Sitting of 2 March 1989

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

  PRIVATE BUSINESS
  ASSOCIATED BRITISH PORTS HULL BILL (By Order)
  BIRMINGHAM CITY COUNCIL (No. 2) BILL (By Order)
  BRITISH RAILWAYS BILL (By Order)
  HYTHE, KENT, MARINA BILL (By Order)
  HYTHE MARINA VILLAGE (SOUTHAMPTON)WAVESCREEN BILL (By Order)
  INTERNATIONAL WESTMINSTER BANK BILL (By Order)
  ISLE OF WIGHT BILL (By Order)
  LONDON UNDERGROUND (VICTORIA) BILL (By Order)
  WENTWORTH ESTATE BILL (By Order)
  BRITISH FILM INSTITUTE SOUTHBANK BILL (By Order)
  BROMLEY LONDON BOROUGH COUNCIL(CRYSTAL PALACE) BILL (By Order)
  CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
  REDBRIDGE LONDON BOROUGH COUNCIL BILL(By Order)
  Orders. for Second Reading read.
  To be read a Second time on Thursday 9 March.

Oral Answers to Questions
  HOME DEPARTMENT

    Crime (Greater Manchester)
    Mr. Burt: To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Greater Manchester for 1988.
    The Minister of State, Home Office (Mr. John Patten): We hope to publish the final crime figures for 1988 shortly. Current indications are that the figures for Greater Manchester are likely to show a drop of about 8 per cent. compared with 1987.
    Mr. Burt: May I thank my hon. Friend for that encouraging reply? Will he confirm that it seems that within those statistics, there will be a pleasing drop in robberies and burglaries, for which all those involved in neighbourhood watch should be thanked? Will he also note my constituents' concern about the continuing unwelcome growth in violent crime? What reassurance does he have for us in Greater Manchester that we shall see more bobbies on the beat?
    Mr. Patten: My right hon. Friend the Home Secretary has recently ensured just that by allocating Greater Manchester an extra 45 police in his recent announcement, which is the second highest number given to any police authority. I also believe that the fact that burglary rates and property crime are declining so fast will continue to free more time for the police to concentrate on violent crime. The Greater Manchester police are already concentrating on various initiatives concerned with public disorder and I am sure that they will continue to have the desired effect.
    Mr. James Lamond: Does the Minister realise that his rather complacent attitude will not go down well with the many thousands of pensioners who were represented in the House recently with a petition calling for more police in the Greater Manchester area? Although the Minister may boast that the Home Secretary has been able to allocate an additional 45 police men, that does not measure up well to the request by the Greater Manchester police authority for 258 extra police men, whom it needs to carry out its duties correctly. He gave less than one fifth of the number requested.
    Mr. Patten: I am sorry that the hon. Gentleman does not set greater store by first, the increased numbers of police my right hon. Friend has made available to the Greater Manchester force and secondly, the increased amount of time that that will make available for the investigation of serious crimes against elderly people. Thirdly, burglary rates and property crime are coming down so fast that the Greater Manchester police will have considerably increased time for the investigation of crimes against the elderly. Fourthly, I am sorry that the hon. Gentleman has not welcomed the recent excellent initiative financed by the local gas, water and electricity boards in a specific crime prevention campaign aimed at helping the elderly in the Greater Manchester area.

    Television Companies
    Mr. McCrindle: To ask the Secretary of State for the Home Department what representations he has received concerning the participation by non-European Economic Community nationals in the ownership and operation of United Kingdom television companies.
    The Minister of State, Home Office (Mr. Tim Renton): We have received over 2,200 responses to our broadcasting White Paper, many of which touch on ownership questions. We propose to continue the prohibition on control of television and radio franchises by non-EC companies, except that we are considering further whether that restriction should apply to local delivery franchises.
    Mr. McCrindle: Does my hon. Friend share my concern about the concentration in ownership of the media and, in particular, about the fact that, to a considerable extent, the printed media are in the same ownership? With the arrival of satellite broadcasting, should we not be considering the introduction of new safeguards to keep the matter under some control?
    Mr. Renton: I understand very well my hon. Friend's point. In the White Paper we propose extensive and effective ownership rules against the excessive concentration of ownership. The White Paper sought comments on a set of principles on which such rules might be based and, as my hon. Friend knows, the Director-General of Fair Trading is currently considering the changes that have taken place in newspaper publishing in the past few years and the growing involvement in other media of leading newspaper groups.
    Mr. Worthington: Given the wholly regrettable concentration of power in the newspaper industry, is it not clear that there should be no cross-ownership between the newspaper industry and television industries and no ownership of television companies by individuals or companies outside the EEC?
    Mr. Renton: I understand the hon. Gentleman's point. We are considering carefully the suggestions that have been made to us by those who say that newspaper interests in, for example, the ownership of regional Channel 3 licences, should be strictly controlled.
    Mr. Harry Greenway: Can my hon. Friend assure the people of Britain that proper standards, in terms of the non-exploitation of violence and sex, will apply to the non-English channels as they come into this country?
    Mr. Renton: Yes, Sir. We are, we hope, within sight of agreeing a convention in the Council of Europe and that is likely to be followed by an EC directive. The convention and the directive will set minimum standards of taste and decency and provide mechanisms for enforcing them. That will give some control over trans-frontier satellite channels not uplinked in this country.
    Mr. Hattersley: Does the Minister recall that during our debate on broadcasting there was support on both sides of the House for the idea of the Government making a general reference to the Monopolies and Mergers Commission on the subject of television ownership—particularly by newspapers and foreign companies? Are the Government prepared to make such a general reference?
    Mr. Renton: As the right hon. Gentleman knows, those matters are more within the remit of my right hon. and noble Friend the Secretary of State for Trade and Industry. The right hon. Gentleman should take on board the fact that the Director-General of Fair Trading is reviewing the matter, taking into account the White Paper on broadcasting and the concentration of ownership of titles, as well as recent developments in newspaper wholesaling. Clearly, that is potentially a wide-ranging review.

    Prisoners (Medical Treatment)
    Mr. Corbyn: To ask the Secretary of State for the Home Department what medical treatment is being given to Paul Hill, Paddy Armstrong, Gerard Conlan and Carole Richardson, currently in Her Majesty's prisons.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): Specific clinical information relating to individual prisoners is confidential and is not normally disclosed. Appropriate medical treatment under the care of prison medical staff is available to all prisoners.
    Mr. Corbyn: Is the Minister aware that there is considerable concern among the families of the four prisoners convicted of the Guildford pub bombings about their medical condition? Paul Hill, who is in Albany prison, had to wait two years to have a saliva gland removed, and even then, the operation was only half done. Paul Hill is at least 3 stone underweight. The other three prisoners are all receiving various forms of medical and psychiatric attention. Is not that a condemnation of the prison service in which they have been held for the past 14 years?
    In the light of that, will the Minister make arrangements to ensure that the four receive all the medical treatment that they require, that their mothers are allowed to visit them on Mothers' day next Sunday and that they are moved to London prisons, where it is easier to get medical support and where it would be easier for their legal representatives to visit them in the run up to the reference to the Appeal Court, which I assume is expected some time later this year?
    Mr. Hogg: The hon. Gentleman and I corresponded about this matter last year and I looked into a number of the points that he raised then. I concluded that there was no ground for anxiety—indeed, two of his suggestions proved to be incorrect.
    I agree with the hon. Gentleman, however, that every prisoner has a right to proper medical treatment. I shall examine the specific criticisms that he has made today to see whether I can satisfy myself on them and, if he would care to expand his criticisms in writing, I shall, naturally, give him a full reply.

    Police Efficiency
    Mr. Nicholas Bennett: To ask the Secretary of State for the Home Department what progress is being made to improve the efficiency of police forces in England and Wales and to obtain value for money.
    The Secretary of State for the Home Department (Mr. Douglas Hurd): The Home Office works with chief officers of police and local police authorities to secure value for

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    money in the police service. Significant improvements in efficiency and effectiveness have been achieved, with the encouragement and support or my Department and Her Majesty's inspectors of constabulary. Through the civilianisation of police posts some 3,900 police officers have been released for operational duty in the past five years. Procedures have been streamlined and unnecessary paperwork eliminated. Support services have been contracted out. Efficiency scrutinies have been carried through and much has been achieved through local initiatives. Still further improvements in value for money in the police service will remain a high priority.
    Mr. Bennett: Will my right hon. Friend join me in congratulating the Dyfed Powys police force which covers Pembrokeshire and which, yet again, has the highest clear-up rate in England and Wales and has been especially vigilant in catching a number of drugs-smuggling gangs in recent years? Does he share my concern that the clear-up record of a number of police forces is pretty poor? When does he intend to introduce performance indicators so that the police and the public may judge the records of individual police forces?
    Mr. Hurd: I join my hon. Friend in congratulating Dyfed Powys on the achievements that he mentioned and on securing better value for money by bringing in divisional operational support units which release officers for operational work and provide a better service. One cannot be too mechanical about performance indicators as it is not easy to measure the value of police work, but Her Majesty's inspectorate of constabulary is working on it as an aid, but not a total answer, to the crucial job of ensuring value for money from the police service. It is worth noting that it now costs £2,000 to provide cover for any particular place by one uniformed police officer for one week. That is the measure of the cost and the reason why we have to emphasise value for money.
    Mr. Duffy: Does the Home Secretary agree that two important steps that he could take to improve the efficiency of the police would be to adopt the recommendations of the Select Committee on Home Affairs to end the disturbing under-funding of forensic services and to harness genetic fingerprinting?
    Mr. Hurd: I need to study very carefully the Select Committee recommendations on forensic services. Forensic services have been through a turbulent and unsettled time with many inquiries, the reasons for which were analysed by the Select Committee. I hope that, under new leadership and with extra resources and staff, they are now emerging from that and will continue to provide a service of a quality which the Select Committee recommended and proclaimed. I also agree with the hon. Gentleman's second point.
    Mrs. Maureen Hicks: Is my right hon. Friend aware that in spite of local Labour opposition, one of the greatest aids to police efficiency in Wolverhampton has been the introduction of video cameras? Wolverhampton is the first town in the United Kingdom to introduce video cameras and in a very short time there has been a dramatic reduction in criminality, which is now at an all-time low. In paying tribute to the police will my right hon. Friend consider recommending that other police authorities
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    follow suit, particularly in inner-city areas that need a considerable police force to man the streets and town centres?
    Mr. Hurd: The west midlands police force, which serves my hon. Friend's constituency, is certainly a pioneer in working out new techniques and methods of effectively using police officers. Her point about video cameras in public places aroused a certain amount of apprehension at first, but if they are properly placed and organised, the public regard them not as a menace to individual liberty, but as part of the protection of the citizen which they expect the police to provide.
    Mr. Wigley: Is the Home Secretary aware that in the north Wales police force there has been a civilianisation of some 54 per cent. compared with an average of only 22 per cent. for all forces during the past 10 years, yet despite that the North Wales police force is still 120 men on the beat short of the figure that was established in 1972? Is he aware that that was the only force out of the 36 that applied for more policemen on the beat to be refused? Given the serious problems in north Wales, of which he is well aware, will he reconsider that decision?
    Mr. Hurd: There has been a particular problem in north Wales which I shall not describe in detail today, in regard to the allocation of people for the new probationer training. I shall write to the hon. Gentleman on the specific point that he raised.
    Mr. Rathbone: My right hon. Friend will be aware of the shortage of police in Sussex as well as in Wales. In an attempt to ease their burden, will he encourage greater recruitment and the use of special constables, who can perform a useful function particularly in rural areas?
    Mr. Hurd: I agree with my hon. Friend. One of our aims has been to encourage police forces throughout England and Wales to step up the recruitment of special constables. We held a conference on that matter in London not long ago. After a period of decline, I hope that people will come forward and that police forces will step up their efforts to recruit. A key element is sensibly to work out the exact tasks which special constables can do, and I hope that substantial progress is being made on that.

    Police Manpower (Leicestershire)
    Mr. Janner: To ask the Secretary of State for the Home Department if he will make a further statement on the level of police manpower in Leicestershire.
    Mr. Douglas Hogg: My right hon. Friend has approved an increase of 27 police posts in the establishment of the Leicestershire constabulary with effect from 1 April 1989, bringing it to 1,760 officers. Fifty four extra posts have now been approved for the force since May 1979. In addition, the chief constable has been successful in recent years in returning about 130 police officers to operational duties through civilianisation and other efficiency measures.
    Mr. Janner: Is the Minister aware that in 1985, chief constable Goodson asked for an increase of 256 officers and got none? The following year, his successor, chief constable Hurst, asked for a total of 136 additional officers by this year. He got none in 1986, 1987 or 1988. The allocation of a total of 18 officers plus nine probationers

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    this year is ridiculous, inadequate and ludicrous, when violent crime has doubled since the Government came to power, and all types of crime are still increasing throughout Leicestershire.
    Mr. Hogg: I have increasingly noticed that the hon. and learned Gentleman is so excitable that he has a tendency to leave his judgment at home. That being so, I shall tell him a few facts which, if he cares to reflect on them, he will find rather comforting.
    For example, in 1978–79, £15·65 million was spent on his constabulary police force. Today, the figure is £52·77 million. The police and civilian strength of the force has been increased by 222. The chief constable has managed to bring 130 more officers on to operational duties by way of civilianisation, and he has identified a further 63. That is a considerable expansion in the number of policemen on operational duties.
    Mr. Latham: Does my hon. Friend recall replying to an Adjournment debate which I introduced on this matter and which was supported by most, if not all, Leicestershire Members? Is he aware that Conservative Leicestershire Members do not speak in the dismissive way in which the hon. and learned Member for Leicester, West (Mr. Janner) speaks? We are glad that there has been an increase in manpower, but we look for further increases in years to come.
    Mr. Hogg: I do, indeed, remember the Adjournment debate which was moved by my hon. Friend. He put the case infinitely more persuasively than the excitable question that hon. Members have just heard from the hon. and learned Member for Leicester, West (Mr. Janner).
    Mr. Vaz: Is the Minister aware that his Department has just approved the establishment of a divisional headquarters in my constituency, at a cost to the taxpayer of £2·3 million, as a result of a campaign by local residents? Bearing in mind the figures that have been correctly put by my hon. and learned Friend the Member for Leicester, West (Mr. Janner), in real terms there are only a couple of officers available per subdivision. Sickness, training and other matters must be taken into consideration. How on earth will the Government assure my constituents that they take law and order seriously? Does the Minister suggest that the chief constable should order cardboard cut-outs of police officers and stick them in the windows of Hambleton police station? Would he be minded to have a cardboard cut-out of the Home Secretary, to enable him to go around the country, lecturing and frightening the Asian community?
    Mr. Hogg: The hon. Gentleman might have spent some of the time on his feet doing some homework. I have a bit of good news for him. The clear-up rate for his force, at 44·7 per cent.—I am using the 1987 figures—is much better than the rest of England and Wales, and there are 37 other forces with poorer records than his.

    Violent Crime
    Mr. Jack: To ask the Secretary of State for the Home Department what action his Department is taking to combat violent crime.
    Mr. Hurd: Police manpower has been increased substantially, and we will add a further 1,100 officers in
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    1989–90. We have increased maximum sentences and tightened up the law on the possession of knives and other offensive weapons as well as on under-age drinking. Last month, there came into force a prohibition on the private ownership of certain of the more lethal types of firearms such as the Kalashnikov rifle. Stricter controls on the issue of shotgun certificates and on the safekeeping of licensed firearms will follow later this year. We also introduced last month the new right of reference to the Court of Appeal by the Attorney-General of an over-lenient sentence.
    Mr. Jack: Encouraging though that information is, my right hon. Friend would receive a different response from the members of the women's institute in my constituency in particular and from the women of Lancashire in general, who have vigorously campaigned to express their concern about the repugnant and violent crime of rape. What message does he have for them about the strong stand being taken by the Government on this crime? Can he reassure them that he will look again at the figure of eight extra officers in Lancashire next year and perhaps give us some more?
    Mr. Hurd: I share the concern of my hon. Friend's constituents about rape. I hope that they will have noticed that in the last three years the sentences passed by the courts on convicted rapists have increased by 63 per cent., so that the average sentence is over six years. My hon. Friend will be aware that the clear-up rate for rape is relatively high at 71 per cent. As for police strength, Lancashire police force has 264 more officers than it had in May 1979, and we shall continue to consider the claims of Lancashire, as of other forces, as part of the substantial programme of further increases on which we are working.
    Mr. Heffer: The Government say that we are now doing well, that people are better off than they ever were and that the country is doing better economically. Will the right hon. Gentleman explain why, if that is the case, there is an increase in violent crime? Is it perhaps because of the nature of the society that has been created by Conservative Administrations in the last 10 years?
    Mr. Hurd: There has been a decrease in some quarters in the total of recorded crime, and that decrease applies in Merseyside as well as in the country as a whole. But the hon. Gentleman is right to say that there continues to be an increase in the one in 20 crimes which are violent and which cause the most anxiety and anger. In the old days the hon. Gentleman and his hon. Friends attributed that—which of course has gone on for 30 years—to unemployment and poverty. Now he is attributing it to affluence and irresponsibility. I do not think that either explanation is right. But whatever is the right explanation, I am perfectly clear that given the drop in the total of recorded crime, we should concentrate increasingly—as the police will be able to do—on violent crime.
    Mr. Wheeler: Does my right hon. Friend agree that one reason why recorded crime is increasing is that we are much better at recording it and more welcoming to women who wish to report rapes? When my right hon. Friend next writes to the 'women's institute, will he explain that women are more at risk within the family, or between known parties, and not so much at risk from strangers outside their own homes?
    Mr. Hurd: Both of those points are correct. The police have altered the way in which they handle allegations of rape. They have followed a much more welcoming approach to the rape victim and that, as my hon. Friend says, has probably increased the number of recorded rapes and reduced the number which tragically happened but were not in the past recorded. My hon. Friend is right in the second part of his supplementary question, and the figures we published last week bear that out.
    Mr. Randall: Is the Minister aware that while the Home Office has invited my city of Kingston upon Hull to participate in the safer cities initiative, which I support in principle, the Department of the Environment has slashed our inner-city money, which helps to reduce crime, by one third of a million pounds this year? How do the Government justify this Home Office initiative being undermined by the actions of another Government Department?
    Mr. Hurd: I do not believe that it will be undermined. I am glad that the hon. Gentleman's city has accepted my invitation to join the safer cities scheme. The whole point is that the schemes are inter-agency and involve different Government Departments, local government and voluntary agencies so that we can identify a local specific profile of crime and then a local specific answer to it.

    National Identity Card
    Mr. Bellingham: T: To ask the Secretary of State for the Home Department what representations he has received on the proposal for a national identity card; and if he will make a statement.
    Mr. Hurd: In addition to the advice of the Association of Chief Police Officers and the recommendations of the Home Affairs Committee, I have received some 380 letters on the subject of a national identity card from hon. Members and from the general public; most have expressed support for some form of identity card system.
    Mr. Bellingham: Does my right hon. Friend agree with me that before we get too carried away with the idea of a national ID card scheme, we should listen very carefully to the advice of bodies such as ACPO, which urge caution? Does he also agree that there are strong arguments for a voluntary scheme and does he have any ideas and proposals in that direction?
    Mr. Hurd: I am certainly not carried away by the idea of a compulsory identity card scheme. But with regard to advice, my hon. Friend is right. When I asked the chief police officers and chief constables to update the traditional police view on this matter, they wrote back saying that there were pros and cons, advantages and disadvantages; but they did not establish that there was a clear advantage as regards crime prevention in having an identity card scheme.
    There would be some clear advantages in a voluntary scheme from the viewpoint of easy travel across Europe. There would be other advantages, too. We are considering whether a sensible scheme could be devised and put to the public and to Parliament.
    Mr. Marlow: Would my right hon. Friend agree that without a compulsory national identity card scheme, it would be impossible to have a system of free movement
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    between European countries and the United Kingdom for personnel, and that as there is not going to be a compulsory national identity scheme, we must continue to have frontier controls between the United Kingdom and other European countries?
    Mr. Hurd: That is a wider question. Within the European Community, we are considering very closely what kind of checks would be sensible to carry out the declaration annexed to the Single European Act, which says that nothing in the Act should weaken our defences against the drug traffickers, terrorists and organised criminals.

    Public Transport (Safety)
    Mr. Graham: T: To ask the Secretary of State for the Home Department what steps he is taking to ensure the safety of citizens travelling on public transport.
    Mr. John Patten: The security of passengers and staff on public transport is central to the responsibilities of Government, public licensing authorities, operators and the police. I understand that London Underground Limited is implementing a range of passenger security measures financed by a £15 million grant from the Department of Transport. The complement of the British Transport police on the Underground has been increased) twice since 1986. Good progress has been made in investigating recent serious incidents on the Underground and British Rail.
    Mr. Graham: Is the Minister aware that a posse of American vigilantes is educating and training a group of young men and women called the Guardian Angels to protect the interests of the travelling public on the Underground? Is he further aware that the security of mind among the travelling public, especially the elderly, has been disturbed, as they are terrified at the Government's lack of action and commitment to ensure that law and order are restored to transport in Britain? Will the Minister ensure that the public do not need to rely on vigilantes to ensure their safety on the Underground in London?
    Mr. Patten: It is for that reason that the establishment of the British Transport police is to be increased from 350 to 400. That is exactly why the Government are encouraging the British Transport Police Authority to consider changing its statutory authority so as to allow British Transport police to recruit special constables. We do not want individual private citizens to take up the policing of this country. We wish them to join the special constables, to get a proper training and uniform, and to do a proper job.
    Sir Anthony Grant: Has my hon. Friend seen an article in today's Daily Mail referring to an internal report and inquiry by British Rail showing a great and disturbing worry about crime by riff-raff on the line between Cambridgeshire and Liverpool street? Will he urge British Rail to publish the report so that all the facts can be known? Will he have discussions with his colleagues in the Department of Transport to see what can be done to help British Rail to stamp out those pests?
    Mr. Patten: I have not read or seen the report by British Rail, although I have seen the report in the Daily Mail. I

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    shall pass on my hon. Friend's concern to my right hon. Friend the Secretary of State for Transport. I am sure that British Rail is well aware that customers—as it increasingly refers to them, rather than passengers—need to feel safe and that if it wants to increase rather than decrease the number of its customers, it will need to address the issues firmly.
    Mr. Darling: The Minister does not seem happy with his lot. As robberies on the London Underground doubled in the last three years, and the clear-up rate has fallen from 20 per cent. to 12 per cent., and bearing in mind the British Rail survey that showed that many women travel in fear on trains, will the Home Secretary lend more police to the British Transport police, or will his shoddy and short-sighted attitude towards spending public money where it is needed mean that more people will continue to travel in fear on the railways when, with a sensible allocation of resources, they would not need to do so?
    Mr. Patten: The hon. Gentleman is ignoring the facts. An additional 50 police are going to the British Transport police. Before the establishment reaches the new level of 400, both the Metropolitan police and the City police are making available 80 of their own police forces to help. In addition, the considerable sum of £15 million for security measures in Underground stations, initially in some 13 stations on the Northern and Central lines, plus Oxford Circus, has been made available by my right hon. Friend the Secretary of State for Transport.

    Metropolitan Police (Recruitment)
    Mr. Jessel: To ask the Secretary of State for the Home Department if he will make a statement on Metropolitan police recruitment.
    Mr. Douglas Hogg: A total of 2,160 officers were recruited to the Metropolitan police force during 1988, an increase of about 100 on the figure for 1987. On 31 January 1989 the strength of the force was 27,932, the highest ever and some 5,680 higher than in May 1979. The present establishment is 28,115 which could be reached by the end of March this year.
    Mr. Jessel: Is my hon. Friend aware that those figures show an encouraging and welcome trend which is a considerable achievement both for the Metropolitan police and for the Home Office, considering all the other employment opportunities in the south-east? Does he agree that, as part of the fight against crime, the commissioner should aim to increase the number of police officers on the streets and on the beat in areas of outer London such as Twickenham?
    Mr. Hogg: May I deal first with my hon. Friend's constituency of Twickenham? At the end of last year there were 349 police officers policing the Twickenham division, which was 18 more than in the previous year. I am aware that on 1 January the arrangements were changed and that my hon. Friend's constituency is now being largely policed from Richmond-upon-Thames station. Consequently, precise figures and comparisons are not possible. On the more general question, my hon. Friend will be pleased to know that at the end of 1987 the number of days worked on street duty had increased by 13 per cent. compared with
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    the end of 1986, and that during 1988 there was a further improvement of 7·5 per cent. in hours spent on street duty. That will continue.
    Mr. Maclennan: Does the Minister believe that the Metropolitan police are satisfied with their resources to deal with white collar crime?
    Mr. Hogg: I very much hope so, because when the hon. Gentleman's party, as it then was, was in power in 1978–79 it was spending £295 million on the Metropolitan force and today we are spending over £1 billion.

    Police (Manning Levels)
    Mr. Gow: To ask the Secretary of State for the Home Department what representations he has received as to whether the police manning levels which he has announced for 1989–90 are adequate to combat present and prospective rates of crime.
    Mr. Hurd: I have received several representations from hon. Friends and hon. Members concerned about this announcement. Many of them have asked for more. The 1,100 extra police officers allocated this year will be followed by a further substantial programme of increases. Along with the other measures which we are taking, increases for 1989–90 will help to build on the recent welcome falls in total recorded crime so that we can concentrate more effectively on dealing with crimes of violence.
    Mr. Gow: Despite greater police manpower and efficiency and better value for money than ever before, the reality is that crime in almost every part of the country is still increasing. Was my right hon. Friend's failure to meet the request from the chief constable and the police authority for a larger police establishment in Sussex due to the fact that he believed that more police men would fail to protect the innocent, or was it because he could not get any more money from the Chancellor?
    Mr. Hurd: Although my hon. Friend's statement would have been true for almost all the past 30 years, it is not true now. The latest figures show a decline, year on year, across the nation of 3·7 per cent. in recorded crime. In my hon. Friend's own county of Sussex, where the crime level is well below the average, there has also been a very slight fall of about 1 per cent. Obviously, increasing the number of police officers is not in itself the whole answer to crime, but, nevertheless, I hope that my hon. Friend will recognise that the 1,100 additional policemen that I have announced for the coming year is on top of a record series of increases which have increased total expenditure on the police by 52 per cent. in real terms. That is a bigger proportion than for any other major public service, and it will be followed by a further substantial programme of increases in which any further claims from Sussex will be considered.
    Mr. Alton: Does the Home Secretary agree that in inner city areas, especially those such as Liverpool, a powerful pressure for crime is the low street value of hard drugs such as crack and heroin? Does he agree that, when considering the establishments for local police forces next year, he should reconsider the size of drug squads to ensure that their activities are better co-ordinated and that the powerful drug barons are apprehended?
    Mr. Hurd: Yes, indeed, I entirely agree with that. The building up of the drugs rings of regional crime squads has been a priority in policing. I am glad to say that they are increasingly effective and are gaining more and more accurate and timely intelligence from overseas. They will remain a priority.
    Mr. Alexander: Does my right hon. Friend agree that the special constabulary has an important role in reducing crime? What reassurance can he give the House that its role will be expanded and recruitment to it increased?
    Mr. Hurd: As my hon. Friend knows, we are certainly pressing for that. I hope that, alter the conference on the subject that we organised in London and after the lead given by many chief officers of police, we shall see a steady build-up of special constables, not just in quantity but in the quality and importance of their work.
    Mr. Corbett: Will the Home Secretary confirm that West Midlands police have received an increase of only 70 uniformed officers since 1981, despite a crime rise that has been faster than the national average and ever-rising levels of crime against the person? Will the Home Secretary further confirm that those 70 extra officers came in response to a plea for 350 extra places, and that for 1989–90 there will be only 62 extra officers although the police authority asked for 1,500 over the next five years? Why does the Home Secretary insist on denying the west midlands the police officers that it needs to prevent and combat crime more effectively?
    Mr. Hurd: That is ripe coming from the hon. Gentleman sitting on the Opposition Front Bench, repersenting the party which left the police in such a state in 1978. The west midlands has shared fully in both the main developments in this field in the past two or three years: a steady increase in the size of the police force and a welcome fall in the total of recorded crime.

    Radio
    Mr. Greg Knight: To ask the Secretary of State for the Home Department what he is doing in advance of any future broadcasting Bill to increase the choice available to radio listeners.
    Mr. Renton: We have endorsed IBA proposals to award 20 incremental contracts for community radio and a further contract for a station covering Heathrow and Gatwick. In addition, we have authorised BBC and independent local radio stations to provide separate programmes if they wish on each of their current frequencies.
    Mr. Knight: My hon. Friend mentioned the setting up of 20 community radio stations. Will he confirm that that is not the final figure, and that there is ultimately a good case for allowing a few hundred such stations to be set up? Will he tell us whether independent local radio stations will be allowed to apply for franchises, and will he confirm that in no circumstances will pirate radio stations still broadcasting be eligible?
    Mr. Renton: I can confirm that my right hon. Friend the Home Secretary announced in January that anyone convicted of an illegal broadcasting offence committed after 1 January 1989 would be debarred from applying for a Radio Authority licence for five years.
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    In answer to my hon. Friend's first question, he is quite right: in due course, as more frequencies become available—particularly on VHF—the new Radio Authority will be able to license up to several hundred community radio stations if the demand exists.

  PRIME MINISTER

    Engagements
    Mr. Fearn: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    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 the House, I shall be having further meetings later today.
    Mr. Fearn: Does the Prime Minister accept that her statement on BBC2's "Nature" programme yesterday that new fridges need new solvents and chemicals conflicts considerably with what was said by her Environment Minister, who earlier in the day ruled out such an observation?
    The Prime Minister: The programme is being broadcast tonight.
    New chemicals are of course required for refrigerators, and it is only on the assumption that those new chemicals can be found that we can dream of an 80 per cent. cut in the use of CFCs.
    Mr. William Powell: Is my right hon. Friend aware that tomorrow will see the 10th anniversary of British Steel's announcement that it proposed to close the Corby steelworks, in which no fewer than 73 per cent. of those living in the town were then employed? Is she aware that in the past 10 years Corby has experienced the most dramatic industrial recovery, and may I pass on to her the thanks of my constituents for the massive help that the Government have given in the past 10 years?
    The Prime Minister: I agree with my hon. Friend. The steelworks had to be closed. It is greatly to the credit of both the British Steel Corporation and the people of Corby that they rose to the challenge of enterprise, have created many new jobs and are now flourishing. I am grateful for what my hon. Friend said about Government help.
    Mr. Kinnock: What is the Prime Minister's excuse for the appalling trade deficit?
    The Prime Minister: The trade deficit is being financed by people who are prepared to invest in Britain and who have full confidence in the country's economy, which has never produced a higher standard of living for our people than it does now.
    Mr. Kinnock: It is obvious from that answer that the Prime Minister has no excuse. Will she therefore give the country an apology, as one is certainly due?
    The Prime Minister: An apology for the fact that we have a higher standard of living, more jobs than ever before in history and a higher standard of social services than ever before? If the Labour Government had had such a record they would have been shouting it from the house tops.
    Sir Fergus Montgomery: Would my right hon. Friend care to comment on the "Environment in Trust" leaflets that the Government published yesterday, which show the Government's commitment to improving the environment and rivers? Does she consider that a good deal more useful than being photographed in a white coat testing the waters of the Regent's park canal?
    The Prime Minister: The booklets to which my hon. Friend referred, in a folder called "Environment in Trust", are excellent and give the full, the accurate and the very good record of this Government on the countryside, the environment, water, getting down pollution and reducing the difficulties which we have had previously with our bathing beaches. It is a better record than any previous Government in this country.
    Mr. Ashley: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Ashley: Before the Prime Minister boasts too much about the Government's record on the environment and before she makes this famous broadcast, will she recognise that the consumer and environment problems now swamping her Government are a direct result of her personal philosophy of non-intervention? She is reaping her own whirlwind and people will be protected from the ravages of industry only by a Government who are committed to positive intervention. That applies whether the problem is eggs, the ozone layer or anything else.
    The Prime Minister: I point out to the right hon. Gentleman that this Government have positively intervened to spend far higher capital on water than ever the last Government did, to spend far higher capital on the National Health Service, and to spend far higher capital on roads. That is because we have had far bigger prosperity under this Government than any previous Government and, in fact, we have been able to spend money on those things. I also point out to the right hon. Gentleman that, with regard to water matters and the state of the beaches, the bathing water directive was agreed in 1975 and the Labour Government did nothing about it for four years.
    Mr. Ashby: When meeting Environment Ministers next week, will my right hon. Friend please take time to explain to them the most excellent Water Bill that is now before the House? Will my right hon. Friend explain to them that in relation to the environment the Bill takes measures to improve the waterways, the rivers and the beaches? Will she suggest that perhaps they should emulate us and produce a similar sort of Bill in their countries, specifically in Europe, to clean up the Rhine?
    The Prime Minister: My hon. Friend is correct. The most polluted rivers coming into the North sea are those which discharge into the German bight, which are the Rhine, the Weser and the Elbe, and they are responsible for most of the pollution in the North sea. I entirely agree with my hon. Friend that the water privatisation Bill will do two things. First, it will set up a separate National Rivers Authority and, secondly, it will make certain that the provision of water is very much more efficient than it has been in the past. I also point out that, although the Opposition talk a lot about water, they cut the capital
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    expenditure on water by 20 per cent. We have put up the capital expenditure on water by 30 per cent.—[Interruption.] Have the hon. Gentlemen got the figures? Labour cut it by 20 per cent; we have put it up by 30 per cent.
    Mr. Canavan: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Canavan: As yesterday was the 10th anniversary of the last Scottish referendum, did the Prime Minister attend any of last night's anniversary beanfeasts, where the Scottish representation appeared to be confined to Tory placemen, such as Lord Goold and the Duke of Buccleuch, and Tory rejects, such as lain Sproat and Michael Hirst, whose opposition to a Scottish Parliament helped to lose them their seats in this Parliament? If the Prime Minister is that confident that Scottish opinion is truly and adequately expressed and reflected by such a parcel of rogues, can I call her bluff and dare her to hold another referendum now—or is she too scared?
    The Prime Minister: I noted that it was the 10th anniversary yesterday. I am sure that the hon. Gentleman is very glad that the referendum was rejected by the Scottish people, because otherwise he would not be here now, and he does, in fact, add greatly to the entertainment of the place.
    Mr. Barry Porter: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Porter: Is my right hon. Friend aware—I know that she is—of the plight of the pre-1973 war widows? Is she equally aware that a large number of hon. Members from all quarters of the House believe that the case made by those ladies deserves early, sympathetic and positive consideration?
    The Prime Minister: Yes, but we have tried and, I think, have succeeded in giving both sympathetic and positive consideration to the case of war widows. There are two distinct pensions. One is that administered by the Department of Social Security and the other is the occupational pension, which differs according to whether service continued beyond 1973. The changes made in the occupational pension, coming under the Ministry of Defence, were not retrospective. Most occupational pension improvements are not retrospective. All war widows receive a tax-free pension under the war pensions scheme administered by the DSS, regardless of their husband's date of death or period of service. Those pensions are at preferential rates, some 30 per cent. higher than the national insurance widows' pensions, with age allowances ranging from £5·75 a week at 65 to £14·45 a week at 80. We have done a great deal for the war widows' pension which, as my hon. Friend knows, is tax-free.
    Mr. Flannery: Has the Prime Minister taken note of Her Majesty's inspectorate's report on the alarming situation in our schools? Does she realise that virtually all the press, with the possible exception of Murdoch and company, are saying such things as The Independent said yesterday, when it described the situation as "a creeping

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    educational disaster"? Does she realise that the shortage of teachers, the imposition on teachers of the national curriculum and all the other difficulties that we are experiencing, are of such a nature that the Prime Minister and her Government are creating a situation in education that we have not hitherto witnessed in our lifetime?
    The Prime Minister: Let me just quote from that particular report. It said:
    "In the majority of schools and colleges standards of teaching and learning are satisfactory or better; initial teacher training and in-service training are in much better shape than a few years ago, and the introduction of the GCSE has shown that a combination of central direction and grass-roots professional development and commitment can bring about worthwhile change and improved standards … In many ways, then, the education service is well placed to face the future with some confidence."
    Mr. Malins: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Malins: Does my right hon. Friend agree that the use of bed-and-breakfast accommodation to house some of our homeless families is expensive and, in terms of quality, damaging to families and young children? Does she further agree that we should try to move towards the abolition of bed-and-breakfast accommodation, but meanwhile we should encourage local authorities to use some of their empty stock and to insist that landlords should provide better conditions for the homeless?
    The Prime Minister: I agree with my hon. Friend. Some local authorities in London have very little occasion to use bed-and-breakfast accommodation because they use their council properties very well indeed and they do not keep them vacant. It is absurd that inner London should have about 10,500 empty properties while Labour councils keep some 2,300 families in bed-and-breakfast accommodation.
    Mr. Tony Banks: What about Westminster council?
    Mr. Speaker: Order.
    The Prime Minister: If they used their vacant properties better they would have very much less need for the adverse bed-and-breakfast accommodation.
    Mr. Sillars: Let me take the Prime Minister back to the ground where she was weakest this afternoon, the balance of payments deficit, which is cumulative. Is not the manifestation of that due to two factors? One was the destruction of manufacturing capacity during her first period of dictatorship, which was obscured from people by the fact that year after year she managed to filch billions of pounds in oil wealth from Scotland. Has she any plans for the future when we are not here to steal from?
    The Prime Minister: Manufacturing output is at an all-time record. In Scotland people have done very well. Manufacturing productivity has increased by 5·6 per cent. per annum since 1979 and, as the hon. Gentleman knows, the amount spent per head in Scotland vastly exceeds that spent in England and Wales.
    Mr. Couchman: To ask the Prime Minister if she will list her official engagements for Thursday 2 March.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Couchman: Does my right hon. Friend agree that 1992 offers a unique opportunity for British industry and commerce to take advantage of our membership of the European Community? Does she agree that the director-general of the Institute of Directors would do better to exhort his members exploit that opportunity rather than make unconstructive and foolish criticisms of the EC's structure and personnel?
    The Prime Minister: I have not read the speech but, as my hon. Friend knows, we are fervent believers in the: single market. We believe in free and fair competition between all members of the Community. We agree that when we get that free and fair competition we shall have an excellent chance to do extremely well out of it, in both visible and invisible trade, and we are working to ensure that 1992 completes the single market because it will be to the benefit of our people here. I hope that all industry and financial and other services are taking maximum advantage of the time between now and then to prepare for it very well indeed.

Business of the House
3.31 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 6 MARCH—Second Reading of the Self-Governing Schools Etc. (Scotland) Bill.
Motions relating to Scottish community charge regulations. Details will be given in the Official Report.
Motion on the Access to Personal Files (Housing) Regulations.
TUESDAY 7 MARCH—Estimates day (1st Allotted Day). Debate on class IV, vote 3, so far as it relates to assistance to the egg industry. Details of the relevant Agriculture Committee report will be given in the Official Report.
Debate on funding of overseas students on a motion for the Adjournment of the House. Details of the relevant Foreign Affairs Committee report and the Government's observations will be given in the Official Report.
At Ten o'clock the Question will be put on all outstanding Supplementary Estimates and votes.
WEDNESDAY 8 MARCH—Motions on the Northern Ireland (Emergency Provisions) Acts 1978 and 1987 (Continuance) Order and the Northern Ireland (Emergency Provisions) (Amendment) Regulations.
Motion on the Appropriation (Northern Ireland) Order.
Debate on a motion to take note of EC document relating to derogations in respect of weights and dimensions of heavy lorries. Details will be given in the Official Report.
THURSDAY 9 MARCH—Debate on the Royal Air Force on a motion for the Adjournment of the House.
FRIDAY 10 MARCH—Private Members' motions.
MONDAY 13 MARCH—Motion for the Easter Adjournment.
Proceedings on the Consolidated Fund (No. 2) Bill.
The House will wish to know, Mr. Speaker, that subject to the progress of business it will be proposed that the House should rise for the Easter Adjournment on Thursday 23 March until Tuesday 4 April.
Relevant documents.
[Monday 6 March
Personal Community Charge (Students) (Scotland)
Regulations (SI 1989 No. 32)
Personal Community Charge (Exemptions) (Scotland)
Regulations (SI 1989 No. 63)
Abolition of Domestic Rates (Domestic and Part Residential Subjects) (Scotland) Regulations (SI 1989 No. 241)
Tuesday 7 March
Estimates Day, class IV, vote 3 (Ministry of Agriculture, Fisheries and Food: agricultural support, animal health, arterial drainage, flood and coast protection) so far as it relates to assistance to the egg industry.
First Report of the Agriculture Committee Session 1988–89
"Salmonella in Eggs" (HC 108)
Overseas Student Grants:
Fourth Report of the Foreign Affairs Committee Session 1987–88 FCO/ODA Expenditure 1988–89
Observations by the Secretary of State for Foreign and
Commonwealth affairs on the fourth report from the Foreign Affairs Committee Session 1987–88 on FCO/ODA Expenditure 1988–89 (Cm. 518)
Minutes of Evidence taken on 1 March 1989 on the Funding of Overseas Students (HC 242)
Wednesday 8 March

Relevant European Community Document

4311/89

Weights and dimensions of commercial vehicles

Relevant Report of European Legislation Committee HC 15-xii (1988–89) para 4]
Mr. Dobson: I thank the Leader of the House for his statement.
Who will be replying to Tuesday's debate on eggs? Will it be a Minister from the Ministry of Health, or will it be a Minister from the Ministry of Agriculture—or will we be getting one of each?
Will the Secretary of State for Transport himself be introducing or replying to Wednesday's debate on heavy lorries?
When are we to get the long-promised debate on the Fennell report into the King's Cross fire? The report was published in November and, in view of the business that we have had this week and the business that he has announced for next week, it is getting a little bit difficult for the Leader of the House to argue that he cannot find time for that promised debate.
When will the Leader of the House be able to find time for the promised debate on the substitution of student loans for student grants? If he can get the Secretary of State for Education and Science into the House, rather than for a few photo-opportunities outside, could he get him to take part in a debate on Her Majesty's chief inspector of schools' report on the current state of our schools and, in particular, a debate on the shocking and growing shortage of teachers of mathematics and science?
When are we to have the promised debate on what the Government say is an all-important review of the National Health Service?
Mr. Wakeham: The hon. Gentleman asked me five questions about next week's business. In particular, he asked me which Ministers were to reply to certain debates. It is not usual for the names of Ministers responding to debates to be announced at this time, but I shall try to be helpful to the hon. Gentleman. Tuesday's debate on assistance to the egg industry will be answered by my hon. Friend the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. The hon. Gentleman will know that the Government have only just received the report of the Select Committee and will be responding to the report in due course, in accordance with normal practice. The question of any other debate will have to wait until the response arrives.
My right hon. Friend the Secretary of State for Transport has some very strong views on the subject of heavy lorries. As I said, it is not usual to announce who will speak in a debate, but I shall be extremely surprised if he does not take part in the debate next week.
I regret to tell the hon. Gentleman that I have nothing more to add to what I have said before about the Fennell report. There is to be a debate, but I cannot announce the date for it at the moment.

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Again, I have nothing further to add to what I have said previously about student loans. The White Paper asked for a response to a number of points and my right hon. Friend the Secretary of State for Education and Science is considering them. I know that he would delight in taking part in a debate, but I cannot arrange one at the moment.
I agree that the National Health Service is a subject for debate, but I am not at present in a position to announce a date.
Mr. Bob Dunn: Will my right hon. Friend take steps today to ensure that the Government and British Rail have brought to their attention the proposals by a group of individuals who support a scheme called TALIS, which seeks to replace the four options proposed by British Rail for a high-speed rail link through the county of Kent? Is he aware of the total opposition in Kent and south London to British Rail's current proposals? Will he tell the House why he thinks that the Garden of England should be destroyed by British Rail for the sake of saving quarter of an hour on the journey time from Paris to London?
Mr. Wakeham: My hon. Friend tempts me to answer questions which go rather wider than the business for next week. The right procedure is for British Rail to consider all the options and to make its proposals known. Those proposals will require, as I understand it, legislation and the matter will, therefore, come before the House.
Mr. James Wallace: Is there to be any opportunity for a debate on remand prisoners and the proposals that the Home Secretary announced yesterday?
Given that the Secretary of State for the Environment yesterday ruled out legislation banning chemicals that damage the ozone layer, and as it is widely reported that the Prime Minister will tonight announce such legislation, will the Leader of the House clarify the position?
Mr. Wakeham: This is neither the time nor the occasion for me to announce legislative proposals of the Government. There is a proper procedure for that, and it is not for me to do so at the Dispatch Box today.
As for the statement of my right hon. Friend the Secretary of State for the Home Department, he indicated the further work that was being considered, and I have no proposals for a debate on this subject.
Sir Michael McNair-Wilson: Can my right hon. Friend say when there will be a debate on the Anglo-Irish Agreement, in view of the fact that the period for the review which is taking place at present is not open-ended?
Mr. Wakeham: I realise that a number of my right hon. and hon. Friends would like a debate on this subject, and I recognise the need for one, but there are no immediate plans for a debate. It is a question of judgment as to what is the right time. On Wednesday there will be debates on a number of Northern Ireland matters, and it seems to me that, with a bit of ingenuity, my hon. Friend might then be able to make some of the points that he wants to make.
Mrs. Ann Clwyd: May I draw the attention of the Leader of the House to early-day motion 498 concerning the report produced by three London boroughs on airline food safety?
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[That this House is appalled that nearly a quarter of all airline meals tested at Heathrow Airport contained excessive levels of potentially dangerous bacteria; notes that the survey was conducted by Hillingdon, Hounslow and Spelthorne Boroughs which cover the airport; further notes that most of the foods were prepared by the cook-chill method which has been implicated in many of the cases of listeria food poisoning, but notes that the foods were not tested for listeria and therefore calls for a further test by environmental health officers; is further concerned that an excessive level of E.coli, the bacteria associated with, faecal contamination, was found in 209 separate dishes; and calls on the Government to take urgent action to ensure the safety of food eaten by airline passengers and to consult with all national and international agencies involved in food hygiene in air transport.]
One quarter of all meals tested at Heathrow were found to contain potentially dangerous bacteria. Should not the Government initiate their own debate on food safety in the light of this report? Does the right hon. Gentleman advise airline passengers to take their own sandwiches?
Mr. Wakeham: As the hon. Lady will know, the report of the survey of airline meals undertaken between June 1984 and December 1986 is a useful document and is being drawn to the attention of national and international agencies involved in food hygiene in relation to air transport. When the survey was being conducted listeria was not regarded as a problem. In any case, there have been no reports of such problems with airline meals. The overall standard of airline catering is well controlled, and reported instances of food poisoning are relatively rare. However, the House may well discuss these matters whether or not I initiate a debate.
Sir Geoffrey Johnson Smith: My right hon. Friend will be aware that it is some time since the White Paper on planning and structure plans was published. In view of the deep interest that has been shown in this important matter—on both sides of the House, but especially amongst my hon. Friends representing constituencies in the south-east—can my right hon. Friend say that there will be an early debate on it?
Mr. Wakeham: I agree that it is an important matter, but since, at the moment, many other matters demand time, I cannot promise that there will be an early debate. However, I will certainly bear in mind my hon. Friend's point.
Mr. Dennis Skinner: Does the Leader of the House recall that a few weeks ago I called for a public inquiry into the methane explosion in Arkwright Town, in my constituency? Is he aware that Ministers are still at sixes and sevens over this proposal, that 40 families had to be evacuated, that these people lost substantial sums of money, that their houses have been devalued as a result of the explosion, and that there is continuing worry concerning the village? Will the right hon. Gentleman call upon the heads of the two Departments concerned—Energy and Employment—to try to ensure that there will be a public inquiry into the explosion so that my constituents may be assured that something is being done?
Mr. Wakeham: I will certainly refer the matter to my right hon. Friends. I cannot accept the premise of the hon.

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Gentleman's question, though it is perfectly proper that he should put it on behalf of his constituents. He deserves an answer, and I shall get him one.
Mr. Peter Thurnham: It is nearly 12 months since the Griffiths report was published. I wonder whether my right hon. Friend could find time for a debate on the recommendations in that report and on care in the community generally.
Mr. Wakeham: I cannot add anything to what I said last week. Active consideration is being given to the Griffiths report, and we hope to be in a position in the near future to bring forward our own proposals.
Mr. James Lamond: Can the Leader of the House tell us whether any consideration has been given to the possibility of inviting President Gorbachev, during his visit this country next month, to address both Houses of Parliament, perhaps from the Royal Gallery?
Mr. Wakeham: I know of no proposal to do so, though the suggestion certainly has its attractions.
Mr. Robin Maxwell-Hyslop: Now that January 1989 has passed, can my right hon. Friend tell the House whether it will have an opportunity to take decisions on the crucially important report of the Joint Committee on Private Bill Procedure in time for its decisions to be implemented before the next tranche of private Bills is introduced in November?
Mr. Wakeham: I agree with the first part of my hon. Friend's question, but I can add nothing more to the second part other than to repeat the answer that I gave a week ago—that I recognise the need for a debate. Much consideration had to be given to that very important report, and I have undertaken to have a debate shortly after Easter.
Rev. Martin Smyth: The Leader of the House will remember that I have asked before about the possibility of clarification of press speculation concerning the British-Irish parliamentary tier. The right hon. Gentleman was not able to help me on that occasion. Since then announcements have been made. Is the right hon. Gentleman in a position to give the House some data about the matter? Will it be in a position, for example, to summon Ministers before it?
Mr. Wakeham: There have been some discussions, and some progress has been made, on the setting up of a parliamentary body that would seek to encourage contacts between the Westminster Parliament and the Parliament in Dublin, and I welcome closer contacts on it. There is considerable work still to be done before final arrangements are achieved. Of course I will see to it that discussions take place through the usual channels with all parties in the House before any announcement is made.
Mr. Roger Moate: With regard to next week's debate on the proposal by the Community to impose heavier lorries on this country, can my right hon. Friend confirm that, in the Government's view, that matter is subject to the unanimity rule, and therefore is
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subject to a British veto? Does he agree that it is unsatisfactory that the House will be allowed simply to take note of that matter rather than express a view?
Mr. Wakeham: I agree that it is an important matter. I do not feel that it is appropriate at this time for me to go into the substance of the subject that the House will debate later next week, but my right hon. Friend the Secretary of State for Transport will take part in it, and no doubt he will be able to give my hon. Friend satisfactory answers to his questions.
Mr. Geoffrey Lofthouse: Is the Leader of the House aware of the statement by Sir Robert Haslam on "Newsnight" last night, confirming a forecast made by myself and other hon. Members some time ago, that, arising out of the privatisation of electricity, he may find it necessary to close profitable pits? Is he also aware that, during this week, the closure of another two Yorkshire pits has been announced? Given that the average age of a miner is only 34, a man who will receive no weekly protection payments, and who is at present having great difficulty because of high mortgage interest rates, lives in fear of what may happen if he is thrown out of work. Will the Leader of the House arrange for an early debate to enable the Government to tell the House and miners what policies they have to provide alternative employment in mining communities which have already been savaged?
Mr. Wakeham: I recognise the hon. Gentleman's interest and concern in matters relating to mining. I suspect that many of the questions that he put to me are matters for the management of British Coal. Nevertheless, I shall refer his points to my right hon. Friend the Secretary of State for Energy. I do not see an early opportunity for a debate on the coal industry, but we have debates from time to time, and I shall certainly bear in mind the hon. Gentleman's suggestions.
Sir Richard Body: Further to the question concerning next week's debate on heavier lorries, is it not the case that the House will not be able to take a decision on that matter? Therefore, if the matter is out of our hands what is the point of having a debate?
Mr. Wakeham: My right hon. Friend the Secretary of State for Transport wishes to hear the views of the House, and he will be reporting to the House. If I were to try not to have a debate, more of my right hon. and and hon. Friends might complain than the number of those who are welcoming the debate. On balance, I have probably done the right thing. If my hon. Friend does not wish to take part, I do not think that he need worry.
Mr. Jeff Rooker: Will the Leader of the House arrange for the appropriate Minister to make a statement next week on the way in which the Government have operated in the past decade the Croham directive of 1977 on the provision of Government background factual and analytical material in arriving at decisions? To assist the House, does the Leader of the House consider it appropriate for all background factual and analytical material and the briefings relating to the British Antarctic Survey, and the alleged discovery by the Prime Minister of the gap in the ozone layer, to be placed in the Library? Without that information, she will not be believed.
Mr. Wakeham: The last part of the hon. Gentleman's question is not worthy of him. On the more general point, this Government have been very forthcoming in giving background information on many matters that are for the House to decide. They have been rather better in doing so than their predecessors. I know that there are difficulties, and that a number of Select Committees seem to be pressing the Government to make available the advice that officials give to Ministers. The Government are right to say that such information should not be made public.
Mr. Ian Gow: Did my right hon. Friend really tell the House a few moments ago that we are to have a debate next Tuesday on the report of the Select Committee on Agriculture? Has he read that report? If he has, does he not think that, instead of having a debate next Tuesday, it would be better for the Select Committee to take its report away, rewrite it and get rid of all the muddled thinking and for us to have a debate on it after the revised report has been laid before the House?
Mr. Wakeham: The question whether we have a debate on the report is not primarily a matter for me. The Liaison Committee believed that the report should be discussed in relation to the Estimates day and I was happy to oblige. I have not read every word of the report, but I have read a number of parts of it. Perhaps my hon. Friend was referring to paragraph 101. If he was, I have some sympathy with his view.
Mr. Eric S. Hefter: In view of the fact that I have asked the Leader of the House for many weeks about safety in the construction industry—I think that I gave him a rest in the past two weeks—and that he will have noted that the early-day motion tabled by myself and other hon. Members had more than 220 signatures from hon. Members of all parties, will he assure me that we shall have a debate on that subject before the Easter recess? We may not be able to do anything about heavy lorries, as was mentioned by the hon. Member for Holland with Boston (Sir R. Body), but we can do something about safety in the construction industry. Is it not time that we had a proper debate and took some action to improve safety for workers in that industry?
Mr. Wakeham: I share the hon. Gentleman's concern about safety, as do the Government. The Government have a record that stands up to good inspection, while the industry itself has a record that, although it is improving, is not as good as it should be. I wish that I could meet his request for a debate in Government time, but I cannot do so. However, the Consolidated Fund debate and the Easter Adjournment debate would present opportunities for him to raise matters of concern, and it would be proper for him to do so.
Mr. David Evans: May I draw my right hon. Friend's attention to early-day motion 494?
[That this House notes the statement of the honourable Member for Lewisham East, published in the Birmingham Evening Mail on Friday 17th February 1989, to the effect that he was present at the football match Millwall versus Newcastle when, he is reported as saying 'I was at the Millwall versus Newcastle game when the club rooms, the directors and their guests were attacked'; further notes that the Chairman of Millwall Football Club, supported by senior officers of the police who were present, has repeatedly made it clear that this was- a minor incident when two windows
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were cracked by visiting supporters who were under police escort at the time and that at no time were any directors of either club or their guests attacked or threatened, and that the Minister for Sport was unaware of this incident until his attention was drawn to it some time later; and, in these circumstances, has no hesitation in accepting the account of the Chairman of Millwall Football Club.]
It is headed:
"Comments of the Minister for Sport"
and is thoroughly misleading. The motion states that my hon. Friend said:
"I was at the Millwall versus Newcastle game when the club rooms, the directors and their guests were attacked."
My hon. Friend actually said:
"In November, I was at the Millwall versus Newcastle game where the club rooms the directors and their guests were in were attacked."
Those who tabled the early-day motion should be brought to the House and made to withdraw it or resign from the Opposition Front Bench.
Mr. Wakeham: I have many responsibilities but, thank goodness, having to vouch for the accuracy of early-day motions is not among them. My hon. Friend is absolutely right. I have copies of both the Birmingham Evening Mail and of early-day motion 494. Either the hon. Members who tabled the motion were incompetent in their copying of the newspaper article, or they were misleading. I leave it to my hon. Friend to judge which it was.
Mr. Max Madden: Is it not astonishing that the House has not been given an opportunity—and is apparently not to have the opportunity next week—to discuss issues arising from the publication of the book "The Satanic Verses"? As a committee of national British Muslim organisations first warned the Prime Minister last October of the grave offence caused by the book and the threat to public order posed by its publication, will the Leader of the House urge the Prime Minister to call upon the Foreign Secretary and the Home Secretary to see what fresh initiatives can be taken to defuse this dangerous and difficult situation? Will he also draw her attention to early-day motion 510, which some believe may offer the key to peace in this very difficult matter?
[That this House urges Salman Rushdie to instruct his publishers in the United Kingdom and overseas to stop producing more or new editions of The Satanic Verses; and believes such action would persuade Muslims in Britain and overseas to end their protests against the book thereby stopping more death, injury and disorder, compel Ayatollah Khomeini to withdraw his odious death threat against Mr. Rushdie and enable Mr. Rushdie to live in peace and safety.]
Mr. Wakeham: The hon. Gentleman is being grossly unfair. My right hon. and learned Friend the Foreign Secretary came to the House and explained the position on all the events of the past weeks. We made it abundantly clear that death threats against our citizens are totally unacceptable and quite incompatible with any kind of normal relations. Britain has the fullest respect for Islam and for Moslem communities here and abroad, and we fully understand the deep offence that the content of the book has given to Moslems, but that does not justify the statements that were made, which we think are totally unacceptable. The Government have made themselves very clear on this matter, and I am surprised that the hon. Gentleman phrased his question as he did.
Mr. Robert McCrindle: Should we not have an early debate on the worrying and growing problem of personal debt? Among other things, we might focus on the seeming ease with which some people can gain access to credit cards and other forms of credit. Any citizens advice bureau will tell my right hon. Friend that the problem is growing throughout the country.
Mr. Wakeham: My hon. Friend, like me, represents part of the county of Essex, and I do not hear many of my constituents talking about the ease with which they get credit. Instead, I hear a number of complaints about the difficulty that they have in meeting interest charges on their existing borrowing. They all recognise, however, that this is a fundamental part of the process of controlling inflation. As my hon. Friend knows, there will be an opportunity after 14 March, extending to several days, to discuss such matters. It seems to me that his point would be highly relevant to the Budget debate.
Mr. Greville Janner: In view of the characteristically offensive response given to me by a junior Home Office Minister at Question Time in reply to my question about inadequate policing in Leicestershire, and as the hon. Member for Rutland and Melton (Mr. Latham) fairly said that this is not a matter of controversy between hon. Members on either side of the House who represent that county, may we please have a debate on the matter? The Minister of State, Home Office could then be called to account and would have to show some understanding of the concern of people who cannot go out at night without fear because there are not enough police men on the beat and because violent crime in our county has doubled since the Government came to power.
Mr. Wakeham: I was not present at Question Time and I therefore cannot accept the hon. and learned Gentleman's description of my hon. Friend's reply. I find my hon. Friend to be a most courteous and gentle person who usually gives good and clear answers. There is a solution available to the hon. and learned Gentleman. He could put in for a debate during our proceedings on the Consolidated Fund Bill. If it fell in the middle of the night, both the hon. and learned Gentleman and my hon. Friend would get their just deserts.
Mr. Michael Latham: Will my right hon. Friend arrange next week, or certainly before the beginning of April, for my right hon. Friend the Secretary of State for Education and Science to explain to the House how the abolition of charging for expeditions during school hours will work? Is he aware that there is considerable concern in rural schools about those proposals which I have raised with Ministers, but I cannot pretend that I have received satisfactory replies?
Mr. Wakeham: I recall that my hon. Friend raised the matter with me during a recent Adjournment debate. As the Easter Adjournment debate is coming up fairly soon, I shall get in touch with my hon. Friend before then so that I do not have to answer him again on that subject, but I regret that I cannot promise him an early debate.
Mr. D. N. Campbell-Savours: May I have a frank reply? Is the Leader of the House ever consulted by, or does he consult, members of the security services on
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matters relating to security? Before he replies, will he remember what happened during the Ronan Bennett affair? May I refer him to his reply to me last week?
"I am not prepared to answer questions on security."—[Official Report, 23 February 1989; Vol. 147, c. 1159.]
May I have a frank reply?
Mr. Wakeham: I have a very frank reply. I have nothing to add to the answer that I gave last week, except to say that I have not the remotest idea how the hon. Gentleman's question relates to next week's business.
Mr. Kenneth Hind: My right hon. Friend will be aware of the disinformation currently being circulated by the hon. Member for Peckham (Ms. Harman) about the White Paper, "Working for Patients". Will he give an undertaking that the House will have an early opportunity to debate the matter so that we can underline the fact that the Health Service will continue to be free, funded by taxation, and that my constituents will not have their hospital removed into the private sector, as the Opposition seem to suggest?
Mr. Wakeham: In regard to a debate, I have nothing to add to what I have said already. I do not know whether my hon. Friend refers to misinformation supplied by the hon. Lady before or after the White Paper was published.
Ms. Joyce Quin: Has the Leader of the House seen early-day motion 256?
[That this House welcomes the opportunity to consider the Public Safety Information Bill, which comes up for its Second Reading on 24th February, and joins with the all-party group of honourable Members as well as such organisations as the British Safety Council, the Consumers' Association and the Scottish Consumers' Council, and also such local authorities as Slough Borough Council, Middlesbrough Borough Council, Harrogate District Council, Shrewsbury and Atcham Borough Council, Wansbeck District Council and Bedfordshire County Council, in supporting the Bill; and further calls upon the Government to support the Bill and assist it in its passage through the House, thus ensuring that the Bill becomes law.] It relates to public safety information and it has been signed by more than half the number of right hon. and hon. Members. Does he accept that such widespread support fully justifies an early debate on the subject? Does he further agree that the Government should respond to the majority wishes of hon. Members and support the proposed legislation as soon as possible?
Mr. Wakeham: The Government have seen the proposals in the Bill and Ministers have asked the Health and Safety Commission to examine the Bill and let us have its views on the ideas behind it. The Health and Safety at Work etc. Act 1974 provides a comprehensive framework for public safety and should not be altered without proper consideration.
Mr. Richard Holt: My right hon. Friend will be aware of the rally taking place in the House today of war widows and hon. Members from both sides of the House who support them in their quest for proper and equable treatment by the Government. Is it not time that we had a full debate on the matter? If there is difficulty in finding speakers to occupy all the time allocated to the RAF debate next week, perhaps we could use the time to debate the situation of the war widows who, after 40 years

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or more in many cases, do not receive the same treatment as the widows and wives of those who were our enemies and are now our partners in Europe.
Mr. Wakeham: I cannot add to what my right hon. Friend the Prime Minister said on the substance of the matter. Whether my hon. Friend's views would be in order in the debate on the Royal Air Force next week is a matter not for me but for Mr. Speaker.
Mr. Harry Barnes: The Leader of the House will be aware that within five days of the storm damage to the south of England on 16 October 1987, the Secretary of State for the Environment rushed to the Dispatch Box, at the first available opportunity after the recess, to say that the Bellwin scheme would assist local authorities. The Bellwin scheme allows county councils, after spending the penny rate, to get 75 per cent. grant assistance. It is 17 days since there was storm damage in Scotland. In an answer to me yesterday, the Secretary of State for Scotland said that it is too soon to decide whether the Bellwin scheme should be used for Scotland.
What is the difference between Scotland and the south of England? Has it anything to do with the coming poll tax legislation? There is to be a debate on Monday on the poll tax regulations. Is it right to say that the Bellwin scheme has not been worked out in terms of the poll tax?
Mr. Wakeham: I have no idea of the answer to that question, but I can find it out. However, the hon. Gentleman's suggestions do not sound plausible. It seems to me that it was fairly clear whether the Bellwin scheme applied. I have no reason to believe that the proper procedures have not been followed in this case as in the previous case.
Mr. Harry Greenway: Will my right hon. Friend arrange a debate next week on the environment so that we may take note of the Government's latest views and examine the suggestions of the Opposition and their alleged keenness to preserve the environment? That is what they claim in their report, but in practice the Labour council in Ealing is determined to destroy 17 beautiful acres of children's playing fields at Cayton road, Greenford, surrounded by very fine trees, and to build on allotments and other nice, environmentally clean areas. Once more the House must take account of the Labour party's actions, which belie its words.
Mr. Wakeham: My hon. Friend raises an important matter which it is right that the House should discuss. My hon. Friend's best chance of discussing the matter is in the Easter Adjournment debate or in the debate on the Consolidated Fund.
Ms. Marjorie Mowlam: Will the Leader of the House find time in the near future to ask the Secretary of
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State for Social Services to explain to the House why there is many months' delay in the printing and delivery of leaflets explaining mobility and disability allowances? I am sure that he is aware that those leaflets have not been available in libraries in Cleveland for many weeks. I hope that the Secretary of State for Social services does not tell the House about the lack of take-up. If people do not know about those allowances, the Secretary of State's figures must be questionable.
Mr. Wakeham: I do not have at my fingertips details of why leaflets are not available in Cleveland. However, I shall certainly refer the matter to my right hon. Friend and get the hon. Lady an answer to her question.
Mr. Tony Banks: May I again draw the attention of the Leader of the House to early-day motion 498 on airline food and ask for an early debate on the matter? Is he aware that about 209 separate dishes were identified as having been contaminated with faecal remains and that eight Members of Parliament, of whom I am one, will be going to the United States next week? I am sure that he would not want eight by-elections on his hands. I am a very nervous passenger. It is bad enough having the thought that one 'will be hitting the ground without realising that one will be having the galloping runs at the same time.
Mr. Wakeham: This place would be poorer without the hon. Gentleman. I hope that he has a safe journey.
Sir Peter Emery: Although this may be the last question, I do not think that it is the least important. Will my right hon. Friend raise with the Secretary of State for Defence a problem faced by many people who served in the forces in Crete? An award granted by the Greek Government which was promised during the battle to the men who fought in it is being blocked by the British Government? Those men are extremely concerned, and it seems awfully petty that our Government should be willing to block the award. Will my right hon. Friend arrange for that matter to be dealt with next week and properly cleared up?
Mr. Wakeham: I cannot promise my hon. Friend a debate on the matter, and I cannot confirm the analysis that he gave it, but I will certainly see that my right hon. Friend knows of his concern and writes to him.
Mr. Ray Powell: The Children Bill has now had its Third Reading in the other place. When can this House expect it?
Mr. Wakeham: I am pleased to hear the news from the hon. Gentleman. The Bill will come to this House fairly soon, and I will be arranging a debate. Obviously, I have to discuss the date through the usual channels. I have no fixed date in mind at the moment, but it will be fairly soon.

Adjournment (Easter)
Mr. Speaker: I have a short statement to make about arrangements for the debate on the motion for the Adjournment which will follow the passing of the Consolidated Fund (No. 2) Bill on Monday 13 March 1989.
Members should submit their subjects to my office not later than 9 am on Thursday 9 March. A list showing the subjects and times will be published later that day. Normally the time allotted will not exceed one and half hours, but I propose to exercise a discretion to allow one or two debates to continue for rather longer, up to a maximum of three hours.
Where identical or similar subjects have been entered by different Members whose names are drawn in the ballot, only the first name will be shown on the list. As some debates may not last the full time allotted to them, it is the responsibility of Members to keep in touch with developments if they are not to miss their turn.

Adjournment (Easter)
  BILL PRESENTED
    HOUSING THE HOMELESS
    Mr. Clive Soley presented a Bill to amend the Housing Act 1985 and the Housing Act 1988 to make better provision for housing homeless people; to limit the period of time during which homeless people may be accommodated in bed and breakfast hotels; to regulate the charges which may be made for such accommodation; to provide for the regular inspection of bed and breakfast hotels used to accommodate homeless people and to prohibit the use of accommodation which does not satisfy prescribed health, fire, safety and space standards; to extend protection from eviction to homeless people accommodated for a period of time in such hotels; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 7 April and to be printed. [Bill 91.]

    Early-Day Motion 494
    4.11 pm
    Mr. James Pawsey: On a point of order, Mr. Speaker. It may not strictly be a matter for you, but I know how jealous you are about the Order Paper. I draw your attention to early-day motion 494, which is headed "Comments of the Minister for Sport".
    [That this House notes the statement of the honourable Member for Lewisham East, published in the Birmingham Evening Mail on Friday 17th February 1989, to the effect that he was present at the football match Millwall versus Newcastle when, he is reported as saying 'I was at the Millwall versus Newcastle game when the club rooms, the directors and their guests were attacked'; further notes that the Chairman of Millwall Football Club, supported by senior officers of the police who were present, has repeatedly made it clear that this was a minor incident when two windows were cracked by visiting supporters who were under police escort at the time and that at no time were any directors of either club or their guests attacked or threatened, and that the Minister of Sport was unaware of this incident until his attention was drawn to it some time later; and, in these circumstances, has no hesitation in accepting the account of the Chairman of Millwall Football Club.]
    It appears that the motion contains certain inaccuracies. It quotes my hon. Friend the Member for Lewisham, East (Mr. Moynihan), the Minister with responsibility for sport. The quotations in the motion are grossly inaccurate. As the Order Paper is the official organ of the House and this might bring the House into disrepute, I wonder whether you will join with me in calling for the sponsors to withdraw the motion.
    Mr. Speaker: I do not know whether the hon. Gentleman was here a few moments ago, but the matter was raised by the hon. Member for Welwyn Hatfield (Mr. Evans), and dealt with by the Leader of the House. It is not a matter for me.

    Housing
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]
    4.14 pm
    The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier): The House has been patient for the last few weeks in waiting for this debate on housing. The hon. Member for Hammersmith (Mr. Soley) and we, too, have been patient in waiting for it. Now that the moment has arrived, I welcome the opportunity of emphasising the Government's strategy on this important subject.
    The Government's aim in housing is no different from that of any post-war Government. We want decent, affordable and suitable housing to be within the reach of all families. We differ from other Governments, and certainly the Opposition, on the best way of achieving that aim.
    Immediately after the war, there were three main policies to restore a decent standard of housing in Britain: first, a huge public sector programme of housebuilding; secondly, restrictions on private house-building to give priority to the public sector programme; and, thirdly, controls to keep rents down in the private rented sector. With about 2 million fewer houses than households, that crash programme approach was fairly understandable. As a direct comparison, today we have more houses than households—in fact, 300,000 more—so circumstances are very different.
    The post-war approach to housing worked by putting bureaucratic controls in place of market forces. One can do that for a while, but, in the end, market forces will have their revenge. If market forces and the resources of the private sector are suppressed, we will produce less, we will produce goods that people do not want, and it is certain that we will produce the wrong amount in the wrong places. Sadly, the post-war housing policies of big public sector building programmes and controls of private sector rents trundled on unchanged through the 1950s, 1960s and 1970s, long after the crisis of housing shortage everywhere had given way to a much more varied pattern of local needs that could not be solved by that blanket approach.
    As a result, we now have the largest state-owned or public housing sector in western Europe and the smallest private rented sector. Other countries have been far more successful in maintaining investment in the private rented sector by encouraging private investment, and by using public money to supplement private money rather than to replace it.
    For example, despite the war's devastation and massive immigration from East Germany, Germany managed to bring demand and supply for rented accommodation back into balance more quickly and effectively that we did. It did that by encouraging private investment. Today, 60 per cent. of German housing is rented, over 40 per cent. of the total is provided by private landlords, 13 per cent. by bodies similar to housing associations, and only 3 per cent. by municipalities. But here in this country, by insisting that subsidised housing had to be built for the public sector, be public sector-owned and have public sector landlords, we also helped to create the major economic problems that were fuelled by the excessive public expenditure which characterised the 1960s and 1970s.
    Mr. David Winnick: A Conservative Government introduced the Rent Act 1957, which was meant to encourage private residential dwellings. As a result of that Act, by the time the Labour Government came to power in 1964, far from there being any increase in private dwellings, there had been a substantial reduction, as well as the scandal of Rachmanism and abuse.
    People are desperate for accommodation. They come to our surgeries or write to us day in and day out. They cannot afford to become owner-occupiers because they cannot afford a mortgage. How can they afford the new rents which will not be regulated? They cannot afford market rents.
    Mr. Trippier: If the hon. Gentleman had listened a little more carefully, he would have gathered that I made a clear distinction between the policy of this Government and that of past Governments. I included Conservative Governments, too. If the hon. Gentleman follows me a little more carefully and opens his ears instead of his mouth, he will hear my explanation of why the Rent Acts are disastrous.
    I was referring to the inflation which characterised the 1960s and 1970s. There must be a limit on public expenditure. I accept that Opposition Members do not believe that there should be, but there must be, and I will develop that theme later. If the Government absorb too high a proportion of the national output, they will fuel inflation. That was why we saw the record level of inflation of about 27 per cent. under the last Labour Administration. That was why we had the IMF crisis, and why the last Labour Government were forced to cut public housing investment by one third in their last two years in office. Perhaps this is an opportunity for the hon. Member for Hammersmith to intervene.
    Mr. Tony Banks: I will.
    Mr. Trippier: In doing so, I hope that the hon. Gentleman will explain why the last Labour Government cut public expenditure in public housing.
    Mr. Banks: I realise that the hon. Gentleman is not an economist and does not know a great deal about housing, either, but he is part of the Government. How can he say that the number of homeless has actually doubled since 1979? Surely that deserves an explanation as well?
    Mr. Trippier: I will give the hon. Gentleman that explanation. Like Opposition Members, I do not believe that the problem of homelessness is a matter for housing policy in the round. I shall develop that theme throughout my speech. I noticed that the hon. Gentleman ducked the opportunity that I put to him, and which I now put to the hon. Member for Hammersmith, to intervene now or at some later stage and explain why the Labour Government cut public housing in their last two years.
    Mr. Clive Soley: I shall deal with it now. I shall not let the Government duck the issue. In their last year, the Labour Government produced over 70,000 houses. It was not one of our best years, not least because of oil price rises. The Minister is saying that he wants to cut public expenditure because it must be limited. Will he limit the public expenditure outlay on mortgage income tax relief, which is now up to nearly £6 billion, one quarter of which goes to those who earn over £25,000 a year?
    Mr. Trippier: It could possibly be the greatest understatement we have heard in the House that the last year of the last Labour Government was not one of their best.
    We can assume that that is correct because it led to the general election at which they were defeated. The hon. Gentleman, however, did not answer my question.
    Mr. Eric S. Heffer: The hon. Gentleman will be aware that we were building more houses than have been built since, but he asked a fair question. Why did the Labour Government cut back on housing? He should know—I do not think that he was here at the time—that many of us on the Back Benches fought strenuously against the housing cuts that were being made by the Labour Administration. They unfortunately had to make those cuts because they were asked to do so by the IMF, which adopted not the Socialist policies for which some of us were arguing but the capitalist Tory policies to which we objected.
    Mr. Trippier: The hon. Gentleman knows that I have some respect for him, not least in the matter of his honesty, and that was an honest comment which I believe to be true. The only correction I would make is that, prior to the IMF coming on the scene, the Financial Secretary to the Treasury of the day, now Lord Barnett, had already cut that budget, and in the noble Lord's book "Inside the Treasury" he explains in clear detail what happened during the period to which the right hon. Member for Liverpool, Walton (Mr. Heffer) referred.
    Mr. Dennis Skinner: We know all about that.
    Mr. Trippier: I appreciate that the hon. Gentleman may know, but some may not. The noble Lord says on page 91 of his book:
    "My main difficulties were with Peter Shore, who as Secretary of State for the Environment, controlled very large budgets in the local authority field. I felt some of them were eminently 'cuttable', especially in expenditure on roads and housing."
    The hon. Member for Walton will agree with that, in view of what he said in his intervention. The Labour party still does not seem to realise that the old approach carried the seeds of its failure and of that Government's destruction.
    In private renting, the fixing of rents at levels that could barely cover the cost of repairs has led to a catastrophic decline. Private renting provided 50 per cent. of the total stock of dwellings in the country immediately after the war. The figure is now only 8 per cent. That is in stark contrast to 30 per cent. in France and 40 per cent. in Germany.
    That 42 per cent. of the private rented stock is in poor condition is a direct consequence of the interference in the market that prevented good landlords from making a modest return and encouraged disreputable landlords—[Interruption.] I thought that the hon. Member for Walsall, North (Mr. Winnick) would come in at that remark. I referred to the disreputable landord, the type to whom the hon. Gentleman keeps referring; he dreams or has nightmares about Rachman and has already mentioned him in this debate.
    Mr. Winnick: I have indeed.
    Mr. Trippier: If anyone deserves to have nightmares, it is the hon. Member for Walsall, North. I admit that
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    disreputable landlords were encouraged to get rid of their tenants to cash in on the price gap between tenanted properties with controlled rents and empty properties for sale. Some people, such as the hon. Member for Walsall, North, find it difficult to believe that the Rent Acts, which were designed to protect tenants, should, in the long run, have done so much harm, but they did. In fact, they were absolutely disastrous.
    The council sector, like all centrally directed programmes, gradually lost touch with what people wanted and eventually produced the concrete mazes that we see in many of our inner cities today——
    Mr. John Battle rose——
    Mr. Trippier: —including the city which the hon. Member for Leeds, West (Mr. Battle) represents.
    Mr. Battle: Despite that remark by the Minister about my city, I am not sure that he knows that the Government of which he is a member did not give much assistance in sorting out the concrete jungle built by Shephards, but that is another story.
    Why was public housing built in the first place? Was it not because conditions in the private rented sector, which predominated in cities such as mine, with 172,000 back-to-back properties, were so bad that public health legislation had to be passed? That led the Government to decide that the only way to provide housing with inside lavatories, bathrooms, and so on, was to build them through the public sector, supported from the common treasury. Is the hon. Gentleman saying that that is not the history of public housing?
    Mr. Trippier: Perhaps the hon. Gentleman should have listened more carefully to my remarks about what happened immediately after the war. I have no doubt that there was all-party support for that crash building programme. That is no excuse for the decline in the private rented sector from 50 per cent. to 8 per cent. today, in contrast with the position in other developed western countries.
    Mr. Harry Greenway: My hon. Friend is right in what he says about concrete jungles. I lived in east London and saw how that area was reduced to a concrete jungle by Labour housing policy. Is my hon. Friend aware that Ealing council will do the same to Ealing unless it is prevented from doing so?
    When the Labour council took over in 1986 there were 30 families in bed-and-breakfast accommodation waiting to be rehoused. People were sucked on to that list from all over the nation and from all over the world, so that the list now comprises 1,300 families and the cost has risen from £300,000 to £16 million per annum. The only way to rehouse all those people in Ealing would be to build on every blade of grass and turn the borough into another concrete jungle, but that must not be allowed to happen.
    Mr. Trippier: I understand the problem outlined by my hon. Friend and, if anything, he understates the case. Because of the dramatic development of public housing, the housing stocks in each borough were too great for people to manage efficiently.
    I do not want to tar all councils with the same brush, but monopoly suppliers in any market tend to see their tenants as dependants instead of as consumers. The modern-day municipal paternalists and their defenders on

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    the Opposition Benches are genuinely confused—none so much as the hon. Member for Walsall, North—as to why their brand of paternalism does not work. They do not see that the root cause of the problem is the assumption that they know what is best for the tenants. In direct contrast, this Government's approach is that those tenants should be free to make their own choices.
    Mr. Skinner rose——
    Mr. Trippier: This is a short debate and I have already allowed perhaps half a dozen interventions. I have tried to be fair to the House, but I now must press on.
    The first of our policies is to put the consumer first. We believe that people can, should and want to take personal responsibility for their housing. State resources should be concentrated on those people who are genuinely in need and who are not able to compete in the market. But they, too, should have far more choice than they have had in the past, including the right to change their landlords if they do not get a decent service.
    The lack of response by the state-directed system of housing supply has meant that, although countryr j 3–8wide there are enough houses for everybody, there are severe local shortages in some areas. In areas of shortage, the most vulnerable households could suffer severely if Government support were cut off. So we intend to maintain a major programme of subsidised housing, but we cannot do that unless we make every penny of public money count.
    The second part of our policy is good housekeeping in the use of that public money. Because public expenditure must be limited, choices have to be made. The old approach, with its insistence on the exclusive use of public sector resources, while rents were often kept low for local political reasons, entailed a huge amount of waste and inefficiency.
    If we can get private investment to add to investment by the public sector in housing, why not do so and build more houses? If better-off people can afford to pay higher rents, why hold their rents down and so reduce the money available to support poorer people? Why should taxpayers, many of whom are not well off, pay subsidies to people who do not need them? Why should we use public investment where private investment will do the job?
    We should focus public resources on those who need them most—the poor, the elderly, the chronically sick and the handicapped. That approach of consumer choice, good housekeeping and focusing support on those with the greatest needs, has shaped the Government's housing policy since 1979. We started with the expansion of home ownership, but the Labour party attacked our right-to-buy policy.
    Mr. Tony Favell: I have been waiting patiently for my hon. Friend to refer to private housing. The Minister has spoken of local authorities and the way in which they have restricted the supply of rented property. Would he like to say something about tight planning controls and their effect on the price of building land? Is he aware that during the 1960s agricultural land was being released at almost three times the rate it is today and during the 1970s at almost twice the rate, and that the price of building land is going through the roof? In the north-west prices increased by 90 per cent. in 1987 and are likely to have more than doubled in 1988. There will be a
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    great effect on the price of housing. Figures issued only last week show that the price of housing in Southampton went up by 50 per cent. last year.
    Mr. Trippier: I have sympathy with my hon. Friend's remarks. That is precisely why my hon. and learned Friend the Minister for Water and Planning recently announced measures that will help to ease the position.
    I was saying that the Labour party viciously attacked the right-to-buy policy. The right hon. Member for Manchester, Gorton (Mr. Kaufman) said that it would not work. But it has worked well; in fact, it has been an astonishing success.
    Well over a million council tenants have bought their own homes since 1979, which is bringing in billions of pounds of private resources to ease the strain on the public purse. They are taking the management of their housing into their own hands. There have been 4 million first-time buyers since we came to power in 1979. Two out of three households in England own their own homes. Now we are tackling the rented sector.
    First, in the rented sector, new tenancies at market rents will encourage existing landlords to continue renting. The tax incentives in the business expansion scheme will accelerate that process. Secondly, in the housing association sector, a 70 per cent. increase in public resources will be supplemented by extra private money to give it new impetus. Thirdly, the financial system for councils' housing will be changed so that they cannot hide poor performance by subsidies from the rates. If they do not operate efficiently, the results will be only too visible to their tenants.
    When authorities like Southwark can allow properties to remain vacant between relets for an average of 24 weeks, or nearly half a year, it cannot be denied that better management is badly needed. Just nine Labour-controlled inner London boroughs, and Liverpool, account for 38 per cent. of the national total of rent arrears, at £86 million between them. Large amounts of arrears, sometimes running into four figures, are owed by individual Labour councillors. It cannot be denied that better accountability is vital.
    Mr. Heffer: I am sorry to interrupt the Minister once again. On the question of rent arrears in Liverpool, is he aware that, in Liverpool more than 15,000 people have been out of work for longer than five years? If the Minister wants to know about rent arrears and the problems of the unemployed, perhaps he should come to some of the estates in my area and see how the people survive on that basis.
    Mr. Trippier: I assure the hon. Gentleman that I am well aware of his estates. He knows that because of my frequent visits to Liverpool.
    My interview on Radio Merseyside this morning with Keva Coombes resulted in the leader of Liverpool city council admitting that it was totally unacceptable to have arrears at the level they are in Liverpool and that it adversely affected those who were paying their rents as well as the ratepayers, because the council has been taking money from the general rate fund to subsidise the housing revenue account.
    Council tenants who feel unhappy with the service that they are getting from their landlords will be able to opt out and accept a new landlord, often a housing association. Whether they go or stay, their freedom to choose will act

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    as a stimulus to efficiency and service. Indeed, it is already doing so. There are plenty of examples of deathbed repentance by councils who are trying to win back the affections of their tenants.
    In addition, a new system for allocating resources for investment by councils would ensure that resources for renovation are much better focused on the areas of real need, rather than on areas that have the most receipts. Opposition Members should welcome such a change, if only they understood it, for many of the areas that they represent will benefit. In the recent Second Reading debate, the hon. Member for Hammersmith seemed to understand so little that he appeared to be quite scandalised by a reform that would help the poorer areas.
    Alongside these policies, we are also introducing new arrangements for improvement grants, so that they are concentrated on those people who most need support, while maintaining a level of expenditure that in real terms is almost double the level of that it reached under the Labour Administration. Twice as much money will be available, and it will be better targeted on the less well off. I should have thought that Opposition Members would welcome that; but they would not recognise good news if it jumped up and hit them in the face.
    When combined, these new policies will have a much more effective impact on the most severe forms of housing need, including homelessness. Housing provided with the help of public sector funds will correspond much more closely with what the tenants themselves want. That is why they will no longer be entirely dependent on their local councils. That is why the Opposition are so agitated.
    Homelessness is one of the most bitter legacies of the old approach to housing that is still espoused by the Opposition. It really. is amazing that with 300,000 more houses than households there should still be more than 30,000 homeless families in temporary accommodation. There can be no clearer demonstration of the misallocation of resources that always results from a State-directed approach to housing.
    As the Audit Commission's report on homelessness pointed out, if the average period taken to re-let a vacant local authority property could be reduced by three weeks outside London and six weeks in London, the number of vacant properties could be reduced to such an extent that an extra 17,700 relets would become available.
    I know that the Housing Act 1988 has been debated exhaustively but there is one topic that needs to be dealt with now—the Opposition's misleading and irresponsible propaganda. All over the country, material is being produced and circulated to tenants on tenants' choice and housing action trusts, which is full of untruths. I am naturally constrained, Madam Deputy Speaker, to use parliamentary language. But it is full of untruths and half-truths and economical half-truths and terminological inexactitudes. Elderly tenants are terrified by leaflets suggesting that their properties are to be handed over to the reincarnation of Rachman. What deceit.
    The hon. Member for Hammersmith is party to that deceit. He undertook to condemn misleading propaganda about tenants' choice. He will recall giving me and the House that undertaking when we were considering the Housing Bill last November. The hon. Gentleman seems to have forgotten that promise. I wrote to him on 19
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    December, enclosing a leaflet produced by Nottinghamshire county council, which is full of complete distortions of the truth. I shall give just one example. It says that rents will go up to market levels under tenants' choice. There was no mention of the fact that the only landlords allowed in tenants' choice will have specifically signed up to charge rents that those on low incomes can afford. There was no mention of the fact that rent levels and arrangements for reviewing them will be one of the matters on which tenants vote.
    Mr. Soley: I must correct the Minister before he gets deeper into the hole. The leaflet was not issued by Nottinghamshire county council. I checked that, and I was going to tell the Minister later. The Minister is doing exactly what he has accused the Opposition of doing. The leaflet was issued at a much earlier stage in the Bill's consideration by a housing group that was not related to the council.
    Mr. Trippier: The hon. Gentleman at least acknowledges that the material exists. I hope that he will denounce it publicly. It never is anything to do with the Labour party. I shall come back to that point in a few moments.
    Mr. Martin M. Brandon-Bravo: I am most grateful to the Minister for giving way, as Nottinghamshire has been mentioned. That material might not be technically or legally issued by county or city, but the House must know, and the Minister will confirm, that the hon. Member for Nottingham, North (Mr. Allen)—I am sad that he is not in his place—has been the greatest peddler of the terminological inexactitudes to which the Minister has just referred.
    Mr. Heffer: On a point of order, Madam Deputy Speaker. I distinctly heard the Minister say that it was Nottinghamshire county council that put out the leaflet. Now he says that it may not have been. He had better withdraw, because it is wrong for a Minister to come to the House and accuse Nottinghamshire county council and then not admit that he is wrong. I ask the Minister to withdraw that now.
    Madam Deputy Speaker (Miss Betty Boothroyd): I am sure that the Minister will make his position clear on the matter.
    Mr. Trippier: I shall, Madam Deputy Speaker. I assure the hon. Gentleman that if I am wrong and if Nottinghamshire county council never played any part in producing the leaflet, I shall be the first to apologise for that mistake, as I always do. [Interruption.] The hon. Member for Hammersmith should not open his mouth at this precise time because I am about to refer to other things that he said he would do but has not done. Having sent two letters to me within one week prior to Christmas, he has not yet replied to my latest letter. It was probably lost in the Christmas post. When he challenged me to debate these issues in public—I cannot think of a more public place than this—in the media or on television, I was happy to accept. I repeat that acceptance now. I am happy to debate the issue with him or with any of his colleagues anywhere, at any time.
    I think that the hon. Gentleman has realised his mistake. I call on him seriously to condemn unreservedly the literature which is going round. If he does not wish to be associated with it—he clearly does not—let him

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    condemn it, say what is wrong in it, and spell out to the House what he does not agree with so that the House and the country may know.
    The hon. Member for Hammersmith does not accept that some tenants may vote to pay slightly higher rents in return for better management and repairs. A recent survey by Glasgow university showed that almost 40 per cent. of tenants would be prepared to pay higher rents for a better service. Some may not, but it is their choice. It is not the Official Opposition's choice. It is not the Labour council's choice. It is not the choice of the wider Labour party or any one of its many divisions, and it has many divisions. It is not even the choice of the National and Local Government Officers Association. It is the tenants' choice. They, and they alone, should decide.
    But when fantasy, imagination, and deception fail him, the hon. Member for Hammersmith has recourse to amateur theatricals. It would be laughable were it not clearly intended to prevent legitimate debate. The way that he and his hon. Friend the Member for Copeland (Dr. Cunningham) tried to sabotage the wind-up speech in the recent Second Reading debate of my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) was a disgrace. I fear that it was all too typical of the way some Opposition Members are bringing on to the Floor of the House the deceitful scaremongering tactics used by their Left-wing activists against tenants. But in truth they resort to those tactics because they have nothing else to say, and because they are desperate to appease the bully boys who are no doubt crucial to their own reselection.
    Behind the Labour party's banner stand those who want to scare tenants into believing that only the council can provide for them; those whose power is threatened by tenants' freedom; and those whose inefficiency will be exposed by tenants' choice.
    The Labour party protests so much, as it has throughout my speech, because it is frightened at the prospect of competition for its municipal fiefdoms—
    Mr. Battle rose——
    Mr. Trippier: I will not give way. I have given way many times. I have just referred to the tactics deployed by Opposition Members, to which the hon. Gentleman is very much a party. He should sit down and listen.
    Mr. Battle: On a point of order, Madam Deputy Speaker. I think it ought to be on the record that if the Minister casts slurs and calls that a speech, and if he makes statements that are not true, hon. Members should have the opportunity to interrogate those statements. It is part of our duty——
    Madam Deputy Speaker: Order. That is not a point of order for the Chair. The Minister will deploy his argument as he sees fit, provided it is within parliamentary conventions.
    Mr. Trippier: We have just had a first-class example of the type of tactics that I was talking about. The hon. Member for Leeds, West simply does not listen. That is the tactic with which we are all too familiar in the House and outside in matters concerning housing, and particularly housing association trusts, which the hon. Gentleman does not know much about, but which exist in his city. That tactic is deployed there. The reason why it is deployed by him, and by the hon. Members for Hammersmith and for Copeland is that they are frightened of giving tenants a
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    choice. They are frightened of competition for their municipal fiefdoms. They are frightened because it is the last bastion of the Labour party—[Interruption.]
    The Government are proud to be the champion of greater freedom, of consumer choice, of more competition and of greater efficiency. Our response to the challenge of today is to trust in people's judgment and their self-reliance, and to let the consumer rule.
    Mr. Robert B. Jones: On a point of order, Madam Deputy Speaker. Towards the end of the excellent opening speech by my hon. Friend the Minister, the hon. Member for Leeds, West (Mr. Battle), twice in my hearing, accused my hon. Friend of lying. He should not use remarks like that in the House simply because he does not like what is being said. He should withdraw.
    Madam Deputy Speaker: Within my hearing no hon. Member accused anyone of lying. They used other words but they certainly did not accuse the Minister of lying. I have very good hearing. That is not a point of order.
    Mr. Robert B. Jones: Further to the point of order, Madam Deputy Speaker. I am sitting nearer to the hon. Gentleman. I accept that you may not have heard it, but I am sure that the hon. Member for Leeds, West will he honest enough to admit to the House that that was precisely what he said.
    Madam Deputy Speaker: Had he done that, I am sure the Minister, who is very much alive to what has been going on, would have taken up the matter himself. We must proceed with the debate.
    4.46 pm
    Mr. Clive Soley: Anyone listening to the Minister's speech who had a housing problem would be appalled at what he had to say. One would think from his speech that there was not a housing problem. I wish to deal with various matters, including some raised by the Minister, but first I will make two other points. First, I want to be as tight with time as I can because it is a short debate. Secondly, I apologise to the House because I will have to leave half an hour early for a meeting on the poll tax at which the Secretary of State for the Environment and I are speaking. I would not like him to be without the advantage of the guidance and the assistance that I may be able to give him from time to time.
    The point that we are making strongly, and with increasing support from across the political spectrum, is that there is a growing housing crisis. Every time the Government try to duck it by referring to the past or to individual local authorities or councillors, they bring shame on themselves because they cannot face up to the problem. What is it? It is a crisis of mortgage rates and market rents. It is a catastrophe of escalating homelessness. It is a lack of low-cost accommodation for rent or sale.
    The Chancellor of the Exchequer's disastrous reliance on interest rates has clobbered home owners with a vengeance. We should never let anyone say that the Conservative party is the party of the home owner. [Interruption.] Yes. The Labour party did far more with start-up schemes and with mortgage relief for first-time buyers than the Conservative party. Let us hear the facts.
    Mr. David Sumberg rose——
    Mr. Soley: Let the hon. Gentleman hear the facts first; then he may intervene if he wishes. I want to limit interventions.
    From January 1988 to January 1989 is just 12 short months. Someone on the average mortgage in Britain is now paying £81 per month more than in January 1988. In the south-east the payment is £112·44 per month more; in inner London it is £135·06 per month more.
    Mr. Sumberg: The hon. Gentleman said that the Labour party is the friend of those who wish to buy their homes. Will he tell the House exactly what the Labour party did for council house tenants who wished to buy their homes?
    Mr. Soley: It is a point that we have been making over and over again. I will repeat it for the hon. Gentleman, who missed it. There is nothing wrong with the right to buy, but it has to be matched by a duty to replace property in housing stress areas. If people are merely given a right to buy, with no duty to replace, the best houses go first. People become trapped in high-rise, grotty, rundown houses from which they cannot be transferred. Waiting lists and homelessness go up.
    Mr. Trippier: If the hon. Gentleman is going to make a comparison with the one particular year on which he has focused, will he compare it with what people paid during the last year or two of the last Labour administration, when inflation was running at 27 per cent?
    Mr. Soley: Significantly less in both percentage and an absolute figure.
    Mr. Trippier: Will the hon. Gentleman give the figures?
    Mr. Soley: I cannot supply them off the top of my head, but I shall supply them. I assure the Minister that he will be able to get them from my own source, the Building Societies Association. If the Minister looked at the figures and other evidence held by the BSA and other organisations, they would tell him something that he should already know.
    When house prices begin to stabilise after house price inflation as a result of interest rates remaining high over a sustained period, homelessness goes up owing to mortgage repossessions. The fastest growing area of homelessness is now due to mortgage repossessions. One in every 10 families is going to the local authority and asking for housing under the Housing (Homeless Persons) Act 1977. They have been made homeless because they cannot pay their mortgages. [Interruption.]
    The Minister makes the mistake, as he shouts from his sedentary position, of supposing that the problem relates only to individual mortgage companies such as the Nationwide Anglias of this world. However, it does not, because it affects many other lenders, including banks and other organisations. Many people have mortgages on which their payments are more than six months in arrears.
    I shall give the Minister the figures. In 1979, the number of mortgages that were more than six months in arrears—the Minister is fond of talking about arrears, and I shall return to that point—was 8,420. In 1986, the figure was 66,930. In 1979, the number of repossessions was 2,530 and in 1986 it was 20,020——
    Mr. Trippier rose——
    Mr. Soley: I shall give way on this occasion, but I shall not do so many more times because if I do it will be at the expense of Back Benchers on both sides of the House.
    Mr. Trippier: I am grateful to the hon. Gentleman for giving way again. He must have heard me give a statement at Question Time last week when I said that the Building Societies Association had made it clear that mortgage repossessions had actually dropped, and that Mr. Boleat had made it clear that there was no direct correlation between higher interest rates and mortgage repossessions.
    Mr. Soley: Why does the Minister not listen before he intervenes? I said to him—to be correct, to a Conservative Back Bencher—that it was no good looking at just the building society figures, because building societies are not the only lenders. He must look at the figures of banks and other organisations that lend money.
    It is not an accident or imagination that one in 10 families has been made homeless as a result of mortgage repossessions. Most of the building societies and a significant number of banks are quite good on this matter. My hon. Friend the Member for Dunfermline, East (Mr. Brown) and I conducted a survey which showed that almost all banks and building societies were worried about their customers' ability to pay and were trying to find ways of making it easier for them. A common theme that came out of the survey was the need to ensure that people sought advice as early as possible. Otherwise, they would inevitably run into trouble.
    Mr. Nicholas Bennett: Will the hon. Gentleman give way?
    Mr. Soley: I shall give way once more, but the hon. Gentleman is biting into his own time.
    Mr. Bennett: Will the hon. Gentleman tell us how the homeless, the residents and the ratepayers in his own borough of Hammersmith and Fulham will be helped by the Labour-controlled council's gambling in the City, in which it lost £50 million?
    Mr. Soley: That intervention is an absolute gift and I shall tell him right now. If, as suggested, it is ultra vires, and the council has to freeze its position, it will walk away with £13 million profit. There will be no loss to the council—the figure in The Independent is wrong. The council would gain £13 million. But it pales into insignificance in the face of the problem that the Secretary of State has created for the Labour and Tory boroughs that have carried out such activities, by his refusal to introduce a proper system of local government finance. He tells local authorities to use business practices. Hammersmith and Fulham used them successfully and made £13 million profit. [Interruption.] It is questionable whether it is illegal.
    We know one thing for sure: if a private company had acted in the same way, everybody would pat it on the back and say how well it had done. It would have been strictly legal in the private sector; it is only local authorities who must not trade in that way.
    I must stick to the point about which the Government are increasingly worried. The Government are blind to the problem being caused by those seeking to buy. A couple of weeks ago the Economic Secretary to the Treasury said:
    "Mortgage rates show no correlation with difficulties over arrears or repossessions".—[Official Report, 26 January 1989; Vol. 145, c. 117.]

