in that instrument; and if the Secretary of State considers it appropriate to do so in consequence of any legal proceedings with respect to any such provision, he may by order made by statutory instrument direct that such conditions as may be
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specified in the order are to be treated as included in the appointment in question until there is an opportunity for the provision to which the proceedings relate to be replaced by virtue of any of the other provisions of this Chapter.").
On Question, amendment agreed to.
The Earl of Arran: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at eighteen minutes past eleven o'clock.

  BASS: CONSERVATION MEASURES
  BASS: CONSERVATION MEASURES
  GENETICALLY MANIPULATED ORGANISMS
  GENETICALLY MANIPULATED ORGANISMS
  IMPORTS OF WASTE: POLICY
  IMPORTS OF WASTE: POLICY