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    Let him tell that to the people who are being made homeless, or those 20,000 people whose payments are in arrears.
    Do the Government think that money grows on trees for those people? The dream of home ownership is turning into a nightmare of bed-and-breakfast accommodation for increasing numbers of people, and the Government know that.
    The other day, The Daily Mirror presented the case of Mr. Soussa—one of the many growing examples of the Rachmanite and Hoogstraten-type experiences about which we have warned the Government. The Daily Mirror said that a family of three—two adults and a child—paid rent of £161 per week for one room and a shower which they shared with 10 other families. Their meal times were limited to half an hour a day in the dining room and there was no fire escape.
    When that story appeared in The Daily Mirror, Mr. Soussa gave the family two hours notice to quit and put them in the street. The council—which was not Labour—had to use other bed-and-breakfast accommodation. Other local authorities—including Conservative-controlled Southend—told the Minister that they could do nothing other than resort to bed-and-breakfast accommodation for such people because of the Government's housing cuts.
    Mr. Trippier: The hon. Gentleman has made a silly mistake that he could have avoided if he had done a little more homework. He would then have found that the family to which he referred was the responsibility of Slough—[Interruption.] Oh, the hon. Gentleman knows that Slough is a Labour-controlled council.
    Mr. Soley: The incident occurred in Windsor. The Minister does not understand that the accommodation is in Windsor and other local authorities use it. The argument is not about which councils place such families in bed-and-breakfast accommodation. Is the Minister really saying that Conservative councils do not use bed-and-breakfast accommodation? The argument is quite simply that local authorities—whether Labour, Tory or Liberal—are forced to use inadequate and inappropriate bed-and-breakfast accommodation because of the Government's policies.
    The leader of the Conservative group in Hammersmith, Councillor Peter Prince, has some interesting suggestions. He says that there is nothing wrong with paying £100 rent per week for a two-bedroomed flat—and that it is all right. Can hon. Members say how ordinary people on average incomes are supposed to pay £100 per week rent for a two-roomed flat? He said something far worse, which I should like the Minister to think about.
    In Hammersmith and Fulham, 19 people from Belfast who were threatened by the Provisional IRA have suddenly turned up. Two of the children had been kneecapped, one in both knees, with similar treatment to elbows and ankles. Quite rightly, Hammersmith and Fulham council put those people into bed-and-breakfast accommodation. It had experience of other cases, knew the dangers of sending them back and realised that it must help them.
    However, Conservative Councillor Peter Prince said they should he sent hack to Belfast. That was not only inhumane but also seems effectively to be saying to the
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    Provisional IRA that it can carry on policing Northern Ireland because it is doing a good job. That is what the Conservative party is saying.
    I have encountered people in Hammersmith who are not in council accommodation but are running from both the Provisional IRA and the Unionist paramilitaries. What do I get from the Minister of State, Northern Ireland Office? He says:
    "Hence, while I have every sympathy for the problems faced by local councils"
    in cases of this kind, he cannot help. As a result of the crisis in Northern Ireland, local authorities in Britain must either provide bed-and-breakfast accommodation, send the people back or provide housing out of their own stock. What will the Minister do about that?
    I have argued for many years that the Northern Ireland Office needs a policy to deal with people who are driven out in that way. I have every sympathy with Southend council, which has the same problems as Windsor, Slough and others. Indeed, Southend and the Conservative-controlled London Boroughs Association and Association of District Councils say that they cannot cope without using bed-and-breakfast accommodation—because of the Government's policy.
    How does the Minister think that a family copes with education, health and family stress when they have to live in bed-and-breakfast accommodation and when the Government have no policy on homelessness? In 1978, a total of 53,110 homeless families were accepted. In 1987, the figure was 118,710. The sharp end of the problem is something that I never dreamt I would live to see in this country: men, women and children sleeping in cardboard boxes in the streets and parks of our towns, in both Tory and Labour areas. If the Minister and his hon. Friends really believe that that is the Labour party's fault, let me tell them that no one else believes it. Other people know that the housing crisis has been caused by the present Government. The Minister should not try to dodge that by blaming local authorities for the existence of empty properties.
    Let us get the figures nice and clear. At present 2·5 per cent. of local authority properties are empty, compared with 3·1 per cent. of housing association properties. Both those figures are pretty good, and should be treated with a degree of flexibility. The figure for the private sector is 4·2 per cent. And who is the worst offender of all? The Minister. Nearly 6 per cent. of properties owned by the Government are empty. Houses and flats with three, four and five bedrooms, valued at £150,000 to £200,000, have been empty for up to nine years. The Government, who have known about it for years, are to knock them down to make way for car parking and landscaping around Wormwood Scrubs prison.
    One in five police houses is empty, as are prison houses, defence houses and houses owned by London Regional Transport and other regional organisations. What the Minister likes to do is blame local authorities—to starve them of cash, undermine their morale and erode local democracy and to try to pretend that that solves the problem. He knows very well, however, that the problem lies at the Government's door.
    Horsham council actually gave an empty council house to none other than the Horsham constituency Conservative party to use as an office. I understand that it

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    had to offer something because this was part of an improvement area—but an empty council house as an office? Are we joking?
    Mr. Robert G. Hughes rose——
    Mr. Soley: I will give way to the hon. Gentleman. Perhaps he would like to explain.
    Mr. Hughes: I agree entirely with what the hon. Gentleman has said about empty properties owned by the Government, and I think that the Departments responsible need to clean up their act. As he says, it is a scandal.
    Would the hon. Gentleman comment on another scandal? According to figures produced by the London borough of Hackney, some 300 housing units have been empty for more than three years so that minor repairs can be carried out. How can that be justified in an area of such stress?
    Mr. Soley: I am grateful to the hon. Gentleman for being the first Conservative Member to acknowledge that it is the Government who should be blamed.
    Mr. Hughes: I did not say that.
    Mr. Soley: I do not want the hon. Gentleman to suggest that it is the Department's fault. It is the Home Office Minister's fault. I took the Wormwood Scrubs case to him about a year ago, but the properties are still not being used. Admittedly the junior Minister said that we could use four of them on a short-life basis, and a housing association is trying to do that, although it will be difficult to use four properties on such a basis. The other properties are not going to be used at all.
    Unfortunately, the examples that we give—including some that I have given about the Government—are irrelevant to the main cause, which is a drastic drying-up of the supply of low-cost accommodation for rent or sale. When the Minister opened the debate he revealed his naivety and inadequate grasp of the problem by saying that the country now contained more houses than people. In a technical sense, what he said was true, but it nevertheless showed a complete misunderstanding of the mismatch of properties to people.
    Having said that he recognised the problem of linking people and properties, the Minister did not go on to say how he would deal with it other than through the private market. The Government are saying that the private sector will provide, whereas local authorities cannot. What they are doing constitutes one of the nastiest forms of bullying that I have seen for many a long year. I attend meetings up and down the country which are packed out, with up to 400 people present. Many are very elderly—in their sixties, seventies and eighties. They go to the meetings because they are scared. [Interruption.] If they are scared, it is not because of me. I attended meetings organised by people from the Minister's own council.
    Rochester upon Medway council in Kent has put out a leaflet. People who went to a meeting in the area wanted to know what would happen to them, as the leaflet mentioned no agreement other than one that might result at the end of the day. They were worried because they were being told to vote for an arrangement under which they would have no contract. I beg the Minister to recognize
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    that many elderly people do not understand that housing associations are not just like any old private landlord. When a leaflet about a housing association takeover drops through their letterboxes, they see a return to the 1930s.
    Dame Peggy Fenner: The hon. Gentleman has already referred to what is happening in my constituency, where tenants are to be given a choice. I consider it, to say the least, slightly less than ethical for an Opposition Front Bencher to try to frighten the lives out of tenants when they have not even held the contract in their hands yet. Perhaps he would like to mention the scheme that my city council hopes to introduce. When the scheme is completed and the tenants know the details, they will have a choice.
    Mr. Soley: Let me tell the hon. Lady what I told the people at the meeting. I told them what I always tell them: "There may be cases in which you want to transfer to a different landlord, but first you must know the facts." What scared people about the leaflet was that it said that an assured tenancy was the same as a secure tenancy, which it is not. When I read it, my knowledge of such matters led me to believe that what the organisers meant—and I suspect that their intentions are quite good—was that they would try to make it the same by drawing up a legal contract, but there is no legal contract here. If the hon. Lady took the leaflet along to a solicitor and asked "Should I buy this?" would he advise her to sign? Of course he would not. What is so wrong with her approach is that bullying and frightening people is unnecessary.
    The Minister talked about Nottinghamshire. I eventually got hold of a leaflet published by the Notts Housing Bill Campaign—not by the Labour party. Why did it take so long to find? Because it was published about a year ago, when the Bill first arrived. Much of it is accurate. [Interruption.] It is difficult to see that it is inaccurate. There are some points which are incomplete. [Interruption.] It is not a new word. It is relevant to the case, because the Government's Bill had only just been published. As we all know, that legislation—with constant changes to it—went through on the hoof with a vengeance.
    Of course, the Minister dodged the real challenge that I put to him. My challenge was not for him not just to debate it publicly but for him or me, if we came across any misleading information—which we could not agree on as being misleading and therefore have it put right—to put it to an independent organisation. The two organisations I suggested were the National Consumer Council and the Institute of Housing. However, the Minister has refused——
    Mr. Trippier: No, I have not. I am quite happy——
    Mr. Soley: The Minister has not done that and he has refused——
    Mr. Brandon-Bravo: The hon. Gentleman is talking about my constituency.
    Mr. Soley: Can I have a clear statement from the Minister? I pointed out 10 or 11 serious inaccuracies in the leaflets put out by the Minister's Department. I said that the leaflet entitled "Tenants' Choice" should go to the National Consumer Council or the Institute of Housing for an independent view. He has refused to do that.
    Mr. Trippier rose——
    Mr. Soley: I want only one answer from the Minister. Will he put the leaflet to either of those organisations in exactly the way I suggested in the debate some months ago?
    Mr. Trippier: I know that one has to tell the hon. Gentleman something about 13 times before he is on to it in a flash, but I must make it clear to him again that I am prepared to debate that isue, and the contents of any leaflet in front of anybody in the public or the media. I am prepared to appear on any occasion—even for no money.
    Mr. Soley: I am not talking about appearing or debating. I am saying that where we cannot agree on what is misleading. we should put it to an independent organisation, which is what the Minister is refusing to do. [HON. MEMBERS: "He did not"] Of course he refused.
    Mr. Brandon-Bravo: The leaflet that has been mentioned affects my constituency. I must ask the hon. Gentleman to accept that that leaflet may be a year old, but we have suffered such literature—press releases and public statements—in our city ad nauseum, month after month, and the majority of it is the most spurious nonsense and disgraceful literature I have ever read. In my constituency there is an estate of 9,000 homes and many old people have written to me saying, "The Labour party locally are saying that our houses will be sold to private landlords; is that true?" That is what is happening in our cities, and it is time that the hon. Gentleman repudiated it.
    Mr. Soley: I will not do it now, for the sake of Back Benchers who want to contribute, but I would be happy afterwards to go through this leaflet with the hon. Gentleman to pick out any inaccuracies. I would say to him that at the time it was written it was basically accurate.—[Interruption.] Since then, the Bill has gone through Committee and has been changed thanks to our amendments.
    We want to know also from the Government whether they intend to change the rigged voting system that has so frightened people that they know that their only solution is to group together as tenants and community groups to fight the Bill. One good thing, however, about that wretched Housing Act is that it has managed to create a sense of community in those areas, because they are so appalled by what is happening.
    I ask the Minister whether the Government will spend the money that they promised on the housing action trust areas now that they know that they have lost the argument there, too. Effectively, all the tenants have said no to their proposals since they rumbled the Government's other dishonesty. They discovered that the real aim of housing action trusts, according to the report prepared for the Government, was
    "to successfully transfer the properties to the private sector."
    That was something that the Government never told the tenants. That is the dishonesty and the deceit which causes the tenants to be fearful and makes me say that the Government are guilty of bullying tenants.
    What will the Government do about the new towns? The new towns will not even get a proper vote until in some cases they have waited two years to see how the new system works. Terrific: we will have a new government now; see how it works and then we will have a vote on it.
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    How about that? Wht sort of democracy is that? Even some cheap dictator would riot accept that as a form of democracy.
    The housing statistics tell the grim story. In 1987 there were 30,000 fewer completions in all sectors compared to 1980. I warn the Minister of that, because that is what he was talking about when referring to public sector investment. Throughout the 1970s, housing investment was high when compared to European standards. Even investment in our worst year, which was 1979, was good compared to other European countries. What is significantly different now is that we are at the bottom of the heap—as we are with the National Health Service. Next year there will be a decline in the private building sector again, because of interest rates. The Government know that. In 1975, local authority completions were 103,000, in 1988 they are estimated to be 15,000 and in 1992 they will be 6,000.
    The Government have suddenly turned to housing assocations as the way out, but housing association completions are only about 2,000 above what they were in 1975. Somehow the housing associations are supposed to swallow local authority housing and build more at the same time. The management implications of that are appalling.
    In addition, there is the disaster of market rents in the private sector. We must remember that the rented sector has declined by 1·2 million houses, more than half of which are from the private rented sector. That decline has been caused by the Government's public expenditure. The Minister dodged my question about mortgage income tax relief. If he is prepared to accept someone on £7,000 per year getting a subsidy of about £300, but someone on £25,000 per year getting about £760, he had better work out where his priorities lie with Government expenditure. That is now up to nearly £6 billion.
    The nightmare about market rents is that they will approximate to what people pay to buy, which is why the private rented sector is declining. Mr. Rachman, Mr. Soussa—not really Mr. Soussa—and Mr. Hoogstraten are not really bad landlords; they are bad property developers. They want to sell with vacant possession, which means getting tenants out, and that is what the 1988 Bill is designed to make much easier.
    Mr. Barry Porter rose——
    Mr. Soley: I cannot give way again, because there is the problem of time.
    The Government refuse to say what a fair rent is, yet many people are spending up to 40 per cent. of their net income on rent. In some cases nurses are spending 39 per cent. of their net income, even taking account of their recent pay rise.
    Rural housing has been hit, too. In the villages of England people are living in the holiday accommodation during the winter and are having to move out when the holiday period begins. They then move to the towns, present themselves as homeless or drift around.
    Mr. Richard Holt: Give us one example.
    Mr. Soley: I shall give lots of examples. I shall give the example of Dorset—[Interruption.] I am giving areas. The hon. Gentleman has not got ears.
    Mr. Holt: The hon. Gentleman cannot back that up with known facts. It is just hot air.
    Mr. Soley: The hon. Gentleman should listen. What I said was that in the villages of England——
    Mr. Holt: Name one.
    Mr. Soley: In Dorset right now——
    Mr. Holt: That is a county; name a village.
    Mr. Soley: I know that is a county. In Dorset right now people are using holiday accommodation lets and moving into the—[Interruption.] If the hon. Member for Langbaurgh (Mr. Holt) does not believe me——
    Mr. Holt: I do not.
    Mr. Soley: The hon. Gentleman does not have to take my word for it. He can get the facts from the Association of District Councils, which is Conservative-controlled.
    What else do people do when they leave their holiday lets? They move in with relatives or wherever they can find accommodation in towns. Of course, in many areas they cannot find accommodation, and they end up sleeping rough.
    We are moving towards having ghettoes in our city areas where there will be the sort of crime and vandalism which the Government try to pin on local authorities. People have died behind their cast iron doors, which prevented the fire brigade from gaining access. The House should remember that those people installed such doors out of fear. People have to take such measures because the Government will not give local authorities the money needed to provide a good 24-hour concierge system. They starved my council of money for the Edward Woods estate almost long enough to push out of the annual programme the system that was designed to come into effect, but the council managed to keep it in. If the Government really cared, they would make sure that they helped good management.
    The Government's problem is that they do not understand that housing is about supply and management. If there is bad management, whether in the private or public sectors, something must be done about it. It is no good picking one or two councillors one does not like and putting the boot in. A housing problem must first be acknowledged and then the solution sought. That means more building, renovating and repairing. It also means that something must be done about bad management.
    The Minister said that he thought that people should have a choice of landlord, but he does not believe that. He believes that local authority tenants should be able to vote once only to change their landlord. But a tenant of Mr. Hoogstraten, Mr. Sonssa or Mr. Rachman would not have that choice. Let me give the House a commitment. The next Labour Government will give tenants of non-resident landlords the right to change their landlord, and, by God, we shall see some landlords changing then. We shall do what the Audit Commission and the internal report of the Department of the Environment said and we shall see people returning to the public sector because, as the report said, local authority housing management is better than that of housing associations and as good as the best.
    Mr. Nicholas Bennett: On a point of order, Madam Deputy Speaker.
    Madam Deputy Speaker: Order. Before I take any points of order let me remind the House that the debate
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    has to finish at 7 o'clock and we should deploy that time sensibly so that I can call as many hon. Members as possible. Therefore, may we have brief speeches, please?
    Mr. Nicholas Bennett: On a point of order, Madam Deputy Speaker. You will recall that the debate was originally due to take place on 1 February on an Opposition Supply day. Will you investigate the distribution of today's Order Paper, because, with only six Labour Back Benchers present, it is clear that not all Labour Members are aware that the debate is taking place?
    Madam Deputy Speaker: I can assure the hon. Gentleman that there are sufficient hon. Members in the Chamber to keep the debate going well after 10 o'clock.
    5.21 pm
    Sir Jim Spicer: I shall abide by your ruling to be brief, Madam Deputy Speaker.
    The hon. Member for Hammersmith (Mr. Soley) referred to holiday accommodation in Dorset. I hope that in the near future as a result of Government legislation much of that will cease to be holiday accommodation and become permanent accommodation. Landlords have holiday accommodation not because there is more money in it but because in the past they could not get the right sort of tenancy agreement to ensure repossession. I want to see more people living permanently in west Dorset rather than have the place flooded with holiday accommodation which is empty in the winter months; that is bad news.
    It is right that the debate should focus primarily on housing problems in the urban areas, but, as the hon. Member for Hammersmith said, there are problems in the rural areas, too. The scale is different, but there are unhappy people in rural areas just as there are in the towns. It is in that context that I welcome the statement made by my noble Friend the Minister for Housing, Environment and Countryside the other day that there would be an increase in the rural allocation for rented accommodation in 1990–91 and 1991–92. No one would deny that that increase is a drop in the ocean. A figure of 900 extra houses in 1990–91 is small. That figure goes up to 1,100 in 1991–92. That is nothing in the rural areas unless it is supported and enhanced by the activities of housing associations.
    Just a few months ago in my constituency a debate was organised by the Dorset county council which set out clearly our involvement with housing associations. I have set a personal target for west Dorset of 500 new housing association houses to rent or buy by the end of 1990. That target is achievable, but only under two conditions. The first and most important is that land should be given to housing associations, or at the very worst, provided at low cost.
    One may ask where that land will come from, but I can tell the House that in Dorset and Somerset many landlords who are members of the Country Landowners Association and the National Farmers Union, are perfectly prepared to give half an acre or an acre of land towards that end. They want to see local housing for local people at reasonable rents. That will come about, but not unless one particular area of mistrust is cleared up, and that is whether land given to a housing association for that purpose might be deemed at increased value for capital gains. This worry has not yet been cleared up.

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    Everybody says that the point is being addressed, but why on earth does it need to he addressed? If people of their own volition are prepared to make a gift of land or to let it go at one tenth of the sum that such land would make on the open market for housing, why cannot the Treasury say that that is in the interests of the community and those who need houses and give a categorical assurance that there will be no such tax?
    Secondly, there is the matter of planning. My right hon. Friend the Secretary of State for the Environment was right to make it clear the other day that he hoped that local authorities would look more sympathetically at planning approval for housing association schemes for local people at low cost and to rent. I pay tribute to West Dorset district council which is implementing that policy. It is a dangerous policy, because a few starter homes may be included in the hope that approval will be given for a larger scheme. That is not what this is about. I hope that planners will significantly bend the rules for housing association schemes to help small villages. We are not talking about an estate of 200 or 300 houses but about a block of six or eight houses at the most for small villages in my constituency. If such housing does not come about, we shall see the continuing depopulation of our rural areas, along with the closure of sub-post offices and pubs, which is the last thing that I want to see.
    My plea to the Government is: please obtain that assurance from the Treasury. If we get that, we shall be able to get on with our building.
    5.27 pm
    Mr. George Howarth: After 10 years in office the Government have managed to land themselves in one enormous mess on their housing policy. The Minister laughs, but if he looks at what is going on sector by sector, the evidence is plain for anybody to see. One principal cause of that is the Government's market philosophy, which has been demonstrated not to work in housing matters. My hon. Friend the Member for Hammersmith (Mr. Soley) has given some examples of that and I shall give some further examples.
    The truth of the matter is that housing policy does not lend itself to a non-interventionist policy. The Government should recognise that they must continue to engage with local authorities, housing associations and others in order to do something about housing. The more one disengages, the greater the problems are.
    The truth of what I say becomes more and more apparent when the situation is looked at sector by sector. For example, the owner-occupied sector, for which there is all-party support—[Interruption.] There may be the odd exception but, broadly speaking, all parties' official policy is to support owner-occupation.
    High interest rates are now putting property, particularly for first-time buyers, out of their range. People simply cannot afford to get into the owner-occupier market—[Interruption.] That might happen in the long term but it has not happened across the board yet. We find that people cannot enter the market. Indeed, some people are having to leave that sector because of the problems of high interest rates.
    The hon. Member for Langbaurgh (Mr. Holt) seems to think that there is something wonderful about high interest rates and mortgage costs. Perhaps I could summon up in
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    support of my argument no less an authority than the right hon. Member for Chingford (Mr. Tebbit), who writes in today's Evening Standard as follows:
    "High mortgage rates are very unpopular but it is mortgage rates in the year before an election, not the second year after one which affect the general election result."
    That tells us a great deal about the cynicism of the right hon. Gentleman.
    Mr. Holt: Perhaps the hon. Gentleman needs a basic lesson in the economics of housing. The mortgage is one thing; the price of the houses is another. Where houses cannot be sold because the mortgages are difficult to repay that stabilises and brings down the prices, which is what my right hon. Friend was saying in the article.
    Mr. Howarth: I do not entirely accept that, because the point I am making is that all sorts of other factors are brought to bear. The burden of my argument is that, as a direct result of high interest rates, there are people who are being prevented from entering the market and, equally, there are people who are being forced to leave the market because they cannot sustain their mortgage repayments. That is a simple fact of life at present. Whatever the long-term effects on that of macroeconomic policy, as matters stand that is what is happening.
    The other problem, which I have mentioned before in the House but which bears repetition, is that we have consistently falling standards of construction, space arid materials. I make it a practice to go on a fairly regular basis and look at new properties that are being built, some of them co-operative—in which I am heavily involved En my constituency—and some in the private sector. We are seeing properties which in 20 years time will be slums which are either put on the market or rented. That is because of the great pressure on people to get into the market at almost any cost. People do not have the kinds of choice that the Government would have us believe exist and consequently are forced either to rent—or in some cases, tragically, to purchase—properties of an appalling standard which will be real problem properties in 20 years' time.
    Mr. Trippier: I am listening to the hon. Gentleman's argument very carefully. He has not addressed the point that I touched on in my opening remarks when I talked about the fact that we have the highest percentage of public sector housing stock anywhere in the western world. In his constituency and that of the hon. Member for Knowsley, South (Mr. Hughes) there is a very high number of council houses. One of the biggest problems that they face is the management of that stock. I do not want to make a political point. but that stock was not built during the period that this Government have been in office. He and I are trying to do something about it together, and I am with his local authority.
    Mr. Howarth: I will cover that later in my speech. While there is disagreement between the Minister and me, he will accept that I understand the sort of problem that he is talking about.
    Another part of the problem in connection with owner-occupation currently is the whole mess of subsidy. My hon. Friend the Member for Hammersmith mentioned that mortgage income tax relief costs about £6 billion. No one is against the idea that people who need help to get into the market should be given it through tax relief or by some other means. But what we have now is a totally

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    unselective subsidy that does not serve any housing policy of which I know. Furthermore, for a Government that seem so obsessed with targeting other benefits, it is very strange that this very general policy should be sustained. I suspect that that reflects a little of the cynicism of the right hon. Member for Chingford because there is a definite electoral sweetie or bribe in that housing policy. That has to be sorted out if something is to be done about housing.
    I do not intend to go into the question of the private rented sector at any length. The Minister deplores the fact that only about 8 per cent. of the current stock in this country is private landlord stock. He might try and look at some of the causes of that. The Government have been in power for 10 years and that figure has not dramatically increased, but has declined, in that period. There are very real barriers to that market developing and one is that people do not trust it. Many of my constituents are familiar with the history of the Rachman era and are very cautious indeed about seeing that as a means of finding satisfactory housing. Other barriers have to do with the economics of housing in general, and the House will be familiar with the arguments which my hon. Friend the Member for Hammersmith adduced.
    The 1988 Act, which was supposed to deal with that, will not change the situation at all, because it did not deal with the root causes of the problem; it dealt with a series of rather fancy measures that will not change the situation at all. I suspect that the Minister already knows that it has failed to reinvigorate the private rented sector as they had hoped. That being the case, that policy has failed even on the Government's own terms.
    The Minister referred with some accuracy to some of the problems that exist in the borough of Knowsley, part of which I represent. I accept, and the Minister knows that my local authority accepts, that some of the problems connected with council housing in Knowsley stem from the difficulty of managing and maintaining a very large council stock. Originally, in 1974, there were, I think, 39,000 council houses in Knowsley, but with a combination of right to buy and some demolition and so on, the figure is now down to some 24,000. My local authority accepts that there is a problem in managing and maintaining a stock of council housing on that scale, so the policy of the borough of Knowsley is not to build any more properties. It feels that the policy for the foreseeable future should be concentrated on correcting the problems with the stock it already has and that any new housing needs should be met through housing co-operatives and associations, which it supports very well and vigorously.
    I accept that it is not necessarily always the case that local authority housing is the only way forward. On the other hand, even in the borough of Knowsley—the Minister is aware of these figures—and even with that policy, we currently need, to put the 24,000 properties with which we are left into some sort of reasonable order, £20 million a year. I use this as an example to illustrate the problems of local authorities.
    The housing investment programme allocation, even though it has recently gone up slightly, is still only about £4 million. With the use of capital receipts and other devices, perhaps that can be raised to £10 million, but that means that £10 million which needs to be spent on those properties every year is not being spent. Therefore, there
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    will be an even further deterioration in the quality of life of the people who live in council houses, brought about not by the mismanagement of the local authority but by the scarcity of resources.
    The Government's solution to that is to introduce market conditions through the provisions in part IV of the 1988 Act. I will not go through all the arguments that my hon. Friends make, but I know, the House knows and anybody who takes an interest in housing knows, that those provisions will not work. What they have done is spread fear and concern among council tenants.
    What is quite staggering about this is that in many areas people who did not rate the council very highly as a landlord before this Act was put on the statute book are now saying that their local authority is wonderful. The Government hoped that they had denigrated local authorities, but they have succeeded in some areas in making the tenants appreciate the local authorities.
    In the housing association and housing co-operatives sector, in which I take a great interest, with the changes in mixed funding, in areas where the cost-value relationship is wrong—and that includes London and the whole of Merseyside—the very device that the Government said would increase the supply of money to housing associations and co-operatives will simply mean that the schemes will not get off the ground. The financial institutions will not engage in that kind of arrangement where the cost-value relationship is wrong, as it is in many parts of the country. I suspect that, once we reach the end of the first year of this new mixed funding arrangement there will be a massive underspend because the scheme cannot be applied in many parts of the country. That is something of which the Government have also made a mess.
    So after 10 years, in every sector imaginable, the Government have made an absolute hash of housing policy. They have done nothing to deal with the needs of people, nothing to create new housing for people in need. They have just let the market rip, and the market simply is not working.
    5.40 pm
    Mrs. Edwina Currie: Before I came to the House, I had the privilege of being housing chairman in the city of Birmingham. I should like to congratulate my hon. Friend the Member for Rossendale and Darwen (Mr. Trippier) on his excellent speech and his grasp of the subject.
    I wish to broaden the debate a little. It is worth pointing out that we have a record number of homes in this country. The housing stock now stands at 23 million dwellings, an increase of about a third since 1961, and as a result we have a lot more property of all kinds. The hon. Member for Hammersmith (Mr. Soley) mentioned that there were about 20,000 families in difficulties. What he forgot to do was to put that in the context of 14·5 million owner-occupiers, some 9 million of them with mortgages; 25 per cent. of those people own their properties outright.
    In council housing, the subject of some of the speeches from the Opposition Benches, we have now about 6 million properties. If we compare that with 1961, we find that my right hon. Friend the Prime Minister is in charge of a hell of a lot more council housing than her Conservative predecessors. I looked at the number of council house lettings and was surprised to find that the

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    figure is still running at some 450,000 a year. That is also a very high level. I do not know whether my right hon. Friend the Prime Minister is aware that she has one of the best records in charge of council housing of any Conservative Prime Minister since the war. I am not sure that that was her objective, but it is true.
    The accusation by the Opposition that fewer houses are being built will not stick either. I listened with the greatest care to the hon. Member for Hammersmith. He talked about some of these little leaflets being incomplete. I hesitate to suggest that he is a bit incomplete, Madam Deputy Speaker, because you might rule that that was a little unparliamentary, but he certainly picked some incomplete statistics. His figures, for example, for the number of houses being built started at 1980. If we start at 1979, when we took power, we find that the number of public starts was 81,000 and the number of private starts was 144,000, giving us a total of 225,000 starts.
    In 1987, the number of public starts was 32,000 and the number of private starts 191,000, giving virtually the same total, 223,000.
    Mr. Soley indicated dissent.
    Mrs. Currie: The hon. Member for Hammersmith may shake his head, but I got these figures not from the Government but from the House of Commons Library. My hon. Friend who will answer the debate may have more up-to-date information, as the figures in the Library are for only the first nine months of 1988, but if we gross up those figures for the whole year, we arrive not at 225,000—the figure for 1979—and not 223,000—the figure for 1987—but 240,000 in a full year for 1988. The simple fact is that we are not building fewer houses. Taking the two together, public and private, we are building roughly the same number.
    It is certainly true to say that public sector new build has fallen. It has been falling for years—and a jolly good thing too. In 1979, there were 81,000 public sector starts; in 1987, there were only 31,000. But if we go back to the first year of the Labour Government of which I believe the hon. Member for Hammersmith was a very proud member, 1974, the figure was 146,000, an enormously larger number than they finished with in 1979. We all had the pleasure tonight of watching him standing there wriggling, a little embarrassed, a little ashamed, at the Dispatch Box, saying that he was not too proud of the housing record of the last Labour Government—and absolutely right.
    There are three reasons why the Labour Government did not build council houses—whatever their policy was, they did not do it. First, they could not afford it. Secondly, it was not needed. The slum clearance programmes of the post-war period were coming to an end. We had shifted 1·5 million households and it was no longer necessary to do that kind of clearance. Thirdly, it was not wanted. People do not want council housing. They want their own houses, and the Labour party now belatedly recognises this.
    Nobody has mentioned tonight the quality of the housing stock. There is a lot more of it, and it is a lot sounder than it has ever been in the nation's history. I am told that there are five basic amenities—an inside loo, a fixed bath in the bathroom, a wash basin, a sink and hot and cold water at three points. If we take the number of properties in England and Wales that lack those amenities, we find that over the past 20 years, despite a widening of
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    the definition of these basic amenities, the proportion of the dwelling stock lacking one or more such facilities has fallen from 25 per cent. to under 3 per cent.—that is, fewer than three homes in 100. I would like to bet that most of them are in the areas covered by Labour councils.
    Renovation of property is something that I was very keen to do in the city of Birmingham. We had enveloping schemes and we did our best to ensure that people could live where they wanted, in the homes that they wanted to live in, and that those homes were in good order. In the live years under Labour, 1974 to 1979—these are not incomplete statistics, and I have taken them again from the Library—over 160,000 houses a year on average were improved. In the past five years, an average of over 440,000 have been improved every year. Our homes are i n better nick than they have ever been and that is because people want to stay in their own homes and they want advice and assistance and support to improve them. That is what we have been doing.
    Of course, the hon. Members on the Opposition Benches used to build their council houses. They are welcome to them. The fact is that they built dismal, damp dumps—they have already been called "concrete jungles" twice—more tatty tenements, more miserable places, more tower blocks named after the Labour chairmen of the housing committees—and people do not want them. They did not want them then and they do not want them now. Nobody wants to live in those grotty estates that were built in those years. People want to live in modern, private houses, put up by private builders who have an eye to the: market, an eye to the customers and what the customers want. When people had no choice, Labour built them junk. They expected them to be grateful. Now people have some choice and they do not want to live in those houses any more.
    Mr. Heffer: The hon. Lady must be aware that it was a Labour Government that first brought in the idea of housing action areas and assistance to modernise houses. We were also responsible for bringing in enveloping. Perhaps she does not know that. Some of us do know it because we were here at the time when we were getting it through the House.
    Mrs. Currie: It is a classic case, because I was on Birmingham council all those years——
    Mr. Heffer: The hon. Lady was not here, doing the legislation.
    Mrs. Currie: The hon. Gentleman is quite right. They passed lots of legislation, lots of it. They did not have the money to implement most of it and the resulting council property is still a slur on the face of the Labour party and the Labour councils.
    Mr. Heffer: Get your facts right, luv.
    Mrs. Currie: I merely say to the House that, as far as I and most of my constituents are concerned, the Labour party is welcome to its claims that it built council housing in the 1960s and 1970s. I look forward to the day when more councils will do what Solihull has just done and pull those properties down. That is what the tenants really want.
    I want to make two more points, the first of which concerns mortgage rates. Again, I went to the Library and looked up the figures. Incidentally, as has been mentioned,

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    this is something of a re-run debate. The first one was supposed to be held in Opposition time. I happened to see the original motion in the Table Office—it just happened to be lying there when I went in one day. The people who worded it cannot spell "mortgage"; the Table Office had to put it right. Anyway, I looked up the interest rates at the time the Labour party was in government and hon. Members opposite were Housing Ministers. In only one year, very briefly in 1978—what about this for cynicism?—was the mortgage rate in single figures. Almost the whole time the Labour party was in power the mortgage rate was over 11 per cent. Indeed, it stood at 12 per cent. in May 1979, just before the election. In those days it was a fixed rate; there was no shopping around. The banks were not giving loans to ordinary people, and borrowers did not have the opportunity that now exists to shop around for the best bargain or for whatever suited them.
    I give the Chancellor my full support in his efforts to stabilise the housing market. The rapid house price inflation that we saw last year was unhelpful to everyone. No one could support or argue in favour of it. And it was aggravated by lower interest rates. Heaven only knows why, the moment interest rates go into single figures, everybody in this country thinks that it is a green light. Nobody in West Germany thinks that an interest rate of 9 per cent. is low. People there do not behave like that, but we in this country do. Well, so long as we think that as soon as the interest rate reached 9 per cent, we should borrow enormous amounts of money that we cannot afford, interest rates will have to stay where they are.
    The Labour party should come clean about one topic that it has mentioned. The hon. Members for Hammersmith and for Knowsley, North (Mr. Howarth) talked about mortgage interest tax relief, did they not? They talked about how much it costs, did they not? They should tell us whether they are going to abolish mortgage interest tax relief. They should come clean and say, "We do not like mortgage interest tax relief, and we are going to abolish it." They should say that that will be in their manifesto for the next election.
    Mr. George Howarth rose——
    Mrs. Currie: The hon. Gentleman has already had a go; it is my turn now.
    The Labour party should come absolutely clean about mortgage interest tax relief. Hon. Members opposite should say that they do not like it and that they are going to abolish it, and that should be in their manifesto. If, however, they recognise that mortgate interest tax relief helps many people to get on to the housing ladder for the first time, and that it is welcomed by those people, particularly by people in constituencies like mine, they should stop criticising it and admit that it is a good thing.
    My final comment concerns a thought for the future. As my hon. Friend the Minister will have realised by now, I am totally in favour of the Government's housing policies. We in this country are extremely lucky to have a Government who run the economy in such a way that we can all afford to buy our homes, a Government who are organising planning legislation in such a way that land will be released. That is happening in areas such as mine, and we are seeing growth. But I offer my hon. Friend one thought for the next 10 years of Conservative
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    Government, the next 10 years we will be in power. One quarter of all households consist of single people, most of them elderly. Nearly 3 million old ladies live alone. Another third of all households consist of two people, mostly older couples whose children have grown up and gone away. We are talking about a large number of old people.
    When we think ahead and take into account the fact that single person households are expected to increase from the current total of 5·25 million to over 7 million by the year 2001—and that will be nearly one third of all households—I wonder whether it is right that so many builders are continuing to build three, four and five-bedroom houses with double garages and no granny flat. For certain, by the end of another 10 years or so we will find that the crying shortage, unless there is a response to this need, will be in property that is suitable for elderly people, particularly those living alone. We will know that we have made progress on this issue when the price of bungalows is lower than the price of houses, not higher, as at present. However, I shall leave that thought for my hon. Friends. I congratulate the Government on the tremendous improvement that we have seen in the nation's housing, and I look forward to further progress.
    Several Hon. Members rose——
    Madam Deputy Speaker: Order. The appeal that I made for brief speeches seems to have fallen on deaf ears.
    5.55 pm
    Mr. Matthew Taylor: I was going to say that the Minister had combined conceit and venom in a way rarely excelled in the House, but the hon. Member for Derbyshire, South (Mrs. Currie) has managed to trump it.
    In preparing for this debate, I took the trouble to read not various statistics—we all know how statistics can be juggled—but the debate that took place on 23 May 1988. The comments that were made then have been repeated today, and I am very sad that it should be so. On both occasions, despite the smugness of what the Government had to say, the message that came through—it is a message which must not be lost among the arguments about the Local Government and Housing Bill and about mortgage interest rates—was that the devastating impact of the continued policy of restricting expenditure on the development of public housing in all its forms is having an immediate and sustained effect on those people in most need of help with housing.
    I rang both local authorities in my area—Carrick and Restormel—a few weeks ago, and the message from them was abundantly clear: "Allow us to spend our money to house our homeless." Not only are local authorities not given that freedom; they are now hampered by rising land prices, even in areas that are relatively poor, such as my own. If a district council like Restormel owns very little land, there is no way in which, with current restrictions, it can outbid private investors. In a recent sale of some land in Newquay, a private developer was able not simply to outbid the local authority by a small amount but actually to double what the council could afford to bid. That local authority has very little land of its own and is therefore hamstrung in attempting to meet the needs of its people.
    Another message has started to come through from my county, and it is echoed in many other parts of the country, not only by councils but by people who come to my

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    surgery and, no doubt, people who consult other hon. Members. They are asking what the point is of a housing allocation list. I understand that councillors in Caradon have gone so far as to suggest that their housing allocations sub-committee should be wound up because there is no longer any such thing as an empty property. As soon as a property in council hands is vacated it goes straight to a homeless family because, as a result of the right to buy, the council no longer has properties for families at the top of the housing allocation list.
    The hon. Member for Derbyshire, South said—I think that I quote her exactly—"People do not want council housing.- I think it is fair to say that people's ultimate ambition is probably to own their homes, but in the case of very many who come to see me, it is not a question of their "not" wanting council housing but of their desperate need for any kind of roof over their heads. When they are told that they will have to live for years in caravans that are damp, smelly. small, unclean and unhygienic, and where, when they are in the bathroom, they can see the land outside, between the floor and the walls, it is no surprise that they are unable to understand why the Government will not put money into providing houses for them.
    Mrs. Alice Mahon: In my constituency there are 6,000 people on the housing waiting list. I am sure that those people, like the hon. Gentleman's constituents, will be highly insulted by some of the remarks that the hon. Member for Derbyshire, South (Mrs. Currie) made about council housing and about their expectations.
    Mr. Taylor: The hon. Lady is absolutely right. I allowed her to intervene, because she has not done so before, but I shall have to rein in other right hon. and hon. Members, because time is short.
    The Conservative-controlled London Boroughs Association says that the Government should relax current restrictions on the spending of local authority capital receipts. It comments:
    "the fundamental requirement is to increase the supply of permanent housing."
    Seen in that context, the fact that the Secretary of State presides over a housing budget that is the only departmental budget to contribute to the Treasury is one of bitter irony for the homeless. All that profit has been made possible by council house sales and at the expense of the homeless.
    People are making their beds out on the streets tonight, as they did last night, and will do again tomorrow night, and the night after that. People are out on the streets because they have no housing. For the hon. Member for Derbyshire, South to say that people do not want council housing is painful for them, and shows no understanding of the conditions that people must endure. It speaks volumes about middle class, suburban ambitions, but nothing about the reality of the very many people who cannot hope to realise those ambitions.
    The recent report of the Audit Commission, "Housing the homeless: The local authority role", made many recommendations, and one point that comes through loud and clear is the continuing need for local authorities to play a role. I hope that Ministers accept the report's argument that there is a strong case for taking greater account of homelessness in the allocation by the Government of resources to local authorities.
    Many of the areas hardest hit by homelessness are not in inner cities but in rural areas. One reason for that is that
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    wealthier, luckier people are fulfilling their ambition to own property and to retire to what, to them, is a lovely part of the country—but to others it is their home and was their parents' home, but can no longer offer them work and, as a result, they cannot afford to buy houses. I refer also to areas where people are buying second homes in beautiful and lovely countryside. It is a pity that people wishing to move to them do not see the poverty of the families living next door, because families who have lived in those villages for years cannot now afford homes there.
    I give as evidence of that the almost ideal example of a young couple in Cornwall, wishing to make a start on the housing ladder. If they both work, both receive the county's average wage for their sex, and have no children—one can hardly imagine a better scenario for first-time buyers—they can, according to local building societies, afford just 2 per cent. of the housing stock that is for sale at any one time. Needless to say, that stock is not in the areas where they want to buy, even if they are lucky enough to track it down before it is sold. That 2 per cent. of the housing stock is to be found in the larger conurbations, in the more rundown areas of high unemployment. Young couples living in villages scattered throughout my constituency and others have no chance of buying a home in their birthplace or workplace.
    A prime example of the Government's response has been the transfer of council stock. For us, one of the most glaring examples is Torbay. Giving council tenants a greater say in what happens has potential, but when the Government exploit that situation, and cloak it in a rigged electoral system of secrecy and misinformation, council tenants naturally grow suspicious and do not feel that they have been made a genuine offer. The only convincing argument for the negative voting system is that under it the constituency of the Secretary of State for the Environment—Cirencester and Tewkesbury—would have fallen to the Liberals at the last election. I am sure that the right hon. Gentleman would not think that such a system would be appropriate if it were to have that result for him.
    When that rigged electoral system for Torbay was overthrown by the Secretary of State under pressure from local Democrat councillors—who collected a petition showing that most people were against the transfer, despite the negative voting claim to the contrary—it was not just an attack on the Tory councillors who attempted to implement that system but, above all, a clear and visible attack on the negative voting system itself. Basically, the Secretary of State told the Tory councillors in Torbay that they had run the system as he had told them to do, but that the system was not right. It is only a shame that the right hon. Gentleman does not recognise the value of extending his decision more generally.
    Council tenants throughout the country are concerned about who will manage their homes. There is great anxiety among tenants of the Commission for the New Towns about the future ownership and management of their homes. I cite Basildon as one example. Can the Minister give an assurance that there will be a ballot for CNT tenants on the future ownership and management of their homes before any changes occur? That is what tenants are pressing for.
    Mr. David Amess: I am staggered by the hon. Gentleman's reference to property transfers in Basildon, because the alliance of the Socialists that he

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    represents and the Labour party has gone out of its way deliberately to frighten tenants. It is disgraceful that the hon. Gentleman makes a debating point of it.
    Mr. Taylor: I reject absolutely the hon. Gentleman's remarks. Our councillors and supporters have tried only to inform, and to argue that tenants should have a genuine say in the transfer of their housing stock. I may add that they have not supported the Labour party in seeking ballot after ballot, because they would like to see matters properly and independently conducted.
    Will the Minister consider giving CNT tenants wishing to buy their own homes the same level of grant and subsidy that he intends giving any housing associations that are interested in CNT stock? If so, that might provide a fair balance and proper choice.
    The young are among those most affected by Tory housing policy. In April 1988, the Government introduced income support regulations that created different levels of income support for 16 and 17-year-olds, for 18 to 24-year-olds, and for 25-year-olds. Household levels of income support were abolished, with the consequence that benefit levels no longer reflect the additional costs involved when a young person has no choice but to live away from his or her parents' home.
    Earlier, I spoke of middle-class suburban values. Another is the assumption that parents can always be relied upon to support their children. For too many young people, that is not the case. Due to the alignment of income support allowances and housing benefit allowances, young people not only receive less help in meeting their personal costs but, if they are on a YTS or are unemployed, receive less help than older people with paying their rent and rates. I have never heard a convincing argument for why that should be, other than that which the Government does not like to articulate, which is that parents are always there, ready and willing to pick up the tab. That is not the case.
    Since April 1988, income support has been payable two weeks in arrears, and the Department of Social Security no longer provides deposits to help people to secure accommodation. People needing money in an emergency must now apply for a discretionary loan, which young people in particular are not guaranteed to obtain. Linked with those changes was a Government promise of a YTS place for every young person who wanted one. The Government have been unable to keep that promise. On 9 November last year, the Government admitted that more than 13,000 young people looking for a YTS place had not been found one. As the Government should be aware, that means that those young people are ineligible for any form of benefit support. They increasingly face homelessness and the risk of destitution. They do not even appear in the figures of the homeless, but go unwanted and unrecognised.
    Recently, I received a letter from a Methodist minister who picked up on those changes, and who wrote asking how such a thing could be. He wrote:
    "Whilst my wife was in St. Austell this morning, she came across a young woman begging outside Tesco, displaying a sign reading, 'I have no work and no money—please can you spare 10p?' This young woman—she is around 18 to 20—had left a catering course after two years and had come to this area seeking work. She has accommodation in a `bed-sit', but is caught in some sort of 'waiting period' until she becomes
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    eligible to draw benefit. She is actively seeking work but, meantime, has no means of support—hence her begging. No doubt this will concern you as it does me, the more so with the temptations which may well come the way of a young woman in this situation. If the present Social Security regulations really are causing such a situation, then they urgently need amending."
    They are causing such situations, especially for those who are not even offered a YTS place or who are without a family to turn to.
    The smug, complacent attitude of the Minister and the hon. Member for Derbyshire, South shocked me. It showed no recognition not only of the political propaganda that the Minister has to face in the House, but of the political reality of young people who have no hope of a house of their own or the Minister who wrote to me describing the young lady begging in the street in St. Austell. That attitude does not recognise the people who cannot afford to pay the mortgage on the houses for which they have scraped together the money to buy on the Government's recommendation. It does not recognise the people in pleasant towns and villages who see the devastating impact that neglect is having on those who have always lived there.
    If the Minister had said that the Government were trying to do what they could, but that they recognised the failings and that more needed to be done, that would be one thing. But the Minister gives the impression that he honestly believes that there is nothing wrong, that no more needs doing, that everything about the Government's policy is right, that there is no omission and no improvement possible. That makes me angry because it shows a fundamental unwillingness to face up to the realities for people today. I hope that as the Minister reads the reports of this debate and the reports from many different organisations, he will reflect that he was wrong after all to take the attitude he has shown today.
    Several Hon. Members rose——
    Mr. Speaker: Order. It may be for the convenience of the House if I say that the Front-Bench Members will seek to catch the eye of the Chair at 6.40 pm. I hope that hon. Members will bear that in mind, given that a large number wish to participate in the debate.
    6.12 pm
    Mr. John Bowis: I must say to the hon. Member for Truro (Mr. M. Taylor) that my hon. Friends do not think that everything is right, but he is wrong when he says that everything is wrong. My hon. Friends are more realistic about their record of achievement. However, they have achieved a tremendous amount in comparatively few years. No doubt that achievement will continue.
    I want to return to the subject of inner cities and the area that I represent in inner London, and to comment on some of the achievements and some of the problems waiting to be resolved. This Government of all Governments have accepted the major challenge to provide a better quality of life for people living in urban areas. The problems in accepting that challenge are considerable. Areas such as Wandsworth face the major problem of dealing with the designers and planners of the past and with vast numbers of high-rise dwellings. The high-rise dwellings of former Socialist administrations in

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    Wandsworth have resulted, 10 or 20 years later, in the crime, deprivation and isolation that we see today and there are mammoth problems to be overcome.
    Such problems affect families and communities because we have areas in which people feel that they do not know each other and in which they feel that they can no longer send their children out to play with other families and know that they are safe. They have either to keep their children indoors or let them go out, where they pick up bad habits from their role models who are, of course, older children. Sadly, we cannot pull down those tower blocks because that would be too expensive a solution, but we can remedy the problem. If we had been able to pull down the tower blocks, we would have been able to house the same number of people on the same area of land in terraced houses with gardens and we should have kept the communities that we have lost.
    That is a major problem, and in trying to solve it we have other problems. In my area, there is a paucity of land available for development. That is not true of all areas, but it is true of my part of inner London. In some areas the Land Registry can help in identifying and releasing land for development, but not in mine. We also have the continuing problem of social change. We have higher rates of divorce, young people leave home earlier, there are more single parents and more people coming out of institutions and looking for accommodation in society.
    I salute the Government's achievements, which have been many. An enormous amount has been achieved through the Estate Action programme, for example. Hon. Members need not take my word for it. They can come to Wandsworth and see what a Conservative Government and a Conservative council have done together to rejuvenate an area of high-rise council estates.
    Mr. John Fraser: Why has Wandsworth borough council kept Park Court on the Doddington estate in Battersea, with 86 houses, empty for two years when there is a large queue of people for homes?
    Mr. Bowis: Park Court is one of the blocks on the Doddington estate which is being completely refurbished so that it can be offered back to the tenants who resided there. It can also he offered to people on the waiting list. Some homes will be for rent and some for purchase. In refurbishing those homes, the council will bring new life into the estate. Alongside that redevelopment is low-rise development with landscaping and all the other amenities that enable one to achieve a more popular and habitable living area in a high-rise estate. I do not apologise for that.
    There has been an enormous achievements, in crime prevention. Hon. Members need not take my word for it. They can come and see the partnership in Wandsworth between the Government, the Department of the Environment and the Home Office and the crime prevention measures that have led to new areas of lighting, locks, ground floor gardens and the moving of walkways. We know what needs to be done in Wandsworth, and we have a good example of partnership there. Tremendous strides have been made on sheltered accommodation and home improvements throughout the borough.
    We have seen the enormous achievement of home ownership. Three million more families nationally own their homes than in 1979. Locally, 12,500 council dwellings
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    have moved into private ownership, including 3,500 council flats. Half have gone to sitting tenants and half to people on the waiting list.
    That is an enormous list of achievements, of which the Government can be proud, although I believe that there is a long way to go on home ownership. We still have more nationalised housing than anywhere else in Europe, but the Government are freeing people from being locked into dependency on tenancy, whereas Labour Governments have sought to perpetuate that.
    We still have particular problems in inner London. We have the problem of empty properties, and other hon. Members have referred to the problem of empty council properties. I shall not dwell on that except to say that the Government are moving to rectify that. There are still problems in the private sector, and we should not under-estimate them. If private sector properties are empty for a period of years, perhaps we should consider trusts taking them over and letting them.
    We should consider the question of squatting. Squatters jump the queue over more deserving people on the waiting list. The definition of homelessness needs to be considered. There are far too many cases in my constituency of people who suffer overcrowding, such as five people living in one-bedroomed accommodation, people in accommodation that needs repair, and disabled people who live upstairs and cannot get out. They are being jumped over by people who are defined as homeless and who, for one reason or another, seem to be able to reach the top of the list ahead of others. Sometimes that may be justified, but too often it is not.
    The other day I received a letter from a constituent which asked the following question:
    "18 months ago, my sister got pregnant—she then moved (almost straightaway) into a three bedroomed council flat … Shall I get pregnant and do things the wrong way round? Will that help my chances?"
    That is not the message that we should give young people in need of housing. Such an attitude is true of too many housing associations.
    I received a letter from a couple in which the young man was training for the ministry. They have been told that they must wait until either they are married or living together. They said that they did not want to live together. The Peabody Trust said:
    "The criterion the Trust has recently adopted in this respect is that couples approaching us must either be married or must show a commitment to the relationship in the form of being already living together."
    That is not the answer that we should be giving to young people who wish to "do it the right way".
    There is one injustice that the Government have not yet put right. Housing associations are central to the Government's housing plans. When they are good, they are excellent but when they are poor they can be tyrannical. We must try not to set a new trap that will prevent people from owning their own homes. My mailbag is full of letters from constituents saying, "The Government have given the option of home ownership to council tenants. Why cannot I have it? I have lived in a housing association property for the past 20 years. My family have grown up in it and I have spent thousands on improving it, yet I am not allowed the right to buy it." Others write and say, "The council has just moved me into a housing association property for its own convenience, and nobody told me that I would lose the right to buy." That behaviour is unjustified. As we bring in more housing

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    association properties to help solve problems of housing and homelessness, more and more people will fall into that trap unless we give them the right to buy their housing association property.
    I hope that no hon. Member will try to tell me about tenants transfer discounts of Home Ownership for Tenants of Charitable Housing Associations. HOTCHA was not so hot, and TIS—the tenants' incentive scheme—is a 'tisn't in London, given that the average price of a council flat after discount is £15,000 while the average after a TIS is between £50,000 and £70,000. For Londoners TIS ain't on.
    I beg my right hon. and hon. Friends to reconsider this matter. Increasingly, housing associations are funded by the taxpayer and the ratepayer, and we therefore have a right to tell them how that money should be spent. It should be spent on providing rented accommodation, from which people can eventually step on to the home ownership ladder by exercising the right to buy. We need also to consider the possibility of allocating a quarter or a third of housing association funds with specific strings attached, insisting that properties should be provided for equity sharing schemes so that the sons and daughters of those who exercise the right to buy can climb up a stage on the home ownership ladder. It is time to right an injustice that has stayed with thousands of London families, and families throughout the country, for far too long.
    6.22 pm
    Mr. Eric S. Heffer: One of the saddest things about this debate has been the repudiation, not only by the Minister but by Conservative Back Benchers, of the previous policies of the Conservative party. Public housing did not begin with a Labour Government—not even with John Wheatley, whose Housing Act 1924 led to the building of about 500,000 houses. Public housing began before that, and was determined by the needs of the people. Let us consider the history of Parliament from 1915 onwards. Perhaps the hon. Member for Somerton and Frome (Mr. Boscawen) is related to Griffith-Boscawen who said, "If it is right to have public education and public roads, why should it be wrong to have housing built by the state and by local authorities on behalf of people in need?" He was absolutely right to argue that case.
    Some hon. Members who have appeared on the Conservative Benches during the last couple of Parliaments do not seem to understand their own history. Some of them have never heard of Joseph Chamberlain or of others in their ranks who argued consistently over the years that local authorities and the state should play a positive role in meeting the needs of the people. They seem not to know that, and that is a great pity. Perhaps they should look into their own history.
    I was born and bred in a very small town. I was not born in Liverpool; I went there later, during the war years, and settled there after the war. I was born in Hertford, which is 20 miles north of London and had a population of 12,000. Even in that small community, we had council houses and council estates. I can name some of them. There was Gallows Hill estate—admittedly not a very good name—and there was the Bengeo estate, through
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    which I passed on my two-mile walk to the church school. My mother insisted that I went to the church school. There were other estates in that small town.
    I sometimes compare the lot of those who lived in council houses with the circumstances in which we lived. Our accommodation was damp, and my brother got TB and died at the age of 21. Others like us lived in dreadful conditions with mould on the walls, and the private landlords did nothing for people. The council houses were wonderful in comparison.
    I then went to the great city of Liverpool. I am sorry that the hon. Member for Derbyshire, South (Mrs. Currie) is not here. She knows what I mean when I call her "luv", because it is a Liverpool expression. In some parts of the country it would be "duck" and in Cornwall, for example, it would be "dear". My remark was not a sexist remark but a Liverpool remark, and I want to put that on record in case people write to me and say, "My God, what a sexist thing to say."
    The hon. Lady and I both come from the city of Liverpool. I have lived there since the end of the war and my wife was born and bred there, on the Norris Green estate, a working-class housing estate. People used to pray that they would get to live in such a place. When my mother-in-law moved from rooms into a house—the house in which she still lives and in which she brought up her family—she took with her a handcart with the few odds and ends that she had; she did not have any furniture.
    Conservative Members say that people do not want council housing. It is all right for the hon. Member for Derbyshire, South. She was born round the corner from where I now live. She would not know what living in council housing meant to people. I do, although I have never lived in one. As it happens, I have been an owner-occupier since the end of the war. First I lived in rooms and then I saved up to get a mortgage. I know that millions of people in this country have benefited from living in council housing and that they have been able to live a decent life because of it.
    People are worried sick about the Government's new housing proposals. They do not know what will happen to them or whether their house will be handed over to some other landlord. I do not know what the leaflets say, but I know that my constituents write to me expressing concern, not because they have received leaflets but because all their lives they have lived happily in those houses.
    Of course people want decent houses. They want their repairs done and they want their houses properly looked after and modernised—as many of them have been looked after and modernised by local authorities. I urge hon. Members to visit my mother-in-law's street. It is easy to tell the council houses from the ones that have been bought: the ones that have been bought are running down because people cannot afford to keep them in proper order. That is what is happening. The hon. Member for Nottingham, South (Mr. Brandon-Bravo) may laugh, but I challenge him to come to Liverpool and look at all the houses that people have bought but are being repossessed because they cannot afford to meet the mortgage repayments. It may be different in other parts of the country.
    Mr. Brandon-Bravo: It is.
    Mr. Heffer: The hon. Member may say that, but he should remember——
    Mr. Brandon-Bravo rose——
    Mr. Heffer: I shall not give way. After all, the hon. Member for Battersea (Mr. Bowis) spoke for 10 minutes. If we are to discuss these matters, we should be really concerned about them.
    I shall conclude by quoting some figures. The hon. Member for Derbyshire, South also used figures. According to the Department of Environment housing and construction statistics published in October 1988, a total of 81,099 local authority houses were started in 1977. In 1979 the figure was 47,465, but by 1988 the figure had fallen to 15,204. Those are not my figures; they are the Department's figures.
    I can also quote other figures, such as those relating to the homeless. A recent written reply to my hon. Friend the Member for Hammersmith (Mr. Soley) shows that, at the end of June 1979, only seven local authorities had over 20 and up to 50 homeless households requiring bed-and-breakfast accommodation. By the end of March 1988, a total of 26 towns and cities had more than 20 homeless households. The position is becoming worse.
    I do not have time to quote all the facts and figures, but the housing crisis still exists. It is worse than it has ever been for ordinary working people, especially in London. Where do ordinary working people in London live? From where can they get housing? There are not even the rooms that used to exist. That is why there is such a rise in the number of homeless. We have to do something about it. The only solution is to get rid of the Government's policies. I hope that when a Labour Government are elected, we shall tackle the housing crisis for the first time. I believe passionately that no Government have really dealt with it properly. Like many workers among the Opposition, I know about living in lousy, rotten conditions and it is about time that it was stopped once and for all.
    6.32 pm
    Sir George Young: I am grateful to the hon. Member for Liverpool, Walton (Mr. Heffer) for curtailing his remarks. I would not contradict what he said about his constituency, but in Ealing the position is reversed. The council houses that have been bought are well maintained, and the houses owned by the council are vandalised, squatted in and left empty for too long.
    I shall address my brief remarks to the housing pressures in London and the south-east. Many of the symptoms have already been referred to—house prices increasing two and a half times in the past 10 years, rising faster than incomes; sadly more families accepted as homeless; young people sleeping on the streets; and problems in recruiting professionals such as teachers and nurses in London. There are also many concealed households, as young people stay with their parents because home ownership or renting is not available.
    I very much welcome all that the Government have done to improve the position, and I congratulate my hon. Friend on what he is doing to reduce voids in local authority stock, to reclaim and use derelict land, to get the urban development corporations to provide affordable housing and to turn round difficult-to-let estates through Estate Action. More power to his elbow, but even if all that is done, there will still be a housing shortage in London and the south-east that can be met only by building more houses. Even SERPLAN, which is
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    notoriously conservative, has now agreed that by 2001 100,000 to 120,000 dwellings will be needed in addition o those already planned.
    I want to rebut the view that the answer to our problems in the south-east is to adhere to a strict planning regime and simply hope that development will take place elsewhere. I welcome the economic revival of the north, and the confident statements from the business community and its civic leaders are music to our ears—our strategy must be to build on that—but it is important not to dismantle or destabilise the economic base of the south-east and, crucially, not to enforce the relocation of residents from the overcrowded south to the north.
    Some of my hon. Friends wish to hang up a "house full" sign on the door of the south-east, tightly to restrict further development and let the market do the rest. I find such a solution unacceptable. It is certainly unacceptable to the DTI. In its evidence to the public inquiry into proposalls for a new country town at Foxley Wood, the DTI was provoked into saying:
    "Past policies of discouraging development in relatively prosperous locations, or even steering that development to other parts of the country, have not met with success. It would therefore be a mistake to interfere with market forces by putting protective barriers around the south-east and other desirable areas in the hope that this would open up opportunities elsewhere."
    We are a party that responds to market forces. We believe in reading the signals given by the market, and the policy of freezing development in the south-east is the very negation of what we stand for. The transformation of the country's economy has been achieved through acting on the supply side, finding out where the bottlenecks are, and removing restrictive practices by trade unions, anti-competitive agreements and the rest. The housing market cannot be expected to work with one hand tied behind its back.
    What happens to the nurses, the teachers and the postmen who live and work in the south-east? As we have heard, local authorities are increasingly committed to rehousing the homeless, and those people often cannot afford to buy at the moment, let alone if the restrictive policies advocated by some people are pursued. The communities that would result from such policies would be unbalanced, polarised and unstable. The social cement that binds us together would not exist. We would have only the prosperous and the poor, and the children of people in the south-east would have real problems in finding somewhere to live.
    Our strategic objective should be to manage and exploit the economic strengths of the south-east for the benefit of its residents and the rest of the United Kingdom. We need more houses. The rapid rise in land prices in England and Wales has increased fivefold in the past 10 years. Much of the land that has become available has not gone to the groups that most need housing, so there has been a mismatch between the type and location of new housing and the reasonable expectations and aspirations of local people. That is an understandable reason why planning committees can turn down development applications because they do not consider them relevant to local needs.
    No one can argue that the land does not exist. Between now and the end of the century, 20 per cent. of agricultural land will become redundant—much of it in the areas of housing shortage. Farmers have already applied for 150,000 acres to go into the set-aside scheme. My right

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    hon. Friend the Minister of Agriculture, Fisheries and Food has made it clear that change of use is needed. At the Conservative party conference in 1987, he said:
    "We must accept that more land will have to come out of agricultural production. So we must facilitate this change, to the benefit of our rural areas, and not obstruct it."
    I see no reason for us to turn our backs on the one form of development that is most urgently needed—homes.
    At the moment, the planning system cannot cope. Farmers and landowners have to play rustic roulette. They either get planning permission and their land is worth £1 million an acre, or they do not and it is worth £1,000 an acre. If they get consent, the developer will maximise his profit by building high-value units often beyond the reach of local pockets. I agree with my hon. Friend the Member for Dorset, West (Sir J. Spicer) that we need a halfway stage—to give planning permission if the land is sold at a realistic price, which means that properties can be bought or rented by people on average incomes, and if the properties are offered in the first instance to local people doing key work or to the children of those already living in the community.
    Many reasons for opposing development are based on sheer selfishness. The secretary of the village conservation society is often the chap who bought the last Wimpey house on the site of the old village school. He is often advocating restrictive development policies which, had they been adopted a few years back, would have meant that the house in which he now lives would never have been built. Other motives are more defensible, but one can overcome the understandable unhappiness of local people by insisting on a higher quality of design and on planning gain, so that there is real advantage to local communities if development goes ahead.
    Many of the issues that I have raised fall outside my hon. Friend's brief, although they fall within his Department. I hope that, as a party, we can approach the subject in the spirit that I have outlined and come up with solutions in keeping with our party's broad sympathy to respond to and harness the forces of the market—solutions made more urgent by a humane desire to see our people adequately housed.
    6.40 pm
    Mr. Paul Murphy: The debate has been wide, but I shall confine my remarks to housing in Wales. When we look, as we must, at the result of the Government's housing policy in Wales, we see that there is no doubt that the problems that have been highlighted by my right hon. and hon. Friends are even worse in the Principality. Wales has the oldest housing stock in Britain. Of all its houses, 40 per cent. were built before the first world war. Despite the fact that the Government have done some work to improve the condition of those houses, their own house condition survey admitted that about £500 million is still necessary to put right the houses in the Principality.
    Welsh district councils have said that they need more money for environmental schemes and more grants for low-paid owner-occupiers to carry out urgent repairs. Low-cost houses are important in the valleys and elsewhere in Wales. The staggering rise in private house prices during the past year is more obvious in Wales than elsewhere. There was a 52 per cent. rise in private house
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    prices in Wales in the past year. That is more than in any other region. It is more than in London, where prices rose by about 15 per cent., and in the country as a whole, where prices have risen by about 31 per cent.
    We have seen widespread gazumping in the Principality. The Prime Minister tells us that private industry and estate agents should work out their own solutions to gazumping. That is not the answer to a major problem in England and Wales. High interest rates and low salaries in Wales mean that young people cannot afford new houses. The only people in Wales who can afford new houses are those who come in from elsewhere and are second, third, or even fourth-time buyers. That fact must be contrasted with the lack of local authority housing.
    One of the most staggering remarks in the debate came from the hon. Member for Derbyshire, South (Mrs. Currie). She said that no one actually wants council houses any more. I wish that she would say that to the 70,000 people who are on waiting lists in Wales or to the other people throughout Britain who badly require housing.
    In the years of this Government, 60,000 council houses in Wales have been sold, and 30,000 more are planned to be sold. The rate in Cardiff is 73 sales a week. The housing supply is effectively drying up. In 1975, a total of 8,000 houses were built in the Principality. Last year, 900 were built, and they were mainly specialist housing. In some district council areas in Wales it takes up to 10 years before people can get the council house which the hon. Lady said they do not actually want. In the past 10 years, there has been a 174 per cent. increase in rents in Wales.
    The traditional supplier of houses in Wales is the local authority, but people cannot now look to their local authorities for housing. If the hon. Lady has her way, they will never be able to. It is wrong to talk of councils in Wales and the rest of Britain building only bad, decrepit housing. That is by no means the case. Local authorities stuck stringently to the Parker Morris standards. This Government relaxed those standards. Council houses were often better built than private houses.
    Housing associations are now seen as the panacea for housing problems in Wales and Britain. The public expenditure White Paper states that they are the main providers of social housing. The organisation Housing in Wales has been created for that purpose. It is elected by nobody and is accountable to no one, save the Secretary of State himself. Its very creation is a slap in the face for local authorities in Wales, with all the experience that they have gained over the years in providing houses for our people. The £72 million that that body has been given should have been given to councils to put right their stock and to build houses, as they have been doing over the decades.
    Housing associations will not provide the answer to social housing problems. Rents will rise through decontrol or the replacement of secure or assured tenancies, and the need for market rents. Those who are just above the housing benefit eligibility level will be caught in a poverty trap.
    Housing associations in Wales provide houses for people. A recent survey undertaken by the associations showed that one in five families in housing associations earn less than £40 a week and that only a handful earn over £100 a week. How will the associations deal with the problem of single, young people in Wales and elsewhere who cannot afford mortgages?

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    There has been a rise in homelessness, the extent of which is more staggering than we have seen for many years. There has been a 100 per cent. rise in 10 years. Six thousand people in the Principality are now homeless, and that is not counting those who are regarded as homeless but are not in the official figures. Matters have been made worse by a rise in rent arrears and mortgage defaults. It is no wonder that the Audit Commission said that some councils will be unable to meet their legal requirements.
    What of the future? The Secretary of State for Wales has provided an answer. He wants to give away council houses altogether. That is a dotty idea. It is as absurd as it is impractical. It has been universally condemned by every Welsh housing association and other housing bodies. The impartial South Wales Argus called it political engineering of the most sinister kind. Public housing stock in Wales and Britain as a whole would be destroyed at a stroke if the Goverment's proposals were put into operation. The Secretary of State's statement has more to do with internal Tory party politics than with the proper provision of housing in Britain.
    There is no doubt that housing in Wales is at a crisis point. First-time buyers cannot afford to buy. There are fewer and fewer houses to rent. Housing association rents will rise dramatically. The financial future for housing is bleak, with housing revenue accounts not to be helped any more by rates. That will fall heavily on pensioner schemes. There has been an effective cut in housing figures over the past 10 years. Wales has lost £1·25 billion in housing money which should have come to it over the last decade.
    Housing in Wales is a time bomb which the Government must defuse. Ministers should plan for a balanced provision between rented and private housing. Instead, all that we are offered is the jungle of the free market which will no more solve Wales's housing needs than Britain's housing needs.
    6.50 pm
    The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): I will not be able to reply to all the points made by the hon. Member for Torfaen (Mr. Murphy) and I hope he will forgive me for not entering into the details of Welsh housing. There was a full debate on Welsh issues yesterday.
    The hon. Gentleman did not make proper reference to the Welsh house condition survey. The latest survey shows that significantly fewer houses in Wales are now unfit. The proportion of houses without basic amenities has almost halved since 1981 and many fewer houses are now in a state of disrepair. These improvements have been particularly marked in areas such as Gwent, where unfitness has more than halved since 1981 and is now well below the Welsh average. I suspect—without having detailed knowledge of circumstances in Wales—that much of what the hon. Member for Torfaen said exaggerated the problems in Wales.
    We have had a lively debate with some excellent contributions, especially from my hon. Friends. We particularly welcome the contribution from my hon. Friend the Member for Derbyshire, South (Mrs. Currie). She commanded the attention of the House, she spoke with knowledge and experience as a former chairman of Birmingham city housing committee and she made some
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    well-researched and telling points which caused confusion among the Opposition. I hope that she continues to speak out on the important subject of housing.
    We also had important contributions from my hon. Friends the Members for Dorset, West (Sir J. Spicer), for Battersea (Mr. Bowis) and for Ealing, Acton (Sir G. Young), and I hope that I shall have time to respond at least to some of the points that they made.
    A common strand that has run through all speeches has been that more houses must be made available either through better management or through new building In the pressure spots, be they in London, the south-east or elsewhere. But before we can have more houses, we must have the land on which to put them, and that is where the planning system comes in.
    That issue was addressed by my hon. Friends the Members for Dorset, West and for Ealing, Acton and, in an intervention, by my hon. Friend the Member for Stockport (Mr. Favell), who said that restricting housing land led to a consequential increase in the cost of that land and, therefore, house prices.
    The latest household projection clearly shows that more housing will be needed in the next decade, not so much because of any population increase as because of the increased rate at which the existing population forms new households. The reasons for that are many. The fact that elderly people are living longer, the increasing divorce rate, the growth of one-parent families and the fact that young people are leaving home earlier are all contributory factors.
    Some say that the new demand for housing should be accommodated within the existing urban areas, as a means of taking pressure off the countryside, especially green field sites, and to encourage urban regeneration. They are right. That should happen as far as possible, but it is impractical to expect all new demand to be absorbed by our older urban areas.
    We are doing as much as we can to encourage the process. Urban development corporations, enterprise zones, simplified planning zones and the financial incentives offered by city grant and derelict land grant are already doing much to rehabilitate urban areas by encouraging new enterprises, new homes and new jobs.
    But cities need their open spaces, too. It is not the business of the planning system to direct people where they should live—to cram them into towns when that is not where they want to live—which is not only immoral but self-defeating. We need more housing in areas outside the. major conurbations. Too often, development plans propose new enterprises and new jobs because of the prosperity they bring, but shun the new homes that are vital to go with them, or hope that neighbouring areas will accommodate them.
    That is often referred to as the "not in my back yard" philosophy. People who support that philosophy fail to realise that increasingly they will be unable to recruit the skilled labour that their businesses need because the price of housing will be beyond the reach of many of the candidates and because the available housing is likely to be snapped up by the more affluent, thereby excluding from the housing market the local people whose interests they are trying to protect.
    We appreciate the feelings of those who see the character of their neighbourhoods changing and their communities being dominated by outsiders, be they commuters, second-home owners, retired people or people

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    who have come from other countries. The answer cannot be to pull up the drawbridge; on that, the comments of my hon. Friend the Member for Dorset, West were important because he drew attention to the possibility of more housing land being brought forward on a voluntary basis by people being prepared effectively to give it as a gift for use by housing associations.
    My hon. Friend the Member for Dorset, West referred to a potential fiscal problem in that connection, especially for capital gains tax. I shall draw his remarks to the attention of the Chancellor of the Exchequer. The Government are well aware of the anomaly and are looking closely to see whether there are any practical means of distinguishing these cases in a way that would enable us to deal with that problem.
    Another initiative that we have taken in recent weeks has been to announce a new deal which will bring considerable comfort to those who live in rural areas, particularly in rural villages, and who resent the fact that their sons and daughters cannot afford accommodation in the place where they were brought up and wish to remain.
    We have said that exceptionally—and only exceptionally—local authorities may, where there is a demonstrable local need, grant planning permission, on sites where it would not normally be granted, specially for low-cost housing for local needs. They should also make arrangements to ensure that housing remains within the low-cost, local needs sector. It is crucial that these sites should be additional to, and not instead of, the provision for general market housing as set out in the development plan. The scheme should be used not as a means of keeping out outsiders but for bringing more land into the market place and making it available for local people. I hope that some of these initiatives will be welcome in west Dorset.
    I must emphasise that I am not advocating random development. Development must be properly planned, and it is important to remember, when considering household projections, that the need for development is absolute. So far as possible, we shall reduce existing under-used and derelict sites in the conurbations. We shall also maintain the green belt and other specially protected areas.
    But we shall still need fresh land for housing, and I look forward to the unanimous support of the House in willing not only the end but the means to ensure that enough houses can be built in the years ahead. I hope that hon. Members listened with interest and respect to the remarks of my hon. Friend the Member for Ealing, Acton, who dealt with this issue with considerable knowledge.
    The hon. Member for Hammersmith (Mr. Soley) raised a number of points, but in the time available to me I shall deal only with his wrong assertion that the biggest cause of homelessness was mortgage repossessions. In the third quarter of 1988, a total of 7 per cent. of homelessness was attributable to mortgage repossessions. That was down
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    from 10 per cent. in the previous year, so the trend is going in the opposite direction to that which the hon. Gentleman alleged.
    That demonstrates the scaremongering attitude that Opposition Members often adopt. They pay lip service to the idea of a property-owning democracy, but seem to seize any and every opportunity to try to frighten people away from home ownership. The hon. Member for Liverpool, Walton (Mr. Heifer) did not miss that opportunity. He made assertions about the consequences for people who purchase houses in his area.
    An independent report found that, on average, right-to-buy purchasers were less heavily committed than other first-time buyers. The report stated:
    "Most buyers have found the problem of purchase and the experience of home ownership to be entirely unproblematical."
    Some people have taken on larger mortgages than perhaps they would have done had they known the extent to which interest rates would go up. I was disappointed that no Opposition Member pointed out that there is often scope for people in that situation to let one or more rooms in their homes, so helping to deal with the problem of homelessness.
    An initiative in that connection, on which the Opposition poured cold water, was brought in by the Housing Act 1988. It will make it easier for resident landlords to remove difficult tenants, an inhibition which has caused many people to be reluctant to let parts of their homes.
    The Opposition have been in one of their doom and gloom moods. They speak of a housing crisis which is really a crisis of their own. They lack a housing policy. Government successes have that effect on the Opposition. The more successful the Government are, the more gloomy the Opposition are. The more successful our housing initiatives are, the more gloomy the Opposition are.
    Socialists have good reason to be gloomy about housing. On national policies, they can hope that the public have short memories and have forgotten what Socialist policies were like in practice, but the Opposition are confronted daily by local examples of their policies in practice.
    We have seen already this year harrowing pictures of estates in Lambeth where tenants live like prisoners behind barricades. One would think that that might have shaken the Opposition from their complacency. The hon. Member for Hammersmith suggested that it was because of a lack of Government funding, but in the past year Lambeth has refused to collect from its tenants rents amounting to £5 million. Those rents could have been spent on improving property. Those estates represent Socialist housing policy in practice. The political views of a housing officer are more important than his management responsibilities. Rents may be low, but the standards of maintenance and repair are even lower——
    It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put, pursuant to Order [24 February].

    Court of Auditors
    7 pm
    The Paymaster General (Mr. Peter Brooke): I beg to move,
    That this House takes note of European Community Documents Nos. 9908/88 on the Annual report of the Court of Auditors of the European Communities for 1987, 8502/88 on the management and control of public storage of agricultural products and 9945/88 on the accounting and financial management of the European Coal and Steel Community; and approves the Government's efforts to press for value for money in Community expenditure.
    Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
    Mr. Brooke: The debate is an important and timely opportunity to consider in some detail a range of questions relating to the control and management of the Community's finances. In its annual and special reports, the Court of Auditors has performed an indispensable service by analysing and publicising such questions. The House would not expect me to agree with everything that the Court of Auditors says, but I am in no doubt about the value of its work. The same goes for the work of the Select Committee on European Legislation: as always, when we debate the work of the court we have the benefit of a clear and thoughtful report by the Committee.
    It might be helpful to begin by reminding the House of the role played by the court in the Community's decision-making process. Under the treaty of Rome, the court is required to examine
    "whether all revenue has been received and all expenditure incurred in a lawful and regular manner and whether the financial management has been sound."
    The Council and the European Parliament are required in turn to consider the court's annual report as part of the discharge procedure for the budget. The Council proposes to the Parliament a recommendation for the discharge and the Parliament decides whether and on what terms to grant the discharge. ECOFIN will discuss the court's report on 13 March. Tonight's debate will influence the Government's position for that Council, at which I shall represent the United Kingdom.
    Mr. Tony Marlow: I am grateful to the Minister. There are not many hon. Members in the Chamber, and it is helpful if my right hon. Friend gives way from time to time. I wonder whether at this stage my right hon. Friend would let the House know whether he intends to accept what seems to be a fundamentally sensible amendment tabled by the Opposition.
    Mr. Brooke: I proposed to deal with the amendment at the end of my speech, but if it would be helpful to my hon. Friend I am happy to comment on the Opposition amendment now.
    I have great sympathy with the sentiments that lie behind the amendment, but I believe that in all the circumstances it would not be appropriate for the Government to withhold their approval of the recommendation to the European Parliament on the discharge of the accounts for 1987.
    The recommendation is subject to qualified majority voting. A vote against it by the United Kingdom would amount to little more than a gesture. The fight against
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    fraud and mismanagement requires rather more than gestures. But in any case, on the substance of the issue, such a gesture would be misplaced, for two main reasons.
    First, by formally withholding approval of the discharge, we would be admonishing the Commission, because the Commission alone is responsible for implementing the budget and drawing up the accounts. If our motive for withholding the approval was to make a broader point about fraud and mismanagement, the impression therefore would be that we were holding the Commission to be largely responsible for such problems. In fact, the responsibility goes much wider.
    The second reason has to do with the nature of the discharge procedure. The discharge relates to a specific set of accounts for a single financial year. Strictly, discharge should be withheld only if these accounts are in some way improper. It has nowhere been alleged that that is the case in respect of the 1987 budget
    The Court of Auditors report draws attention to accounting procedures and devices that the Community was forced to resort to in 1987 and to which I would expect some of my hon. Friends might animadvert. Those procedures, notably the delayed payments for agricultural market support, were agreed by the Council. They were not unilateral actions by the Commission. It would therefore be inappropriate for the United Kingdom to censure the Commission in the way that the amendment suggests.
    Mr. William Cash: My right hon. Friend knows that there was a period of two months within which the national authorities subsumed some responsibility for the discharge of certain moneys in the Community. If it was proved that there had been fraud—I believe that there is some evidence that that is capable of proof—would it not be right for, say, the Public Accounts Committee, or indeed the Government, to pursue the matter on their own account, let alone pursuing the Commission? The Commission has received a heavily qualified audit from the Court of Auditors.
    Mr. Brooke: The point that I was making before my hon. Friend intervened was that the Council had supported and sustained the procedures that we adopted at the close of 1987.
    Mr. Nigel Spearing: Will the Minister give way on the question of the amendment?
    Mr. Brooke: There are few hon. Members present and the hon. Gentleman will have plenty of opportunity to make points hereafter. However, I will give way.
    Mr. Spearing: I thank the Paymaster General for graciously giving way. It might be convenient to intervene now because the Minister animadverted, rightly or wrongly, to the amendment.
    Surely the Minister is being slightly inaccurate. The amendment does not say that we should vote against any recommendation by the Council; it says that we should withhold approval, not on principle for ever, but only until we have received the report of the working party, which the Commission itself thought it advisable and necessary to establish. Surely that is rather different from what the Paymaster General said.
    Mr. Brooke: I alluded to the amendment only because I was asked a question about it by my hon. Friend the

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    Member for Northampton, North (Mr. Marlow). We can return to the substance of the Opposition's case and their amendment.
    I propose to concentrate tonight on the key issues and themes arising from the three documents referred to in the motion. The most important of them relates to fraud and mismanagement involving Community resources. The focus here is on export refunds for beef, to which the court devotes a section of its annual report; and intervention storage, which is the subject of a special report. I am sure that hon. Members would expect me to devote a significant part of my speech to these matters.
    But I also want to touch on the implementation of the 1987 budget and the question of getting better value for money from Community resources. I hope that hon. Members will forgive me if, as a result, I pass rather lightly over some other aspects of these very lengthy reports, but I shall do my best to deal with any specific points in my winding-up speech, if the House will allow me one.
    Fraud is a crime against Community taxpayers which tarnishes the Community's policies and institutions. There can be no excuse for member states treating it any less seriously than fraud involving national finances. The Government have consistently made clear that we are ready to support any practical and cost-effective measures to combat it. Lest there be any misunderstanding, let me reiterate what has been said by three of my Ministerial colleagues from the Dispatch Box in the past week about a recent allegation made in another place that the United Kingdom vetoed a Commission proposal on fraud. That was simply not the case. All member states voted against the measure in question. The United Kingdom did so because we did not believe that the proposal as drafted would have improved the situation.
    By its very nature, the scale of fraud is impossible to quantify.
    Mr. Marlow: I think that I heard my right hon. Friend aright when he said that he would support any proposals against fraud. If there was a proposal that the Commission itself should have outposts in Community countries to supervise the expenditure of its money, would my right hon. Friend support that? It is manifestly obvious that until that happens there will be a great incentive in many European countries, perhaps in the United Kingdom, to maximise the amount of Community money that is being expended, perhaps without proper supervision.
    Mr. Brooke: In preparing for the debate, I read earlier debates and I recall that my hon. Friend the Member for Northampton, North raised the idea of a supranational authority. It was the more striking because those sentiments are not those I would have expected from my hon. Friend's lips. I shall be listening with great care to the debate in case there is a general view in the House that such a supranational authority should be encouraged.
    The court's work on export refunds, which related to beef, scrutinised the effectiveness of controls in the four member states—including the United Kingdom—which account for over 80 per cent. of the expenditure in this sector. The court uncovered evidence of serious deficiencies concerning inspection, verification and other procedures. It concluded that the scope and quality of
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    national controls did not give reasonable assurance that the expenditure concerned was legally and regularly incurred.
    As regards intervention storage, the court's special report is hardly less disturbing, although strictly it has to do with mismanagement rather than fraud. The report is highly critical of Commission guidelines and their national implementation, citing in particular the lack of clear central rules, inadequate physical controls by member states and unsatisfactory accounting and audit procedures.
    I shall come in a moment to the steps which are being taken in the light of these reports, but, first, it is worth noting—as does the court—that a number of the abuses which have been so tellingly catalogued spring from the very character of the Community's policies and regimes. That is why direct attempts to detect and deter fraud must go hand in hand with firm control of total spending, notably on the CAP. The court rightly points out that the differential between Community and world agricultural prices entails a significant risk of fraud. That problem is being tackled. The agricultural stabilisers agreed last year have already been triggered for a wide range of arable crops. For the key cereals crop, there will be a price cut of 3 per cent. from 1989 onwards.
    The position on intervention stocks is also improving. The butter and milk powder mountains all but disappeared last year, and beef stocks fell by over a third.
    Mr. Teddy Taylor: Is it not outrageous for a Minister once again to say in the House that the food mountains have gone down because of reform? Does he not agree with the Agriculture Minister? If he looks up the figures, which have been published time and time again, he will see that they show that the reason for the butter mountain going down was that last year, at a massive cost, we sold 877,000 tonnes of butter, at prices as low as 2¾p per pound, instead of the usual 400,000 tonnes. Does not he accept that it is grotesque, when faced with massive fraud and abuse, for any Minister to try to pretend that the food mountains have gone down because of reform? Does he not accept that there is clear and precise evidence that we had a fire clearance sale, no more and no less?
    Mr. Brooke: I would be the first to acknowledge some of the basic facts that my hon. Friend has stated. It is also the case that butter was not being taken into storage because the procedure triggered a moment when that process ceased. While I would be the first to acknowledge that some of the stocks were disposed of by the process that my hon. Friend mentioned, he would be uncharacteristically unfair if he did not acknowledge that the procedures of the Community also played some part.
    Mr. Taylor: They played no part, and my right hon. Friend knows that.
    Mr. Tim Boswell: Does my right hon. Friend agree that, having emptied the bath at some considerable cost, the most important thing is to ensure that the tap is shut and remains firmly shut?
    Mr. Brooke: That is the policy that the Council has adopted in its report.
    Mr. Teddy Taylor rose——
    Mr. Brooke: If my hon. Friend will allow me, I will make a little more progress. From experience of past occasions, I know that he will not hesitate to intervene again.
    None of this diminishes the need to tackle fraud and waste directly. My right hon. Friend the Minister of Agriculture emphasised the importance of firm action on export refunds and intervention storage at the Agriculture Council last month. I shall do all that I can to ensure that such action is taken at the meeting of ECOFIN on 13 March. In particular, I shall be pressing for new proposals from the Commission in two areas: first, the control and monitoring of export refunds, reflecting the recommendations in paragraph 4.56 of the court's report; secondly, the management of intervention stocks, on which an ad hoc group has already been set up to study the court's recommendations. I believe that deadlines should be set for the presentation of these proposals and for the adoption of the necessary measures.
    Agricultural fraud gets the headlines, but the problem goes wider. The greatly expanded structural funds give rise to obvious difficulties of financial control and management. The new regulations governing the operation of the funds are commendably robust and straightforward. They show what can be done if the need to prevent fraud is explicitly considered when new legislation is being drafted. But much existing Community legislation is too complicated and open to fraud: "leaky and sprawling" was how a recent press story described it. Ways must be found of simplifying it wherever possible.
    Simplification and fraud-proofing of regulations is one of the areas where I hope the Commission's recently established anti-fraud unit will get involved. I and my officials have had detailed discussions with the head of the unit about his objectives and priorities. I have encouraged him to focus, essentially, on practical measures. I emphasise the word "practical". Amidst the welter of recent publicity about fraud it is all too easy to be misled by righteous indignation into believing that there is some quick-fix solution. There is not. Nor can there be in a Community of 12 member states with a great variety of legal and administrative systems. It would be interesting to hear hon. Members' views on the desirability of harmonised systems, or, as I said in response to my hon. Friend the Member for Northampton, North, of some sort of supranational authority to combat fraud.
    The fact of national diversity cannot, however, be allowed to become an excuse for inertia. I am therefore much encouraged that the Spanish presidency has organised a discussion of fraud at this month's ECOFIN, going beyond the specific issues arising from the court's reports. That discussion will be an opportunity to identify the areas in which action is needed, and to define the procedural steps which should be taken to create the necessary momentum for change. We can operate only by persuading the Commission and other member states that fraud must be taken seriously. That will be a protracted campaign; some member states have a much more relaxed attitude to fraud than we have in the United Kingdom.
    The Government are carefully reviewing all aspects of the problem, but the objectives are reasonably clear. First, we need to strike a judicious balance between carrot and stick to ensure that member states take all necessary measures to prevent, detect and punish fraud against the Community budget. Secondly, we need more and better information on the nature and incidence of fraud in
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    member states. Existing reporting arrangements are failing to provide the Commission with the facts that it needs in order to analyse the position and to design effective counter-measures.
    Mr. Marlow: In view of the Government's quite proper desire to assist in overcoming fraud, and the possibility of loose and inadequate accounting within the United Kingdom itself, will my right hon. Friend make it clear that any agencies in this country will provide full and total assistance to anybody from the Commission or from the Audit Commission seeking advice and or information?
    Mr. Brooke: Within the proper proprieties that the House would wish any agency in this country to observe, I give my hon. Friend that assurance.
    Mr. Cash: If there was any real reason why the court needed to acquire information, sought it and could not acquire it as a result of an obdurate refusal by the agency to provide the information, does my right hon. Friend agree that that is the moment at which Her Majesty's Government should say, "This will not do; we must get to the bottom of this, because it is in our interests to do so"?
    Mr. Brooke: I am not clear whether my hon. Friend is speaking to a hypothetical case or to a particular case. The tenor and spirit of my answer follow the answer I gave a moment ago.
    Thirdly, we need to consider how far an enhanced role for the Commission in the detection or investigation of fraud could be expected to help reduce the scale of the problem. Fourthly, we need to be satisfied that enforcement standards in all member states reflect the seriousness of the problem. Finally, we need to establish procedures which will enable all new Community legislation to be fraud-proofed, and which will help to root out existing regulations and regimes which are, to coin a phrase, fraudster-friendly.
    Let there be no mistaking the Government's determination to cut through the rhetoric about fraud and to pursue workable and effective measures to tackle it. Our determination has been underlined by my right hon. Friend the Prime Minister who has made clear that she will, if necessary, raise the issue of fraud at the Madrid European Council in June.
    Mr. Ian Taylor: In that context, will my right hon. Friend pay tribute to the civil service in the Brussels Commission, particularly taking note that its secretary-general is a former senior official of the Cabinet Office of this country? Therefore, its standards should be at the level that we would expect in this country and not of the kind that Sir John Hoskyns tried to imply earlier this week.
    Mr. BrookeI am happy to endorse what my hon. Friend correctly said.
    I turn now to the court's criticisms concerning the implementation of the 1987 budget. There are three main ones: that almost 20 per cent. of the final budget for 1987 was not charged to the 1987 accounts; that published figures for the growth of agricultural expenditure in 1987—as in 1986 and 1985—significantly understated the actual rate of increase; and that the budget was balanced only by successively adjusting the duration of the agricultural year.
    The court goes on to argue that these factors call into question the value of the political objectives set out at the

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    1984 Fontainebleau European Council, and the budget discipline decisions of the 1988 Brussels European Council.
    I would not quarrel with the court's criticisms, but I believe that its conclusion is rather wide of the mark. The accountancy practices to which the court draws attention were the products of a collision between the apparently inexorable increase in agricultural expenditure and the Community's own resources ceiling. It was precisely in order to avoid future collisions of this nature that the United Kingdom insisted during the negotiations on the Community's financing, which culminated last year, that we would not accept an increase in the own resources ceiling until agricultural expenditure had been brought under firm control—until, that is, the Community had adopted rules and procedures to ensure that it could live within its means without recourse to the practices that the court identifies.
    The 1987 budget, to which the report relates, was the last to be drawn up and implemented entirely under the ancien regime for budget discipline. The new regime put in place after the February 1988 European Council is altogether more rigorous and watertight. I must therefore take issue with the court's dismissive reference to the
    "superficially more binding objectives regarding budgetary discipline"
    agreed at that Council. The future financing package does not consist of mere objectives. It consists of a panoply of firm controls which have given the Community a solid basis for financial stability.
    In the case of agricultural expenditure—which is, rightly, the court's main preoccupation—there are three elements of the new system which go well beyond earlier arrangements. First, the agriculture guideline is legally binding; secondly, it constrains the growth of agricultural spending to a maximum of 74 per cent. of the rate of growth of Community GNP; thirdly, there is no open-ended let-out for exceptional circumstances of the sort that bedevilled the Community's finances in the past. In future, there will be a cash-limited monetary reserve, capable of being drawn upon only in tightly circumscribed situations. These controls are buttressed by the reforms to which I have already referred—systematic depreciation arrangements and automatic stabilisers for all the main agricultural commodities.
    I said earlier that the 1987 budget was the final offspring of the old regime. I look forward to the court's report on the 1989 budget, which is the first complete product of the new one. The provision for agricultural spending in that budget is about £1·3 billion below the guideline, and the budget as a whole is over £2·5 billion within the own resources sub-ceiling for 1989.
    The third document mentioned in the motion is the court's annual report on the accounting and financial management of the European Coal and Steel Community. The report is intended to give the European Parliament and the Council an insight into the Commission's management of ECSC resources, most of which come from a levy on coal and steel producers, from borrowing on the capital markets and from bank loans.
    Mr. Teddy Taylor: Will my right hon. Friend answer a question that I have asked several times and to which I should like an answer? In view of what he has said about
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    his co-operation with the court so that the accounts are properly managed, why did the Council of Finance Ministers, at which he was present, refuse to discuss a report, submitted by the court, which said that the Council's decision to transfer the responsibility for butter dumping from the EEC to member states was unlawful? That refusal meant that nothing could happen.
    Mr. Brooke: It is wrong to say that the Council refused to discuss it. It was as a result of the United Kingdom's interventions that the report is now discussed at ECOFIN. That was the basis which we are expanding further at the meeting on 13 March. However, I agree with my hon. Friend the Member for Southend, East that there was disagreement between the Council and the court over that particular measure.
    I shall confine my remarks to an aspect of the report that touches on an issue currently before the Council. The court notes that the ECSC's reserves increased in 1987, and calculates that the ratio of total reserves to total assets is higher than recommended by independent consultants. This is relevant to decisions on the current and future funding of the ECSC's programme of social measures for redundant steel workers. The Government have consistently argued that those should be financed, at least in part, by drawing on the ECSC's reserves. The court's report confirms that the reserves are adequate for this purpose.
    The Commission, however, considers that there are insufficient resources within the ECSC budget to finance a programme of social measures at the proposed level. It has sought to remedy the alleged shortfall by proposing a transfer to the ECSC budget from the general European Community budget. The Government have resisted this, while making it clear that we are not opposed to the social measures in principle. The matter is to be discussed at the Council of Industry Ministers next Monday.
    In my speech on this same occasion last year, I mentioned that I had recently visited the Court of Auditors and had emphasised the contribution that it could make on the subject of value for money in the Community budget. The Community's traditional approach to auditing has tended to concentrate on the regularity and propriety of expenditure by reference to legislative instruments and procedures. That is a necessary function, of course, but I am encouraged by the indications in the latest annual report of the court, moving beyond the traditional approach and towards the concept of value-for-money auditing with which we in the United Kingdom are familiar, but which has yet to take a firm hold in the Community. This shift of emphasis is particularly noticeable in the court's remarks on research and development and the structural funds.
    As regards R and D, the court offers a cautious welcome for the programme of evaluation adopted by the Commission in 1983 and extended in 1987, but it urges the Commission to pay more attention to improving its assessment of the implementation and current validity of the R and D framework programme for 1987–91. A mid-term review of this programme is due to take place later this year, and will no doubt lead to proposals by the Commission for new projects and activities in areas which the programme does not at present cover.
    I would not wish to prejudge the outcome of the review—some difficult negotiations lie ahead—but it would make neither financial nor industrial sense simply to graft new

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    activities on to the existing programme. It would be a mistake to assume that newly identified research priorities must necessarily be pursued at Community level. Even where this is appropriate, new activities should take the place of existing ones which have outlived their usefulness, which are not producing the intended results or which have been overtaken by other developments. Rigorous evaluation is needed in order to identify candidates for weeding out, just as detailed industrial and scientific assessment is needed to identify potentially worthwhile new projects. The criteria and procedures suggested by the court will be an especially useful input to the negotiations on the review.
    As regards the structural funds, the court has some interesting things to say about measuring the impact on regional development of infrastructure investments subsidised by the Community. The precise methodology adopted by the court would not necessarily commend itself to all experts in this sphere, but the expansion of the structural funds which was agreed last year will involve a significant transfer of resources from the richer areas of the Community to the poorer. The greater convergence of member states' economic performance that that transfer is intended to bring about will not happen unless the resources are carefully targeted and the projects to which they apply are scientifically evaluated.
    Sir Russell Johnston: Will the Minister take this opportunity to clarify whether he agrees with the remark recently made by the Chancellor of the Exchequer, that all regional policy in the Community was a waste of time?
    Mr. Brooke: Since I share departmental responsibility with my right hon. Friend, I should verify precisely what he said. However, I am grateful to the hon. Gentleman for drawing my attention to the remark.
    I referred earlier to the new machinery for controlling Community expenditure. With that machinery firmly in place, the Government are now taking the debate one step further by focusing on the quality of Community expenditure, not just the quantity. To that end we have formally tabled a detailed series of amendments to the financial regulation, which governs the implementation of the budget. The amendments are designed to provide a legal framework for improving the value for money of Community expenditure, clarifying its objectives and developing measures to indicate how far those objectives are achieved in practice. Those concepts have become an established part of the landscape in our own public sector, but are not yet embedded in the Community's culture. We aim to try to change that.
    I believe that many of the court's anxieties about the implementation of the Community budget have been addressed in the future financing package agreed last year. I hope that that will allow the court to develop its work on value for money and cost-effectiveness. Finally, I encourage the court to continue in its role as the scourge of fraud, waste and mismanagement. In that it has the Government's full support.
    I accordingly commend to the House the reports mentioned in the motion, and look forward to hearing the views of hon. Members.
    7.30 pm
    Mr. Stuart Holland: I beg to move, as an amendment to the Question, at end to add:
    "and to this end calls on Her Majesty's Government to withhold their approval of any recommendation by the Council of Ministers of the European Economic Community to the European Parliament to discharge the annual accounts of the Community for the year 1987, in accordance with the procedures specified in Article 206B of the Treaty of Rome, until the Council has received and discussed the report of the working party established by the Commission of the European Communities to consider the recommendations of the Special Report No. 5/88 of the Court of Auditors (8502/88) dated 13 September 1988 on the management and control of public storage of agricultural products."
    It seems to Opposition Members—and, I suspect, to Conservative Members—that: the Minister's unconcern about some of the fundamental implications raised by the auditor's report is simply staggering. The position is highlighted by an excellent report in today's edition of The Guardian, which states:
    "Massive fraud involving an estimated £17·25 billion over the past eight years is causing the EEC to fear that the entire Common Agricultural Policy is being discredited."
    It is all very well for the Minister to say that that was the ancien regime and that things are changing. He does not face the implications of the report, which in our view falls into two categories, one long-term and one short-term. The short-term category may be the more dramatic, but the long-term one is also important.
    One of the reasons why there is so much scope for fraud in the European Community is the price support system that it operates, rather than the deficiency payments system that it should be operating. The system should both enable the consumer to benefit and allow operations to be more transparent in supporting producers. That was the basis of the deficiency payments system. Commodities came in, by and large, at world prices—therefore low prices—and the subsidies went to the producers, that is, the farmers, in a manner that could be effectively scrutinised by the Ministry of Agriculture.
    The argument at the time of the debate on the common agricultural policy throughout the early and mid-1960s was that the share of the working population in agriculture in the Community was too high for a deficiency payments system to operate. One out of four workers in the original six countries was employed in agriculture in 1957, but, as I have told the House before and as many hon. Members. present tonight are well aware, the working population in agriculture—at least in the Community of 10, for which figures are readily available—is down to less than 7 per cent.
    I will not elaborate on the point unduly, but none the less I think that it should be made. What this means in practice is that production quotas can be set within guidelines for specific farms, concerning head of cattle, grain production, or whatever. If world market prices are then prevailing on the import side, the whole range of fraudulent operations—for example on the export and re-import of beef products highlighted in the auditors' report simply would not be happening, as there would not be subsidies for the export and re-import of beef.
    Those long-term structural factors must be addressed. If the Government are not addressing them, whatever they do at an ECOFIN meeting in a few weeks' time will not begin to resolve the fundamental problems.
    Mr. Cash: The hon. Gentleman is trying to wrap up the argument in terms of deficiency payments. Wearing their other hat in the Ministry of Agriculture, the Government are trying to deal specifically with how to mitigate surpluses. Those policies, which would be combined with such measures as reducing pollution and the quantity of nitrates—I shall not go into them in detail now—would in aggregate reduce the amount of money required. Clearly that would be the best course to take, and if other countries would adopt the policies that we have been pursuing a good deal of progress might be made.
    Mr. Holland: That is probably so. Certainly it is important for us to see agricultural policy as related to other kinds of priority policy, such as the environment and regional development. One of the ways in which reduced expenditure on agriculture could well be reallocated is via the social and regional fund. In the environmental context, for example, the argument is well established that keeping some land under cultivation, which may not in itself be economically viable, is environmentally desirable. It also avoids the grotesque depopulation of the countryside and the "Deserted Village" syndrome that has afflicted various parts of Europe.
    Let me return to the short-term implications of what the Government are doing, and the extent to which they are responsible for what has happened. The Minister flipped over that rather easily, saying that responsibility for the monitoring of intervention funds was shared between the Commission and member states. The guidelines are there for the Commission, and some of the auditing and supervision must be done by the Commission, but the responsibility is that of the individual member states. In this instance, it would be the responsibility of member states to establish whether suitable controls are in operation, whether they are accurate on a monthly or annual basis, controls on quantities and quality, the nature of declarations, the source data and accounting arrangements generally—the main items in the auditors' report.
    In this context, a letter dated 13 September 1988 is important. It was written by Mr. Marcel Mart, the president of the Court of Auditors, to Karolos Papoulias, at the time president of the Council. It poses questions to be raised with Ministers about what the Government have been, and are doing, in this regard. For example, there is the notorious case, widely reported in the press and mentioned on page 21 of Mr. Mart's letter in its English translation, of the overcrowding of space in storage, preventing any reasonable access or checks. Is the Minister satisfied that that is not occurring in the United Kingdom? What proportion of storage facilities are investigated by the Government each year to ensure that it does not happen?
    Page 22 of the letter states:
    "There is only one country"—
    that is, Denmark—
    "in which volumetric assessment of the quantities of cereals kept in flat storage is feasible."
    Why is it not feasible for the United Kingdom? Page 25 states that there is a great variety of surveillance and technical differences between various states. In monitoring humidity and knowing how to watch for the presence of insects or to prevent the access of other animals, only Denmark appears to have effective mechanisms for
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    scrutiny. As that factor relates to health, the Government should be rather sensitive to the health quality of food products.
    Mr. Marlow: I am sure that the hon. Gentleman understands that measuring the volume of a commodity such as grain does not define the value. The value of that volume of grain varies according to the amount of moisture and impurities in it, and the type of grain that is stored. It is essential that, if any heap of grain, for example, is being measured, the other qualities pertaining to it are examined, otherwise it is impossible to have any idea of the value. That is one reason why so much fraud is apparent at present. I agree with the hon. Gentleman. My point is that Mr. Mart's letter highlight that the Danish have a range of inspection procedures which are relevant, such as temperature probes, monitoring humidity, and under which conditions to ventilate. Of course, it is not simply quantity but quality. Notoriously in the beef case, it is alleged that there are so many different quality specifications that it is impossible to monitor effectively. It has been alleged that there are up to 1,000 different regulations for beef products in the Community. Is that so?
    Mr. Boswell: Following the point made by my hon. Friend the Member for Northampton, North (Mr. Marlow) and speaking as a practical farmer, I must say that one of our problems with volumetric measurement is that, unless one has a good standardised measurement of the actual density of the grain, it is difficult to know the tonnage involved. That may vary within the heap, even if one has a standardised volume.
    The other point that has concerned me is that the hon. Gentleman has several times referred to the practice in Denmark. As I read the report, I believe that Denmark was not one of the countries considered in the detailed study. In fact, the "D" stands for Deutschland, namely the Federal Republic of Germany. I wonder whether I am right about that, and, if so, will the hon. Gentleman correct his assertion?
    Mr. Holland: The hon. Gentleman may be correct and I am most grateful to him. It is certainly confusing if Denmark is expressed by an initial—(D)—which represents Deutschland.
    The letter says on page 27 that there is
    "only one case known (France, cereals) where examples are found of storekeepers being financially sanctioned for excessive quality differences."
    What kind of sanctions are being employed by the United Kingdom Government? Are all our storekeepers angels? Can we assume that they are? How many prosecutions have the Government undertaken concerning any breach of the storage of food regulations?
    On page 29, the letter says:
    "since under current arrangements there exists no stable valuation basis for the recording of stock movements and their consequences for the Community budget in the financial accounts".
    Why is there not such a stable valuation basis for the recording of stock movements in the United Kingdom? Will the Minister answer that question, because for that the Government and not the Commission are responsible?
    Another consequence is reported on page 30:
    "profits and losses cannot be attributed to individual transactions."

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    In effect, that amounts to transfer payments and prices being charged by firms in their operations. Why do we not have that transparency? What are the Government doing in that respect?
    Sir Russell Johnston: I am not sure about the hon. Gentleman's page references. The page which the hon. Gentlman gave as page 30 is page 67 in my copy of the report.
    Mr. Holland: I shall be glad to clarify that. I did say that what we are talking about is a letter from the president of the Court of Auditors of the European Communities, Mr.Marcel Mart, of 13 September 1988 to Karolos Papoulias, then President of the Council of Ministers. That document is available in the Vote Office, and perhaps the hon. Gentleman has it.
    Page 31 of this letter—which after all was written by the president of the Court of Auditors to the then president of the Council of Ministers—concerns the timing of submissions on expenditure and expenditure claims. Mr. Mart said:
    "the Member States have an interest in the earliest possible declarations of expenditure because the declaration has to have been submitted before funds can be withdrawn from the EAGGF Treasury account. It was established that the great majority of the intervention agencies draw up their second category declarations in the first week of the month following the month in which the physical operations took place … It will be clear that as such an early moment in time, it is hardly likely that the centrally recorded data in respect of intervention transactions can be complete."
    What does the Minister say about that, because those who are making those claims should be responsible to him, as the Government are responsible for the operation of our intervention agency?
    The cost figures involved in the misallocation relates partly to what have been called Mafiosi-type swindling, but also partly to the inefficiency with which the intervention process is being managed.
    Page 43 of Mr. Mart's letter says:
    "no audit is performed by any of the internal audit departments, of the monthly declarations nor of the annual accounts of public storage expenditure, submitted to EAGGF."
    Why should they not be in the United Kingdom? In fact, what we have heard is that the Government are appalled by what is happening. They say that the problem will be reduced because we will have stabilisers. The fact that cereal prices may fall by 3 per cent. in 1990 is hardly encouraging for rapid progress in that respect. However, no doubt a fall will be more welcome than an increase. What is the Minister doing in the United Kingdom? When will he put his own house in order? When will he report to the House and respond specifically to the allegations that have been made?
    Mr. Marlow: I put it to the hon. Gentleman that, as the system is at the moment, my hon. Friend is unlikely to do anything about it at all. The Community funds—especially in the common agricultural policy—are being ripped off right left and centre by every other country in the Community. If my hon. Friend were to do the decent thing—which I am sure he would like to do—it would mean that the United Kingdom would not get its fair share of funds. There is no incentive for my hon. Friend, on his own, to stand up and do the proper thing.
    Mr. Holland: I think that the hon. Gentleman, allegedly the hon. Friend of the Minister, has put his finger on it.
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    There is little incentive, as such, for the Government to seek to reduce the transfers which come to the United Kingdom under the guidance and guarantee fund.
    However, another argument involves the accountability of Ministers to the House. For example, the Minister gave two main reasons for rejecting the terms of our amendment. First, he said that to accept the amendment would admonish the Commission. Secondly, he said that the discharge relates to specific accounts and whether or not they are improper. In this case, the admonition is not so much of the Commission as of the individual member states and their failure to pursue adequate audit and scrutiny procedures. It is in the sense that this is the appropriate Chamber in which the Minister should be held responsible for the range of issues that I have raised—where either the United Kingdom is not achieving the best practice available in other Community countries or it is failing to ensure that the quality of food or the manner in which claims are made are adequately transparent and supervised.
    Moreover, the Minister's argument on the amendment is bizarre in view of a statement made in this House by the Secretary of State for Agriculture, Fisheries and Food. He said:
    "As I have said, the Commission draws attention in its proposals to the need to tackle the problem of CAP fraud … What we now need is action … The Scrutiny Committee draws the House's attention to the importance of the European Court of Auditors report on intervention. I welcome the Commission's initiative in setting up a working party to study the recommendations of this report."—[Official Report, 27 February 1989; Vol 148, c. 29–30.]
    If there is no sanction at any level, there is no guarantee that the auditors' recommendations will be implemented.
    Mr. Cash: The hon. Gentleman is trying to pin blame on the Government. No doubt he regards that as his job. However, at the back of the Court of Auditors report in the Official Journal are the Commission's replies. This is an intricate matter but, when presented with the overwhelming evidence of its failures, the Commission's replies are, to say the least, inadequate.
    Mr. Holland: I agree with the hon. Gentleman. Whether the Commission's replies start on page 257 or 265, which I read, they are anodyne in relation to the scale of the crisis that has emerged and the solutions that are needed.
    One reason why the Opposition have tabled their amendment is to create a sense of urgency among those concerned in addressing the issues. If, at the 11th hour and 59th minute, one were to withdraw one's objections to the approval of the budget without a fuller implementation of the recommendations of the Court of Auditors, it might not be surprising. The Council is well known for stopping, the clock on many matters.
    What is surprising is not simply that the Minister is not prepared to fight, but that he is not even prepared to appear to fight. All we are likely to get is talk, talk and talk again rather than real progress.
    We do not agree with Sir John Hoskyns's assertion that Brussels bureaucrats are not answerable to any Parliament. I have some sympathy with Lord Plumb when he says that he is outraged by Sir John's ignorance and asks:
    "Has Sir John been asleep these last 10 years while the directly elected Parliament has been at work?"

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    What I am concerned about is whether the British Government have been asleep for the past 10 years since they have failed to fulfil their responsibility to adequately scrutinise those public funds which are being expended by Britain's intervention agency which is located in Reading. That scrutiny has been inadequate and the Government should show far more urgency in addressing the problems.
    7.52 pm
    Mr. Michael Knowles: I congratulate my right hon. Friend the Paymaster General on not taking the cop-out route of blaming the Commission, which Ministers have taken on previous occasions. That is the easy way out for any Minister responding to his national Parliament. Everybody enjoys having a go at the Commission, especially as it is not represented in Parliaments.
    However, there is a real problem about the Council. In the end, the Council is responsible. It has to act and approve in many cases. The Commission can make suggestions to it. It makes many, the majority of which are not approved. If the Council is a cabinet the doctrine of collegiate responsibility applies and my right hon. Friend is its representative here tonight. But if it is a legislative chamber, as it is in many respects, it is unacceptable that it should meet in secret. No one knows what happens.
    The problem is that the Council is a hybrid, but I suspect that the balance is changing. We are getting to the stage when something must be done about the Council. Indeed, something must be done about an awful lot of the Community's structure. Everybody knows that it is nonsense to have such a large Commission, yet every nation state wants to be represented. Every language has to be translated and enormous bills result. A great deal of money goes on translating every document. As everyone in the Community knows, the two working languages are English and French and everybody uses them, but, as a matter of national pride, no one will give up their language. Therefore, there is a problem with the Council.
    The hon. Member for Vauxhall (Mr. Holland) made a point about deficiency payments. There is an argument for switching to deficiency payments once the agricultural population reaches a fairly low figure. That is not politically realistic; I cannot see other member states switching. Many good questions arose from the president's letter which he quoted, dealing with storage and technical differences between countries, with which I will deal later.
    Mr. Holland: Why should deficiency payments be unfeasible as a longer-term objective? From another document before the House, on the European Coal and Steel Community, we see that
    "urgent action should be taken to decide the future of the ECSC after July 2002."
    If plans can be made for that far ahead for coal and steel can we not plan that far ahead to change the system for agriculture?
    Mr. Knowles: One knows the speed at which change comes about within the Community. However sensible or rational, on matters such as this, which require a unanimous decision, someone somewhere will use the veto; in some cases just so that they can be brought off. That is not completely unknown within the Council.
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    The great difficulty with the system, as emerged from an earlier exchange, is that every member state has an interest in fraud. It is in their interests to grab as much as they can, for fear that other people will grab more. That is a recipe for financial disaster. To be fair, the Court of Auditors has said that time and again. It was reinforced when the European Parliament discharged its report. The Commission has produced plans which go to the Council and then we come to next year's auditors' report. The problem is that the Court of Auditors is a stand-alone institution and has no power in its own right. Nor has any other institution at a level where it could have an effect.
    In places, the report makes nasty reading. Chapter 1 in particular is fairly horrible. The way in which the Commission presented the accounts is its responsibility, but, to put it mildly, the Council shares responsibility for that. Amounts of almost 7 billion ecu were not charged to the account. Two months were paid for by member states resources, not by the Community as they should have been, so that people could say that there was only a small increase—under 4 per cent.—in the budget that year. That is true if one runs a 10-month year—it is always easy to make the figures balance in that way—but taking the year as a whole, there was an increase of around 25 per cent. in agricultural spending. The figures were massaged and disguised, and we all know that that was for political reasons.
    On butter, other sums were lost—about 1·5 billion ecu. That is being amortised over the next four years. Members were owed almost 700 million ecu and that was postponed until this financial year. Chapter 1 is a real horror story for anyone who believes in accounting. I suspect that if that happened in this country, Treasury Ministers would have a very hard time from the House and especially from the Public Accounts Committee. Indeed, if any director of a company or any council did that to their figures they would find themselves inside a court very rapidly. Yet nothing happens here. We have here the problem, to which the court has drawn attention time and again, of the Commission over-budgeting. It happens every time because people are padding the figures. It gives them maneouvrability during the year to switch them about—and they do.
    Mr. Cash: Does my hon. Friend think, however—this is a thought that has been occurring to me since we were recently together in Luxembourg—that when one considers and compares the situation of countries that build up a national debt and then get into a bit of a jam,one sees a certain similarity of approach? The real problem that arises here is not necessarily that they have got into a bit of a jam and there is a budget deficit but that there is quite clearly severe fraud which is not being pursued as vigorously as we would like, and that it is the accounting procedures which must be put right.
    Mr. Knowles: If my hon. Friend will bear with me, I will come to the fraud question. I have some sympathy with the point he makes.
    We have set up a system in which every member state has a vested interest in fraud. That is a recipe for disaster, and it is the implication of the system of shared management over agricultural funds especially. There are no common Community controls. It is all in the hands of the member states. The Commission pays out the money on the members' declaration and later there will be an

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    examination and a justification. That is a nightmare. Again, as the court has pointed out, the Commission has not put enough resources into this area, and it should.
    Agriculture affects the northern states more and co-financing affects the southern states more. There is just not sufficient audit of the regional and social funds. I think I am quoting accurately from the report when I say that they cannot trace the effect of Community expenditure. Admittedly, Commissioner Christophersen is getting more of a grip on the situation, but frankly he needs to get a stranglehold on it the way things are now.
    Chapter 4 of the report, in particular, is a horror story. Paragraph 4.68 on page 76 reads:
    "Two Member States (IRL, UK) refused to allow the Court access to scrutiny reports notwithstanding that these checks are required to be carried out under Community law."
    Then there are paragraphs 4.73 and 4.74. And so it goes on.
    On page 193, "Reports and opinions adopted by the Court of Auditors during the last five years", we get a constant repetition. Some of us have read those reports over the years and the same things keep coming up, because the system itself is deficient. We have built a nightmare. People are responding to the problems in a human way, so we have to change the system to work with the grain of human nature and not against it.
    My right hon. Friend said that the problem was the regime—I think that was the expression he used. I do not believe that it is. I think that it is more a matter of constitutional balance. The Court of Auditors stands alone as an institution. The European Parliament then discharges with recommendations, and so on round the circle again. We have to look at changes across the range of the institutions of the Community, including the size of the Commission and the whole argument over languages. Indeed, a debate to this effect took place in the European Parliament recently, of which, of course, no notice whatsoever was taken.
    Mr. Marlow: While my hon. Friend is considering institutional change, I wonder if he would like to address himself to the question put by our right hon. Friend? Does he believe that Community institutions ought to have more powers of intervention in how the system operates for the expenditure of Community funds and how it is audited and controlled within Community countries, because without this I do not think that we shall get anywhere?
    Mr. Knowles: I think that my hon. Friend is right, but I am well aware of the implications of the question he is asking and of why my right hon. Friend did not answer it directly. Without that, I am at a loss to suggest another answer. The system does not work when Community funds are, in a sense, accessed through national Governments. That is the problem. Therefore, the only way is to have the Community's own institutions being able to oversee that function. If someone can suggest an alternative——
    Mr. Teddy Taylor: Would not the best alternative be for the Community not to have any funds at all and to concentrate on free trade? Would that not be the best answer for everyone and solve all the problems?
    Mr. Knowles: The difficulty here—my hon. Friend knows the problem—is that the Community is much more than a free trade area. It was so designed in its very nature;
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    it is written into the treaties. We tried a free trade area on precisely that basis and in the end we still had, or we decided—history can be written either way—to join the Community. That had massive political implications; one cannot gainsay that. The Commission has a curious hybrid function, part political, part civil service. In a sense, nothing like it has been seen before.
    Mr. Cash: My hon. Friend is now getting very close, I suspect, to the centre of his argument. As a result of the previous intervention, he is conceding a point which I know he holds quite strongly, which is that some form of supranationality is required. But will he not accept that the treaty of Rome in no way, in 1957, in 1972 or indeed in 1986 with the Single European Act, prescribes, empowers or creates a political union? When we deal with the central question of finance and control over finance and concede that as a central point with reference to the control of public finance, we are effectively saying that we will have a political union.
    Mr. Knowles: We have signed many documents saying that we are in favour of union, and it is not true. The preamble to the treaty referred to producing an ever closer union among peoples of Europe. The implications were clear, they were spelt out, and one has to follow through on the argument. We have a system designed to produce fraud on a massive scale. On the argument of sovereignty—here my hon. Friend and I disagree—we say that we will not accept those controls because that infringes sovereignty; therefore, we have to accept that we go along with the fraud. It is one or the other.
    Mr. Marlow: If this is Community money, where is the infringement of sovereignty if Community officials are allowed to supervise it?
    Mr. Knowles: I am with my hon. Friend; that is precisely my view, but it is not one that is shared by my hon. Friend the Member for Stafford (Mr. Cash).
    Mr. Cash: Does my hon. Friend accept that one can have common standards by which the accounting procedures are administered through the national authorities, and have the bun and the ha'penny, too?
    Mr. Knowles: I should live so long, is the answer to that. We have only to look at the report on common standards of looking after food or common standards across the professions—or even in the Court of Auditors itself, and there we are dealing with a professional body. To amalgamate the traditions of British public finance and the public finance of France, Germany and all the others has proved very difficult indeed, and there we have men working very closely in a similar field. They have found it difficult, so how one is going to do that across the 12 member states right through the professions I am not at all certain.
    There was reference earlier to the Select Committee's recent visit to the institutions. It is interesting that in the run-up to 1992, the regulations covering public procurement will be enforced by the Commission. There will not this time be dependence on national good will and the hope that people will do it right, because they have learned the lesson; they know what has happened before when they have depended on member states to carry out a

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    common policy. The truth is that the states do not do it, so the Commission has to do it for the Community as a whole.
    The same argument applies to paying out Commisssion money. The same argument applies also to the Community's own resources; they are dependent on the member states. For instance, customs duties now all go to the Community, not to the nation states—they merely get a 10 per cent. collection fee. So what has happened? Are the nation states who control the customs officers rigorously collecting customs duties as they used to do when the money went into national treasuries? I suspect not. Customs officers have been diverted to other duties. They are looking more for drugs—we have heard the statements in the House. It applies across the board in the other countries. So the Community as a whole loses both ways. The member states will not collect the money for it properly yet the member states will spend that money like water. And we are surprised when we end up in financial difficulties. One could not have devised a system more likely to produce that result.
    The answer is to look at all the institutions, their powers and their relationships to each other. We must think again. We must start talking both to the other member states and to the institutions. There is no point in throwing up our hands and merely saying that we are against fraud as we are against sin, but not following the implications of that argument right the way through. I suspect that the implications are much greater than merely making a saving of some millions or billions of ecu.
    8.11 pm
    Mr. Nigel Spearing: I should like to begin on neutral ground by thanking the Paymaster General for his remarks about the reports of the Select Committee on European Legislation. We have three before the House tonight, one on the Court of Auditors' report which is to the fore, that is, HC 15-viii, one on the special storage report, 8502/88, to which my hon. Friend the Member for Vauxhall (Mr. Holland) referred, that of Mr. Mart and his colleagues, HC 15-ii, and the report on steel matters, HC 15-xi
    We would all agree, although it was not mentioned by the Paymaster General, that we would like to see proper recruitment, adequate qualifications and good collection of the common Community tariff, also emphasised in the report by the Court of Auditors. One cannot expect a Court of Auditors, with which we all agree and which we praise, to work without proper recruitment of people with proper qualifications. If they are to be a "scourge"—I disagree with that word, for reasons that I shall give in a moment—they must have the tools of their trade, and it is the quality of the human tool that we all agree must be present in this case.
    I speak now not as Chairman of the Select Committee on European Legislation, which produced the reports, which are there for the guidance of the House and the public, but in an individual capacity, although I do not do so in a controversial way. It is clear to us all that there are no inbuilt national incentives to detect fraud in the structure of these finances, particularly in respect of food. As the Paymaster General himself has admitted, there is an
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    inbuilt incentive to defraud, both individually and on a national scale. He actually coined the phrase "fraudster-friendly".
    Are we becoming a community fit for Arthur Daley to operate in, with its "little earners"? They are not little earners; they are big ones. I understand that some transactions in intervention stores go up to 5 billion a throw. That is not small money. Even a 5 per cent. fraud on such a sum involves a lot of money. So the Paymaster General has more or less given the game away—and he is an accountant. I was very surprised——
    Mr. Brooke: I have been called many things in my time, but I have never been called an accountant, and I am not one.
    Mr. Spearing: I must apologise to the Paymaster General. Perhaps I was misled by his official title. At least he is an experienced man of business. That would perhaps be a more adequate and accurate title.
    The right hon. Gentleman is glad to hear, he says, of the introduction of value for money. Not many of us would disagree with that, but how can we have proper value for money before we have honesty and probity? Surely the best guarantee of value for money is to ensure that we have probity and honesty to start with. That is the normal auditing procedure for firms and organisations in Britain. If one gets a qualified report from an auditor, things begin to happen—unless, of course, it is the Court of Auditors of the European Economic Community.
    This is where I disagree with the Paymaster General when he talks about the court being a scourge. He says that we should let the court remain the scourge of the fraudster. What has happened is that the Court of Auditors has blown the whistle, not just once but every year for the past 14 years, and play goes on. It is not the role of the Court of Auditors to chase fraud; it is there to show where fraud exists. Is that not the function of an auditor? So the promotion of a fraud squad inside the Commission, while it may, on the face of it, seem praiseworthy, will work only if that fraud squad, and the auditors, have sufficient evidence on which to work.
    I suggest that the court reports show not just that things have gone wrong and that there is fraud but that there is no structure for the prevention and detection of fraud. That must be our major criticism of the food intervention and export structure of the common agricultural policy.
    On the European investment bank, paragraph 1.46 of the court's report says:
    "With regard to operations financed from Community resources in which the EIB is involved to varying extents, the Court is justified in fearing that, due to a lack of watchful action on the part of the Commission, its task as a higher external audit authority will gradually become meaningless, if not impossible."
    The Paymaster General said a little while ago that he would not blame the Commission. That is what he said when I intervened at the beginning of the debate. If for nothing else, surely the Commission could be held responsible for that. It is an extraordinary statement. It is obviously true. The Council must do something about it, and so must the Commission.
    Turning to the question of food, which is exercising the mind of the public and the media at the moment, nearly everyone agrees that the CAP needs reform in principle, and all pay lip service to the elimination of fraud, but nothing seems to happen. Why? The answer lies in two distinct but overlapping dimensions: the system, or lack of

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    it, of book-keeping, and its management and supervision by both national and Community authorities. If fraud is to be discouraged, let alone eliminated, there must be both an adequate built-in system, matched to the nature of the transactions and the markets, and effective audit, together with an overlap or junction between the national and Community auditing authorities.
    The evidence, however, suggests that neither of those conditions exists. No doubt the Commission would say that it is the fault of the Council and the Council that it is the fault of the Commission. The concept of a joint committee and national management lies at the heart of the issue. It has been referred to by Government Members. If, like me, one is keen on the retention of national competence, how far can one go in ceding authority to the Court of Auditors of the EEC in respect of these matters? Quite rightly, the Paymaster General himself has put that question.
    Even if one agrees, as I do, that the nature of joint management must gain the assent of national Governments, surely that right cannot go as far as denying the installation of joint effective management procedures that would provide and control audit quality no less than that expected by any nation in respect of its national institutions or companies. Surely that is self-evident, yet I am afraid that such procedures are what we have not got. Surely, provided that satisfactory controls and systems are in place within a nation, its central Government need not know everything about what is going on and all the individual transactions. But where those controls and systems are not in place, can such information be denied to appropriate bodies? I will come back to that point at a later stage.
    Why is fraud rampant in food storage and in the export activities of the EEC? It is because, within the complex transactions, there are no inbuilt dials and gauges to tell us what is going on. Unlike our own firms and organisations, the EEC did not have them built in from the start. When one looks at company accounts, or makes checks in any organisation with which one is familiar—even a tennis club—one finds them. But an audit is only as good as the evidence available to the auditor. If the evidence is inadequate, the opinion is also inadequate. Time and again the Court of Auditors tells us that it does not have enough evidence, so it has no opinion. The accounts are not just qualified; they are found to be unacceptable—except, of course, to the Council of Ministers and the Commission, which merrily discharge them year by year.
    This would be totally unacceptable in the case of any social club, shop, works or store in this country, where committees and managers know all about the inbuilt principles of auditing and checking. There is the visible reconciliation of evidence of purchase and the cost of storage in appropriate conditions, including temperature and protection against misuse, moisture and insects. Then there are such factors as access, visibility for checking, elimination of the risk of adulteration—for example watering beer; sale in checkable quantities—for example pints by the glass; and assured quality, as in the case of proof spirits. This has to be backed by matching book-keeping, complemented by schedules of quantities and locations—all subject to regular and, on occasions, irregular audit. Every working men's club in the country, and, no doubt, Tory clubs and golf clubs, too, will know what I am talking about, as does every restaurant and cafe. It is something that most people understand.
    Mr. Christopher Gill: Of course, we are not talking about working men's clubs or Tory clubs, or clubs of any other sort. Will the hon. Gentleman take it from me that, because of the very nature of the commodity, it is probably a practical impossibility, even with hundreds or thousands of inspectors, or auditors, or whatever other form of system of control might be installed, to control it? Its control has defied very many people over very many years. I submit that, where there is no personal interest in controlling such commodities, the sort of fraud that is being experienced now will always be with us. The fault lies in the system, not in its control.
    Mr. Spearing: I think that the hon. Gentleman is partly right, but food is particularly difficult to store and to sell because it varies in quality and in quantity—for all the reasons about which he and I would agree. I go with him to that extent, but I disagree with him in that safeguards were not built into the system at the start. The Mart report refers to this. That is where it has gone wrong. Unless and until such safeguards are inserted, fraud will not be detected and there will be every incentive to commit it. That is the essential fact that this House, and, moreover, the Council of Ministers and the Commission must grasp. At the moment they have shown no sign of doing so. Of course, no system is perfect, and there are difficulties in respect of food. But there is an obligation on public bodies to use public money in a responsible way, as I am sure the hon. Gentleman agrees. That is not being done.
    It is clear from the evidence that safeguards such as I describe, visible in tens of thousands of enterprises—I will not say clubs—in this country, do not exist within this system. It is even more complicated than the transactions in a restuarant. Instead of the customer paying for his food or drink and consuming it on or off the premises, he makes a bid for surpluses advertised for tender. The person submitting the lowest tender takes away the food, claims to have exported it, in certain quantities and of certain quality, to particular destinations, and, having done so, goes back to the shop with bits of paper and gets up to five times what he paid for the goods.
    That, I believe, is a crude, but not an unfair, description of the principles of export restitution as operated in the EEC. Each nation has its own food shop, checked by its own Government. The net expenditure for purchase, storage and export subsidy comes on repayment from the EEC, but not necessarily in the exact amount. However, the Court of Auditors, in its annual and special reports, tells us that the system is wide open to abuse. More regulations on top of the system that we have will be about as effective as corking a leaking boat with paper, since we are told that sufficient evidence is not available. We have to refashion that craft before we can stop the leaks.
    Hon. Members may think that I am exaggerating, so I shall turn to the words of evidence from the reports themselves. Special report 8502/88, which for the purposes of the debate I shall call the Mart report, referring to food storage, says:
    "The conclusion that inevitably results from these findings is that it is technically impossible to arrive at any audit opinion whatever, on the view presented by the EAGGF budget accounts, of public storage expenditure."
    One cannot get anything more blunt than that. The report, in paragraphs 6.13 and 6.14, goes on to show why the system is basically defective. I will save the time of the House by saying simply that the report points out that the system was introduced in 1960 as a temporary measure

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    and that it was unsatisfactory but that nobody wanted to change it and that it is now ingrained. That is clear from the reports of the Court of Auditors.
    Paragraph 7 on page 64 of the report says:
    "The charge borne by Member States in respect of technical and financial costs of public storage for the financial year 1986 can be conservatively estimated at about 450 Mio ECU. The result in terms of published financial information is that the official Community accounts do not reflect any more the full costs of the Community's intervention storage policy."
    That can only mean that nobody knows how much officially, it is costing. Although we may know how much is charged to EEC institutions, we do not know how much each national Government is having to tip in as well. What a situation we are in.
    Let me go on to the court's report itself and out of intervention into export restitution. Some of the problems have already been mentioned. Paragraph 4.21 says that the nomenclature for export refunds contains more than
    "1,200 separate classifications for agricultural produce, including almost 400 for milk products and about 80 for beef."
    We have to repay, for that little chit that I talked about, no fewer than 80 varieties of beef. It is open to enormous fraud. It is exported to 11 zones throughout the world, so for beef alone there are probably about 800 schedules. The Paymaster General will tell me if I am wrong, but that is what the paragraph says. No wonder, if there are 800 scales of repayment, that there are incentives for fraud. The Paymaster General has the cheek to say that future regulations must be simplified. That is no use, for we must first deal with the existing regulations that provide such a structure.
    Paragraph 4.33(b) complains about the lack of spot checking, stating:
    "even where arbitrary national scales of examination have been set, they are not always adhered to by the customs services. Some customs stations had recorded examination rates as low as 1% without an apparent justification".
    The Commission, to its credit, had a go at persuading countries to adopt a minimum 5 per cent. check rate, which is still not very high. We read on page 258, presenting the Commission's replies—and I have some sympathy for it, and do not wish to be unfair——
    "At the beginning of 1987 it sent the Council a proposal for a regulation on the monitoring of the payment of amounts granted on export of agricultural products (COM(87)9 final)."
    I looked up that document, and it says, "Let's have 5 per cent. checks," but the nations will not agree.
    Mr. Marlow: On another and related point, can the hon. Gentleman tell the House—I think he knows more about Community affairs than anyone else—what action is taken to mark and identify a consignment that leaves the Community so that it cannot come back into the Community in the dead of night and be re-exported again?
    Mr. Spearing: My knowledge does not extend that far, but the hon. Gentleman puts his finger on a flaw in the structure. I read somewhere that several thousand lorries are running all over the place—and we all know what happens to containers.
    Mr. Dennis Skinner: My hon. Friend is well versed in matters concerning the Common Market, which has been an unmitigated disaster for the British working
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    people from start to finish. As to lorries crossing borders, it is true that they go back and forth, and that, each time they do so, the amount of money that can be made through fraud is increased. In Ireland that fraud is perpetrated on a slightly different scale. Not only do lorries cross the border, but cattle are being driven back and forth. Every time that the cattle cross the border, their owners get extra money. They are doing it that often that the cattle are finding the way by themselves.
    Mr. Spearing: My hon. Friend is right, and I recall that practice being mentioned in a previous report of the Court of Auditors.
    Mr. Skinner: Yes, the court admitted it.
    Mr. Spearing: The Paymaster General should consider also the situation in this country. If we are to make any fuss in the Council, as we ought to do, we must first ensure that we are behaving properly. I am not sure that we are. Intervention buying in the United Kingdom is not the biggest in the Community. HC 137 of 1988–89—"Intervention Buying: Accounts"—shows that in 1987 we had £376 million of butter in stock, and £122 million of beef. I do not know whether those quantities were physically checked on 31 December 1987, and later I shall ask the Paymaster General a question about physical checks.
    However, intervention board report CM404 for 1987 reports:
    "The Board's external trade verification and scrutiny team visited 208 traders during the year to check declarations against company records. As a result financial adjustments were recommended in 74 cases, involving recovery for the Board of £434,713."
    The report refers to "company records", but not to any check against actual stores. I am not sure that such checks are made. When the Paymaster General replies, I hope that he will say whether continual physical checks are made by the intervention board, or whether it relies on its contractors to do so.
    Mr. Cash rose——
    Mr. Spearing: I am sorry, but I must move on, because I wish to present several more items of evidence. No doubt the hon. Gentleman will have an opportunity to speak later.
    I turn to the 30th report of the Public Accounts Committee for 1987–88, where reference is made to Customs and Excise. If the system is to operate properly, there must be proper inspection at ports. However, paragraph 2(iv) states:
    "We consider that the absence of inspection facilities at some ports is unacceptable."
    How can one run such a system without any certification at ports? Paragraph 2(vi) of the Committee's report adds:
    "We are surprised that, in the absence of satisfactory C&E records for CAP examination, IBAP"—
    the Intervention Board for Agricultural Produce——
    "can be satisfied with the evidence about the level of examination."
    In other words, the Committee spotlights a weakness in Customs and Excise.
    I have some surprising statistics for the House. The United Kingdom comes fourth of the Community countries that benefit from export refunds. At the top of the list is France, with refunds totalling 3,074 mecu. The Netherlands come next, with 1,777 mecu, and Germany third with 1,445 mecu. The United Kingdom ranks fourth,

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    with refunds of 880 mecu. When one considers that the French market is worth £2,000 million per year, those amounts fall into perspective.
    It is also significant that the three countries that top the list have a total of 25 votes in the Council. As right hon. and hon. Members well acquainted with the EEC will know but others outside the House may not, 23 votes can produce a blocking third. Any amendments to the rules of the kind that we want to see will have to achieve a two-thirds majority, which could be blocked by the top three countries if they so wish: I am not claiming that they do, but they have that capability.
    I have three questions for the Minister. First, does he think that physical checks take place at stores, and that there is a sufficient number of them and that there are physical checks at ports? The evidence of both the Court of Auditors' annual report and the special report suggests that the Paymaster General cannot answer yes to those questions. Secondly, while I understand the right hon. Gentleman's reticence in respect of an earlier request for information, if the Community's audit authority wants information from a national authority, is there not, by contract as it were, an obligation to assure the court that there is an adequate domestic audit procedure or, in the absence of such a procedure, an obligation to provide any necessary facts? It is clear that, alas, we do not have a satisfactory domestic audit procedure.
    Thirdly, does the Paymaster General accept the amendment that is on the Order Paper? He cannot say that it is a criticism of the Commission. It is not. It could be interpreted as backing it up. Whatever may be the failures of the Commission—and some of its replies are pretty pathetic—at least it has set up a working party to consult national Governments. Would it not be wise to await the results of that working party, and to discuss those findings—I am not saying that we should accept them—before recommending a discharge of the accounts to the European Parliament, as the treaty provides? That would not only be sensible and wise but would be an action of probity and honesty, and would at least satisfy the people of this country, who are growing increasingly worried at the situation.
    The power of this House was founded on, and can only be sustained by, the power to vote money and to scrutinise expenditure. The Paymaster General and the Government should do nothing less at the next meeting of the Council of Ministers on this subject.
    8.39 pm
    Sir Richard Body: I hope that the hon. Member for Newham, South (Mr. Spearing) realises that the House is much in his debt for all he is doing as Chairman of the Select Committee on European Legislation and for his diligence on this and other EC matters.
    Having struggled through most of the 300 pages of the auditors' report, I was left with the desire that Sir John Hoskyns, a fair-minded man, might be persuaded to give enough time to read this report and especially to read that horror story, as my hon. Friend the Member for Nottingham, East (Mr. Knowles) described it, in which 18 per cent. of the Commission's expenditure in 1987, the year with which we are concerned, was unaccounted for. I should like to think that, if Sir John read the report, the
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    next time he had any comments about the Commission, they would be less charitable and generous than they were when he spoke at the Albert hall the other day.
    My right hon. Friend the Paymaster General has invited the House to give its opinion on whether there should be a supranational authority to police the expenditure under the common agricultural policy. It seems that logic is driving us in that direction. I have never been a friend of the common agricultural policy. To me, it seems that it was devised by the devil when he was inebriated, but I am in favour—as I hope all of us are—of international co-operation on a number of agricultural issues.
    I wish that my right hon. Friend would realise the tremendous potential we have towards that end in Europe through the Economic Commission for Europe. I find it sad that the Foreign Office had turned its back on that institution, which, after all, has the support of almost every country in Europe and certainly every country that is a member of the United Nations. It is uniquely qualified to do some of the tasks that all hon. Members would wish to see done in international co-operation on certain agricultural issues.
    The common agricultural policy is, of course, supranational. That is why it is inherently wrong and why it has a number of built-in mechanisms that are unmanageable. I cannot see how we shall ever manage it. If we wish to have a common agricultural policy and if the House is willing to surrender its powers over agricultural policy, we must recognise the inevitable consequence that there will be endless fraud because billions of pounds are sloshing around in the funds. As all the mechanisms are so complex, it is extremely difficult for anyone to understand.
    For some time I have, for a particular reason, been studying some of the agricultural reports. I have been a farmer, and have had the advantage of practising at the criminal Bar for 20 years and taking on many fraud cases. But even with those qualifications, I found it difficult to comprehend the frauds. We cannot expect our own police force, overworked as it is, especially the fraud squad, to embark on that work and it would not have the will to do it. Our own Government, recognising that we are one of the main beneficiaries of the refund system, would have to be willing to give the police the necessary resources.
    Given the great complexity of the frauds, I am driven to the view that if we want to do something—which will only scratch the surface—it will be necessary to have a team of supranational officials based in Brussels. I hope that it would work under the auspices of the Court of Auditors, the one institution over there in which one can have faith. The force would have to be drawn from all the countries and would have to have the right to come here and look at the books, to pursue matters and to act as a supranational police force.
    Mr. Cash: Does my hon. Friend agree that what he is describing is similar to the operations of Interpol? However, the co-ordination required in following fraud, especially in an area such as the Community, presents certain complications. Under the present system, the ultimate prosecution is left to the national authorities.
    Sir Richard Body: I agree. I am wholly in favour of Interpol. As an international framework, it is wholly desirable, but it is made up of individual police forces co-operating with each other when their interests

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    converge. That is admirable, but it is not the same as the issue here, when we are dealing with a supranational policy, where supranational funds are involved, where far too much money is available for the purposes and where, inevitably, sticky fingers are trying to get hold of it.
    That is why I said that if we want to deal with the problem—and we shall never truly deal with it, because it is too vast—and if we want to try to do something, I am driven to the view that we must have a team based on Brussels under the control, I would hope, of the Court of Auditors, recruiting detectives and accountants internationally and with the power to go throughout the Community. It would need to have powers to match those of our own police force and it might be necessary to go further and to have supranational courts. That seems to be the logic if we decide to go along the supranational road.
    Mr. Alan Meale: Is the hon. Gentleman aware that there are also plans to lessen the customs procedures across the boundaries of member states? Does he not think that it is madness to proceed with such a stupid measure at a time when such vast amounts of fraud are being perpetrated on the Governments of member states?
    Sir Richard Body: Indeed, I am at one with the hon. Gentleman on that. The House and our Government must make up their minds about which way they want to go. They have the power, as I have said on numerous occasions, to disengage from the common agricultural policy.
    Were they to take that step, they would undoubtedly succeed in causing reforms for other countries, which would be to the advantage of the whole Community. This country, more than any. has it in its power to do something about the common agricultural policy. It is uniquely able to do that. Sad to say, the Government do not have that will at present. I wish that they had the resolution to disentangle this country from the common agricultural policy. As long as we go along with the common agricultural policy, which is essentially supranational, and if we want to work supranationally, we must have a supranational police force to check the frauds to some extent. However, given the complexities, I do not believe that we shall ever see the end of the great frauds that have been committed over the past few years. They will continue despite the assurances that my right hon. Friend sought to give us.
    8.48 pm
    Sir Russell Johnston: In one respect, this debate represents an improvement on our last debate on the Court of Auditors' report, which also took place on 2 March. The Minister may recall rising to his feet at 1 o'clock in the morning on that occasion, and the degree of liveliness that hon. Members exhibited was perhaps slightly affected by the lateness of the hour. This time, we are conducting our debate at a more civilised time.
    Nineteen eighty-seven was an exceptional year in terms of the Community's finances. I hope that it will have been the last year in which the Council was late in agreeing the budget, with the result that the previous year's budget had to be extended temporarily, a month at a time. We very
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    much hope that that measure will not need to be used again. The second half of 1987 also saw the implementation of the Single European Act which, among other things, greatly improved the decision-making procedures.
    As hon. Members have already said, it is right that we should congratulate the Court of Auditors on an extremely detailed, thorough and forthright report. Some hon. Members remain highly suspicious of all things European, but it is clear that the Court of Auditors is a very effective institution. The Community does not consist of a closed conspiracy of empire-building Eurocrats. It has open institutions that are capable of self-criticism which, on occasions, they conduct extremely well.
    I, too, propose to criticise the Commission during my short speech, but I hope that my criticism will be constructive. With respect to the hon. Member for Holland with Boston (Sir R. Body), I thought that Sir John Hoskyns made an extraordinarily loose speech, designed simply to bring the Community into some disrepute—for what reason, I am not very clear. He also took a long time to make such a statement—but I shall not be diverted into talking about him.
    It is unsatisfactory that we should be debating the report so long after the year with which it deals, but the debate will at least concentrate our minds on the need to respond—and to respond more effectively than the Government have so far seemed to be responding.
    In our debate on the European Community last Thursday, I said that I felt that only the European Parliament could undertake such activities, and I continue to hold that view. The concentration on fraud in the Community is largely due to the constructive, diligent, patient and repetitive work of the European Parliament.
    The myth persists that the British taxpayer single-handedly supports the European Community. Page 219 of the auditors' report carries a colourful table from which one can establish that, in fact, we were the second biggest recipient of funds from the structural fund in 1987—receiving 1·2 billion ecu. The United Kingdom's total receipts from the Community were 3,121 mecu. Our contribution—even before taking into account the abatement—was 5,305 mecu—only 55 per cent. of the contribution made by the Federal Republic of Germany. I do not think that we shall hear the Germans complaining in quite the same way about what they pay into the Community, because they feel more than compensated for their contribution by the huge benefits to their industry.
    Mr. Cash: The hon. Gentleman may or may not have taken part in the debate on the structural fund directive the other day. It is clear that of the 14 billion ecu to be made available by 1992, 9·2 billion will go to Greece, Portugal, Italy, Nothern Ireland and Ireland, as well as the French overseas departments. The proportion that will go elsewhere—to countries other than the United Kingdom—is therefore somewhat different from the proportion in the picture that he painted.
    Sir Russell Johnston: I can only say that I have been citing figures in the report, which referred to 1987. Perhaps we are talking about two different periods, although the hon. Gentleman is right to say that in the most recent round the majority of money went to the Mediterranean countries, particularly Greece and Portugal.

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    While on the subject of the structural fund, let me point out that the Minister did not respond when I referred to the Chancellor's Chatham house speech. I do not have the cutting on me, but I remember accurately a report of that speech and the questions that the Chancellor answered after it in The Guardian. He was asked about regional policy and the diverting of resources to less favoured areas and replied that he thought it was "positively damaging". It is evident that the Chancellor does not believe in regional policy, although that is not a new thing for him. In 1962 or 1963, before I was elected to the House, I read an article in The Financial Times by the right hon. Gentleman—then a journalist—in which he referred to the "liberal illusion of regionalism". I remember that clearly. At least the Chancellor has been consistent, although he has not been consistent with the Brussels agreement, which increased structural funds and which the Government supported.
    Before dealing with fraud itself, I must express my view that for us not to apply the additionality rule to the regional structural funds is a form of fraud. The whole idea of having regional funds at all is to give extra money to deprived areas, but all we have done is to use them as a method of substituting expenditure rather than adding to it.
    As we work out the cost of Europe—and I am not talking about fraud here—we should remember that there is also a cost of non-Europe, to be found, for example, in the waste that has resulted from not having a single European market. That cost is difficult to estimate, but some have suggested that it might be nearly five times the Community's present budget—perhaps £126 billion.
    The question of fraud has rightly dominated the debate. Many hon. Members already said that the report contains some terrifying passages. Paragraph 4.15 on page 67 of the report, which deals with member states' declarations of expenditure, says that they
    "bear only a tenuous relationship to the actual level of the underlying expenditure. Its analyses, showed, for example, that the average error rate of quantities declared as having left public storage, which determine the losses on sales from intervention to be made good by the Community, was as high as 45 per cent."
    Paragraph 4.17 concluded:
    "In the absence, taken overall, of adequate independent physical stocktaking and quality control arrangements in the Member States, in the Court's opinion no reliance can be placed on published figures for the quantities and values of products held in intervention storage at the end of the financial year nor on the related expenditure in the year."
    It could not he much more devastating than that. Inevitably much of our discussion has related to whether we can do anything about it, and if we can do anything about it, what is the best mechanism. The hon. Member for Holland with Boston reluctantly said that we may well have to have a supranational body to deal with the matter as effectively as possible. I agree with what the hon. Gentleman said, and although I know that it is not his natural position, it seems inevitable.
    Despite what the Minister said, I am puzzled about what Lord Cockfield said in another place. The Minister made a short statement on the matter, but I was not much clearer about it when he had finished his statement than before he started it. As I understand it, he said that Britain did not veto the anti-fraud proposals from the Commission, but everyone voted against it, suary Lord
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    Cockfield was wrong. On 14 February, Lord Cockfield said exactly that: that not only Britain but all the member countries have voted against it.
    I am not clear why that was done. Lord Cockfield obviously considered that it was a good proposition that would enable the Commission to conduct investigations In a way that is not available to it at present. I should like to know why it was opposed. The Minister said that it was an inappropriate measure—a dreadful Civil Service expression that one hears from time to time. When they do not want to tell you why something was done, they tell you that it was inappropriate and that does not mean anything.
    Since that was done in 1986, about two and a half years ago, why has there been no follow-up? Why did the Commission just give up? I do not understand that, nor do I understand what the Commission wants in addition to the existing fraud squad established in 1987, the strength of which was doubled as recently as January this year. What did the Commission want to do which the member states unanimously prevented? That is extremely relevant, particularly since fraud on such a scale has been uncovered and, as has been said, the Court of Auditors has pointed out evidence of fraud for many years but no action was taken.
    The popular press has given the impression that the United Kingdom is on the march. The Times said:
    "The Prime Minister is spearheading a drive against fraud".
    It seems to me that the Prime Minister has not been spearheading any drive against fraud and that the United Kingdom, along with the other member countries has not been doing anything about it.
    To return to the European Parliament, one of the British members of the Court of Auditors explained the action of the Commission as follows:
    "The Commission was feeling harassed by the European Parliament on the subject of fraud, and were looking for a buffer to protect themselves from the sniping."
    That reading of the situation was supported by Robert Cotterill in The Independent on 9 February, when he wrote:
    "The emergence of fraud as a significant issue at ministerial level of the European Community brings to a climax a year of patient groundwork by the budget control committee of the European Parliament."
    In other words, the drive seems to come from the European Parliament rather than from within the Council.
    It may be, as the hon. Member for Newham, South (Mr. Spearing) pointed out, that the top three recipients of intervention were not liable to take the lead in controlling this matter. We were fourth in the league, so perhaps we were under similar pressures.
    Mr. Skinner: We just got pushed out of a medal place.
    Sir Russell Johnston: I am afraid that the hon. Gentleman's remark was too subtle for me.
    Mr. Skinner: The hon. Gentleman is a bit before or lately. He does not know whether he is coming or going.
    Sir Russell Johnston: At the moment, I am standing still.
    In one of the many sections of the report, paragraph 10.102, there is criticism by the Court of Auditors of the Commission's involvement in subsidising a television channel. It was an extraordinary exercise on the part of the Commission. In October 1986, it agreed to grant a subsidy of £1 million ecu to a television channel. It failed, and the Commission is still trying to get back the money. The

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    auditors say that the Commission did not verify as it should that the recipient's financial basis was sound. In many respects it appeared to behave like a babe in the wood. I question the basis on which the Commission subsidised a television channel. There are many points that one could make. It appears that the Commission took the wrong course. It would be interesting to know what the position is now and whether it has been successful in recovering our money.
    The report is chastening. There has been widespread fraud and incompetence. The Court of Auditors deserves to be congratulated on the way that it has focused our attention on the problem. The Government are beholden to work vigorously with other member states to do their best to prevent further serious abuses.
    9.6 pm
    Mr. Tim Boswell: I am grateful for the opportunity to make a brief contribution from a long-standing pro-European viewpoint. As hon. Members have said, the European Community of 12 is an imperfect vessel. Any body with such a large membership must have some diffusion of decision-making and accountability, but, at the hon. Member for Inverness, Nairn and Lochaber (Sir R Johnston) said, there are compensating benefits. I often regard myself as being in the position of Galileo who, after sore torment, reflected on his views on the earth rotating around the sun, is reputed to have muttered, "But yet it does so." It still works in that sense.
    In much the same vein, even though it does not do a perfect job, the Court of Auditors' report adequately delves into some of the murkier parts of the Community budget, and the common agricultural policy in particular. We must still get total European expenditure into some context. It represents only a tiny fraction of the total public spending of member states. Even if the whole lot were to be defrauded or wasted, it would still represent only about one year's increment in national Government expenditure. At the same time, all hon. Members must admit that we still do not know how big is the incidence of fraud, yet we can say the same about domestic crime. We would be able also to say that, just as an increase in reported crime may reflect an increase in reporting, an increase in fraud may reflect improvements in auditing systems. It is difficult to tell which is which.
    I counsel the House against one possible blind alley. From my experience of the workings of the CAP, I know that there must be a strong temptation for auditors to opt for soft targets. Paradoxically, by that I mean those member states which tend to have the best developed administrative systems and the highest traditional levels of compliance. The House will realise that I am hinting at the countries of the northern tier in the Community, including ourselves. Of course, things can and do go wrong with public money in Britain, Germany and France, but but there is some hope for putting them right.
    The position is no longer hopeless south of the Alps. It is possible, for example, to use satellite imaging to count the number of olive trees which evidently grow in such remarkable and heavily subsidised profusion in countries such as Greece and Italy. Hon. Members will appreciate
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    from the experience of milk quotas in the latter—which, after five years, are still not in full operation—that some Community members are more equal than others.
    To put it bluntly, if the European auditors were to nose about in the accounts of cereal intervention stores in the United Kingdom, the worst that they might encounter—and I do not think they would encounter obstruction—would be MAFF, but if they did it in Italy they would be running up against the Mafia.
    There are three levels at which our common objective of achieving a cut in fraud under the common agricultural policy could be achieved. The first is simply to cut off some of the excess public funds going into the agricultural sector and the CAP. That would be a matter of policy changes, and some hon. Members who have spoken have not given sufficient weight to what has happened so far.
    There is a considerable way further to go yet, and I readily admit that in the current year the savings, of about 2 billion ecu, have had a great deal more to do with the American drought than with the measures that have been taken. Those measures have been worth while, but they have not solved the problem.
    It is remarkable this year that, because of the drought, we have got back to the budget as well as to the guidelines. It would be wrong not to acknowledge the efforts that have been made to empty the intervention stores, even if we had to knock out the excess stocks to do it. They are now empty, or much more empty than they were, and it is in the interests of everyone to keep them that way. Intervention must revert to the original concept of a case of last resort and not the regular way of doing business.
    Mr. Teddy Taylor: My hon. Friend does not believe that, does he?
    Mr. Boswell: Yes, I do.
    That is the first line of defence: the auditors' and the Select Committee's strictures. Next, fraud can be diminished if the distinctions between the agricultural regimes applying between member states can be reduced. The point of much that was said about the beef regime in the auditors' report is that people profited from the wide disparities between the internal price of beef and the export price, and therefore the refunds.
    In the same way, traders profit from the large distinctions that exist between the effective prices in member states. Naturally, this is largely connected with the issue of monetary compensatory amounts and border taxes arising from the different rates of the green currencies.
    To some extent the same has applied to special arrangements such as the beef variable premium in the United Kingdom, with the consequential clawback on exports. It has also applied to certain animal health matters. Although there will have to be exceptions in, for example, animal health, I welcome 1992 as a move towards removing further internal occasions for fraud, because it will reduce the differences between member states and the prices farmers in them receive.
    At the same time, a quid pro quo is to have an effective Community action squad in place, and the debate has been interesting in taking that concept further than simply the Commission's internal procedures. It may have to be a police force. I was interested in the exchanges about customs forces because, if 1992 is to mean a withdrawal of

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    Community frontier controls, the logic must be Community spot checks at any point within the area of its responsibilities.
    I commend the efforts of Her Majesty's Government to put some of those controls in place, although I acknowledge the view held by many people—I have some sympathy with it—that they do not go far enough. I am always concerned, when we are considering regulations, that there should be adequate resources for policing. I would add to that adequate resources within the Intervention Board for Agricultural Produce, to account and monitor and to check its own activities. There have been some signs that it has been inadequately staffed.
    The fraud that has been clearly set out in the reports is an extra tax paid by legitimate Community taxpayers such as ourselves to persons unknown. None of us should want to rest in our efforts to remove the occasion for fraud and to provide adequate resources that would make it no longer worth while.
    9.15 pm
    Mr. Dennis Skinner: I listened carefully to the hon. Member for Daventry (Mr. Boswell) who I believe could be described as a pro-marketeer, even after all these disastrous years since we had that fateful vote in this place on 28 October 1971. Then we heard the cries of the people like Roy Jenkins, now in the other place, who talked about what would happen when we got into this wonderful market, how we would get economies of scale, how unemployment would fall and everything in the garden would be rosy. He was followed by people like Shirley Poppins and Dr. Death. They were all in the same bed then. They marched into the Lobbies behind the last Tory Prime Minister, taking us into the great nirvana. Everything would be all right for everybody.
    Every so often we have a debate in the House which tells us the bald unvarnished truth. There are a few hon. Members on both sides of the House who refuse to give in on the Common Market. When we read the Court of Auditors report, we see the Common Market with all the veneer stripped off. What do we see? We see fraud on a scale that would not be countenanced in this country. If anything of the kind perpetrated in the Common Market was done here, people would be in gaol.
    From what I have heard today from hon. Members who reckon to be in the know, including the hon. Member for Daventry who is a fanatical pro-marketeer, this thing started when Roy Jenkins was the head of the show. He came back with a big fat pension. What did he do about fraud? All we can gather is that it has grown almost every year, imperceptibly, until, according to the Prime Minister the other day, about £2 billion is being paid by the British taxpayer, to fill the claret glasses of those in the Common Market.
    It is not to feed the Third world, as they said it would he when we went in to the Common Market. It was a grand great strategy to fill the bellies of the spindle-legged kids in Ethiopia, who we saw on our television screens. They do not have two halfpennies to rub together. These great strategists who are now members of the SDP and the SLD and the Liberals and all those in the party that dare not speak its name, told us that the Common Market would solve all those problems. That is why it is in my guts.
    The Common Market has been one of the biggest confidence tricks ever perpetrated in this country in my
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    lifetime. I hear about the £6 billion of fraud. In one newspaper it says £17 billion. They cannot even calculate it. It is like having a train robbery every week. But nobody is getting 30 years inside. Nobody is told, "Hey, just a minute. You cannot run away with money on a scale like that." Just imagine.
    Then we pick up the paper and read about some old-age pensioner in Britain who does not know which way to turn and is caught in Marks and Spencer pinching a tin of pilchards and put inside. A disabled woman in my constituency was chucked in gaol because she could not pay her television licence. Then we hear hon. Members saying that the Common Market is grand and lovely, but turning a blind eye to the fraud on a massive scale.
    Then a Tory has the gall to say, "Oh yes, I have discovered it as well." Sir Henry Plumb rips up his director's card, and God knows what else, because somebody in the higher echelons of the Tory ranks is prepared to open his gills about it. Some of us have been prepared to do that for a long time. The television companies should do something about it. Let us have one television documentary a week on fraud in the Common Market. Why are the television companies not delving into things to find out who the guilty people are?
    I have been told by someone who has been on the continent about £2·5 million-worth of goods being on a ship and, when a crate of beef was opened, chicken offal was found underneath. That is one of the tricks. Some people are making money hand over fist. The Mafia are moving in on a big scale. I am told that there are olive trees that exist only on paper. The authorities have been searching for 3,000 olive trees in Italy for the past three years. We are paying money out on those olive trees day after day. What a scandal. Then the Government have the cheek to talk about surcharging Labour councils, not for fraud but because they are providing goods and services for the elderly and disabled. In their efforts to provide services, councils are going to great lengths, but not fraud, so that the people can have a decent existence.
    The whole thing is ready made for Del Boy and George Cole. All the ingredients for fraud are there. It seems that people who go across to the Common Market cannot fail to make money on the side. So we have not got the jobs or the money for the regions. The other day my hon. Friends told the Prime Minister about the massive pit closures in Nottinghamshire, Derbyshire, Yorkshire and Wales. The Common Market was supposed to resolve all that, but we cannot even get money for the regional policy. Why? If there is £17,000 million of fraud, we are not likely to get money for Wales, for shipbuilding in the north-east or to keep pits open. It is a sad commentary on what has taken place in the 18 years since the vote in 1971.
    Other hon. Members want to speak. We shall come back to this. In the meantime some of us have a job to do—to make it clear to the nation that there will be a body of people here, representing large sections of the population, who believe that it is our duty to expose the fraud, always in the knowledge that the Common Market has been an unmitigated disaster for Britain. Some of us will work night and day until we get out of the mess. We will never surrender the belief that the Common Market has been a complete and utter waste of time and money. On we go, with councils here being attacked because they are providing services. Lambeth, Liverpool and other local

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    authorities are being surcharged, yet the posh bureaucrats can get away with fraud in countries throughout the Common Market.
    I do not know what the chairman of the Tory party will say in reply to the debate. Will he answer one question? Can he give me a guarantee that some of that £17,000 million of fraud has not gone into the Tory party coffers?
    9.23 pm
    Mr. Christopher Gill: While I shall speak less volubly than the hon. Member for Bolsover (Mr. Skinner) I do not want the Paymaster General to think that I speak any less passionately about the matters that we are considering.
    My right hon. Friend was nothing if not realistic. He said that the scale of fraud was impossible to quantify. I understood him to mean that not just in respect of beef export refunds or intervention storage costs, but equally in respect of the structural funds.
    The House should not be surprised because, when that amount of money is sloshing around, there will be sharks in its wake who will find some way of getting their teeth into it. The fault must be with the system—and perhaps with us in that we allow it to continue. While I do not have any blind trust in auditors generally, equally I do not share the confidence of Opposition Members who place so much trust in the ability of inspectors to prevent some of the fraud and abuse so apparent in matters such as the food mountains.
    Mr Meale: If, as the hon. Gentleman says, he does not have much trust in inspectors, will he explain how the many cases that have been discovered—such as the tens of thousands of lorries that have crossed boundaries and never even been weighed and the tens of thousands of boxes of so-called beef that when opened were found to contain chicken offal—could have been discovered other than by inspectors' examinations?
    Mr. Gill: I am glad that the hon. Gentleman asked that question. Before I answer it, I should like to say how heartened I was to hear the Paymaster General say that we must put greater emphasis on practical matters. The hon. Member for Mansfield (Mr. Meale) has raised a practical point, and I hope that when he listens to my reply he will realise that it comes from a practical person.
    I have spent a lifetime in a very practical industry—the meat industry—which is at the heart of the problems on which the hon. Gentleman questions me. As a result of my experience after a lifetime in the meat industry, I believe that no number of inspectors will ever obviate the fraud and abuse that we are criticising. I wish it were so, but to believe that that would ever be the case would be a triumph of hope over experience.
    Mr. Meale: Will the hon. Gentleman accept that the lesson to be learned from the auditors' report is not to concentrate on the quantity of fraud—which is hard to determine—but to reduce the incidence of it in the future?
    Mr. Gill: I listened carefully to what the hon. Member for Newham, South (Mr. Spearing) said about this matter. At one point he invited the House to comment on whether it thought he was exaggerating. In reply to the intervention
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    of the hon. Member for Mansfield I can say that I did not consider that the hon. Member for Newham, South was exaggerating.
    I was convinced that if the hon. Gentleman had his way and we were able to employ more and better auditors, we would discover more fraud. What we are considering is purely and simply the tip of the iceberg, which is why, inevitably, I have come to the conclusion that it is the system that is at fault—and we are at fault for allowing it to continue.
    I hope that my right hon. Friend is listening and will tell other Ministers that they must concentrate harder to reform or abandon this system which appears to be beyond all reasonable control.
    Why do we have structural funds? I believe that we can create a Europe that will achieve the objectives that we Conservatives believe to be important without the structural funds. I was interested to hear the comments of the hon. Member for Holland with Boston (Sir R. Body), who suggested that we could perhaps do better by repatriating agricultural support to the individual nation. Certainly if we did that, agricultural support would be more intelligible, which would benefit those employed in the industry. As hon. Members will have heard me say in the House before, one of the faults of the present system is that it is completely unintelligible to those who earn their living in the industries that are affected. I also believe that, if it were repatriated, agricultural support would be more closely targeted towards the people whom it is intended to help and who, indeed, need that help. Last but not least—I hope that this is of interest to the hon. Member for Newham, South—it would be easier to account for the funds.
    I fear greatly that the common agricultural policy could be the rock on which the European Community founders. I do not want to see that: I have a vision of a Europe in which we have removed the fiscal, technical and political barriers and have created a bigger, freer market from which we will all derive greater prosperity. I see the structural funds as an entirely unnecessary extravagance, and I urge my right hon. Friend to serve notice that the House cannot and will not tolerate the position described in the report.
    9.35 pm
    Mr. Teddy Taylor: I hope that everyone who has read the report feels physically sick. We see here not only shameful abuse of public funds but grotesque mismanagement and blind inefficiency. Anyone who feels complacent about the report should be shot. It is disgraceful, when we think of the use that could be made of money that is being frauded away.
    What worries me are the attitudes that have been conveyed. My right hon. Friend the Minister said that the reason for the overspend of some 20 per cent. was the "ancien regime", the old system of cash. That system was not exactly ancient; it started in 1984 at Fontainebleau. When my right hon. Friend the Prime Minister returned from Fontainebleau she said, "Do not worry about the extra cash: we have spending controls which are binding on the Council."
    Does my right hon. Friend the Minister remember that? I sat here—we all sat here—and heard: "Forget about the overspending. It is sorted out now because we have binding controls." Sadly, we can forget about that,

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    because the controls have proved utterly hopeless, fraudulent and wrong. The Government simply stood back and watched the Commission using the accountancy device of a 10-month year.
    The Minister, too, has a case to answer, and I hope that some day he will do so. He knows that another device used by the Council and the Commission to get over spending controls was to do something illegal. We transferred spending for butter dumping from the Commission to member states, and the Court of Auditors put in a report saying that that was illegal. The Council did not even discuss that, which was shameful.
    We are kidding ourselves if we try to pretend that the CAP is being reformed. Every time we debate these reports we hear that reform is current. We hear about a fall in the value and size of the mountains. We have simply had a fire clearance sale. It is ludicrous to say that the Commission can do things. The report is full of specific criticisms of the Commission and of what can be done.
    What on earth can we do? When we receive these reports year after year—when the fraud continues and increases, as does the mismanagement—we must admit that nothing can be done within the existing rules. Euro-police are a joke. We know what is going on: it is identified. I have asked the Government time and again about the specific case of the Mafia obtaining funds for the delivery of non-existent fruit juice to NATO headquarters in Palermo. Everyone knows about it, but what is being done? The answer is nothing, apart—we are told—from inquiries.
    There is only one thing that we can do, and that is to decide that our next chance to act is when the Common Market is next bust. It was bust in February 1988, and the Prime Minister gave it another pile of cash. That is when we have a veto—and here again we are told that we have legally binding controls. There were binding controls last time. They did not work then and they will not work now. We must say that the common agricultural policy, by its nature, creates all that nonsense. It is evil spending, because the people who really suffer are the people of the Third world, whom few people care about. If we look at the food aid reports, we can see that they are suffering. It is shameful. Money is allegedly being spent on food to feed the poor, but instead it is going on fraud and mismanagement. We know, too, that we are killing those countries by dumping food at knockdown prices.
    The Government should say that the only answer is to repatriate agriculture to member states. The only way we can do that is by saying no when the EEC is next bust and looking for more resources. The same happened when King Charles had no money. He came to Parliament and asked for cash. We said that he could only have it on certain conditions. If we do not receive that message from the report, but instead we have more inquiries, more meetings and more councils, we all know that it will lead to nothing. We will be kidding ourselves. It is a dreadful report. We should admit the simple fact that the position is a disaster, it is shameful and it is horrible. Our only answer is to commit ourselves to asking for repatriation and the end of the CAP the next time the EEC is bankrupt.
    9.35 pm
    Mr. William Cash: We have heard a catalogue of cases which are quite appalling in their extent and degree. I would like to read out one such example,
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    because there has not been a specific example given which I regard as being quite as bad as this one. At page 74 the report says:
    "the Court notes with concern that one trader, already under investigation for export refund fraud in 1985 in one Member State, was paid some 12 mio ecu in 1986 in another Member State, without any special attention being paid to individual claims, without an investigation of his export refund activities and without a Directive … control. The question thus arises of establishing whether the Commission has at present any system providing it with information on cases of this kind arid allowing it to monitor the Member States' mutual information-supplying activities and react promptly where necessary."
    That is only one example of the kind of thing that is happening.
    The fact is that there have not been sufficient prosecutions. We have actual knowledge in this report of cases of forgery and the like, and—just as, for example, in the area of financial services and the recent attacks on city frauds—there is no way of dealing with the problem.
    I do not believe, however, that we need to do this by a supranational authority. The Paymaster General asked us whether we thought this should be done by supranationality or otherwise. It is my belief—which I believe may also be the view of the Court of Auditors—that what are required are common standards applied throughout the Member States, but with each of the national authorities preserving to themselves the right of prosecution. The question is not whether we have evidence of fraud—I believe that evidence has already been made available—hut I am concerned about the prosecutions which need to be made in order to give effect to the requirement which happens to be associated with proper accounting procedures.
    In a sense, nothing more than that needs to be said on that subject. However, there have been criticisms of the Community about the manner in which the agricultural system operates. I would like to put one other thought to the House. On a recent visit to Brussels, we heard much about the social dimension. I understand that there must be something in the form of a dimension of that kind. However, when in practice the whole of the agricultural policy, or much of it, in relation to certain member states is effectively run as a vehicle for social engineering and is, in fact, a social policy by any other means, then I ask a question of the hon. Member for Bolsover (Mr. Skinner). Does he agree that it is not right that people—for example, in his mining constituency or in mine—should have difficulties under the existing social fund arrangements on a domestic level, because of the way in which the Community functions?
    Inefficiency, incompetence and an inability to see the wood for the trees lie at the heart of the auditors' report. As my hon. Friend the Member for Southend, East (Mr. Taylor) said, people in the Third world are suffering grievously as a result of the problems that drought and the like have visited on them. We have evidence to enable us to remedy most of those problems. I believe that the Government have every intention of doing everything that they can to sort the matter out, and I look to my right hon. Friend the Paymaster General to work as hard as possible to make sure that the matter is remedied forthwith.
    9.40 pm
    Mr. Tony Marlow: There are many horror stories in the auditors' report, but today we have been concentrating on £6 billion of public money which is being expended casually, carelessly and without proper control on the storage of agricultural products and on export refunds for agricultural products. That, as a proportion of the EC budget, is a greater slice than the United Kingdom social security budget. It is without control and out of control. It is maladministered.
    As hon. Members have said, there is no proper measurement of the quantities or qualities of commodities in store. There is no proper means by which to access the volume or nature of goods being transported out of the Community. Somebody may look over the back of a lorry or open the occasional box, but less than 1 per cent. of cargoes is inspected and probably less than one tenth of cargoes are analysed in any proper way.
    It is open season for fraud. No wonder the EC is ripped off by the Mafia and the IRA. No wonder it is ripped off with three different operatives in Italy to register the number of olive trees. Those trees are registered three times over because the co-operatives want to retain their custom. As my right hon. Friend the Paymaster General said, this is a fraudster-friendly rip-off. It is a £6,000 million slush fund which is completely maladministered.
    Why should Britain do something about the problem? In a world of car thieves, the man who does not steal one himself must walk. If everyone else is doing it, we must do it, or we shall be left outside. No individual country will take action.
    If we are to take this matter to the EC and the Council of Ministers, we must realise that some countries are doing well out of such frauds. The chap who drives round in a Rolls-Royce, like my hon. Friend the Member for Epping Forest (Mr. Norris), will not, if it is stolen—I am not saying that my hon. Friend's is stolen—want to increase the number of CID members looking for those driving round in stolen cars. Human nature being what it is, there is no incentive for any nation state to do anything about the problem.
    If we look at the matter properly and open up what has been happening in the past it will turn out to be a Pandora's box. Governments throughout the EC will be falling like ninepins as all the fraud comes to light and all the horror stories see the light of day.
    My right hon. Friend the Paymaster General has asked for suggestions and solutions. I am sure that he would suggest that we should tighten up procedures and have new guidelines. There is common procedure throughout the EC but it is still operated by the individual countries. The slacker they operate the procedures the more benefits they obtain for their country and we shall not get anywhere.
    We have to render unto Brussels that which belongs to Brussels. I would not want a great deal to belong to Brussels, but it is Community money, these are Community systems and we must allow Community institutions to supervise them. If we leave it to member countries, we shall get nowhere.
    I have one other plea to put to my right hon. Friend. The Audit Commission is universally supported in the House. It is the one non-controversial institution within the European Common Market. It does a good job and we all support it. Let us give it more support, give it the
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    resources, give it the finance, give it the power, so that it can do its job. The House traditionally is concerned with money and with voting supply. Let us see that that money is properly co-ordinated and controlled and let us give the Audit Commission all the support it needs.
    9.46 pm
    Mr. Holland: It is clearly appreciated by hon. Members on both sides of the House that seldom in the history of public expenditure can so much have been taken from so many by so few so fraudulently.
    It is the transparent fraud which scandalises the House. The abuse, however—and many hon. Members seemed to have missed this—has to be dealt with by the intervention agencies of national member states. It is fine for Commission-shooting season to be open—the Commission is to blame for this and for that—but it is the Governments who are responsible for the national intervention agencies. We should not be saying that there is nothing we can do about it. We have a Minister here who is responsible for that national intervention agency. It is there that we need the action; it is from this Minister that we need the action, to get transparency of accounts.
    When will a report on these accounts and what the Government are doing be made to the House? I put several specific questions to the Minister earlier about what the Government are or are not doing to follow up the recommendations in the report. I think that hon. Members on both sides of the House have a right to an answer from the Minister now.
    9.47 pm
    Mr. Brooke: I elicit a degree of hollow laughter on the occasion of these debates, which I have been attending for some years, when I say that we have had an excellent debate, but I repeat those words again tonight. It has been an excellent debate with a series of admirable and valuable contributions.
    The hon. Member for Vauxhall (Mr. Holland) raised a number of matters in his earlier speech and he has come back in his final remarks and quite properly said that it is not simply a matter for the Commission; it is a matter for member states as well. I hope that I showed that I was in accord with that in my earlier remarks and I certainly say that I am now.
    There was an agreeable paradox in the utterances with which the hon. Gentleman opened his speech at about 7.30. He indicated—as the Opposition have done on more than one occasion—the urgency of the need for corrective action against fraud in the Community. He then proposed what was essentially a long-term solution relating to a change in the basis of agricultural policy. He cited the year 2002 in the context of the Coal and Steel Community and said that if we were ready to think about that year in the context of coal and steel we should be thinking about agriculture too. I am perfectly prepared to think into the next century on the subject of agriculture, but it does not seem to me to march entirely with the degree of urgency which the hon. Member expressed.
    Mr. Holland: The Minister is surely aware that I am talking about long-term structural change in the common agricultural policy back to a deficiency payments system which allows food to come in at world prices. If that happens, we do not have this cross-border nonsense that

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    we have seen under the beef regime. The short-term issue is what action the Government will take to investigate this fraud in this country through its own agencies.
    Mr. Brooke: I freely acknowledge that I was to a degree pulling the hon. Member's leg, but there is a difference between the two time frames. However, I take the point that he was making.
    The hon. Member asked me a series of questions about the intervention agency. He would be the first to acknowledge that those questions were dense and detailed. If he will excuse me, I will deal with them in correspondence with him after the event. They were reasonable questions to ask. I made the point earlier—there is reference to it in the amendment, and both the hon. Gentleman and the hon. Member for Newham, South, (Mr. Spearing) referred to it—about the working party that is engaged on these matters. It has already met on a number of occasions and, I understand, is due to complete its work in April. We are concerned to put on pressure for a deadline for the conclusion of that work when we come to the ECOFIN meeting on 13 March.
    My hon. Friend the Member for Nottingham, East (Mr. Knowles) mentioned resources and, in particular, resources of people. The Government have always made it clear that they would be prepared to see greater resources of people put to work by the Commission and would not stand in its way, although the Commission has a habit of asking for large groups of people without specifying what it wants them for.
    As to the court, I should be delighted if proposals were put to us—and I totally share with a number of my hon. Friends and other hon. Members their admiration for the Court of Auditors. If proposals were put before the Government they would be looked at reasonably and rationally. In fact, we recently agreed to the appointment of what is known in the Community as an A1, essentially a second permanent secretary on the administrative side, for the Court of Auditors.
    I detected in what my hon. Friend the Member for Nottingham, East said a feeling that original sin had something to do with the problems with which we are faced—that is something in which all on the Conservative side would have no difficulty in joining him. He referred to the criticism by the court of the United Kingdom and Ireland for not making scrutiny reports available to the Court of Auditors. In this area we certainly welcome the court's findings.
    On the specific criticisms of the United Kingdom, I note that we have met the requirements of the directive and that our instructions for carrying out scrutinies are praised in paragraph 4.67 of the report. We maintain records of scrutinies and are disappointed that the court should draw conclusions on our coverage of scrutinies, based on a small sample. We are considering positively the court's suggestions for improving the quality of scrutinies.
    The hon. Member for Newham, South also mentioned the quality of personnel. I am delighted to say, at least with regard to customs and excise, that nearly half the people in customs and excise engaged on this work in the United Kingdom have received or are receiving in the current year special training in what to look for in this area.
    The hon. Gentleman spoke of safeguards—I had earlier spoken of simplification. There is not much between us there. He also asked about the built-in controls over intervention storage. He was perhaps blurring the line
    496
    between fraud and mismanagement, but I would not dispute his point about inadequacy of those controls. It is possibly in recognition of this point, that, as I saidearlier, a working group is now urgently considering the position.
    Examination rates for export refunds are as low as 1 per cent. in some cases, and we fully support the Commission's 1987 proposal which would provide for a 5 per cent. physical inspection target. The United Kingdom's current target is 7 per cent., and at ECOFIN I shall press the Commission to adopt the 1987 proposal in the light of the court's recommendations.
    The hon. Gentleman also raised the subject of the Intervention Board for Agricultural Produce and physical checks. The IBAP has recently introduced a rolling programme of stocktaking for beef and butter in intervention stocks. Cereal stocks are inspected annually, or more frequently if trouble is suspected, for both quantity and quality. There is also an independent programme of physical checks carried out by the National Audit Office. In addition, the IBAP's contractual arrangements with cold store operators have recently been revised to ensure that the operators shoulder a greater share of the responsibility for loss or deterioration. It is worth noting that the IBAP's arrangements for controlling cereals intervention were complimented by the Commission in its report last year.
    If the hon. Member for Newham, South has in mind a particular case of denial of information to the Court of Auditors and would care to write to me about it, I should, of course, investigate and reply as soon as possible.
    My hon. Friend the Member for Holland with Boston (Sir R. Body) referred to the Serious Fraud Office and to Interpol. I am delighted to report that the director of the Serious Fraud Office, Mr. John Wood, was very well received when he spoke at the European Parliament's budgetary control committee hearings in Brussels in January. There was also an intervention from Interpol.
    As to the intervention in that speech by the hon. Member for Mansfield (Mr. Meale) on the subject of frontiers and the Single European Act, it is the very possibilities of fraud within the clearing-house mechanism that make the Government so determined that that mechanism should not be brought in.
    The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) vividly remembers the debate in the middle of the night last year, as I do because the second of the two days—the day into which we moved—was my birthday. The hon. Gentleman referred to what he described as so-called additionality. It is an extraordinary claim that the way in which the United Kingdom treats structural fund receipts is a form of fraud. That is what I understood the hon. Gentleman to be saying. I am afraid that it is a terminological inexactitude of the highest order, and it needs correction. There is no question of the United Kingdom structural fund receipts being used for anything, other than their intended purpose. The hon. Gentleman referred to the Chancellor. I think I detected some exegesis of what the Chancellor had said. However, we shall have a word about it afterwards because I think that there may have been a misunderstanding.
    As for why the United Kingdom did not vote for the proposal put forward by my noble Friend Lord Cockfield, the United Kingdom and all other member states took the view that it would not be help, in the pursuit of fraud, to permit Commission officials to conduct investigations, in their own right, in member states. The practical difficulties

    497
    would be considerable, and it would be necessary for the officials involved to understand, and to comply with, national criminal law. In addition, there is the possibility that member states' own investigations could be jeopardised.
    My hon. Friend the Member for Daventry (Mr. Boswell) made a balanced speech and brought in, for the first time, the subject of olive oil, which then returned to the debate. I am glad to say that the account on olive oil—paragraphs 4.107 to 4.114—is a great deal more favourable than those in previous reports were, and I have some sense of the hon. Member for Bolsover (Mr. Skinner) recycling his material. He did, however, do the House a service in injecting some passion into the debate, from which it gained, even if some of his material had been recycled.
    The hon. Gentleman raised the subject of the £17 billion that had been mentioned in The Guardian. As the hon. Member for Vauxhall rightly pointed out, that sum was over eight years. It is an interesting question where the figure comes from. My own calculation is that it is probably 20 per cent. of the FEOGA expenditure over the last eight years. Then one asks where the 20 per cent. comes from. I think it comes from an analysis by Professor Tiedemenn, of Freiburg university, for the European Parliament budget committee in 1987, based on Swedish-Finnish frontier fraud and a previous study. It is a demonstration that in this unquantified area the figures are uncertain.
    My hon. Friend the Member for Ludlow (Mr. Gill) asked for reform of the system. I refer again to what I said about simplification. What he said about the CAP marches entirely with the Government's views in terms of what they were seeking to do about the future financing proposals.
    My hon. Friend the Member for Southend, East (Mr. Taylor) referred to 1984. I did not arrive in my present position until November 1985, but I would be the first to admit that my hon. Friend drew my attention to some of the failings of the Fontainebleau arrangements as soon as I arrived. It is not simply that we had a fire clearance sale. I hope that he will be fair enough to acknowledge that the reduction in intervention stocks is due not just to sales of existing stocks but is the result of policies that have reduced surpluses and, therefore, the quantities that are brought into intervention.
    My hon. Friend came back to the 10-month issue—one of which we have had exchanges before. The issue of NATO commodities in Palermo, which has not actually been the subject of a Court of Auditors report—it goes back to a press report in February 1987—has been somewhat difficult to pursue, but I hope to write to my hon. Friend very shortly giving the outcome of my researches.
    My hon. Friend the Member for Stafford (Mr. Cash) asked that there should be prosecutions. The whole House will join him in wishing to see that happen and that example served. My hon. Friend the Member for Northampton, North (Mr. Marlow) praised the Court of Auditors. I look forward to sending the report of this debate to Mr. Mart, president of the court.
    We have debated for three hours before 10 o'clock rather than having three hours of debate after 10 o'clock. A number of people have asked why we should do
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    something about these matters. The answer is, because of the corrosive effect that fraud has on all our institutions. The whole House has demonstrated that it is against fraud, and I shall carry that message to ECOFIN.
    Question put, That the amendment be made:
    The House divided: Ayes 18, Noes 97.

    Division No. 115]

    [10 pm

    AYES

    Bell, Stuart

    Meale, Alan

    Buckley, George J.

    Mowlam, Marjorie

    Cunliffe, Lawrence

    Nellist, Dave

    Dixon, Don

    Pike, Peter L.

    Foster, Derek

    Skinner, Dennis

    Haynes, Frank

    Spearing, Nigel

    Hinchliffe, David

    Wray, Jimmy

    Holland, Stuart

    Lofthouse, Geoffrey

    Tellers for the Ayes:

    McKay, Allen (Barnsley West)

    Mr. Ray Powell and

    Mahon, Mrs Alice

    Mr. Harry Barnes.

    NOES

    Alexander, Richard

    Knapman, Roger

    Amess, David

    Knowles, Michael

    Amos, Alan

    Lang, Ian

    Arbuthnot, James

    Latham, Michael

    Arnold, Jacques (Gravesham)

    Lawrence, Ivan

    Ashby, David

    Lennox-Boyd, Hon Mark

    Atkinson, David

    Lightbown, David

    Baker, Nicholas (Dorset N)

    Lyell, Sir Nicholas

    Boswell, Tim

    MacKay, Andrew (E Berkshire)

    Bottomley, Peter

    Mans, Keith

    Bowis, John

    Mawhinney, Dr Brian

    Brazier, Julian

    Maxwell-Hyslop, Robin

    Brooke, Rt Hon Peter

    Mayhew, Rt Hon Sir Patrick

    Browne, John (Winchester)

    Miller, Sir Hal

    Burt, Alistair

    Mitchell, Andrew (Gedling)

    Campbell, Menzies (Fife NE)

    Mitchell, Sir David

    Carlile, Alex (Mont'g)

    Moynihan, Hon Colin

    Carlisle, Kenneth (Lincoln)

    Neubert, Michael

    Cash, William

    Nicholson, David (Taunton)

    Chapman, Sydney

    Norris, Steve

    Clarke, Rt Hon K. (Rushcliffe)

    Patnick, Irvine

    Coombs, Simon (Swindon)

    Portillo, Michael

    Currie, Mrs Edwina

    Rhodes James, Robert

    Durant, Tony

    Rowe, Andrew

    Fallon, Michael

    Sackville, Hon Tom

    Fishburn, John Dudley

    Shaw, David (Dover)

    Fookes, Dame Janet

    Sims, Roger

    Forman, Nigel

    Steel, Rt Hon David

    Forth, Eric

    Stern, Michael

    Franks, Cecil

    Stevens, Lewis

    Freeman, Roger

    Stradling Thomas, Sir John

    French, Douglas

    Summerson, Hugo

    Garel-Jones, Tristan

    Taylor, Ian (Esher)

    Gill, Christopher

    Taylor, John M (Solihull)

    Glyn, Dr Alan

    Thatcher, Rt Hon Margaret

    Gorst, John

    Thompson, D. (Calder Valley)

    Ground, Patrick

    Thompson, Patrick (Norwich N)

    Harris, David

    Thurnham, Peter

    Heathcoat-Amory, David

    Waddington, Rt Hon David

    Heddle, John

    Wallace, James

    Hind, Kenneth

    Waller, Gary

    Holt, Richard

    Wardle, Charles (Bexhill)

    Howe, Rt Hon Sir Geoffrey

    Wheeler, John

    Hughes, Robert G. (Harrow W)

    Widdecombe, Ann

    Hunt, David (Wirral W)

    Wilkinson, John

    Hunt, John (Ravensbourne)

    Wilshire, David

    Irvine, Michael

    Jack, Michael

    Tellers for the Noes:

    Janman, Tim

    Mr. Alan Howarth and

    Johnston, Sir Russell

    Mr. David Maclean.

    Jopling, Rt Hon Michael

    Question accordingly negatived.
    Main Question put and agreed to.
    Resolved,

    499
    That this House takes note of European Community Documents Nos. 9908/88 on the Annual report of the Court of Auditors of the European Communities for 1987, 8502/88 on the management and control of public storage of agricultural products and 9945/88 on the accounting and financial management of the European Coal and Steel Community; and approves the Government's efforts to press for value for money in Community expenditure.

    Court of Auditors

      CIVIL AVIATION (AIR NAVIGATION CHARGES) BILL [Lords]
      Order for Second Reading read.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 90 (Second Reading Committees), That the Bill be now read a Second time.
      Question agreed to.
      Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committtal of Bills).

      NATIONAL MARITIME MUSEUM BILL [Lords]
      Order for Second Reading read.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 90 (Second Reading Committees), That the Bill be now read a Second time.
      Question agreed to.
      Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

      PESTICIDES (FEES AND ENFORCEMENT) BILL
      Order for Second Reading read.
      Motion made, and Question put forthwith, pursuant to Standing Order No. 90 (Second Reading Committees), That the Bill be now read a Second time.
      Question agreed to.
      Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

    WAYS AND MEANS

      PESTICIDES (FEES AND ENFORCEMENT) BILL
      Resolved,
      That in the Pesticides (Fees and Enforcement) Bill it is expedient to include provision—
      (1) authorising either of the Ministers to require payments by such persons has he considers appropriate in respect—

      (a) of the balance not covered by fees of the cost of handling and evaluating applications for approval of pesticides under Part III of the 1985 Act;

      (b) of the collection of information under section 16(11) of that Act and the processing of information supplied under subsection; and

      (c) of monitoring the effect of the use of pesticides in the United Kingdom; and

      (2) authorising the payment into the Consolidated Fund of any increase attributable to the provision of the Bill substituting a new section for section 18 of the 1985 Act in the sums falling to be paid into that Fund under section 23(3) of that Act; and in this Resolution—
      "the 1985 Act" means the Food and Environment Protection Act 1985;
      "fees" means fees paid by applicants for the approval of pesticides under Part III of the 1985 Act on making their applications, as a contribution to the cost of handling and evaluating them; and
      500
      "the Ministers" and "pesticides" have the same meanings as in the 1985 Act.—[Mr. John M. Taylor.].

    BUSINESS OF THE HOUSE
    Ordered.
    That, at the next sitting of the House at which a day may be allotted pursuant to Standing Order No. 52 (Consideration of estimates), paragraphs (1) and (3) of Standing Order No 53 (Questions on voting of estimates, &c.) shall apply to the Motion in the name of Mr. Secretary Younger relating to Estimates, 1988–89 (Army), Vote A as if the words `for the coming financial year' in lines 5 and 21 were omitted.—[Mr. Johm M. Taylor.]

    PROCEDURE
    Ordered,
    That Mr. Harry Ewing be discharged from the Select Committee on Procedure and Mr. David Winnick be added to the Committee.—[Mr. David Hunt.]

  PETITION

    Sewage Disposal (Ulverston)
    10.12 pm
    Mr. Michael Jopling: I have the proud honour to present a petition to the House, which has been signed by no fewer than 3,930 residents of the Cartmel peninsula living in the Westmorland and Lonsdale constituency. I should like to tell the House what it says:
    To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The humble petition of residents of Westmorland and Lonsdale constituency, sheweth that the undersigned are concerned that the following schemes proposed by the North West Authority … to discharge raw sewage from Blackpool and surrounding areas to a new long sea outfall to the Lune Deep at the entrance of Morecambe Bay, and … to reroute Ulverston's sewage to a new sea outfall, will adversely affect the health and recreational enjoyment of both residents and tourist, the region's ecology and the livelihood of the Bay's fishermen.
    Wherefore, your Petitioners pray that your Honourable House do safeguard the above areas of concern by causing a public inquiry to be held, at which the matter would be fully investigated and all options, including full inland treatment, considered.
    And your Petitioners, as in duty bound, will ever pray.
    The petition runs in conjunction with the petition currently in the hands of my hon. Friend the Member for Barrow and Furness (Mr. Franks) signed by no fewer than 3,370 residents of Ulverston and the surrounding area in the constituency of Barrow and Furness.
    As an amendment to the petition, may I say, Mr. Deputy Speaker, that in respect of the Ulverston outlet my hon. Friend and I—
    Mr. Deputy Speaker (Sir Paul Dean): Order. I am afraid that the right hon. Gentleman cannot say that on this occasion, although he can present his own petition.
    Mr. Jopling: I am sorry, Mr. Deputy Speaker. I think that my remarks are unnecessary because most of our constituents know that we strongly support a public inquiry in respect of the Ulverston outlets.
    To lie upon the Table.

  National Health Service (Consultants)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maclean.]
  10.14 pm
  Mr. Stuart Bell: This is the first occasion that the Cleveland child abuse crisis has been brought to the Floor of the House other than through parliamentary statements and questions. I have taken the opportunity of raising the matter on an Adjournment debate because of the deep concern that my constituents feel at the turn of events following the publication of the consultants' statement in The Guardian. It is a matter of regret to me and to my constituents that once again the consultants should feel that they ought to prove their innocence on matters which have been through the courts. The motion arises out of the action of 11 paediatricians, who submitted a statement to The Guardian newspaper, among others, in which they stated:
  "In our opinion, the majority (quite possibly 90 per cent.) of the children were abused, and the paediatricians' diagnoses were accurate to a far higher degree than the public realise."
  The sequence of events that led to the submission of that statement will not be time-consuming in relation to the role of the consultants within the NHS. Towards the end of last year, at a specialists' sub-committee of the Northern regional health authority, the future of Dr. Marietta Higgs was discussed. It was decided that a recommendation should be made to the regional health authority that Dr. Higgs be reinstated in Cleveland. Some of the consultant paediatricians at that meeting had come from as far away as Carlisle, let alone Cleveland. Some of the Tyneside consultants also formed part of a support group organised in the new year under the guidance of Dr. David Scott and his wife Anne. It transpired later that Dr. David Scott had worked with Dr. Higgs on a study of cot deaths, and that his wife Anne had been a former secretary to Dr. Higgs in that study.
  That support group met early in February and a draft letter of support for Dr. Higgs was prepared and submitted by Dr. Nigel Speight, a consultant paediatrician at Dryburn hospital in Durham. Dr. Speight has long been an avowed supporter of Dr. Higgs. He telephoned me in her support when the crisis began, and invited himself to a television broadcast on the extent of the crisis. However, he did not give evidence to the Butler-Sloss inquiry.
  In Cleveland in January, the Communist party got into the support act when it called a meeting in Middlesbrough to discuss the Cleveland child abuse crisis, although the crisis was now fading from public memory. After that meeting, addressed by another ardent supporter of Dr. Higgs, Ms. Bea Campbell, who subscribes to the view that one in four of the population are abused as children, it was decided to set up a support group similar to the one in Newcastle, again with the avowed purpose of reinstating Dr. Higgs in her old neonatological job at Middlesbrough general hospital.
  The draft letter of Dr. Speight found its way to Middlesbrough and was discussed at a meeting of consultant paediatricians on 15 February. Dr. Geoffrey Wyatt, who was banned from child sexual abuse cases by the regional health authority following his involvement in the Cleveland child abuse crisis, and who accepted that ban as well as a reprimand and warning as to his future conduct, presented on an overhead projector facts and
  502
  figures which seemed to justify the diagnoses that he and Dr. Higgs had made at Middlesbrough general hospital. Apparently, Dr. Wyatt proposes to publish those facts and figures in an article in The Lancet. The meeting discussed the statement of Dr. Speight, made some deletions, principally in reference to police surgeons, and agreed its onward submission to the press. The purpose of the letter was contained in its last paragraph:
  "Following the crisis in Cleveland, Doctor Higgs has been seconded to look after babies at the Princess Mary hospital, a university teaching hospital in Newcastle. We strongly support and would welcome the return of Doctor Higgs to her former post in Cleveland where she was employed with special skills for the care of sick newborn babies."
  Pressure on the Northern region health authority, as the employer of Dr. Higgs, has become urgent, in view of the allegation that her secondment to the Princess Mary hospital in Newcastle was about to end, and the fact that a paediatric post was about to be advertised for Cleveland by way of an advance appointment to cover the future retirement of Dr. Hilary Grant, the senior consultant paediatrician.
  In any event, Dr. Higgs is still on the books as a consultant paediatrician at Middlesbrough, and her work has been carried on by locums. There were also court proceedings which I do not intend to cover tonight.
  The statement was supposed to be a letter signed by all 11 consultants from Tyneside and Cleveland, but such was the haste to get it out that signatures could not be gathered. The author of the statement had already left for Khartoum. The statement was sent out by Val Hall, who turned out to be Mrs. Dr. Geoffrey Wyatt, although Dr. Hall has since said that she was merely the secretary. In fact, her role has been greater than that. Dr. Hall is also a member of the Cleveland support group, and she has been in touch with several members of Parliament, seeking their support for Dr. Higgs.
  There is nothing reprehensible in any of those activities, except the deceit and dissimulation that has accompanied them in the failure to declare an interest. There was, of course, an anguished reaction by parents and children who were innocently caught up in the crisis.
  It might be convenient to state the number of children who were involved. About 121 children were diagnosed as allegedly having been sexually abused. Of those 121 children, 98 were returned home by the courts. There were eight arrests but only four successful prosecutions. Two men hanged themselves in Durham gaol, and in two other cases in which the only evidence was the diagnostic technique of reflex anal dilatation, the charges were dropped. It is against that tide of the court decision that the paediatricians, in their statement to The Guardian and elsewhere, seek to swim.
  Hardly surprisingly, parents and children alike, settling down about 18 months after the crisis, were traumatised by the sudden appearance of the consultants' statement which was promptly picked up and relayed throughout the media. Some children immediately asked their parents whether it meant that they had to go back to Cleveland hospitals. Mothers and children, too, had nightmares. Children were afraid to return to school on the Monday morning after the mid-term holiday, because they feared that someone would take them away. There was dread and horror that the cycle of repeated physical examinations and disclosure work was back again.
  There is no new evidence available to the consultant paediatricians that was not in the hands of the Butler Sloss

  503
  inquiry, to the medical assessor appointed to that inquiry, or to the courts that dealt with the cases. When I called him on this specific point, the author of the letter, Dr. Nigel Speight, accepted that he had seen no medical records. The evidence that was available to the courts in relation to the 98 children was weighed carefully by High Court judges, magistrates and registrars alike, who preferred the alternative available medical evidence which concluded that the children had not been abused.
  The consultant paediatricians were not entitled to bring new grief and anguish to the innocent families of Cleveland. The question for the Minister to weigh is this: how can they justify their conduct, ethically and professionally? Several of the Cleveland consultants who agreed the statements under their name are still in charge of children who were caught up in the crisis. After publication of the statement in The Guardian, many parents were encouraged to go to those consultants, and everyone who did so was assured that they were not included in the 90 per cent.
  The most appropriate statement of the so-called evidence was given by Dr. Douglas Hague, the regional general manager of the health authority. On local television, he said:
  "The precise figure will never be known partly because of the weakness of the medically recorded evidence."
  That weakness was revealed even by the signatories to the statement that appeared in The Guardian. Thus, Dr. Peter Morrell and Dr. Marietta Higgs examined a seven-year-old girl at Middlesbrough general hospital on 5 May 1987. They diagnosed vaginal and anal abuse, but the minutes of a case review meeting held on Friday 5 June 1987 show that Dr. Peter Morrell pointed out that there was no conclusive medical evidence of sexual abuse. It is to the credit of Dr. Peter Morrell that he changed his mind.
  Dr. Nyint Oo, another signatory to the statement, along with his co-signatory, Dr. Diaz, examined three children aged five, seven and 10 who had been diagnosed by Dr. Higgs as having been sexually abused. This examination took place at 10 o'clock on the evening of Wednesday 24 June. According to the parents of the children, they were roused from their hospital beds for examination. Both Dr. Oo and Dr. Diaz disagreed with the diagnosis of Dr. Higgs, and all three children were allowed home.
  Another signatory, Dr. Caroline McCowen, could not agree with Dr. Higgs' diagnoses after an examination which she made on 10 July 1987 on three children, all girls, aged 10, eight and two, and those three children were subsequently reunited by the courts with their parents.
  Are these now the children whom the consultants say were being abused all along? To their credit, those consultants, along with three others in Cleveland, have since offered their apologies to the families for the distress that they had caused. It is a pity that they did not go further and retract their 90 per cent. statement, leaving that task to the regional general manager of the northern regional health authority and the Minister of State, Department of Health.
  The families, however, cannot leave matters as they stand. They cannot leave their future in the hands of irresponsible statements. They have waited to hear what the Paediatric Association might have said about the letter. There has been a deafening silence. Sadly, the paediatricians—the consultants in this matter of the letter—exercised power without responsibility. Fortunately, I
  504
  have 21 letters in support of the parents and the children from other doctors and consultants throughout the country which rectify the balance, but the parents have seen the destruction of childhood innocence in their children by repeated medical examinations and disclosure sessions. Now they are seeing the steady destruction of what is left of their children's childhood.
  Inquiries are now being made about what legal action can be taken against the consultants. I have therefore spoken on behalf of the families with a firm of solicitors, and submissions will now be prepared by the families with a view to bringing that legal action.
  Thirteen families with 25 children have also begun, or are about to begin, legal proceedings for negligence and assault against those whom they hold responsible for depriving them of their children and their children of their innocence. The consultant paediatricians may feel that they can express their opinions through the press. The families will express theirs through the courts.
  I have a series of questions for the Minister. As he may know, appointments to the rank of consultant are made pursuant to Statutory Instrument 1982 No. 276. Is he satisfied that the procedures for these appointments remain adequate? Equally, under present service contracts, once a consultant has a job description, it may change radically without the knowledge of the health authority as employer. Is that sensible?
  A procedure has been adopted by the northern region by which all new consultants are told six months after commencing duty to ask whether their provisional timetable has changed in practice. Should that procedure be adopted throughout the country? Consultants may also, in accordance with a Government circular, be considered in a disciplinary framework by their employing authority where there is concern about them in any of four main areas—professional competence, professional conduct, personal conduct and contractual commitments. Were the consultants, in signing their statement to The Guardian, in breach of discipline in relation to their contract of service?
  The Government circular to which I refer is HM(61)(112), which sets out the formal disciplinary action open to an employing authority when allegations have been made which involve professional incompetence or professional misconduct. Has the chairman of the Northern regional health authority looked at the statement in the press as a breach of discipline?
  The evidence of Mr. Liam Donaldson, the regional medical officer to the Northern region at the Butler-Sloss inquiry was:
  "There is currently considerable dissatisfaction on the part of the many employing authorities that this is the only formal mechanism in existence for serious disciplinary action against consultant medical staff in respect of professional incompetence or misconduct. It is lengthy, extremely expensive, highly legalistic, the burden of proof required is much higher than with disciplinary procedures involving other grades of staff and as a result it is seldom used."
  Can the Minister state whether he believes that this is satisfactory for a disciplinary procedure within the Health Service dealing with consultants?
  Mr. Donaldson also said that the lack of a formal procedure for matters which, although serious, are not serious enough to result in dismissal, has led to national discussions between the profession, the DSS and the NHS to try to resolve this matter. Where are these discussions? What stage have they reached? What progresss has been

  505
  made in making consultants more accountable to their employers? Do they have an automatic right of appeal to the Secretary of State upon dismissal? If so, is it right?
  Am Ito understand that a warning that was given to the consultants who signed the statement by Sir Bernard Tomlinson, the chairman of the regional health authority, falls within the disciplinary framework?
  Mr. Richard Holt: My constituents, who live in the south of Middlesbrough, wish to be entirely associated with the remarks of the hon. Member for Middlesbrough (Mr. Bell). When investigating the conditions of consultants, I was amazed to find that they have an automatic right of appeal, and that thereafter no action is taken against any consultant until he reaches retirement age. I was given to understand that the longest period that anyone has been in that position is 17 years.
  Mr. Bell: I am grateful for the hon. Member's intervention. He and I have our political differences, but both of us have accepted that it was not a political problem that divided us. This has united our constituents. Throughout the crisis in Cleveland the hon. Gentleman has been a steadfast supporter. It should be placed on record that he has steadfastly looked after those constituents who came to him with their problems.
  My other question for the Minister concerns the Northern regional health authority, among others, being the employer of the consultants. What was clear in the Cleveland child abuse crisis was the distance between the consultants who were employed by the region and the district authority. It appears that the district authority had no control over the consultants, other than to provide hospital accommodation and facilities, and patients through the local health service. It seemed to me, and to others, that a great gulf was created because of that lack of accountability and remoteness from the health authority where they worked. It seemed appropriate to me that it might be better if they were employed in future within the local service and be responsive to the health district.
  It has struck all concerned in the matter that we render homage, in a sense, to consultants within the Health Service for their work, and we respect the norms within which they work, and their efforts, but there must be accountability, as there is for the rest of us. The statement to The Guardian went far beyond what consultants ought to have said. At least five of those consultants had no knowledge of events in Cleveland. One of them who signed the statement had come to the area only a year before, and had no personal knowledge of the situation. The other six had personal knowledge from their files, and were going far beyond their duty as consultants in revealing what was in those files.
  I shall be most grateful to the Minister for any response that he can give me.
  10.34 pm
  The Parliamentary Under-Secretary of State for Health (Mr. Roger Freeman): I congratulate the hon. Member for Middlesbrough (Mr. Bell) on being successful in the selection for the Adjournment debate and on the clarity and forcefulness with which he has presented his case to the House. I will try to answer all his questions in the time
  506
  available. If I do not cover them all, I assure him that I and officials in the Department of Health will study the record of the debate and, if necessary, I will write to him.
  I also welcome the intervention of my hon. Friend the Member for Langbaurgh (Mr. Holt). I know of his deep concern on behalf of his constituents in the case being debated. I also welcome my predecessor, my hon. Friend the Member for Derbyshire, South (Mrs. Currie). I know of her lasting and great concern about the events that happened in Cleveland. Her presence is clear evidence of her continuing interest.
  I agree with the hon. Member for Middlesbrough that the whole business is a sorry, depressing and tragic tale, not least for the children. In a sense it is a tragedy that there should still be uncertainty and concern in the north-east about the events that occurred some time ago.
  Since the subject of our debate is the role of consultants in the National Health Service, it may be helpful if I say a little about their rights and their responsibilities; rights and responsibilities are, of course, closely linked.
  Consultants are the main senior medical staff of the hospital service, and they have individually a very considerable degree of clinical autonomy. Each consultant who sees patients is responsible for the clinical care of those people, adults or children. Consultants alone are responsible for their clinical decisions. But as members of the medical profession they are guided by the standards set by their profession. They do, of course, work within a contract with their employing authority, which may include a job description.
  Consultants are responsible for the resources they use, and the Government are taking steps, such as the resources management initiative, to ensure they have the information they need. One such experiment is taking place at the Freeman hospital in Newcastle. The medical profession has taken its own initiatives in developing medical audit, that is the systematic, critical analysis of the quality of medical care. In the recent White Paper on the National Health Service we have welcomed these initiatives and set out our proposal to extend medical audit throughout the Health Service.
  In answer to the hon. Gentleman's first question, let me say that consultants are entitled, under the nationally agreed terms and conditions of hospital medical staff, to publish books and articles and write letters to the press and to deliver lectures and speeches without the prior consent of their employing authority. As always, however, the right to speak out must be balanced by responsibility for the consequences of what is said.
  I hope that the 11 consultant paediatricians in Cleveland gave adequate consideration to that responsibility before deciding to write to The Guardian as they did. The events of the crisis in Cleveland, so well documented by Lord Justice Butler-Sloss, seriously damaged public confidence in the paediatric and child protection services in Cleveland. Much good work has been done since to re-establish faith in the quality and sensitivity of those services, and I can only regret anything which might serve to undermine that.
  There are, of course, limits to the freedom of action of consultants. Naturally, I cannot make specific comment on the particular consultants mentioned by the hon. Gentleman. He will realise and understand that the whole question of disciplinary action in individual cases is a matter for the employing authority. The Department of Health does not employ consultants it is regional health

  507
  authorities, designated teaching district health authorities and special health authorities who are the employers. It is for them to determine what course of action to follow, taking account of published depart-mental guidance and the prescribed terms and conditions of service of senior hospital medical and dental staff.
  In broad terms, disciplinary proceedings may be initiated for reasons of personal misconduct, professional misconduct or professional incompetence. Under the terms and conditions of service of senior hospital medical and dental staff, there is, as my hon. Friend the Member for Langhaurgh indicated, a right of appeal to the Secretary of State against a decision of the employing authority to dismiss.
  Any proceedings relating to the subject of this debate are the responsibility of the Northern regional health authority. However, I can tell the House that the chairman of the NRHA deplored the intervention by the 11 consultants when he issued a statement on 23 February. Further, I understand that the regional general manager and regional medical officer have between them spoken to most of the consultants individually and reminded them of their wider responsibilities not to undermine public confidence in paediatric services.
  In 1987, a working party was set up with representatives of the Health Departments, the NHS and the professions to recommend possible improvements in disciplinary procedures. The White Paper "Working for Patients" and the subsequent working paper on consultants indicated our intention to open negotiations with the profession on the basis of proposals contained in the report of the joint working party. The changes should result in improved procedures which will, for example, enable cases to be dealt with more quickly, benefiting both the health authority and the doctor concerned.
  The hon. Member for Middlesbrough raised questions about how contracts were held and about the relative roles of districts and regions. As he knows, the contracts for most of the consultants who signed the letter to The Guardian are, I understand, held by the regions—as are most consultants' contracts, even though the consultants are employed by, and work in, individual health districts.
  As is evident from the White Paper, we do not propose that contracts should be held other than by the regions. However, we propose two important reforms. First, the district health authority will play a far greater role in deciding who is appointed and which job is to be filled.
  508
  Secondly, we intend that the consultants' job description should be prepared with the full co-operation and involvement of the district health authority and should be regularly reviewed.
  Therefore, the hon. Gentleman and my hon. Friends will appreciate that we propose a fundamental change in the way that consultants work in the Health Service. Although their contracts will still be legally held in the region, they will be managed by the district health authorities.
  The hon. Gentleman referred to the claim by some consultant paediatricians in the north-east that "in their opinion" a majority, possibly over 90 per cent., of the children were abused. I re-read parts of her report this afternoon, and Lord Justice Butler-Sloss, after a thorough and detailed inquiry, did not reach conclusions on this matter, I think for good reasons.
  Child sexual abuse presents great difficulties in identification and diagnosis. Particularly when it takes place within families—and unpalatable though it is, we have to recognise that it does happen within families—it is surrounded by secrecy and deception. Often the physical signs are ambiguous or non-existent. Cases where the investigating agencies are confident abuse has occurred may not be taken to court, because the perpetrator cannot be identified, or because the uncorroborated evidence of child witnesses is unlikely to secure a conviction in criminal proceedings.
  It was always unlikely that a definitive verdict on each of the Cleveland cases could ever be reached, and it is clearly impossible now. Continual debate over numbers is likely to prove fruitless. May I further comment on the consultants' statement that they believed, to quote from The Guardian
  "that some genuinely abused children have been wrongly returned home by the Courts".
  I regret this criticism of matters appropriately dealt with by the courts.
  I share with Lord Justice Butler-Sloss the hope that the troubles of 1987 will recede for all those concerned with the protection of children in Cleveland, and that they will work together to tackle the exacting task of helping children who are subject to sexual abuse to the lasting benefit of the children, the families and their community.
  Question put and agreed to.
  Adjourned accordingly at seventeen minutes to Eleven o'clock.

DEFENCE

  National Curriculum
  Mr. Thorne
  To ask the Secretary of State for Defence, pursuant to his answer of 9 February, how, following the introduction of the national curriculum in service children's schools, he will seek to minimise the disruption to children's education on military posting.

  Mr. Neubert
  The introduction of the national curriculum will in itself help reduce such disruption. In order to avoid possible difficulties associated with the syllabi of different examining groups, the joint council for GCSE has set up a working party to agree upon common procedural guidelines for the transfer of course work. My Department is represented on this working party.

  Exercise Red Lanyard
  Mr. Redmond
  To ask the Secretary of State for Defence if he will list how many aircraft and by type were employed during exercise Red Lanyard; how many service personnel were engaged; what types of other ancillary equipment were employed; what were the locations of bases and the area covered; what is the projected estimated cost to public funds; and what were the aims and objectives of the exercise.

  Mr. Neubert
  Exercise Red Lanyard was designed to rehearse the procedures that the services would use should they be called upon to assist in the safe evacuation of British subjects from a trouble spot overseas. A maximum of 15 C130 Hercules aircraft were employed, with two Chinook and one Puma helicopters. Up to 750 Army and 180 RAF personnel were involved at any one time. Ancillary equipment employed included Landrovers, associated trailers, Fox and Scorpion armoured vehicles and guns. The exercise proper took place on the Standford training area in Norfolk; the C130 Hercules aircraft used RAF airfields at Lyneham and Watton. This execise was not costed separately and it is not possible to derive the financial information requested except at disproportionate cost.

  Nuclear Weapons
  Mr. Redmond
  To ask the Secretary of State for Defence what are the implications for his policy on nuclear modernisation in the light of General John Galvin's announcement that the North Atlantic Treaty Organisation is prepared to scrap up to 1,000 artillery shells, provided member countries agree to modernise other nuclear armaments; and if he will make a statement.

  Mr. Archie Hamilton
  I am not aware of any such announcement by Saceur. However, the Government continue to believe that it is essential that we maintain an up-to-date stockpile. NATO's nuclear stockpile in Europe 254
  is today at its lowest level for 20 years, having reduced by some 35 per cent. since 1979. Any further reductions will be welcome provided we retain a fully effective, reliable and survivable deterrent.

  Mr. Sean Hughes
  To ask the Secretary of State for Defence (1) what is his policy, in the event of the breakdown of nuclear deterrence, towards North Atlantic Treaty Organisation initiating the use of tactical nuclear weapons;

  (2) if he will define the Government's understanding of North Atlantic Treaty Organisation's doctrine of flexible response;

  (3) whether, in the event of the breakdown of nuclear deterrence, the use of tactical nuclear weapons is an option which the Government might take;

  (4) whether, in the event of the breakdown of nuclear deterrence, limited nuclear war is a possibility under the strategy of flexible response.

  Mr. Neubert
  I refer the hon. Member to the annual statement on the Defence Estimates, in particular the essays on NATO strategy in 1985 and 1987, which contains the information he seeks.

  West German Minister
  Mr. Wareing
  To ask the Secretary of State for Defence when he last met the West German Defence Minister; and what subjects were discussed.

  Mr. Archie Hamilton
  My right hon. Friend last met Dr. Scholz at the Anglo-German summit in Frankfurt on 20–21 February. A range of subjects of mutual defence interest were discussed.

  Aircraft (Missiles)
  Mr. Shore
  To ask the Secretary of State for Defence how many dual capable LRINF and SRINF aircraft were in service with the North Atlantic Treaty Organisation and the Warsaw pact in 1985 and at the latest available date; and how many of these aircraft are equipped with air-to-surface missiles.

  Mr. Neubert
  The numbers of dual-capable LRINF and SRINF aircraft in service with NATO and the Warsaw pact are as follows:

  1985

  End 1988

  LRINF

  NATO

  150

  140

  Warsaw pact

  350

  300

  SRINF

  NATO

  1,300(600)

  1,500(650)

  Warsaw pact

  3,800

  3,250

  These figures cover land based aircraft deployed n Europe west of the Urals and exclude French aircraft and those with a primary maritime role. The figures in brackets show NATO aircraft certified for nuclear use. Comparable figures are not available for the Warsaw pact.

  The majority of Warsaw pact dual-capable aircraft in these ranges are capable of carrying air-to-surface missiles armed with conventional or nuclear warheads. Some of these missiles have ranges of up to several hundred kilometres. None of the NATO aircraft is currently equipped with air-to-surface missiles armed with nuclear warheads.

  Backfire Bombers
  Mr. Shore
  To ask the Secretary of State for Defence how many dual capable Backfire bombers were available to the Warsaw pact in 1985; and how many were added in 1986, 1987 and 1988.

  Mr. Neubert
  In 1985 the Warsaw pact air order of battle included approximately 230 Backfire bombers. In each of the three years 1986, 1987 and 1988 around 30 additional Backfire were deployed.

  Shots
  Mr. Sean Hughes
  To ask the Secretary of State for Defence when was the last time that service personnel fired shots on the British mainland in the course of their duty when they were not involved in training exercises, previous to the Tern hill incident.

  Mr. Neubert
  To the best of our knowledge the last time prior to the Tern hill incident that service personnel fired shots on the British mainland in the course of their duty and when they were not involved in training exercises was in support of the police in the Iranian embassy siege in May 1980.

  Start II
  Mr. Sean Hughes
  To ask the Secretary of State for Defence if the Government intend to participate in a Start II negotiation.

  Mr. Neubert
  I refer the hon. Gentleman to the reply that my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) gave to my hon. Friend the Member for Walthamstow (Mr. Summerson) on 10 January 1989 at columns 677–78.

  A90 Project
  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what proposals he has for changes in the management of the A90 project.

  Mr. Sainsbury
  The National Nuclear Corporation Ltd. was appointed in June 1988 to provide a comprehensive management and co-ordination service.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what financial claims against his Department are outstanding or expected from Balfour Kilpatrick relative to the A90 project.

  Mr. Chope
  I have been asked to reply.

  No claims are outstanding or expected from Balfour Kilpatrick. The PSA has no contract with this company. It is subcontractor to Haden Young, which is the main contractor for the mechanical and electrical engineering works services on the A90 project. The contract was substantially completed in March 1988. Negotiations on the final account for the contract are proceeding. Haden Young has submitted a claim which is under consideration in accordance with the conditions of contract. The amounts and grounds of the claim are a matter of commercial confidence.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what discussions have been held between his 256
  Department and Balfour Kilpatrick on the financial position of the company and its impact on its ability to fulfil the A90 contract.

  Mr. Chope
  I have been asked to reply.

  The answer is none.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence whether any assessment has been made of the quality of materials supplied by Messrs Hargreaves of Bury for the A90 project as against the original specifications.

  Mr. Chope
  I have been asked to reply.

  All materials supplied by Messrs Hargreaves of Bury have been inspected in accordance with the contract specification. Certain duct flange welds have failed to meet the specified requirements and options for overcoming this problem in the most economical way are under discussion with the Ministry of Defence.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what is his estimate of the cost of aborted mechanical and electrical work on the A90 project.

  Mr. Chope
  I have been asked to reply.

  A broad estimate of the cost of mechanical and electrical work which has been rendered abortive by changes of requirement during the course of the contract is £1 million.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence (1) whether he has assessed the fitness of Balfour Kilpatrick to undertake further government contracts;

  (2) if he will make a statement on the management by Haden Young of the A90 project;

  (3) what assessment he has made of the achievements of Balfour Kilpatrick in ensuring the speediest possible achievement of targets in the A90 construction project;

  (4) if he will carry out an assessment of all contracts awarded by his Department to Balfour Kilpatrick in the past five years.

  Mr. Chope
  I have been asked to reply.

  The financial position and performance of all companies working or likely to be engaged on work for PSA are kept regularly under review and appropriate action taken where necessary. Findings concerning specific firms are a matter of commercial confidence.

  Mr. Campbell-Savours
  To ask the Secretary of State for Defence if he will investigate disputes in the A90 construction project between the main contractors and Balfour Kilpatrick; and if he will make a statement.

  Mr. Chope
  I have been asked to reply.

  Any disputes which may exist between Haden Young and Balfour Kilpatrick are a matter for them.

OVERSEAS DEVELOPMENT

  "Pathway to International Security"
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether his Department has received any invitation to send delegates or observers to the conference "Pathways to International Security" at the Royal Society of Medicine, London, on 18 March, organised by Professions for World Disarmament and Development.
  257
  Mr. Chris Patten
  I received an invitation which I had to decline.

  Falklands
  Ms. Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs how much has been set aside by the European development fund for each year since 1984, to be spent on the Falklands; and how much has been spent.

  Mr. Chris Patten
  The Falkland Islands receive an allocation of aid under each five year European development fund (EDF). Under EDF V, this was 0·05 mecu for 1980–85. This has been fully committed but not yet spent. Under EDF VI, 1·1 mecu were allocated for 1985–90. Commitments have yet to be made. In addition the Falkland Islands were allotted 0·067 mecu in 1988 for a shortfall of export earnings from sheep's or lamb's wool.

ATTORNEY-GENERAL

  Breach of Confidence
  Mr. Cran
  To ask the Attorney-General what plans he has to implement the recommendations of the 1981 Law Commission report on breach of confidence affecting the disclosure of information obtained by improper means.

  The Attorney-General
  The Law Commission's report No. 110, Cmnd. 8388, amounts for the most part to a recommendation for a restatement of the common law of breach of confidence and the Government do not propose, particularly in the light of recent judgments which restate that law, to give its implementation high priority at present.

  Guardian Angels
  Mr. Grocott
  To ask the Attorney-General if he will make it his policy to give his consent under section 2(2) of the Public Order Act 1936 to any prosecution of members of the organisation known as the Guardian Angels under section 2(1)(a) of that Act, for usurping the functions of the police.

  Mr. Attorney-General
  No. It will remain my policy to give consent under section 2(2) of the Public Order Act 1936, and any policy as regards consents generally, only in cases where the evidence is sufficient to justify the conclusion that there is a reasonable prospect of a conviction and the public interest requires a prosecution.

  Mr. Grocott
  To ask the Attorney-General whether the Crown prosecution service is considering any prosecutions of members of the organisation known as the Guardian Angels under sections 4 or 5 of the Public Order Act 1986.

  Mr. Attorney-General
  No.

  Mr. Chander Singh
  Mr. Campbell-Savours
  To ask the Attorney-General what progress has been made in proceedings with the prosecution of Mr. Chander Singh for offences of fraud in connection with the Marconi company.

  The Attorney-General
  Mr. Chander Singh has no connection with the Marconi Company Ltd.

  Planning (High Court Applications)
  Mr. Conway
  To ask the Attorney-General if he will state, for the past three years, the number of applicants to the High Court under section 245 of the Town and Country Planning Act 1971, seeking review of the decisions of the Secretary of State for the Environment.

  The Attorney-General
  For the financial years 1985–86, 1986–87 and 1987–88 there were respectively 114, 137 and 154 applications to the High Court under section 245 of the Town and Country Planning Act 1971.

HOME DEPARTMENT

  Sexual Offences
  Mr. Patnick
  To ask the Secretary of State for the Home Department what was the average clear-up rate recorded by the police for sexual offences in 1987 and 1988.

  Mr. John Patten
  In 1987 the average clear up rate for sexual offences was 75 per cent. compared with 71 per cent. in 1986. The figure for 1988 is not yet available. The police give a high priority to the detection and apprehension of sexual offenders.

  Charities Commission
  Mr. French
  To ask the Secretary of State for the Home Department when he last met the chief commissioner of the Charities Commission; and what subjects were discussed.

  Mr. John Patten
  My right hon. Friend last met the chief charity commissioner on Wednesday 22 February to discuss the proposals that the Government will be putting forward in the forthcoming White Paper on charities.

  Crime (Derbyshire)
  Mr. McLoughlin
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Derbyshire for 1988.

  Mr. John Patten
  We hope to publish the crime figures for 1988 shortly. The figures for Derbyshire are likely to show a drop of 7·5 per cent.

  Sunday Trading
  Mr. John Marshall
  To ask the Secretary of State for the Home Department if he will make a statement about the number of local authorities who made no prosecutions for breaches of the Sunday trading law in 1988.

  Mr. Renton
  Information about the number of local authorities which made no prosecutions for breaches of the Sunday trading law is not held centrally. Decisions on whether or not to prosecute in any given case are a matter for the local authorities concerned.

  Mr. Duffy
  To ask the Secretary of State for the Home Department when he last circulated guidance to district councils on their duty to enforce the law on Sunday trading.
  259
  Mr. Renton
  I am sure that local authorities are well aware of their responsibilities under section 71 of the Shops Act 1950. We have not circulated guidance to councils on this matter.

  Mr. Robert G. Hughes
  To ask the Secretary of State for the Home Department what representations he has received in response to his request for views on the reform of Sunday shopping.

  Mr. Renton
  Since I last answered a question on this subject, from the hon. Member for Normanton (Mr. O'Brien) on 2 February 1989 at column 415, we have received 133 written representations broadly in favour of Sunday trading and 155 against.

  Police Efficiency
  Sir Anthony Grant
  To ask the Secretary of State for the Home Department what progress has been made in securing greater efficiency and value for money from the police in East Anglia.

  Mr. Douglas Hogg
  It is primarily the responsibility of chief officers of police and local police authorities, to ensure that their resources are used to best effect. Value for money has been improved in the Cambridgeshire constabulary by streamlining administrative procedures, devolving operational management responsibility to sub-divisional level, and establishing civilian administrative units in the sub-divisions.

  Mr. David Martin
  To ask the Secretary of State for the Home Department what measures he is taking to implement the recommendations of the Audit Commission on police efficiency.

  Mr. Douglas Hogg
  I refer my hon. Friend to the reply that I gave to a question from my hon. Friend the Member for Waveney (Mr. Porter) on 2 February at column 387.

  Single European Act
  Ms. Armstrong
  To ask the Secretary of State for the Home Department when he next expects to meet Ministers of the Trevi group to discuss the implications of the Single European Act.

  Mr. Galbraith
  To ask the Secretary of State for the Home Department when he next expects to meet Ministers from other Governments in the European Economic Community to discuss the movement of persons within the European Economic Community after 1992.

  Mr. Morgan
  To ask the Secretary of State for the Home Department when he next expects to meet Ministers within the Trevi group; and if he will make a statement.

  Mr. Hurd
  I shall be meeting Trevi Ministers informally on 9 and 10 March in Seville. We shall discuss a range of matters of mutual interest including the implications of the Single European Act.

  Prison Service
  Mr. Stern
  To ask the Secretary of State for the Home Department if he has any plans to alter the negotiating structure for pay and conditions in the prison service.
  260
  Mr. Douglas Hogg
  There are no plans to alter the established negotiating structure for pay and conditions in the prison service.

  Carole Richardson
  Ms. Abbott
  To ask the Secretary of State for the Home Department what medical attention has been offered to Carole Richardson currently in Her Majesty's prison Styal.

  Mr. Douglas Hogg
  Miss Richardson has received appropriate medical treatment under the care of the medical staff at Her Majesty's prison Styal. Specific clinical information pertaining to individual prisoners is confidential and is not normally disclosed.

  Criminal Appeal Act 1968
  Mr. Sedgemore
  To ask the Secretary of State for the Home Department how many cases have been referred to the Court of Appeal in exercising of the power under section 17(1) of the Criminal Appeal Act 1968, since 1968; and what was the outcome in each case.

  Mr. John Patten
  Between 1 September 1968, when the Criminal Appeal Act 1968 came into force, and 31 December 1988, 105 defendants had their convictions referred to the Court of Appeal under section 17(1)(a) of the Act. The appeals of 57 defendants were allowed, 40 were dismissed, four were abandoned and one retrial was ordered. The cases of three defendants have yet to be determined.

  Drugs
  Mr. Rathbone
  To ask the Secretary of State for the Home Department when the last meeting of the ministerial group on the misuse of drugs took place, and what it discussed.

  Mr. Douglas Hogg
  The last meeting of the ministerial group on the misuse of drugs, which I chair, took place on 9 February. Issues discussed included Customs' provisional drug seizure figures for 1988, plans for regionally-based anti-drug publicity campaigns, the development of drug misuse services in 1989–90 and evaluation of pilot syringe exchange schemes.

  Mr. Paice
  To ask the Secretary of State for the Home Department what progress he has made in securing greater international co-operation against the illegal drug trade.

  Mr. Hurd
  I refer my hon. Friend to the answer that I gave on 2 February to a similar question from my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) at column 419. Since then, I have taken part in useful discussions about co-operation against illicit drug trafficking, among other matters, with my counterparts in the Federal Republic of Germany and in France.

  Mr. Knapman
  To ask the Secretary of State for the Home Department what steps have been taken to curtail the illegal import of drugs.

  Mr. Douglas Hogg
  The Government have developed a comprehensive and balanced strategy aimed at tackling all aspects of the drugs problem; it is overseen by the ministerial group on the misuse of drugs.
  261
  Specific measures aimed at preventing and detecting the illicit importation of drugs include:
  supporting international efforts to curb trafficking in drugs. Last December together with 42 other countries we signed the new United Nations convention against illicit traffic in drugs. We also provide drug-related assistance overseas and maintain a number of drug liaison officers at strategic points on drug trafficking routes.
  strengthening Customs and police enforcement. During 1988–89 a further 233 customs preventive staff have been allocated and the number of specialist customs drugs investigation staff will have risen to 395. We have also further strengthened the national drugs intelligence unit which co-ordinates drugs intelligence for Customs and police.
  deterring drug traffickers by high maximum penalties and by confiscating the profits of their crime. We have already entered into reciprocal agreements with four countries for the confiscation of drug traffickers' assets, and are negotiating more.

  Mr. Tredinnick
  To ask the Secretary of State for the Home Department what progress he has made in securing closer international co-operation on confiscation of drug-traffickers' assets.

  Mr. John Patten
  We have signed bilateral agreements with the United States of America, Canada, the Bahamas and Australia. and have completed substantive negotiations with Spain, Switzerland and Sweden. We expect to conclude further agreements this year. The United Kingdom also played a major part in bringing about the adoption in Vienna last December of a new United Nations convention against illicit traffic in narcotic drugs and psychotropic substances, which among other measures obliges member states to assist each other in confiscating the proceeds of drug trafficking.

  Mr. Andrew MacKay
  To ask the Secretary of State for the Home Department what are the proceeds received to date from the confiscation of the assets of drug traffickers.

  Mr. John Patten
  The courts have made confiscation orders totalling more than £3 million since section 1 of the Drug Trafficking Offences Act 1986 came into force on 12 January 1987. The information held centrally does not at present distinguish revenue obtained from the payment of such orders from revenue obtained from payment of other monetary penalties.

  Police Forces (Co-operation)
  Mr. Teddy Taylor
  To ask the Secretary of State for the Home Department if he will make a statement on the procedures for consultation and co-operation between police forces and transport police.

  Mr. Douglas Hogg
  I understand that there is extensive consultation and co-operation between police forces and the British Transport police. Senior officers of all forces are in regular contact discussing issues of mutual interest and planning joint operations. Assistance is also provided regularly to the British Transport police around the country by regular police forces and the British Transport police reciprocates.

  Community Radio
  Mr. Favell
  To ask the Secretary of State for the Home Department if he will make a further statement on the prospects for community radio.
  262
  Mr. Carrington
  To ask the Secretary of State for the Home Department what plans he has to widen choice for radio listeners.

  Mr. Renton
  I refer my hon. Friends to the reply I gave earlier today to a question from my hon. Friend the Member for Derby, North (Mr. Knight). We have endorsed IBA proposals to award 20 community radio contracts. In due course, up to several hundred local and community radio stations would be possible under our proposals in the White Paper "Broadcasting in the '90s".

  Video Recording Act 1984
  Sir Michael McNair-Wilson
  To ask the Secretary of State for the Home Department if he will make a statement on the workings of the Video Recording Act 1984.

  Mr. Renton
  The Act is now fully in force, and was quickly effective against the so-called "video nasty". We have extended enforcement powers to local authority trading standards officers to strengthen its impact over the full range of material. I have discussed the working of the Act with the British Board of Film Classification and I am confident that the board is doing its job effectively. I have also discussed with representatives of the video trade what further action they might take to ensure that matters not directly covered by the Act, such as displays in shops and packaging material, might be improved.

  Passport Offices
  Mr. Archer
  To ask the Secretary of State for the Home Department whether he intends to increase the number of permanent staff in passport offices.

  Mr. Renton
  Passport department officials are in consultation with trade union representatives about staffing levels, pending a full review of staffing requirements which is to be undertaken following the completion of the current computerisation programme.

  Mr. Rowe
  To ask the Secretary of State for the Home Department what are the average times taken to process non-urgent passport applications at major passport offices; and what were the comparable times one year ago.

  Mr. Renton
  The current processing times for straightforward non-urgent postal applications at the six United Kingdom passport offices are shown in the table, together with those of a year ago. Urgent applications are given priority, and are not normally subject to delay.

  Average time between receipt of application and issue of passport

  (working days)

  Passport office

  19 February 1989

  21 February 1988

  London

  18

  37

  Glasgow

  20

  22

  Peterborough

  18

  18

  Newport

  24

  16

  Liverpool

  24

  12

  Belfast

  3

  3

  Broadcasting
  Mr. Kirkhope
  To ask the Secretary of State for the Home Department what is his latest estimate of the date on which the Council of Europe convention on broadcasting will be open for signature.
  263
  Mr. Renton
  We hope that the Council of Europe draft convention on transfrontier television will be agreed shortly and opened for signature within the next few months.

  Mr. Dykes
  To ask the Secretary of State for the Home Department if he will make a statement on the progress of discussions between the United Kingdom and other European countries on the attainment of Europeanwide standards and specifications relating to broadcasting technology and contents.

  Mr. Renton
  The United Kingdom is co-operating, through a EUREKA project, with a number of other European countries on the development of standards for high definition television. There is also a wide range of discussions on broadcasting specifications generally in the relevant international fora. We also hope to conclude agreement shortly on the Council of Europe convention on transfrontier television which, among other things, will provide minimum standards on taste and decency.

  Crime (Cumbria)
  Mr. Franks
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Cumbria for 1988.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Cumbria police force area fell by 3 per cent. compared with the 12 months ending 30 September 1987. The change between the calendar years 1988 and 1987 will be similar.

  Wandsworth Prison
  Mr. Cox
  To ask the Secretary of State for the Home Department if he will make a statement on the present position at Wandsworth prison following the recent dispute.

  Mr. Douglas Hogg
  Prison officers returned to work on 9 February. Under the terms of the dispute settlement, local discussions led to agreement on revised shift patterns by 15 February. They were implemented on 19 February.

  Magistrates Courts
  Mr. Soames
  To ask the Secretary of State for the Home Department if he will make a statement on the administration of the magistrates courts.

  Mr. John Patten
  I refer my hon. Friend to my right hon. Friend's reply to the question from my hon. Friend the Member for Basildon (Mr. Amess) on 17 January, columns 140–41.

  Mr. Atkinson
  To ask the Secretary of State for the Home Department if he proposes to invite local benches to submit representations to the Le Vay scrutiny of magistrates courts.

  Mr. John Patten
  Mr. Le Vay has already written to all magistrates courts committees in England and Wales, with copies to justices' clerks, indicating his willingness to consider any comments sent to him. It is open to any local bench to submit representations if it so wishes.

  Prisons (Hygiene)
  Mr. Ashley
  To ask the Secretary of State for the Home Department if he will request Her Majesty's inspector of prisons to carry out an unannounced inspection, together with a senior environmental health officer, of the kitchen and other facilities related to hygiene of a prison selected by that environmental health officer.

  Mr. Douglas Hogg
  Her Majesty's chief inspector of prisons has ready access to information and expertise which enables him to make proper assessments of hygiene standards in kitchens and other facilities during routine and unannounced inspections.

  Neighbourhood Watch
  Mr. Roger King
  To ask the Secretary of State for the Home Department how many neighbourhood watch schemes are now established in England and Wales.

  Mr. John Patten
  At the end of 1988 there were some 64,000 neighbourhood watch schemes in England and Wales covering approximately three and a quarter million households.

  County Constabularies
  Mr. Vaz
  To ask the Secretary of State for the Home Department if he has received any representations on the allocation of extra police for the county constabularies for 1988–89.

  Mr. Douglas Hogg
  My right hon. Friend has received representations from hon. Members, from police authorities and from members of the public about the allocation of extra police officers for 1988–89 and for 1989–90.

  Entry Refusals
  Mr. Tony Banks
  To ask the Secretary of State for the Home Department how many refusals of entry were made at United Kingdom ports of entry in each quarter of 1988.

  Mr. Renton
  The information is given in the following table:

  Pasengers refused leave to enter the United Kingdom and removed in 1988

  Number of persons

  First quarter

  3,955

  Second quarter

  4,475

  Third quarter

  6,064

  Fourth quarter

  5,884

  Paul Hill
  Mr. Fisher
  To ask the Secretary of State for the Home Department if he will facilitate the moving of Paul Hill of the Guildford Four to Wormwood Scrubs prison to ensure that the appropriate legal advice and preparation is available for his appeal; and if he will make a statement.

  Mr. Douglas Hogg
  Any request on these lines from Paul Hill's legal representatives would be carefully considered.
  265
  Mr. Battle
  To ask the Secretary of State for the Home Department if he will facilitate a further operation for Paul Hill to remove stones in the saliva gland and further ensure that the necessary after-care treatment is available.

  Mr. Douglas Hogg
  Specific clinical information pertaining to individual prisoners is confidential and is not normally disclosed. Mr. Hill has received appropriate medical treatment and I have no information which suggests that his general medical condition is other than satisfactory.

  Mr. Mullin
  To ask the Secretary of State for the Home Department how many prison moves Paul Hill has experienced since conviction; why they have been necessary; and what assessment he has made of the effects of these moves on the ability of Paul Hill's family and relatives to visit him.

  Mr. Douglas Hogg
  I will write to the hon. Member.

  Firearm Certificates
  Mr. Colin Shepherd
  To ask the Secretary of State for the Home Department if he plans to review the procedures for police scrutiny of applicants for firearm certificates to determine their suitability.

  Mr. Douglas Hogg
  The Firearms (Amendment) Act 1988 contains powers to impose further requirements relating to applications for the grant or renewal of a firearm certificate. In addition to the stringent criteria set out in section 27 of the Firearms Act 1968, such applications will, later this year, need to be accompanied by photographs of the applicant and be countersigned by a person of standing in the community who has known the applicant personally for at least two years. The countersignatory will be required to verify the personal details of the applicant and to declare that he knows of no reason why the applicant should not be permitted to possess a firearm.

  Scottish Broadcasting
  Mrs. Margaret Ewing
  To ask the Secretary of State for the Home Department when he last met with Scottish representatives of the broadcasting authorities; and what issues were discussed.

  Mr. Renton
  I am regularly in touch with the broadcasting authorities in order to discuss a wide range of broadcasting issues. On 27 and 28 February I met representatives from all the Scottish independent television companies in order to discuss the White Paper on broadcasting and other broadcasting matters.

  Safer Cities Programme
  Mr. Patrick Thompson
  To ask the Secretary of State for the Home Department what progress has been made in the safer cities programme.

  Mr. John Patten
  The safer cities programme is making good progress, with the first nine crime prevention projects either functioning or well on the way to becoming established. The Bradford and Wolverhampton projects have steering committees and locally recruited staff in place and are fully operational. We will establish seven 266
  more projects in the coming year and I have recently invited Bristol, Hull, Salford, Sunderland and Wirral to take part.

  Police Patrols
  Mr. Lord
  To ask the Secretary of State for the Home Department what steps he is taking to increase the number of uniformed policemen patrolling public places in towns and cities.

  Mr. Douglas Hogg
  The deployment of police officers is a matter for chief officers of police but the increases in police establishments approved since May 1979 will have assisted them in allocating more officers to operational duties. My right hon. Friend announced on 30 January his approval of further increases in provincial force establishments amounting to over 800 extra police posts. The great bulk of these posts will be deployed by chief constables on patrol duties. At the end of 1988, 52,906 officers (of all ranks) were estimated to be deployed on patrol duties—this was 55·8 per cent. of strength. That is an increase of 0·8 per cent. on the previous year, which in turn had shown a gain of 2·9 per cent. over the year before. Information on the Metropolitan police is collected on a different basis. This shows that in 1988 some 1,600,000 man days were spent on street duty, an increase of 9 per cent. on 1987.

  Abortion
  Miss Widdecombe
  To ask the Secretary of State for the Home Department what consideration was given to the representations received on his decision not to direct the coroner to hold an inquest into the death of the Carlisle baby.

  Mr. Douglas Hogg
  All representations received were considered very thoroughly.

  Sir Bernard Braine
  To ask the Secretary of State for the Home Department if he has any plans to increase the maximum sentences available to those found guilty of performing abortions contrary to sections 57 and 58 of the Offences Against the Person Act 1861 and the Infant Life Preservation Act 1929.

  Mr. Douglas Hogg
  No. Procurement of an abortion already carries a maximum penalty of life imprisonment.

  Mr. Alton
  To ask the Secretary of State for the Home Department if he will now place in the Library the information provided by the coroner on the case involving the death of the Carlisle baby.

  Mr. Douglas Hogg
  No.

  Mentally Disturbed Prisoners
  Mr. O'Brien
  To ask the Secretary of State for the Home Department what steps he plans to take to reduce the number of mentally disturbed people sent to prison.

  Mr. Douglas Hogg
  We are preparing guidance to the courts encouraging the use of their powers under the Mental Health Act 1983 to divert mentally disturbed offenders from the penal system.

  Prisoners (Health)
  Mr. Pike
  To ask the Secretary of State for the Home Department what steps he is taking to increase the health prospects of the prison population.
  267
  Mr. Douglas Hogg
  A number of measures which are under way or planned can be expected to have a significant effect on the health and well being of prisoners. They include a major programme of new building, refurbishment and environmental improvement and an increasing emphasis on preventive medicine and health education including specific initiatives in relation to AIDS, hepatitis B, and the risks from drug and alcohol misuse and smoking.

  Mr. George
  To ask the Secretary of State for the Home Department what steps he is taking to ensure the health of prisoners held in police cells.

  Mr. Douglas Hogg
  The police have a duty of care to anyone held in their custody and I have no doubt that chief officers of police ensure that that duty is carried out responsibly. In accordance with the codes of practice issued under the Police and Criminal Evidence Act 1984, the police must call a doctor if a prisoner appears to be physically or mentally ill.

  London Underground (Policing)
  Mr. Evennett
  To ask the Secretary of State for the Home Department how many Metropolitan police officers are currently deployed on policing the London Underground.

  Mr. Douglas Hogg
  I understand from the commissioner that 60 officers have been attached to the British Transport police to help police the Underground. There are also 22 officers from the City of London force.

  Crime (Somerset and Avon)
  Mr. David Nicholson
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Somerset and Avon for 1988.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Avon and Somerset police force area rose by 1 per cent. compared with the 12 months ending 30 September 1987. Between the calendar years 1988 and 1987 there will be a small decrease.

  Probation Service
  Sir Hal Miller
  To ask the Secretary of State for the Home Department how many replies he has received to the consultation paper on the probation service.

  Mr. John Patten
  Some 150 interested organisations and individuals have commented on the Green Paper "Punishment, Custody and the Community".

  Guildford Four
  Mr. Skinner
  To ask the Secretary of State for the Home Department what representations he has received from legal representatives of the Guildford Four concerning moving them to London prisons prior to the Court of Appeal hearing.

  Mr. Douglas Hogg
  None.

  Crime (London)
  Dr. Twinn
  To ask the Secretary of State for the Home Department what progress his Department is making against crime in Greater London.

  Mr. John Patten
  In the 12 months ending September 1988 there was a decrease of 1 per cent. in total recorded crime in the Metropolitan police district, compared with the corresponding period to September 1987. In particular motor vehicle theft decreased by 8 per cent., theft from the person decreased by 7 per cent. and residential burglary decreased by 3 per cent. These figures are an encouraging indication of the success of a range of crime prevention measures.

  Ministerial Talks
  Mr. Cash
  To ask the Secretary of State for the Home Department what has been the outcome of his recent talks with his counterpart in the Federal Republic of Germany.

  Mr. Hurd
  Our discussions focused on terrorism, drugs and immigration control. We took stock of the results of the regular co-operation between the police and other relevant services of the two countries and reinforced our commitment to develop that co-operation both bilaterally and within the European Community.

  White Collar Crime
  Mr. Maclennan
  To ask the Secretary of State for the Home Department what police manpower resources are currently directed to clearing up white collar crime.

  Mr. Douglas Hogg
  Chief officers of police decide in accordance with the needs of their area what manpower resources should be directed to the investigation of each particular type of crime.

  Mr. and Mrs. Calgar
  Mr. Hardy
  To ask the Secretary of State for the Home Department if he will make a statement on the refusal to allow Mr. and Mrs. Calgar to return to the United Kingdom together.

  Mr. Renton
  I have nothing to add to my letter of 2 February and earlier replies to the hon. Member's previous representations about this case.

  Foetuses
  Mr. Ken Hargreaves
  To ask the Secretary of State for the Home Department if he has any plans to introduce legislation to criminalise the supply of foetuses for other than medical or scientific purposes.

  Mr. Douglas Hogg
  My right hon. Friend has no plans to do so. The disposal of foetal material in Great Britain is closely regulated in accordance with the code of practice recommended in the report of the advisory group on the use of foetuses and foetal material for research (the Peel report 1972). There is no evidence that this code of practice is being disregarded.

  Prison Population
  Mr. Knox
  To ask the Secretary of State for the Home Department how many people were in prison at the most recent count.
  269
  Mr. Hogg
  At unlocking on Friday 24 February, 49,325 prisoners (The figures comprise returns from each regional office. Figures from the North region are only provisional.) were held in prison establishments in England and Wales. A further 196 prisoners were held in police cells.

  Deportations
  Mr. Canavan
  To ask the Secretary of State for the Home Department how many spouses of British citizens have been ordered to leave the United Kingdom since May 1979.

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

  Terrorists (Funds)
  Rev. Martin Smyth
  To ask the Secretary of State for the Home Department if he will make a statement about efforts to prevent leakage of public grants and funds to terrorist organisations.

  Mr. Hurd
  Although we have no evidence that this has been a problem in Great Britain the new provisions in the Prevention of Terrorism Bill will facilitate investigation of any case in which there are reasonable grounds to suspect such abuse. So far as Northern Ireland is concerned, policy on the payment of public funds to community groups, where there is evidence that such payments could directly or indirectly further the aims of a terrorist organisation. remains as set out in the reply I gave as the then Secretary of State for Northern Ireland to a question from the hon. Member for Solihull (Mr. Taylor) on 27 June 1985 at column 449.

  Vietnamese Refugees
  Mr. Devlin
  To ask the Secretary of State for the Home Department what are the number of Vietnamese refugees accepted to date; and whether provision for Vietnamese refugees will be increased.

  Mr. Renton
  I refer my hon. Friend to the replies that I gave to my hon. Friend the Member for Corby (Mr. Powell) on 2 February, at column 384 and my hon. Friend the Minister of State for Foreign and Commonwealth Affairs gave to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on 23 February at column 755.

  Crime (Nottinghamshire)
  Mr. Andrew Mitchell
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Nottinghamshire for 1988.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Nottinghamshire police force area fell by 1 per cent. compared with the 12 months ending 30 September 1987. The change between the calendar years 1988 and 1987 will be similar.

  Mr. Ian Dunlop
  Mr. Hinchliffe
  To ask the Secretary of State for the Home Department if he will as a matter of urgency review 270
  the case of Mr. Ian Dunlop, currently detained in Her Majesty's prison, Wakefield, with a view to his early release.

  Mr. Douglas Hogg
  I am satisfied that there are insufficient grounds for Mr. Dunlop's early release on life licence. I have recently written to the hon. Member about this case.

  NACRO
  Mr. Lofthouse
  To ask the Secretary of State for the Home Department when he next intends to meet the National Association for the Care and Resettlement of Offenders to discuss minimum standards in prisons.

  Mr. Douglas Hogg
  I see representatives of NACRO from time to time to discuss a variety of subjects, but no date has yet been fixed for our next meeting.

  Crime (Thames Valley)
  Mr. Tim Smith
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in the Thames Valley for 1988.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office statistical bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Thames Valley police force area fell by 9 per cent. compared with the 12 months ending 30 September 1987. The change between the calendar years 1988 and 1987 will be similar.

  Electronic Tagging
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what evidence he has considered on electronic tagging schemes in the United States of America.

  Mr. John Patten
  My noble Friend Lord Caithness reported to my right hon. Friend the outcome of his ministerial visit to the United States of America in 1987, in the course of which he looked at the use there of electronic monitoring. A large amount of published and unpublished American material on this subject has also been reviewed within my Department. Home Office officials visited the United States during the week beginning 13 February to make an up-to-date assessment of electronic monitoring services in operation.

  Football Membership Scheme
  Mr. Ashton
  To ask the Secretary of State for the Home Department what discussions he has had with the Police Federation regarding the introduction of membership cards for football supporters.

  Mr. Douglas Hogg
  My right hon. Friend has had no discussions with the Police Federation on this subject but my hon. Friend the Minister for Sport met them on 15 December. They have also had a meeting with officials.

  Crime (Essex)
  Mr. Burns
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Essex for 1988.
  271
  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Essex police force area fell by 2 per cent. compared with the 12 months ending 30 September 1987. The change between the calendar years 1988 and 1987 will be similar.

  Crime (Kent)
  Mr. Jacques Arnold
  To ask the Secretary of State for the Home Department if he will make a statement on the figures for reported crime in Kent for 1988.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 show that recorded crime in the Kent police force area rose by 2 per cent. compared with the 12 months ending 30 September 1987. The change between the calendar years 1988 and 1987 will be similar.

  Northumbria Police
  Mr. Amos
  To ask the Secretary of State for the Home Department what representations he has received about the current manning levels of the Northumbria police force; and if he will make a statement.

  Mr. Douglas Hogg
  My right hon. Friend considered an application from the police authority for an additional 84 police posts for the Northumbria police in 1989–90. As announced on 30 January at columns 6–7, he was able to approve 30 posts subject to the authority's confirmation of funding which has since been received; 800 posts were available for provincial forces for 1989–90 and demand exceeded this.

  The Department has also received an application for 59 other posts in order to police the Tyne and Wear Metro rapid transit system. This proposal is under consideration.

  Chief Police Officers
  Mr. Wareing
  To ask the Secretary of State for the Home Department when he last met the officers of the Association of Chief Police Officers; and what matters were discussed.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply that my right hon. Friend gave to a question from my hon. Friend the Member for Lancashire, West (Mr. Hind) on 15 December at column 708.

  Motor Vehicles (Theft)
  Mr. Hanley
  To ask the Secretary of State for the Home Department if he will list the most recent figures for thefts of motor vehicles in England and Wales.

  Mr. John Patten
  It is planned to publish 1988 figures for all forces in a Home Office Statistical Bulletin in the week beginning 13 March. Figures for the 12 months ending 30 September 1988 were published in Home Office Statistical Bulletin 36/88 and show that recorded thefts of motor vehicles in England and Wales fell by 6 per cent. compared with the 12 months ending September 1988.

  Parties
  Mrs. Maureen Hicks
  To ask the Secretary of State for the Home Department what consideration is being 272
  given to giving the police the power to enter houses without warrants where excessively long or noisy parties are being held.

  Mr. Douglas Hogg
  None. Police powers to enter private premises without warrant must be strictly limited. They are set out in section 17 of the Police and Criminal Evidence Act 1984.

  Juveniles (Court Attendance)
  Mr. Gill
  To ask the Secretary of State for the Home Department what steps he intends to take to encourage courts as a general rule to require that parents of juveniles attend court with them.

  Mr. John Patten
  Courts already normally require parents to attend with their juvenile children who appear in court in criminal proceedings, but we are considering how even better parental attendance might be encouraged.

  Remand Prisoners
  Mr. Grocott
  To ask the Secretary of State for the Home Department what is the latest figure on the proportion of prisoners held in custody who are unconvicted awaiting trial; and what was the corresponding figure for the nearest available comparable date in 1979.

  Mr. Douglas Hogg
  Untried prisoners in prison service establishments and police cells in England and Wales formed about 19 per cent. of the prison population on 31 December 1988 compared with about 9 per cent. on 31 December 1979.

  Race Relations
  Mr. Leighton
  To ask the Secretary of State for the Home Department why he has not yet given a response dealing with the merits of the proposals "Review of the Race Relations Act 1976: Proposals for Change" presented to him by the Commission for Racial Equality in 1985.

  Mr. Hurd
  The Home Office has discussed the Commission for Racial Equality's 1985 review of the Race Relations Act 1976 with the commission on several occasions.

  AIDS
  Mr. Chris Smith
  To ask the Secretary of State for the Home Department on how many occasions in the last 10 years immigration officers have refused passengers admission to the United Kingdom on any grounds directly or indirectly connected with AIDS, HIV infection, or suspected AIDS or HIV infection, including the failure to satisfy immigration officers that the passenger had funds available to meet the costs of medical treatment which might be necessary in consequence of such infection or disease.

  Mr. Renton
  I refer the hon. Member to my reply on 10 February to his earlier question on this subject at column 820. The additional information which he now seeks is not available.

  Strychnine
  Mr. Ron Davies
  To ask the Secretary of State for the Home Department (1) how many prosecutions there have been in each of the last three years on charges arising from the misuse of strychnine;

  (2) what information his Department has concerning the criminal misuse of substances containing strychnine.

  Mr. Douglas Hogg
  The Home Office does not collect information about the criminal misuse of substances containing strychnine or about the number of prosecutions arising specifically from its misuse.

  "Broadcasting in the '90s"
  Mrs. Margaret Ewing
  To ask the Secretary of State for the Home Department if he will list in the Official Report the names of those organisations who submitted a response to the White Paper, "Broadcasting in the '90s," Cm. 517; and which of those organisations favoured the auctioning of franchises.

  Mr. Renton
  We have so far received over 2,200 responses to the White Paper, a number of which propose some form of competitive tender procedure for licence allocation. Some expected responses are still outstanding, but we have it in mind in due course to place in the Library a list of the main organisations who have submitted comments.

  Television Licences
  Mr. Corbett
  To ask the Secretary of State for the Home Department under what circumstances tenants or residents eligible for a concessionary television licence under the Wireless Telegraphy (Broadcasting Licence Charges and Exemption) (Amendment No. 2) Regulations 1988 may claim a refund on the £5 fee if they cease to be eligible for the licence.

  Mr. Renton
  A refund may be given if the concessionary licence was required for less than 28 days; if two licences had been issued, one of them unnecessarily; or on changing from a concessionary licence to a full licence.

  Mr. Corbett
  To ask the Secretary of State for the Home Department under what authority local authorities may collect concessionary television licence fees from tenants eligible for such licences under the Wireless Telegraphy (Broadcasting Licence Charges and Exemption) (Amendment No. 2) Regulations 1988.

  Mr. Renton
  These arrangements have operated under long-standing agreements with local authorities, in the interests of licence holders and of keeping administrative costs down.

  Mr. Corbett
  To ask the Secretary of State for the Home Department whether he will make it his policy for the national television licence records office to collect fees for concessionary licences from persons in dwellings erected or converted for occupation by persons eligible under the Wireless Telegraphy (Broadcasting Licence Charges and Exemption) (Amendment No. 2) Regulations 1988 against a list of completed licence schedules and appropriate certificates from a local authority or housing association.

  Mr. Renton
  There are no plans to do so.

  Tape-recorded Evidence
  Mr. Andrew F. Bennett
  To ask the Secretary of State for the Home Department if he will make a statement about tape recording police interviews with suspects.

  Mr. Douglas Hogg
  I refer the hon. Member to the reply that I gave to his question of 15 December at column 715. We plan to lay the first order under section 60(1)(b) of the Police and Criminal Evidence Act 1984 during the current parliamentary session. The order will require the tape recording of interviews in accordance with the codes of practice in areas specified in the order. We are discussing with the Association of Chief Police Officers the timing of the first order and which forces it should cover.

  Official Secrets Bill
  Mr. Dalyell
  To ask the Secretary of State for the Home Department if he will list the number of officials in his Department at each grade working on the Official Secrets Bill.

  Mr. Hurd
  Work on the Bill falls mainly to six officials in my Department—one in grade 5, one in grade 7, one higher executive officer (development), one administration officer and two personal secretaries. Other officials assist as required.

  Absent Voting
  Mr. Bowis
  To ask the Secretary of State for the Home Department if he will report progress on his consideration of the options for changing the law on absent voting.

  Mr. Hurd
  I have placed in the Library copies of a consultation paper on absent voting, together with a paper on associated costs, which the home Departments are issuing today to representatives of the local authorities, electoral registration officers and main political parties. This discusses possible ways of remedying certain difficulties regarding postal and proxy voting which arose during the 1987 general election.

  BBC Services for Doctors
  Mr. Fisher
  To ask the Secretary of State for the Home Department what information he has as to how many doctors(a) are subscribing to and (b) have decoders to receive the British Broadcasting Corporation's night-time subscription service for doctors.

  Mr. Renton
  [holding answer 23 February 1989]: I understand from British Medical Television that, so far, some 2,000 decoders have sent to doctors who have subscribed to the service and that there are some 13,000 subscription requests still to be processed.

  DNA Testing
  Mr. Vaz
  To ask the Secretary of State for the Home Department (1) how many people over 18 years, but who had a positive DNA test result when they were under 18 years, are currently waiting for their application to enter the United Kingdom to be processed; and if he will make a statement;

  (2) how many dependants of men already settled in the United Kingdom, having had positive DNA test results, are currently waiting for their applications to enter the

  275
  United Kingdom to be processed; and how many of these dependants have been waiting for (a) 12 months and (b) over 24 months.

  Mr. Renton
  [holding answer 31 January 1989]: The information is not available in the form requested, and could not readily be obtained.

  As regards the age of young applicants, applications for entry clearance as a child under paragraph 50 of the immigration rules must be made to a British post overseas before the child's 18th birthday. Any DNA evidence which is produced before the application is finally determined will, however, be taken into account, whether the tests were commissioned before or after the child's 18th birthday. Applications or reapplications for entry clearance lodged after a child has reached the age of 18 will normally fall to be considered under paragraph 52 of the rules.

  The great majority of cases in which DNA evidence has been produced involve applications made to posts at Dhaka and Islamabad. How long an application will normally take to be processed will depend upon in which queue the application is placed. Waiting times at Dhaka and Islamabad in October 1988 were as follows:

  Months

  Dhaka

  Q1

  3

  Q2

  7

  Q3

  7

  Q4

  23

  Islamabad

  Q1

  4

  Q2

  11

  Q3

  20

  Q4

  20

  Persons seeking admission under paragraphs 50 or 52 of the rules will be placed in whichever is the relevant queue under the following criteria:

  Q1: persons with a claim to the right of abode; special compassionate cases.

  Q2: children under 18 applying for the first time.

  Q3: children over 18 applying for the first time.

  Q4: reapplicants, whether over or under 18.

SCOTLAND

  Charities
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland (1) whether he will seek to introduce, as a compulsory requirement upon each charity in Scotland, registration with the registrar of friendly societies, together with a requirement to lodge annual accounts with the registrar;

  (2) if he will seek to extend to the sheriff court jurisdiction, concurrent with the court of session, over matters concerning charities.

  Lord James Douglas-Hamilton
  The Scottish Home and Health Department issued a consultative memorandum last year on supervision of charities in Scotland. Among matters on which views were invited were the establishment of a register of charities and a requirement on charities to make publicly available copies of the annual accounts. Views were also sought on the possibility 276
  of the sheriff court having concurrent jurisdiction with the Court of Session on charitable matters. The responses to the memorandum are now under consideration.

  Forestry Commission
  Mr. Ron Davies
  To ask the Secretary of State for Scotland when the Forestry Commission intends to review its broadleaves policy; and if he will make a statement.

  Lord James Douglas-Hamilton
  The Government's broadleaves policy is presently being reviewed. My right hon. and learned Friend will make a statement to the House when the review has been completed.

  Mr. Ron Davies
  To ask the Secretary of State for Scotland if he will list the areas to which the Forestry Commission's felling licence requirements do not apply.

  Lord James Douglas-Hamilton
  Several types of felling are exempt from the felling licence requirements, of which the most important are when:

  1. The felling is in accordance with an approved plan of operations under one of the Forestry Commission's grant schemes.

  2. The trees are in a garden, orchard, churchyard or public open space.

  3. The trees are all below 8 cm in diameter, measured 1·3 m from the ground; or in the case of thinnings, below 10 cm in diameter; or in the case of coppice or underwood, below 15 cm in diameter.

  4. The trees are interfering with permitted development or statutory works by public bodies.

  5. The trees are dead, dangerous, causing a nuisance or are badly affected by Dutch elm disease.

  6. The felling is in compliance with an Act of Parliament.

  Also, in any calendar quarter up to 5 cu m of timber may be felled by an occupier without a licence provided not more than 2 cu m are sold. Further information is given in the Forestry Commission's booklet "Control of Tree Felling"—a copy of which can be found in the Library.

  Farm Woodland Scheme
  Mr. Ron Davies
  To ask the Secretary of State for Scotland what has been the broadleaved component of applications so far submitted under the farm woodland scheme in Scotland, and of those which have been accepted, respectively.

  Mr. Michael Forsyth
  My right hon. and learned Friend has received 160 applications, to date, containing proposals to plant approximately 1,700 hectares of land, of which almost 60 per cent. are identified for broadleaf trees. Twenty-four applications have so far been approved and approximately 80 per cent. of the approved planting area is identified for broadleaf trees.

  School Examinations
  Mr. Allan Stewart
  To ask the Secretary of State for Scotland if he will make a statement about the introduction of standard grade examinations and the consequent withdrawal of O grade examinations and traditional forms of examination in higher grade and certificate of sixth-year studies.

  Mr. Michael Forsyth
  Eighty per cent. of pupils currently in their fourth year of secondary school in Scotland will be presented in one or more subjects at
  277
  standard grade this year. This is a most encouraging figure. Teaching materials selected and prepared by central support groups and core groups have now largely been distributed for all subjects in phases 1 to 3 and any remaining materials will be circulated during the current school year. Notes for principal teachers, a manual for headteachers and a revised brochure for pupils and parents have also been produced. Assistance to education authorities for equipping schools for standard grade, especially in science and technological subjects, has been included in capital expenditure allocations amounting to date to £6 million. A further £3·3 million will be available to education authorities for this purpose in 1989–90, an increase of one third on the sum notified to them last year as likely to be available. Details will be given to education authorities shortly.

  In view of these developments, it is now appropriate to set firm dates for the withdrawal of certain O grade and traditional higher and CSYS examinations. The timetable will be as follows: as previously announced, the last O grade examinations in metalwork and woodwork will be held in 1989. The last O grade examinations in subjects covered in phases 1 and 2 of the standard grade development programme, will be held in 1991. The last O grade examinations in subjects included in phase 3 of the standard grade development programme will be held in 1992.

  The last O grade examinations in subjects for which no standard grade is being developed will be held in 1992. Dates for the last O grade examinations in subjects included in the standard grade development programme after phase 3 will be announced in due course. In every case there will be a limited O grade examination in the immediately following year open only to those resitting the subject.

  Pupils normally sit highers one or two years after O grade. Accordingly, the last traditionally higher grade examinations in subjects where the higher is being revised to articulate with standard grade will be held two years after the last O grade examination. Similarly, the last higher grade examination in subjects where the higher grade is being discontinued will be held two years after the last O grade examination except for metalwork and woodwork where the last higher grade examination will be held in 1990. Again, in every case there will be a restricted examination in the immediately following year for candidates resitting the subject.

  The CSYS is normally taken one year after higher. Consultation has confirmed, however, that in some cases it will be as acceptable for candidates to proceed to revise CSYS from traditional higher as from revised higher. Accordingly, the last traditional CSYS examinations in English, French and Latin will be held in 1990. Dates for the withdrawal of other traditional CSYS examinations will be announced in due course. No resits are available for CSYS.

  Details of these arrangements are set out in the table, along with a list of new courses which have been or are being developed or about the development of which consultation will take place.

  Withdrawal of O grades

  Last examination 1989

  Metalwork

  Woodwork

  Last examination 1991

  Arithmetic

  278

  Art and Design

  Computing

  Craft and Design

  English

  French

  Home Economics

  Latin

  Mathematics

  Last examination 1992

  Agricultural Science

  Anatomy, Physiology and Health

  Biology

  Chemistry

  Economic History

  Engineering

  Gaelic

  Geography

  Geology

  German

  Hebrew

  History

  Horticultural Science

  Italian

  Modern Studies

  Music

  Navigation

  Norwegian

  Physics

  Portuguese

  Russian

  Seamanship and Nautical Knowledge

  Secretarial Studies

  Spanish Statistics

  Swedish

  Last examination after 1992

  Accounting

  Classical Studies

  Economics

  Greek

  Religious Studies

  Technical Drawing

  Withdrawal of traditional highers

  Last examination 1990

  Metalwork1

  Woodwork1

  Last examination 1993

  Art and Design

  Craft and Design

  English

  French

  Home Economics

  Latin

  Mathematics

  Last examination 1994

  Agricultural Science1

  Anatomy, physiology and Health

  Biology

  Chemistry

  Economic History1

  Engineering1

  Gaelic

  Geography

  German

  Hebrew1

  History

  Horticultural Science1

  Italian

  Modern Studies

  Music

  Navigation1

  Norwegian1

  Physics

  Portuguese1

  Russian

  Secretarial Studies1

  279

  Spanish

  Swedish1

  Last examination after 1994

  Accounting

  Economics

  Greek

  Religious

  Studies

  Technical Drawing

  1Indicates subjects where no revised higher will be available.

  Withdrawal of traditional CSYS

  Last Examination 1990

  English

  French

  Latin

  Dates for other subjects have still to be set.

  New Courses Developed, in Process of Development, or to be considered for development

  Standard Grade

  Phase 1

  Science

  Social and Vocational Skills

  Phase 2

  Contemporary Social Studies

  Phase 3

  Office and Information Studies

  Physical Education

  Technological Studies

  Later Phases

  Accounting and Finance

  Drama

  Higher Grade

  Accounting and Finance

  Classical Studies

  Computing Studies

  Drama

  Management and Information Studies

  Science (consultation stage only)

  Technological Studies

  CSYS

  Accounting and Finance

  Computing Studies

  Craft and Design (consultation stage only)

  Management and Information Studies

  Music (consultation stage only)

  Religious Studies

  Technological Studies

  Public Expenditure
  Sir Hector Monro
  To ask the Secretary of State for Scotland when he will publish the Scottish commentary on public expenditure.

  Mr. Rifkind
  My Department is issuing today "Public Expenditure to 1991–92: A Commentary on the Scotland Programme". I have, as in previous years, arranged for a copy to be sent to each Scottish Member. Copies are also being placed in the Library.

EDUCATION AND SCIENCE

  Information Technology
  Mr. Atkinson
  To ask the Secretary of State for Education and Science if he will make a statement of progress on the introduction of information technologies to facilitate internal communications in his Department and the provision of information to the public concerning 280
  those areas for which he is responsible; and if he has any further plans to apply the newest technologies in these fields.

  Mr. Butcher
  Under the Department's office systems strategy, 600 staff in London—roughly half—are being provided with PCs, attached to a local area network. Most of these are now in place, and we are considering extending the provision. Consideration is also being given to making similar arrangements in the Department's other site, in Darlington, and to connecting the two networks.

  The Department also has in place a communications strategy for Her Majesty's inspectorate of schools, under which all 450 inspectors in the field will be provided with the means of electronic communication with each other, and also with the centre.

  The Department does not at present provide electronic information services to the public.

  Student Loans
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will provide calculations on the cost and savings of the top-up loans scheme, as illustrated in annexe E, page 43 of the White Paper "Top-Up Loans for Students," on the basis of(a) 90 per cent. take-up, (b) 100 per cent. take-up, (c) 90 per cent. take-up with an expansion of student numbers similar to that in the 1980s and (d) 100 per cent. take-up with an expansion similar to that in the 1980s.

  Mr. Jackson
  The table shows how the net PSBR effect would vary with alternative take-up assumptions, for the student numbers assumed in the White Paper. It would not be realistic to project into the future the expansion of student numbers that occurred over the 1980s because the demographic outlook is quite different.

  £ million, 1990 prices

  80 per cent.

  Take-up 90 per cent.

  100 per cent.

  1990

  103

  123

  144

  1991

  105

  129

  153

  1992

  103

  128

  154

  1993

  93

  120

  147

  1994

  78

  106

  133

  1999

  17

  50

  81

  2004

  -31

  4

  40

  2009

  -69

  -33

  3

  2014

  -162

  -137

  -113

  2019

  -205

  -186

  -167

  2024

  -227

  -210

  -194

  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will provide calculations on the cost and savings of the top-up loans scheme as illustrated in annex E, page 43, of the White Paper "Top-up Loans for Students" on the basis of the(a) four and (b) five year courses which medical and dental students in particular have to pursue.

  Mr. Jackson
  The calculation of the costs and savings of the Government's proposals for top-up loans for students, as set out in annex E of Cm. 520, already takes account of the longer courses pursued by students of medicine, dentistry, and some other subjects.

  Universities (Scotland)
  Mr. McAllion
  To ask the Secretary of State for Education and Science when he next intends to meet with representatives from Scottish universities concerning the future problem of university provision in Scotland.

  Mr. Jackson
  We have no plans for such a meeting. Although both my right hon. Friend and I regularly visit universities, including those in Scotland, the allocation of public funds towards general university provision is a matter for the University Grants Committee and, from 1 April, the Universities Funding Council established under the Education Reform Act 1988. The funding of the eight Scottish universities is done under standard criteria which allow for different course lengths and apply to all universities in Great Britain. Both bodies have a committee to advise on particular matters relating to Scotland.

  Advanced Supplementary Level Courses
  Mr. Ken Hargreaves
  To ask the Secretary of State for Education and Science how many students are taking advanced supplementary level courses in the current year; and if he will make a statement.

  Mr. Kenneth Baker
  I have today announced the results of a survey carried out by my Department last autumn. This shows that over 30,000 students in England are now taking GCE advanced supplementary courses. About 27,200 of these students are in schools and provisional figures show a further 3,300 in further education colleges. About 13 per cent. of first year A-level students are now choosing to study one or more AS level courses.

  The most popular AS level courses were general studies, with nearly 9,500 students, mathematics, with nearly 7,000 students, English with about 2,500 students, computing, with nearly 2,000 students, and French, with over 1,500 students.

  About 1,200 schools and over 100 colleges have mounted AS level courses this year. This represents 44 per cent. of schools, and 38 per cent. of colleges, with A-level students.

  The full results of the survey will be published in due course.

ENVIRONMENT

  Litter
  Mr. Amess
  To ask the Secretary of State for the Environment what proposals he has to strengthen the law on litter.

  Mrs. Virginia Bottomley
  We are monitoring current experiments and pilot projects set up by the Tidy Britain group and others. We shall develop our policies accordingly, including the introduction of further legislation if appropriate.

  Inner-city Land (Clearance)
  Mr. Thurnham
  To ask the Secretary of State for the Environment what proportion of the £67 million which is to be made available for the clearance of derelict inner city land will go to the north-west; and what are the proposed locations.
  282
  Mr. Trippier
  Derelict land grant is available for reclamation of derelict land nationally, not just in inner city areas. Nearly a third of the national resources has been made available to the north west, including Merseyside, in 1989–90. Of this, £10·7 million will be devoted to schemes in the eight rolling programme areas of Salford Quays, Wigan, north east Lancashire, Barrow, Leeds/Liverpool canal corridor, Liverpool, Wirral and Ellesmere Port. The remaining resurces have yet to be allocated to specific projects, but priority will continue to be given to schemes which will contribute to the regeneration of the inner city areas.

  Aluminium
  Mr. Redmond
  To ask the Secretary of State for the Environment if, pursuant to his answer of 31 January,Official Report, columns 202–04, he will identify the medical advisers who agreed the aluminium standard in drinking water treatment plants; and what was the limit they set.

  Mr. Moynihan
  The Department took advice from medical advisers on the staff of the chief medical officer. In formulating their advice they took note of the views of the committee on the medical aspects of the contamination of air, soil and water (CASW). Limits were set individually for each supply zone up to a highest three-monthly mean of 1,200 microgram per litre and an absolute maximum of 3,500 micrograms per litre.

  Water Testing
  Mr. Simon Coombs
  To ask the Secretary of State for the Environment whether any additional precautions have been taken or any additional testing undertaken, by water authorities, in the light of the mild winter weather and low water levels in reservoirs.

  Mr. Moynihan
  It is for water authorities to decide whether to take any additional precautions or to carry out additional sampling in the light of local circumstances.

  Enterprise Zones
  Mr. Gordon Brown
  To ask the Secretary of State for the Environment if he will list all enterprise zones and the dates tax exemptions or rates reliefs cease.

  Mr. Trippier
  The period for which each of the following areas is designated as an enterprise zone is ten years from the date when the designation took effect. The financial benefits of enterprise zone status end when the area concerned ceases to be an enterprise zone.

  Name of enterprise zone

  Date of designation

  Belfast

  21 August 1981

  Clydebank (City of Glasgow)

  18 August 1981

  (Clydebank District)

  3 August 1981

  Corby

  22 June 1981

  Dale Lane and Kinsley (Wakefield)

  23 September 1983

  Delyn

  21 July 1983

  Dudley

  10 July 1981

  Dudley (Round Oak)

  3 October 1984

  Glanford (Flixborough)

  13 April 1984

  Hartlepool

  23 October 1981

  Invergordon

  7 October 1983

  Isle of Dogs

  26 April 1982

  Langthwaite Grange (Wakefield)

  31 July 1981

  Londonderry

  13 September 1983

  283

  Name of enterprise zone

  Date of designation

  Lower Swansea Valley

  11 June 1981

  Lower Swansea Valley Number 2

  6 March 1985

  Middlesbrough (Britannia)

  8 November 1983

  Milford Haven

  24 April 1984

  North East Lancashire

  7 December 1983

  North West Kent (zones Numbers 1–5)

  31 October 1983

  North West Kent (zones Numbers 6 and 7)

  10 October 1986

  Rotherham

  16 August 1983

  Salford Docks/Trafford Park

  12 August 1981

  Scunthorpe

  23 September 1983

  Speke (Liverpool)

  25 August 1981

  Tayside

  9 January 1984

  Telford

  13 January 1984

  Tyneside

  25 August 1981

  Wellingborough

  26 July 1983

  Workington (Allerdale)

  4 October 1983

  Mr. Gordon Brown
  To ask the Secretary of State for the Environment if he will itemise all the costs of enterprise zones since their inception.

  Mr. Trippier
  The costs of the British enterprise zones to 1985–86 are contained in "EZ Information 1985–86", a copy of which has been placed in the Library. I expect to publish the next in this series of annual reports in the very near future.

  Mr. Gordon Brown
  To ask the Secretary of State for the Environment what is his estimate of the cost per job created in enterprise zones once all costs are taken into account.

  Mr. Trippier
  The consultants commissioned by my Department to evaluate the enterprise zone experiment about mid-way through its life estimated the public cost per additional job within the enterprise zones to be £8,500. ("An evaluation of the enterprise zone experiment" by PA Cambridge Economic Consultants, published by Her Majesty's Stationery Office December 1987.) This figure is liable to change over time as both the number of additional jobs and the public costs in the zones increase.

  Sport and Leisure Facilities
  Mr. Redmond
  To ask the Secretary of State for the Environment what changes he will be making to section 19 of the Local Government (Miscellaneous Provisions) Act 1976, including education departments via the Education Act 1944; and if he will make a statement.

  Mrs. Virginia Bottomley
  It is our intention to enable local authorities to delegate their discretionary charging powers under section 19 of the Local Government (Miscellaneous Provisions) Act 1976, if they so wish, to contractors who manage sports and leisure facilities set up under the same section. We are currently considering how to achieve this and what the wider implications of such an amendment would be.

  Owner-occupied Property (Repairs)
  Mr. Cummings
  To ask the Secretary of State for the Environment if Her Majesty's Government are making available extra funding to local authorities to cover amounts for repairs and maintenance on owner-occupied properties for those on low or reduced income.

  Mr. Trippier
  An additional £20 million of resources have been made available for 1989–90 to 29 local 284
  authorities (isted in my reply to a question from the hon. Member for Burnley (Mr. Pike) on 3 February, Official Report, columns 429–30, to encourage the renewal of the private sector housing stock in selected areas. The authorities concerned are expected to steer a significant proportion of these additional resources towards owners on low incomes.

  Council House Sales
  Mr. Cummings
  To ask the Secretary of State for the Environment what financial facilities are available to purchasers of system-built local authority housing.

  Mr. Trippier
  Tenants who want to buy system-built properties are entitled to the normal right-to-buy discount and, if necessary, for a mortgage from their council.

  Sewage Works (Derbyshire)
  Mr. Harry Barnes
  To ask the Secretary of State for the Environment if he will list the sewage works in Derbyshire where effluent levels currently exceed the limits set by his Department; and whether he has any plans to alter such limits.

  Mr. Moynihan
  I have yet to receive the annual non-compliance reports for 1988 from the Yorkshire, Severn Trent and North West water authorities, whose areas include Derbyshire. When returns for all 10 authorities have been received, they will be placed in the Libraries of both Houses.

  My hon. Friend the Minister for Water announced on 7 December 1988 at column 199 that applications for temporary variations in discharge consent conditions will be considered for those sewage works where capital improvements are programmed for completion by March 1992. Subject to this condition, authorities may apply for temporary variations to the consent conditions for works which failed to comply in 1988.

  Assessment Planning
  Ms. Walley
  To ask the Secretary of State for the Environment what steps his Department is taking to monitor the implementation of the Environment Assessment Planning (Town and Country Planning Assessment of Environmental Effect) Regulations 1988, implementing EC directive 85/337.

  Mr. Chope
  The Department receives copies of environmental statements submitted under the regulations relating to development proposals in England. In addition it keeps records of decisions by the Secretary of State under the regulations as to the need for environmental assessment and has asked local planning authorities to inform it when they give opinions under the regulations that environmental assessment is required.

  Landfill (Rixton)
  Mr. Hoyle
  To ask the Secretary of State for the Environment if he will request an explanation from Cheshire county council as to why his Department was not informed earlier than February that 2,500 drums of paint residues and pigments from the Chemstar plant had been landfilled at Rixton.

  Mrs. Virginia Bottomley
  Cheshire county council, as the waste disposal authority, is the competent body with
  285
  regard to the licensing of waste disposal facilities. It is the council's responsibility to ensure that all facilities that it licences pose no risk to public health, water resources or the environment generally. There is no requirement for the council to inform this Department of wastes that it permits on to a landfill.

  Mr. Hoyle
  To ask the Secretary of State for the Environment what further tests have been carried out at the Rixton landfilled site following the recent discovery of dioxins in the ground at Chemstar.

  Mrs. Virginia Bottomley
  I am informed that Cheshire county council, the waste disposal authority, has carried out no tests for dioxin at the Rixton landfill site. I understand that it is in close touch with Tameside borough council in whose area the Chemstar plant is located.

  Mr. Hoyle
  To ask the Secretary of State for the Environment what information he has of ash from the Luvella waste incinerator being dumped at Rixton; what was the quantity of this ash: at which sites the ash was dumped; and if his Department will take samples of this ash to test for the presence of dioxins.

  Mrs. Virginia Bottomley
  None. It is the responsibility of the waste disposal authority, Cheshire county council, to licence and monitor the Rixton landfill. If it perceives the need, it is the responsibility of the local waste disposal authority to arrange for any particular waste stream to be analysed.

  Air Pollution
  Mr. Kirkwood
  To ask the Secretary of State for the Environment what procedures exist to monitor air pollution in British cities.

  Mrs. Virginia Bottomley
  ;: The Department of the Environment monitors levels of air pollution in British cities through a number of research contracts, in some cases in conjunction with the appropriate local authorities. Further details are contained in the 11th edition of the "Digest of Environmental Protection and Water Statistics", a copy of which is in the Library of the House. Some local authorities also carry out their own additional monitoring of selected pollutants.

  Local Government Councillors
  Mr. McCartney
  To ask the Secretary of State for the Environment what powers he has to take action against local government councillors who receive financial or pecuniary benefit or advantage for their elected office.

  Mrs. Virginia Bottomley
  None.

  It is an offence for a councillor who has not received a dispensation to speak or vote on any matter in which he or she has a pecuniary interest. Prosecution of such offences rests with the Crown prosecution service.

  Mr. McCartney
  To ask the Secretary of State for the Environment what categories of councillors' expenses are deemed to be personal income; and if he will make a statement.

  Mrs. Virginia Bottomley
  Councillors may become entitled to attendance allowance, financial loss allowance, special responsibility allowance, and travel and subsistence allowance. Where these allowances are not to 286
  reimburse expenditure or loss incurred wholly, necessarily and exclusively in the performance of the councillor's duties, they may be treated as personal income for tax and social security benefit purposes.

  Cryptosporidia
  Mr. Raffan
  To ask the Secretary of State for the Environment whether the Government will be taking any further steps in respect of cryptosporidia in water supplies.

  Mr. Howard
  Thames Water has been dealing with a problem relating to cryptosporidia in water supplies in the Oxford and Swindon area. As a precaution, Thames Water extended special sampling to other parts of its area and by the end of last week a number of the organisms had been identified intermittently at some other water treatment works. However, no link has been established between currently reported cases of cryptosporidiosis and drinking water supplies outside the Oxford and Swindon areas and the Department of Health has advised that there is no need for consumers to take any special precautions. Thames Water is taking action aimed at removing the organisms from these additional supplies and will continue with intensive sampling. They also propose to undertake an independently led review aimed at learning lessons from the experience. This information was announced in a press release by Thames Water last Saturday.

  In view of the absence of information on cryptosporidia in water supplies, my right hon. Friend the Secretary of State for the Environment, in consultation with my right hon. Friend the Secretary of State for Health, has decided to establish a group of experts under the chairmanship of Sir John Badenoch to advise on the subject. The group will consider the extent to which this organism may be present in water supplies, the monitoring methods necessary to detect it, the public health significance of its presence and whether any action is necessary.

  Bathing Waters
  Dr. Cunningham
  To ask the Secretary of State for the Environment what proportion of designated bathing waters were tested for the presence of enteroviruses during 1988; and what proportion complied with the European Community bathing water directive.

  Mr. Ridley
  [holding answer 28 February 1989]: Of the 380 waters identified under the EC bathing water directive in England, Northern Ireland and Wales, 164 were monitored for the enterovirus parameter and of these 42 per cent. met the directive's zero enterovirus standard. Monitoring for enteroviruses is required under the directive only if inspection of the bathing water indicates that they are present or if the quality of water has deteriorated. Enteroviruses are ubiquitous in the water environment and may arise not only from sewage but from birds and animals. In some circumstances it may, therefore, be impossible in practice to meet the zero standard. This is one of the issues likely to be considered in the review of the bathing water directive which has been proposed by the European Commission.

  Business Rate
  Dr. Cunningham
  To ask the Secretary of State for the Environment if he will publish in the Official Report figures, based on tables 1 to 5 of the Non-Domestic

  287
  Rating: Transition consultation paper published on 15 February, showing separately the effects of (a) the revaluation and (b) the introduction of a unified business rate.

  Mr. Ridley
  [holding answer 21 February 1989]: The information is set out in the tables. It must be emphasised that it is based on a preliminary sample survey of the effects of the revaluation of non-domestic properties and the introduction of a uniform business rate (UBR). The new valuations supplied for the sample of properties were best estimates, and not actual revaluations. The results therefore need to be interpreted with caution.

  As in the consultation paper the tables are all in 1988–89 prices. They break down the aggregate figures, to show first the effect of introducing a uniform business rate with no revaluation and second the effect of the revaluation with the UBR in place. The tables given here exclude the effects of the transitional arrangements for the new system. Table 3, and part of table 5, of the consultation paper show the effects of the transitional arrangements, which will apply to the total changes in rate bills, and are not defined in a way which enables their effect to be disaggregated between the introduction of the uniform business rate and the revaluation.

  Columns and rows may not sum due to rounding in these and the original tables.

  Table 1A

  Amounts of overall increases and reductions in rate bills

  (excluding effect of transitional arrangements)

  Aggregate reduction (-) increase (+)

  Net change on UBR

  Net change on revaluation

  £ million

  £ million

  £ million

  England

  Gainers

  -1,550

  -360

  -1,190

  Little change (less than ± 5 per cent)

  -4

  +41

  -45

  Losers

  +1,550

  +315

  +1,235

  Wales

  Gainers

  -40

  -3

  -39

  Little change (less than ± 5 per cent)

  —

  —

  —

  Losers

  +40

  +3

  +40

  Table 2A

  Distribution of overall change in rate bills

  (excluding effect of transitional arrangements)

  Change in rate bill: reduction (-) increase (+)

  Net change on UBR

  Net change on revaluation

  £ million

  £ million

  £ million

  England

  Reductions

  50 per cent, or more

  -570

  -150

  -420

  5 per cent, to 50 per cent.

  -980

  -210

  -760

  Little change

  (less than ± 5 per cent.)

  -4

  +41

  -45

  Increases

  5 per cent.to 50 per cent.

  +460

  +200

  +260

  50 per cent, to 100 per cent.

  +450

  +50

  +400

  100 per cent, or more

  +650

  +70

  +580

  Wales

  Reductions

  50 per cent, or more

  -12

  —

  -11

  288

  Change in rate bill: reduction (-) increase (+)

  Net change on UBR

  Net change on revaluation

  £ million

  £ million

  £ million

  5 per cent. to 50 per cent.

  -30

  -3

  -27

  Little change

  (less than ± 5 per cent.)

  —

  —

  —

  Increases

  5 per cent, to 50 per cent.

  +18

  +2

  +16

  50 per cent, to 100 per cent.

  +16

  —

  +15

  100 per cent, or more

  +8

  —

  +8

  Table 4A: Possible change in rate bills by properly type, England and Wales (excluding effect of transitional arrangements)

  Property Type

  Overall reduction (-) increase (+) in rate bill

  Net change on UBR

  Net change on revaluation

  per cent

  per cent

  per cent.

  England

  Factories

  -25

  -8

  -18

  Warehouses

  -12

  -4

  -8

  Shops

  +14

  -3

  +17

  Offices

  +14

  +20

  -5

  Other properties

  +7

  -3

  +10

  Wales

  Factories

  -16

  -3

  -14

  Warehouses

  -9

  +2

  -10

  Shops

  +18

  0

  +18

  Offices

  +5

  +4

  +1

  Other properties

  +6

  +1

  +5

  Table 5A:Projected changes in rate bills by region, England (excluding effects of transitional arrangements.)

  Region

  Overall reduction (-) increase (+)

  Net change on UBR

  Net change on revaluation

  £ million

  £ million

  £ million

  North West

  -310

  -160

  -150

  West Midlands

  -200

  -20

  -180

  East Midlands

  -130

  -70

  -60

  Yorkshire and Humberside

  -150

  -150

  0

  Northern

  -50

  -100

  +50

  East Anglia

  +40

  +10

  +30

  South West

  +130

  -20

  +150

  Inner London

  +390

  +460

  -70

  Outer London

  +50

  +80

  -30

  Rest of the South East

  +230

  -10

  +250

  Rating Reform
  Mr. Barry Porter
  To ask the Secretary of State for the Environment if he will list in the Official Report the estimate of the community charge his Department expects for the district councils in (a) Merseyside, (b) Greater Manchester, (c) Lancashire and (d) Greater London.

  Mr. Gummer
  The Government have made no estimates of future community charges. Illustrative figures were published on 23 June showing what the community charge would have been in each area had the new system been in force in 1988–89. Those illustrative figures assume existing levels of spending and existing local authority responsibilities.

  Local Authorities (Finance)
  Mr. David Shaw
  To ask the Secretary of State for the Environment what information he has on the losses sustained to date by individual local authorities from open and closed transactions involving interest rate swaps and other money market futures and option contracts.

  Mr. Gummer
  This information is not available from the regular financial returns which are made by authorities and we do not have full information from other sources for any individual authority.

  I suggest my hon. Friend asks for details from councils engaging in this business who no doubt will want to be fully publicly accountable.

FOREIGN AND COMMONWEALTH AFFAIRS

  EC Council Meeting
  Mr. McAllion
  To ask the Secretary of State for Foreign and Commonwealth Affairs what issues he expects to raise at the next European Community Council meeting.

  Mrs. Chalker
  I assume that the hon. Member is referring to the Foreign Affairs Council. The next meeting will be on 20–21 March. The agenda is expected to include consideration of the way forward in the GATT Uruguay round negotiations, and the relationship between the Community and the Council of Europe. A ministerial meeting with the EFTA countries will be held in the margins. Measures to tackle EC fraud are expected to be discussed in ECOFIN on 13 March.

  Nuclear Disarmament
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the United Kingdom is party to any international agreement requiring the United Kingdom to be involved in nuclear disarmament negotiations.

  Mrs. Chalker
  Article VI of the non-proliferation treaty, to which the United Kingdom is a party, requires each of the parties to undertake to pursue negotiations in good faith on effective measures relating to cessation of the nuclear arms race at an early date and to nuclear disarmament, and on a treaty on general and complete disarmament under strict and effective international control. Our policy in respect of this article is contained in the answer given to the hon. Member by my hon. Friend the Minister of State (Mr. Waldegrave) on 8 December, at col.316–17.

  Nuclear Non-proliferation Treaty
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if, during his recent trip to Japan, he had the opportunity to discuss with other foreign ministers or heads of state current progress on the strengthening of the nuclear non-proliferation treaty and plans for the first preparatory committee for the 1990 non-proliferation treaty review conference, to be held on 1 to 5 May.

  Mrs. Chalker
  On this occasion, no. However, we regularly take the opportunity to discuss with other governments the strengthening of the nuclear non-proliferation treaty, and are actively pursuing with other 290
  states the parties' preparations for the first preparatory committee for the 1990 non-proliferation treaty review conference.

  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to instruct the United Kingdom delegation to the first preparatory committee meeting, to be held on 1 to 5 May, for the 1990 fourth review conference of the non-proliferation treaty, to negotiate full observer status for the European proliferation information centre to attend the 1990 review conference.

  Mrs. Chalker
  We have not yet received any such request from the European proliferation information centre (EPIC). However, as a recognised nongovernmental organisation, the EPIC was granted observer status at the 1985 non-proliferation treaty review conference. If similar rules of procedure are adopted at the 1990 review conference, there should be no objection to EPIC attendance as observers.

  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs on what occasion ministers or officials of his Department last raised the question of accession to the nuclear non-proliferation treaty by France and the People's Republic of China, respectively, with ministers or officials of those states.

  Mrs. Chalker
  I refer the hon. Member to the reply given on 20 February by my hon. Friend the Minister of State at column 472.

  Disarmament Conference
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs if his Department received any invitations to send delegates or observers to the conference on conventional and non-nuclear disarmament at the polytechnic of the south bank organised by the British Peace Assembly.

  Mrs. Chalker
  No.

  Sub-Saharan Africa
  Ms. Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the total amount of official debt owed to the United Kingdom by each country in sub-Saharan Africa; and what proportion of their total official debt this represents.

  Mrs. Chalker
  Following the cancellation of £275 million of old aid debts for sub-Saharan Africa, remaining debt to ODA is insignificant. Debt owed to ECGD by sub-Saharan African countries as at 31 December 1988 was ·1·868 billion (equivalent to about $3·25 billion at today's exchange rate). This amounts to around 4·5 per cent. of the $71·9 billion estimated in the IMF's October 1988 world economic outlook as sub-Saharan Africa's total long-term debt in 1988 to official creditors (including the international financial institutions except the IMF). Figures for debts owed to ECGD by individual countries are not published.

TRANSPORT

  Bus Services (Rural Area)
  Mr. Grocott
  To ask the Secretary of State for Transport what evidence he has received on the effect of the Transport Act 1985 on bus services in rural areas.

  Mr. Portillo
  Studies conducted for the Department's transport and road research laboratory indicated that the level of bus services in rural areas was broadly maintained following deregulation. In the English shire counties bus mileage increased by 18 per cent. between 1985–86 and 1987–88.

  Heavy Goods Vehicles (Drivers)
  Mr. David Marshall
  To ask the Secretary of State for Transport how many heavy goods vehicle drivers have been(a) prosecuted and (b) convicted of offences arising out of breaches of Road Traffic Acts in each of the last five years.

  Mr. Peter Bottomley
  The number of HGV driver prosecutions arising from offences detected by traffic examiners for each of the last five years are as follows:

  Year

  Number of prosecutions

  1984

  6,530

  1985

  5,576

  1986

  6,721

  1987

  5,893

  1988

  6,895

  Figures are not available for the number of absolute discharges.

  Mr. Heddle
  To ask the Secretary of State for Transport what is his Department's policy regarding the ownership, financing and management of airports in the ownership or management of local authorities.

  Mr. Peter Bottomley
  The policy is set out in paragraphs 9.15 and 9.16 of the White Paper "Airports Policy" of June 1985 (Cmnd 9542). Fifteen airports are now run by local authority-owned companies formed under the Airports Act 1986.

  The Government would like to see the present local authority owners increasingly involve the private sector in the ownership, development and running of airports.

  M4 (Lanes)
  Mr. Gareth Wardell
  To ask the Secretary of State for Transport if he will publish in the Official Report a list of those sections of the M4 motorway served by (i) two lanes in each direction and (ii) three lanes in each direction; specifying the length to the nearest mile of (i) and (ii).

  Mr. Peter Bottomley
  The information for the M4 in England is as follows:(1) Dual two-lane sections (11 miles)

  Junction 1—Boston Manor

  Junction 20—Junction 221

  1 Includes Severn bridge

  The section at Catherine hill (Junctions 20–21) is two lanes westbound and three lanes eastbound.
  (ii) Dual three-lane sections (108 miles)

  Boston Manor—Junction 4

  Junction 4B—Junction 20

  292
  (iii) Dual four-lane section (1 mile)
  Junction 4—Junction 4B (at M25 interchange)

  The M4 in Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

  Mr. Gareth Wardell
  To ask the Secretary of State for Transport if he has any plans to construct additional lanes on the M4 motorway.

  Mr. Peter Bottomley
  We plan to widen the M4 to four lanes between the M25 and junction 8/9. There are also schemes in the trunk road programme to improve junctions 4 and 8/9.

  The road programme is currently under review. We expect to make an announcement in the spring.

  The M4 in Wales is the responsibility of my right hon. Friend the Secretary of State for Wales.

  Roads (Hampshire)
  Mr. Hunter
  To ask the Secretary of State for Transport what has been Hampshire county council's bid for spending on roads each year since 1979 expressed in(a) cash terms and (b) real terms, based on 1988–89 value.

  Mr. Peter Bottomley
  Local highway authorities submit bids only for allocations for capital expenditure on roads. Details of Hampshire county council's bids are given in the following table:

  Year

  Bid in cash

  Bid in real

  terms

  terms1

  £ million

  £ million

  1979–80

  10·086

  18·815

  1980–81

  12·677

  19·966

  1981–82

  13·592

  19·488

  1982–83

  12·987

  17·379

  1983–84

  14·562

  18·638

  1984–85

  16·955

  20·656

  1985–86

  18·645

  21·552

  1986–87

  17·219

  19·261

  1987–88

  17·806

  18·919

  1988–89

  16·519

  16·519

  1989–90

  19·426

  18·501

  1 Conversion to 1988–89 prices using the GDP Deflator.

  Insulation Grants
  Mr. Redmond
  To ask the Secretary of State for Transport if he will list for each of the three counties of Yorkshire by year, for the last five years the number and cost of providing insulation grants and other assistance for people living adjacent to(a) motorways and (b) airports and airfields; and if he will make a statement.

  Mr. Peter Bottomley
  I refer the hon. Member to the statement on noise insulation on 6 February at columns 535–36, in reply to my hon. Friend the Member for Pembroke (Mr. Bennett). The Department has no information on payments made or insulation provided by local airport management or operators. The information in connection with motorways is as follows:

  (a) Noise insulation for dwellings near motorways

  Cost of grants or insulation provided

  Number of dwellings

  West Yorkshire

  North Yorkshire

  South Yorkshire

  £

  £

  £

  1984–85

  406

  310,790

  —

  —

  1985–86

  540

  421,864

  —

  —

  1986–87

  103

  79,291

  20,000

  —

  293

  Cost of grants or insulation provided

  Number of dwellings

  West Yorkshire

  North Yorkshire

  South Yorkshire

  £

  £

  £

  1987–88

  16

  1,132

  31,300

  —

  1988–89

  2

  843

  —

  —

  Road Building (Yorkshire)
  Mr. Redmond
  To ask the Secretary of State for Transport if he will list the road building work contracts within the three counties of Yorkshire during(a) 1988–89 and (b) 1989–90 scheduled to cost over £1 million; and if he will make a statement.

  Mr. Peter Bottomley
  Trunk road improvement scheme contracts costing over £1 million in the counties of North Yorkshire, South Yorkshire and West Yorkshire are as follows:

  Completed during 1988–89

  A616 Stocksbridge to M1

  A1 Wetherby Bypass

  A629 Airedale, Section 1

  A650 Airedale, Section 2

  A65 Settle and Giggleswick Bypass

  M62 Climbing Lane west of Junction 25

  Presently under construction

  Al Dishforth Interchange

  Due to commence construction in 1989–90

  A65 Addingham Bypass

  A650 Drighlington Bypass

  A1 Improvement, Bramham to Wetherby (Subject to the completion of outstanding statutory procedures).

  In addition work has been carried out in 1988–89 on four major maintenance contracts with a value of over £1 million. There are eight major maintenance contracts with a value of over £1 million planned for 1989–90.

  Road building contracts on non-trunk roads are the responsibility of the local highway authorities.

  Stansted Airport
  Mr. Snape
  To ask the Secretary of State for Transport what the anticipated capital expenditure programme is for the development of Stansted airport to accommodate 8 million passengers a year, split between financial years.

  Mr. Peter Bottomely
  The Government do not hold this information. BAA plc is responsible for developing Stansted airport.

  Chapel-en-le-Frith/Whaley Bridge Bypass
  Mr. Tony Lloyd
  To ask the Secretary of State for Transport if he will give details of the amount already paid to contractors for the Chapel-en-le-Frith/Whaley bridge bypass and his estimate of the likely final claims; and if he will make a statement.

  Mr. Peter Bottomley
  The amount certified to date for payment to the contractor is £36,187,743.

  The outstanding claims for additional payments remain commercial matters between the Department and the contractor until they have been settled.

  Mr. Tony Lloyd
  To ask the Secretary of State for Transport if he will give details of the extraordinary or unexpected localised groundwork conditions encountered during construction of the Chapel-en-le-Frith/Whaley bridge bypass; and if he will make a statement.
  294
  Mr. Peter Bottomley
  The main problems encountered reflect the particularly difficult and variable geology on the route of the bypass. The road crosses alternating layers of sandstone, shale and mudstones which are overlain by variable depths of glacial clays, sands and gravels, alluvium and industrial fill. In places erosion has produced over steepened slopes which have marginal stability and are prone to landslips.

  In particular there were problems with the foundations to the eastern end of the Hayfield road viaduct, difficulties with the construction of the Western lane retaining wall, problems with the stability of the Carley lane embankment and the cutting slope at Silk hill, and greater than anticipated amounts of unsuitable material along the route of the bypass.

  Mr. Tony Lloyd
  To ask the Secretary of State for Transport if he will make a statement on the report by Allott and Lomax, consultng engineers, into the performance of the consulting engineers employed on the Chapel-en-le-Frith/Whaley bridge bypass; and if he will place a copy in the Library.

  Mr. Peter Bottomley
  The report is not yet complete. We shall consider whether it should be placed in the Library at the appropriate time.

  Coastal Waters (Pollution)
  Mr. Nicholas Bennett
  To ask the Secretary of State for Transport what sanctions his Department has over the owners of foreign vessels which cause pollution within United Kingdom territorial waters.

  Mr. Portillo
  Where the owner of a foreign vessel has a registered office in the United Kingdom he may be prosecuted in United Kingdom courts and fined up to £50,000 of summary conviction; otherwise the Department notifies the relevant flag administration and asks it to consider prosecution. In addition the costs of the clean-up are recovered from the owners.

  Coal Imports
  Mr. Mullin
  To ask the Secretary of State for Transport if he will list coal imports through the port of Sunderland for 1987 and 1988 by country of consignment.

  Mr. Portillo
  Her Majesty's Customs and Excise figures for imports of coal at Sunderland include imports at Seaham. Details by country of consignment for 1987 and for 1988 (provisional) are as follows:

  Coal imports at Sunderland (including Seaham)

  Thousand tonnes

  Country of consignment

  1987

  1988

  France

  4

  2

  Belgium/Luxembourg

  13

  17

  Netherlands

  113

  166

  Federal Republic of Germany

  17

  13

  Denmark

  —

  2

  Portugal

  —

  4

  Iceland

  —

  6

  Norway

  2

  13

  Sweden

  7

  2

  USSR

  6

  40

  Poland

  30

  28

  Australia

  2

  —

  Canada

  —

  29

  United States of America

  1

  27

  Colombia

  3

  —

  295

  Thousand tonnes

  Country of consignment

  1987

  1988

  Venezuela

  —

  69

  TOTAL

  198

  418

  Ships (Registration)
  Sir David Price
  To ask the Secretary of State for Transport what progress has been made since the memorandum of understanding signed with the Bahamas in June 1988, in negotiating similar arrangements with other states operating open registries to help ensure the availability to Her Majesty's Government of flagged-out British ships in the event of war.

  Mr. Portillo
  On 20 February exchanges of letters were completed between representatives of Her Majesty's Government and both the Republic of Liberia and the Republic of Vanuatu under which the Liberian and Vanuatuan Governments agree to allow British-owned ships on their registers, for which a contract of commitment exists, to be made available to Her Majesty's Government in the event of hostilities.

  The contract of commitment is an agreement between Her Majesty's Government and the owner under which the shipowner agrees to make the named ships available to Her Majesty's Government in the event of hostilities and in return is guaranteed reinsurance by Her Majesty's Government against Queen's enemy war risks at that time. This would be carried out through one of the British war risks associations, with whom a revised agreement has recently been completed.

  The Department will shortly be approaching British shipowners known to have ships on the two registers.

  Merseyrail
  Mr. Ken Hargreaves
  To ask the Secretary of State for Transport whether he will provide capital allocations and grant for the fire improvement works being undertaken on Merseyrail.

  Mr. Portillo
  I welcome this programme of works. I am making available capital allocations of £1·096 million to cover expenditure on certain items in this programme and I would be prepared to consider sympathetically applications for further such support in due course. In addition, I am making available grant of £316,000 to assist with expenditure in 1988–89.

PRIME MINISTER

  Official Secrets Bill
  Mr. Dalyell
  To ask the Prime Minister if she will list the number of Government officials at each grade working on the Official Secrets Bill.

  The Prime Minister
  I refer the hon. Member to the reply which my right hon. Friend the Home Secretary gave to a question by him earlier today.

  EC (Fraud)
  Mr. Taylor
  To ask the Prime Minister what proposals she will submit to the European Council about the level of fraud in the European Community.
  296
  The Prime Minister
  The form of any initiative on fraud at the Madrid European Council will be determined in the light of developments between now and then, notably the outcome of discussions on the Court of Auditors annual report at the Economic and Finance Council in March.

  Middle East
  Mr. Latham
  To ask the Prime Minister whether she intends to seek an early meeting with the President of the United States of America to discuss the calling of a middle east peace conference, following the initiative in that regard in early 1988 by former Secretary of State George Shultz; and whether she will make a statement.

  The Prime Minister
  I have at present no firm plans for a further meeting with Mr. Bush. When I see him, I expect that we will wish to discuss the middle east.

  Concorde
  Mr. Adley
  To ask the Prime Minister if she will use the occasion of the 20th anniversary today of the maiden flight of Concorde to convey her congratulations to those who designed and built her.

  The Prime Minister
  Yes. Concorde has been a remarkable and unique technical achievement and now has 11 years of successful operations with British Airways and Air France behind it. It remains the flagship of both airlines.

  Civil Service (Dispersal)
  Dr. Godman
  To ask the Prime Minister if she will make a statement on the dispersal of Civil Service jobs to(a) Strathclyde and (b) other regions of Scotland.

  The Prime Minister
  Some 2,050 jobs were earmarked for Scotland under the dispersal programme announced in 1979. Almost all of these jobs are now in place including 1,330 with the Ministry of Defence and 600 with the Overseas Development Administration, and the commitment will be more than met when the Passport Office and the Ministry of Defence transfer further posts to Scotland in the first half of 1989. In addition, some 450 jobs will be created in Glasgow as a result of the recent Department of Social Security dispersal arrangements. Strathclyde region has attracted the majority of these jobs to date.

  Roads (London)
  Mr. Corbyn
  To ask the Prime Minister what action the Government are taking to protect London from encroachment through road building.

  The Prime Minister
  We are promoting a range of appropriate measures to meet London's transport needs. These cover public transport and traffic management as well as road improvements.

  Where improvements to the trunk road network are necessary and can be justified, the schemes are subject to environmental appraisals and statutory planning procedures.

  Relocation
  Mr. Allen
  To ask the Prime Minister if she will list. those Departments which, in reviewing the location of their work, are considering the Chalfont drive site in Nottingham for relocation.
  297
  The Prime Minister
  No. The policy announced by my right hon. Friend the Paymaster General on 31 March 1988 at columns 610–11, places on individual Departments the responsibility to review the location of their work in accordance with clear guidelines. They will consider a number of relocation sites offering easier labour markets, value for money and increased operational efficiency. Where appropriate, these will include areas such as Nottingham which are the focus of the Government's regional and urban policies. Departmental Ministers will announce their own decisions on significant relocations, including their chosen venues.

  Separatist Movements
  Mr. Sillars
  To ask the Prime Minister if she will list the separatist movements in the European Community to which she made a general reference in her speech delivered at the Holiday Inn, Glasgow, on 3 February.

  The Prime Minister
  I was referring to those democratic political parties in the member states of the Community seeking fully independent national status for the areas that they claim to represent.

  Engagements
  Mr. John Marshall
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  Mr. Stern
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  Mr. Favell
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  Mr. Jack
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  Mr. Andrew F. Bennett
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  Mr. Harry Greenway
  To ask the Prime Minister if she will list her official engagements for Thursday 2 March.

  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.

  EEC Directives
  Mr. Leighton
  To ask the Prime Minister if she will make a statement explaining the procedures under which directives are classified as stemming from particular clauses of the treaty of Rome, as amended by the Single European Act with particular reference to the criteria by which it is determined as to whether matters fall to be decided under(a) article 100 and (b) article 100a.

  The Prime Minister
  The Treaty article (or articles) on which EC legislation is based is proposed in the first instance by the Commission. It is for the Council to decide upon proposals for legislation, including their treaty base. Whether a proposal falls under article 100 or 100a is determined in accordance with the provisions of those articles.

WALES

  MMR Immunisation
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales if he will publish in the Official Report any preliminary figures for the uptake of MMR immunisation in each health authority in Wales during the first three months of the MMR being available.

  Mr. Grist
  Reports of MMR immunisation uptake at district health authority level are presently being analysed and the results will be available shortly. I will write to the hon. Member as soon as possible.

  Housing Associations
  Mr. Rowlands
  To ask the Secretary of State for Wales whether he will list for each housing association in Mid Glamorgan(a) the number of allocations granted in 1988–89 for rehabilitation and new dwellings and (b) the bids made by each association for rehabilitation and new dwellings in 1989–90 and (c) the allocations granted for each association for 1989–90.

  Mr. Grist
  The information is shown in the tables:

  Housing association

  New build units

  Rehabilitation units

  (a) Allocations to housing associations for new schemes in Mid Glamorgan in 1988–89

  Cynon Taff

  —

  53

  Corland

  37

  —

  Merthyr health authority

  11

  27

  Wales and West

  —

  34

  SHAW

  —

  10

  South Wales federated

  —

  4

  Rhondda health authority

  26

  35

  UKHT

  24

  10

  Western permanent

  20

  —

  Pontypridd and district

  20

  6

  Hafod

  20

  —

  (b) Units bid for housing for Wales funding in 1989–90 in Mid Glamorgan

  Cynon Taff

  17

  80

  Corland

  162

  —

  Wales and West

  261

  271

  SHAW

  150

  163

  Rhondda health authority

  71

  59

  UKGT

  6

  46

  Western Permanent

  102

  102

  Pontypridd and district

  34

  20

  Hafod

  264

  140

  Abbeyfields

  10

  10

  Gwalia

  12

  —

  Newydd

  100

  —

  Baptist

  17

  —

  New Era

  —

  25

  Stoneham

  —

  7

  South Wales federated

  5

  63

  (c) South Wales federated allocations to housing associations for new schemes in Mid Glamorgan in 1989–90

  Cynon Taff

  17

  27

  Wales and West

  25

  —

  SHAW

  25

  —

  South Wales federated

  —

  12

  Hafod

  —

  10

  Abbeyfields

  10

  —

  New Era

  —

  5

  Merthyr

  32

  10

  This does not take account of any further allocations which will be made during the year.
  299
  Mr. Rowlands
  To ask the Secretary of State for Wales what was the grant made to each housing association in Mid Glamorgan in 1988–89; what the grant for each association will be in 1989–90; and what assessment he has made of the likely average increases in rent on new dwellings over those rents set for 1988–89.

  Mr. Grist
  The table shows the grant made to each housing association for new schemes in Mid Glamorgan in 1988–89:

  £000

  Cynon Taff

  1,715

  Corlan

  1,258

  Merthyr HA

  1,197

  Wales and West

  780

  SHAW

  325

  South Wales Federated

  72

  Rhondda HA

  1,918

  Wales and West

  325

  United Kingdom HT

  1,045

  Western Permanent

  580

  Pontypridd and District

  775

  Haford

  600

  It will not be possible to provide details of grants to housing associations in 1989–90 until the end of the financial year.

  The setting of rents is a matter for the housing association concerned. Any change in rents will differ from property to property according to a wide range of variables. Average increases are not meaningful and no assessment has been made of them.

  Farm Woodland Scheme
  Mr. Ron Davies
  To ask the Secretary of State for Wales what has been the broadleaved component of applications

  Local authority capital allocations 1981–82 to 1989–90

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Local authority

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  Alyn and Deeside

  3,528

  4,018

  3,788

  3,245

  3,242

  3,567

  3,938

  2,710

  2,774

  Colwyn

  2,590

  3,862

  3,127

  2,675

  2,595

  2,360

  2,831

  2,250

  2,365

  Delyn

  2,266

  3,543

  4,200

  4,461

  4,087

  4,801

  3,077

  2,512

  2,823

  Glyndwr

  1,393

  1,957

  2,656

  1,770

  1,986

  1,983

  1,903

  1,809

  1,616

  Rhyddlan

  1,861

  2,464

  2,597

  2,077

  1,972

  2,265

  4,211

  4,192

  2,995

  Wrexham Maelor

  5,767

  6,480

  5,357

  5,724

  5,399

  7,936

  7,717

  5,921

  7,080

  Carmarthen

  2,940

  4,311

  8,924

  4,125

  3,547

  3,933

  4,432

  3,057

  3,109

  Ceredigion

  2,728

  4,381

  5,135

  3,316

  2,755

  3,158

  3,494

  2,858

  2,868

  Dinefwr

  1,009

  1,717

  2,743

  1,694

  1,456

  1,651

  1,867

  2,224

  1,885

  Llanelli

  3,895

  5,710

  5,395

  4,204

  3,175

  3,349

  3,919

  3,357

  4,187

  Preseli

  2,007

  2,699

  4,663

  4,170

  3,282

  2,891

  3,306

  3,267

  2,590

  South Pembrokeshire

  1,428

  2,825

  4,443

  3,439

  2,978

  2,803

  5,067

  3,287

  2,196

  Blaenau Gwent

  5,265

  12,111

  12,176

  8,315

  6,727

  10,197

  12,870

  8,629

  10,933

  Islwyn

  3,474

  5,692

  5,899

  5,130

  5,625

  9,324

  8,209

  7,681

  4,439

  Monmouth

  2,110

  3,563

  5,176

  4,026

  3,942

  3,854

  4,157

  2,703

  2,779

  Newport

  8,357

  13,750

  11,038

  7,996

  8,418

  9,713

  9,262

  7,642

  6,928

  Torfaen

  3,441

  5,329

  5,266

  4,696

  4,665

  6,253

  7,000

  6,311

  5,319

  Aberconwy

  2,076

  2,223

  2,575

  1,942

  1,877

  1,908

  2,257

  1,987

  3,645

  Arfon

  3,583

  3,810

  4,207

  3,356

  2,692

  2,761

  3,411

  3,750

  3,210

  Dwyfor

  1,086

  1,508

  3,460

  2,114

  1,435

  2,225

  2,539

  2,000

  1,464

  Meirionnydd

  1,625

  1,692

  5,175

  2,475

  1,313

  1,452

  1,728

  1,942

  1,665

  Ynys Môn

  1,954

  3,162

  6,559

  2,945

  3,701

  4,617

  4,847

  3,725

  2,973

  Cynon Valley

  2,767

  3,520

  5,035

  4,216

  3,680

  4,831

  6,793

  7,213

  4,984

  Merthyr Tydfil

  3,941

  6,006

  5,616

  3,806

  3,111

  5,116

  6,179

  5,090

  5,477

  Ogwr

  5,354

  7,881

  7,419

  6,016

  5,481

  6,051

  8,493

  6,805

  5,475

  Rhondda

  5,521

  7,117

  13,745

  8,943

  8,558

  10,959

  12,738

  17,771

  12,706

  Rhymney Valley

  5,162

  7,770

  6,856

  5,766

  6,238

  8,544

  10,648

  10,131

  6,595

  Taff Ely

  6,377

  10,201

  10,133

  5,886

  5,049

  5,782

  7,696

  5,751

  5,148

  Brecknock

  1,745

  1,602

  3,043

  1,715

  2,066

  3,444

  3,270

  1,689

  2,120

  Montgomeryshire

  1,411

  1,608

  3,685

  1,782

  1,741

  1,921

  2,119

  2,118

  2,171

  Radnor

  889

  1,497

  1,758

  1,108

  970

  1,109

  1,426

  1,187

  1,042

  Cardiff

  17,029

  19,559

  24,792

  19,551

  15,924

  19,094

  21,060

  17,933

  15,289

  Vale of Glamorgan

  5,082

  5,730

  7,776

  4,687

  3,903

  5,224

  5,981

  4,517

  4,031

  300
  made so far under the farm woodland scheme in Wales; and what is the proportion in those which have been accepted.

  Mr. Peter Walker
  The broadleaved component of all applications received is 76 per cent. Those applications which have been processed and approved so far have a broadleaved component of 94 per cent.

  National Botanical Garden
  Mr. Alan Williams
  To ask the Secretary of State for Wales what financial support he intends to make available for a Welsh national botanical garden based at Swansea; and if he will make a statement.

  Mr. Peter Walker
  No such proposal has been put to me.

  Capital Allocations
  Mr. Nicholas Bennett
  To ask the Secretary of State for Wales if he will give the capital allocations for each Welsh county and district for each year since 1981 and capital allocations hypothecated to particular services between 1981–82 and 1984–85.

  Mr. Peter Walker
  The information requested is given in the tables. Capital allocations shown for 1988–89 and 1989–90 are provisional. Allocations form only part of local authority capital investment capacity. Gross spending provision (excluding provision for law and order services) for all district and county councils in Wales for 1989–90 is £4·50 million, an increase of 8·2 per cent. over 1988–89.
  301

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Local authority

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  £'000s

  Port Talbot

  2,262

  2,489

  2,674

  2,315

  1,899

  3,509

  4,389

  3,843

  3,544

  Lliw Valley

  3,486

  4,569

  4,447

  3,782

  3,155

  3,692

  4,069

  3,638

  3,608

  Neath

  2,165

  5,239

  4,802

  2,779

  3,123

  3,731

  4,417

  3,978

  3,512

  Swansea

  9,398

  18,845

  17,957

  14,112

  10,788

  12,317

  12,563

  12,234

  10,418

  Clwyd

  8,561

  9,507

  12,653

  12,014

  12,249

  14,092

  16,649

  16,797

  12,840

  Dyfed

  8,967

  13,184

  11,175

  9,110

  11,369

  16,615

  16,594

  15,455

  16,948

  Gwent

  20,677

  29,506

  24,855

  21,437

  13,000

  17,582

  21,466

  18,479

  24,019

  Gwynedd

  7,124

  10,989

  7,222

  8,354

  11,528

  8,565

  9,197

  7,907

  7,903

  Mid Glamorgan

  18,624

  19,350

  17,193

  19,985

  17,102

  22,708

  24,077

  23,111

  26,648

  Powys

  5,304

  6,314

  4,634

  3,730

  3,904

  6,950

  7,111

  6,055

  6,110

  South Glamorgan

  18,080

  21,457

  19,395

  14,068

  23,008

  26,764

  32,411

  29,607

  18,132

  West Glamorgan

  12,398

  13,787

  11,949

  11,071

  14,389

  19,233

  20,124

  18,163

  22,247

  Total districts

  136,972

  200,440

  234,297

  170,359

  152,455

  188,325

  213,983

  189,570

  150,841

  Total counties

  99,735

  124,094

  109,076

  99,769

  106,649

  132,509

  147,629

  135,589

  130,033

  TOTAL WALES

  236,707

  324,534

  343,373

  270,128

  259,104

  320,834

  361,612

  323,286

  300,810

  Capital allocations hypothecated to services 1981–82

  £ thousand

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Urban programme

  Total allocation

  Alyn and Deeside

  0

  229

  0

  2,520

  685

  94

  3,528

  Colwyn

  0

  0

  0

  1,610

  980

  0

  2,590

  Delyn

  0

  0

  0

  1,350

  590

  326

  2,266

  Glyndwr

  0

  47

  0

  1,000

  346

  0

  1,393

  Rhuddlan

  0

  0

  0

  850

  1,011

  0

  1,861

  Wrexham Maelor

  0

  43

  0

  3,230

  1,881

  613

  5,767

  Carmarthen

  0

  0

  0

  2,030

  870

  40

  2,940

  Ceredigion

  0

  0

  37

  1,740

  934

  17

  2,728

  Dinefwr

  0

  0

  0

  850

  159

  0

  1,009

  Llanelli

  0

  0

  85

  1,950

  1,476

  384

  3,895

  Preseli

  0

  0

  0

  1,740

  267

  0

  2,007

  South Pembroke

  0

  0

  0

  1,140

  213

  75

  1,428

  Blaenau Gwent

  0

  241

  0

  4,010

  385

  629

  5,265

  Islwyn

  0

  312

  0

  2,280

  674

  208

  3,474

  Monmouth

  0

  0

  0

  1,850

  260

  0

  2,110

  Newport

  0

  702

  0

  6,500

  545

  610

  8,357

  Torfaen

  0

  34

  0

  2,890

  359

  158

  3,441

  Aberconwy

  0

  0

  0

  1,420

  656

  0

  2,076

  Arfon

  0

  1

  0

  2,500

  892

  190

  3,583

  Dwyfor

  0

  0

  0

  770

  316

  0

  1,086

  Meirionydd

  0

  0

  0

  1,020

  605

  0

  1,625

  Ynys Mon

  0

  16

  0

  1,370

  533

  35

  1,954

  Cynon Valley

  0

  0

  0

  2,430

  248

  89

  2,767

  Merthyr Tydfil

  0

  306

  0

  2,704

  773

  158

  3,941

  Ogwr

  0

  106

  0

  4,530

  645

  73

  5,354

  Rhondda

  0

  118

  102

  4,310

  458

  533

  5,521

  Rhymney Valley

  0

  353

  14

  3,650

  948

  197

  5,162

  Taff Ely

  0

  37

  87

  5,830

  374

  49

  6,377

  Brecknock

  0

  0

  0

  1,110

  635

  0

  1,745

  Montgomeryshire

  0

  31

  0

  950

  430

  0

  1,411

  Radnor

  0

  0

  0

  640

  249

  0

  889

  Cardiff

  0

  881

  0

  10,690

  5,050

  408

  17,029

  Vale of Glamorgan

  0

  0

  0

  3,200

  1,881

  1

  5,082

  Port Talbot

  0

  97

  0

  1,800

  261

  104

  2,262

  Lliw Valley

  0

  0

  0

  2,760

  726

  0

  3,486

  Neath

  0

  0

  0

  1,720

  393

  52

  2,165

  Swansea

  0

  320

  0

  6,674

  2,067

  337

  9,398

  Total Districts

  0

  3,874

  325

  97,618

  29,775

  5,380

  136,972

  Clwyd

  3,521

  3,499

  585

  0

  623

  333

  8,561

  Dyfed

  2,743

  4,792

  578

  0

  725

  129

  8,967

  Gwent

  3,758

  12,988

  723

  0

  3,003

  205

  20,677

  Gwynedd

  2,271

  2,685

  413

  0

  1,536

  219

  7,124

  Mid Glamorgan

  8,609

  6,167

  1,122

  0

  2,517

  209

  18,624

  Powys

  2,269

  2,338

  303

  0

  394

  0

  5,304

  South Glamorgan

  2,559

  13,898

  692

  0

  632

  299

  18,080

  West Glamorgan

  5,050

  3,623

  765

  0

  2,956

  4

  12,398

  Total Counties

  30,780

  49,990

  5,181

  0

  12,386

  1,398

  99,735

  302 303

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Urban programme

  Total allocation

  Total Wales

  30,780

  53,864

  5,506

  97,618

  42,161

  6,778

  236,707

  Capital allocations hypothecated to services 1982–83

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Urban programme

  Total allocation

  £000

  £000

  £000

  £000

  £000

  £000

  £000

  Alyn and Deeside

  0

  13

  0

  2,873

  784

  348

  4,018

  Colwyn

  0

  0

  0

  2,342

  1,520

  0

  3,862

  Delyn

  0

  0

  0

  1,681

  1,135

  727

  3,543

  Glyndwr

  0

  100

  0

  1,581

  276

  0

  1,957

  Rhuddlan

  0

  0

  0

  1,273

  1,191

  0

  2,464

  Wrexham Maelor

  0

  0

  0

  3,616

  1,592

  1,272

  6,480

  Carmarthen

  0

  0

  0

  3,823

  484

  4

  4,311

  Ceredigion

  0

  0

  52

  3,635

  693

  1

  4,381

  Dinefwr

  0

  0

  0

  1,278

  239

  200

  1,717

  Llanelli

  0

  0

  100

  3,104

  772

  1,734

  5,710

  Preseli

  0

  30

  0

  1,783

  771

  115

  2,699

  South Pembroke

  0

  0

  0

  2,365

  300

  160

  2,825

  Blaenau Gwent

  0

  0

  0

  10,172

  853

  1,086

  12,111

  Islwyn

  0

  0

  0

  4,685

  460

  547

  5,692

  Monmouth

  0

  0

  0

  2,917

  595

  51

  3,563

  Newport

  0

  578

  0

  10,956

  1,075

  1,141

  13,750

  Torfaen

  0

  0

  0

  4,370

  670

  289

  5,329

  Aberconwy

  0

  0

  0

  1,708

  515

  0

  2,223

  Arfon

  0

  0

  0

  2,936

  417

  457

  3,810

  Dwyfor

  0

  6

  0

  1,119

  383

  0

  1,508

  Meirionnydd

  0

  0

  0

  1,289

  403

  0

  1,692

  Ynys Mon

  0

  0

  0

  2,471

  681

  10

  3,162

  Cynon Valley

  0

  0

  0

  2,830

  552

  138

  3,520

  Merthyr Tydfil

  0

  25

  0

  2,885

  2,418

  678

  6,006

  Ogwr

  0

  113

  0

  6,197

  1,037

  534

  7,881

  Rhondda

  0

  212

  0

  5,546

  681

  678

  7,117

  Rhymney Valley

  0

  236

  0

  6,211

  934

  389

  7,770

  Taff Ely

  0

  5

  55

  7,020

  3,121

  0

  10,201

  Brecknock

  0

  0

  0

  1,283

  319

  0

  1,602

  Montgomeryshire

  0

  0

  0

  1,292

  276

  40

  1,608

  Radnor

  0

  0

  0

  1,376

  121

  0

  1,497

  Cardiff

  0

  997

  0

  13,607

  4,100

  855

  19,559

  Vale of Glamorgan

  0

  0

  0

  4,812

  895

  23

  5,730

  Port Talbot

  0

  0

  0

  1,842

  647

  0

  2,489

  Lliw Valley

  0

  0

  0

  4,078

  491

  0

  4,569

  Neath

  0

  0

  0

  4,118

  762

  359

  5,239

  Swansea

  0

  0

  0

  10,760

  7,397

  688

  18,845

  Clwyd

  4,016

  2,750

  184

  0

  2,314

  243

  9,507

  Dyfed

  3,726

  6,545

  720

  0

  1,705

  488

  13184

  Gwent

  4,211

  22,370

  1,163

  0

  1,700

  62

  29,506

  Gwynedd

  2,108

  2,660

  712

  0

  5,050

  459

  10,989

  Mid Glamorgan

  9,046

  7,745

  1,022

  0

  1,245

  292

  19,350

  Powys

  2,726

  2,770

  319

  0

  499

  0

  6,314

  South Glamorgan

  4,214

  14,430

  1,087

  0

  1,033

  693

  21,457

  West Glamorgan

  4,048

  4,740

  851

  0

  4,143

  5

  13,787

  Total Districts

  0

  2,315

  207

  145,834

  39,560

  12,524

  200,440

  Total Counties

  34,095

  64,010

  6,058

  0

  17,689

  2,242

  124,094

  Total Wales

  34,095

  66,325

  6,265

  145,834

  57,249

  14,766

  324,534

  Capital allocations hypothecated to services 1983–84

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Urban programme

  Total allocation

  £000

  £000

  £000

  £000

  £000

  £000

  £000

  Alyn and Deeside

  0

  0

  0

  2,922

  462

  404

  3,788

  Colywn

  0

  0

  0

  2,483

  594

  50

  3,127

  Delyn

  0

  0

  0

  2,025

  1,357

  818

  4,200

  Glyndwr

  0

  0

  0

  2,345

  311

  0

  2,656

  Rhuddlan

  0

  0

  0

  1.189

  1,408

  0

  2,597

  Wrexham Maelor

  0

  0

  0

  3,833

  787

  737

  5,357

  Carmarthen

  0

  0

  0

  8,160

  652

  112

  8,924

  Ceredigjon

  0

  0

  0

  4,478

  657

  0

  5,135

  Dinefwr

  0

  0

  0

  2,334

  211

  198

  2,743

  304 305

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Urban programme

  Total allocation

  £000

  £000

  £000

  £000

  £000

  £000

  £000

  Llanelli

  0

  0

  82

  3,745

  984

  584

  5,395

  Preseli

  0

  0

  0

  3,526

  477

  660

  4,663

  South Pembroke

  0

  0

  0

  3,804

  274

  365

  4,443

  Blaenau Gwent

  0

  0

  0

  10,236

  843

  1,097

  12,176

  Islwyn

  0

  90

  0

  5,215

  415

  179

  5,899

  Monmouth

  0

  0

  0

  4,643

  472

  61

  5,176

  Newport

  0

  60

  0

  9,137

  1,331

  510

  11,038

  Torfaen

  0

  0

  0

  4,370

  621

  275

  5,266

  Aberconwy

  0

  0

  0

  2,006

  569

  0

  2,575

  Arfon

  0

  0

  0

  3,469

  418

  320

  4,207

  Dwyfor

  0

  35

  0

  3,032

  393

  0

  3,460

  Meirionnydd

  0

  0

  0

  3,282

  1,804

  89

  5,175

  Ynys Mon

  0

  530

  0

  5,260

  650

  119

  6,559

  Cynon Valley

  0

  0

  0

  4,323

  451

  261

  5,035

  Merthyr Tydfil

  0

  132

  0

  3,993

  1,034

  457

  5,616

  Ogwr

  0

  79

  0

  5,870

  1,202

  268

  7,419

  Rhondda

  0

  105

  0

  12,030

  816

  794

  13,745

  Rhymney Valley

  0

  205

  0

  5,465

  811

  375

  6,856

  Taff Ely

  0

  58

  0

  8,886

  1,077

  112

  10,133

  Brecknock

  0

  0

  0

  2,851

  192

  0

  3,043

  Montgomeryshire

  0

  0

  0

  3,393

  292

  0

  3,685

  Radnor

  0

  0

  0

  1,593

  165

  0

  1,758

  Cardiff

  0

  2,038

  0

  17,835

  3,915

  1,004

  24,792

  Vale of Glamorgan

  0

  0

  0

  5,333

  2,219

  224

  7,776

  Port Talbot

  0

  50

  0

  1,982

  377

  265

  2,674

  Lliw Valley

  0

  0

  0

  3,992

  410

  45

  4,447

  Neath

  0

  0

  0

  3,892

  419

  491

  4,802

  Swansea

  0

  0

  0

  11,365

  5,520

  1,072

  17,957

  Clwyd

  4,746

  5,460

  820

  0

  759

  868

  12,653

  Dyfed

  3,817

  5,044

  720

  0

  1,324

  270

  11,175

  Gwent

  5,430

  16,199

  1,040

  0

  1,565

  621

  24,855

  Gwynedd

  2,035

  3,517

  716

  0

  747

  207

  7,222

  Mid Glamorgan

  7,391

  7,527

  852

  0

  1,149

  274

  17,193

  Powys

  2,102

  2,073

  194

  0

  257

  8

  4.634

  South Glamorgan

  4,557

  11,923

  741

  0

  1,600

  574

  19,395

  West Glamorgan

  4,247

  4,943

  1,476

  0

  1,283

  0

  11,949

  Total Districts

  0

  3,382

  82

  184,297

  34,590

  11,946

  234,297

  Total Counties

  34,325

  56,686

  6,559

  0

  8,684

  2,822

  109,076

  Total Wales

  34,325

  60,068

  6,641

  184,297

  43,274

  14,768

  343,373

  Capital allocations hypothecated to services 1984–85

  £000

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Special projects

  Urban programme

  Total allocation

  Alyn and Deeside

  0

  0

  0

  2,234

  370

  0

  641

  3,245

  Colwyn

  0

  0

  0

  2,089

  475

  0

  111

  2,675

  Delyn

  0

  0

  0

  1,459

  731

  900

  1,371

  4,461

  Glyndwr

  0

  0

  0

  1,521

  249

  0

  0

  1,770

  Rhuddlan

  0

  0

  0

  951

  1,126

  0

  0

  2,077

  Wrexham Maelor

  0

  0

  0

  3,746

  630

  0

  1,348

  5,724

  Carmarthen

  0

  0

  0

  3,571

  539

  0

  15

  4,125

  Ceredigion

  0

  0

  0

  2,790

  526

  0

  0

  3,316

  Dinefwr

  0

  0

  0

  1,414

  169

  0

  111

  1,694

  Llanelli

  0

  0

  66

  2,737

  787

  0

  614

  4,204

  Preseli

  0

  0

  0

  2,862

  382

  350

  576

  4,170

  South Pembroke

  0

  0

  0

  2,323

  219

  350

  547

  3,439

  Blaenau Gwent

  0

  0

  0

  6,238

  674

  0

  1,403

  8,315

  Islwyn

  0

  0

  0

  4,499

  332

  0

  299

  5,130

  Monmouth

  0

  0

  0

  3,599

  378

  0

  49

  4,026

  Newport

  0

  0

  0

  6,554

  734

  0

  708

  7,996

  Torfaen

  0

  0

  0

  4,002

  497

  0

  197

  4,696

  Aberconwy

  0

  0

  0

  1,635

  307

  0

  0

  1,942

  Arfon

  0

  0

  0

  2,940

  334

  0

  82

  3,356

  Dwyfor

  0

  0

  0

  1,800

  314

  0

  0

  2,114

  Meirionnydd

  0

  0

  0

  1,352

  1,123

  0

  0

  2,475

  Ynys Mon

  0

  0

  0

  2,350

  520

  0

  75

  2,945

  Cynon Valley

  0

  0

  0

  3,090

  361

  0

  765

  4,216

  Merthyr Tydfil

  0

  0

  0

  2,521

  827

  0

  458

  3,806

  Ogwr

  0

  0

  0

  5,011

  962

  0

  43

  6,016

  Rhondda

  0

  0

  0

  7,468

  653

  0

  822

  8,943

  Rhymney Valley

  0

  240

  0

  4,412

  649

  0

  465

  5,766

  Taff Ely

  0

  20

  0

  4,999

  862

  0

  5

  5,886

  306 307

  Local authority

  Education

  Transport

  PSS

  Housing

  Other services

  Special projects

  Urban programme

  Total allocation

  Brecknock

  0

  0

  0

  1,321

  154

  0

  240

  1,715

  Montgomeryshire

  0

  0

  0

  1,548

  234

  0

  0

  1,782

  Radnor

  0

  0

  0

  976

  132

  0

  0

  1,108

  Cardiff

  0

  1,881

  0

  12,557

  3,132

  0

  1,981

  19,551

  Vale of Glamorgan

  0

  0

  0

  3,080

  1,375

  0

  232

  4,687

  Port Talbot

  0

  0

  0

  1,586

  302

  0

  427

  2,315

  Lliw Valley

  0

  0

  0

  3,220

  328

  0

  234

  3,782

  Neath

  0

  0

  0

  2,064

  335

  0

  380

  2,779

  Swansea

  0

  16

  0

  9,073

  3,282

  500

  1,241

  14,112

  Clwyd

  3,797

  6,174

  500

  0

  607

  0

  936

  12,014

  Dyfed

  3,054

  4,059

  600

  0

  1,059

  0

  338

  9,110

  Gwent

  4,344

  14,418

  850

  0

  1,252

  0

  573

  21,437

  Gwynedd

  1,628

  5,390

  400

  0

  598

  0

  338

  8,354

  Mid Glamorgan

  5,513

  11,551

  1,200

  0

  919

  500

  302

  19,985

  Powys

  1,682

  1,742

  100

  0

  206

  0

  0

  3,730

  South Glamorgan

  3,646

  7,527

  600

  0

  1,280

  0

  1,015

  14,068

  West Glamorgan

  3,398

  5,437

  1,000

  0

  1,126

  0

  110

  11,071

  Total districts

  0

  2,157

  66

  125,592

  25,004

  2,100

  15,440

  170,359

  Total counties

  27,062

  56,298

  5,250

  0

  7,047

  500

  3,612

  99,769

  Total Wales

  27,062

  58,455

  5,316

  125,592

  32,051

  2,600

  19,052

  270,128

EMPLOYMENT

  Child Employees
  Mr. Meacher
  To ask the Secretary of State for Employment how many children below the age of 16 years have been identified by his inspectors as involved in illegal employment during each year since 1980.

  Mr. Nicholls
  Details of individual instances of illegal employment are not kept but convictions under section 1 of the Employment of Women, Young Persons and Children Act 1920, concerning the illegal employment of children since 1980 are as follows:

  Year

  Convictions

  1981

  4

  1982

  4

  1983

  3

  1984

  6

  1985

  6

  11986

  4

  21986–87

  9

  31987–88

  42

  1 January to March.

  2 April to March.

  3 April to March.

  4 Provisional.

  Note Some of these convictions may involve instances of multiple employment.

  Back-to-Back Operations
  Mr. Meacher
  To ask the Secretary of State for Employment if he will prosecute the Inter-Exec SM1 for running a back-to-back operation contrary to the Employment Agencies Act 1973; and if he will make a statement.

  Mr. Lee
  The matter is being investigated and a decision will be made when investigations have been completed.

  Wages Councils
  Mr. Meacher
  To ask the Secretary of State for Employment how many young workers under 21 years of age were employed in trades covered by wages councils in each year 1985 to 1988, inclusive.

  Mr. Nicholls
  [holding answer 21 February 1989]: No count is made of the number of young people under 21 in wages council trades. However, an estimate made in 1985 suggested a figure of around half a million.

TRADE AND INDUSTRY

  Insolvency
  Mr. Holt
  To ask the Chancellor of the Duchy of Lancaster whether he has any proposals to seek to amend the Insolvency Act 1986; and if he will make a statement.

  Mr. Maude
  There are no plans to amend the Insolvency Act 1986 itself in the foreseeable future. Amendments to the insolvency legislation are included however in the Companies Bill. Part 7 of the Bill, which relates to financial markets, modifies certain parts of the Insolvency Act 1986. Section 323 of the Insolvency Act 1986, which deals with set-off in bankruptcy, is amended by part VIII of the Bill. In order to retain harmonisation rule 4.90 of the Insolvency Rules 1986, which deals with set-off in companies winding up, will also be amended, although this amendment will be effected by way of a change to the Insolvency Rules 1986 and not by the Companies Bill.

  Additional minor amendments to the insolvency legislation will be considered when suitable legislative vehicles become available.

  Secured Loans
  Mr. Tim Smith
  To ask the Chancellor of the Duchy of Lancaster what evidence he has on the level of understanding among consumers of the concept of a secured loan.

  Mr. Maude
  The results of a survey published by the Office of Fair Trading last autumn showed widespread
  309
  lack of understanding of the concept of a secured loan; 44 per cent. of respondents claimed to have no idea of the difference between a secured loan sand an unsecured loan and only 11 per cent. understood unprompted that a secured loan could result in the loss of the borrower's home.

  Mr. Tim Smith
  To ask the Chancellor of the Duchy of Lancaster what proposals he has to make regulations under the Consumer Credit Act 1974 requiring advertisements for secured loans to carry a health warning.

  Mr. Maude
  As part of the review of the Consumer Credit (Advertisement) Regulations, it is proposed that advertisements for secured loans should include a warning of the risk of repossession in the event of default.

  Manufacturing Investment (North West)
  Mr. Pike
  To ask the Chancellor of the Duchy of Lancaster if he will publish a table, using 1979 at a value of 100, of investment in real terms in manufacturing in the north west for each of the last 10 years; and if he will make a statement.

  Mr. Maude
  No regional breakdown of manufacturing investment for 1987 and 1988 is yet available. The required information for the period 1979–86 is shown in the following table:

  Manufacturing investment in the North West, in constant (1980) prices, as a percentage of the 1979 level

  Year

  Per cent.

  1979

  100

  1980

  89

  1981

  63

  1982

  58

  1983

  61

  1984

  68

  1985

  72

  1986

  62

  Source: Annual Census of Production.

  Since 1986, manufacturing investment in the country as a whole has risen sharply; and is predicted to rise even faster.

  Domestic Animals (Pelts and Skins)
  Mr. Hinchliffe
  To ask the Chancellor of the Duchy of Lancaster what steps his Department takes to licence and monitor the activities of hide and skin merchants concerned with rendering the pelts and skins of domestic animals.

  Mr. Alan Clark
  [holding answer 22 February 1989]: My Department does not licence or monitor the activities of hide and skin merchants.

NORTHERN IRELAND

  Explosives
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if, pursuant to his answer to the hon. Member for Londonderry, East,Official Report, 23 January, column 396, he will indicate the amount of explosives recovered from neutralised devices, the amount used in explosions; and the number of such terrorist explosions for each of the same years.
  310
  Mr. Ian Stewart
  The further information is not readily available in the exact form requested and could only be obtained at disproportionate cost. Such information as is available relates only to the number of explosions.

  Explosions recorded in RUC "N" division1

  Number

  1984

  40

  1985

  30

  1986

  29

  1987

  44

  1988

  51

  1 "N" Division includes the City of Londonderry.

  RPI Error Fund
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland if he will make a statement about the operation of the retail prices index error fund; and if he will publish a table showing(a) those organisations which applied to the Department of Health and Social Security for funding and the outcome and amounts of any award and (b) those organisations which applied for funds under the scheme administered by the Northern Ireland voluntary trust and the outcome and amount of any award.

  Mr. Needham
  [holding answer 22 February 1989]: I refer the hon. Gentleman to the reply given to a question by my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on 3 May about the retail prices index error fund. On 9 May 1988 I announced that Northern Ireland would recieve £250,000 as its share of the fund and published the arrangements under which grants would be made. Applications were invited from voluntary organisations which resulted in the receipt of bids 10 times in excess of the amount available for distribution. The Department of Health and Social Services gave careful consideration to all applications which it received from regional organisations and grants were subsequently made having regard to the published criteria and to the Department's own strategic priorities. The list of those organisations which applied to the Department and the details of the awards made are voluminous, and I have therefore placed. a copy in the Library.

  The sum of £.120,000 was allocated to Northern Ireland. voluntary trust for disbursement to locally-based. organisations. Details of the applications considered by Northern Ireland voluntary trust and the grants made by it to date have also been placed in the Library.

  I am pleased to report that Northern Ireland is now also to receive a further £251,000 of the additional monies available from the retail prices index error fund which my hon. Friend the Minister of State for Social Security announced on 9 February. Arrangements for the allocation of this sum will be finalised shortly.

  House Searches
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland (1) how many house searches were carried out in Armagh during December 1988 and January 1989 by(a) the Army (b) police and (c) the Ulster Defence Regiment; in how many of the houses searched arms, ammunition or explosives were found; and whether there was reasonable suspicion in respect of each house searched or the occupants of each house searched:
  311
  (2) how many house searches were carried out by the (a) Royal Ulster Constabulary, (b) Army and (c) Ulster Defence Regiment in each of the Northern Ireland parliamentary constituencies during the year 1 January 1988 to 31 December 1988; whether there was reasonable suspicion in respect of each house searched, or the occupants of each house searched; and how many houses which were searched did not include arms, ammunition or explosives.

  Mr. Ian Stewart
  [holding answer 31 January 1989]: I assume that the hon. Member is referring to searches under section 15 of the Northern Ireland (Emergency Provisions) Act 1978. The only figures that are readily available relate to Northern Ireland as a whole. I understand that, in 1988, the RUC carried out 4,136 house searches in Northern Ireland under that section; information about finds as a result of those searches is not readily available. Army records indicate that they carried out 889 searches of houses and other premises under section 15 during that period, although that figure is subject to confirmation, but the majority of these were in conjunction with the RUC and are also counted in their figures. The figure for the Army includes searches by the UDR. Of these 889 searches, arms, ammunition, explosives, transmitters, scanning receivers or hides were found in 102 cases. Under section 15(2) of the Act it is a requirement that there should be reasonable grounds for suspicion that munitions are being held unlawfully in a private dwelling, or that there is a transmitter or scanning receiver there, and all searches are conducted on that basis.

NATIONAL FINANCE

  Cost of Living
  Mr. Gordon Brown
  To ask the Chancellor of the Exchequer if he will provide an index for the cost of living for consumers based on the retail price index but excluding indirect taxes, including value added tax, excise duties and rates, for the calendar year 1979 to the calendar years 1986, 1987 and 1988 taking the value of the index as 1979 equals 100.

  Mr. Lilley
  The following is an estimate of movement in the RPI excluding VAT, excise duties and rates measured at December each year. Calendar year information is not readily available.

  December 1979=100

  Year

  RPI

  1979

  100

  1980

  115

  1981

  127

  1982

  133

  1983

  140

  1984

  146

  1985

  154

  1986

  159

  1987

  167

  1988

  179

ENERGY

  North Sea Oil
  Mr. Sillars
  To ask the Secretary of State for Energy what are the implications of the operation of the Single European Act for Her Majesty's Government's freedom to determine policy towards the North sea oil industry.

  Mr. Peter Morrison
  As a result of the Single European Act, in determining its policy the United Kingdom must take appropriate account of articles 99, 100A, 100B, 118A and title VII of the EEC treaty.

  Information Technology
  Mr. Atkinson
  To ask the Secretary of State for Energy if he will make a statement of progress on the introduction of information technologies to facilitate internal communications in his Department and the provision of information to the public concerning those areas for which he is responsible; and if he has any further plans to apply the newest technologies in these fields.

  Mr. Parkinson
  My Department does not currently use information technology (IT) for internal communications to any great extent. It is moving to a new headquarters building later this year, where a broadband cabling framework is being installed. This is using new technology which will provide internal communications by computer where cost effective.

  While IT is widely used by my officials to collate and prepare information for the public, the IT systems do not provide direct public access to information, nor are there any plans to do so. However, my Department has an IT strategy which is approved by top management and which is subject to continual refinement, monitoring and review.

  Nuclear Materials (Licences)
  Mr. Flynn
  To ask the Secretary of State for Energy if he will list the applications for licences to ship nuclear materials which he has received from British Nuclear Fuels plc in the last six months, showing in each case the ports of departure and destination and the names of the vessels involved.

  Mr. Michael Spicer
  It has been the standard practice of successive Governments not to make public the details of export licence applications.

  Gas
  Mr. Michael Brown
  To ask the Secretary of State for Energy if he has any information as to which country in(a) the industrialised world and (b) the European Economic Community charges the highest prices for the supply of firm gas to large industrial users.

  Mr. Peter Morrison
  The only information available on gas prices in all industrialised countries is published by the IEA and covers all supplies to industrial consumers. Of those countries who supplied data in 1987, Japan had the highest prices. In the European Community, prices were highest in Ireland.

HEALTH

  Scientific Services
  Mr. Fearn
  To ask the Secretary of State for Health how many staff there were in the scientific services, broken down into the professional groups(a) medical consultant, (b) PTA/A top grade scientists, (c) other grades of PTA/A staff, (d) PTB/A MLSO staff and (e) radiographers in post in each December from 1984 to 1988.

  Mr. Mellor
  We do not collect routinely detailed information on staff in post at December. The information available as at 30 September each year is set out in the table.

  Table: Staff in the scientific services: England As at 30 September each year

  Whole time equivalents1

  Staff Group

  1984

  1985

  1986

  19873

  Medical Staff2

  2,300

  2,370

  2,410

  2,430

  Biochemists

  1,250

  1,200

  1,180

  1,380

  Top Grade

  90

  110

  120

  150

  Principal

  240

  240

  250

  310

  Senior

  460

  440

  430

  490

  Basic Post Probationer

  280

  240

  220

  230

  Basic Probationer

  170

  160

  150

  200

  SQOO4

  5

  5

  10

  5

  Physicists

  700

  720

  770

  790

  Top Grade

  60

  70

  70

  70

  Principal

  190

  200

  220

  240

  Senior

  270

  290

  280

  260

  Basic Post Probationer

  100

  90

  80

  90

  Basic Probationer

  70

  90

  110

  130

  Other Scientists

  370

  380

  440

  550

  Top Grade

  20

  20

  30

  30

  Principal

  40

  50

  50

  70

  Senior

  100

  110

  130

  140

  Basic Post Probationer

  50

  70

  90

  100

  Basic Probationer

  70

  100

  120

  140

  SQOO4

  80

  40

  30

  70

  Clinical Psychologists

  1,360

  1,520

  1,620

  1,700

  Top Grade

  120

  150

  200

  240

  Principal

  270

  330

  360

  410

  Senior

  570

  600

  600

  580

  Basic Post Probationer

  220

  220

  210

  200

  Basic Probationer

  190

  210

  240

  270

  SQOO4

  5

  5

  10

  10

  Medical Laboratory

  Scientific Officers

  14,550

  14,540

  14,620

  15,470

  Radiographers

  Qualified

  7,750

  7,990

  8,140

  8,250

  Helpers

  160

  190

  230

  270

  Source: Department of Health (SR7) annual census of NHS non-medical manpower.

  1 Figures independently founded to the nearest ten whole-time equivalent.

  2 Including consultants in pathology, radiology and radiotherapy.

  3 Due to occupation coding problems, the 1987 figures, for some regions and therefore for England are not strictly comparable with those for previous years.

  4 Precise grade not held centrally.

  5 Less than 5·.0 whole time equivalents.

  Notes:

  The staff groups whose pay and conditions of service were negotiated in Committee A of the former Professional and Technical Staffs Council "A" before its demise in 1983 were Biochemists, Physicists, Other Scientists and Clinical Psychologists. Since 1983 pay of these groups has been the responsibility of the Scientific and
  314
  Professional Staffs Council.

  Trainee and Basic clinical psychologist grades were introduced with effect from 1 February 1987 in place of the former basic probationer and basic post probationer grades.

  Nursing Homes

  Mr. Pendry
  To ask the Secretary of State for Health what plans he has to prevent re-registration of any private residential home owner or private nursing home owner found guilty of ill treatment or abuse of residents.

  Mr. Mellor
  It is for local authorities and health authorities respectively to satisfy themselves, by making thorough inquiries, of the suitability of applicants for registration in relation to residential care homes and nursing homes. We have advised local authorities that, when making such inquiries they should inform the applicant that by virtue of the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (as amended) a conviction which would otherwise be "spent" would have to be declared.

  The Department assists by acting as a channel of information between authorities about people who have had their registration cancelled and provides a consultancy service to authorities seeking information about applications in respect of homes with children and young people under age 18.

  Residential Homes
  Mr. Tony Lloyd
  To ask the Secretary of State for Health if he will specify the number of residential homes(a) in the private sector, (b) owned by local authorities and (c) run by health authorities.

  Mr. Mellor
  Information on the number of residential care homes in the private sector and of those owned by local authorities for years prior to 31 March 1987 is published in "Residential Accommodation for Elderly and Younger Physically Handicapped People: All Residents in Local Authority, Voluntary and Private Homes Year ending 31 March 1986" and "Homes and Hostels for Mentally Ill and Mentally Handicapped People, at 31 March 1986"; copies of which are available in the Library. Provisional information as at 31 March 1987 is given in the table. Health authorities have no powers to run residential care homes.

  Number1 of residential care homes at 31 March 1987: England

  Residential care homes

  Number

  Private registered homes

  7,559

  Homes owned by local authority2

  4,642

  1 Provisional. Includes homes for alcohol and drug misusers.

  2 Includes unstaffed homes and hostels.

  Trent Regional Health Authority
  Mr. Redmond
  To ask the Secretary of State for Health which hospitals are involved within the Trent regional health area in the resource management initiative; and what information he has as to whether any will be joining the initiative in the next year.

  Mr. Freeman
  Pilgrim hospital in South Lincolnshire district health authority is one of the six pilot resource management sites. A decision on the next tranche of hospitals that will be joining the resource management initiative will be made shortly. Additional hospitals in Trent are expected to be involved.
  315
  Mr. Redmond
  To ask the Secretary of State for Health if he will list by district health authority the services provided within the Trent regional health authority; and what is their catchment area.

  Mr. Mellor
  District health authority services are the responsibility of the relevant regional health authority, in this case, Trent. The hon. Member may care to write to the chairman of Trent regional health authority to obtain the information that he seeks.

  Resource Management
  Mr. Galbraith
  To ask the Secretary of State for Health into which hospitals he plans to introduce resource management initiatives; what are the provisional dates for this; and what consultancy firms will undertake the work.

  Mr. Freeman
  Future plans on the resource management initiatives were set out in the White Paper, "Working for Patients". It is planned to extend the RMI to the 260 main acute hospitals in England over a phased period starting with 20 sites in 1989–90. A decision on the first tranche of hospitals will be made shortly. Decisions on which consultancy firms to employ will be principally the responsibility of health authorities.

  NHS Nursing Homes
  Sir Eldon Griffiths
  To ask the Secretary of State for Health if he will publish in the Official Report a list of the number of National Health Service nursing homes at present in operation in each of the following regions and the number of beds in each (a) East Anglia, (b) North East Thames, (c) North West Thames, (d) South West Thames and (e) South East Thames.

  Mr. Mellor
  We are aware of four.

  Name

  District health authority

  Beds

  St. Olave's

  Lewisham and North Southwark

  17

  Meadow Lodge

  Brighton

  20

  Brownswood Road

  Hackney

  22

  St. Leonard's

  Hackney

  24

  Disabled People
  Mr Ashley
  To ask the Secretary of State for Health what measures he is taking to ensure that severely physically disabled people do not remain in acute hospital beds, in an inappropriate setting for long-term care, because of a shortfall of alternative provisions.

  Mr. Mellor
  Responsibility for providing the most appropriate type of care for disabled people rests with health and local authorities. It is up to each authority to determine the level and pattern of services in their area in the light of local priorities and resources. The Department recently issued a Health Circular/Local Authority Circular, HC(88)43/LAC(88)14, and a Health Notice/Local Authority Social Services Letter, HN(88)26/LASSL(88)8, which drew attention to the need to promote the independence of disabled people and to use the acute, rehabilitation and continuing care services in an effective way.

  Mr. Hannam
  To ask the Secretary of State for Health how many local authorities have made use of their power 316
  to co-opt disabled people on to local authority committees under section 15 of the Chronically Sick and Disabled persons Act 1970.

  Mr Mellor
  We do not hold this information centrally. The legislation to which the hon. Member refers is now reinforced by section 10 of the 1986 Disabled Persons (Services, Consultation and Representation) Act. The social services inspectorate is currently undertaking a monitoring exercise of the effect on social services departments of those sections of the 1986 Act so far implemented. This should provide some valuable information as to how local authorities are developing awareness of the rights of disabled people to be represented.

  Residential and Nursing Homes
  Mr. Ashley
  To ask the Secretary of State for Health what measures he is taking to regulate and monitor the standards of care in residential care homes and nursing homes.

  Mr. Mellor
  I refer the right hon. Member to my reply to my hon. Friend the Member for Wyre Forest (Mr. Coombs) on 23 February at column 793.

  Hospital Closures
  Mr. Cummings
  To ask the Secretary of State for Health whether the Northern regional health authority intends to close any hospitals or community health units as part of its re-organisation.

  Mr. Freeman
  I presume that the hon. Member is referring to proposals for re-organising the management arrangements for health services in Easington. There are no hospital closures involved. Acute psychiatric in-patient accommodation will be transferred from Winterton hospital to Cherry Knowle hospital, which will significantly improve access for patients from north Easington. Overall, the package increases expenditure on health care for the people of Easington.

  Patients (Travelling Distance)
  Mr. Cummings
  To ask the Secretary of State for Health if, as a result of the proposed reorganisation of the Durham, Hartlepool and Sunderland health authorities, he envisages that there will be a general increase in the distance travelled by patients to and from centres for treatment.

  Mr. Freeman
  No. I understand that for all general hospital services there is no proposed change in the centre of treatment with the exception of mental illness services for the population of north Easington where the distance travelled will be significantly reduced.

  Children
  Sir Ian Gilmour
  To ask the Secretary of State for Health whether he has any estimate of the numbers and percentages of children being brought up in(a) once-married two-parent families, (b) two-parent families where the parents are married, but one parent is not the natural parent, (c) two-parent families where the parents are not married and (d) lone-parent families, distinguishing between widowers and widows, divorced, separated and never-married lone parents.
  317
  Mr. Freeman
  I regret that not all the information requested is available. The numbers and percentages of dependent children in the different types of families in Great Britain in 1986 are estimated to be as follows:

  Number of dependent children thousands

  Percentage

  Dependent children in:

  Married couple families (includes some cohabiting couples)

  11,500

  87·6

  Lone mother families

  Single

  310

  2·4

  Separated

  340

  2·6

  Divorced

  730

  5·5

  Widowed

  120

  0·9

  Lone father families

  Single

  10

  1·1

  Separated

  40

  Divorced

  60

  Widowed

  40

  All dependent children

  13,140

  100

  Source: General household survey and labour force survey.

  Notes:

  1. Components do not add precisely to total, because of rounding.

  2. A dependent child is one aged under 16 or from 16 to 18 and in full-time education or on one of the Government training schemes.

  3. Adults with children are classified as lone parents if they did not describe themselves as either married or living together as married.

  Dentists
  Mr. Sean Hughes
  To ask the Secretary of State for Health what is the current state of progress in the negotiations for a new contract for general dental practitioners; and whether he will make a statement.

  Mr. Mellor
  Following preliminary discussions with representatives of the dental profession, we are currently drawing up proposals for formal negotiations, which we hope to begin shortly.

  Tranquillisers
  Mr. Fearn
  To ask the Secretary of State for Health what is the incidence of teratogenicity in babies born to women taking benzodiazepines.

  Mr. Mellor
  We do not hold this information.

  Mr. Fearn
  To ask the Secretary of State for Health what information he has on the number of people who have died from major convulsions following benzodiapine withdrawal; and who collects and holds such information.

  Mr. Mellor
  There is no central register of those people taking benzodiazepine or other drugs. We do not therefore know how many people who have died of major convulsions were also suffering from withdrawal symptoms from a particular drug or drugs.

  Mr. Fearn
  To ask the Secretary of State for Health whether his Department issues any specific advice on the prescribing of benzodiazepines to the elderly.
  318
  Mr. Mellor
  The Department funds the free distribution to all doctors of a number of independent publications which have included general guidance on the prescribing of benzodiazepines applicable to all patients. "Prescribers' Journal" and the "British National Formulary" have referred specifically to the elderly.

  Ambulance Service
  Mr. Fearn
  To ask the Secretary of State for Health if he will list the various places where information on the number of patients whose stay in hospital is extended due to the non-availablility of ambulance services or other transport facilities is held.

  Mr. Freeman
  Such information is not collected centrally but may be available at individual hospitals.

  AIDS
  Mr. Moss
  To ask the Secretary of State for Health when he intends to publish "AIDS and Drug Misuse, part 2; a report from the Advisory Council on the Misuse of Drugs"; and if he will make a statement.

  Mr. Mellor
  The advisory council's report was published today and copies have been placed in the Library.

  We are grateful to the council for producing this report and welcome its advice. We are considering carefully those recommendations which are addressed to central Government. We will be giving this report a wide circulation to assist authorities in planning and delivering services, and to inform other interested agencies.

  Private Patients
  Mr. Nicholas Bennett
  To ask the Secretary of State for Health if decisions have been taken on the central reference lists of model charges for National Health Service private patients for the year from 1 April.

  Mr. Mellor
  From 1 April 1987 health authorities have been able to determine their charges for private patient facilities. Action is now in hand to enable them also to determine, from 1 April 1989, charges for overseas visitors liable to pay. The Health and Medicines Act enables those authorities choosing to set their own charges to do so on a commercial basis.

  The central reference lists of model charges for private patients and overseas visitors are given in the tables. Model charges from 1 April 1989 are for in-patients 6·6 per cent. higher and for out-patients 7·2 per cent. higher than those for 1988–89. The figures take account of increased costs (including capital depreciation) and, as before, reflect the fact that private patients have shorter lengths to stay than NHS patients. As in previous years charges for overseas visitors are based on those for private patients.

  Charges for amenity beds are increased in line with increased costs. It is intended that after 1989–90 no further reference lists will be produced.
  319

  Central Reference List (Model Charges): 1989/90

  In-Patients

  Daily charges to private patients not paying consultant(s) separately and to overseas visitors

  Daily charges to private patients paying consultant(s) separately

  Single room

  Other accommodation

  Single room

  Other accommodation

  £

  £

  £

  £

  Class A (Long-Stay Hospitals)

  99

  90

  93

  85

  Class B (Psychiatric Hospitals)

  90

  82

  85

  77

  Class C1 (mainly Acute and other hospitals in non-teaching districts)

  152

  138

  143

  130

  Class C2 (Acute and other hospitals in non-teaching districts)

  181

  164

  170

  155

  Class D (Hospitals in London teaching districts (other than hospitals in Classes A and B))

  241

  219

  228

  207

  Class E (Hospitals in provincial teaching districts (other than hospitals in Classes A and B))

  194

  177

  183

  167

  Central Reference List (Model Charges): 1989–90

  Out-Patients

  Services Provided

  Hospital Class A-E

  Hospital Class F and G

  £

  £

  Consultation

  1.

  i. Private Patients—for each attendance other than attendances associated with the procedures listed in paragraph 2–10

  7.00

  14.00

  ii. Overseas Visitors—a patient on each attendance at a hospital other than attendances directly associated with the procedures listed in paragraphs 4–12

  14·50

  23·00

  Day Cases

  2

  i. Private Patients—charges per day exclusive of charges for procedures listed in paragraphs 4–10

  30·50

  31·50

  ii. Overseas Visitors—charges per day exclusive of charges for procedures listed in paragraphs 4–12

  30·50

  31·50

  For Overseas Visitors only

  For the purpose of this item a day case is a patient who attends as a non-resident patient for investigation, treatment or operation and who occupies a bed without staying overnight.

  Day Patients

  3

  i. Private Patients—charges per day exclusive of charges for procedures listed in paragraphs 4–10

  35·50

  37·00

  ii. Overseas Visitors—charges per day exclusive of charges for procedures listed in paragraphs 4–12

  35·50

  37·00

  For overseas visitors only

  For the purpose of this item a day patient is someone who attends regularly for a course of treatment without necessarily occupying a bed or staying overnight

  320

  Services Provided

  Hospital Class A-E

  Hospital Class F and G

  £

  £

  Pathology

  4. For each request

  7·50

  15·50

  Radiodiagnosis, nuclear medicine and ultrasound

  5

  i. Charges per KÖrner unit value (The units charged for each procedure are as listed at annex B of HC(88)11)

  9.00 per unit for first 6 units, 1·00 for each additional unit over 6

  12·00 per unit for first 6 units, 1·25 for each additional unit over 6

  ii. CT scanning

  107·00

  128·50

  Radiotherapy

  6. For treatment in any one day

  20·00

  45·00

  Physiotherapy and remedial gymnastics

  7. For each attendance

  6·50

  12·00

  Occupational therapy

  8. For treatment in any one day

  10·00

  11·00

  Other diagnostic procedures

  9

  i. Audiometry

  5· 50

  5·50

  ii. Electrocardiography, for each testing session

  10·50

  17·50

  iii. Electroencephalography, for each testing session

  38·50

  83·50

  iv. Electromyography, for each testing session

  24·00

  50·50

  Use of operating theatre facilities

  10. Use of operating theatre facilities:

  i. For less than 10 minutes

  24·000

  29·50

  ii. For 10 minutes to 30 minutes

  46·50

  59·00

  iii. For more than 30 minutes

  70·00

  88·50

  Dialysis (Overseas Visitors only)

  11. For Haemodialysis or intermittent peritoneal dialysis:

  i. With training or routine at a hospital, per session.

  119·00

  119·00

  ii. routine, at home—per session

  75·50

  75·50

  iii. Minimal Care Unit—per session

  97·00

  97·00

  321

  Services Provided

  Hospital Class A-E Class

  Hospital F and G

  £

  £

  For continuous ambulatory peritoneal dialysis (including continuous cycling peritoneal dialysis)—per day.

  36·00

  36·00

  Supply of drugs and Medicines (Overseas Visitors only)

  12. For the supply of a drug or medicine which is designed to eliminate, prevent the replication of, or in any way inhibit the mode of action of any Human Immunodeficiency Virus—for each quantity sufficient for one day's treatment.

  15·50

  15·50

  Amenity beds (Private Patients only)

  For accommodation in a single room—£14·50 per day.

  For accommodation in a small ward with two or more beds—£7·00 per day.

  Food Poisoning
  Mr. Rooker
  To ask the Secretary of State for Health if he will make a statement on food poisoning attributed to chickens and eggs in the 12 months to December.

  Mr. Kenneth Clarke
  [pursuant to his answer 23 January 1989, c. 409]: In 1988 a total of 24 outbreaks of salmonella food poisoning associated with the consumption of chicken were reported to the Public Health Laboratory Service. In 1987, the same number (24) of such outbreaks were reported. Provisional data show that the 24 outbreaks in 1988 involved over 600 people whereas in 1987 the same number of outbreaks involved around 400 people.

  Mid-Essex Health Authority
  Mr. Burns
  To ask the Secretary of State for Health what steps he is taking to reduce hospital waiting lists in the Mid-Essex health authority area.

  Mr. Mellor
  [holding answer 1 March 1989]: All regional health authorities have been asked to take action to reduce waiting times for hospital treatment as part of the Government's waiting list initiative. A total of £194,300 has been made available to the Mid-Essex health authority from the waiting list fund in 1987–88 and 1988–89, and will enable them to treat an additional 794 in-patients and day cases from the waiting lists. The regional health authority also proposed to allocate funds to the district from the 1989–90 waiting list fund.

  Drug Reactions
  Mr. Ashley
  To ask the Secretary of State for Health if he proposes to increase the penalties on companies failing to report serious adverse drug reactions.

  Mr. Mellor
  [holding answer 1 March 1989]: Any such change would require amendment to the Medicines Act 1968 and I have no plans for this at present.

  Mr. Ashley
  To ask the Secretary of State for Health (1) how many companies failed to report serious adverse drug reactions to the Committee on Safety of Medicines or licensing authority since 1972; and what penalties were imposed;
  322
  (2) if he will list the penalties which can be imposed under the Medicines Act on a company failing to report serious adverse drug reactions.

  Mr. Mellor
  [holding answer 1 March 1989]: Because information on suspected under-reporting is held on files relating to specific products and containing full licensing information, a count of all possible instances of under-reporting since 1972 cannot be made without disproportionate cost. However, we believe the number to be very small. The vast majority of licensed medicinal products are subject to EC directives. Where, in such cases, there has been a breach of the licensing conditions under the Medicines Act and there is concern about safety, quality or efficacy, the licensing authority can suspend, revoke or vary a product licence, subject to the procedures laid down in the Act. In the case of medicinal products not subject to EC directives, such action can be taken whether or not there is a concern. Other options available to the licensing authority, where appropriate, include giving oral or written admonition to the chairman or managing director of the pharmaceutical company as well as requiring a written undertaking by the company that it will observe the licensing conditions in future.

  Residential Care
  Mr. Ashley
  To ask the Secretary of State for Health if he will consider establishing an independent inspectorate to monitor and assess the quality of residential and nursing care.

  Mr. Mellor
  [holding answer 1 March 1989]: I refer the right hon. Member to my reply to the hon. Member for Wakefield (Mr. Hinchliffe) on 23 February at columns 794–95.

  Mr. Ashley
  To ask the Secretary of State for Health what proportion of Government spending on community care is allocated to residential care.

  Mr. Mellor
  [holding answer 1 March 1989]: Residential care is funded by local authorities and not directly by central Government, other than through contribution made by social security benefits which are, of course, a matter for my right hon. Friend the Secretary of State for Social Security. About half of local authority service expenditure on the personal social services goes on residential care.

  Physically Disabled People
  Mr. Ashley
  To ask the Secretary of State for Health (1) if he will consider including information on the development of community care provision for people with physical disabilities in his annual report to Parliament under section 11 of the Disabled Persons (Services, Consultation and Representation) Act 1986, when implemented;

  (2) if he will consider proposing amendments to section 7 of the Disabled Persons (Services, Consultation and Representation) Act 1986 to include people with physical disabilities.

  Mr. Mellor
  [holding answer 1 March 1989]: No. Section 11 of the Act requires that an annual report be laid before Parliament containing information about the development of health and social services in the

  323
  community for people with mental illness or mental handicap, and about the numbers of such people who are receiving treatment in hospital. Section 7 provides for the identification of people discharged from hospital after treatment of six months or more for a mental disorder, and for the assessment of their needs for welfare services. We accepted the need to include these particular provisions when the Bill was going through Parliament, but are not convinced that a similar need arises for other types of disability.

  Community Care
  Mr. Ashley
  To ask the Secretary of State for Health what measures he is taking to ensure that people with progressive disabilities are not discharged from acute hospital beds without appropriate community support services.

  Mr. Mellor
  [holding answer 1 March 1989]: A circular "Discharge of Patients from Hospital" is being issued to health and local authorities this week. Health authorities are asked to ensure that patients are not discharged until appropriate arrangements for after-care have been made with social services departments, primary health care teams and others. Health notice/local authority social services letter, HN(88)26/LASSL(88)8 which was issued by the Department last November also emphasised the need for co-operation between the relevant agencies to ensure that services for people with disabilities were planned before discharge.

  Staff (West Midlands)
  Mr. Corbett
  To ask the Secretary of State for Health (1) whether he will list by district health authority for the West Midlands region for the past five financial years the numbers of permanent and contract staff employed by category; and what in each year was the cost by category;

  (2) what, in each of the past five financial years, was the number of agency staff employed by category or job-title in each of the West Midlands district health authorities by name; what was the cost by category each year; and what proportion this represented of permanent staff in each category.

  Mr. Mellor
  [holding answer 1 March 1989]: Information about individual district health authorities is best obtained from the relevant regional health authority. The hon. Member may wish to write to the chairman of the West Midlands regional health authority who should be able to provide much of the information requested.

  General Practitioners
  Mr. Kirkwood
  To ask the Secretary of State for Health what is the general practitioner list size that corresponds to the average number of night visits, new registrations and age of patients used to work out general practitioners' pay in the examples contained in the document "General Practice in the National Health Service—A New Contract".

  Mr. Mellor
  [holding answer 1 March 1989]: The assumptions referred to are based on the average general practitioner's list size in England which is 2,020.

THE ARTS

  Business Sponsorship
  Mr. Redmond
  To ask the Minister for the Arts if he will make a statement on progress on the business sponsoring incentive scheme in the Doncaster area of South Yorkshire.

  Mr. Luce
  Figures for South Yorkshire are not available. However, latest figures for Yorkshire as a whole show that 75 companies, 57 of which are first-time sponsors, have supported the arts under the scheme. Over £1 million in new money has been generated, nearly £700,000 in new sponsorship which has been matched by over £332,000 in Government awards.

  Information Technology
  Mr. Atkinson
  To ask the Minister for the Arts if he will make a statement of progress on the introduction of information technologies to facilitate internal communications in his office and the provision of information to the public concerning those areas for which he is responsible; and if he has any further plans to apply the newest technologies in these fields.

  Mr. Luce
  The introduction of information technologies in my Department is undertaken within an overall strategy for information technology which covers the Office of Arts and Libraries, the Cabinet Office and the Office of the Minister for the Civil Service. This group of Departments has about 120 computers, and a large proportion of them is connected to the Government offices, Horse Guards road, local area network. A total of eight are, or will shortly be, installed in the Office of Arts and Libraries.

  The introduction of this equipment has facilitated communications within and between Departments, and has assisted the preparation of information in response to wider inquiries.

  Victoria and Albert Museum
  Mr. Fisher
  To ask the Minister for the Arts how many(a) administrative and (b) curatorial staff are currently employed at the Victoria and Albert museum.

  Mr. Luce
  [holding answer 15 February 1989]: There are currently 750 staff employed at the Victoria and Albert museum. A total of 125 staff are in administrative grades and 171 are in curatorial grades A-G. The remaining staff are in the following groups:

  Museum Warders

  Museum Technicians

  Secretarial

  Scientists

  Photographers

  Professional and Technology

  Graphics

  Office Services

CIVIL SERVICE

  Information Technology
  Mr. Atkinson
  To ask the Minister for the Civil Service if he will make a statement of progress on the introduction of information technologies to facilitate internal communications in his office, and the provision of information
  325
  to the public concerning those areas for which he is responsible; and if he has any further plans to apply the newest technologies in these fields.

  Mr. Luce
  The introduction of information technology (IT) in the Office of the Minister for the Civil Service (OMCS) is subject to an IT strategy. This includes a directive that installed IT equipment should be capable of attachment to a local area network (LAN), with the objectives of improving internal communications and information management.

  LANs have been installed in five buildings, the largest of which now has about 100 connected computers. My office and the press office are on this LAN.

  The press office was one of the first contributors to the recently announced Central Office of Information news distribution service, which is designed to speed the provision of information to the news media. The OMCS deals mainly with other Government Departments and public bodies. It has few direct dealings with the public.

  Future plans include the provision of communications between LANs, better information retrieval using the latest indexing software, and desk-top publishing.

SOCIAL SECURITY

  Pensioners
  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security what proportion of all pensioners receive a state additional pension; what is the average amount received; and what is the average amount of state additional pension received by those retiring now.

  Mr. Peter Lloyd
  As at 31 March 1988, approximately 20 per cent. of all pensioners were in receipt of state additional pension; the average weekly amount received net of guaranteed minimum pension was £2·96 (men), and £2·42 (women on their own contributions). The average weekly payments to men aged 65 and women aged 60 (on their own contributions) were £4·72 and £3·13 respectively.

  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security if he will give(a) the overall increase in pensioner incomes in real terms between 1979 an 1986 by quintile group and (b) the overall increase in pensioner incomes in real terms between 1983 and 1986 by quintile group.

  Mr. Peter Lloyd
  The real terms increase in pensioners' average total income by quintile is as follows:

  Percentage increase

  1979–86

  1983–86

  5 (highest quintile)

  27

  8

  4

  20

  4

  3

  21

  3

  2

  23

  4

  1 (lowest quintile)

  20

  2

  Elderly People (Expenditure)
  Mr. Hind
  To ask the Secretary of State for Social Security by how much public expenditure on the elderly has increased since 1978–79.

  Mr. Peter Lloyd
  Public expenditure on the elderly was £8·6 billion in 1978–79, and has risen to about £23 billion 326
  in 1988–89. This represents a real terms increase of 22 per cent. A total of 51 per cent. of benefit expenditure goes to the elderly.

  Social Fund
  Mr. Redmond
  To ask the Secretary of State for Social Security what is the social fund allocation for his Department's offices in Doncaster for the next two financial years.

  Mr. Peter Lloyd
  I refer the hon. Member to my reply to the hon. Member for St. Helens, North (Mr. Evans) on 6 February 1989 at columns 628–35.

  Mr. Matthew Taylor
  To ask the Secretary of State for Social Security if he will list for each of his Department's offices in Cornwall total expenditure on(a) social fund. grants and (b) social fund loans from 11 April 1988 to 31 January 1989 or 28 February 1989.

  Mr. Peter Lloyd
  Such information is available from the details in the Library.

  Family Support
  Sir Ian Gilmour
  To ask the Secretary of State for Social Security, further to his reply to the hon. Member for Chesham and Amersham of 1 February,Official Report, column 295, what assessment he has made of the reasons for the increase in the proportion of expenditure on families with children since 1981–82.

  Mr. Peter Lloyd
  The number of lone parent families increased slightly as a proportion of families with children over the period (from 12 per cent. in 1981 to 14 per cent. in 1987. (Source: General Household Survey)) but, in addition, the proportion of lone parent families dependent on benefit has increased at a much greater rate. In 1981 about 45 per cent. of lone parents were claiming supplementary benefit, but in 1986 this had risen to about 60 per cent.

  Sir Ian Gilmour
  To ask the Secretary of State for Social Security what is his policy on the distribution of expenditure on families with children between lone-parent families and others.

  Mr. Peter Lloyd
  The social security system aims to target help on families in need rather than simply allocate expenditure according to family types. It recognises that need may arise in different kinds of circumstances, some of which may require special help. The distribution of expenditure between one-parent and two-parent families will, therefore, be affected by the numbers who meet the conditions attached to the benefits concerned.

  Sir Ian Gilmour
  To ask the Secretary of State for Social Security if he will update, to the most recent year for which figures are available, the answer given to the then hon. Member for Kensington of 1 July 1986,Official Report, column 405, showing expenditure on one-parent benefit, national assistance/supplementary benefit and housing benefit in 1960, 1970, 1980 and 1986; and if he will include expenditure on family income supplement/family credit as appropriate.

  Mr. Peter Lloyd
  The information requested is set out as follows:
  327

  Great Britain

  Benefits paid to lone parents

  £ million

  1960–61

  1970–71

  1980–81

  1985–86

  1988–89 (estimated outturn)

  Expenditure in cash terms

  One parent benefit

  —

  —

  61

  134

  174

  Supplementary benefit Income Support1

  20

  90

  640

  1,240

  1,850

  Housing benefit2

  —

  —

  50

  4004

  740

  Family Income Supplement/Family Credit

  —

  —

  30

  60

  180

  Expenditure at 1988–89 prices3

  One parent benefit

  —

  —

  96

  152

  174

  Supplementary benefit Income Support1

  170

  430

  1,010

  1,410

  1,850

  Housing benefit2

  —

  —

  80

  450

  740

  Family Income Supplement/Family Credit

  —

  —

  50

  70

  180

  1 National assistance in 1960–61.

  2 Local authority rebates scheme for 1980–81; information for 1970–71 is not available.

  3 Converted to constant prices using the retail prices index.

  4 Revised figure following reinterpretation of data.

  Benefit Changes
  Sir Ian Gilmour
  To ask the Secretary of State for Social Security, pursuant to his answer to the hon. Member for Leeds, West (Mr. Battle) of 26 January,Official Report, columns 710–11, if he will re-calculate the figures to show the cumulative effects on public expenditure of the changes to national insurance benefits since 1981–82.

  Mr. Peter Lloyd
  It is not possible to carry out the recalculation requested other than at disproportionate cost. Many artificial assumptions would need to be made, rendering any answer speculative, and much of the underlying data could be obtained only by extensive and costly investigation.

  Income Support
  Mr. Strang
  To ask the Secretary of State for Social Security what representations he has received on the effects of denying young people income support; and if he will make a statement.

  Mr. Peter Lloyd
  Our arrangements for 16 and 17-year-olds are working well. Over 413,000 young people are now in the youth training scheme where they receive a weekly training allowance of £29·50 in the first year and £35 in the second.

  Those who cannot work or go onto the youth training scheme, such as the severely disabled or lone parents, can claim income support. Others who are waiting for a youth training scheme place, but either have no home or cannot live at home, can claim income support for a limited period. Income support for a limited period may also be payable where there would otherwise be unavoidable severe hardship.

  We have received a number of representations about benefits for young people. Most recently my hon. Friend met my noble Friend Baroness Faithfull and representatives of various organisations involved with young people. I met representatives of the Church of England Children's Society and officials have met with representatives of the Association of County Councils and the
  328
  Confederation of Scottish Local Authorities. They have also met with representatives of organisations which provide emergency accommodation for young people who are homeless.

  In addition we have received letters and copies of reports from various organisations representing the interests of young people.

  Supplementary Benefit
  Mr. Corbyn
  To ask the Secretary of State for Social Security how many claimants of income support, who were claimants of supplementary benefit before April 1988, have lost some or all of their transitional protection as a result of mortgage interest rate increases.

  Mr. Peter Lloyd
  [holding answer 22 February 1989]: Precise information is not available. The estimated number of claimants who pay mortgage interest and whose transitional protection has ceased or reduced, for any reason, is 140,000.

AGRICULTURE, FISHERIES AND FOOD

  Scientists
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food how many scientists he has employed both on a full-time and contract basis for each year since 1979 in(a) ADAS and (b) AFRC; and what estimates he has for each year until 1994.

  Mr. Donald Thompson
  The number of permanent staff in scientific grades employed in the agricultural development and advisory service of my Department in the years requested is given in the table. Forecasts of staff in post in these grades for future years are not available. So far as AFRC is concerned the staff are not directly employed by my department but we do spend considerable sums with the AFRC on commissioned research (1987–88 £44·2 million).
  329

  11979

  11980

  11981

  11982

  11983

  11984

  11985

  11986

  11987

  11988

  1989

  Chief Scientific Officer

  14

  28

  29

  23

  21

  21

  2—

  —

  —

  —

  —

  Deputy Chief Scientific Officer

  Senior Principal Scientific Officer

  Grade 7 (Principal Scientific Officer)

  1,226

  1,358

  1,341

  1,326

  1,268

  1,288

  1,292

  1,234

  1,124

  1,169

  1,110

  Senior Scientific Officer

  Higher Scientific Officer

  Scientific Officer

  Assistant Scientific Officer

  1Figures at 1 April for all years except 1989—1 February.

  2 From 1985 these grades are included in unified Grades 4–6 and cannot be separately identified.

  Foxes
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what work has been undertaken by the agricultural development advisory service relating to predation by foxes upon lambs and other farm animals; whether any such work has been published; and if he will make a statement.

  Mr. Donald Thompson
  I refer the hon. Member to the reply I gave to his similar question on 18 January 1989 at column 24.

  Woodlands
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what is the number and related area of
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  woodland grant scheme applications and acceptances, respectively, which have been eligible for storm supplement in the present financial year.

  Mr. Ryder
  The information relating to the woodland grant scheme is given in the table.

  Number

  Area (hectares)

  Applications received

  565

  4,586

  Applications approved to date

  246

  1,181

  In addition, a further 909 hectares of restocking have been approved for the special supplement under other Forestry Commission grant schemes. The closing date for receipt of applications for the supplement is 31 March 1989.

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Ely): The LORD CHANCELLOR on the Woolsack.
The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business, I take the opportunity to inform the House that I have accepted an invitation from the University of St. Andrews to receive an honorary degree. The graduation ceremony will take place on Tuesday, 7th March. Accordingly, I trust that the House will agree to grant me leave of absence for Tuesday, 7th March.

EC Agricultural Exports: Fraud
Lord Jay Lord Jay asked Her Majesty's Government:
What action they are taking to prevent large-scale fraud in the distribution of export subsidies by the Commission of the European Communities under the common agricultural policy.
The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, rigorous checks are made by Customs and Excise on exports of agricultural produce from the United Kingdom in order to detect and deter fraud. Cases of detected fraud are prosecuted whenever appropriate. The Government are also pressing other member states and the Commission to step up co-ordinated action against fraud across the Community. My right honourable friend the Minister of Agriculture has raised this matter several times in the Agriculture Council, most recently on 13th February.
Lord Jay: My Lords, as the Court of Auditors' reports reveal a scandalous level of fraud and waste, not merely in export subsidies but in storage and in many other cases, are the Government really satisfied that their action will be effective in stopping what is a gross misuse of British taxpayers' money? Can the noble Baroness now tell us what really happened in 1986 when the noble Lord, Lord Cockfield, claims that he put forward a splendid plan for stopping all this fraud which was then blocked by the British Government?
Baroness Trumpington: My Lords, my right honourable friend the Minister first alerted the Council to the problems of CAP fraud more than a year ago. He reinforced that message—not for the first time—last month. Largely because of the adverse publicity which reflects badly on the operation of the CAP, we believe that the Council now understands the importance of taking practical steps to reduce the scope for fraud.
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With regard to the second part of the noble Lord's question, on 14th February my noble friend Lord Cockfield alleged that the United Kingdom had vetoed action by the Commission on fraud. This is not so. On the contrary, the United Kingdom has been the leading advocate of the anti-fraud unit set up by the Commission. The decision to which my noble friend referred, taken unanimously by the Council in March 1987, was to reject the Commission's proposal because it was not thought right to have a Commission-led investigative mission on Customs matters. We think it right that the Commission and member states should work together to tackle the problem of fraud.
Baroness Robson of Kiddington: My Lords, is the noble Baroness aware that the European Communities Committee of your Lordships' House is publishing on 10th March its report on fraud against Community funds? Is she also aware that we are hoping to have a debate shortly after Easter when no doubt we shall be able to go into these questions in depth?
Baroness Trumpington: My Lords, I am aware of that, but it would not be right for me to comment before the report is published.
Lord Cockfield: My Lords, is my noble friend aware that the proposal which I put forward on behalf of the Commission dealt with "Customs or agricultural matters"? I am reading from the actual document which also refers to "missions in co-operation with the competent authorities of the members states'', not by the Commission alone but in co-operation with the member states. How does that differ from what the Minister is now saying? Is she prepared to give the House an assurance that the Government will take effective measures in this field and that they will support the Commission in the efforts it is making, including giving it the necessary powers in co-operation with the member states?
Baroness Trumpington: My Lords, I can merely repeat that it was a unanimous decision not to follow my noble friend's project. That must speak for itself. The problem of fraud in the Community is clearly serious and must be tackled firmly. My right honourable friend the Paymaster General will be commenting in detail in another place later today on the Court of Auditors' report. We are pressing the Council to take early action on the report's recommendations. I understand that my right honourable friend the Prime Minister hopes to raise the subject in the next European Council to be held in Madrid in June.
Lord Gallacher: My Lords, can the noble Baroness say whether the Commission itself, when making proposals for reform of the common agricultural policy, considers the possibility of increased opportunities for fraud? Currently, there is a proposal whereby the Commission is hoping to increase the use of cereals in animal feedstuffs. Everyone who has looked at that proposal, in both last year's and this year's budget, is firmly of the opinion that the enhanced opportunities for fraud

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which this proposition would give are almost infinite. Is this not a case where the Commission might itself be somewhat more circumspect in what it is proposing?
Baroness Trumpington: My Lords, I have several answers and I am not quite sure which one to give the noble Lord. There have been some encouraging developments. The Commission's new anti-fraud unit is now fully operational. The Court of Auditors is doing a useful job in exposing slack controls in member states. As I said, we have pressed the Council to act urgently on the court's recommendations.
Lord Campbell of Croy: My Lords, can my noble friend comment on suggestions which have appeared in the press that some of the money obtained by such fraudulent means has found its way to the IRA?
Baroness Trumpington: My Lords, I have no evidence that CAP fraud is organised by the IRA or any other terrorist organisation.
Lord Taylor of Gryfe: My Lords, has the attention of the Minister been drawn to the statement made by Sir John Hoskyns this week that the Community is guilty of intellectual and financial corruption? Is she aware that an editorial in The Times today says that his speech has much in common with the British Government's thinking? Will the Minister confirm or deny that judgment?
Baroness Trumpington: My Lords, any malpractice anywhere is of concern. The United Kingdom has taken the lead in denouncing fraud. We believe, however, that press reports have been exaggerated.
Lord Carter: My Lords, is the Minister aware of a report in the French newspaper Liberation that in terms of convictions for fraud and irregularities, Italy is first, Britain second and France third?
Baroness Trumpington: My Lords, I wish to confine my remarks to the United Kingdom. In 1987 we reported to the Commission irregular payments totalling approximately £2.3 million; but not all of these involved fraud.
Lord Kennet: My Lords, the noble Baroness has told the House that it was in company with other governments that our Government rejected the Commission proposal to which the noble Lord, Lord Cockfield, has referred. Given that she has confirmed thereby this Government's dislike of Commission-led action, even in co-operation with national governments, can she say what is the Government's preference as a way to proceed in the matter in view of the fact that the joint Commission-national government option has been ruled out?
Baroness Trumpington: My Lords, I believe I answered that question in my original Answer.
Lord Stoddart of Swindon: My Lords, is there not a grave discrepancy between the £2·3 million that the noble Baroness has just mentioned, which the British
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Government believe is the extent of the fraud, and the £6 billion which has been mentioned not in a single press report only but in many? Can the Minister assure the House that not only the British Government but also the Commission itself take the matter very seriously, bearing in mind their defensive and illiberal attitude, and reply, to the speech delivered yesterday by Sir John Hoskyns?
Baroness Trumpington: My Lords, as the noble Lord said, very large figures have been quoted by newspapers; namely, £6 billion, or 20 per cent. of the Community budget. By its nature the exact amount of fraud cannot be known; but such figures are exaggerated. However, fraud is clearly a serious problem and certainly more serious than implied by the reported irregularities and must therefore be tackled seriously.
The Commission emphasises the need to tighten up Community provisions for combating fraud and we agree that rules can be made clearer so that member states carry out more uniform checks. We shall support any appropriate and cost-effective changes that the Commission proposes.
Lord Stoddart of Swindon: My Lords, I am sorry to come back on this point, but if the extent of the fraud is not known, how can the noble Baroness say that the £6 billion is an exaggerated figure?
Baroness Trumpington: My Lords, as I said, by the very nature of fraud it is difficult to come to any total conclusion; one can only go on those matters which are reported. Moreover, one realises that it may be that there is a great deal more which is not reported.
Noble Lords: Next Question!
Lord Jay: My Lords, whatever the noble Lord, Lord Cockfield, or even Sir John Hoskyns, may have said, would it not be better if more of these very well qualified persons in Brussels were to devote more time and energy to correcting such frauds than to devising all sorts of blueprints for imaginary futures?
Baroness Trumpington: My Lords, I think that the noble Lord asked whether it would not be better if more time were devoted to such matters. Is that correct?
Lord Jay: Yes.
Baroness Trumpington: My Lords, that matter really comes under another heading. However, the Minister has reminded the Council of the importance of taking early decisions on the recommendations of the Commission's working group, taking full account of the Court of Auditors' findings. We also believe that each new proposal for Community expenditure must be examined so as to minimise the risk of fraud.

Dogs: Registration Proposal
3.13 p.m.
Lord Suffield Lord Suffield asked Her Majesty's Government:
Whether they will introduce a registration scheme for dogs, in order to reduce the number of strays and the consequent need for destruction.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, the Government consider that a registration scheme will do nothing to reduce the number of stray dogs, which is the consequence of irresponsible ownership.
Lord Suffield: My Lords, I thank my noble friend for that reply. However, is he aware of the increasing number of cases of appalling cruelty to dogs, and of organised dog fighting, which such registration would help prevent? Is he further aware that there is also wide public support for such action from the farming community?
Lord Hesketh: My Lords, the difficulty starts with the fact that when there was a dog licence, which cost only 37½p, over half the dogs in the United Kingdom were not registered. The Government are ready to consider whether there is any scope for improvement to the large amount of legislation which already exists on dog welfare and control. However, any changes must be effective and enforceable and cannot be introduced as an emotional safety valve.
Lord Molloy: My Lords, have the Government consulted—and if not, will they consult—the Royal Society for the Prevention of Cruelty to Animals on this subject, because the society has some very definite views on the matter, based on its great knowledge of such problems?
Lord Hesketh: My Lords, at present there is no evidence that the number of stray dogs is increasing. According to the published reports of the RSPCA, the number of dogs which the society puts down each year has been roughly constant at 55,000 to 60,000 per annum during the 1980s. It is hard to see where the reported figure of 1,000 dogs per day, or what would be 350,000 per annum, originates from.
Lord Molloy: My Lords, will the Minister be good enough to consider what I said?
Noble Lords: Order!
Lord Hailsham of Saint Marylebone: My Lords, is my noble friend aware that were my little dog here today, he would heartily endorse the original Answer and tell us that he has no confidence whatever in the policy of the RSPCA?
Lord Molloy: But he is not here!
Lord Hesketh: My Lords, I received much fortitude from the remarks made by my noble and learned friend and also from the support of his canine friend.
Lord Graham of Edmonton: My Lords, unlike the noble and learned Lord who spoke before the Minister, will the Minister take the Question seriously?
Noble Lords: Oh!
Lord Graham of Edmonton: My Lords, will the Minister also recognise that it is not just a question of putting down dogs; it is a question of trying to ensure that the animal welfare organisations, and the local authorities, carry out a job to protect the health of the nation?
Further, will the Minister undertake, as one of his initiatives, to organise a conference or discussions with animal welfare organisations, and the local authorities, which have recently been deprived of the income which they previously had—however small—to do that very job?
Lord Hesketh: My Lords, first I must with the strongest words reject the insinuation of the noble Lord, Lord Graham, that I do not take the matter seriously. The very great difficulty, of which everyone in this House is aware, is that originally, when there was a dog licence, over half the dogs in the country—that is, nearly 4 million dogs—were not registered and did not have a licence.
As I said in an earlier answer, we are ready to consider whether there are ways to improve the situation. However, any such changes must be effective and enforceable.
Lord Kennet: My Lords, does not the original Answer imply that "the people is to blame, and that we should elect another one"?
Lord Mulley: My Lords, is the Minister aware of the fact that the derisory final figure of the dog licence, and the lack of take-up, was because the money went to local authorities? Would it not have been the case, had the Treasury been the recipient over the years, that the dog licence would now certainly be over £5? Therefore, would not such a scheme be a sensible thing to start?
Lord Hesketh: My Lords, if half of the dog owners in the country did not pay the licence fee when it was 37½p, I suspect that the percentage would be even smaller were the fee to be £5.
The Viscount of Falkland: My Lords, can the Minister give his reaction to the figure issued by the RSPCA of the cost to the country of uncontrolled and abandoned dogs of approximately £76 million, which I think includes animals which cause traffic accidents and damage livestock, as well as the cost of finding and taking away stray animals? Further, if he does agree with that figure, is that not sufficient justification for some sensible legislation?
Lord Hesketh: My Lords, of course there is considerable cost involved. However, we return again to the problem of enforceability; that is really the crux of the matter.
Viscount Hanworth: My Lords, the Minister said that the licence was unenforceable; I think it would be more accurate to say that it was unenforced. When thinking about the matter, let us remember that a great many of our laws are not enforced. For example, would he not agree that the 30 miles-perhour speed limit is completely ignored?
Lord Hailsham of Saint Marylebone: That has nothing to do with the Question.
Lord Hesketh: My Lords, with regard to enforceability, one of the great problems which would be the first to arrive on the doorstep would be that the number of dogs thrown out of their homes, dumped by the roadside, and so on, would possibly be very great indeed.
Lord Glenamara: My Lords, can the noble Lord confirm that it is still the law that a dog must wear a collar with an identification disc on it? Would he further agree that, if that provision were properly enforced, it would achieve just as much as a registration scheme?
Lord Hesketh: My Lords, I am pleased to confirm the noble Lord's point about dog collars.

Gibraltar: Withdrawal of Troops
3.20 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What they estimate will be (a) the saving to defence Votes resulting from the withdrawal of troops from Gibraltar, and (b) the resulting effects on the Gibraltar economy.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, it is not yet possible to put a precise figure on this saving as the detailed studies are not yet complete and in any event the majority of the forces to be withdrawn will be deployed elsewhere. Any effect on the Gibraltar economy will be offset by the release of further land to the authorities there, thus facilitating the creation of new economic activity and additional employment opportunities.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that not particularly informative reply. If the further withdrawal following the closure of the dockyard adversely affects the economy of that British colony, will Her Majesty's Government look sympathetically at providing some additional investment by way of compensation?
Lord Trefgarne: My Lords, the best contribution we can make is in the transfer of redundant facilities to the Gibraltarian authorities. As my noble friend will be aware, we shall be transferring further facilities to them, for the most part free of charge.
Lord Irving of Dartford: My Lords, in view of the Gibraltar Government's estimate that the Ministry of
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Defence generates 18 per cent. of the territory's income, and many of its jobs, what estimate is the Minister making of the increase in the social security budget which will be caused by the unemployment that will result from the departure of the troops? Is it not important that that matter should be settled before the troops begin to move, because the unemployment will be immediate and the consequences serious?
Lord Trefgarne: My Lords, I do not believe that the noble Lord is correct, if he will forgive me for saying so. A large number of Gibraltarian civilians are employed by the armed forces in Gibraltar. I fear that some of them may not be required after the force adjustments have taken place. However, as I say. the solution to that problem is in generating new economic activities in Gibraltar, thus providing the additional employment opportunities which I am sure the noble Lord will support.
Lord Mayhew: My Lords, does the Minister agree that the fact that it is possible to withdraw those troops is extremely welcome and that that trend should go on if possible? Did I understand him to say that he is now calculating the impact on the defence budget? Surely the right procedure is to make that calculation before reaching a decision.
Lord Trefgarne: My Lords, no, because the change in the force levels in Gibraltar is not related to the defence budget; it is related to the cost-effective use of our forces generally. We believe that there are more important places than Gibraltar in which to deploy our soldiers.

County Hall, London: Development
3.23 p.m.
Lord St. John of Fawsley Lord St. John of Fawsley asked Her Majesty's Government:
What progress has been made with plans for the development of County Hall and the contiguous area.
Lord Hesketh: My Lords, the London Residuary Body and the County Hall Development Group exchanged contracts for the sale of County Hall complex on 27th January this year. The County Hall Development Group jointly with the London Residuary Body submitted a number of applications for planning permission, listed building consent and conservation area consent to the London borough of Lambeth on 10th February.
Lord St. John of Fawsley: My Lords, 1 thank my noble friend for that reply. Is he aware that the Royal Fine Art Commission is reasonably content with the treatment of County Hall but is deeply disturbed by the inclusion in the development of a monstrous white elephant of an office building which will, by its bulk and height, dominate Scott's riverside building and will cast a giant shadow in front of it? In view of the importance of the site to the capital and to the nation, will my noble friend persuade his right

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honourable friend the Secretary of State for the Environment to call in that development and to hold a public inquiry?
Lord Hesketh: My Lords, I shall draw the remarks of my noble friend Lord St. John to the attention of my right honourable friend. The usual procedures for obtaining consent will apply to the proposed alterations. The County Hall Development Group has announced publicly that it intends to restore the major rooms, including the council chamber and the concert hall, and to remove the post-war additions to reinstate Sir Ralph Scott's original design. I am sure that my noble friend will approve of that proposal.
Lord Hatch of Lusby: My Lords, will the Minister tell the House whether the suggestion made by the noble Lord, Lord St. John, is a reality, and whether there is a danger of a large multi-storey building being constructed near County Hall? If that is so, does he agree that it will distort the whole of the South Bank area, which to many of us is a precious heritage and a social asset not just to London but to the country?
Lord Hesketh: My Lords, I am sure that the noble Lord, Lord Hatch, will be aware that it is for the local planning authority—Lambeth borough—in the first instance to consider the application. It would be wrong for me to attempt to anticipate its decision.
Baroness Strange: My Lords, is my noble friend aware that the site of County Hall is called Pedlar's Acre? Does he agree that the original pedlar would not have approved of a monstrous white elephant when he gave the site to the church, St. Mary's, Lambeth, in exchange for a small corner of the churchyard in which to bury his dog?
Lord Hesketh: My Lords, I have to bow to my noble friend's greater historical knowledge and accuracy on that matter.
Lord Graham of Edmonton: My Lords, what steps do the Government intend to take to ensure that the money raised from the sale of the site is maximised and is then returned to the people of London, from whom County Hall was stolen in the first place?
Lord Hesketh: My Lords, the residuary body will receive the money, which it handles on behalf of the ratepayers of London.
Lord Plummer of St. Marylebone: My Lords, what steps will the Government take to improve the traffic conditions in York Road, as it is evident that the development will create a great deal more activity and that there will be an increase in passenger traffic at Waterloo by reason of the Channel Tunnel?
Lord Hesketh: My Lords, in the long term, if the building in the middle of the roundabout is removed the roundabout will become better and the traffic flow will improve.
Lord Glenamara: My Lords, whatever the planners decide, will they bear in mind that it will be necessary to reconvert the building to County Hall after the next general election?
Lord Hesketh: My Lords, that is probably a matter of opinion.
Lord St. John of Fawsley: My Lords, will my noble friend, who has so kindly said that he will intervene with the Secretary of State for the Environment on the question of the office building, also draw to his attention the fact that the rest of the South Bank site is being developed and that it is essential, for aesthetic reasons, that the development of the County Hall site and the rest of the South Bank site be co-ordinated?
Lord Hesketh: My Lords, as always, I am grateful for the remarks made by my noble friend. I know he will appreciate that I cannot anticipate the first stage of that process, which will be the decision of the Lambeth borough planning department.

Business
3.28 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Companies Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Third Reading of the Junior Hospital Doctors (Regulation of Hours) Bill and the Second Reading of the Police Officers (Central Service) Bill will be taken.

Easter Recess
Lord Denham: My Lords, it may also be for the convenience of the House to know that, subject to the progress of business, the House will adjourn for the Easter Recess on Thursday 23rd March and return on Monday 3rd April. The House will sit at 11 a.m. on Thursday 23rd March.

Employment (Age Limits) Bill [H.L.]
Baroness Phillips: My Lords, I beg to introduce a Bill to prohibit the use of age limits in job appointments, training schemes, promotion, retirement and advertising of jobs; to make other provisions relating to employment; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Baroness Phillips.)
On Question, Bill read a first time, and to be printed.

Companies Bill [H.L.]
3.30 p.m.
Lord Strathclyde: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Strathclyde.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 244ZA:
Before Clause 97, insert the following new clause:
("Merger references. In section 64 of the Fair Trading Act 1973 (merger situation qualifying for investigation) after subsection (2) insert—
"(2A) The Secretary of State shall make a merger reference to the commission unless he is satisfied that the merger situation will not operate against the public interest."")
The noble Lord said: I beg to move this amendment standing in my name and that of my noble friend Lord Peston. It may be for the convenience of the Committee if I also speak to Amendments Nos. 244ZD and 245J. This group of amendments deals with what is known as the "onus of proof". Perhaps I may remind the Committee of the present situation. When a company wishes to merge with another company, the Director General of Fair Trading has to use his own resources to find out whether the merger is taking place. If the proposed merger comes within the scope of the Fair Trading Act 1973—in other words, it is more than a certain amount in value of net assets or a certain amount in terms of market share of the product—the Director General of Fair Trading may study the merger. He then has the duty, if he studies it, to recommend to the Secretary of State whether or not he thinks that the merger should be referred to the Monopolies and Mergers Commission.
The system as at present constructed does not really even represent neutrality in terms of the public interest. It represents a philosophy which says that mergers should take place unless there is a clear balance against the public interest initially and subsequently after the report of the Mergers and Monopolies Commission. In 1978 the Green Paper on merger policy recommended a shift from this bias in favour of the merger, if I may put it like that in simplistic terms, to a position of neutrality. I am bound to confess that I was never quite clear how that shift could be achieved in law. That policy was overtaken by the events of May 1979 when the Government changed, and the policy was then abandoned. So the neutrality proposition put before the country in the Green Paper in 1978 did not come into operation.
We on these Benches have argued for some time that mergers should be scrutinised much more carefully than they are at the moment. The question which we ask ourselves—as indeed the Government have asked themselves—is: are mergers really successful? Where is the record? The record is set out in a document produced by the Department of Trade
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and Industry following the Green Paper of 1978 which was called A Review of Monopolies and Mergers Policy. The later document was called Mergers Policy to which there is a very interesting annex which I wish to summarise for the Committee because it gives a very clear statement of the current empirical analysis of whether or not mergers are successful.
Annex E of the document entitled Post Merger Performance—the Evidence is pretty firmly of the view that the evidence on post-merger performance that has emerged since 1978 supports the earlier findings of disappointing or inconclusive performance. It goes on to say that the consistency of the results of the various academic studies which are summarised in the annex and the wide range of approaches used tend to increase the robustness of the findings of the 1978 Green Paper. That paper said specifically that in roughly half the cases examined the merger had resulted in an unfavourable or a neutral effect on the profitability of the companies concerned. So the 1978 analysis was that it was a toss of the coin. If one tosses a coin, it comes up heads or tails and 50 per cent. of the time on average it should come up one or the other. The DTI has confirmed the 50 per cent. rule in its latest document, so we cannot say with any degree of confidence that any particular merger will do anything for the economic health of the nation.
Given that, it seems to us that we must look a little further at the motives for mergers and takeovers. In pure economic theory, the motive is very simple. It is designed to maximise the return on the assets of the shareholders. No doubt that is the theory which we shall perhaps be hearing from certain noble Lords on the Benches opposite. The fact of the matter is that motives for mergers and takeovers are rather more complex than that. As the 1978 Green Paper found out and as we know from experience, takeovers are not necessarily launched simply in order to maximise the return on assets, the return to shareholders. They are not necessarily launched for the benefit of the employees working in a particular company. Frequently the effects are that they are against the interests of employees. However, I do not wish to get into that argument at the moment.
There are no statistics on this because, although by definition there can be no statistics, frequently takeover bids are launched by companies whose boards of directors believe that they want to expand their business in whatever way is most favourable to them. Frequently that is the result of having a rather high priced share which they wish to use as currency in order to make an acquisition.
These motives which are perfectly human and understandable do not necessarily lead to operations in the public interest. I put it at its mildest. Since the 1978 Green Paper, the Director General of Fair Trading himself has propounded the view that the onus of proof should change. Rather than the Government having to show, in whatever form it is—the director general, the Secretary of State or the Monopolies and Mergers Commission—that a particular operation is against the public interest, it should be for the company launching the bid to show that it is in the public interest. Otherwise it should be

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stopped. If the director general with all his great experience in these matters believes that then the amendment is on solid ground.
Amendments Nos. 244ZD and 245J address themselves essentially to the same problem. If it is true that the Secretary of State should be totally convinced that a merger is in the public interest, it must therefore be true that the director general should also be totally convinced in making his recommendation to the Secretary of State. Equally, turning to the provisions in the Bill on notifications, we believe that it is also the case that the public interest should be demonstrated prior to anything happening.
In essence, these amendments would take us a little further towards what we regard as a sensible way of controlling what is known as "merger mania". We believe that it is up to companies to demonstrate that what they are doing is in the public interest before what they are doing is allowed. These are relatively modest amendments. They do not make any enormous changes. If companies are convinced of what they are doing, they should be prepared to go on the record and persuade the director general and the Secretary of State that what they are doing is in the public interest. I beg to move.
Lord Lloyd of Kilgerran: The Committee will be grateful to the noble Lord, Lord Williams of Elvel, for an interesting history of mergers and the interest of the public in relation to these matters. I certainly support Amendment No. 244ZA which merely states that merger references,
"will not operate against the public interest".
The words "public interest" are defined in Section 84 of the Fair Trading Act 1973.
Amendment No. 244ZC seeks to make the position mandatory—
Lord Williams of Elvel: I apologise to the noble Lord. I did not speak to Amendment No. 244ZC. I spoke to Amendment No. 244ZD. I recognise that the groupings in this Bill are extremely complex because of the numbering of the amendments. I hope the noble Lord accepts that I shall speak to Amendment No. 244ZC when we come to it.
Lord Lloyd of Kilgerran: I am grateful to the noble Lord. I have in my hand the Companies Bill groupings. Amendment No. 244ZC is grouped with Amendment No. 244ZA. However, I understand we shall have the pleasure of hearing the noble Lord speak on Amendment No. 244ZC later.
Amendment No. 245J again indicates that mergers should be in the public interest. Therefore I support that amendment. The noble Lord also mentioned Amendment No. 244ZD. I am in some difficulty on that amendment. I shall be interested to hear what the Secretary of State says about it. Amendment No. 244ZD states,
"and such person shall demonstrate to the Director that the merger situation is likely to be in the public interest".
As a lawyer I have some difficulty as regards how such a person could demonstrate that the merger,
"is likely to be in the public interest".
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It is very difficult to prove that something is,
"likely to be in the public interest".
I should have thought that to include this provision would only mean a lengthening of the proceedings and make them more difficult to carry out than in the past.
Lord Morris: The noble Lord, Lord Lloyd of Kilgerran, has just informed the Committee, much to my surprise, that the words "public interest" are defined in Section 84 of the Fair Trading Act. All I can say is, would that they were. The section itself refers to the public interest. It is around this particular section that all the difficulties revolve. The section states that it is not only the power but the duty of the Monopolies and Mergers Commission to take into account any matters that appear relevant to it and which affect the public interest. The section further states that the commission shall have regard to the desirability of various competition points. It is on that particular issue that I want to speak.
I give the Committee an example of how the Monopolies and Mergers Commission operates or, as some people think, does not operate. I give the Committee the example of the Minorco Societe Anonyme bid for Consolidated Gold Fields. The Monopolies and Mergers Commission deemed the merging of the platinum interests of both companies not to be against the public interest. The EC considered the bid was in the public interest but ruled that the bid should not proceed unless Minorco divested itself of an interest in a particular asset which is at the moment in the hands of Consolidated Gold Fields. That asset was a mine in the process of development for the production of platinum.
This kind of conflict can so often occur if the Monopolies and Mergers Commission keeps strictly to the competitive effects within the United Kingdom and does not look wider than that. The other problem is that I do not believe that the interpretation by Her Majesty's Government of Section 84 of the Fair Trading Act is consistent with the Act itself. In my view it is clear that in any sensible interpretation of that particular section, they are bound to take into consideration the kind of matters which were raised so elegantly by my noble friend Lord Erroll of Hale at Question Time some days ago. On that occasion he asked my noble friend the Secretary of State for Trade and Industry whether it was not central to the public interest that those who seek to gain control of British companies which have been operating for over 100 years should be seen to be squeaky clean. I believe that to be central to the public interest.
One must remember that there have been not one or two but three departmental investigations by virtue of the Companies Acts and other Acts with regard to these matters. Therefore, I believe it is very important that the Monopolies and Mergers Commission does not restrict its consideration to narrow competition points alone. I believe very strongly that the amendments that have been tabled so reasonably and as usual so ably by the noble Lord, Lord Williams of Elvel, can help these matters considerably. I ask my noble friends to consider very carefully what he had to say.
3.45 p.m.
Lord Lloyd of Kilgerran: The noble Lord suggested that I had misunderstood Section 84 of the Fair Trading Act 1973. Perhaps the noble Lord has not read that section accurately. Section 84 as it stands has the words "public interest" alongside it in the margin. Later, I shall table some amendments to extend the scope of the public interest in the Bill. Section 84(1) states: "In determining for any purposes to which this section applies whether any particular matter operates, or may be expected to operate, against the public interest, the Commission shall take into account all matters".
The matters to be taken into account are set out in the paragraphs to subsection (1). The matters against which the public interest must be considered are contained in five paragraphs. Although the section does not define the public interest as consisting of X, Y and Z, nevertheless, in my view it is quite clear, as the section stands, what the words "public interest" mean in the context of the Fair Trading Act 1973. However, I submit that that definition, as I call it, is not adequate in the modern context of merger situations. I shall table amendments later to deal with that aspect.
Lord Jay: I also wish to support the amendments spoken to by my noble friend Lord Williams of Elvel. They place a more positive onus of proof on those advocating mergers. Experience is on the side of my noble friend. In the days when Mr. Charles Clore, as he then was, invented takeover bids, it used to be argued that mergers whether hostile through takeover bids, or amicable, could be beneficial to the public interest because they would lead to better use of the assets owned by at least one of the companies involved in the merger.
It is much harder to take that view today. I say that in the light of experience gained over the past 30 years. I have personally observed a great many takeover bids from more than one angle. I find myself moved to the belief that in a great many cases the motives are not really increased efficiency; they are due to one of two factors—either a desire to suppress, or at least modify, competition, or a tendency towards empire building on the part of the chairman or chief executive of a company who wants to believe he is the head of an even grander concern than he was before. I do not say that that is true of all company chairmen but I think that it is true of some of those who launch takeover bids.
The strongest evidence in relation to the motive of suppressing competition seems to me to be that in one case after another one can observe that it is companies producing similar or competing products which come together under one guise or another. I think that the fashionable term at present is joint enterprise. In effect, they cease to compete with each other.
If there was any substance in those suspicions one would discover very little evidence that the mergers and takeover bids which have occurred in the past 25 years have achieved positive benefits for the economy as a whole. As my noble friend pointed out, the various inquiries into the issue—which is difficult to demonstrate either way—have in almost every case
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shown that there is little evidence that such benefits have occurred.
In addition, reading the national press both here and in the United States one cannot help feeling that the amount of time, energy, ability and effort given by chairmen, chief executives and other members of large and important companies might be better employed. They should be enhancing the efficiency and enterprise (as the noble Lord the Secretary of State likes to call it) of their own concerns rather than indulging in long-drawn-out, elaborate and dubious battles with one another.
All those reasons point to support for the amendment moved by my noble friend.
Viscount Caldecote: I have considerable sympathy with the principle behind the amendment. As my noble friend the Secretary of State will know, I attach great importance to the strengthening of our manufacturing base. Any merger which weakens the manufacturing base is, I believe, ipso facto against the public interest.
I am particularly interested in manufacturing companies. Agreed mergers of manufacturing companies usually result in a strengthening of the manufacturing base because the two parties involved agree that a merger will improve their strength in a particular field. On the other hand, opposed mergers too often are more concerned with making money than with creating wealth through the strengthening of the manufacturing base. It is interesting and relevant to note that there are few opposed mergers and takeovers in Germany and Japan, which are our two fiercest competitors in manufacturing industry and cause us considerable trouble in relation to our balance of payments deficit in manufactured goods.
Therefore I have considerable sympathy with the principle behind the amendment. I very much hope that my noble friend the Secretary of Slate will give careful and sympathetic consideration to what has been said by other noble Lords, and to what I have said. I hope that he will consider the amendment, which may need further amendment to get it right and to apply the principle in exactly the right way. I hope that my noble friend will give particular attention to the point about strengthening the manufacturing base. I hope that he will not turn down the principle of the amendment at this stage but will undertake to bring something back in the form of a more carefully thought out amendment at a later stage.
Baroness Carnegy of Lour: I have been a member of the sub-committee of your Lordships' European committee which has been looking at the subject of mergers in the European context. The sub-committee has not yet reported to the main committee. In the course of our discussions it has become clear that the Community view on merger matters is that as far as possible the criterion on which a decision should be based is that of competition. I believe that politics should be kept out of the matter. As soon as one begins to consider what is the public interest and to require those proposing a merger to prove that it is in the public interest, one enters the political field.

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It is interesting that it is pointed out in an OECD report which was brought to the attention of the sub-committee that the competition criterion is the only or main criterion applied in Germany, Japan, the USA and Canada. This country is one of a number of countries which take into account other aspects of the effects of mergers.
I should have thought that what the noble Lord has suggested goes in the opposite direction from the rest of Europe. I believe that it would politicise decisions and damage the clarity of the competition criterion.
Lord Ezra: I should like to support the remarks of the noble Viscount, Lord Caldecote. I think that we should be warned by the experience of the United States whose practices in relation to mergers are tending to spread here. The motives for many recent mergers have been of a purely financial nature leading to the breaking up of the companies taken over for no apparent good other than the benefit of those who have manipulated the financial markets. I very much trust that such practices will not spread either to the United Kingdom or to the Community.
Lord Rees: As one would expect, the amendment was moved very attractively by the noble Lord, Lord Williams of Elvel. Nonetheless, I believe that it is misconceived.
I think there is a general principle that the operations of the market-place should not be retarded by the Government unless there are clear and stated grounds for so doing. The practical consequences of the amendment would be that the government of the day would have to be ready to clear any and every takeover bid that was mounted in the market-place. A moment's reflection will show what an intolerable burden that would place on the government of the day and the degree to which it would clog the market-place. On practical grounds the amendment strikes me as misconceived.
Secondly, as a point of principle I believe that the Government should interfere in the operations of the market-place only in certain very clearly understood and defined circumstances. As it happens, I have had to consider takeovers in two capacities: as a Minister of the Crown serving, I am happy to say, with my noble friend Lord Cockfield in the then Department of Trade, and also as chairman of a company which was under threat. I am glad to be able to say that the threat was successfully resisted. However, that has made me appreciate the force of the argument that a great deal of management time can be dissipated, possibly to no great purpose, in resisting such threats. Therefore I am sensitive to that argument.
However, my experience in government considering a public interest case leads me to think that that is a very elusive, not to say subjective, test. It is difficult to say in any given situation what is the public interest. It is easy to advance that kind of argument. The chairman of a company which is under threat will inevitably have recourse to such an argument if he can, and sometimes the arguments will be a little specious.
In one of the cases in which I had to adjudicate as Minister I was overwhelmed with evidence from local
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authorities and trade unions about the impact on the morale of the workforce, on the local economy, and so on. I have to say, not with any particular pride, that I had to take a robust view and overrule the views of the majority of members of the Monopolies and Mergers Commission in that case. Luckily on that occasion there was a strong minority report by the chairman of the commission, so that I was somewhat fortified in my decision.
I should like now to reflect on the outcome of that case. I shall not mention names. The workforce settled down perfectly happily under the new ownership. As far as I could judge, the local economy was not fatally affected. It is true that the demand for the products of that company dwindled, but for reasons quite unconnected with the takeover. With the advantage of hindsight, I suspect that the only parties who were unhappy about my decision and the outcome were the predators who took over the company. However, that case led me to be rather sceptical about the value of such an elusive test as that of public interest.
That said, I recognise that perhaps the advantages at present lie too far in favour of the predator. That problem should certainly be addressed, and we shall perhaps have an opportunity to do that when we consider other amendments. I do not say that the market works absolutely perfectly in that situation. Equally, I concede that there must be some cases in which there is a clearly observable public interest that the government of the day would ignore at their peril. I merely suggest that I do not believe that the amendment would resolve, either in practice or in principle, such a problem. It would have the consequence of overloading the government of the day, involving them politically in virtually any takeover of which one might care to conceive and clogging up the market and weakening what is the ultimate discipline on ineffective management. I hope that the amendment will not commend itself to the Committee.
4 p.m.
Lord Peston: In supporting the amendment, perhaps I may contribute one or two words on the nature of competition. I must say that, for me, competition is the central issue here. The locus classicus on this matter is Adam Smith's The Wealth of Nations, in which this subject was first properly discussed and from which all important subsequent work derives
Essentially, Adam Smith considered the question of competition as relating to the number of sources of independent economic power in our system. Therefore, prima facie, any mergers that take place are anti-competitive; they simply reduce the number of sources of economic power. If one thinks in the tradition of Adam Smith to the present day and one is in favour of competition one would take the view that the starting point should be a presumption against mergers. Essentially, according to modern thinking, there is a little more to the matter than Adam Smith suggested some 200 years ago; that is why one has the list of criteria. Although I am sympathetic to the noble Baroness, Lady Carnegy, in

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saying that competition is the central idea, I must make two points. If competition is the central idea, this is the amendment to support because mergers lead to a decline in competition. Therefore, to wish that no politics or judgment were involved is to wish away certain other aspects of reality. That is why the other criteria are there.
I am bound to say that those people who genuinely believe in competition must ensure that, at the very least, the balance of proof should be correctly balanced. As the Committee knows, I go further than that because, despite my general political views, I am a true disciple of Adam Smith. But I do not seek to persuade Committee Members of that this afternoon; I know that, if one believes in competition, balance is the minimal position that one can adopt. We can think of it in terms of the risks involved. Essentially, in all those matters, one cannot get everything 100 per cent. right. There are two kinds of risks. Does one have a criterion, the effect of which—having got most things right—would be to let through some mergers that should be stopped, or a set of criteria which stops some mergers that should be let through? Our concern is that we are letting through some mergers that should be stopped, but I freely admit that if one moves to a more balanced position, some mergers will be stopped that should be let through, as we shall not get everything right.
I wish to make two other points. I do not see the point about bureaucracy that the noble Lord has just made because—as the noble Viscount, Lord Caldecote, has said—in accepting this measure or some version of it the Secretary of State would simply send a signal to the market as to how the system should operate. He would not necessarily—and, in my opinion, should not necessarily—invent a new bureaucracy or become execessively involved. I therefore take the point about bureaucracy, but I do not see it as a necessary consequence of moving in the direction that my noble friend Lord Williams mentioned.
Lord Rees: I am most grateful to the noble Lord for giving way. As he has referred directly to my point, I hope that he will allow me to put this proposition: surely, in any contested takeover, the chairman of the company under threat would automatically request one of his friends in either House to ask the Minister of the day whether he would state on what grounds he believes that the public interest is not involved in that particular case.
Lord Peston: As I, like the noble Lord and other noble Lords, am not usually in charge of companies or involved in asking significant friends to ask Questions in the House, I am already taken aback that anyone would think that that was a proper way to behave; but let us leave that on one side. I do not see how that differs from the present state of affairs in which I gather that this sort of thing happens in any case. That is not my point. I believe that, with the criterion slightly changed, the Secretary of State can still stay above the battle and not involve himself with bureaucracy, but I accept that things are more difficult for the company concerned. It has to
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demonstrate something more positive. I am bound to say that that is the whole point of the amendment.
Perhaps I may just make one point about the workings of markets generally. Let us make the assumption—although it is not quite right—that the market in financial assets is perfect and operates in a satisfactory way. I do not accept that, but let us leave that point on one side. The real point is whether the criterion of maximising the return on assets is always the criterion that maximises the national economic welfare. So long as the market for goods and services remains competitive, one accepts that the free working of financial markets will lead to the correct outcome. But the whole point is that, if the operations are merger operations, the markets for goods and services become less competitive and the signals sent to the financial markets do not maximise the national interest.
To go back to my point, I accept and understand the argument. One of the points that puzzles me is that I understood—and perhaps the Secretary of State will repeat that statement—that the Government were committed to competition as regards the private sector, as I and my noble friend Lord Williams are. However, given the acceptance of the competition criterion as dominant—we shall come to the other criteria in a moment—I do not understand why, for years, the balance criterion has not been the obvious one. That is not a political point. I am not convinced that I could have talked a Labour Government into this either. The other criteria need to be explained. I leave the matter at that point. If one wants competition, it seems to me that one should demonstrate that, where competition prima facie is reduced, the burden of proof must be put forward positively.
Lord Wolfson: It seems to me that there is already a comprehensive body of legislation dealing with acquisitions and takeovers and I am sure that the noble Lord, Lord Williams, does not wish every acquisition to be referred to the Secretary of State; otherwise, he would be more harried than he already is.
I should like to refer to one or two points. When one talks of competition, I do not think that it is simply a question of United Kingdom competition; one must think in terms of European and international competition. As we all know, the world is getting smaller and competition 'lows across borders as free trade increases. Directors are not economists. They are not there to think of the national economy, although I am sure chat they do. They are there to manage their own firms which, in the end, will benefit the national economy. If they were economists, I believe that their record would be considerably worse than the 50&–50 that has been mentioned with regard to mergers. That point should be borne in mind.
I have not heard the word "shareholders" used. Surely the people who own companies should have some say in whether their companies are bought or sold. Are they receiving enough information at the moment? Are fund managers too powerful in that respect? Should they be required to refer to their own shareholders as to whether they should accept bids or

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not? The question of dawn raids, and so on, comes to mind.
Those are perfectly valid points, although I have not heard them raised. I do not think that more legislation will help, but I believe that individual shareholders could be consulted through fund managers more than they are at present. Perhaps my noble friends on the Front Bench will give thought to that.
The Secretary of State for Trade and Industry (Lord Young of Graffham): The noble Lord, Lord Williams of Elvel, has referred, with what I thought was an air of rather wistful nostalgia, to the review of merger policy undertaken in 1978 by the government with which he and his noble friend Lord Jay were associated. It is interesting to note that, until then, the legislation that we are still using had been operated quite satisfactorily by the government. Incidentally, roughly the same proportion of qualifying mergers were referred to the MMC then as now.
The 1978 Green Paper only raised the possibility of a more neutral approach to mergers. It did not go so far as requiring positive benefit to be shown before a merger could proceed, which is what the noble Lord now wants. It is ironic, when thinking about markets—and even the Opposition are prepared to admit that markets have some advantages—that they want to take mergers out of the hands of the market. My noble friend Lord Morris has some interesting amendments to come. Perhaps some of the points he has raised can be dealt with then. However, he should not judge all competition policy on the strength of one decision.
The Monopolies and Mergers Commission can look only to the competitive effects within the United Kingdom because that is what it is concerned with. Neither the Director General of Fair Trading nor the MMC considered platinum to be of importance to the United Kingdom market but it may well be that the commissioner, Sir Leon Brittan, had other views. His scope within Europe was different; he came to another view. That demonstrates the double jeopardy when we have some mergers being looked at here and in the Commission. I am hopeful that before the year is out we may be able to see that satisfactorily resolved.
Perhaps I may say to my noble friend that the "squeaky clean" test is particularly difficult to operate. There have been a number of investigations, the results of which have not as yet been published. It would be quite wrong to draw any conclusions from the mere fact of investigations.
Perhaps I may also draw to the attention of my noble friend Lord Caldecote and the noble Lord, Lord Ezra, that 90 per cent. of all bids in the United Kingdom are agreed bids. Only 10 per cent. are hostile bids. I know that my noble friend is as ever concerned with manufacturing. But I fail to see how insulating and protecting boards of manufacturing companies from bids will either strengthen manufacturing industry or sharpen their competitive edge. Indeed I fear that it may do precisely the opposite. The result of that protection is that we would see a less competitive element rather than a more competitive element.
Viscount Caldecote: I never suggested for one moment that there was any question of protecting inefficient management from bids. I suggested only that the public interest is better served if a merger increases the strength of our manufacturing base rather than decreases it. There are very good criteria for considering that. My noble friend can ask the companies, for instance, whether their share of the market will be increased or decreased by the merger.
Lord Young of Graffham: I should remind my noble friend that at the end of the day the only decision as to whether or not the share of the market has increased is not made by the boards of companies but by their customers and the demand for the goods, and the quality of the goods, that they manufacture and hopefully sell. I have the greatest admiration for the MMC but I should hate to think that it had to decide the likely future sales of any product. However, my noble friend is entitled to his view. I suspect that he has as much chance of converting me as I have in the long run of converting him.
Lord Ezra: Since the noble Lord referred to me, perhaps I may say that the point I was raising was the fear that some of the practices in the United States at the moment—the high leverage bids and the liberal use of junk bonds—would be most undesirable here. What does the noble Lord feel about that?
Lord Young of Graffham: That is another question, but I agree with the noble Lord. I have some difficulty in deciding exactly what a junk bond is. I suspect that it is something that is always recognised in hindsight rather than beforehand. However, I am happy to say that the tide has turned in the United States and the prevailing fashion for that type of operation seems to have passed. Certainly it does not seem to have come to the United Kingdom in anything like the same shape or size as it has taken place in the United States.
The noble Lord, Lord Peston, admitted a conversion to Adam Smith. I fear that the conversion was caused by a misreading of Adam Smith since his definition of competition and his support of it would lead to a static market. I suspect that would in fact lead more to a decline in competition than anything else. The contention of the noble Lord is based on the idea that there is only a stated number of sources of supply.
4.15 p.m.
Lord Peston: I hate to educate the noble Lord with respect to the history of economic doctrine. However, I must first say that I was both aware of and a supporter of Adam Smith before the noble Lord knew anything about economics, if I may be so acerbic. However, the essence of Adam Smith is precisely his emphasis on the dynamics of competition. Other economists later may have slightly lost sight of that. But Adam Smith saw the market as a living, dynamic thing in which, when people got together and merged, those essential dynamics were destroyed. That is exactly what this debate is about.
Lord Young of Graffham: I shall say without any fear of disagreement from either side of the Committee that I know absolutely nothing about economics, even today. I shall not therefore contest that matter. I say it as a matter of some pride! I hope that the noble Lord, Lord Peston, will admit that there is a certain incentive to boards of directors which fear that they might be in receipt of an unwelcome bid at least to sharpen their performance. Insulation from that is not what our economic life should be about.
I say to my noble friend Lord Rees that I took great comfort from his history of a robust decision. I confess that I have not as yet had any occasion to overrule the MMC but the history he recounted will give me courage should the occasion still arise, as indeed did the robust history of the merger that he described and fought off.
I hope that my noble friend will admit as a result of that experience—it might well have taken up a considerable amount of time and energy, but I am willing to venture a not small wager—that at the end of the day the company was in rather better shape than it was before. The noble Lord can confide that to me on another occasion.
The amendments to which the noble Lord, Lord Williams of Elvel, has spoken today would require the Secretary of State for the time being, in deciding whether to refer a merger to the Monopolies and Mergers Commission, to assess the public interest effects of the merger. He would be required to make a reference unless satisfied that the merger was not against the public interest. The duty of the Director General of Fair Trading to advise the Secretary of State on reference decisions would naturally be amended accordingly.
These amendments would mean that there was a presumption in favour of reference; the Secretary of State would have to be satisfied that there would be no adverse effects before he could clear a merger without a reference. There is a subtle but important difference between that and what happens at present, where I make a reference when I think, having had the director general's advice, that the merger raises issues of public interest. In practice this means that I want to be positively satisfied that there are such issues before I make a reference.
At this point I am reminded of the contribution of my noble friend Lord Wolfson who was the first and only Member of the Committee to mention the owners of companies—the shareholders.
Lord Williams of Elvel: I did.
Lord Young of Graffham: I apologise to the noble Lord, Lord Williams. However, my noble friend Lord Wolfson mentioned shareholders. In my position I have to balance a great number of different interests. I wished to ensure that all Members of the Committee were aware that the interests of shareholders were very truly one of those.
Perhaps I could briefly remind the Committee what happens at present. The Director General of Fair Trading, and no one else, learns of a merger. He then calls the parties and hears their views and the
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views of others, and then advises me on whether or not it should be referred to the Monopolies and Mergers Commission. Only if the Monopolies and Mergers Commission finds that a merger is likely to act against the public interest does the Act give me the power to stop it or to impose conditions. Noble Lords will find this process admirably summarised in the booklet Competitive Policy—How it Works which I issued and circulated widely towards the end of last year.
It is central to our view of mergers that there should have to be a good, positive reason before a reference—with the work and expense which that involves for firms as well as the authorities—can be justified.
Mergers are a normal part of the workings of the market. As I said, over 90 per cent. of the mergers in this country are by agreement. On the whole they are beneficial in the mechanism they provide for assets to be reallocated so that they are put to the most productive use; and in the spur which they provide to incumbent management to put those assets to the best use, so that firms adapt and grow. This view was confirmed by our thorough review of merger policy, the conclusions of which were set out last year in my department's Blue Paper.
The existing discretionary power to refer mergers where there are concerns about their effects is sufficient safeguard that those few cases which may be against the public interest will be picked up and subjected to a thorough scrutiny. It seems to us evident that it is any loss of competition as a result of a merger which is most likely to be against the public interest. That is because it is unlikely to be against a firm's own interests—at least in the short term—if competition is reduced. In other respects, what is good for the firm will almost always be good for the economy. We would not regard matters such as employment, regional development or research and development as typically matters where, in acting in their own interests, firms will damage the wider public interest, although exceptionally they may.
For the time being the present reference power leaves a large measure of discretion to the Secretary of State. That itself causes problems for some people. It is in the nature of a discretionary power that there cannot be absolute predictability of reference decisions. Nevertheless, given the guidance we have put out, I believe that those concerned often have a pretty good idea of which cases are likely to raise problems. Their uncertainty could only be reduced further by losing flexibility. That would probably mean more mergers being referred, because it would deprive us of the ability to clear mergers which increase concentration, but where the structure of the market means that this does not cause a loss of competition.
The fact is that of the almost 400 mergers and prospective mergers looked at by the Office of Fair Trading in a year, only about 8 to 12, or roughly 3 per cent., are referred to the Monopolies and Mergers Commission.
The noble Lords, Lord Williams and Lord Peston, say that this is only a modest change. The presumption in favour of reference would entail a

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more stringent examination at the pre-reference stage. That concerns the 400 or so references for merger which are looked at first. It could also mean 40 or 50 cases a year going to the MMC. Apart from the additional costs to the taxpayer, it would, more importantly, increase the burden on firms by subjecting them to unnecessary trouble and delay.
Noble Lords opposite would argue that mergers should be subjected to this critical scrutiny, because they are inherently to be distrusted. For their own good and for the wider public good, those whose business is running firms, and whose capital is invested in them, should be impeded from legitimate business activity.
The noble Lord will object that the evidence is that mergers do not work, that they are against the public interest. There are several problems with this argument. First, it assumes that those running and investing in businesses are not themselves capable of weighing up the available evidence and taking appropriate decisions. Secondly, it would deny them the right to make the wrong as well as the right decisions. After all, it is they who most directly stand to lose from the wrong decision. Thirdly, even granted that they may make the wrong decisions, it assumes that those of politicians or bureaucrats are somehow better. Finally, it ignores the very real spur given to incumbent management by the threat of takeover.
Noble Lords opposite would argue that mergers should be subjected to this critical scrutiny, because they are inherently to be distrusted. For their own good and for the wider public good, those whose business is running firms, and whose capital is invested in them, should be impeded from legitimate business activity.
The noble Lord will object that the evidence is that mergers do not work, that they are against the public interest. There are several problems with this argument. First, it assumes that those running and investing in businesses are not themselves capable of weighing up the available evidence and taking appropriate decisions. Secondly, it would deny them the right to make the wrong as well as the right decisions. After all, it is they who most directly stand to lose from the wrong decision. Thirdly, even granted that they made the wrong decisions, it assumes that those, of politicians or bureaucrats are somehow better. Finally,, it ignores the very real spur given to incumbent management by the threat of takeover.
Our emphasis has been on the need to let businessmen get on with running their businesses. Merger controls are necessary to preserve competition, but they should themselves give the minimum impediment to the market mechanism. My noble friend Lady Carnegy of Lour pointed out very appositely that Japan, Germany and other countries have adopted competition as the principal spur for looking at mergers' mechanisms. We have looked at this long and hard over the years and competition has been the dominant way in which we have regarded all merger policy during the years of this decade and certainly since 1984.
The measures in this Bill are designed to improve procedures, enabling the authorities to do their job
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while otherwise impeding business as little as possible. The prenotification system in particular is directed to this end.
We are also improving procedures in ways not requiring statutory change. In particular, the time taken by the MMC to produce reports has been reduced from six months to three months in most cases. We are also concerned to minimise delays before reports are published and my decision announced. However, there are certain procedures to be gone through which cannot be unreasonably curtailed in fairness to those concerned with the report and to ensure full consideration of any action to be taken.
First, under the Fair Trading Act I have a duty to exclude from the text of a published report material which it would be against the public interest to publish. I must therefore consider requests from the principal parties, or from third parties, for excisions to be made from the published text. Some of those same parties may already have asked the MMC to make excisions, on the grounds of commercial confidentiality, from their evidence as presented to me in the report, but I have a statutory duty to consider separately arguments made on public interest grounds alone.
Obviously much depends on the scope and diversity of the excisions sought. Some of the delay should be reduced by an amendment in the Companies Bill which will permit excisions of material which would damage private interests unless it would be in the public interest to disclose the material at issue. This amendment should allow me more flexibility to accede to reasonable requests.
To speed matters generally, I would urge all commercial parties who wish to make representations to my department to do so swiftly. Once the MMC has advised them on the terms on which their evidence will come forward, commercial parties should immediately make any further representations to me.
The second reason why time is needed before MMC merger reports can be published is that I must consider any advice which the Director General of Fair Trading wishes to give me. Clearly this can be a major exercise; for example, when the MMC concludes that a merger would be against the public interest unless certain conditions are fulfilled. In some cases the director general will need to consider the possibility of securing undertakings on the future conduct of the businesses. He must look carefully at how those undertakings might be framed and policed. In other cases the director general might need to think about the detailed terms of divestment. All this takes time. It is important that I receive considered advice from the director general before I come to my own view, taking his advice into account, on the appropriate decisions in each case. I am sure noble Lords will appreciate that it is inevitable that the length of time the director general needs to advise must vary from case to case.
The third reason that time is needed is to allow for printing and distribution of the report. As I have explained, the text cannot be settled until decisions have been reached on any excision requests. But once the text is finalised, Her Majesty's Stationery Office is

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now able to use the latest techniques to enable the report to be printed, distributed and published in a few days.
I hope it is clear that there are good reasons why the time from my receipt of MMC reports to publication must vary. I fear that there can be no set rules. The number of excisions requests may be quite unrelated to the complexity of the issues in the report and the remedy the MMC recommends. But all possible efforts are made to expedite the publication of the report and decisions on it.
The amendments of the noble Lords, Lord Williams of Elvel and Lord Peston, seem intended to use the mechanisms for examining mergers in order to hamper merger activity. Instead of keeping markets open, I suspect that the effect of their amendments would be to close them off. It is, I fear, symptomatic of the difference between the Government and Opposition. For those reasons I must oppose these amendments, and I very much hope that the noble Lords will reflect on what I have said and even now withdraw them.
4.30 p.m.
Lord Williams of Elvel: I am grateful to all noble Lords who have taken part in the debate. I am most grateful to my noble friend Lord Jay and to the noble Lord, Lord Lloyd of Kilgerran, the noble Viscount, Lord Caldecote, and the noble Lord, Lord Ezra, for support, although for differing motives. However, I believe that we generally share the same position.
I accept the strictures of the noble Lord, Lord Lloyd of Kilgerran, on the drafting of one of my amendments. I am not the world's greatest parliamentary draftsman. It is my job simply to set out what the Opposition feel should be the case and, if the Government accept it, there are plenty of people who will draft it much better than I can.
A noble Lord: Hear, hear!
Lord Williams of Elvel: I am grateful for that. The noble Lord, Lord Morris, dealt with amendments which will arise later in connection with the public interest. Therefore, I shall not now address myself to those matters.
The noble Baroness, Lady Carnegy, raised the interesting question of whether merger policies should be out of politics. There are two ways of running merger policy. The first is what I call the "United States way" where it is a matter of law. It is a matter for the government or the state, if they feel so moved, to challenge in the courts any particular operation. That is a perfectly clear system but it is not the system that we in this country have adopted since 1948. Nor is it the system which the Government are proposing to introduce. We have a flexible system of merger control which allows the public interest to be taken into account at a number of levels. The case is not decided finally in the courts but by the Secretary of State and the Executive of the Government.
It is true that in Germany and Japan competition rules tend to follow the United States practice. However, as the noble Viscount, Lord Caldecote, pointed out, almost all the mergers are agreed. Not
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only are they agreed between two companies but they are also agreed with the governmental authorities. For four years I was engaged in arranging mergers on the Continent and I know perfectly well—
Lord Young of Graffham: Does the noble Lord agree that agreed mergers can be just as anticompetitive as contested mergers?
Lord Williams of Elvel: Most certainly I agree with that. However, I was making the point that on the Continent governmental, or state, or land authorities are brought into negotiations when a larger merger takes place. I know that that is certainly the case in France and Germany because I have been involved in a number of them. That point needs to be made because the situation is unlike that in the United States where the issue is decided in the courts.
The noble Lord, Lord Wolfson, spoke of European competition. We shall deal with that point in our discussions on Section 84 of the Fair Trading Act and the public interest critieria. If the noble Lord will excuse me I shall not comment on what he said. However, I should like to point out that. I mentioned shareholders and I believe that they have their rights in such matters. However, I also believe that employees have their rights and I should like to see more attention paid to that—
Lord Wolfson: Does the noble Lord agree that in many cases employees and shareholders are becoming one and the same?
Lord Williams of Elvel: I hope that that situation will grow. The Minister has conceded my amendment which deals with ESOPs and which will promote just that move. I support the development so the Minister and I are at one on that matter.
The Minister appeared to be in a rather humble mood today. He announced that he knew nothing about economics; he announced that he did not know about junk bonds; he said that he had not read The Wealth of Nations. However, I thought that he was rather dismissive of the arguments put forward by his noble friend Lord Caldecote. There lies the central difference of opinion on the Benches opposite. I believe that I align myself with the noble Viscount more than I align myself with the Secretary of State.
The noble Lord, Lord Young, then treated the Committee to a lengthy discursus on the existing system of the way in which the Director General of Fair Trading works. I understand that because I have worked in the system. Nevertheless, I do not believe that it is a sensible argument to say, "We cannot adopt the amendment because it would clog up the system". There I take up the point made by the noble Lord, Lord Rees.
At the moment if a merger is proposed which is above the two thresholds set out in the Fair Trading Act the director general has a duty to smoke it out in some way—he must look at the proposal. If he must do so because someone tells him that the merger is to take place—or if he must look at the proposal in any event, as he does at the moment—I do not see how the system will differ greatly administratively. I do not see that a requirement for an extra 30 people in the Office of Fair Trading will clog up the system.

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Finally, the noble Lord, Lord Young, attempted to make what I regard as a party political point. He said that we are not in favour of competition and that we should like to be nostalgic about the old days. We are not arguing about that issue and I wish that on every occasion the Secretary of State would abandon the last page of his brief and let the Committee discuss the practical amendments.
This is an important amendment although, in our view, a major change would not be involved. However, it would place a block before a merger takes place so that the Secretary of State and the director general can look at the proposal and say that prima facie it may be against the public interest and should be referred.
Clearly we cannot guess at the number of references which may take place under that system. The Minister guessed at them but I have no idea of the effect in terms of references. However, I believe that if we as Parliament—and through Parliament the Executive—cannot take a view on whether it is in the public interest that the merger should take place, we are in default in our duty. The noble Viscount, Lord Caldecote, put his finger on the point when he said that building up the manufacturing base will be essential—
Lord Young of Graffham: Perhaps the noble Lord can elucidate and tell the Committee how it helps to build up the manufacturing base by asking the Monopolies and Mergers Commission to look at 40 or 50 bids a year or by asking the Office of Fair Trading to look in considerably more detail at 200 of the 400 bids a year?
Lord Williams of Elvel: It helps because there would be a public interest criterion in Section 84 as it exists at present. Furthermore, the merger must be proved to be in the public interest before being allowed to go through. At the moment there is no burden of proof.
Lord Young of Graffham: Perhaps the noble Lord does not follow me. I understand the point about the criterion, but how does it help to build up the manufacturing base? What test can the Monopolies and Mergers Commission carry out to ensure that somehow firms will be made more competitive and their products will sell more widely?
Lord Williams of Elvel: That is exactly the point. The Monopolies and Mergers Commission, the Secretary of State and the director general must take that decision, and at present they take the decision by non-referral. All we are asking is that the question of referral—the burden of proof—should be made positive rather than negative. I believe that that responds to the point made by the Secretary of State about the DTI paper from which I quoted extensively. I pointed out that at present 50 per cent. of all mergers appear to go wrong. We believe that the public should pay attention to that fact and for that reason I hope that the Committee will support us in our amendment. I beg to move.
4.38 p.m.
On Question, Whether the said amendment (No. 244ZA) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 125.

DIVISION NO. 1

CONTENTS

Addington, L.

Hunt, L.

Aylestone, L.

Jay, L.

Birk, B.

Kilbracken, L.

Blackstone, B.

Listowel, E.

Bonham-Carter, L.

Llewelyn-Davies of Hastoe, B.

Boston of Faversham, L.

Broadbridge, L.

Lloyd of Kilgerran, L.

Buckmaster, V.

Lockwood, B.

Carmichael of Kelvingrove, L.

Longford, E.

Mais, L.

Carter, L. [Teller.]

Mishcon, L.

Chandos, V.

Molloy, L.

Cledwyn of Penrhos, L.

Mulley, L.

Cocks of Hartcliffe, L.

Nicol, B.

Cudlipp, L.

Peston, L.

David, B.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Diamond, L.

Ponsonby of Shulbrede, L. [Teller.]

Dormand of Easington, L.

Elwyn-Jones, L.

Prys-Davies, L.

Ennals, L.

Rathcreedan, L.

Ewart-Biggs, B.

Ritchie of Dundee, L.

Ezra, L.

Rugby, L.

Falkland, V.

Sainsbury, L.

Gallacher, L.

Seear, B.

Gladwyn, L.

Serota, B.

Glenamara, L.

Stallard, L.

Graham of Edmonton, L.

Stedman, B.

Gregson, L.

Stewart of Fulham, L.

Hanworth, V.

Stoddart of Swindon, L.

Hatch of Lusby, L.

Strabolgi, L.

Henderson of Brompton, L.

Turner of Camden, B.

Underhill, L.

Houghton of Sowerby, L.

Williams of Elvel, L.

NOT-CONTENTS

Aldington, L.

Elliot of Harwood, B.

Ampthill, L.

Elton, L.

Arran, E.

Ferrers, E.

Auckland, L.

Fortescue, E.

Balfour, E.

Fraser of Carmyllie, L.

Barber, L.

Fraser of Kilmorack, L.

Belhaven and Stenton, L.

Gainford, L.

Beloff, L.

Gray of Contin, L.

Belstead, L.

Grimthorpe, L.

Bessborough, E.

Haig, E.

Birdwood, L.

Hailsham of Saint Marylebone, L.

Blatch, B.

Blyth, L.

Halsbury, E.

Boardman, L.

Hardinge of Penshurst, L.

Bolton, L.

Harvington, L.

Borthwick, L.

Henley, L.

Boyd-Carpenter, L.

Hertford, M.

Brabazon of Tara, L.

Hesketh, L.

Brightman, L.

Hirshfield, L.

Brougham and Vaux, L.

Hives, L.

Campbell of Alloway, L.

Home of the Hirsel, L.

Campbell of Croy, L.

Hooper, B.

Carnegy of Lour, B.

Howe, E.

Cathcart, E.

Hylton-Foster, B.

Cockfield, L.

Ilchester, E.

Coleraine, L.

Jenkin of Roding, L.

Craigavon, V.

Killearn, L.

Cullen of Ashbourne, L.

Kimball, L.

Denham, L. [Teller.]

Lawrence, L.

Denning, L. [Teller.]

Lloyd of Hampstead, L.

Dundee, E.

Long, V.

Dunrossil, V.

Lurgan, L.

Ellenborough, L.

Mackay of Clashfern, L.

1165

Macleod of Borve, B.

Seebohm, L.

Mancroft, L.

Selborne, E.

Manton, L.

Selkirk, E.

Margadale, L.

Shannon, E.

Marley, L.

Simon of Glaisdale, L.

Marsh, L.

Skelmersdale, L.

Merrivale, L.

Southborough, L.

Milverton, L.

Stockton, E.

Mottistone, L.

Strange, B.

Mowbray and Stourton, L.

Strathcarron, L.

Munster, E.

Strathclyde, L.

Nelson, E.

Strathspey, L.

Norrie, L.

Suffield, L.

Onslow, E.

Swansea, L.

Oppenheim-Barnes, B.

Swinton, E.

Orkney, E.

Terrington, L.

Oxfuird, V.

Teviot, L.

Pender, L.

Thomas of Gwydir, L.

Pennock, L.

Thomas of Swynnerton, L.

Plummer of St. Marylebone L.

Thorneycroft, L.

Trafford, L.

Porritt, L.

Trefgarne, L.

Portland, D.

Trumpington, B.

Portsmouth, E.

Vaux of Harrowden, L.

Quinton, L.

Waldegrave, E.

Rankeillour, L.

Weir, V.

Reay, L.

Westbury, L.

Rees, L.

Wise, L.

Rodney, L.

Wolfson, L.

Roskill, L.

Young of Graffham, L.

Sanderson of Bowden, L.

4.46 p.m.
Lord Peston Lord Peston moved Amendment No. 244ZB:
Before Clause 97 insert the following new clause:
("Merger reference: section 84 of Fair Trading Act 1973.. In section 64 of the Fair Trading Act 1973 (merger situation qualifying for investigation) after subsection (5) insert—
"(5A) In determining whether to make a merger reference to the Commission the Secretary of State shall have regard to the public interest considerations as specified in section 84 of this Act."".)
The noble Lord said: A number of the considerations which applied to the previous amendment are relevant also to this one so I shall not delay the Committee excessively—especially given the Division we have just had. I am not full of confidence that I can sway any open minds assuming that there are any.
We are discussing something to which the Secretary of State referrerd earlier; namely, how these matters are dealt with in practice. One interpretation of Section 64 of the Fair Trading Act is that at the stage where the Secretary of State is involved, he devotes himself entirely to concentration or competition matters with the criteria in Section 84 only applying later. However, it is difficult to believe that that is what the Act actually means. If it did mean that, then nearly all mergers would be referred. As I argued earlier, by definition there is always an increase of concentration when a merger takes place.
Therefore, in practice, there must be other criteria not unconnected with the definition of the public interest which arise when the question of a merger reference appears before the Secretary of State. Perhaps I may argue mutatis mutandis because I believe this amendment is grouped with Amendment No. 245K. That is the corresponding amendment which applies to the director general, and a similar
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point applies. In other words, in deciding these matters where the Secretary of State or director general take a view, there must be some criteria in mind. The Secretary of State almost said as much in his earlier remarks.
Previously, the Secretary of State referred to nostalgia for those times; I have a nostalgia for those times. Without revealing any official secrets or breaking the normal confidences which civil servants have, it is not impossible that officials, when advising the Secretary of State on how he should approach the question of a merger reference, draw his attention to the criteria in Section 84.
In other words, in arguing as a matter of consistency that the criteria in Section 84 should be on the face of the Bill, I am also partly arguing that I am fairly sure that that is what happens in practice anyway. Therefore why should that not be stated very clearly?
I have another interest on which I should like to draw out the Secretary of State. This relates to whether there are any other hidden criteria; namely, whether there are other matters that influence the Secretary of State. My view is that, if there are, those criteria should also be spelt out. Being as brief as I can, my arguments on why these amendments should commend themselves to the Secretary of State are partly for logical consistency and secondly, because it must be the case that that is broadly what happens, anyway.
I am also arguing the case for explicit criteria against, if you like, hidden criteria. However, even there I must not go too far because Section 84 contains the expression—which I admit I do not like—"and amongst other things". In other words, it still leaves room for other matters to be brought forward. Even moving that far would not constrain the Secretary of State too much. To summarise, therefore, there is a rational case for such an amendment to be introduced and I commend it to the Committee. I beg to move.
Lord Lloyd of Kilgerran: I should like briefly to support these two amendments in spite of the long dissertations we have heard about The Wealth of Nations and the recent speeches made by the Secretary of State.
There is a rationale for these two amendments. The position is quite clear. Under Section 64 we are dealing with a merger situation qualifying for investigation. All that Amendment No. 244ZB proposes is that the considerations in Section 84 of the Act should be looked at. That is all it says.
I understand that the amendment is linked with Amendment No. 245K. We have another pragmatic, simple situation. We are now referring to Section 76, which deals with the functions of a director in merger situations. What does he have to do? He must look at the position in the light of the public interest and in the light of the criteria already in the Act. I should have thought that these two amendments could happily be introduced.
Viscount Chandos: I too speak in favour of this amendment. The Secretary of State asked the noble Lord, Lord Williams, what the previous amendment

1167
would do to improve sales, competitiveness and profitability in a company that is referred. The point is that there are cases where companies can justify a period of shelter in exactly the way, as I pointed out on Second Reading, that the Government have granted temporary periods of shelter to companies that they have privatised through the existence of golden shares and so on. It seems to me that there are a reasonable number of companies that are not being caught by the current competition-oriented criteria which are falling prey to the relatively short-term predators and that the public interest is thereby being harmed.
My second point is that the Secretary of State said earlier that he had a great deal of flexibility and discretion. My understanding is that he can only overrule the Director General of Fair Trading if the director general recommends that a merger be blocked. The Secretary of State cannot recommend that a merger be blocked if the director general has cleared it. Therefore, it is most important that the Secretary of State takes into account the broader public interest definitions and makes that clear to the Monopolies and Mergers Commission when there is a reference in order to ensure that the MMC itself takes into account the broader criteria that the Fair Trading Act empowers it to do.
Lord Young of Graffham: I reassure the noble Lord, Lord Peston, that I have an open mind. Surely he should have learnt that from my claim not to be an economist—but that is something else.
Perhaps the noble Viscount, Lord Chandos, has misunderstood the position. I always have the right to overrule the Director General of Fair Trading. What I cannot do is block a merger which the Monopolies and Mergers Commission says can proceed, having considered the merger and said that it would not operate against the public interest. In those circumstances, under the Fair Trading Act I could not arbitarily decide that there is a new test of public interest.
I heard what the noble Lord, Lord Lloyd of Kilgerran, had to say. Perhaps I should say to both the noble Lords, Lord Peston and Lord Lloyd, that we have already discussed the action which I and the director general would have to take and to which these amendments are applying the public interest test. However, I can only add at the moment that it is left to the MMC to apply the test of public interest under Section 84. For that to be done at the pre-reference stage—and it would have to be done first by the Director General of Fair Trading—would pre-empt the role of the MMC. It would apply a rigorous examination of a kind which only a few moments ago the Committee decided would be inappropriate at that stage. In the circumstances, therefore, I hope that the noble Lord will accept the position and withdraw his amendment.
Lord Peston: I am bound to say that I am a trifle disappointed. It is certainly not the intention of the amendment to pre-empt the activities of the MMC or anything like that. The intention is to make much clearer what the Secretary of State and the director
1168
general are up to. After all, the words are "have regard to". I did not have in mind anything other than making much clearer what would be happening.
Lord Young of Graffham: I hope that the noble Lord will accept that I cannot "have regard to" the test without actually examining it. In effect, that would mean the director general would have to apply the same rigorous examination as the MMC. We must also remember that the MMC, consisting of a panel of 32 people which varies from time to time, has been decided in the past by your Lordships' House to be the most suitable body to apply the test.
Lord Peston: Perhaps I could at least make clear what we are talking about. The intention is not to replace another body with the activity of the Secretary of State. It is certainly not for the Secretary of State to do the work. Equally, we must recognise what actually is the position. The Secretary of State has himself made clear that he does not simply take a merger and say, "This is a merger. Clearly it involves concentration, first and foremost, and therefore I must send it on". The director general does not do that. They clearly concern themselves with criteria. I understood the Secretary of State to he saying that he took a broader view of the matter.
I am moving the amendment in the same spirit as that of the Secretary of State on Second Reading. He said that in discussing these matters "we would be open minded" —to use that expression again. I am seeking to be constructive. I am not looking for trouble, as perhaps I was earlier. I am trying to be constructive in saying that, as I see it, the Secretary of State must as a rational person have some class of criteria that he is applying in taking his actions. I suggest that it is logical that the criteria should be those in Section 84. I cannot believe that they would not be. In other words, I am saying to the Secretary of State, without asking him to tell me what he does secretly, that I cannot believe that he does not already do what I am saying should be made explicit.
It may be that we are having an argument which we ought not to be having, so to speak, and perhaps the Secretary of State may wish to make some further comment before I conclude so that we may proceed amicably. I do not see this in quite the contentious way that the Secretary of State himself almost interpreted it.
5 p.m.
Lord Young of Graffham: Perhaps I may help the noble Lord, Lord Peston. I am aware—indeed, we are all aware—of the public interest test that the Monopolies and Mergers Commission will apply in due course. I have said in the past that the job of the Director General of Fair Trading, and indeed my job as well, is to act almost as a magistrates' court to see whether there is a case to answer, and purely that. If there appears prima facie to be a case to answer—and it so happens that between eight and 13 times a year there is—then those cases get referred to the Monopolies and Mergers Commission.
The commission does the deep and exhaustive test to find out if the proposed merger does have an anti-

1169
competitive effect which will operate against the public interest. If we are to bring that test forward, then that deep and exhaustive investigation will have to be undertaken by the Director General of Fair Trading rather than the prima facie approach that he takes at the moment. That is really the point I am making.
Lord Lloyd of Kilgerran: I may have misunderstood the Minister. Is the noble Lord saying that in his preliminary investigation he has no regard to Section 84 of the Fair Trading Act? Section 84 of the Fair Trading Act gives criteria for the public interest. Is the noble Lord saying that he takes no account of Section 84 in his rulings and the decisions that, in his capacity as Secretary of State, he has to make in this preliminary matter?
Lord Young of Graffham: No, I said at the beginning that we have regard to Section 84 all the way through. The job of the director general is to see whether there is a prima facie case to be fully investigated. That preliminary view is different from the more exhaustive view that takes some three months and which the MMC makes. It is only if they see that there is a prima facie case, and I accept that there is a prima facie case, that it gets referred. What this amendment would do is make us have a more exhaustive investigation by a body that, frankly, is unsuited to that task.
Lord Lloyd of Kilgerran: I am sorry to intervene once again, but that is precisely what this amendment is intended to do. You have to see whether there is a prima facie case. You will have to have regard to Section 84. I should have thought that the Minister in his reply now is ad idem with the noble Lord, Lord Peston, at least in relation to the terms of this amendment.
Lord Young of Graffham: If it were to do what happens now then it is clearly unnecessary. My view is that it asks us to do more than we are doing now.
Lord Peston: Before bringing this to a conclusion, may I first say to the Secretary of State, if I dare, that I thought that he put my case better than I did. I think his analogy with the magistrates' court is precisely what I had in mind, and the question of whether there is a case to answer is precisely what I had in mind. Therefore, as with the noble Lord, Lord Lloyd, the issue simply revolves around whether it should be made explicit.
The Secretary of State shakes his head and I shall not pursue the point. I have tried to be as helpful as I can in terms of the Bill. I believe that, with this added, the Fair Trading Act would be a better Act. I think it would be enormously helpful to industry. However, we cannot spend all afternoon and evening trying to persuade the Secretary of State if he will not be persuaded. All I can do is ask him whether, given how well he put the case for this amendment, he would not like at least to think about it again, because we shall be coming back to these matters. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 97 [Restriction on references where prior notice given]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 244ZC:
Page 98, line 6, leave out ("may") and insert ("shall").
The noble Lord said: I beg to move Amendment No. 244ZC, standing in my name and that of my noble friend Lord Peston. At this stage we come to the Bill itself rather than discussing certain preliminaries that we were trying to put into the Bill, and we come to Clause 97. Clause 97 deals with the prenotification procedure that is suggested.
This amendment is based on the legislation in the United States which is summarised as the Hart-Scott-Rodino legislation. The amendment, if accepted and put into the Bill, would require, as the Hart-Scott-Rodino legislation in the States requires, a mandatory prenotification once the relevant threshold has been crossed. The relevant threshold in Hart-Scott-Rodino is size of company and the proportion, or the amount, of stock in another company acquired. The relevant threshold in the Fair Trading Act is size of company in terms of net assets and share of market.
There are some obvious differences between the United States practice and our own and we cannot follow explicitly the terms and provisions of the Hart-Scott-Rodino Act. Nevertheless there are some features of it that should commend themselves to us.
The United States legislation provides that whenever one company buys more than 15 million dollars' worth of stock in another for purposes other than purely passive investment, it must notify the Justice Department and the Federal Trade Commission. After the notice is filed, the company—the bidder in this case—has to observe a 30-day waiting period. This is similar to what we have in the Bill at the moment.
The company then waits during the waiting period and if the Justice Department or the FTC say nothing at all, the company in question is then free to proceed with a bid. If the FTC or the Justice Department tries to challenge it, then it will challenge in the courts according to the normal anti-trust procedures under the Sherman Act.
The procedure in the United Kingdom is of course somewhat different, as we have discussed earlier, in that it is for the director general to make a first assessment and the Secretary of State to make an assessment according to what criteria he feels appropriate, and for the Monopolies and Mergers Commission then to intervene if that is the right thing to do and if the merger reference takes place.
Our amendment would seek to take what the Government are proposing and to make sure that all companies take advantage—if I may use that expression—of the provisions in the Bill. Not just those who wish to should take advantage: all should do so. The merit of this in our view—and we go some way in supporting the Government in what they are proposing; we think it is a relatively convenient system, as I said at Second Reading—is that we

1171
should like to see this as a general rule rather than an option.
We believe that, if the director is informed by companies which cross the relevant threshold in the Fair Trading Act, he will then have the opportunity to do all the things that he can do under the provisions of Clause 97 as it is in the Bill at the moment. He would be able to do that and the companies would be quite secure that, if he did not intervene, they could go ahead, and there might be undertakings or there might not be undertakings, and all that would proceed in the way that the Bill specifies. The director would also make public these prenotifications as is provided in the Bill, and others would have the opportunity to comment on those prenotifications. It would introduce a system that was not just optional but which was the regular feature of the merger world.
It works well in the United States. I have to confess that the Hart-Scott-Rodino legislation was fought very hard through Congress when it was introduced, but in the end it got through and it has worked well. It allows the government—the Justice Department and the Federal Trade Commission—to weigh up the issues before anything actually happens.
I do not want to go into any of the detail of the United States legislation because the United States system is rather different from ours, and it may be again that the amendment is incorrectly drafted. It may be that the amendment needs a more expert hand than mine. However, we believe that this is a procedure that the Government would do well to adopt, and I beg to move.
Lord Young of Graffham: The prenotification system is designed to facilitate the process of examining mergers, especially for the vast majority of mergers where it is clear at an early stage that a reference would not be justified. It will enable parties to know what they have to do and what information to provide; and, if they meet the necessary conditions, once the period for considering the merger has expired I will no longer have the power to refer it. It will give the Office of Fair Trading the information that it needs to decide quickly which mergers raise no competition or other problems and advise me accordingly or which need further examination with a view to a possible reference.
The noble Lord wants to make prenotification mandatory. His amendment is flawed, however, because it takes no account of the fact that the present discretionary system is very widely drawn. Proposed arrangements would have to be prenotified if they only might result in a qualifying merger. It would be impossible for the applicant to know whether the obligation to notify had arisen, because what might result in a merger situation is often a matter of judgment, which is ultimately for the Monopolies and Mergers Commission. Moreover, what happens if they fail to notify the director general is not made clear; there is nothing to stop the merger proceedings, as the Act only enables me to do that following an adverse report by the Monopolies and Mergers Commission.
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There is in our view no case for requiring prenotification. It is rare for completed mergers to present a problem, so holding all mergers up pending examination is unnecessary. It would catch a large number of cases of no real interest to the authorities. We believe that a voluntary system which leaves it to the parties to decide whether it is worth obtaining advance clearance is consistent with the principle of minimising intervention in the merger control process. The whole point of our proposed system is that it is voluntary: firms will be able to decide whether it is worth while prenotifying, and it is up to us to make it worth their while.
The noble Lord's amendment would therefore impose an unnecessary burden on firms and the authorities. I fear that it would use procedures designed to facilitate examination of mergers in order to put a brake on mergers. I hope that he will be so good as to agree to withdraw it.
Lord Williams of Elvel: Perhaps the Secretary of State can clear up one point. If I heard him correctly, he said that companies might not know when they were in a notifiable situation. I should have thought that the net asset criterion in the Fair Trading Act was clear enough so that any company would know when it was in a prenotification situation. Am I right or wrong on that?
Lord Young of Graffham: This point will come into being later on. Companies can start to acquire more shares and then find themselves in a merger situation or it could be determined later that they were in a merger situation without necessarily realising it.
Lord Williams of Elvel: I am grateful to the noble Lord, but in fact I was after a slightly different point on the thresholds under the Fair Trading Act. I take the point that companies rather curiously may find themselves getting into a merger situation through a purchase of shares, which is nothing to do with the thresholds under the Fair Trading Act, about which I was talking.
I have listened to the noble Lord's argument. I have to accept that there is a difference of opinion between us and the Government on the matter. I shall not press the Committee for a decision. I shall read carefully what has been said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 244ZD not moved.]
5.15 p.m.
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 244A:
Page 98, line 17, leave out ("resulting merger situation") and insert ("merger situation qualifying for investigation which is created in consequence of carrying those arrangement into effect").
The noble Lord said: In moving Amendment No. 244A I hope that it will be convenient if I speak also to Amendments Nos. 245D and 245E. These are purely drafting amendments to replace a defined term, which is used only once, in new Section 75A(3) with the full definition. The definition in Section 75E can accordingly be dispensed with. I beg to move.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 244B:
page 98, line 33, after ("twenty-eight") insert ("working").
The noble Lord said: In moving Amendment No. 244B, I shall speak also to Amendment No. 244C. Amendment No. 244B has been suggested by the Law Society of Scotland.
It is an oddity that calendar days are used in the Bill instead of working days. When we talk of calendar days there may be long gaps such as the Christmas and New Year holidays whereby the number of working days in a given 28-day period is not the same as in May or June. There is a risk that merger notices may be bunched round the end of the first week in December by a clever group of bidders, perhaps to no one's particular advantage. We think that it is sensible for the period about which we are talking to be working days rather calendar days. The same is true of Amendment No. 244C where the director has power of extension of the period. Again we believe that "working days" is the proper expression.
Perhaps I may ask the Secretary of State to clear up one point on the power of the director to extend the period. As I understand it, he has the power under the Bill to extend the period only once. It is not an indefinite series of extensions that he can go in for. I hope that the noble Lord can clear up that point in his reply.
While the amendments are not of great significance, they come from a good and reputable source. I hope that the noble Lord will be able to give them careful consideration. I beg to move.
Lord Young of Graffham: To be successful the prenotification system must offer prenotifiers the certainty of a decision from the authorities within a time-scale which is as short and as firm as possible. The director general needs sufficient time to consider whether in the light of the available facts a merger should be referred for full consideration by the Monopolies and Mergers Commission. But the longer the time allowed to the director general the less attractive voluntary prenotification becomes to the companies concerned, which will not use the system if it does not offer any advantage in terms of time. A careful balance needs to be struck between these two requirements if voluntary prenotification is to be workable.
Our assessment, based on past experience and consultation with the director general, is that a period of 28 days strikes the right balance. We have used a definition based on "days" rather than "working days" because this is more straightforward and readily calculable. The period of 28 days would have to start and end on a working day.
We recognise concerns that a fixed period of 28 days may not in every case prove sufficient for various reasons, of which the loss of days through Bank Holidays is by no means the most important. That is why the Bill contains a provision allowing this 28-day period to be extended by a further 14 days. We envisage that this provision will not have to be used in the majority of cases. However, there is nothing to prevent this power being used to extend the period
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more than once. In fact, it can be extended more than once. There is no reason on that account to make the extension provision in the Bill for a longer period.
Lord Williams of Elvel: The Secretary of State said that the period can be extended more than once. Can it be extended an indefinite number of times? Is there no limitation on what the director general can do?
Lord Young of Graffham: Yes, it can be extended for an indefinite period.
I hope that it is not part of the noble Lord's intention in moving the amendment simply to delay further the progress of prospective mergers. As I have already said, there should be no place in government policy for measures designed purely to obstruct legitimate merger activity. That is why the period set in the Bill for consideration of prenotified mergers is the shortest possible consistent with a proper assessment of the facts. However, we recognise that setting a period in terms of working days may have some advantages for the authorities. In the circumstances, therefore, I am prepared, if the noble Lord will withdraw the amendment, to look at the matter again. If we were to do so, it would cover the same calendar period. It would be a reduced number of working days.
Lord Williams of Elvel: I am most grateful to the noble Lord. It certainly was not my intention in moving the amendment to shorten the time-scale. I was trying to find someting more satisfactory than calendar days. I accept that if the vvorking day principle is adopted the number of working days would be smaller than the 28-day calendar.
I have not moved an amendment to this effect but it is somewhat worrying that the director can engage in an indefinite number of extensions of this period. The noble Lord said absolutely rightly that firms want to have a clear idea of the time-scale. There can be one extension, but to have one, two, three, four or five extensions creates exactly the problem that the noble Lord and I want to avoid. I hope that he will consider having another look at the point before we come to Report stage.
Lord Young of Graffham: If the noble Lord will withdraw the amendment, I shall look not only at the working day point but also at extensions more than once.
Lord Williams of Elvel: I am most grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 244C not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 244D:
Page 99, line 24, at end insert ("or
(c) he suspects that there is no intention to implement the notified arrangements or that any such intention has been abandoned.").
The noble Lord said: This again is an effort to try to improve the provisions of prenotification. The amendment would give to the Secretary of State the

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opportunity to shorten the period if he perceives that the original intention will not materialise. Everybody has pulled away from the deal and the period can then be shortened. The amendment has been suggested by the Law Society of Scotland. I should be grateful if the noble Lord would give some attention to it. I beg to move.
Lord Young of Graffham: I hope that the noble Lord will take this as an example of how open my mind is today.
This amendment is presumably intended to allow the director general to reject prenotifications he considers to be speculative and would also allow him to cease consideration of cases where he considered the proposed transaction had been abandoned since the prenotification was made. This change seems to make a sensible additional provision; but we are not entirely convinced that it is necessary. Where the director general has doubts about a proposed merger, he will have the power under subsection (4) of the new Section 75B to request whatever information he needs to be satisfied about the proposed transaction. If this information is not forthcoming, if it is not supplied in time or if the director general suspects it is false or misleading, he will then be able, under subsection (6) of new Section 75B, to reject the prenotification. If parties no longer intend to proceed with a merger, there is provision for them to withdraw their notification. These provisions should deal satisfactorily with most situations.
The amendment would introduce an element of uncertainty into the system for prenotifiers. Prenotifiers need to be confident that if they provide all the information that is requested they will in most cases get a decision within a short time, without there being a whole series of qualifications to the decision-making process. We are concerned that the system for voluntary prenotification of mergers will not be successful if it is hedged around with too many exceptions of this kind.
Having said that, we can see some merit in this amendment as a procedural change which would allow the director general to concentrate his resources on cases where there was a clear intention to go ahead with the proposed merger. The director general would have to exercise this power in a fair and reasonable way. He could not arbitrarily reject prenotifications when there were good reason to think they had been abandoned. On this basis, we are prepared to look again at this as a minor procedural improvement. If the noble Lord will withdraw the amendment we will consider bringing forward something on these lines at a later stage.
Lord Williams of Elvel: I am most grateful to the noble Lord. We are making a great deal of progress on the Bill. I am sure that it is being improved in Committee. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 244E:
Page 99, line 29, leave out ("England and Wales") and insert ("any part of Great Britain.").
The noble Lord said: This again is a Scottish amendment. The Law Society of Scotland has a problem in that Bank Holidays in Scotland do not necessarily fall on the same days as Bank Holidays in England and Wales. The director general, being situated in London, clearly does not work on Bank Holidays in England and Wales but may work on Scottish Bank Holidays; and vice versa. There does not seem to be any difficulty in making sure that the Bank Holiday exclusion is extended to Scotland as well as to England and Wales. I beg to move.
Lord Young of Graffham: This amendment would change the definition of a working day for the purposes of the prenotification system so that it excluded Bank Holidays in any part of Great Britain rather than Bank Holidays in England and Wales. At first sight this appears to be a sensible amendment, but I hope to explain why it is unnecessary and in this case even undesirable.
The definition of a working day is required because new Section 75B provides that the 28-day period allowed for the director general to consider a prenotified merger shall begin and end on a working day. The important point here is that the day on which the period begins and ends should be a working day for the director general, who is located in England, because he is the person doing the considering. That is why the provision is framed as it is.
The effect of the proposed amendment would be to prevent the 28-day period beginning or ending, for example, on a Scottish Bank Holiday even though the day in question was a normal working day for the Office of Fair Trading. I therefore suggest that the existing provision is correct. There is no slight intended to those who live north of the Border. We want the provision to be as straightforward as possible consistent with ensuring that the Office of Fair Trading is open for business on the day the period begins and ends. If in the event we look at working days only, that would follow from any change we then make.
Lord Williams of Elvel: I am sure no slight is intended but slight has been taken by the Law Society of Scotland. It claims that the reference in subsection (7) to the definition of "working day" as meaning Bank Holidays in England and Wales but without reference to Scotland is objectionable. I am sure that the Law Society of Scotland and I will read carefully what the noble Lord has said on this subject. I have to return to this matter at a later stage of the Bill should it come to that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Morris Lord Morris moved Amendment No. 245:
Page 100, line 9, at end insert ("or is suspected of being").
The noble Lord said: This modest amendment is an attempt to improve the Bill and to probe my noble friend. Why is there a different test or arrangements whereby the director may at any time before the period for considering a merger notice expires reject the notice if he suspects that any information, whether in the merger notice or otherwise, is in any

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material respect false or misleading. After the period there is a different test. He then has power only to refer a bid if any information is seen to be in any material way false or misleading. This appears to be an anomaly. I should be grateful if my noble friend would explain the reason for the different tests. I beg to move.
5.30 p.m.
Lord Young of Graffham: I hope that my noble friend will understand if I say to him that I suspect that the amendment which he has moved is neither modest nor, I fear, does it in our view improve the Bill. It is obviously essential for the proper operation of the prenotification system for the authorities to be able to rely on information which they are given by applicants. That is why we have provided that a clearance will be invalidated if any information given, whether in the original notice or otherwise, is false or misleading and why we have given the Director General of Fair Trading power to reject a notice where he suspects false or misleading information to have been given. However, it is also essential, if business is to have confidence in the system, that once a merger has been cleared it should not be possible to reopen it without good reason.
It is one thing to reject a notice at the time it is being considered, because the authorities will be subject to strict time limits and need to be able to trust the information they are given without having time to double-check everything. Rejection then means only that the applicant will lose the benefit of prenotification. The merger will still be considered in the normal way or the applicant can renotify and substantiate the information in question. It is not unreasonable therefore that the director general should be able to reject a notice on suspicion.
It is quite another matter when the period for considering the prenotification ends without a reference having been made. The applicant will then assume that the merger can no longer be referred to the Monopolies and Mergers Commission and may have acted on that assumption. Before that assumption is overturned on the grounds that false or misleading information had been given, it is only reasonable to require that this should actually be the case. The authorities will not be under any time constraint in establishing this, as it will remain possible to reopen a case at any time provided information can he shown to be false or misleading or if other new material information emerges. But it would be unjustified and disruptive to reopen a case, possibly several years after the event, merely on suspicion—which may turn out to be unfounded—that information was false or misleading. That is what the amendment moved by my noble friend would permit.
I hope that what I have said reassures my noble friend that the authorities will not be prevented from having another look at a case where there can be shown to be new material information or where existing information turns out to be wrong, and that he will in all those circumstances agree to withdraw the amendment.
Lord Peston: I am bound to say that I thought that the amendment was rather sensible. However, it may well be that the Secretary of State has already covered the point which I thought was sensible. What one has in mind is exactly the point which I think the Secretary of State has made; that is, that the time has gone by and then suddenly, as it were, one begins to suspect that there is something fishy in the matter and therefore one wants to be in a position to look at it again.
Perhaps I may ask the Secretary of State this question. If it is suspected that there was some false or misleading information, am I right in thinking that the matter could be pursued but that the reference could not be taken up until one was pretty confident that there was false and misleading information? In other words, there is nothing to stop people looking further into a matter if they smell a rat. As I understand it, the Secretary of State is simply saying that the process of smelling a rat is not good enough and that one must actually find one's rat before one can reopen the case. I hope that I am right in my interpretation of what the Secretary of State said.
Lord Young of Graffham: Yes, you must not just smell a rat, nor must you catch it; you must at least see it.
Lord Morris: I am most grateful to my noble friend for that explanation. I must say that I had the greatest difficulty in understanding the clauses as originally drafted. Therefore I am sure that he will understand why I also had a certain amount of difficulty in understanding his reply. However, I think that I understood what he said and I am as certain as I can be that it was a highly satisfactory explanation. Therefore, in the light of what he said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245A:
Page 100, line 10, at end insert—
"(2) Where—

(a) two or more transactions which have occurred or, if any arrangements are carried into effect, will occur may be treated for the purposes of a merger reference as having occurred simultaneously on a particular date, and

(b) subsection (3) of section 75A of this Act does not prevent such a reference with respect to the last of those transactions,

that subsection does not prevent such a reference with respect to any of those transactions which actually occurred less than six months before—

(i) that date, or

(ii) the actual occurrence of another of those transactions with respect to which such a reference may be made (whether or not by virtue of this subsection).

(3) In determining for the purposes of subsection (2) of this section the time at which any transaction actually occurred, no account shall be taken of any option or other conditional right until the option is exercised or the condition is satisfied.
The noble Lord said: With permission I shall speak also to Amendment No. 250. These amendments relate to the application of the provisions of Clause 101 to cases which are prenotified, and so I shall have to anticipate our discussion of that clause in order to explain them.
The merger reference powers in the Fair Trading Act recognise three distinct degrees of control which can create a merger: acquisition of material influence, of control over policy and of a controlling interest. The last is usually clear-cut but the others can occur at various levels of holding depending on the structure of ownership of the enterprise being taken over and other factors; consequently it is a matter of judgment whether the crucial stages have been reached. Although it is my job—and that of my successor in title—after taking advice from the Director General of Fair Trading, to take a view when deciding to make a merger reference, ultimately the judgment about whether a merger situation has been or will be created has to be made by the Monopolies and Mergers Commission.
That can pose a problem when a holding in a company is built up over a period of time in very small steps. It is a matter of deciding whether a given step has created a merger situation qualifying for reference, bearing in mind that it ceases to qualify after six months, in the absence of new material information. The Monopolies and Mergers Commission cannot look at previous acquisitions which no longer qualify for reference. So if a reference is left too late, the MMC might decide that the crucial step had already been taken and was beyond their reach; on the other hand, if we were to act too early, it might decide there was no merger to examine.
At present the problem can only arise where there is more than six months between transactions; but in future it will be possible to prenotify each step and the authorities must then either refer it within the period for consideration—which obviously they cannot extend indefinitely without good reason—or let it go. As a result, transactions could take place with little more than a month between them, resulting in a merger situation which might escape full scrutiny.
The new Section 66A introduced by Clause 101 will therefore enable us to treat successive transactions as having occurred simultaneously for the purposes of a merger reference. The transactions must all occur within a two-year period and must either result in one of the crucial degrees of control I have already mentioned; that is, increase the degree of control or be a step towards one of these things. Acquisition of a controlling interest will necessarily bring the series to an end, as this is a clearly identifiable step. The mergers legislation is not concerned with increasing control beyond this, and we would not want further acquisitions of minority holdings to reopen earlier transactions to reference.
However, Clause 97 provides that it will not be possible, except in certain defined circumstances, to refer a merger which has been properly prenotified once the period for considering it has expired. Any transaction which gave rise to a merger and which had been cleared under the new procedure could therefore not be included in a series being examined by the Monopolies and Mergers Commission under the provisions of Section 66A; and were it to conclude that the merger it was looking at had in fact come about as a result of one of these earlier transactions and not the one which finally sparked the reference,
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there would be nothing it could do about it. Amendment No. 245A therefore provides that a previous clearance following prenotification will not stop such a transaction from being included in a series covered by Section 66A, provided it is still possible to refer the latest in the series, and provided each transaction is separated from the next by no more than six months. I should explain that the last proviso means that we cannot reopen any previously prenotified and cleared merger involving the same enterprises within the last two years just because there is a further increase in control, unless there is a series of transactions each separated from the other by not more than six months.
By definition, a prenotified merger will be one that is in prospect. As it stands, however, only existing mergers are covered by Section 66A, and by the existing Section 66, which gives much more limited power to treat events as having occurred simultaneously. Prospective mergers are referred to the MMC under Section 75 of the Act, and Amendment No. 250 applies Section 66A for this purpose, as if the transaction giving rise to the reference occurred just before the reference was made. The present provision applying existing Section 66 to mergers in prospect, which is rather unclear, is replaced with a similar provision.
I apologise for taking up so much of the Committee's time with provisions which by their nature are likely to be invoked extremely rarely; indeed, their main value may be as a deterrent, to discourage people from exploiting what could otherwise be a loophole opened up by the new prenotification procedure. However, they are extremely technical, even by the standards of companies and mergers legislation, and I thought that the Committee would therefore want to have a full explanation. I beg to move.
Lord Williams of Elvel: The Committee is extremely grateful to the Secretary of State for his full explanation which allows us to try to start to understand what the government amendments mean. They are complex. We shall read carefully what the noble Lord said, and if we have any problems we may move amendments to his amendments on Report.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 245AA:
Page 100, line 12, at end insert ("specified in subsection (2) below").
The noble Lord said: This marks, I am afraid, the start of a series of amendments from these Benches, which will appear fairly regularly throughout our discussion of the Bill. The amendments are designed to try to ensure that as much goes into primary legislation as possible. It should not be left to the Secretary of State—whoever the Secretary of State may be at the time—to make regulations to change the primary legislation which this place has approved or to make regulations which deal with matters which in our view should properly be in a schedule.
In the case of new Section 75D, I cannot understand, and nor can others, why, for instance, the manner in which the merger notice is authorised

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or required to be given—the various details of the measure—should not be in a schedule to the primary legislation rather than in regulations which this place will not have a full opportunity to consider. The amendment is somewhat less important than others, especially those relating to new Section 74F of the Fair Trading Act, to which we shall come later.
I should like the Secretary of State to answer the questions that the amendments pose. They are of course probing amendments. Why does not the existing legislation provide for the matters referred to in new Section 75D? Why do we not have a new schedule to the Fair Trading Act which would set out the matter in primary legislation enabling everyone to see what we are doing? Why do these matters have to be left to regulations? I beg to move.
Lord Young of Graffham: The fundamentals of the pre-notification system are set out in new Sections 75A to 75C in Clause 97. We consider it appropriate for the details of the system-how prior notice will be given; how it will be rejected; how it will be withdrawn, and when prior notice will be treated as received or rejected—to be dealt with by secondary legislation. It is after all a new procedure which has to stand the test of time.
The amendment would restrict our ability to frame regulations to deal with particular aspects of the prenotification system where requirements could change over time. The matters to be dealt with by regulation relate to the detailed mechanics of the system, not to the essentials of it. Secondary legislation has a clear role to play in dealing effectively with the details. I hope all in this place will agree that it is not appropriate to take up undue parliamentary time with non-controversial details which are, in all the circumstances, better left to secondary legislation.
While we are dealing with these provisions, perhaps I may, with the permission of the Committee, speak to Amendment No. 254B which enables regulations governing the service of notices on applicants to require an address for service. That is so that there can be no question about where is the proper place to send such notices. We intend to require such an address to be within the European Community to ensure that the normal course of post is within reasonable realms and that postal delays do not make the system unworkable.
5.45 p.m.
Lord Williams of Elvel: I appreciate what the Secretary of State says. I accept that there is a balance to be struck between implementing the details of legislation by regulation and having a schedule which is part of the primary legislation. However, the Financial Services Act, a piece of new legislation, according to the noble Lord, in a moving market—we did not know at the time it was a Bill what the result would be—set what in our view has become an undesirable precedent of having great chunks of primary legislation amended by statutory instrument which this place does not have a chance properly to consider as it does primary legislation. That is a worrying tendency. It is a worrying tendency in the Bill.
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The noble Lord, Lord Strathclyde, knows from our previous discussions that I shall be saying that many times in an attempt to cut down the number of instances a Secretary of State or the Executive can amend primary legislation by statutory instrument. Having made my point, as the noble Lord, Lord Strathclyde, will know yet again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 245AB not moved.]
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245B:
Page 100, line 29, at end insert—
("(cc) provide for the address which is to be treated for the purposes of section 75B(5) of this Act and of the regulations as a person's proper address,").
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245C:
Page 100, line 36, at end insert—
("(2A) The regulations may make different provision for different cases.").
The noble Lord said: I shall speak also to Amendment No. 245F. Amendment No. 245C adds to the power to make regulations for the purposes of the pre-notification system a standard formula which ensures that regulations may make different provisions for different cases. One example is that in specifying time in which material information must be disclosed under new Section 75C, we might specify different times according to the location of the applicant which could affect how long it takes notices to reach him.
It does not however seem necessary to add the words, "or classes of case". Amendment No. 245F is a drafting amendment removing these words from another similar provision. I beg to move.
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245D:
Page 100, line 49, at end insert ("and").
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245E:
Page 101, line 2, leave out from ("Act-) to end of line 7
[Amendment No. 245EA not moved.]
Lord Young of Graffham Lord Young of Graffham moved Amendment No. 245F:
Page 101, line 21, leave out ("or classes of case").
>Clause 97, as amended, agreed to.
Lord Peston Lord Peston moved Amendment No. 245G:
After Clause 97, insert the following new clause:
(" Public interest.
. In section 84(1)(a) of the Fair Trading Act 1973 (public interest), at end insert—"and in the European Economic Community".").
The noble Lord said: With the Committee's permission I shall speak also to Amendment No. 245M. The amendments are important. They relate to matters raised on many occasions in this place. They were raised on Second Reading. I believe that I heard one or two European matters raised in our main debate on mergers earlier this afternoon.
Our concern again is to make explicit the European dimension of competition policy. We have a further amendment along analogous lines. The amendments have two purposes. The first is clarification; to obtain a statement from the Secretary of State as to the relationship between European legislation, to which we are committed in all sorts of ways, and our legislation. That relates to another matter of principle. I believe that I am right that in such cases we are already bound to take account of EC matters. I think I am right, but I should like to know that. If we are bound or obliged to take account of European Community aspects of competition and merger problems, then as regards the law I speak very much as a layman but is it not right that the Fair Trading Act should contain those matters? I ask that in order to be educated in the subject. I think other noble Lords would welcome a chance to have this matter taken further.
However, there is also a substantive economic point here which, again, we have debated. What is the relevant market within which we are discussing competition? Obviously I must assume that all those years ago, in 1973, those who were drafting the legislation on the Fair Trading Act took for granted that the relevant market was the supply of goods and services in the United Kingdom. The one thing we already know is that we must broaden our horizons. When we get to 1992, a fortiori we shall have to broaden our horizons.
The interesting question is whether in a sense we ought to argue that the United Kingdom is not at all the market to look at. Perhaps it ought to be. We have written down,
"and in the European Economic Community",
but the correct statement may well be,
"in the European Economic Community".
These amendments have been put down with a view to gaining some elucidation, to remind ourselves how important the Community is in terms of competition and the criteria for competition. They are clearly not ones on which it would be appropriate simply to divide the Committee at this time. But we must hear the Secretary of State's thinking about them since it will be quite relevant to the way in which competition policy will emerge in the future. That is the reason for the amendments and we look forward to hearing what the Secretary of State has to say. I beg to move.
Lord Ezra: I wish to support the amendments, which I think are very timely and appropriate. The noble Lord, Lord Young, has himself played a leading role in stimulating industry to prepare for 1992 and the single market. It would be quite wrong if in this legislation, specifically on mergers, the European Community were not referred to.
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As regards the first amendment, I think it is absolutely right that the Fair Trading Act 1973 should be amended in Section 84 (1)(a) to read:
"of maintaining and promoting effective competition between persons supplying goods and services in the United Kingdom and in the European Community".
That seems to me to be a totally proper amendment to be brought into effect in 1989, looking to 1992.
Similarly, I think it is very important that we take account of merger control arrangements within the Community. As matters are developing now, it will be for each country to deal with mergers according to its own legislation. But I believe that it is generally agreed—and no doubt the noble Lord can say whether this is true or not—that above a certain level affecting more than one Community country the mergers will be dealt with according to regulations to be worked out on a Community basis. If that is so, I think our legislation should be modified accordingly.
Lord Young of Graffham: The first of these new clauses would mean that the Monopolies and Mergers Commission would have to concern itself with competition not just in the United Kingdom but also in the European Community. There is nothing wrong with being concerned about competition at the Community level. We are after all committed to a programme to reduce barriers to trade, to which the noble Lord, Lord Ezra, kindly referred a moment ago, and trade within the Community will further open up opportunities for competition.
There is already an institution charged with applying the competition provisions of the treaties. That is the European Commission. Anyone concerned about possible threats to competition within the European Community can go straight to the European Commission; or they can seek redress directly through the United Kingdom courts. It is unnecessary to give this task to the Monopolies and Mergers Commission. In fact, it would give a false impression. If the Monopolies and Mergers Commission decided that some particular merger or transaction was not against the public interest and the European Commission took a different view, the view of the European Commission would prevail.
We are committed, as I said, to increasing competition within the Community. The effect of competition at the Community level is something which our competition authorities can and do take into account. It is already necessary for the Monopolies and Mergers Commission to take into account, when judging the effect of a merger on the public interest, all matters appearing to it in the circumstances to be relevant. If they are relevant, considerations raised in community merger control arrangements—whatever that may mean—could also be taken into account. The United Kingdom is of course already subject to the requirements of the Treaty of Rome, including the provisions designed to preserve competition in the Common Market.
Amendment No. 245M, the second of these clauses, seems, I fear, to he addressing a non-existent problem. I do not see how the words,
"both inside and outside the European Economic Community",
add anything to the expression, "outside the United Kingdom". If somewhere is outside the UK, then

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undoubtedly it is either inside or outside the European Community.
The provision of the Fair Trading Act in question is specifically concerned with competitive activities outside the United Kingdom by those producing or supplying goods and services from within the United Kingdom—in other words, exporters—and with the need for them to be competitive. The existing wording seems to us to be perfectly adequate.
Perhaps I may say to the noble Lord, Lord Peston, that there may be a misapprehension that because the United Kingdom competition authorities are concerned with competition solely in the United Kingdom they do not take account of the effect of competition at the Community level. This is simply not true. The scope for competition from outside the United Kingdom—whether in the Community or in the wider world—is always taken into account in looking at whether a merger would damage competition in the United Kingdom. On the other hand, simply because there is a potentially competing firm somewhere in Europe it does not follow that we can always accept a loss of competition in the United Kingdom because the structure of the market may limit the scope for overseas competition.
It may help if I give two examples. The market for bus services is highly localised. There is no scope for competition from operators elsewhere in the United Kingdom, let alone in the Community, so I referred a merger between two companies running bus services in Bristol and Avon. On the other hand, the market for bus manufacturing is an international one, so I decided not to refer the merger between Volvo and Leyland Bus, although they together had more than half the United Kingdom market, because of the competition from other European manufacturers. In those circumstances there was a sufficiency of supply elsewhere within the Community to ensure that a competitive market would remain to those people wishing to buy buses in the United Kingdom.
As I said, simply because there is a potentially competing firm somewhere in Europe it does not follow that we can always accept a loss of competition in the United Kingdom, because the structure of the market may limit the scope for overseas competition. Nor can we accept uncritically the argument that a loss of competition in the United Kingdom should be accepted in order to enable United Kingdom firms to compete more effectively internationally. This is a siren song which is occasionally sung by those who would like to see larger aggregations of companies. Like other claims about offsetting benefits, we would normally expect these to be justified before the Monopolies and Mergers Commission which will balance the likely damage to competition against the likely benefits of a larger aggregation.
United Kingdom competition authorities must concern themselves with competition in the United Kingdom and not competition at the wider international level, except to the extent that competition on a wider international level impinges on competition in the United Kingdom. Thus our interest in exporters is because they bring benefits to
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the United Kingdom and our interest in imports, or the potential for them, is because of their effect on competition in the United Kingdom. This will be unaffected by the new clause. I hope that I have satisfied the curiosity of the noble Lord, Lord Peston, and that in all the circumstances he will now be happy to withdraw the amendment.
6 p.m.
Lord Lloyd of Kilgerran: With great respect to the Secretary of State, his brief does not seem to me to have addressed itself to a fundamental issue in relation to the activities of parliamentarians of both Houses. We are sincerely trying to improve the Bill in Committee. No political questions arise here. We are trying to improve the Bill because, if it becomes an Act, it will be read by industrialists and people outside who will not be aware of the fact that parameters in relation to EC directives and decisions have to be taken into consideration.
Therefore I believe it would be very helpful to industrialists and to lawyers to have a reference in this part of the Bill to the fact that notice must be taken of the European Community in relation to these controls. I have here the McKenna Law Letter which is published by an eminent firm or solicitors. I read this letter out on the fourth day of the Committee stage of the Bill. The article in the law letter discusses the issue of central merger control and the European Community.
I again remind the Committee that the publication is issued by an eminent firm of solicitors with a large number of clients. That firm deals with commercial matters every day. The article states:
"the issue remains current and businessmen cannot afford to ignore the policy in Brussels when making decisions on mergers and acquisitions—or 'concentrations' in Commission parlance."
All the amendment suggests is that it is made clear to anybody who advises clients to take account of a parameter involving the European Community. That is all the amendment suggests.
Lord Peston: We have slightly jumped the gun. We have not yet come to my Amendment No. 245H. Most of what the noble Lord has said is relevant to that amendment. I shall not speak on that matter yet. I shall go back to my amendment No. 245G and to the reply that the Secretary of State made.
Lord Lloyd of Kilgerran: I am sorry, but I do not understand what the noble Lord, Lord Peston, is saying. Which amendment is he referring to?
Lord Peston: With respect, we are discussing Amendment No. 245G, which is an amendment concerning the operations of our merger policy, viewed as our merger policy. I am about to move Amendment No. 245H, which covers precisely the ground that the noble Lord, Lord Lloyd of Kilgerran, has referred to. That amendment concerns taking account of European merger policy. I have not yet spoken to Amendment No. 245H because I was dealing with Amendment No. 245G. This is a purely procedural matter. I was simply doing what I was told, which was to stick to the amendment that I was moving.
Lord Lloyd of Kilgerran: We are indulging in a little bit of semantics here. The amendment the noble Lord is moving mentions the European Economic Community in general terms.
Lord Peston: This misunderstanding is my fault. I did not intend the reference to the European Community to mean at that point the Community's competition arrangements. The points I raised, and the points to which the Secretary of State addressed himself, concerned such matters as the nature of the market we were considering. I entirely accept that I have blurred the issue here. But I should like at least to get my blurred issue dealt with first, because I felt that for the second time today the Secretary of State put my argument better than I could have done. His bus analogy was precisely what I had in mind.
I believe the Secretary of State said that the market for bus services is clearly a local market. Indeed, sometimes it is not a market that covers the whole of the United Kingdom but merely a part of it. We fully accept that in some cases a local market is the relevant market. We are concerned with the nature of competition within that market.
The Secretary of State then moved on to consider the bus manufacturing market. He pointed out that that was a European market. For all we know, it may become a world market in due course. The relevant point concerns the level of competition that exists. We agree that it is the level of competition that must be taken into account. I thought the Secretary of State made that point extremely clearly.
I moved Amendment No. 245G to draw attention to the second kind of example that the Secretary of State gave. The Secretary of State said that there are always other factors to be taken into account when assessing competition. I believe that is broadly what he said. But I make the point that rather than merely state that other factors should be taken into account, this is the occasion to make the other factors explicit; namely, to state that those other factors refer to the European Community.
I do not think, given the reply of the Secretary of State, there is anything between us on the matter. I entirely agree with what the Secretary of State said. My only concern is that I should have liked, perhaps only symbolically, to have Europe mentioned in the legislation at this stage to indicate that the European dimension would be taken into account.
Lord Young of Graffham: I shall confine my remarks to this amendment, although I suspect that what I say may have utility in other amendments. I fear that the noble Lord, Lord Lloyd of Kilgerran, misunderstood what I said. He is of course perfectly entitled to question any amendment. We want to improve the workings of the Bill. I accept that totally. I should be the first to accept any amendment which improved the workings of the Bill.
Where I suspect the noble Lord, Lord Lloyd of Kilgerran, has not understood the effect of the amendment here is simply that Amendment No. 245G would require the Monopolies and Mergers Commission in determining the public interest to have regard to the desirability of maintaining and
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promoting effective competition in the European Community as well as in the United Kingdom.
Amendment No. 245M concerns another point that I have dealt with. It is not the purpose of the Government of the United Kingdom, or of the Monopolies and Mergers Commission, or of the Secretary of State for Trade and Industry then in office, to promote effective competition in the European Community. It is our task to promote effective competition within the United Kingdom. In the bus case that I mentioned and in many other cases we look at the size of the market and assess whether there is effective competition for the consumer within the United Kingdom. In the case of local bus services, we would be concerned with the consumer who was resident in, say, Bristol and Avon.
As regards purchasing buses, we would be concerned with purchasers of buses resident within the United Kingdom. If one can effectively buy buses from Europe quite easily, we would take into account the availability from Europe. I shall give the Committee another example. When British Steel was sold it had over 60 per cent. of the United Kingdom market. But it was considered that such was the competition from Europe that there was no question of a monopoly position developing. If British Steel decided to increase its prices, there would be sufficient competition from Europe to ensure British Steel remained competitive.
So the test the whole time is to consider the amount of competition available to a particular consumer. The consumer may be a man or a woman standing at a bus stop somewhere, or somebody wanting to buy steel, a particular service or a bus, but the test can only apply to the consumer within the United Kingdom. One of the great difficulties of merger policy is that people have to concentrate quite hard and investigate a particular case to determine the test of competition to the consumer in that market. There can be no hard and fast rules or percentages. That is why I and, I suspect, my successors for generations to come will always have difficulty with this topic.
Baroness Seear: If we use geographical terms are we not confusing the issue? We are concerned with competition within the relevant market, whatever the geographical limits of that market may be. By introducing geographical terms we confuse the issue and distract attention from the fact that it is the relevant market we are concerned with. Is that not the position?
Lord Young of Graffham: That is precisely the point. We are concerned with competition in the relevant market. The test of that competition is the particular consumer concerned, be he a man, a woman or an industrial company. So if we added the words "European Economic Community" to the amendment, they would confuse the issue.
Baroness Seear: The words "United Kingdom" would also be confusing.
Lord Young of Graffham: Yes, I accept that. Our writ of course only runs within the United Kingdom. The test of competition only applies within the United Kingdom.
Lord Ezra: If we keep in the words "United Kingdom" surely we must in the new context add the words "European Community". We are talking here about merger policy and approaches to mergers. There are any number of firms which are preparing themselves for the larger market by merging and linking up. I mention the case of GEC and Siemens. If that had been purely related to the UK market, I presume it would have been regarded as far too large a grouping. But because it is seen in the EC context in the new situation it is regarded quite differently. The EC introduces a specific new dimension which has to be taken into account in relation to merger policy. I do not understand why it need be left out.
Lord Young of Graffham: I fear that I cannot even listen to the seductive words of the noble Lord, Lord Ezra, about that merger. My mind must remain completely blank until such time as I hear from the Monopolies and Mergers Commission.
There is a competition authority responsible for competition within the Community. That authority is the Commission. It is the Commission's responsibility to ensure that a competitive environment exists throughout the Community. It is the responsibility of the Government of the United Kingdom to ensure that a competitive environment exists in the United Kingdom. We do not have any responsibility for the competitive environment in France, Germany, Italy or elsewhere.
That is why we object to the proposed new clause. In determining the public interest Section 84(1) would have us have regard to the desirability of promoting and maintaining effective competition within the Community as well as in the United Kingdom. Clearly that cannot be our task. That is the task of the Competition Commissioner in Brussels. I have no doubt that Sir Leon Brittan will discharge it very effectively.
Lord Lloyd of Kilgerran: I am sorry to intervene again. Perhaps I may draw the attention of the Minister to Section 84(1)(e). One of the criteria to be applied in determining the public interest: "maintaining and promoting competitive activity in markets outside the United Kingdom on the part of the producers of goods, and suppliers of goods and services in the United Kingdom".
All the amendment does is draw attention to the fact that matters relating to the European Community are of importance.
Lord Morris: I am very glad that the noble Lord raised that point. That is the major reason why I believe that the amendment is unnecessary. The point is already covered by Section 84(1)(e). A very good example was quoted—at the wrong time in the debate—of the EC operating in that field in the case of Minorco Societe Anonyme and Consolidated Gold Fields. It was concluded that the effect on the platinum market was against the public interest within the EC, which includes the United Kingdom. The Monopolies and Mergers Commission in this country did not consider the matter because it regarded it as being outside its remit.
Viscount Torrington: Perhaps I may make an observation. It seems to me that the noble Lord, Lord Lloyd, is talking about the desirability of including advice in the Bill. Surely the purpose of the Bill is to enshrine an Act and not advice as well.
Lord Young of Graffham: I suspect that this is a debate that we may well have again on a later amendment. Perhaps it is as well to ventilate the matter now. The United Kingdom is subject to the requirements of the Treaty of Rome. The treaty is paramount: it includes provisions designed to preserve competition throughout the European Community.
The Commission has powers to consider mergers under Articles 85 and 86 of the treaty. The noble Lord, Lord Lloyd of Kilgerran, referred to that fact. In addition, because of the confusion which that creates, with the Commission having power to unscramble anti-competitive arrangements, a European merger control regulation has been proposed. At present it is a moot point whether the draft merger regulation represents an improvement on Articles 85 and 86. We are negotiating the matter and I hope that during the course of this year the draft regulation will be improved. At present we are not convinced of that and are maintaining a general reservation.
It is clear that the responsibility for competition within the Community as a whole is the Commission's. Responsibility for competition within the United Kingdom lies with the Government of the United Kingdom. There may be occasions in the future when the Commission will be dissatisfied with competition in the United Kingdom and may wish to do something about it. That is a point which is yet to be determined. Above all else I am happy to say that it cannot be part of my responsibility to concern myself with competition matters in Spain, Portugal, Greece or any other country in the Community.
Lord Peston: Perhaps I may bring this extremely interesting discussion to a close. I have a sense of responsibility that in drafting the amendment badly I may have led us on to the wrong track.
What the Secretary of State said earlier is what I also believe and his analytical apparatus is exactly the one that I have in mind. Following on from what the noble Baroness, Lady Seear, said, it was probably silly to refer to any geographical area. It is clear that the MMC is concerned with competition in the United Kingdom; that is not the problem. I am drawing attention specifically to the fact that in a great many more cases than were anticipated in 1973, and than many people realise today, the relevant market is Europe. Therefore in the new world of 1992, in relation to competition in the UK the Secretary of State's bus supply case will be much more the typical case.
I realise that the amendment is hopelessly badly drafted and has put us onto several wrong tracks. However, its purpose is to bring us into the new spirit of the times and to include that in UK legislation.
Having said that, I do not believe that there is any substantive difference between any of us on the issue.

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I shall read what the Secretary of State has said. I may well come back to the matter because I still believe that I am right in wanting to include a European element in the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
Lord Peston Lord Peston moved Amendment No. 245H:
After Clause 97, insert the following new clause:
("EEC considerations
. After section 84(1) (public interest) of the Fair Trading Act 1973, insert—
"(1A) The Commission shall take into account all considerations raised in EEC merger control arrangements.".)
The noble Lord said: Amendment No. 245H in the names of the noble Lord, Lord Williams of Elvel, and myself concerns a matter which we have been discussing. This is the amendment which raises a question about a point which the Secretary of State has already raised. We are committed to the Treaty of Rome. The treaty is essentially a competition treaty; it relates to free markets and the extension of competition. Whether or not it is written onto the face of the Fair Trading Act 1973, what is set out here must be the case in any event.
The first reason for putting down the amendment is to ask the Secretary of State to confirm that the Commission must do as the amendment proposes and that the EC merger control arrangements take precedence, as suggested by the noble Lord, Lord Lloyd of Kilgerran. Is that the case?
If that is the case, would it not be helpful to write it into legislation of this kind? As the noble Lord, Lord Lloyd said, anticipating what I intended to say, it will very much influence what British businessmen will do. We do not want to spend hours going over the ground yet again. I simply ask two questions: is the Commission obliged to take account of the European dimension on merger policy, and if it is, would it not be a good idea to make that abundantly clear in the Bill? I beg to move.
Lord Lloyd of Kilgerran: I apologise for having made my speech prematurely. I shall not delay the Committee any further. I support the amendment.
Lord Young of Graffham: I boasted to the noble Lord, Lord Peston, about having an open mind. Even though I do not agree with him on this occasion my mind is still open.
There is no question about the matter: the Treaty of Rome takes precedence in law. The arrangements at which the Commission arrives take precedence over everything else. The difficulty arises because the situation is very fluid and changes quickly. I have been in my present post for less than two years. When I first took up the responsibility it was not clear that Articles 86 and 87 had relevance to competition policy. It was certainly not as clear as it is today. The position may be clearer in a year's time if we were to withdraw our general reservation on the proposed European Community merger control regulation and we had a different regulation. There is also a series of
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other directives which may appear. I suspect that it would only confuse the issue if we were to adopt the proposed new clause. There may well be new directives; there may one day be a European equivalent of the Monopolies and Mergers Commission.
European law is paramount in these matters. The amendment as presently drafted appears superfluous and will in the long run be confusing in view of the flexible way in which the commission changes.
Lord Peston: I thank the Secretary of State for his answer, which is, to a considerable extent, reassuring. I believe that the noble Lords, Lord Ezra and Lord Lloyd, and myself were right to raise this matter. I shall not pursue it now because I should like to reflect on precisely the points that the noble Lord has made about the fluid nature of the matter. However, I repeat my point that both the Government and those of us in Opposition must make much more clear to people the significance of what is happening in Europe and the significance of 1992 in terms of legislation generally. That is why I have pursued the matter. I shall return to it in this and other Bills. Having said that—I do not in any sense criticise the Secretary of State's answer—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 245J and 245K not moved.]
Lord Peston Lord Peston moved Amendment No. 245L:
Before Clause 98, insert the following new clause:
("Director to consult employees.
. In section 76 of the Fair Trading Act 1973 (functions of
Director in relation to merger situations), at end insert—
"(2) In exercising his function under this section the Director shall take all such steps as are reasonably practicable to seek representations from relevant employees and employee organisations and from relevant consumer groups." ")
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 245N. I apologise to the Committee for now introducing a rather controversial—although important—matter.
Although it was dealt with peripherally when we discussed the burden of proof, I believe that I should now deal with it much more explicitly. It may demonstrate where we and the Government are perhaps somewhat divided.
When we discussed the burden of proof, arguments were put forward by the Secretary of State's noble friends to the effect that we simply needed to look at the way the markets worked—notably the financial markets—and that the real criterion was whether shareholders and such people take their decisions freely in free financial markets. They appeared to believe that, if the creation of mergers or monopoly situations was in their interest and the merger or monopoly went through the market and there was no obvious example of fraud or malpractice, that was all that had to be borne in mind in that respect. They claimed that there were various other matters in the criteria section of the Fair Trading Act, and that was that.
I do not believe that that conception of either society or the economy is acceptable to us. I should like to believe that it is not acceptable to the other side.

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of the Committee either and that it is therefore entirely reasonable that the director general and the MMC should have a wider view of those from whom they are obliged to take representations. In saying that, let me emphasise that taking representations does not mean doing what the people concerned say; it simply means giving them an opportunity to say what they think.
Perhaps I may start with consumer groups. I referred earlier to Adam Smith, but I go back to my point that enterprise exists for the sake of consumers; I do not believe that consumers exist for the sake of enterprise. The consumer interest is paramount. When I am asked why I favour competition, I answer, "Because that is the way to protect the consumer". On the other hand, I am bound to say that I simply do not believe that consumers are always immediately protected just by markets as they operate in our society and economy. That is why consumer groups have come into existence. We all agree that bodies such as the National Consumer Council on the one hand—whose leader has just joined this House and from whom we expect to hear in due course on these matters—and voluntary bodies such as the Consumers Association do a valuable job. We all agree that—as the expression goes—they are not backward in coming forward in such matters. With respect to them, we are simply saying that we should like to write something more definite into the statute so that, instead of leaving it as a matter of choice on the part of the director-general or the commission, he will have to give them a few moments of his time. I press the consumer issue very strongly.
The employee issue is rather more interesting in a way because in my experience—certainly when the Labour Party was in power—employees took an interest in mergers and other such matters. However, I do not reveal any secrets when I say that they were not always necessarily on the side of competition. In saying that, and asking that they and their representatives should have their views taken into account, I do not say categorically that those views would always be to the effect that a merger should not go forward and that competition should be à outrance.
I believe that I am particularly honest in emphasising the need to take employees' views into account because I do not think that their views would always agree with mine. But nowadays we legislate for the economy and a society that will be there in the next century after we have gone. Our vision is one in which the employee has a much more important role in these matters than seems to have been the case in the past few years. If we are to live in a society in which people feel that they are members of society and that their interests are typically taken fully into account in matters such as mergers which affect their lives, we should at the very least reassure them that they will be asked what they think.
We are not misleading those people. I do not suggest that one should go to an employee and say, "You will be the deciding force". I prefer a society in which that is typical and in statute, as in other countries, and in which employees are asked what they think rather than one in which they are regarded
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in the crude language of economics as just another factor of production that others choose to manipulate. I press the employee aspect of the matter strongly, but no more strongly than the consumer aspect. That is the nature of my argument and I hope that it will commend itself to the Committee. I beg to move.
Lord Young of Graffham: I should say to the noble Lord, Lord Peston, at the outset that I have nothing against the idea of obtaining representations from consumer organisations or employees. I suppose that my quarrel with the noble Lord about these amendments is that I believe they are unnecessary. Indeed, I go further than that: by singling out two particular interest groups, they appear to downgrade all the others. I should like to explain that argument.
It is my experience that when there is a merger—particularly a contested bid such as we are discussing—the employees, their representatives and consumer organisations are not slow to come forward. Indeed, they provide an important contribution to the advice that the Director-General of Fair Trading gives to me about mergers. In appropriate cases, he may actively seek their views. Such groups are very much encouraged to make their views known to the director-general. I have tried to emphasise in speeches to the business community and in the brochures that I have issued and circulated widely around the country, that it is the director-general whom they should approach in the first instance, not me, as he has the duty to advise me and I rely heavily on his advice in reaching my decisions.
To that extent, the amendment seems unnecessary; the problem is not one of encouraging representations. If such representations are not forthcoming, that in itself may indicate that the merger does not raise major public interest implications. The amendment would require the director-general actively to canvass views on over 300 cases a year, the great majority of which raise no public interest concerns. I believe that that would place an undue burden on his resources, not to mention the organisations which might in those circumstances feel bound to respond. The effect would be to slow down the whole process.
I now come to my second point. To single out employee and consumer organisations is to ignore all the other groups that may have an interest in mergers. Let me give some groups: the industrial suppliers, competitors and customers of the merging firms, the relevant trade associations, local chambers of commerce and so on. Before the noble Lord, Lord Peston, asks, I should make it clear that I am not proposing to add all these to the list. My point is that it is impossible to make it comprehensive. For that reason, I believe that it is invidious to single out certain groups to the exclusion of others. If they are sufficiently interested, they will come forward.
The case of the Monopolies arid Mergers Commission is rather different. Here it has already been decided that there are public interest issues warranting thorough investigation. My duty under Section 64(6) of the Fair Trading Act is to arrange for references to be published in order to bring them to the attention of those likely to be affected. The

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commission is also under a duty in Section 81 to take into consideration representations made by interested parties or by representative bodies and to give them the opportunity of an oral hearing unless this is impracticable or unnecessary. If necessary the Monopolies and Mergers Commission even has power to require people to submit information or to attend hearings, although in practice it finds that it can rely on the co-operation of those concerned.
In addition, the Monopolies and Mergers Commission takes appropriate steps to alert interested groups to the reference and invites them to submit views. This is over and above the requirement on me to publish the reference. Those invited to submit views will almost always—I wish to assure the noble Lord—include relevant employee organisations and consumer groups. So the duty which the amendment would impose, while it is not difficult to fulfil, is unnecessary, since it happens at present.
But that is not the whole story. From whom it is appropriate to seek views, and what steps should be taken to do so, will, I suspect, vary according to the subject of the reference. Again, it would be wrong to single out particular groups for special treatment. In short, I believe that these new clauses tackle a nonexistent problem. It is not our experience—certainly not during my time, and, so far as I am aware, previously—that those likely to be interested are unaware of mergers which concern them. Nor are we failing to obtain their views. Seeking views where appropriate is an intrinsic part of the work of both the Office of Fair Trading and the Monopolies and Mergers Commission.
I hope that I have reassured the noble Lord, Lord Peston—perhaps he will reflect on my words—that his concerns on this score are already adequately catered for. I trust that in all the circumstances he will feel able to withdraw his amendment.
Lord Lloyd of Kilgerran: On these Benches, we support the theme of Mr. Peston—
Noble Lords: He is a noble Lord.
Lord Lloyd of Kilgerran: I am so sorry. We support what the noble Lord, Lord Peston, said in support of his amendment. Having listened to the Minister, it appears that he has not accentuated the position of the employee, as did the noble Lord, Lord Peston. The position of the employee is of increasing importance, as the noble Lord, Lord Peston, said, in merger situations. I should have thought that it was a good industrial relations point to emphasise that the director shall take all such steps that are reasonably practical to seek representations from relevant employees. If the amendment stopped there, would the Minister have any sympathy with it?
Baroness Seear: Before the noble Lord replies, perhaps I may make one brief point. The Secretary of State has said that this is always done. However, there is a world of difference between having a right to be heard and knowing that it is very likely that you will be called. Those are not the same things. It is the right to be heard that we wish to be embodied in the Act.
Lord Young of Graffham: Perhaps I may respond to the noble Lord, Lord Lloyd of Kilgerran, and to the noble Baroness. I hope that noble Lords on all sides of the Chamber agree that because of the nature of the eight to 12 references a year—they are publicly known; everybody goes on pilgrimage to the Monopolies and Mergers Commission—there is no difficulty if one puts an obligation on it. The difficulty lies with the Director General of the Office of Fair Trading: he has up to 400 merger situations a year. Sometimes these are mergers arising from bids and are contested situations. Many are friendly mergers. Some are what are described, probably incorrectly, as creeping mergers where the shareholding goes up until at some stage the director general decides that there is sufficient influence on it that a merger situation arises. To be forced to go to people to get the views of unions (when, of the 400 and so cases a year, only eight to 13 are referred) would create alarm and despondency in many situations. To alert them to a bid which may not happen, or to something which may not occur, would do far more harm than good.
I am very conscious of the position of employees here. If it were to serve the purpose, perhaps I could take this away and consider some formulation along the lines of Section 81(1)(a) which would mean that the director general would have to take into consideration any representations from those who have an interest. I make absolutely clear that this will not put an obligation on him to seek interest; that would be far too onerous. But it means that he will have to listen to anyone who makes representation to him. I suggest that that is a reasonable compromise in the circumstances.
Lord Peston: I had not realised that I had been so quiet over the last two years that the noble Lord, Lord Lloyd of Kilgerran, had not yet noticed that I had joined this Chamber. However, that is by the way. The Secretary of State has responded admirably to the concerns of the Committee. I look forward to seeing what he can do to help us here. On the basis of so heartening a response on his part, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.30 p.m.
[Amendments Nos. 245M and 245N not moved.]
98 [Undertakings as alternative to merger reference]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 245P:
Page 103, line 9, leave out ("in such manner as he may consider appropriate.").
The noble Lord said: This is a very small matter. The amendment is designed to seek clarification from the Secretary of State on how the undertakings will be published because,
"in such manner as he may consider appropriate"
is somewhat vague. We should like to know what manner is appropriate. I should have thought normally that there would be a press release or some arrangement made that would be in legible form, to

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use the normal word. Perhaps the Secretary of State will let me know what the Government have in mind with this expression. I beg to move.
Lord Young of Graffham: The words in question, which Amendment No. 245P would omit, relate to the duty that I or my successors would have to publish undertakings given instead of a merger reference, the advice of the director general on the adverse effects they are designed to prevent, and any variation or release of the undertakings.
These words make it clear that the manner of publication is for the Secretary of State to decide, according to what he considers appropriate in the circumstances. They do not qualify the duty of publication, and their omission would not therefore necessarily reduce the extent of my discretion. Publication for any particular purpose is not something fixed and definite. What publication there should be will always depend on the circumstances.
On the other hand, the words make clear that publication must be in an appropriate manner. While it is difficult to imagine any Secretary of State publishing in an inappropriate manner, they would in theory provide a basis for challenging the way the Secretary of State carried out his duty. They thus provide a safeguard for those who might have an interest in the undertakings, who might fail to hear of them if the duty were not properly carried out.
Perhaps I could explain what we have in mind to publish, and when, in a little more detail. We envisage that the Secretary of State will be advised on a merger by the Director General of Fair Trading in the usual way. This advice, if it recommends reference of the merger, could specify possible adverse effects of the merger which undertakings might remove. The Secretary of State would then announce his decision to clear the merger, to refer it immediately or to refer it if suitable undertakings were not forthcoming—with an indication of the adverse effects which the undertakings would be designed to prevent. The negotiation of the undertakings would be done by the director general in much the same way as for undertakings following a report.
When the undertakings were given they would have to be published so that third parties were aware of the position, particularly in view of the rights to bring proceedings following a breach. For the same reason publication of any variation or release of the undertaking is needed. A published statement of the adverse effects that the undertakings were designed to prevent is also needed because the specified adverse effects will constrain the powers to replace undertakings with alternative remedies.
I hope I have persuaded the noble Lord, Lord Williams, that the words his amendment would omit are a useful clarification, which if anything limit rather than widen the Secretary of State's discretion; and that in all the circumstances he will accordingly withdraw it.
Lord Williams of Elvel: I am most grateful to the Secretary of State. I understand what he says about the initial undertaking and the initial announcement, but the Bill states in new Clause 75H(1)(c): "any variation or release of such an undertaking".
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Let us suppose that an undertaking lasts for a year and then there is a variation for one reason or another which may be perfectly legitimate. In what form will the Secretary of State announce it? Presumably it will not be published in a provincial Icelandic newspaper. We need to know that, when they are varied, which may be a year later than the initial undertaking, those who rely on these undertakings are given proper notice.
Lord Young of Graffham: I am grateful to the noble Lord. I have been looking for the name of a provincial Icelandic newspaper in which to publish these things for a considerable time. Perhaps he would care to give it to me. I have said that the publication must be in an inappropriate manner. While it is extraordinarily difficult to imagine a Secretary of State publishing in an appropriate manner, that provides a basis for anyone to challenge it. Therefore there is a safeguard for those who might have an interest in the undertaking or for those who might fail to hear of it, if the duty is not properly carried out.
It is difficult because undertakings vary so widely and circumstances vary so much. I suspect it is rather better to leave the duty on the Secretary of State to publish in an appropriate manner, and that will vary according to the case.
Lord Williams of Elvel: I do not wish to pursue this argument too far because it is a minor amendment. If the words had read:
"in such manner as may he appropriate",
I would fully accept what the noble Lord said. If it were to go to the court, the test would be whether the Secretary of State had considered that manner to be appropriate. That is the point I am making. The issue would have been stronger if the words had read:
"in such manner as appropriate".
In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 245Q, not moved.]
Clause 98 agreed to.
Clause 99 agreed to.
6.45 p.m.
Clause 100 [Temporary restrictions on share dealings]:
Lord Morris Lord Morris moved Amendment No. 246: Page 105, line 38, at end insert—
("(e) where in any event there exists a continuing investigation under section 442 of the Companies Act 1985 or section 177 of the Financial Services Act 1986 into any company falling within subsection (4A), at the time of the publication of that investigation's report, or, if no report is published, at the time of the conclusion of that investigation.").
The noble Lord said: The purpose of this amendment is to develop the principle behind Clause 100, which, as the Committee will be aware, is making statutory what already is practised under the takeover rules. It is a welcome change in the law. The effect of the amendment would deal with the anomaly

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that has arisen and may arise again in the future whereby a reference is made to the Monopolies and Mergers Commission and the Commission cannot take into account the inspector's report—as the Chairman of the Takeover Panel told me—and does not have the clarifying benefit of hindsight in that it cannot see the result of the report of the inspector who in each case will have been appointed by the Department of Trade and Industry. This is a considerable problem.
Under Section 84 of the Fair Trading Act it is clear that it is not only a power but a primary duty of the Commission to take into account the public interest point. As we all know, that is the side note. The problem currently is that so often the department has issued guidelines to the public that the only point that should be taken into consideration involves competition. I do not believe that it is possible to read Section 84 in any other way than the way in which it is written. It is clear that in determining for any purposes:
"to which this section applies whether any particular matter operates, or may be expected to operate, against the public interest, the Commission shall"—
not may—
"take into account all matters which appear to them in the particular circumstances to be relevant and, among other things, shall have regard to the desirability"—
then there are listed all the matters of competition. That is having regard to the desirability among other things.
The major point is the public interest point. I fail to understand—and I believe that the general public
fail to understand—how it is possible for any body, be it the Takeover Panel or the Monopolies and Mergers Commission, to consider these matters properly without having the benefit of an investigation which has been set up in order to clarify the facts. It cannot consider these matters properly. The amendment seeks to assist consideration of these issues by allowing the Secretary of State not to act until such time as he has the clarifying benefit of his own report.
I cannot see that there is any problem in relation to this, other than the general principle that hard cases invariably make bad law. That may be so, but in the cases that I have seen that are affected by this it would have a greatly beneficial effect, not least in taking the senior governing body—namely the Department of Trade and Industry—off an extremely uncomfortable Morton's Fork.
The other problem for the Takeover Panel is that it can only consider matters that are before it. It cannot bring to bear any further evidence that might appear later. At an earlier stage in the consideration of the Bill, my noble friend Lord Brabazon of Tara in considering an amendment moved by the noble Lord, Lord Benson, quite rightly and briefly put the position as it is and should be with regard to any self-regulatory organisation. He said that if regulation was to be effective, regulators needed to be able to move swiftly and decisively, sometimes on less than conclusive evidence, if it seemed necessary to do so. I believe the mere fact that the Department of Trade and Industry has set up investigations under
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Section 442 of the Companies Act to look into insider dealing can be done only on prima facie evidence for the simple reason that in the nature of these things there has been a conspiracy. It will be very difficult indeed to get hard evidence. In those circumstances they must say that if a stewards' inquiry is taking place all bets are to be off. In saying that I use the fair analogy of the noble Viscount, Lord Falkland, of one of the semi-detached parties.
My noble friend the Secretary of State referred to one of my amendments as being interesting. I hope that this is the one, and I beg to move.
Lord Williams of Elvel: The noble Lord, Lord Morris, has raised an interesting and technically difficult point. I am not entirely convinced that his amendment falls in the right place, but no doubt he has been advised about that. I wonder whether his amendment should not only define the period but cover broader terms. No doubt the Secretary of State will comment on that matter.
There is a growing problem because a number of investigations fall under different pieces of legislation. There is the Companies Act and the Financial Services Act, and we are now amending the Companies Act in order to provide new rules for investigations. In my view, they are rightly multiplying because many issues must be properly investigated. There is a growing problem because the more investigations there are the more the parallel issues become confused with them.
Thus, in the case referred to by the noble Lord, Lord Morris, there is an investigation into possible share dealing infringements of one form or another. At the same time, there is a merger situation. In some way we must be able to reconcile two different systems. The noble Lord, Lord Morris, has proposed one way of reconciliation. I have no preference but I believe that the Government must make arrangements to reconcile the procedures as they go along. Otherwise we shall find ourselves in the same kind of trouble as with the Minorco case and possibly other cases.
Lord Young of Graffham: If I have correctly understood the intention of the noble Lord, Lord Morris, it is to maintain in force the prohibition on dealings in each other's shares by parties to a merger which had been referred to the MMC (eight to 13 cases per year) as long as there was a continuing investigation under the provisions of the Companies Act or the Financial Services Act. Indeed, it appears my noble friend wants to curtail all takeovers of, or by, companies which are the subject of such investigations. The prohibition would apply to the bidder company and to the target company.
The amendment as it stands would not achieve this. The prohibition would still apply only where there had been an MMC reference. The starting of a Companies Act or Financial Services Act investigation would not bring the prohibition into operation. However, it would end the prohibition when the investigation ended—which could be before action on the MMC report was finished—and it would not, in our view, prolong the prohibition if any of the other events in new subsection (4B) occurred

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first. This is more likely, as investigations under Section 442 can take more than a year to complete. Section 177 investigations are generally shorter but even so take on average 11 months.
My noble friend appears to be under the impression that his amendment would enable the Monopolies and Mergers Commission and the Secretary of State to delay decisions on mergers until Companies Act inspectors have reported. I fear that that will not happen. It will only prevent a bid from being pursued, but in the meantime the Monopolies and Mergers Commission will be required to report and I shall be required to publish its report.
In any case, I have to say that we do not accept the need for such a prohibition, except to deal with the problem which the clause as it stand tackles; that is, acquisitions of shares which might prejudice the outcome of the MMC reference of a prospective merger. The investigations covered by the amendment—into the ownership of companies and suspected insider dealing—are quite separate from the provisions of merger control and the conduct of one does not directly affect the other. It sometimes happens that these investigations stem from events during a takeover, and they very occasionally yield information material to the MMC's inquiry. The law of the land is that should an inspector's report provide new information material to a merger on which the MMC had already reported, that could be considered by the Director General of Fair Trading, who would advise me whether a further reference would be justified. There was recently a fairly prominent case on slightly different grounds.
Investigations can happen at other times and for other reasons. Furthermore, they may well concern persons not directly involved with merging enterprises. Let me expand on that a little. The investigation may relate to the activities of someone connected with the bidding company. It could equally be someone connected with the target company or someone entirely outside both. The fact that an investigation relating to a company's shares is in progress is no reason to protect that company from unwelcome acquisition or to penalise it by restricting its own dealings.
If that were the case we could envisage circumstances in which it became part of the technique of defending bids to throw dust into the air and to make allegations about inquiries solely for the purpose of generating an inquiry. In that case, everyone cries "halt" for a year while the investigation takes place. In those circumstances, one hopes that the bidder will go away. We must be most careful, and therefore I hope that my noble friend will withdraw his amendment.
Lord Williams of Elvel: Can the Minister expand on part of his answer and respond to the point which I and the noble Lord, Lord Morris, were trying to make? It was that there are different kinds of inquiries and investigations which run in counter currents to the takeover procedure. For instance, the Takeover Panel has certain powers to investigate market dealings, as under certain statutes has the DTI. I shall not quote any cases, but it could easily be that the results of an inquiry by the Takeover Panel or the
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DTI affect the takeover situation. For example, 20 per cent. of a company might have been acquired contrary to the law or in circumstances of which the Takeover Panel would disapprove. That might have affected the takeover situation. I am trying to be cooperative but I think that we must find a way of dovetailing the various procedures.
Lord Young of Graffham: Before the Lord sits down, I should like to point out that, as the law now stands, if an investigation produces new evidence I have the power to send it back to the Monopolies and Mergers Commission within six months of receiving the evidence.
With respect, the difficulty which my noble friend faces is that he is confusing two different matters. The first is the investigation into the conduct of the market in shares; that is, insider dealing situations. The second is a monopolies or mergers reference about competition matters.
If an investigation shows that as a result of something which was clearly wrong the course of a merger was affected, I and my successor will have the power to refer back to the Monopolies and Mergers Commission. We can do so under the present law and within six months of receiving the inspector's report. In those circumstances, I trust that my noble friend will withdraw the amendment.
Lord Morris: I understand from my noble friend's original response that his fundamental objections were to the drafting of the amendment. I accept that. I had doubts about whether it appeared in the right part of the Bill.
I ask my noble friend to look at the matter again or to allow me to write to him about it in the meantime, because a serious problem arises. There is a lack of understanding not only in my mind but in the country as a whole. It seems strange that, if a company is undergoing an investigation which might lead to criminal charges, it is still able to benefit as a result of a merger going ahead.
7 p.m.
Lord Young of Graffham: Perhaps my noble friend will give way. In that event, if the investigation shows that something wrong has been entered into—and I shall not define "wrong" exactly but my noble friend knows what I mean—and benefit has been gained from that, then I have the power to refer that back to the Monopolies and Mergers Commission. What my noble friend or any amendment similar to his might ask me to do would apply if the target company or the bidding company or parties entirely unconnected with the transaction were being investigated. That would clearly be wrong. Therefore, I have the power to refer back in the event that the aggressor company is doing something wrong. In any other circumstances, it would not be right to take that sort of step.
Lord Morris: That is the point. It does not matter whether it is the target company, the predator or anybody else. Any deliberate destabilisation of the market upsets people. In the circumstances of a merger or a takeover bid, then I believe that all bids

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should be off. From what I have learned this evening from my noble friend, I am convinced that I have the drafting wrong with regard to this point. However, I ask him to consider at a later stage a new attempt to try to make more effective the regulations with regard to these matters which I believe are making many people in the City extremely unhappy. There are many cases where matters have gone wrong. I shall not list them but Members of the Committee know what I am talking about.
Lord Young of Graffliam: I should be very grateful if my noble friend will write to me with his very long list of cases where that has happened, because I shall be extremely interested in that. However, there is no possibility that we could stop bids merely because parties entirely unconnected with the transaction had done something wrong. In equity it would be wrong to stop bids when the target company had done something wrong. At present, if the bidder company has done something wrong I have the power to undo that. I hope that my noble friend will reflect on the situation. I should be grateful if he will write to me by all means, but I believe that on mature reflection he will accept that the law has sufficient teeth at present. However, if he cites cases where that has not been so, then I shall look into them.
Lord Morris: I am grateful to my noble friend. I shall certainly take his advice on that matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 246A:
Page 107, line 2 at end insert—
("(4M) The Secretary of State may by order delegate his powers under sub-sections (4A) to (4L) of this section to the Securities and Investments Board.".)
The noble Lord said: This is a very simple amendment, which asks the Government whether or not there is a case—and this is meant to be a helpful amendment—for allowing the Secretary of State to delegate his powers to the SIB, since these are controller market dealings. I beg to move.
Lord Young of Graffham: The new subsections introduced into Section 75 of the Fair Trading Act by this clause would prohibit parties to a merger which I refer to the Monopolies and Mergers Commission from acquiring each other's shares, except with my consent. The prohibition is designed to prevent the build up of holdings which might prejudice the outcome of the MMC inquiry; it would come into operation when a prospective merger was referred, and would last for the duration of the inquiry.
As was made clear when we considered the amendment of my noble friend Lord Morris, the regulation of securities dealings and the control of mergers are separate matters; and the instruments of one are not suitable for the purposes of the other. In any case, I should make it clear that, even if the powers in the subsection were delegated to the SIB, they would not allow them to impose a prohibition on share dealings. The prohibition only comes into
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effect when a merger is referred to the MMC, which only I can do. The sole power under these subsections is to grant consents lifting the prohibition in certain cases. These can be either general or specific; for example, we may well allow holdings up to a certain level—say 10 or 15 per cent.—which would not have a bearing on the inquiry.
Having put the prohibition in place to avoid prejudicing the inquiry, there is no conceivable reason for allowing a body unconcerned with merger control to exercise the power to lift it. That would take the powers to deal with the effects of mergers out of the hands of the competition authorities; nor are the powers suitable for the purposes of securities regulation, as I have explained, even were this desirable. Perhaps, therefore, the noble Lord will agree to withdraw the amendment.
Lord Williams of Elvel: This is part of a larger debate as to the role of the SIB which we shall come to in due course. This is not the time to engage on that, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 100 agreed to.
Clause 101 agreed to.
Lord Strathclyde: I beg to move that the House do now resume until five minutes past eight.
House resumed.

Junior Hospital Doctors (Regulation of Hours) Bill [H.L.]
7.7 p.m.
Lord Rea: My Lords, in moving that this Bill be read a third time I should like to say a few brief words before sending it on the next stage of its journey.
I refrained from moving any amendments in Committee because I was anxious to speed its progress to another place. However, for example, in Clause 3 I should have preferred the word "shall" to the word "may" as an instruction to Ministers in the future further to reduce hours from 72 to 60 hours per week in stages. I believe that the argument about the desirability of a 72-hour week is now accepted both by the department and in general. The only questions are when and how that is to be done. I am very pleased that the Minister accepted the suggestion of the BMA Junior Staffs Committee that the appointment of some of the new batch of 100 consultants mentioned in the White Paper Working for Patients will be linked with a pilot project where methods of achieving 72 hours will be worked out and put into operation.
Nevertheless, I feel that the force of legislation is still necessary in order to bring in a nationwide reduction to 72 hours a week. I believe that that must be regarded as only the first step. The achievement of a 60-hour week should be the real aim, which will mean that junior hospital doctors have something like a normal social and family life and are even allowed a little time for study. Although junior hospital doctors are supposed to be in training posts, many have no time for reflection or reading. That

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may be good for the coffers of the Royal Colleges as candidates may have to sit their professional examinations several times instead of once, but it benefits no one else, particularly the patients.
The noble Lord, Lord Brain, would have moved a useful amendment ensuring protected time for study but, if the Bill reaches a Committee stage in another place, that and other useful amendments could well be moved.
I believe that this Bill has already served a useful purpose in raising public awareness of the current situation but I feel that legislation is necessary to achieve the solution which we all seek. I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Rea.)
Lord Ennals: My Lords, first I congratulate my noble friend on having achieved the Third Reading of this Bill. I congratulate the Government for not having raised difficulties which would have meant that the Bill did not proceed to another place. I consider it to be very satisfactory that your Lordships have passed a Bill which is very necessary.
The issue arose in its most prominent form shortly before Christmas, when I was myself in hospital. I will not say that I was talked at, but I heard the views of many junior hospital doctors. Since leaving hospital I have become increasingly aware of the need for some action to be taken. The achievement of my noble friend is that there has been some response. I do not consider the decision to appoint 100 new consultants, with the consequences that that will have for the juniors, in any way a satisfactory response. But it is clear that the Government recognise there is a serious problem that has to be tackled.
I take the same view as my noble friend. There is a need for legislation. I have watched successive governments—during the time I was Secretary of State and in the 10 years subsequent to that—endeavouring with the best will in the world but lacking the force of legislation, fail to come up with an answer. I believe that there is need for legislation, that the profession very much want it—which was not the case 10 years ago—and that the public support it. They recognise that it is not right that junior hospital doctors should be working intolerable hours.
I hope very much that the Bill will be accorded a Third Reading and that it will go with the blessing of this House to another place. What will happen in another place remains to be seen. I hope that the noble Lord who is to reply—if it is for the first time in his new post I warmly congratulate him and welcome him to our frequent health debates—will want to commend the Bill to his colleagues there. I hope that the Government will listen further and that the Bill will finally come through both Houses and become the law of the land.
Lord Trafford: My Lords, as one of those noble Lords who, on Second Reading, had some reservations about the Bill, I too congratulate the noble Lord, Lord Rea, on bringing the measure successfully through this House. I do not think that
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I can say in all honesty that I have changed my mind. It would have been better for the profession to have solved this problem in its own way.
I had prepared a number of amendments based on the detail of the Bill, some of which referred to previously, but I was not sufficiently against the principle to hinder the Bill going forward with the good wishes of the whole House. To have produced a series of amendments would have delayed the Bill and no doubt those proposals will in any case be put forward in another place. At any rate comments might be expected to be made.
There is no doubt—I do not wish it be thought there is any doubt—that it is wrong that any group of young professionals in any profession should be asked to work more than a reasonable number of hours. I am sorry that it has come to legislation. However, as we now have legislation. I certainly accept the principle. For that reason I have not tabled my amendments. I wish the Bill well in another place, and I congratulate the noble Lord, Lord Rea, on bringing it through this House.
Lord Butterfield: My Lords, I follow the noble Lord, Lord Trafford, in welcoming the Bill which, I sense, will receive its Third Reading. I too congratulate the noble Lord, Lord Rea, on the successful way he has negotiated the Bill through this House.
There should be no doubt in your Lordships' minds that some interesting problems can be expected while the Bill goes through the other place. One senses that there may be a need for agency doctors to work at the weekends in the same way that agency nurses have had to be brought in. There are two sides to that. It will put up costs a little, but there will also be the interesting effect of bringing people in private practice back into the hospital world. That might be to the general benefit of patients. I add my congratulations to the noble Lord, Lord Rea.
7.15 p.m.
Lord Pitt of Hampstead: My Lords, before the Minister replies may I say that I hope that the Government will take a very generous attitude to the Bill. Ist is a difficult subject. We know that there are problems if we pass the Bill saying that people should work certain hours and that those hours are limited. There will be institutions—some small hospitals, for example—where there will be difficulties.
I hope that the Government will take a generous attitude. The Bill asks for acceptance of the fact that the hours junior doctors have to work are too long and that there must be the sort of control of their working hours that exists for certain other people, such as airline pilots and lorry drivers. That is what I hope we shall hear from the Minister.
We all know that when the Bill goes through the other place there may be different attitudes to it. But if the Government take a reasonable and generous attitude, this question of the long hours worked by junior doctors can be dealt with, and dealt with successfully. I hope that we will hear from the Minister that the Government are taking that generous attitude.
Lord Henley: My Lords, I thank noble Lords for their contributions to the debate. In particular I thank the noble Lord, Lord Ennals, for his kind words of welcome. Perhaps I may say how pleased I am that he is out of hospital. I hope that we will see a great deal of each other across the Dispatch Box over the coming months.
I think it would be of assistance to your Lordships if I summarised the Government's attitude to the Bill and gave some information on recent developments. As my noble friend Lord Hesketh told the House during the Second Reading debate, the Government believe that an average week of duty of 72 hours is a target which we should work towards. There were a number of reasons why the Government had grave reservations about a statutory limitation of hours. My noble friend referred, first, to the fact that the Government's initiative to reduce rotas more onerous than one in three announced last June, with the agreement of all interested parties, was not due to be completed until October this year. Secondly, the pattern of work of junior hospital doctors could not, and should not, be determined centrally. Thirdly, it was far from clear that we could recruit the large number of extra doctors in the short-term necessary to implement the Bill. Fourthly, any increase in the number of junior doctors would run entirely counter to our current efforts to reform the hospital staffing structure.
Although the Government do not believe that legislation is the right answer, we are grateful to the noble Lord, Lord Rea, for the thoughtful way in which he argued the case for the Bill at Second Reading. There was the opportunity too of hearing constructive contributions from other noble Lords who spoke in that debate. Those contributions certainly illustrated why this is such a longstanding and difficult problem.
My noble friend Lord Hesketh spoke on that occasion of the meeting that my honourable friend the Minister for Health was to have with representatives of the BMA to discuss progress on the June initiative and to consider what further action might be required. That meeting, which took place on 23rd February, was useful and constructive. It was clear to all present that many health authorities had already taken action to reduce onerous rota commitments. Methods planned or used to reduce onerous rotas included removing split site working, changing working arrangements, and the provision of cross-grade and cross-specialty cover.
However, my honourable friend wishes to ensure that progress is maintained and that corrective action is taken where appropriate. Therefore he intends to write personally to the chairmen of all regional health authorities stressing the importance he attaches to the initiative. It was encouraging that at the meeting the BMA undertook to seek to persuade the profession at large that it would pursue with vigour the opportunities for further reductions in juniors' hours.
My honourable friend said that dealing with onerous rotas worse than one in three was a very important stage in reducing the heavy commitments of some junior hospital doctors. But more would
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need to be done. He was very concerned at the problem of long continuous hours and in particular the practice of long weekend working when a junior doctor might be on call continuously from Friday through to Monday every third weekend. Even those on one in three rotas could be working or on call every third week for 120 hours.
He recognised that this was often because some doctors preferred this arrangement so that they could have the other two weekends off. However, the practice was unlikely to be in the interests of patients and we would be holding talks with a view to it ceasing. Finally the meeting agreed to further discussions between the BMA and the Government about the possibility of mounting pilot studies to explore ways in which junior doctors' weekly hours of duty might be reduced to 72.
In brief, the Government cannot support this Bill. But we are actively sponsoring and supporting ways of reducing the onerous commitments of some junior doctors. Useful progress has been made and further action will be pursued with vigour.
Lord Rea: My Lords, I should like to apologise to the noble Lord for not congratulating him in my opening speech. I am sure that we shall be meeting a lot across the Floor of the House. I also thank him for his words. The useful meeting with the BMA on the 23rd of this month might not have been quite so constructive had this Bill not been currently passing through Parliament.
I think it will do nothing but good for the topic to be gone over again and some of the arguments that we have heard here developed in another place. This is why I shall be looking at Hansard and perhaps going to the Gallery in another place and watching its progress with great interest.
On Question, Bill read a third time, and passed, and sent to the Commons.

Police Officers (Central Service) Bill [H.L.]
7.23 p.m.
The Earl of Arran: My Lords, on behalf of my noble friend I beg to move that this Bill be now read a second time.
The purpose of the Bill is to amend Section 43 of the Police Act 1964 and Section 38 of the Police (Scotland) Act 1967 so as to overcome certain difficulties which have arisen over the status of police officers seconded to central service. The officers concerned are seconded from their forces in order to enable the Home Secretary and the Secretary of State for Scotland to provide centrally certain services designed to promote the efficiency of the police.
The services concerned include the Police Staff Colleges, the district police training centres, the forensic science laboratories and the staff officers to the Inspectors of Constabulary. In all, there are just over 600 police officers on central service in England and Wales and in Scotland. They make a very important contribution to the efficiency of the police service, although their numbers are small in relation to the present total of about 138,000 police officers in Great Britain.

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Before 1964 there was no statutory provision for common police services. They were provided on an ad hoc basis, with police officers being seconded to perform them while remaining members of their parent forces. This was not a very satisfactory arrangement. It meant that, although the officers on central service were performing duties for which the Secretary of State was ultimately responsible, they were not accountable to him: they were answerable to the chief officer of their parent force. It was therefore decided in 1964 that steps should be taken to place the central service arrangements in England and Wales on a more logical basis. Since they were engaged on duties for which the Secretary of State was ultimately responsible, it was felt that they should be answerable to the Secretary of State.
Section 43 of the Police Act 1964 therefore provides that a member of a police force who is seconded to central service is to be treated in general as if he were not a member of that force during the period of his secondment. There are certain exceptions to this general rule in order to ensure that officers are not placed at a disadvantage by accepting a central service appointment. Section 43 preserves the officer's entitlement to return to his parent force upon completion of his period of central service. His period of central service also counts as police service for pay purposes; and he is eligible for promotion in his own force in his absence.
A period of central service also counts as police service for pensions purposes. Provision for this was originally made in Section 43, though the enabling provision is now contained in the Police Pensions Act 1976. The other side of the coin is that an officer who commits a disciplinary offence while on central service is liable to be dealt with by his own force for that offence on his return from central service.
Subject to these specific exceptions, a police officer on central service ceases to be a member of a police force. This means that he has in effect no police powers; no right to wear a uniform; no protection under Section 51 of the Police Act 1964, which makes it an offence to assault a constable in the execution of his duty; and no right to membership of the Police Federation or the other police staff associations.
This has been causing concern to the police service. There are occasions when seconded police officers need to wear police uniform in public. For example, staff officers to the Inspectors of Constabulary need to do so when accompanying the inspectors on their visits of inspection. Supervisory staff at district training centres need to do so when in charge of probationer constables outside the premises. More generally, there is a need for central service officers to wear uniform when they are representing the police service, particularly at conferences with other uniformed services.
Members of the public would expect an officer in police uniform to exercise police powers if the circumstances demanded it. An officer on central service would therefore be in a very difficult position if he found himself in a situation where prompt action was needed which called for the exercise of police powers. Only two courses would be open to him. Either he could ignore his lack of police powers and
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take the necessary action; or he could conclude that his lack of police powers prevented him from getting involved. In such a situation most central service officers would act instinctively as police officers. They would take the necessary action. That would clearly be in the public interest. There is therefore a need for them to be able to exercise police powers when the circumstances demand. That is the main purpose of the Bill.
I shall deal with its contents only briefly although I shall of course be happy to answer any specific questions which your Lordships may wish to raise later. Subsection (1) of Clause 1 provides for the insertion of three new subsections after Section 43(3) of the Poice Act 1964. The new subsection (3A) gives police officers, in effect, the right to wear uniform, the right to exercise police powers if the need arises and the right to remain members of the Police Federation (with its related obligation not to take industrial action). It would also give them the protection against assaults which is provided by Section 51 of the 1964 Act.
The new subsection (3B) makes the Secretary of State liable for any torts committed by central service officers in the exercise of their police powers. We expect this liability to arise only very rarely, if at all. But a remedy for torts must be provided. Since central service officers are answerable to he Secretary of State for the performance of their central service duties, it seems appropriate that he should be liable for any torts committed by such officers in the exercise of their police powers.
The new subsection (3C) tidies up a minor problem of interpretation by making it clear that police officers who are seconded in an advisory capacity are to be regarded as being on central service. Subsection (2) of Clause 1 provides for the Bill to have retrospective effect. This unusual provision is needed to safeguard the position of central service officers who may in the past have acted—either from ignorance of the legal position or in what they regarded as the public interest—as though they possessed the powers and privileges of police officers.
Clause 2 deals wth Scotland, where the present position is broadly the same as that in England and Wales. It is clearly desirable that the legislation relating to police officers on central service should remain consistent north and south of the Border. Clause 2 will therefore ensure that the provisions of Section 38 of the Police (Scotland) Act 1967 remain in line with those of Section 43 of the Police Act 1964.
This then is a small Bill and, I hope, a noncontroversial one. It will affect only the small number of police officers who are seconded to central service. The police powers which it will enable them to exercise during their period of central service will be very rarely used. Their use will be confined to completely unforeseen circumstances, but it is in precisely those unforeseen circumstances that the need for central service officers to exercise police powers arises. When there is a need for urgent action they should be able to take it. They need to know that they possess the necessary powers, and we must ensure that those powers are available to them. I therefore commend the Bill to your Lordships.
7.31 p.m.
Lord Mishcon: My Lords, the House will be grateful to the noble Earl the Minister for the lucid way in which he explained the purpose of what he described as this small and non-controversial Bill. Let me assure him at once that the Bill ought to be welcomed by the House in our view as a very necessary measure to clarify—the clarification is long overdue—the status of officers who perform central services.
As the Minister has explained, those central services, which are of a temporary nature, cover many very important services, one of which is district police training services. I mention that because there is one point, of which I have given the noble Earl some degree of notice, that I wish to raise on Second Reading. If we are trying to tidy up what is an anomalous and somewhat untidy situation, we might as well try to tidy it up completely. If the Minister can give me an assurance that the matter will have his attention and that of his colleagues at the Home Office, I shall be perfectly satisfied to leave it to see what that degree of satisfaction is before we start thinking of tabling any amendments for Committee stage.
Let me explain what the anomaly and untidiness is. The Bill quite correctly provides that officers of the appropriate ranks—we call them the federated ranks—continue in membership of the Police Federation while they are on central service. That situation does not obtain at present and will obtain if the Bill becomes law. As I have said, a relatively large number of members on central service are instructors at police training establishments. The federation has been asking the Home Office to obtain representation on the management committees of the district police training centres. I should mention that all recruits outside the Metropolitan Police undergo initial training at these centres. Thanks to the revised training arrangements which put the emphasis on training throughout a two-year probationary period, those members now spend longer at the training centres than used to be the case. The trouble is that at present the federation is not able to represent those members effectively while they are at the centre and this will continue unless something is done by the Home Office.
Each centre has two committees, one for the police authorities in the region and the other for chief officers. The authorities committee is concerned mainly with the cost-effective management and administration of the centre and the chief constables committee is concerned with professional and personnel aspects. As your Lordships will appreciate, that is the committee that deals with most of the matters in which the Police Federation has a direct interest. Now that the Bill confirms that instructors at training centres are members of the Police Federation, those instructors will naturally expect effective representation on their behalf on matters that concern their powers of duty and conditions of service.
I hope that the Minister will be able to inform the House that a fresh look is being taken at the application for membership of the appropriate
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committee to which I have just referred, the management committee, and the committee that deals with matters of personnel and professional aspects, the chief constables committee. As I have said, this measure to tidy up the situation of those who perform central services can be achieved at the same time as we pass the Bill, which I hope we will eventually do.
7.36 p.m.
The Viscount of Falkland: My Lords, we on these Benches welcome the Bill wholeheartedly. The only question that one asks is why such a Bill was not introduced earlier. Section 43 of the 1964 Act, which is now replaced, seems very confusing if one puts oneself in the position of a police officer. That is an important aspect. Police officers have been placed in a position of embarassment, if not of inconvenience or worse, under the section as it stood in the 1964 Act.
I have the disadvantage of following the noble Lord, Lord Mishcon, who is a distinguished lawyer. I notice that under the Bill police officers will be responsible to the Secretary of State for what the Minister described as disciplinary offences. I am curious to know why in England disciplinary offences should be described as "torts" while under the Scottish Bill they are described as "wrongful acts". Is there any legal nuance of importance here?
I am also curious to know why Northern Ireland is left out of the legislation. Presumably officers from the Province of Ulster are seconded in the same way as officers from England and Scotland for all the reasons listed by the Minister and the noble Lord, Lord Mishcon. In what position are officers from Northern Ireland now placed? Why are they not included in the Bill? I have no doubt that there is a good reason. I shall be grateful if the Minister will spell it out.
The status of police officers and their feeling about their own status is important in these times. There is no doubt that officers seconded for central duties, whatever they may be, will now be able to wear their uniform without fear of any comeback and, as has already been mentioned, to join the various staff associations, including the Police Federation. There is also a question of confidence that they are protected should they be victims of assaults. In the period running up to the Bill, I trust that there have not been too many cases of assault on police officers. I have heard of none. But for those police officers who had doubts about their protection, the provisions of the Bill will be welcome. I am pleased to see that the Bill will be retrospective and that those police officers who have had doubts about whether in the past they were correct to wear their uniform will have no fear of retrospective action.
We welcome the Bill, and I am glad to have had the opportunity to make a short Second Reading speech.
7.42 p.m.
The Earl of Arran: My Lords, I am grateful for the constructive and helpful approach which the noble Lord, Lord Mishcon, and the noble Viscount, Lord Falkland, have brought to this Second Reading debate. I said earlier that I should be happy to answer

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questions. Perhaps it would be helpful if I tried briefly to answer those points now.
The noble Lord, Lord Mishcon, asked about Police Federation representation on police district training centre management committees. I listened with great interest to what he said but I must point out that the chief constables' and local authoritys' committees for the police district training centres are management committees, not consultative groups. They are concerned with the management of the police district training centres on behalf of the chief officers and police authorities using them. It is important that there are adequate consultative arrangements concerning the students which involve both the Police Federation and other staff associations, but the management committees are not the place for this. Arrangements have been made for local representatives of the Police Federation to receive minutes of both chief constable's and local authority's district training centre management meetings.
The noble Viscount, Lord Falkland, made several points. He asked about torts and wrongful acts. Neither torts nor wrongful acts are necessarily disciplinary offences. They are private wrongs for which a suit for damages may be brought in a civil court. Secondly, he asked about the position in Northern Ireland. This Bill does not apply to Northern Ireland because police officers are not seconded to central service there. In England and Wales, where there are 43 police forces, and in Scotland, where there are eight, it is more efficient to provide certain services on a national basis for the benefit of all forces. In Northern Ireland there is only one police force—the Royal Ulster Constabulary. Accordingly, most of the services provided through central service in England and Wales—for example, district police training centres, forensic science laboratories and the police national computer organisation—are provided on a force basis for the RUC. The one major exception is the Police Staff College, which has no parallel in Northern Ireland. Places on courses at the college are therefore always made available to members of the RUC.
In conclusion, subject to the points which have been raised, I think we are in fairly general agreement on this Bill. Police officers who are seconded to central service do not cease to be police officers. They retain their police training, their police experience and the police tradition of reacting instinctively to any incident which calls for urgent action in the public interest. It is clearly right that they should be able to exercise police powers when the occasion demands. This will be the main effect of the Bill. I beg to move.
Lord Mishcon: My Lords, before the noble Earl sits down, I wonder whether he would with his usual courtesy allow me to utter a word about what he has said in regard to my query. I understand that two committees deal with each training centre. As I tried to say before, but possibly did not make clear, the one about which I was mainly speaking was the chief constable's committee, which I am told is concerned with professional and personnel aspects, the very matters upon which the Police Federation would wish to say a word if it is properly to look after its
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members. In view of the remarks that have been made at Second Reading, I wonder whether he and his colleagues will look at this aspect of the matter and reconsider it. That is all I ask for. I should be glad to have his confirmation that he is prepared to do that.
The Earl of Arran: My Lords, it might be a sensible idea if the noble Lord, Lord Mishcon, would let me write to him giving him some detail as to why we are not keen to carry on in the way that he suggests. That might be appropriate at this time. There is of course the Committee stage of the Bill if the noble Lord wants to take this matter further.
Lord Mishcon: My Lords, I am deeply grateful to the noble Earl. That is an excellent idea. I am sure he will see that I get the letter from him, which I shall eagerly await, before the Committee stage.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
Lord Henley: My Lords, I beg to move that the House do now adjourn during pleaspre until five minutes past eight.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 7.46 to 8.5 p.m.]

Companies Bill [H.L.]
House again in Committee.
Clause 102 [False or misleading information]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 246B: Page 108, line 31, leave out ("two") and insert ("seven").
The noble Lord said: This is in the nature of a probing amendment. It seems to us that Clause 102 has similarities to Section 47 of the Financial Services Act 1986 in the sense that anyone who provides false or misleading information under that Act is subject to a penalty of seven years' imprisonment and here we have provision for a term of two years' imprisonment. I certainly do not wish the amendment to be incorporated into the Bill because it is not the function of the Opposition to try to increase the prison population, but I believe that there is a divergence between the provisions in the Bill and those in the Financial Services Act. I should therefore be most grateful if the noble Lord, Lord Strathclyde, could explain why that is the case. I beg to move.
Lord Strathclyde: A maximum term of imprisonment of two years seems to us to be about right for an offence of this kind, involving giving false or misleading information to the competition authorities. The penalties were taken directly from the more limited offences which Clause 102 replaces; that is, those in Sections 46(3) and 85(6)(b) of the Fair Trading Act 1973.
It is true that the maximum penalty for insider dealing, to which I think the noble Lord was.

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referring, was increased in 1988 from two years to seven years. That reflected experience of the offence and indications that the original penalty provided an insufficient deterrent in relation to the size of the gains to be made. We are not introducing this new offence because of any evidence of widespread abuse and there is no reason, therefore, to increase the penalty from that which applies to the present offences; it is the scope of the offence which is being broadened. I hope that that explanation will satisfy the noble Lord.
Lord Williams of Elvel: Am I right in thinking that Section 47 of the Financial Services Act, which concerns the provision of misleading information recklessly or otherwise, carries a maximum penalty of seven years' imprisonment? Further, is that not exactly the problem which we are addressing in this clause of the Bill?
Lord Strathclyde: I still think that what I said basically explains the situation in that whereas some penalties were specifically created to deal with a major perceived problem, what we are dealing with here is not a problem which is perceived to be particularly great, or something which gives us great cause for concern, but rather a penalty which has been taken from the old section of the FairTrading Act. In fact, all we are really doing is broadening the scope of the provisions. Therefore we believe that any similarity with that which has occurred in other Acts, especially the Financial Services Act, is irrelevant. Indeed, there is in this case no significant problem which we need to deal with by means of such a serious penalty as seven years' imprisonment, as suggested by the noble Lord. I hope that that further explanation clarifies the position.
Lord Williams of Elvel: I wonder whether the noble Lord will reflect upon this problem for a moment. As I understand it, having read Section 47 of the Financial Services Act, anyone who provides misleading information, whether recklessly or otherwise, suffers a maximum penalty of seven years' imprisonment. However, anyone convicted under this clause of providing false or misleading information in what, after all, are very similar circumstances, can receive a maximum penalty of two years' imprisonment. There seems to me to be an inconsistency between the two. Therefore, I very much hope that the noble Lord will reflect upon the matter.
Lord Lloyd of Kilgerran: Surely the circumstances in the Financial Services Act which the noble Lord is citing differ from those in the Fair Trading Act. To have a sentence of seven years' imprisonment under the Fair Trading Act even for giving reckless or misleading information in a material particular is too savage.
Lord Williams of Elvel: I wholly agree with the noble Lord, Lord Lloyd of Kilgerran. I am not trying to introduce seven years into the Bill. I am trying to ensure consistency between the treatment of
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offenders under a certain section of the Financial Services Act for providing false information, whether reckless or otherwise, and under the Bill. It seems to be that it is a problem that might well be cleared up.
Lord Lloyd of Kilgerran: I do not understand the noble Lord when he says that he is not putting seven years into the Bill. Surely he is amending subsection (3)(b), which says two years. The noble Lord wants seven years. It is a horrifying idea to introduce such a savage sentence into the Fair Trading Act 1973.
Lord Williams of Elvel: As I tried to explain to the noble Lord, Lord Kilgerran, I am not trying to put seven years into the Bill.
Lord Lloyd of Kilgerran: I beg the noble Lord's pardon.
Lord Williams of Elvel: It is a probing amendment to see whether the Government have compared the provisions that they are putting into Clause 102 with Section 47 of the Financial Services Act. I should prefer Section 47 of the Financial Services Act to have a penalty of two years.
Lord Lloyd of Kilgerran: The noble Lord did not say that.
Lord Williams of Elvel: I cannot say that because I cannot amend the Bill in that respect.
Lord Strathclyde: I do not believe so, but we may have genuinely missed something here. It may help if I were to check up on that point and let the noble Lord know.
Lord Williams of Elvel: I am grateful to the noble Lord. It is a point of consistency. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 102 agreed to.
Clause 103 [Fees]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 246C:
Page 109, line 38, leave out subsection (8) and insert—
(" (8) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.".)
The noble Lord said: It is a rare occasion when the Opposition can move for a negative procedure rather than an affirmative procedure, as it is in the Bill. I am being helpful to the Government in moving the amendment in the light of the fact of course that this afternoon the Secretary of State was extremely helpful to us in accepting some of our amendments.
It seems to me that when the Secretary of State makes regulations about fees they should not be subject to the affirmative procedure. The matter comes before this place. It is debated. There is a Motion. All sorts of procedures have to be gone through. If there is ever a case for having a negative procedure I should have thought that this was one. I am trying to help the Government by moving the amendment. I beg to move.
Lord Strathclyde: I was amazed when I saw the amendment, because the noble Lord, Lord Williams, has been so hard on us whenever we have tried to introduce any sort of regulation. I am not sure whether the noble Lord has gone through some biblical conversion. I shall briefly explain the position.
Many of the details of the system of fees for merger control have been left to be spelt out in regulations. That is to enable us to vary not only the level of fees but the way in which they are charged and collected, and the categories subject to them. Because of that, we thought it appropriate to make the regulations subject to the affirmative resolution procedure. That would ensure that they would always be scrutinised by this place and in another place. If the noble Lord feels that that is unnecessary and that the negative resolution procedure is sufficient we could perhaps be persuaded to reconsider the matter.
Lord Williams of Elvel: I am grateful to the noble Lord. It is not a biblical conversion, if I may say so to the noble Lord. As always, I am extremely reasonable. Whenever possible I try to help the Government. On many occasions it is not possible, and I oppose the Government.
Lord Lloyd of Kilgerran: At length.
Lord Williams of Elvel: At considerable length. In this case it seems to me that the negative procedure is probably the right one. In that spirit, should I withdraw the amendment? Will the noble Lord consider it?
Lord Strathclyde: Yes.
Lord Williams of Elvel: In that case, I will withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 107 agreed to.
8.15 p.m.
Lord Peston Lord Peston moved Amendment No. 246D:After Clause 103, insert the following new clause: ("Monopolies and Mergers Commission
(Performance of Functions) Order 1989.
. In the Monopolies and Mergers Commission (Performance of Functions) Order 1989, paragraph 2(2) is omitted.").
The noble Lord said: I shall speak briefly to the amendment, which, on the face of it, is nearly incomprehensible. I shall explain what my noble friend Lord Williams and I have in mind. During the Government's period of office I have been most concerned about the activities of the MMC. The problem essentially is that the Government, having abandoned what we called industrial policy, then discovered, not surprisingly, that many issues arise in the economic field which require them to have an industrial policy and an agency to deal with it.
In a desperate condition because they try to abolish all our agencies that they do not like, the Government have tried to squeeze within the monopolies and mergers criteria some means by which the commission may consider matters which are not matters of competition policy but of industrial policy.
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It seemed to me that it would be useful if I were to draw to the Committee's attention what has happened and to say that if that is what has happened we should recognise that the Government push industrial policy on to the MMC. In some ways, it should not do so; but if it does we should recognise it.
The purpose of the amendment, which, in the end, refers to an order, is to indicate what has happened and to enable us to point out with some regret that the MMC, which should be overwhelmingly merely a competition body, has been given these other tasks. We do not like to see the way that the Secretary of State has to contort himself to justify referring certain matters to the MMC which prima facie are not competition policy matters. That is the reason for the amendment. We should like to hear the noble Lord, Lord Strathclyde, make some response with a view to enlightening us on whether the Government have now recognised that they could do with a proper commission which would be their industrial policy arm. Even if the Government do not recognise that fact, the country would like to have such a body.
Lord Strathclyde: I am not going to sound very encouraging to the noble Lord, Lord Peston. I remember the noble Lord, Lord Williams, giving notice of his intention to seek to reverse this provision of the Monopolies and Mergers Commission (Performance of Functions) Order when it was before this place for approval in January. The noble Lord is, if I may say so, making a major issue out of a minor procedural change, unless I have missed something in what the noble Lord said.
The provision in question reduced from five to three the minimum number of members on the groups through which the MMC's investigations are carried out. I emphasise the word "minimum". It does not mean that the size of the groups will be reduced for all, or even most, investigations. Six (one more than the existing minimum) has been the normal number in recent years, and is likely to continue to be so. The change merely provides the flexibility to use a smaller group where that is appropriate to the task in hand.
It will continue to be for the chairman to decide the point, obviously having regard to the need to ensure a sufficient range of experience, together with the need for speed and efficiency and the use of public resources commensurate with the significance of the issue under investigation. For example, it is unlikely that a major inquiry such as that into credit cards will be given to a smaller group; but a narrower issue, such as a local newspaper merger or a particular anticompetitive practice might be. The commission, and the group performing the functions of the commission for the purpose, would be working to the same broad public interest test and would be able to draw on the expertise of the commission's staff as a whole.
Lord Williams of Elvel: With the greatest of respect, the noble Lord has not started to address the problem that my noble friend Lord Peston put to him. The proposal is to reduce the MMC panel from five to three members. However, in almost every Bill that comes before your Lordships' House there is

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reference to the Monopolies and Mergers Commission and a considerably increased load is being put upon the MMC. Given that and given that the commission now seems to be responsible for running industrial policy in the whole country, is it right that the chairman should have the sole discretion to decide on a panel of three members? Those three members would, as the noble Lord has pointed out, have total authority to commit the Monopolies and Mergers Commission on the issues which they were discussing.
It seems at least to us that there should be a rather broader spread of opinion. The chairman should be able to say, "I have to have five people because there are major issues. It is not in my discretion to reduce them to three". I understand what the noble Lord is saying about the small Monopolies and Mergers Commission inquiries, but there will be large Monopolies and Mergers Commission inquiries. Until we have some assurance, such as a statement from the chairman or a statement from the Government through the Secretary of State, that there is a distinction between different kinds of inquiry, that some will merit a panel of five and others may be reduced to three—until we have some sort of guidance on how the chairman will exercise his functions under this change in the order made under the Act, I am afraid we must persist with our thought that the Monopolies and Mergers Commission is a responsible body. It must make sure that there is a broader spread of opinion than the order allows it.
Lord Strathclyde: The Monopolies and Mergers Commission has a very reasonable and respectable chairman who makes these kinds of decisions quite happily. It is for him to decide how many members and in what way to use the committees and commissioners. The noble Lord himself has experience in the procedures of public bodies, having been chairman of one himself. He reminded us that the Price Commission worked as a commission, not, as the MMC does, through groups. Yet I believe I am correct in saying that, although the final reports were agreed by the full commission, they were in practice drawn up by panels of members. So perhaps there is a similarity between what the Price Commission was doing when the noble Lord was in charge of it and what we are suggesting that the MMC should be doing now—that is, trying to make its activities as efficient and expedient as possible through the good decision of the chairman.
Lord Peston: Were the noble Lord to say that the Monopolies and Mergers Commission would farm out investigations to a panel of three and that those investigations would come before the full Monopolies Commission for discussion and approval, then I should support him. But at present under the Fair Trading Act it is perfectly clear, and under the Competition Act it is carried forward that, the Monopolies and Mergers Commission can form a panel which, without reference to the full commission, can commit the commission. That is the problem. If there is to be a panel of three which can issue a report without any reference at all to other
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members of the commission and commit the Monopolies Commission, that seems to us to be an undesirable state of affairs.
Lord Strathclyde: It seems to us to be entirely fair enough. There is no danger of the MMC's inquiries becoming arbitrary or capricious as a result of the order and as a result of there being on occasions smaller committees of three members. The statute, not to mention the possibility of judicial review, contains sufficient safeguards against that.
I hope that I have convinced the noble Lord that his fears are unfounded and that he will not persevere with the amendment, which would undo a small but extremely useful change to the procedures of the MMC.
Lord Peston: I am certainly not persuaded. My view is exactly the reverse. It is that the MMC is overloaded and this is introduced in some way to try to keep it still operational. However, we have a duty as an Opposition to point out the longer term implications of the Government's frivolous actions. We have done our duty in that regard and we have also listened to the noble Lord in his attempt to justify what the Government are doing. We have happily made our point and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 104 agreed to.
Schedule 15 [Amendments about mergers and related matters]: [Amendment No. 247 had been withdrawn from the Marshalled List.]
Lord Lloyd of Kilgerran moved Lord Lloyd of Kilgerran moved Amendment No.: Page 197, line 29, at end insert—
(". In section 2(I) of the Fair Trading Act 1973—
(a) after first "activities" insert "including anti-competitive activities";
(b) after paragraph (b) insert—
"(c) and generally to keep under review receive and collate evidence with respect to such activities as are mentioned in the preceding two paragraphs which may appear to him to be contrary to the public interest.";
(c) in section 5(1)(a) of that Act after first "situation" insert "or anti-competitive activities".".)
The noble Lord said: I wish to move Amendment No. 247A and speak to Amendment No. 248. We are coming to a very interesting and important part of the Bill.
A Noble Lord: Yes, it is.
Lord Lloyd of Kilgerran: I am glad that I have some support in that! Schedule 15 is entitled:
"Amendments about mergers and related matters"
Iwas advised that the amendments that I wished to put forward were more suitably placed under Schedule 15 than in the earlier part of the body of the Bill.
I shall not be entering into long dissertations about philosophy or history and that sort of thing. I take a

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very pragmatic view in order to try to help improve the Bill. The first amendment is directed towards bringing the Fair Trading Act 1973 up to date, having regard to the terms of the Competition Act 1980. Section 2 of that Act refers to "anti-competitive activities" in its title. The Fair Trading Act 1973, seven years earlier, was enacted at a time when industry had not become involved with competitive or anti-competitive activities. Therefore the first part of Amendment No. 247A proposes that:
"In section 2(1) of the Fair Trading Act 1973—
(a) after first 'activities' insert 'including anti-competitive activities' ".
All that does is to bring the Fair Trading Act 1973 up to date, having regard to the terms of the Competition Act 1980.
Following upon that Section 2(1)(a), paragraph (b) of my amendment is necessary:
"after paragraph (b) insert
'(c) and generally to keep under review receive and collate evidence with respect to such activities as are mentioned in the preceding two paragraphs which may appear to him to be contrary to the public interests.' "
That is a very pragmatic approach. All that has to be done is to keep under review and collate the evidence with respect to the matters in the previous two paragraphs. Having regard to the first part of my amendment, it therefore follows that it will be necessary to amend Section 5(1)(a) of that Act, after the first reference to "situation" and insert "or anti-competitive activities". Consequently, that amendment is entirely directed to bringing up to date or at any rate up to the date of the Competition Act, the Fair Trading Act 1973. That Act contains no reference at all as it should in these modern times, to "anti-competitive activities".
Amendment No. 248 is consequential. I wish to leave out the words
"the Fair Trading Act 1973"
and insert "that Act" because those words are referred to at the beginning of my Amendment No. 247A. It is getting late and no doubt it will get later, but this is a very important amendment. It is simply directed to bringing Section 2 of the Fair Trading Act 1973 up to date, having regard to the terms of the Competition Act 1980. At that date it was becoming quite clear to industry, to lawyers, to institutions and even to the Government that it was necessary to deal with anti-competitive activities. With that introduction of the words "anti-competitive activities", the Fair Trading Act 1973 will become far more relevant to industry and advisers to industry than it is now. I beg to move.
8.30 p.m.
Lord Peston: I wish to say a few words in support of the noble Lord, Lord Lloyd of Kilgerran. I, too, have no idea whether Schedule 15 is the right place for this provision. But that is a minor matter. I have several points to make here. The provisions that are suggested in the amendments which we are discussing should take place anyway. My guess is that, in practice, they may well happen anyway. I look for some reassurance from the Minister on that.
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I particularly draw the attention of the Minister to the point that the noble Lord, Lord Lloyd of Kilgerran, made concerning the phrase "anticompetitive activities". In the past 15 years or so we have learnt a great deal about the nature of competition, and the nature of forces endeavouring to restrict competition. One hopes that all those working in the competition field recognise the problem of anti-competitive activities. A.s I know the relevant people, I am confident that they recognise the problem. However, I am entirely sympathetic to the view of the noble Lord, Lord Lloyd of Kilgerran, that it would be extremely useful to amend the Fair Trading Act 1973 so that that particular phenomenon appeared on the face of the legislation and was made clearer.
I interpret the noble Lord, Lord Lloyd of Kilgerran, to be partly asking for a response about what is happening in terms of the practice of competition policy, but also to be stating that we have the chance to bring other bits of legislation up to date. The Government are doing that in a number of their amendments. This amendment provides another good opportunity to bring legislation up to date.
Lord Strathclyde: I too shall speak to Amendments Nos. 247A and 248. Amendment No. 247A, and Amendments Nos. 253, 254 and 255, which we shall come to shortly, are all concerned with applying the public interest test set out in Section 84 of the Fair Trading Act 1973 in various new ways. It may therefore help if I start by reminding the Committee how this test operates at present.
The Monopolies and Mergers Commission is the body to which this legislation gives the task of determining whether matters are against the public interest or not. We shall come later to the question of what may be taken into account by the MMC in determining the public interest, when we consider Amendment No. 251, so I shall just say that Section 84 requires the MMC to take into account all matters which appear to it to be relevant, and contains a list of particular matters which is inclusive, not exclusive.
Thus in deciding whether to refer questions to the MMC, the Director General of Fair Trading and Ministers have to consider whether there are issues of the public interest which merit examination by the MMC, but they do not prejudice the question of whether matters actually are or are not against the public interest.
Amendment No. 247A would make three amendments to the Fair Trading Act 1973. Two of them are additions to the duties of the Director General of Fair Trading under Section 2 of the Fair Trading Act. This section already requires the director general to keep commercial activities in the UK under review, and collect information, so as to become aware, among other things, of:
: "practices which may adversely affect the economic interests of consumers".
He must also be aware of: "monopoly situations or uncompetitive practices".
This is in our view quite broad enough to cover everything which might raise matters of the public

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interest and be within his field of expertise. This would encompass anti-competitive activities, so specific reference to those is unnecessary. But in any case, there are the separate provisions of the Competition Act under which the director general can investigate anti-competitive practices.
The third of the amendments to the Fair Trading Act made by Amendment No. 247 is to the duty of the Monopolies and Mergers Commission under Section 5(1) of the Fair Trading Act to investigate and report on questions referred to it relating to possible monopoly situations. It would add a duty to investigate anti-competitive activities. This addition is also in our view unnecessary. The section sets out the principal functions of the MMC—its basic raison d'être—but it is not a comprehensive list: it is supplemented by more explicit provisions elsewhere relating to particular kinds of reference. However, one thing distinguishes all its functions; it can only investigate matters referred to it. These already include anti-competitive practices referred by the director general under the Competition Act. It can also, in considering whether monopolies operate against the public interest, look at anti-competitive behaviour in that context. Amendment No. 247A does not add to the reference powers already available—and, given the existing power I have mentioned, this would be unnecessary anyway.
I have to say, therefore, that Amendment No. 247A seems to us unnecessary, and I hope that the noble Lord will be prepared to withdraw it.
Lord Lloyd of Kilgerran: Once again the Government have not addressed themselves to the problems that we, as parliamentarians, have to deal with. We have to produce an Act that may be read not only by Ministers or members of institutions but also by members of the public, and advisers to industrialists and must be understood by them. The brief of the noble Lord did not address itself to this problem. The problem arises in the Fair Trading Act. Let us put ourselves in the position of an adviser to an industrialist. The adviser looks at Section 2(1)(a) of the Fair Trading Act 1973. He knows that it will be necessary for the director general to keep under review the: "carrying on of commercial activities in the United Kingdom".
He then looks at the definition part of the legislation—that is Section 137. There he discovers that commercial activities in the United Kingdom are defined as:
"any of the following, that is to say, the production and supply of goods in the United Kingdom, the supply of services in the United Kingdom and the export of goods from the United Kingdom".
A very important matter arises today as regards competition policy and anti-competitive practices. The Bill, as it now stands, is entirely silent on that matter. I believe it is the Government's public duty to ensure that when a Bill becomes an Act anybody who reads it will understand quite clearly that anticompetitive activities are a vital matter to which the director general must have regard.
As the Bill stands in its present form it is not clear that the director general will have to take account of
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anti-competitive activities. It is all very well to say that in the Competition Act there are here and there references to anti-competitive practices. But we are dealing with the Fair Trading Act 1973. That Act still stands, subject to amendments. I think that the amendment that is vitally required is somehow or other to insert into the Act the provision that the director general must look out for anti-competitive practices. Then the industrialist and his advisers will have to take account of that very important matter. It is very necessary to draw that to the attention of industry.
Lord Strathclyde: I realise that the noble Lord, Lord Lloyd of Kilgerran, is extremely experienced in this particular field and that he has spent much time on these matters. However, I do not really understand why he is worried about the conclusions drawn by a legal adviser from Section 2 of the Fair Trading Act concerning the duties of the Director General of Fair Trading when there is also Section 2 of the Competition Act under which the director general can investigate anti-competitive practices on the part of businesses.
Furthermore, I have no doubt that industrialists are constantly referring to Section 2(1) of the Fair Trading Act. I am sure that no one who has been involved in an inquiry by the Director General of Fair Trading or the MMC under the Act is in any doubt about the powers to consider anti-competitive behaviour. Perhaps, in the light of that explanation, the noble Lord would like to read what I have said. Perhaps it may make better sense then.
Lord Lloyd of Kilgerran: I am grateful to the noble Lord for his attempts to get this matter right. But he is saying that the Fair Trading Act as it stands is irrelevant to anti-competitive practices. That is a most unreasonable situation. The Fair Trading Act 1973 is still in being. Certainly the Competition Act introduced other regulations and practices, but the Fair Trading Act, which we are trying to improve, does not have that important reference. It seems to me most unreasonable for the Government to leave the Act in that position.
The noble Lord was very kind to mention my expertise. I have been concerned with merger problems and matters relating to the Treaty of Rome since the 1960s, before this country became a member of the European Community. Consequently I have in mind the problems that will be encountered by people endeavouring to collaborate with firms abroad—smaller firms which the Government are encouraging to become more active and create wealth. They do not understand the problems. When the secretaries or directors of the companies, who are probably not lawyers, read the Act they will think that all that has to be taken into account is commercial activities in the United Kingdom. Their attention will not be drawn to the need to have great regard to anticompetitive activities.
I should have thought that in those circumstances the noble Lord might wish to reflect upon the matter, as I shall reflect on his speech. Perhaps he will be good enough to reflect upon my presentation of the matter.
Lord Strathclyde: The noble Lord has put his case extremely well. As I said earlier, he is more than expert in the subject. I shall read with care what he has said. However, I cannot give any commitment that we shall be able to improve on the present situation. We feel that the two Acts complement each other and that it is therefore not necessary to update the Fair Trading Act. I hope that he will feel able to withdraw his amendment.
Lord Lloyd of Kilgerran: I am obliged to the noble Lord. We have moved a step further. The Government may feel that some reference could be made to the Competition Act 1980 in the Fair Trading Act 1973. That might be helpful to advisers of industrialists and to small companies which are trying to create wealth for the country.
In the light of what the noble Lord said, I shall reflect upon his speech. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 248 not moved.]
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 249:
Page 197, line 42, at end insert—
(" . In section 64(1)(b) of that Act omit "£5" and insert "£25".".)
The noble Lord said: We now come to Section 64 intituled in the margin: "Merger situation qualifying for investigation".
I need not read through the section. It provides that to qualify for investigation the value of the assets taken over must exceed £5 million. The object of my amendment is to raise the sum of £5 million, which was established in 1973, to a figure which is more relevant to today's circumstances, having regard to inflation.
It is a probing amendment. I have suggested a figure of £25 million although that seems somewhat on the low side. I beg to move.
Lord Strathclyde: The noble Lord explained the position very well. However, I am glad to be able to tell him that the figure already stands at £30 million. It was increased to that level in 1984 by the Merger References (Increase in Value of Assets) Order 1984, a copy of which can be found in the Library.
Lord Lloyd of Kilgerran: I am very much obliged to the noble Lord. I had not discovered that amendment to the amount. I did not gather in which regulation it is to be found, but I accept that the figure of £30 million has replaced the figure of £5 million. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.45 p.m.
Lord Strathclyde Lord Strathclyde moved Amendment No. 250: Page 198, line 9, at end insert—
("7A. In section 75(4) of that Act—
(a) after "sections 66" there is inserted "66A", and
(b) for paragraph (a) there is substituted—
"(a) section 66 shall apply, where an event by which any enterprises cease as between themselves to be distinct
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enterprises will occur if the arrangements are carried into effect, as if the event had occurred immediately before the date of the reference.
(aa) section 66A shall apply, where a transaction falling within subsection (2) of that section will occur if the arrangements are carried into effect, as if the transaction had occurred immediately before the date of the reference.".)
The noble Lord said: I have already spoken to Amendment No. 250 in connection with Amendment No. 245A. I beg to move.
On Question, amendment agreed to.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 250A:
Page 198, line 24, at end insert—
(". In section 84(1)(a) of that Act after "competition" insert "and the control of anti competitive practices".")
The noble Lord said: In moving Amendment No. 250A I should like to speak also to Amendments Nos. 252A, 255 and 256A. Amendment No 250A is an amendment to Section 84, about which we have heard a great deal this evening, dealing with the public interest. The section sets out criteria for determining what constitutes the public interest. The maintaining and promoting of effective competition is one of those criteria. Another important factor is the control of anti-competitive practices.
The amendment therefore would further update the Fair Trading Act 1973 and put it into terms which are understood in practice with regard to competition. Not only must effective competition be
promoted—that one can understand in relation to competition between companies or institutions—but anti-competitive practices or activities must also be controlled. Once again this is a probing amendment intended to enable small companies and their legal advisers to understand the importance of anticompetitive practices in industry today.
Amendment No. 252A embodies the same philosophy. Section 137(2) defines certain terms. The amendment defines anti-competitive practices as including any agreement, decision, arrangement, transaction or obligation. It sets out those five terms in order to help the reader to understand what those anti-competitive devices or practices are.
Many of the terms I have listed are conditions which are taken into account by M MC or the Director General of Fair Trading in considering merger problems. They also take account of the terms of Articles 85 and 86 of the Treaty of Rome as they are understood today, having regard to the string of cases on anti-competitive matters which have arisen since the introduction of the Fair Trading Act in 1973.
It would take me a long time to explain to the Committee the kind of cases that are now relevant and understood, having regard to the decisions of the courts and the practice of the commission. There is a whole string of cases from the Continental Can case of 1972 or 1973 to the very complicated and long Philip Morris v. Rothman case of 1987. I have endeavoured to put into the definition of anticompetitive practices some references to matters that could be of great use to the advisers of small companies. That is what is generally understood when we refer to anti-competitive devices.

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Paragraph (a) refers to one of the conditions with which my amendment deals. That is the type of condition laid down, for instance, in the recent British Gas case. It states that an anti-competitive practice occurs when, directly or indirectly, selling prices are fixed with or without any other trading conditions. Any attempt which,
"limits or controls production, marketing, technical development or investment"
could be an anti-competitive device. If one limits or controls shares, markets or sources of supply—as stated in paragraph (c)—that again could be anticompetitive.
I need not read the rest, but I shall read again the provision which relates to Article 85 of the Treaty of Rome and refers to,
"arrangements or supplementary obligations resulting in competitive disadvantages of any kind".
The last provision is a very important one. My advisers tell me that, if it had been clear and if the Fair Trading Act 1973 and the Competition Act 1980 had covered those points, it would probably not have been necessary for the GEC-Siemens v. Plessey case to go to court as happened just before Christmas.
Paragraph (e) states that an anti-competitive practice is one which,
"may lead directly or indirectly to any abuse of a dominant position affecting or likely to affect the course of trade by one or more enterprises".
That, in effect, is a paraphrase of Article 86 of the Treaty of Rome, which is of great importance to industrialists when they enter into agreements on the Continent.
Added to that paragraph is a definition of a dominant position. It states: " 'a dominant position' means when a market share of the order of 40 per cent. to 45 per cent. is reached".
Those figures are taken from recent decisions of the EC in the courts. It is necessary to try to help those people who are concerned with creating wealth by means of agreements with foreign countries.
The other amendment to which I should like to speak is Amendment No. 255, which states: (" . In section 14 of that Act at end insert—
"((4) In determining for the purpose of what constitutes "against the public interest" the appropriate Minister or the Comptroller shall have regard to the matters set out in section 84 of the Fair Trading Act 1973").
That Act is concerned with the public interest. I have read that out. There is no need for me to argue or present any support for the amendment. The words are there before the Minister and his advisers and I shall be interested to know what they have to say.
The last amendment to which I ask leave to speak is Amendment No. 256A. That seeks to insert in Section 33(2) of the Act two terms that I used earlier; namely, "anti-competitive practice" and "a dominant position". I shall explain the amendment as briefly as possible. On page 200, there is a list of terms. As I have used the two terms "anticompetitive practice" and "a dominant position", it is appropriate that they should be inserted in Section 33(2) of that Act. I beg to move Amendment No. 250A.
Lord Strathclyde: I shall speak to the same amendments as the noble Lord. He seems to think that the existing provisions for referring anti competitive practices to the Monopolies and Mergers Commission are insufficient. We have discussed his proposed additions to the functions of the MMC in this respect, in considering Amendment No. 247A, and I hope that I have explained why we consider the present provisions for referring anti-competitive behaviour cover the ground quite well.
Amendment No. 250A would require the MMC in considering the public interest to have regard to the desirability of promoting or maintaining control of anti-competitive practices. However, the section already refers to the desirability of maintaining and promoting competition in the UK, and it is hard to see how that can be done without controlling anticompetitive behaviour. Indeed, since this test would apply when the MMC has anti-competitive practices referred to it, there is an element of circularity. In effect, it says that in deciding whether anticompetitive practices are against the public interest the MMC should have regard to the desirability of controlling anti-competitive practices.
It has not been found necessary to define competition in the existing competition legislation. The Competition Act, which contains powers to deal with anti-competitive practices, defines engaging in an anti-competitive practice in very broad terms: it is a course of conduct, in the course of business,
"which has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition"
in the supply of goods or services in the UK. A similar definition is used for "uncompetitive practice", which is the term—slightly less graphic, I think—used in the Fair Trading Act at present.
Amendment No. 252A, which defines the term "anti-competitive practices" used in Amendment No. 250A, is both more specific in certain respects and broader in others. Although I recognise it is inclusive, not exclusive, it does not have the breadth given by the reference to preventing, restricting or distorting competition in the existing UK legislation and in Article 85 of the Treaty of Rome, or by the reference to abuse in Article 86. Also, in defining a dominant position as 40 per cent. to 45 per cent. of the market, it lacks the flexibility of Article 86, which contains no definition but leaves it to be assessed in the light of the structure of the relevant market and of the UK monopolies legislation, which sets the threshold for monopolies at 25 per cent.
At the same time it attempts to conflate Article 85—which deals with what we would call restrictive trade practices or cartels—and Article 86, which deals with abuse of a dominant position. Thus, it brings in agreements between firms as well as single firm behaviour. Agreements are already regulated under the restrictive trade practices legislation which, as the noble Lord is aware, we have been reviewing. Moreover, because of the separate legislation with its own procedures, when the MMC investigates a monopoly it is explicitly precluded from dealing with agreements caught by that legislation.
The absence of either agreement or abuse from the definition of anti-competitive practice also has the

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effect that behaviour on the part of a single firm which is everyday commercial practice, such as the setting of prices or trading conditions or the establishment of production schedules, could be regarded as anti-competitive.
My intention has not been to criticise the noble Lord's drafting for the sake of it, but to show why we think that the existing definition of anti-competitive behaviour covers the ground rather better. There are problems with trying to be too precise, and this amendment intrudes into areas covered by other legislation. That is not to say that there are no lessons to be learnt from the Treaty of Rome. On the contrary, we are, as he knows, proposing to adopt a similar system to deal with cartels, and I am sure he will take a close interest in the legislation on that as and when parliamentary time permits. I would not rule out the possibility of looking again at the way in which our legislation on anti-competitive practices works, at some stage, but there is a limit to how much we can do at a time, and it would be a mistake to embark on piecemeal changes rather than looking at the whole system. I hope, therefore, that the noble Lord will agree to withdraw his amendment.
Perhaps I may turn briefly to Amendment No. 255, which would amend Section 14 of the Competition Act. It suggests that Ministers or the Comptroller-General of Patents should apply a public interest test. This is not their role; instead they rely on the public interest findings of the Monopolies and Mergers Commission.
It is for them to apply appropriate remedies. Since in doing so they are already bound by the MMC's public interest findings it would be wrong to require them in effect, to reopen that assessment.
In any case, the Copyright, Designs and Patents Act 1988 will when it is brought into force repeal and replace this section. I am sure that the noble Lord would agree that it is far too soon to start reopening matters settled in that Act, on which he spent so much time last Session, and that he will therefore withdraw his amendment.
Lord Lloyd of Kilgerran: I am very grateful to the noble Lord for the careful way in which he has dealt with this. It has been very helpful in order to decide what action 1 may or may not take in the future. I shall read with care the interesting presentations that he has made. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9 p.m.
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 251: Page 198, line 24, at end insert—
("9A.—(1) In section 84(1)(a) of that Act, after "United Kingdom" insert "and exporting to markets outside the United Kingdom".
(2) In section 84(I)(b) of that Act, after "purchasers" insert "exporters".
(3) In section 84(I)(c) of that Act, omit "through competition" and after "markets" insert "and in and exporting outside the United Kingdom".
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(4) In section 84(1)(d) of that Act, after "distribution" insert "and regional development".
(5) In section 84(1)(e) of that Act, omit "competitive" and after "in" insert "and export from".
(6) In section 84(1) of that Act, at end insert "and (f) of having regard to any European Economic Community obligation.".").
The noble Lord said: We come to an important series of amendments. This amendment is directed to improvements to Section 84 of the Fair Trading Act 1973 in order to bring it up to date. I can deal with the matter very quickly. In Section 84(1)(a) I suggest that after "United Kingdom" there should be inserted
"and exporting to markets outside the United Kingdom".
It is not clear that it is the duty of the commission to have regard to maintaining and promoting effective competition between persons supplying goods and services outside the United Kingdom. It deals only with goods and services in the United Kingdom. The first part of the amendment is directed to providing,
"and exporting to markets outside the United Kingdom",
which is a very important function of any company these days.
The second part of this amendment is directed to one of the criterion under paragraph (b) for public interest. After "purchasers" my amendment would insert "exporters". As the Bill stands it relates only to the criterion involving purchasers, but exporters are also of considerable importance in this field.
In the third section of my amendment I refer to the third criterion in Section 84(1) which does not provide for exporting outside the United Kingdom. It is concerned with markets in the United Kingdom. The criterion for public interest surely should be extended to deal with exporting outside the United Kingdom. The fourth section of this amendment is very important. It should deal with regional development in my view. At the present time Section 84(1)(d) states that one of the criterion for deciding what is the public interest is
"maintaining and promoting the balanced distribution of industry and employment in the United Kingdom".
Those are the present words. I have suggested that after "balanced distribution" should be inserted "and regional development". Regional development is a very important factor with regard to British industry at this time.
The fifth part follows what I have said previously: one should have regard to exporting goods as well as dealing with goods in the United Kingdom.
The last part of the amendment refers to the fact that there should be inserted a further criterion to determine what is meant by "in the public interest" in this section. I have suggested that there should be added a paragraph (f) stating as one of the criterion involving public interest that regard must be paid to any European Community obligation.
I was going to say that I am almost singing the same tune. I am talking of directors or advisers of small companies. They will have their attention directed to this criteria for determining what is meant by the public interest. One of the factors in 1989 and thereafter is that they should have regard to any European Community obligation which is relevant to their own industries. It would remind the readers, the

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advisers or the directors of the companies that we are now in the age of the Single European Act. We are in close contact with other countries in the Community. Therefore one criterion that should be regarded is any European Community obligation.
This is a long amendment. It is composed of a number of factors that are interrelated. I am quite sure that the drafting could be improved. I shall be glad to hear what the Minister has to say. I beg to move.
Lord Strathclyde: Amendment No. 251 would make a number of changes to the public interest test applied by the Monopolies and Mergers Commission when looking at matters referred to it. I should remind noble Lords that Section 84 of the Fair Trading Act requires the MMC, in determining whether a matter operates or may be expected to operate against the public interest, to take account of all matters which appear to it to be relevant. The list of particular desiderata which follows, although fairly wide-ranging, is not exclusive. The weight to be attached to particular factors will vary from case to case.
I am not sure that the noble Lord's amendments would change the test fundamentally. On the other hand, it has stood the passage of time well, and therefore we need to be wary of tinkering with it unnecessarily. In fact I wonder whether the additional points the noble Lord wants to include are not already covered. Several relate to fostering exports, but Section 84(1)(e) already deals with that. It refers to,
"maintaining and promoting competitive activity in markets outside the United Kingdom on the part of producers of goods, and of suppliers of goods and services, in the United Kingdom".
Curiously the noble Lord's amendment would remove the word "competitive" here, but it is difficult to see how exporters can succeed without being competitive.
"Maintaining and promoting the balanced distribution of industry and employment in the United Kingdom".
allows regional factors to be considered where appropriate. Therefore the noble Lord's addition to paragraph (d) seems unnecessary. So does the addition of the term "exporters" in paragraph (b), since in so far as UK exporters are users or purchasers of goods and services in the UK, their interests are already taken care of.
The theme of the section is however the public interest, which for UK competition legislation must mean the public interest in the UK. Thus paragraph (a) of subsection (1) refers to competition between persons supplying goods and services in the United Kingdom. The noble Lord's proposed addition at the end would suggest that the MMC should concern itself with competition in markets outside the UK. To take a hypothetical example, the commission might take the view that the public interest would not be harmed by the merger of two major exporters; but relying on this provision as amended it might be forced to conclude that the loss of competition in export markets was against the public interest.
Finally, Amendment No. 251 would require the MMC to have regard to European Community
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obligations. That is unnecessary and understates the case as under the European Communities Act 1972 we are bound to observe Community obligations. We could not therefore use the power in this legislation in ways which conflicted with our obligations. Therefore, it is not just desirable but essential that the MMC takes this into account, if it is to act correctly.
We could talk at length about which matters are to be considered in assessing public interest in particular cases. Whatever the disagreements about these, however, I believe there would be general acceptance that there is nothing in the existing provisions of Section 84 to prevent the MMC taking any matter which might be of concern into account, including the kind of issues that the noble Lord has raised. I hope that he will agree to withdraw his amendment.
Lord Lloyd of Kilgerran: Once again I must express my gratitude to the noble Lord. I listened with great interest to what he said. He said that he could not understand activities being competitive and wondered why on earth I should remove the words "competitive activity" in subsection (1)(e). Section 84 refers to,
"maintaining and promoting competitive activity in markets outside the United Kingdom".
The word "competitive" does not seem to be necessary because the expression implies that there must be some kind of competition. However, that is an extremely minor point at this late hour.
I shall read what the noble Lord said and consider what action to take. I must express great surprise that the Government are refusing very firmly for a number of reasons, many of which I, as a practising professional in this field, do not understand, to help persons concerned in industry to look out for anticompetitive devices and practices and also to look at factors involving exports from the United Kingdom to parts of the European Community. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Strathclyde moved Amendment No. 252:
Page 199, line 41, leave out ("'93B"') and insert ("'section 93B".').
The noble Lord said: This is a drafting amendment correcting a consequential amendment to Section 132 of the Fair Trading Act which refers to the various sections of the Act containing offences. I beg to move.
On Question, amendment agreed to.
(Amendments Nos. 252A to 255 not moved.
Lord Lloyd of Kilgerran moved Amendment No. 256 Lord Lloyd of Kilgerran moved Amendment No. 256:Page 200, line 43, at end insert—
(".In section 19(3) of that Act there is inserted
"(g) The Treaty establishing the European Economic Community.
(h) The Single European Act." ".)
The noble Lord said: This amendment is directed at improving the Competition Act 1980. Section 19 of that Act refers to restrictions on disclosure of information and subsection (2) sets out a number of enactments referred to generally. Subsection (3) cites enactments referred to in subsection (2) and lists

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about six Acts: the Trade Descriptions Act 1968, the Fair Trading Act 1973, the Consumer Credit Act 1974, the Restrictive Trade Practices Act 1976, the Resale Prices Act 1976, and the Estate Agents Act 1979. The Committee can see that in 1980 these enactments were being brought up to date as far as possible.
My amendment suggests that in 1989 there should be added to that list the treaty establishing the European Economic Community, often referred to as the Rome Treaty and, secondly, that there should also be referece to the Single European Act which is so important to the United Kingdom at present in terms of the position in the European Community.
The amendment seeks to put information into the Competition Act in order to bring it up to date in respect of the enactments to which the earlier part of Section 19 refers. Members of the Committee have a list of six Acts passed up to 1979. It is now most significant that the Competition Act should draw attention to the fact that two other important matters should be added. They are the treaty establishing the European Economic Community and the Single European Act. I beg to move.
Lord Strathclyde: The noble Lord is concerned that information obtained by the UK competition authorities under the Competition Act should, where necessary, be able to be passed on for the purposes of the EEC treaty and the Single European Act. We believe that this is already adequately provided for by Section 19(2)(d), which permits disclosure in pursuance of a Community obligation. Therefore, I hope that the noble Lord's question does not arise.
9.15 p.m.
Lord Lloyd of Kilgerran: The Minister has drawn attention to an interesting point of interpretation of the Act. Subsection (2)(d) states: "in pursuance of a Community obligation".
Nowhere does the Competition Act define the word "Community". Nowhere does it state what is meant by "a Community". There is an almost half-hearted reference to "a Community". What is "a Community"? It is obvious that what is meant is the treaty establishing the European Economic Community.
At present the Competition Act 1980 does not make the position clear. I hoped that the Minister would show some sympathy, even at this late hour, and agree that "a Community obligation" is not as clear as it should be. If he is saying that the phrase "Community obligation" is clear and therefore it refers to the treaty establishing the European Economic Community, he should include the Single European Act as a further enactment of significance at this time.
Lord Strathclyde: It is not that I do not wish to be encouraging or generous to the noble Lord—I am always delighted to be so. However, in this case the expression "Community obligation" is defined in the European Communities Act 1972. There is no doubt to which Community and obligation the reference is made. The noble Lord said that I was referring to the
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European Economic Community and therefore I feel sure the position is understood. In those circumstances, I hope that the problem is solved.
Lord Lloyd of Kilgerran: The Minister, the noble Lord, Lord Williams, and I understand the position, as will all Members of the Committee. However, it is not understood by the ordinary working-class adviser, particularly those in small firms. The hour is too late for me to pursue the matter further.
I express my surprise at the Government's reluctance to insert a more clear provision about the Community. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 256A not moved.]
Schedule 15, as amended, agreed to.
Clause 105 [Introductory] On Question, Whether Clause 105 shall stand part of the Bill?
Lord Williams of Elvel: At this point we embark on a new part of the Bill dealing with financial markets and insolvency. My amendments are designed to be probing and to elicit clarification of the proposals made by the Government in this part of the Bill.
Clause 105 is the introductory clause. I have informed the noble Lord, Lord Strathclyde, that the object of having a clause stand part debate is to continue the somewhat foreshortened Second Reading debate.
Insolvency has been the subject of numerous pieces of legislation over the years but most recent has been the Insolvency Act 1986, which was a consolidation of the Insolvency Act 1985 with amendments. The principle of what is known as pari passu distribution was strengthened by substantially reducing the classes of creditors entitled to preference to the benefit of unsecured creditors generally. That was in accordance with the recommendations of the Cork Committee.
As I understand it, the Government now seek to override the general Insolvency Act by introducing a special category. It is argued—and I hope that the Government can produce counter-arguments—that the financial markets should properly observe the Insolvency Act 1986 provisions and should deal with the problem which the Government seek to address in this part of the Bill by compensation arrangements to ensure that outsiders who deal with members in the exchange will not suffer. Compensation schemes have already been set up and in our view it would be more appropriate to compel those various bodies to increase the compensation levels rather than override the Insolvency Act—the pari passu principle—in one particular case. By opposing that the clause stand part, I seek a considered view from the Government on why this legislation is desirable.
Lord Strathclyde: I am grateful to the noble Lord, Lord Williams, for being relatively brief. I am also glad that he gave notice that he would oppose the Question that the clause stand part of the Bill. I apologise that I am not able to be quite as brief

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because this is obviously a very technical and highly complex issue and perhaps I should explain it as fully as I can.
The integrity of the financial markets is important for their members, for investors and for the UK economy. Defaults are rare but we cannot shut our eyes to the possibility that they occur. The markets have therefore developed systems to minimise the disruption which a default could cause. In particular the systems aim to prevent a domino effect, where one default causes a second and then a third.
Naturally the markets themselves have tried to frame their systems in such a way that they cannot be successfully challenged in the courts. Until recently very few people had any doubts about the legal foundation of these systems. Participants in the markets assumed without question that they would prove effective in the event of an insolvency. But doubts have been expressed in certain quarters and the Government have had to address the issue. It is not an issue which can be ducked.
Unfortunately insolvency law is complex and the rules and other contractual arrangements which embody these systems are also complex. In applying one complexity to the other, it is very difficult to be certain what view the courts would take if the issues were ever taken to court. There has been little relevant case law in this area.
The Government's position is simple. On a question of such importance, uncertainty is not acceptable. It may be that the courts would find nothing objectionable in the operation of these systems. It may be that the powers of an office-holder would not be exercised in the manner feared. But it could take many months, perhaps years after a default, before the legal issues were finally resolved. Financial markets move rapidly. Participants cannot wait that long to learn what is to be done with their contracts.
The Government have considered the various methods which the markets have accepted to handle defaults. Broadly speaking, we consider them to be fair and satisfactory. Our aim is therefore to remove any doubts that there may be about their legal effectiveness.
I should like to emphasise two general points. First, most of the provisions in Part VII have a broadly similar effect to that of the current law. Let me give one example. Insolvency law enshrines the important principle of set-off. If the insolvent owes a debt to me, and I owe a debt to the insolvent, I am entitled—subject to certain conditions—to set one debt off against the other. Part VII follows this principle by providing for the rights and obligations under an unsettled market contract to be converted into a debt from one party to the other. If there are two or more contracts between the same two parties, Part VII provides for the resulting debts between them to be netted off.
My second general point is this. The integrity of financial markets is in everybody's interest. Part VII is not merely about protecting members of the market. Directly or indirectly it protects investors too. By preventing a domino effect, the investors who
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have put their business through other members are protected; and those investors who have put their business through the defaulter will be covered by the part. Their unsettled contracts may be transferred to other members. If that is not possible they will benefit from the procedures laid down in the part for converting unsettled contracts into debts and for netting-off those debts.
To give a comprehensive account of the interaction between insolvency law and the various market systems would require not merely a letter to noble Lords but a book. Indeed, I believe a book is being written. The noble Lord may prefer me to give a few examples of possible conflicts.
The first concerns the pari passu principle whereby all creditors with the same priority are treated equally and given a pro rata distribution if the insolvent's assets are inadequate. The courts have shown themselves ready to strike down systems which run counter to this principle. It might be argued that the market systems offend against the principle, because they are concerned only with particular creditors of the defaulter; namely, members and investors. On the other hand, insolvency law incorporates the principle of set-off of the debts between two parties. Market systems have been structured around this principle; but we cannot be certain that the courts would accept this.
Would the principle extend to a case where instead of debts between the two parties there are unsettled contracts, for example? If not, the liquidator has a specific power to disavow contracts which are unprofitable to him. He might therefore be able to pick and choose which contracts to perform. Heads he wins, tails you lose. The courts might decide that picking and choosing was inequitable in a particular case. But, then again, they might not.
Another problem arises from a contract entered into after a petition to wind up a member has been presented. His counterparty may be unaware of the petition and may enter into the contract in good faith. Normally such post-petition contracts would be void. The court has a discretion to order that the contract should stand; but there is no certainty that it would do so.
My final example concerns the deposit of margin with a clearing house. This is an essential part of a system whereby the clearing house assumes the depositing member's obligation to perform the contract for his counterparty. The purpose of the margin deposit is to protect the clearing house if the member defaults. It could be argued that this deposit is a preference under the Insolvency Act because it seeks to place the clearing house in a better position than other creditors if the depositing member becomes insolvent. If it could be struck down as a preference, margin-based systems which operate on all the future exchanges would be undermined.
The courts have a wide discretion under insolvency law on some of these issues. The examples indicate some of the areas of uncertainty which we wish to sweep away.
I hope we all share the objective behind Part VII, which is to safeguard the financial markets in the event of a default. These markets are fast moving and

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can only work if participants are confident that their bargains will be settled. If the other party to the bargain has collapsed, it may not always be possible to guarantee settlement in full. In any event, the market's settlement system must be allowed to operate speedily and securely so that people know exactly where they stand. Lengthy disputes in court over the relationship between the settlement system and the law must be avoided.
Lord Williams of Elvel: I am grateful to the noble Lord for setting out the reasons the Government have produced Part VII of the Bill. I hope he will accept that consultation on this part was limited. There may be very good reasons why consultation was limited. It was extremely useful for the Committee to have the noble Lord's explanation as to exactly what this part is about.
We and our advisers will have to read carefully what the noble Lord said in order to frame our views when we come to the next stage. The amendments that. I shall move are all in the spirit of probing amendments to discover the Government's reasons for the various clauses they put forward in this part.
Clause 105 agreed to.
Clauses 106 and 107 agreed to.
Schedule 16 agreed to.
Clauses 108 and 109 agreed to.
9.30 p.m.
Clause 110 [Proceedings of exchange or clearing house take precedence over insolvency procedures]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256B: Page 112, line 36, leave out subsection (2).
The noble Lord said: In our view there is a certain inconsistency between Clause 110(1) and (2). Subsection (2) refers to "a relevant office-holder" as defined in Clause 129. We believe that there is also an inconsistency with Schedule 16. I should be grateful if the noble Lord could explain exactly where, if we are wrong, we are wrong. I beg to move.
Lord Lloyd of Kilgerran: I have some difficulty with this subsection for a different reason. I wonder whether the subsection is really necessary. Subsequent clauses give much more detailed provisions in relation to the specific powers of the office-holder and the courts.
Lord Strathclyde: Clause 110 is an important element in the protection which the part is designed to give to exchanges and clearing houses. It establishes the principle that where conflict might arise between insolvency law and the systems of the exchanges and clearing houses, the latter are to take precedence. To achieve this result, subsections (1) and (2) are both necessary. It is not enough to ensure—as subsection (1) does—that contracts and rules are valid. It is also necessary that the clearing and settlement systems and the default rules should be able to deal with those contracts. That is the purpose of subsection (2).
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The objective is that the market's systems should take precedence. I think the Bill should say so clearly, as it does in the subsection. Moreover the functions of a liquidator are to get in, realise and distribute the property of the company. He has a duty to do this. He must initially take all the property of the company into his custody or control, and then in due course distribute it. Clause 110 ensures that these functions and duties, which are cast in wide general terms, do not lead to a conflict with exchanges and clearing houses operating their rules, or prompt the liquidator to challenge them on a general basis.
Lord Williams of Elvel: I am grateful to the noble Lord. He mentioned Clause 110(1). Is this intended to cover receiverships and administration orders? If so, why is this not specifically stated? As to subsection (2), some clarification of "relevant office-holder" does seem to be necessary. I draw attention also to the fact that under Clause 110(4) there arises the question of voting procedures at meetings called for the purposes of the Insolvency Act which seem somewhat unclear.
I do not expect an immediate response because I have not moved an amendment in this respect. However, I hope that the Minister may take my concern on board and consider it. Perhaps he will feel moved to write to me and to the noble Lord, Lord Lloyd of Kilgerran, who is always anxious to receive letters from the Government Front Bench.
In spite of the general principle that the Minister has announced, some technical problems arise. We believe that there is an inconsistency of law relating to the distribution of assets. I hope very much that the Minister will be able to respond.
Lord Strathclyde: It was pleasing to hear the noble Lord discuss the possibility of future amendments in his name. We look forward to those.
Clause 110(1) is not concerned with administrative receivership because we do not consider that there is likely to be any conflict. Therefore, it does not arise. Furthermore, the relevant office-holder is the office-holder appointed to the member. I hope that that answers the noble Lord's question.
Lord Williams of Elvel: I am grateful to the Minister. No doubt he will read what l have said; I shall read what he has said; and we will study the matter with care. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 110 agreed to.
Clause 111 [Duty to give assistance for purposes of default proceedings]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256C: Page 113, line 15, leave out subsection (3).
The noble Lord said: This is a probing amendment. In the view of my advisers, the costs of assisting the market in its default proceedings should be borne by the market itself. Clause 111(3) appears to envisage

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that non-market creditors will bear these costs. That seems inequitable. I shall be most grateful if the Minister can help me on this point. I beg to move.
Lord Strathclyde: The noble Lord suggests that the exchange or clearing house should meet the cost of providing assistance. The Government do not believe this is appropriate save in circumstances in which there is no prospect of the cost being recovered out of the insolvent's estate for which the clause already provides.
We have two reasons for taking this view. First, the whole of the clause is essentially about co-operation. In practice, in the case of a default the exchange or clearing house concerned and the office-holder are going to need to work very closely together. It is unlikely that the expenses incurred will be significant. I suggest that in most cases it will be no more than a question of exchanging information on the telephone. As the assistance will be reciprocal it really does seem right that the costs should be borne where they fall on either side.
Secondly, it should be noted that the requirement on the exchange to deal with all the defaulter's unsettled contracts and to produce a report certifying the sum due to or from the defaulter in respect of each counterparty will relieve the office-holder of a substantial burden of work which he would otherwise have to perform himself, and the cost of which would have to be met out of the estate. It is surely not unreasonable, therefore, that any costs incurred in giving assistance, which as I said are likely to be relatively minor, should be met out of the estate. Having said that, I hope that the noble Lord will feel able to withdraw the amendment.
Lord Williams of Elvel: I am grateful to the noble Lord for his explanation of the Government's intentions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 111 agreed to.
Clause 112 [Duty to supply and return documents]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256D: Page 113, line 27, leave out ("or copies of them").
The noble Lord said: I am unclear as to whether original documents are to be provided, and if they are not, whether the copies of them will be in some sense certified copies. The object of the amendment is to make sure that we have this point clear in our minds. We want to know whether any originals held will be to the order of the relevant office-holder. I beg to move.
Lord Lloyd of Kilgerran: This amendment is of some practical importance. The noble Lord, Lord Williams, has suggested that copies should be certified copies. I have known photostats to be quite acceptable in certain circumstances. It often happens that original documents are not available but copies are. If they are certified or photostat copies they would do just as well.
Lord Strathclyde: I am sorry but I shall be brief. It is not intended that the copies should be certified copies.
Lord Williams of Elvel: Or photocopies?
Lord Strathclyde: Photocopies would be fine. What is important is speed. That is the main requirement. Copies would be perfectly all right.
Lord Williams of Elvel: But there must be some procedure for ensuring that they are copies of the original document and that they are not just handwritten reproductions of the original document. There must be some evidence that they are copies of the original document. Is that not the case?
Lord Lloyd of Kilgerran: I understand the Minister to be accepting my suggestion that they should be photocopies.
Lord Strathclyde: It is a fact that the copy can be a photocopy. It is quite acceptable for it to be a photocopy. The noble Lord, Lord Williams, asked whether there would have to be proof that the copy, whether a photocopy or any other type of copy, was a copy of the original document.
Lord Williams of Elvel: Yes. My problem is that the word "copies" can mean several things. It can mean an authenticated, properly signed copy, or it can mean that a copy of the Marshalled List in my own handwriting is a copy of a certain document. All I am trying to establish is what the Government mean by saying "copies".
Lord Strathclyde: We mean what we say. A copy is a copy. I understand the noble Lord's example. It would be easy for him to make a copy and it would not necessarily be an exact copy. It will always be possible for the originals to be handed over so they can be left in the hands of the insolvency practitioner. I am not sure whether that entirely answers the question posed by the noble Lord, but perhaps this is a matter at which we can look further. However, there is obviously no guarantee that we shall necessarily come back with any changes.
9.45 p.m.
Lord Williams of Elvel: I fully understand that there is no guarantee. There is a certain difficulty here but no doubt that can be resolved. It is not for the Committee this evening to resolve such a difficulty across the Floor. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 112 agreed to.
Clause 113 [Supplementary provisions as to default proceedings]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256E: Page 114, line 21, leave out subsection (4).
The noble Lord said: Subsection (4) seems to us to remove the general bar on actions against an

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insolvent for no obvious good reason. We consider that the leave of the court should be required to bring proceedings, for instance, against an insolvent defaulter; that is to say, that the normal procedure which we have at present should continue to apply. I beg to move.
Lord Lloyd of Kilgerran: I go along with the noble Lord, Lord Williams of Elvel, as regards part of this deletion, but I am most reluctant to do anyting which involves Scottish law. When I see no mention of the Bankruptcy (Scotland) Act 1985 in this amendment, I am also tempted to suggest that it should be struck out. However, I think that that would be too courageous of me at this time of night.
Lord Williams of Elvel: I hasten to assure the noble Lord, Lord Lloyd of Kilgerran, that this is a probing amendment rather than an amendment designed to trespass upon important legal matters north of the Border.
Lord Strathclyde: I am very glad to have that reassurance from the noble Lord, Lord Williams. The purpose of subsection (4) is to ensure that an exchange or clearing house can take action without delay in relation to the defaulter or his property in connection with default proceedings. The amendment would reintroduce scope for delay, by requiring leave of the court (or alternatively, in the case of Section 11(3) of the Insolvency Act, of the administrator) to be obtained in such circumstances. This would be undesirable for two main reasons.
First, there is the scope for additional delay. When a default happens, all necessary action has to be taken quickly. This is particularly important at times when the markets are highly volatile, and of course it is quite possible that, were a default to occur, it might be at a time of particular market volatility. Thus if any kind of action or proceedings does need to be taken, this should require as few steps as possible. Procedural delay may risk reducing the effectiveness of the action taken.
Secondly, it is desirable that the exchange or clearing house should be able to act with certainty. The requirement to seek the leave of the court introduces an element of uncertainty into an area where certainty is important. For example, a clearing house acts effectively as guarantor in relation to the contracts which it clears. It takes margin to cover itself against the cost of effecting the guarantee of performance. Where it takes margin in a form other than cash, it needs to be sure that it can realise the margin promptly if need be. I hope the noble Lord will understand that.
Further, the Government believe that this subsection is necessary in the interests of speed and certainty. The provisions in the Insolvency Act are widely drawn; for example, Section 130 refers to any action or proceeding and is not explicitly limited to legal action. Were this to extend to actions such as realising property provided as cover for margin, or indeed to the application of margin for the purposes of default proceedings, the effectiveness of default proceedings could be seriously jeopardised by the need to seek leave before any action is taken.
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The Government believe that that would be unacceptable in the context of the problems addressed by the Bill. We believe that the subsection is necessary to ensure that default proceedings can be executed effectively. I know that the noble Lord will understand why we see the need for speed and certainty in this area as being important and perhaps, therefore, he will be prepared to withdraw the amendment.
Lord Williams of Elvel: I am most grateful to the noble Lord. In all cases where the normal procedure is overridden by the Bill, we shall require government explanations as to why it should be so. The noble Lord has given the Government's explanation, at which we shall look most carefully and at a later stage, if we feel that it is necessary, we shall return to the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 113 agreed to.
Clause 114 [Duty to report on completion of default proceedings]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256F: Page 114, line 31, leave out subsection (3).
The noble Lord said The noble Lord said: Again, there is a difficulty on the basis of conversion of foreign currency into sterling because what is proposed is inconsistent with the procedure established in the Insolvency Rules 1986, which specify the date of liquidation as the relevant date for conversion. That is acceptable for the purposes of default proceedings, but in insolvency proceedings it is considered that the proof should be admitted under Clause 115, using the basis for conversion laid down in the Insolvency Act and rules. Again, we have a difference between the procedure proposed in the Bill and the procedure in the Insolvency Act. I beg to move.
Lord Strathclyde: The effect of the amendment would be that the normal Insolvency Act provisions on currency conversion would apply if the exchange or clearing house reported a debt expressed in foreign currency. I do not see any objection to the noble Lord's approach, and we shall bring forward a government amendment.
Lord Williams of Elvel: I am most grateful to the noble Lord. We are making a great deal of progress with the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 114 agreed to.
Clause 115 agreed to.
Clause 116 [Disclaimer of property, rescission of contracts, &c.]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256G: Page 116, line 8, leave out subsection (3).
The noble Lord said: It seems to us that subsection (3) is not drawn tightly enough. We accept that

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contracts with third parties which are bona fide and for proper value should not be capable of upset by the avoidance procedures which are at present in the Insolvency Act 1986; but all contracts which fail that test should be open to attack under the general insolvency procedures. It cannot be in the interest of general creditors or the market that any contracts failing that test can be enforced. The amendment is again a probing amendment; and I should like to have the Government's response to that point. I beg to move.
Lord Strathclyde: As I have already explained, the underlying purpose for Part VII of the Bill is to remove the uncertainty that would exist between the interaction of insolvency law and the clearing and settlement systems of those financial markets included in Part VII, if a member of a market were to default, by making specific provisions for the application of insolvency law to those markets. This clause is a piece of that jigsaw, and it may assist the Committee if I spend a few moments outlining the aim of the clause.
Basically it is designed to achieve two goals: first, it prevents ordinary market transactions from being overturned in the event of the insolvency of one of the parties to a market contract, and so forth; and, secondly, it enables the recognised investment exchange or recognised clearing house to carry out the procedures required under their default rules without the possibility of any necessary transactions entered into being upset by a liquidator, trustee or the court.
In winding-up or bankruptcy proceedings, contracts may be disclaimed by a liquidator or trustee if they are onerous or unprofitable. They may be rescinded by the court.They may be void dispositions of property. On the other hand, the contracts may be allowed to stand. In each case there is an element of discretion which imports uncertainty.
If markets are to operate efficiently it is necessary that those dealing in them should be certain that proper commercial transactions will not subsequently be overturned and that the clearing house concerned is able to use the margin provided by the defaulting member as, in effect, the security provided by him to finance the settlement of bargains under the default procedure.
However, the Government have no intention of allowing a third party to gain an illegitimate advantage from procedures which are designed to safeguard the market and ensure certainty. The insolvent's estate is thus protected by enabling a trustee or liquidator acting in the interest of all the creditors to recover from a third party any profit or benefit arising from a contract entered into after a winding-up or bankruptcy petition had been presented against the insolvent member where the other party to the contract knew of those proceedings. This protection is contained in subsection (3) of the clause, which the noble Lord seeks to remove.
I have said, although certain provisions concerning avoiding contracts have been disapplied, the
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Government consider that subsection (3) provides an important level of protection for the general body of a defaulter's creditors. Thus where a person knew that a winding-up or bankruptcy petition had been presented against a member of an exchange or clearing house he would not be able to retain the value of any profit or benefit arising from a contract entered into after he had that information, unless the court specifically orders.
I am surprised that the noble Lord is seeking to remove this protection, but in the light of my explanation I hope that he will be able to withdraw his amendment.
Lord Williams of Elvel: I am most grateful to the noble Lord. As I hope I have pointed out on numerous occasions, these are probing amendments. We are not trying to remove subsections of the Bill but trying to establish what the Government's intentions are. The noble Lord has set out the intention of the Government. I hope he will accept that the principle of a court having discretion, if a transaction is not bona fide, is accepted and not challenged by what the Government are trying to write into the Bill.
Lord Strathclyde: That is a matter which obviously involves many of the principles surrounding the whole aspect of insolvency law. When we are talking about this, there are many principles of insolvency law. When it comes to a court deciding between—as the noble Lord said—whether or not a settlement or bagain is valid under the terms of the law—
Lord Williams of Elvel: Perhaps I may help the noble Lord by reinterpreting what I am saying. We accept that contracts with third parties which are bona fide and of proper value should not be capable of being upset. Nevertheless, the court should have the ultimate jurisdiction or discretion if the transaction was not bona fide.
Lord Strathclyde: I can now see exactly what the noble Lord is getting at. If it is not bona fide, the court will have the necessary discretion to provide the remedy.
Lord Williams of Elvel: I am most grateful to the noble Lord for that assurance. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 116, agreed to.
Clause 117 [Adjustment of prior transactions]: On Question, Whether Clause 117 shall stand part of the Bill?
Lord Williams of Elvel: Clause 117 deals with the adjustment of prior transactions. In our view, it will be of some detriment to creditors. If Clauses 116 and 117 are taken together they will mean that claims which might otherwise be avoided will be settled within the default procedure. Assets which would otherwise be available to creditors would be lost.

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In our view, what seems to be needed is a requirement that the exchange report all transactions to the relevant office-holder, who is then empowered to investigate their validity, to advise the exchange of those which are not bona fide and seek the termination of all such transactions not finalised. It may be that Clause 117 goes too far. I hope the noble Lord will he able to reassure me that our worries are unnecessary.
10 p.m.
Lord Strathclyde: I have already outlined the principles underlying Part VII of the Bill. The aim of this particular clause is to protect persons who have entered into a market contract with the insolvent, without being aware that the contract was at undervalue, which gave them a preference over, or prejudiced, other creditors. The same protection extends to the exchange or clearing house where it deals with part of the defaulter's estate under the provision of their rules.
Under insolvency law the court may order restoration of the position following transactions at an undervalue or which create a preference upon application by the liquidator, trustee or administrator. It does not matter whether the person who had the benefit of the transaction realised its effect. But it will not be certain whether the court will make an order or not, and there will be inevitable delays while applications are made to the court even if hearings are expedited. It is certainty and speed that are essential to the market's operation.
Moreover, the rules of the market in some ways limit the member's ability to choose the persons with whom he deals and the way in which deals are done. Provisions which are appropriate to deal with transactions entered into between parties who have sufficient time to assess one anothers' motives and who are fully aware of each other's identities will not necessarily be appropriate to deal with transactions effected on an exchange in accordance with the rules of the exchange and clearing house. If the preference and undervalue provisions were not disapplied, uncertainty and confusion could arise in dealings in the market. However, a safeguard has been introduced to provide that if the person was aware that the transaction was at an undervalue or gave him a preference, then the court may set it aside.
The effect of omitting the clause would be to retain the existing insolvency law provisions relating to preferences and undervalue transactions so far as market contracts are concerned. As I have explained, the Government think that this is undesirable. Dealings on markets or exchanges are not conducted in the same way as most businesses are conducted. Strict rules govern them. Such rules do not exist in the normal commercial environment.
These provisions could cause doubt and uncertainty about the effectiveness of transactions entered into in the market. This is particularly so in relation to contracts pursuant to which margin is paid. It may assist the Committee if I give a brief illustration of the type of practical problems that could ensue where a market contract was entered into
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and where winding-up, bankruptcy or administration proceedings ensue in relation to one party if the normal insolvency provisions in this area were to continue to apply. As I am sure the Committee will appreciate, the price at which market transactions take place can vary throughout a given day. In a volatile market, price movements may be substantial. Bearing in mind this scenario, if I were to buy investments, I would obviously wish to do so at the lowest price available. However, suppose that the seller was, unknown to me, insolvent at the time I purchased the investments, and that later in the day the price had on the market risen so that I would have had to pay substantially more for my investments if I had bought at that time.
Now, suppose that the insolvent seller is wound up. Under the insolvency law provisions, his liquidator will look at the sale of the investments to me at what may well appear to be a remarkably low price and may conclude that I had the benefit of a transaction which was at an undervalue. However, my gain had been due purely to market fluctuations—I could just as easily have made a loss—and certainly was not due to any improper conduct on my part. Even if he has sold at a value considerably below other deals being done at the same time, that may be no more than evidence that his expectation as to price movements was different to other members. At the same time, the effect of the transaction may have been to put me into a better position than I would have been if the transaction had not been entered into. If the insolvency legislation relating to preferences were to remain in force, however, this might enable an application to be made to the court for an order to restore the position.
The possibility of these orders could effect the way in which the market operated by creating uncertainty in the minds of buyers and sellers. It is to avoid such uncertainty and to create a stable market environment that provisions relating to preferences and undervalue transactions are specifically disapplied by this clause. I hope that the Committee will accept that the provision is a necessary one. The exchange will report the transactions. We intend that the office-holder can then examine them to see whether they are bona fide. Having said that, I hope that the noble Lord will not oppose the clause standing part of the Bill.
Clause 117 agreed to.
Clause 118 to 120 agreed to.
Clause 121 [Market charges]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256H: Page 118, line 34, at end insert ("or").
The noble Lord said: In speaking to Amendment No. 256H standing in my name and that of my noble friend Lord Peston, I should also like to speak to Amendments Nos. 356J and 256K.
In Clause 121 we are dealing with a rather strange concept called "market charges". That strange concept, with which we have to begin to grapple, embodies a notion which, in our view, has not appeared before in English law, namely the ability to

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take a charge on indeterminate assets for the benefit of unknown persons. That is an extraordinary notion. Perhaps it will go down in legal history. It is wholly open-ended.
I think that the Government need to consider very carefully whether that is absolutely necessary for the benefit of the Bill and for the purposes they have in mind in Part VII. It is quite extraordinary. I beg to move.
Lord Strathclyde: Is that it? The noble Lord said that the provision was extraordinary. I hope that I shall be able to prove that it is not.
In responding to the amendment I shall also speak to Amendments Nos. 256J and 256K. The effects of Amendments Nos. 256H and 256J would be to remove from the definition of market charges, charges given in favour of their settlement banks by members of the Bank of England's Central Gilts Office system. While transactions in gilts take place on a recognised investment exchange—namely, the Stock Exchange—the transactions are cleared not through that exchange's settlement system but through the Central Gilts Office. I can expand on the way the CGO operates if the Committee would find that helpful. The essential point, however, is that the charge which underpins the gilts clearing arrangements is given not in favour of the Stock Exchange, or indeed in favour of the Central Gilts Office itself, but in favour of a bank—known as the member's settlement bank—which undertakes to make payments on the member's behalf in respect of transfers of gilts within the CGO system. Those charges are an essential feature of the system, and it is important that they should be within the definition of market charges. In the light of that explanation I hope that the noble Lord will feel able to withdraw the amendments.
The effect of Amendment No. 256K is uncertain. Without subsection (2) it would not be clear whether the protection of the part was available to charges granted partly for purposes specified in subsection (1) and partly for other purposes or whether the protection was available only to charges granted solely for specified purposes. The Government want it to be clear that a charge of the former kind is to be eligible for protection, but that protection is to be available only in so far as the charge has effect for purposes specified in subsection (1).
As a matter of practice, charges granted by market members for any of the purposes set out in subsection (1) of the clause may secure a wider range of liabilities than those with which the clause is concerned. For instance, the charge granted by a member of the Central Gilts Office to its settlement bank may secure its ordinary overdraft, as well as liabilities incurred in connection with gilts settlement thorugh the Central Gilts Office system. It would be inconsistent with the purposes of the part if such a charge attracted the modified insolvency regime in relation to the ordinary overdraft. Yet there might be difficulties if separate charges had to be granted for the two purposes.
It is therefore necessary to provide that such a mixed charge will be a market charge, and will attract
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the modified insolvency regime, only in so far as it has effect for the market-related purposes described in subsection (1). In practice, it will be necessary to specify in some detail the precise purposes for which particular market charges may be granted, the assets subject to such charges which are to be realised in accordance with the clauses and the liabilities which may be secured by such charges. That will be done in regulations made under these clauses.
As regards the detail of the regulations, we will use the charge granted by members of the Central Gilts Office to their settlement bank as an example. It is intended that regulations under the market charges clauses should have the effect that the modified insolvency regime for charges (set out in Clauses 123 to 124) should apply in the following way. First, the protection should extend only to certain assets covered by the charge. The assets would be specified securities (i.e. mainly gilts) in the member's CGO account and moneys receivable in respect of transfers of such securities out of that account. Secondly, the protected assets, when realised, could be used only to secure certain liabilities. Those liabilities would be the liability of the member to the ban arising in connection with transfers of specified securities into the member's account.
I hope that after what I have said the noble Lord will withdraw his amendments.
Lord Williams of Elvel: I am most grateful to the noble Lord. I wonder whether he will kindly write to me to explain whether there is any precedent in English law regarding the ability to take a charge on indeterminate assets to an unspecified person.
Lord Strathclyde: I shall be delighted to write to the noble Lord.
Lord Williams of Elvel: I am most grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 256J to 256L not moved.]
Clause 121 agreed to.
Clause 122 [Modifications of the law of insolvency]: [Amendment No. 256M not moved.]
Clause 122 agreed to.
Clause 123 [Administration orders, &c.]: [Amendment No. 256N not moved.]
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 256P: Page 120, line 3, leave out ("knows") and insert ("knew or ought to have known").
The noble Lord said: It is not entirely clear to us what Clause 123(5) is designed to cover. We believe that the wording appears rather restrictive and should be expanded in the way that the amendment proposes. I beg to move.
Lord Strathclyde: This amendment also concerns the part of Clause 123 which relates to dispositions of property. It seeks to amend Clause 123(5), which

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currently provides that the disapplication of Sections 122 and 284 of the Insolvency Act 1986, by virtue of subsection (4) of the clause, cannot benefit a person other than the chargee who was a party to a relevant disposition of property and who knew at the time of the disposition that a winding-up or bankruptcy petition had been presented against the party that made the disposition. Such a person may be required to pay the value of such a profit or benefit to a liquidator or trustee of the insolvent defaulting party unless the court directs otherwise.
The noble Lord's amendment would effectively widen the scope of the subsection and provide that the person would be subject to two alternative tests before he could retain the value of any profit or benefit in such circumstances: the person must either not have known about the presentation of the petition or had no reason to have known about any such petition. This is an altogether more stringent test and by its very scope is likely to create uncertainty in the very place where certainty is most needed—the market itself.
The subsection as drafted is intended to create certainty in the minds of all market users, certainty which is vital to the market's effective operation and certainty which the amendment would undermine. In the circumstances I hope that the noble Lord will be able to withdraw the amendment.
Lord Williams of Elvel: I am grateful to the noble Lord. Again we will read what he has said and put on the record and may revert to it at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 123 agreed to.
Clauses 124 to 131 agreed to.
Lord Henley: I beg to move that the House do now resume.
House resumed.
House adjourned at a quarter past ten o'clock.

  REORGANISATION OF THE LEGAL PROFESSION: GREEN PAPER
  REORGANISATION OF THE LEGAL PROFESSION: GREEN PAPER
  JAPANESE LANGUAGE SPEAKERS: DTI INITIATIVE
  JAPANESE LANGUAGE SPEAKERS: DTI INITIATIVE
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  LOCAL AUTHORITY SECURE ACCOMMODATION: DETAINEES
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  PIPER ALPHA RIG: SABOTAGE ATTEMPT
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